HUD Releases Updated Guidance on Flat Rents

On November 15, HUD’s Office of Public and Indian Housing (PIH) released Notice PIH-2017-23 (HA), entitled “Updates to Flat Rent Requirements.” This Notice supersedes and replaces the guidance provided in Notice PIH 2015-13 and clarifies HUD’s interpretation of the statutory amendment related to flat rents.This notice also serves as supplemental guidance to the interim rule published on September 8, 2015 with an effective date of October 8, 2015.

The FY 2014 Appropriations Act requires PHAs to establish flat rents at no less than 80 percent of the applicable Fair Market Rent (FMR). However, if a new flat rent amount for a unit increased a family’s existing rental payment by more than 35 percent, then the new flat rent amount was required to be phased in as necessary to ensure that the family’s existing rental payment did not increase by more than 35 percent annually.

The FY 2015 Appropriations Act further amended the public housing rent requirements for flat rents. Specifically, the statute was amended to require that flat rents must be set at no less than the lower of 80 percent of the fair market rent or at the discretion of the Secretary if the Secretary determines a different amount more accurately reflects local market conditions. This can be done by a PHA applying for an exception waiver.  

Notice PIH-2017-23 provides guidance and clarification on using smaller geographic area FMRs to determine flat rents, applying for exception flat rents, incorporating utility expenses into flat rents, complying with flat rent policies on an annual basis, and conducting annual rent options.