HUD Sets Certain Operating Cost Adjustment Factors for 2019

Operating Cost Adjustment Factor (OCAF) rent increases are based on the OCAFs HUD releases annually in the Federal Register. Eligibility is determined by your HAP contract. If the Rent Adjustment section of your contract or plan of action refers to OCAF adjustments, you’re eligible to submit an OCAF request. Generally, sites that have renewed under the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA) are eligible to submit OCAF rent adjustment requests.

HUD recently published a notice that establishes OCAFs for project-based assistance contracts issued under Section 8 of the United States Housing Act of 1937 and renewed under MAHRA for eligible multifamily housing sites with an anniversary date on or after Feb. 11, 2019. The 2019 OCAFs can be found at www.federalregister.gov/documents/2018/11/23/2018-25440/notice-of-certain-operating-cost-adjustment-factors-for-2019.

OCAFs are calculated as the sum of weighted component cost changes for wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas, and water/sewer/trash using publicly available indices. The weights used in the OCAF calculations for each of the nine cost component groupings are set using current percentages attributable to each of the nine expense categories. Average expense proportions were calculated using three years of audited Annual Financial Statements from projects covered by OCAFs.