Housing Vouchers Have Gone Up – What Does That Mean for Rental Managers and Affordable Housing?
Throughout Orange County, housing voucher subsidies are increasing, giving housing voucher holders more purchasing power and access to a wider selection of units throughout the county. If you are a property owner, landlord, someone thinking about renting out a property you own, or generally interested in the housing market, listen up! This is great news for clients and residential rental providers.
These mandated annual adjustments to subsidy values ensure housing vouchers remain competitive for market rate apartments and, this year, the result is a large increase for all locations and rental sizes. So, what does that mean for rental properties? In short, this is great news for rental housing providers, as even more market rate units can now qualify to lease to housing voucher holders.
“Many property providers are unaware of the benefits that can come from renting to voucher holders,” said Steven Gallian, QIP Management. “Voucher holders are just as, if not more, reliable as other tenants, and with guaranteed rental income, I’m able to focus on other aspects of property management. I’ve found it creates a better relationship with the tenant when I’m not worried about when the rent will be paid.”
With the new rates in place, housing vouchers are now comparable with non-subsidized rental payments. For property providers, not only does this open the door to a wider pool of applicants, but it also gives them access to additional benefits such as guaranteed on-time rental income each month from the public housing authority, protection from changes in tenant income, longer tenancy, and less loss rent and turnover expenses.
“Orange County Housing Authority is hoping the 2023 Payments Standards will help current Section 8 Housing Choice Voucher (HCV) participants keep up with the rising cost of rent and will make it easier for current and future voucher participants to maintain and access additional affordable housing units in the current rental market in Orange County,” said January Johnson, Orange County Housing Authority. “We are optimistic about the new Payment Standards, especially as, for the first time, HUD used up-to-date private rent data to help set Fair Market Rents (FMRs) to ensure that FMRs better reflect housing costs in local communities.”
Housing voucher payment standards are calculated as a percentage of HUD’s Fair Market Rents and can range from 90%-120% of the FMRs. Each year, HUD releases an assessment of what they consider Fair Market Rent for a geographic area, based on the number of bedrooms in the rental unit. “The goal is to lower the rent burden for current and future participants, reflect the actual local rental market, and balance those goals within the existing budget,” said Johnson.
The recent announcements from all four public housing authorities, Anaheim, Garden Grove, Santa Ana, and Orange County represent a substantial increase for properties in every city in the county.
Santa Ana has increased housing voucher values by $505 on average, with the largest increase seen for single family home rentals, but a still sizable increase for 1 and 2 bedrooms of $350. Renters in Anaheim will benefit from rates set at 110% of FMR, which matches the rates for South County. Those in Garden Grove are receiving a 5% higher portion of FMR and the higher FMR base rate, resulting in an average increase of $383.
In the rest of the county, the biggest raises occurred in Huntington Beach, Costa Mesa, and Fountain Valley with an average of a $564 increase. Overall, the average increase across all regions and rental sizes is a substantial $423, with the most sought-after 1 bedrooms increasing $326 and two bedrooms increasing $374.
“The payment standard increase is going to really level the playing field for our clients,” said Elizabeth Andrade, Chief Executive Officer at Family Assistance Ministries. “Not only is this great news for property providers and housing voucher holders, but this benefits our community as well—helping to reduce poverty and homelessness, and helping low-wage workers make ends meet.”
If you are a property owner, and uncertainty around the housing market has you considering renting instead of selling, take this opportunity to explore the benefits of renting to a housing voucher holder and helping a family or Veteran in need.
If you’d like to learn more about the payment standard increase or would like assistance determining the range a housing voucher holder could qualify for when renting your next unit, we invite you to schedule a complimentary consultation with WelcomeHomeOC℠ via:
Email: WelcomeHomeOC@UnitedWayOC.org
Phone: 949.263.6114
Schedule an appointment online.
