Rent Increase Policy Overview by Housing Stability Council
The Rent Increase Policy established by the Housing Stability Council aims to balance financial sustainability with resident stability in affordable housing. The policy allows for rent increases up to 5%, with reviews required for higher increases. Stakeholder feedback, unique market conditions, and stakeholder surveys play key roles in shaping the policy. The goal is to ensure that rent increases are compliant, modest, and sustainable to support operational needs while prioritizing housing stability for tenants.
- Rent Increase Policy
- Housing Stability Council
- Affordable Housing
- Stakeholder Feedback
- Market Conditions
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Presentation Transcript
Rent Increase Policy Housing Stability Council December 2019 1 1
Presentation Overview Current Policy Overview / Background Market Conditions Stakeholder Feedback Proposed Changes Next Steps 2 2
Rent Increase Policy Established in April 2018 Rent Increases up to 5 percent reviewed by staff Rent Increases beyond 5 percent reviewed by staff and the OHCS Finance Committee The criteria adopted for consideration of approval in excess of 5 percent are as follows: Reasonableness to area rent comparables Reasonableness for resident population Comparison to the current maximum rent limits for the property Reasonableness of the vacancy rate history Comparison to pro forma rent projections 3 3
Policy Intent The rationale for establishing such a policy is to balance the financial sustainability of projects with the stability of residents in affordable housing. Unique Market Conditions; suppressed rent growth followed by recent increase creating substantial ability to increase rents 4 4
$1,099 HUD Rent 4 person 50% AMI, Oregon Counties 2010 - 2019 $1,100 $1,050 $1,018 $1,000 $956 $950 $934 $919 $916 $913 $900 $890 $900 $870 $868 $868 $868 $850 $830 $819 $814 $798 $790 $789 $800 $780 $810 $750 $746 $743 $740 $750 $730 $721 $715 $713 $706 $736 $731 $698 $721 $719 $700 $699 $695 $666 $688 $661 $684 $680 $670 $670 $650 $651 $649 $646 $639 $631 $600 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Deschutes County Jackson County Klamath County Marion County Multnomah County 5 5
Policy Intent The goal of this Rent Increase Policy is to ensure that increases to rents at the project level are: In compliance with applicable funding sources, regulatory documents and established affordability restrictions; Implemented modestly so as to prioritize housing stability for tenants; Necessary to sustain and support the operational needs of the building. 6 6
Stakeholder Survey 88 respondents finished the survey 37 Owners, 30 Property Managers, 19 Other, 2 Did not identify Highlights of responses: 7% agreed that the policy does not need to change 44% agreed that affordable housing should use the same standards for rent increases as the market 81% agreed that they only request rent increases needed to sustain their building 87% agreed that OHCS should have a streamlined approach to rent increases over 5 percent 90% agreed that OHCS should not need to approve rent increases at or below 5 percent 82% agreed that OHCS should not need to approve rent increases for new tenants 93% agreed that they should be able to appeal any decision 7 7
Recommended Policy Update Defining expectations: Lays out an updated time period for the evaluation to take place Establishes clear rights to appeal decisions Describes the core process and expectations for documentation Clarifies criteria: Solidifies that the financial sustainability of the project or portfolio operations will be the basis for any rent increase determination Addresses how specific scenarios, such as combined resources (e.g. units with HOME or Project-Based Funding) or unapproved rent increases will be addressed 8 8
Recommended Policy Update Streamlines processes: Establishes a low-barrier path to requesting up to 5 percent increase on existing tenants and up to Oregon SB 608 standards for any unit being leased to a new tenant Creates two different submittal forms with documentation needs up front for those requests within the new broader streamlined path, as well as for enhanced review 9 9
Housing Stability Council Feedback It is clear that increases to a household rent have direct implications for their household stability. At the same time, given that affordable housing rents are guided by federal restrictions, it is understandable that project owners would be resistant to additional oversight over their business operations. Is Housing Stability Council comfortable with OHCS continuing to apply this policy to our affordable housing portfolio? What, if any, concerns does Housing Stability Council have with the proposed rent increase options? What additional information would Housing Stability Council like to see prior to finalizing an update to this policy? 10 10
Next Steps Incorporating Housing Stability Council feedback Further discussion with stakeholders Bringing revised recommendation to Housing Stability Council for approval 11 11
