Bill Proposes Minimum Rents for Public Housing, Voucher, Project-based Section 8 Residents

On Sept. 18, Rep. Randy Neugebauer, R-Texas, introduced H.R. 5632 “to reform and update the flat rent structure for public housing.” The bill was referred to the House Committee on Financial Services. Neugebauer is the Chair of the Subcommittee on Housing and Insurance of the House Financial Services Committee.

The bill would require all public housing agencies to have minimum rents of no less than $50 per month for public housing residents and voucher holders, and require the HUD secretary to set minimum rents for project-based Section 8 households at no less than $50. Under current law, PHAs can choose to set monthly minimum rents of up to $50 per month for public housing and voucher households. According to a HUD study, 73 percent of PHAs have $50 minimum rents, 11 percent have no minimum rent, and the remainder have minimum rents between $0 and $50 per month.

In the project-based Section 8 program, the HUD secretary has the discretion to set monthly minimum rents of up to $50 per month. However, HUD has long set minimum project-based Section 8 rents at $25 a month.

H.R. 5632 would also allow HUD, at the request of a PHA, to decrease flat rents. The U.S. Housing Act requires public housing residents to choose annually between paying an “income-based rent” or a “flat rent,” one not based on household income. The purpose of the flat rent option is to discourage higher-income tenants from moving out of public housing as their income increases. Congress changed the flat rent option standard to be at least 80 percent of the Fair Market Rent (FMR) in the FY 2014 HUD appropriations bill, and HUD directed PHAs to implement the change this summer.