Did you know that the Housing Authority of the City of Austin (HACA) provides housing for more than 19,000 Austinites? HACA's mission is to provide affordable housing to families and individuals in need. The U.S. Department of Housing and Urban Development (HUD) also plays a role.
Public housing is not the only option for these families and individuals. Instead, many rely on tax credits and housing vouchers to pay their property's rent.
Read on to learn how Section 8 rules decide if a property's rent is reasonable. Explore topics such as what is Section 8 and fair rent determination.
What Is Section 8?
Section 8 dates all the way back to the Housing Act of 1937. The United States was in the midst of the Great Depression, and citizens needed help paying rent. Section 8 authorized a rental assistance program for low-income and vulnerable Americans.
Over the years, Section 8 has been amended and modernized. It is now commonly referred to as a housing voucher choice program.
Local government housing agencies are responsible for administering the program. In Austin, HACA is the administering agency.
Eligibility is based on median income levels and family size. HUD publishes median income levels for Austin and other locations across the country. HACA then verifies that an applicant does not earn more than 30% of Austin's median income.
What Is Fair Rent Determination?
HUD sets maximum rent limits based on two primary criteria. The first is a rent assessment of comparable housing in Austin, TX.
The applicant's income is the second criterion considered by HACA. Here, rent cannot exceed 30% of a household's adjusted income.
What Are Rent Factors to Consider?
There are many factors that play into a fair-market rental valuation. For example, the number of bedrooms impacts the formula. The more bedrooms in a property, the more a landlord is likely to receive in rent.
Square footage is another important fair-market rental factor. In the real estate industry, metrics like price per square foot are essential for comparative analysis.
It is no different for a housing voucher choice program. Housing officials use square footage to ensure they are making an apples-to-apples comparison.
Property conditions are also going to impact a rent assessment. If a property is in poor condition, the rent is going to come down. On the flip side, property upgrades tend to increase fair market rent.
Amenities are also considered in a property evaluation. For example, a washer and dryer in the unit are going to increase the rent assessment. Tenants will pay more to do their laundry at home rather than walking or driving to a local laundromat.
This is where a property management company can help.
Your Guide to the Government's Reasonable Rent Requirements
These are just a few factors that may increase or decrease a property's fair market rent. Many landlords turn to a property management company to understand these concepts better.
The property management company will process government payment vouchers for you. They understand the housing voucher choice program and how to navigate it.
If you need help with Section 8 housing, contact us at Austin Property Management to speak with an experienced professional.