On June 19, 2022, John Oliver presented an investigative show on RENT in America, but unlike most of his shows, the RENT piece didn’t go nearly far enough. Last Week Tonight RENT can be viewed on HBO MAX (with subscription) or on YouTube.
Noticeably absent from the exposé on affordable rent was the role of HUD on determining Fair Market Rents (FMR) nationwide. One point made was about a woman who waited 29 years for a Section 8 voucher. (I’m 12 years on my way waiting to even apply for the Section 8 voucher waitlist.) Others on the show who had received vouchers in a more timely manner couldn’t find a landlord that would accept them.
The purpose of this diary is to share with you my experience with low-income housing programs and to introduce you to the systems and tools and to determine, analyze, and predict Fair Market Rents (FMR) in your area. I think it is important to expand on this topic to inform citizens who think they are subsidizing rents through taxes appropriated to HUD. We are actually paying off greedy landlords with very little of our tax dollars going to subsidize the newly poor who must pay inflated rent without assistance. Even if you are not a renter, you may want to pay attention to this because FMR increases drive up other housing values — mortgages. Landlords aren’t the only culprits manipulating FMR increases. Maximum rates for affordable rents are set each April by HUD and are supposedly based on the Family Median Incomes (FMI) of a state or area. These programs are administered by HUD through federal, state, and local agency offices when they are available.
HUD has been chronically underfunded for years. For more information on that, see:
The U.S. ignored public housing. This is what happened.
The Trump Administration's Impact on Public and Assisted Housing
HUD BUDGET CONTAINS MAJOR FUNDING SHORTFALLS
Two government rental assistance programs
There are two main government programs that assist poor people with rent. One is Section 8 vouchers and the other is “affordable housing.” HUD plays a role in both. Low income renters may apply to and benefit from one or both programs simultaneously. Renters are more likely to find an affordable unit than a voucher.
Section 8 Vouchers
- The housing choice voucher program is the federal government's major program for assisting very low-income families, the elderly, and the disabled.
- A participant may choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects.
- Housing choice vouchers are administered locally by the public housing agency (PHA). Vouchers generally cover the difference between 30% of the participant’s monthly income and the total monthly rent. For example, a renter making $1,200 a month would be expected to pay $360 (30%) a month for rent. If the family’s rental cost is $1,000 a month, the family (or PHA) would receive a voucher for $1,000 — $360 or $640.
- In general, the family's income may not exceed 50% of the median income for the county or metropolitan area in which the family chooses to live. Family income must be certified and re-certified annually.
- A housing subsidy is paid to the landlord directly by the PHA on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program.
In the 12 years I have been seeking Section 8 assistance, I have not been able to even fill out an application for the program. In Portland, no waitlist exists at HUD.
“Affordable housing” takes on a different definition depending on who you are talking to. The program parameters differ from state to state.
- Generally, landlords contract with federal, state, and/or local agencies to offer housing at a reduced rent over a period of time in exchange for tax credit. The amount of the rent charged can vary from 30% to 80% of Fair Market Rent.
- A qualifying family must meet the Family Median Income limits to qualify for an “affordable” unit.
- Families must find a place to live themselves. Affordable housing projects can often be found on state and city housing authority websites. For example, Oregon Housing and Community Services and Portland Housing Bureau in the state of Oregon.
- Family income must be certified to qualify and re-certified annually.
- Families must move when their income exceeds FMI. (In theory.)
For Portland, the HUD/Portland Housing Bureau requirement to be considered low income in 2022 for a one-person family is $59,650 , and very low income is $$37,300. A family of four must make no more than $85,200 to be considered low income and $53,250 to be considered very low income. The average Social Security retirement benefit in January 2022 was about $19,370 per year. The average disabled worker received slightly less than that. Many, like myself, receive much less. It should be evident that tying Family Median Income of an area to Fair Market Rent has a devastating effect on seniors and the disabled.
A fairer, more compassionate way to calculate rent must be implemented.
We used to have one. What happened to it?
I became suspicious that the HUD numbers perhaps were being manipulated when my rent — which had been stable and sustainable for many years — shot up over 15% in one year in 2019. My suspicions were well-founded since then HUD Secretary made it clear in 2018 that Ben Carson Thinks the Only Way to Help Poor People Is to Make Their Housing Unaffordable. He was quite vocal about it:
I found Trump’s HUD Secretary to be true to his word. He saw to it that poor people paid more rent.
FMRs during the Trump administration began to increase by leaps and bounds in Portland, Oregon — and nationwide.
My question is this: Why do rents continue to rise inexplicably to date — under Marcia Fudge and the Biden administration?
My concern is that the Carson/Trump algorithm still being used by HUD to determine Fair Market Rents is just downright wrong and purposely forcing poor people out of their homes. (Read on for evidence.)
I am asking Secretary Fudge and the Biden administration to call for a freeze on rent increases until we can figure out how and why a once stable and sustainable rent system has become so burdensome on renters.
From the HUD calculator website:
The Department of Housing and Urban Development (HUD) sets income limits that determine eligibility for assisted housing programs including the Public Housing, Section 8 project-based, Section 8 Housing Choice Voucher, Section 202 housing for the elderly, and Section 811 housing for persons with disabilities programs. HUD develops income limits based on Median Family Income estimates and Fair Market Rent area definitions for each metropolitan area, parts of some metropolitan areas, and each non-metropolitan county.
A little about me
I’m a 72-year-old well-educated, retired white woman. I could not have imagined that I would be living at the poverty level during this time in my life. Some years ago, an innocuous classroom remark
and a lawsuit
presided over by a crooked judge
coupled with a chronic illness over time decimated my life savings. For the past 10 years I have lived on my social security pension. I was fortunate enough to find an “affordable” studio apartment in 2010 and was able to live independently, yet very frugally, for several years. I have lived in my current home for 12 years. For the first seven years, my rent was stable, much like a mortgage payment is stable — it didn’t change much year to year. In 2019 when my rent increased over 15% monthly, I used the HUD-user tools cited above to analyze why the rent for my Portland MP @50% studio apartment was so high. The worksheet below shows the numbers I came up with compared to the Portland Housing Bureau numbers. According to my calculations, the 2022 FMR will require over 80% of my income. I can’t afford that. I will lose my home and independence — no matter how frugal I plan to be. (See documents below. MP is my residence.)
I do the math.
Data included in the analysis below was mined from the HUD and PHB websites. Why did Family Median Income continue to rise rapidly during the pandemic? I have questions
* A moratorium on rent was in effect during 2020 due to the Covid-19 pandemic.
** Rent for 2021 is based on the 2020 figure provided by HUD.
*** Rent calculated for 2022 leaps over the 2021 figure to give landlords a two year boost in rent based on HUD data.
From 2002 to 2012, affordable FMR range calculated by HUD increased $173 or 26%
From 2012 to 2022, affordable FMR range calculated by HUD increased $751 or 53%. WTF?
From 2010 to 2016, affordable rent at MP increased $8 or 1.3%.
From 2017 to 2022, affordable rent at MP increased $277 or 36%.
In 2019, the state of Oregon had just enacted Senate Bill 608 to “protect” renters from no-cause evictions and unreasonable rent rate hikes. The bill offers a sweet deal for landlords, but no protection for the poorest renters living in affordable housing.
From Willamette Week:
The new law capped rent increases for apartments and homes at about 10 percent a year. Yet Mayer's landlord is not violating that law. That's because the new state law applies only to market-rate, i.e., unsubsidized housing. Subsidized housing for low- and fixed-income Oregonians (there are more than 8,000 such units in Portland alone) are not covered by the rental cap created by Senate Bill 608.
Mayer is caught in a bind. Rent increases on her subsidized apartment are pegged by federal rules to the median family income for the local area. That means Mayer's rent rises as the average Portlander's income goes up. So when the economy booms, her landlord can hike her rent—even though her income is fixed.
The Legislature could have included subsidized housing in its cap on rent increases, but House Speaker Tina Kotek (D-Portland) decided against it. "It was our understanding that these programs already have regulatory oversight and tenants would not experience rent gouging," says Kotek.
Former House Speaker, Tina Kotek, who is now the Democratic candidate for Oregon Governor, did not foresee the need to protect tenants living in affordable housing as those rents had been stable for decades. When I quizzed legislators about whether low-income residents needed to be concerned about SB 608, I was reassured that affordable housing would not be affected. At that time my concern was that landlords would be able to raise affordable rates by around 10% as prescribed by the new law. An estimated 8-10% increase annually in rent may not sound like much, but for a low-income renter it can be devastating. It can be difference between having a home and becoming homeless. It did not occur to me that without protection provide by that law, landlords could raise my rent by much more than 10% — to whatever rate was set by HUD at the federal level and also locally by PHB. I can’t fault Kotek for not having a crystal ball to see the future. After all, affordable rents had been stable for decades. Who could have guessed that HUD rates under Ben Carson would increase by double digits in coming years, causing affordable housing rates to skyrocket? But now that politicians can see the effects of cruel policy aimed at harming the poor, the elderly, the disabled, and veterans, it’s time to fix the problem! As of this date, I have not been able to reach Kotek for a conversation or comment.
My research revealed that our local PHA, Portland Housing Bureau (PHB), — always unavailable for comment — is actually doubling down on HUD numbers and charging Portlanders much more for affordable units than FMRs calculated by HUD. I have been trying to get the ‘powers that be’ to pay attention to this issue for years — HUD, PHB, city council, county commissioners, state legislators, the mayor’s office, state legislators, and the media — to no avail. Two years of Covid-19 isolation has given officials an excuse to not engage, even by phone.
One notable exception has been Senator Jeff Merkley’s office. His staff reached out to help me. They led me to resources including Northwest Pilot Project that have been instrumental in locating an open waitlist for a more affordable place. So, there is a glimmer of hope for me — fingers-crossed. Waiting is hard.
Although I am ever grateful for Senator Merkley’s attention to my personal situation, I don’t know if he is working on a policy solution to help everyone. Again, fingers-crossed.
In 2019, Willamette Week, a local free weekly, offered to print the story. Instead of questioning the system, the story turned into a diatribe about my personal unfortunate situation. (I was miffed. I had made it very clear to the WW reporter that the story was to be about policy, not about me.) There are several inaccuracies in the story, not the least of which is that mine is an extreme case. Another is that I am doubly unlucky. Luck has nothing to do with it. Greed and heartless policy are at the root of our housing woes. There is a bit of useful information here though. Read with a raised eyebrow:
From the Willamette Week article: Oregon’s Landmark Tenant Safeguards Haven’t Protected Deb Mayer
Tom Cusack, a retired federal housing official who writes the Oregon Housing Blog, says renters like Mayer are doubly unlucky.
"There are two different sets of programs; there are programs that are deep subsidy programs, in which rent is a function of actual tenant income; your rent won't go up if income doesn't come up," says Cusack. "Those are the gold-standard programs for low-income people."
But Mayer couldn't find a way into such programs, which have long waitlists, so her rent is tied to other Portlanders' income. "And as such, there are not the same protections in place," Cusack says. "If median income increases in an area, that could increase the maximum rent."
Uncapped rent on units that are supposed to be affordable creates a painful irony.
"We've set up a housing policy that decimates people living in the central city," says Ruth Ann Barrett, 73, a former marketing professional, who lives in an Old Town affordable housing building that's also seen a rent increase this year. "It's a form of gentrification, in the end."
Funding HUD — where does all the money go?
The HUD offices in Portland are housed in the spectacular recently reconstructed Edith and Wendell Wyatt Federal Building. This vacuous LEED Platinum building is a gorgeous modern marvel, a tribute to the city. There seems to be plenty of funding to house HUD, just not people. The buildings surrounding it are boarded-up and graffiti-ridden at ground level as are many buildings in downtown Portland after the protests.
As far as I can tell, since its completion in 2013, the HUD office has not accepted applications for Section 8 vouchers. This is the message you get when you try to apply online for a Section 8 Voucher in Portland, Oregon.
The requested page "/offices/pih/pha/contacts/states/or.cfm" could not be found.
When I visited the HUD office in person in 2019, I was told that all programs in Portland were closed, and none would open for six years. Six years! How can they predict that? Officials there suggested I move to another county in Oregon and get on an open waitlist there. That’s crazy! I was told that all funding coming into the Portland office goes to pay the rent increases of those already receiving assistance. In other words, all new funding goes straight to landlords who raise rents. Clicking on this Home Forward (Portland’s local housing authority program) link Mainstream Application For Section 8 Housing Choice Voucher Waiting List takes you to this application.
Note that it is an outdated application for only a waitlist. Like HUD, Home Forward is not accepting applications for two to five yers. There is no waitlist.
How are HUD participants in the two programs affected by FMR increases?
Renters in the Section 8 program experience no change in the amount of rent they pay unless their income increased during the year. Since the amount of rent they pay is fixed at 30% of their income. They are not affected by a rise in Family Median Income. The FMR increase is paid by taxpayers through funding appropriated to HUD. The problem is that only enough money to fund increases is allocated. Lack of funding prevents HUD from enlisting new applicants. HUD spends new funding to pay the increases in rent of those already enrolled. For years HUD has shut down enrollment and not accepted new applicants — at least in Portland. Lack of funding availability has led to the greatest number of homeless residents in history.
Renters in affordable housing units pay the entire increase themselves. They sign a lease with their landlord each year agreeing to pay the increased amount. Affordable renters really have no choice but to sign and pay the higher rent since finding another affordable rental is nearly impossible. Most waitlists are years long or closed.
The beauty of the HUD FMI/FMR ‘affordable’ system for landlords is that it creates an absolutely fluid, smooth, sleek, hassle-free mechanism for poor people to pay increasingly higher rents to their wealthy landlords — straight from our poor bank accounts to their rich ones.
The money goes straight from the poor renter’s bank account into the wealthy landlord’s. The government does not benefit from this situation. The increase is not a tax. Landlords can count on the yearly increase as is evidenced by increases since 2019. One exception is 2020 when a moratorium was called on rent increases because of the Covid-19 pandemic. That moratorium did not prevent the increase in FMR though.
The landlord increases are a triple threat to the taxpayer in these ways. Firstly, the taxpayer has already subsidized the landlord’s property with tax credits. Secondly, The landlord gets a nice return on investment yearly — unlike the home mortgage owner who only recognizes a return upon selling the property. Thirdly, the landlords cashes in when the property is sold, having been instrumental in raising property values that makes purchasing a home all the more unlikely for the renter or taxpayer supporting the system.
Some renters are lucky enough to participate in both programs, the voucher and the affordable programs — having applied to live in an affordable building and also having won a Section 8 voucher years ago. This is the best outcome for all involved, the tenant, the landlord, and the taxpayer.
Why don’t low-income renters sue the landlords, PHB, HUD?
I have been asked many time why tenants don’t organize and sue landlords and policy makers? First of alll, we don’t have money for attorneys. Secondly, we have tried, but turns out that no one is breaking any laws. As long as landlords don’t raise rents above the federally and locally set caps, they are not breaking the law. I’ve been told that relief would would most likely come in the form of new legislation. That can take years, and we can’t wait for that! Our best course of action may be to appeal to the better angels of our government as ask them for relief.
The data below from HUD and PHB supports the above analysis:
My purpose in providing this data and analysis is to demonstrate that my situation is not an isolated incident. Anyone in affordable housing can use the HUD data to create a history, analyze their current situation, and through extrapolation, predict their future rent. Homelessness is predictable.
Will every poor person have had this same experience? That depends on the landlord. My building is owned by a multi-national corporation that always charges the maximum rent allowed by HUD/PHB. Other landlords may not be so greedy and cruel, but the point is that all landlords are legally allowed to increase rents annually as set by the government. Not only is this system cruel to the poor and biased to benefit the rich, but it is inflationary. Market forces are not at work here. This is not free enterprise. This is not how capitalism is supposed to work. The system is f*ed up. It is a major reason so many families have become homeless over the past five years.
So, how do we fix it?
- Freeze rent increases on all affordable units until the system has been examined and repaired — and rescind the huge 2022 FMR increase. STOP penalizing poor people.
- Find some really smart people who have a conscience and who can return us to the system that worked really well for most of us for a really long time. It will involve math, statistics, ethics and integrity, some critical and creative thinking, some moral and intestinal fortitude, and other stuff. It won’t be easy.
- Create a ‘universal,’ free application that allows renters to apply for as many affordable units as they choose without paying fees.
- Require that all landlords become PHAs. That act alone would make many, many homes available for renters.
- Build more truly affordable housing. Fund companies that build economical factory-made housing and can deliver.
- Pay reparations to all poor renters who have been overcharged for the past five years. Make landlords pay them back. It was easy enough to raise rents on the poor each year, It should be just as easy for the rich to pay them back.
- Fund HUD extravagantly, like the military, so everyone can have a home.
- Open the HUD waitlists for both vouchers and affordable housing. Waitlists should never close. Without disclosing personal information, make waitlists transparent. We have computers now that can track a lot of data. Keeping a waitlist should be a piece of cake.
- Stop illegal evictions! Also, stop funding a cottage industry of attorneys of dubious repute, who prey on those who have been evicted. Do provide equitable, timely, and free representation for evicted residents.
- Transition unqualified renters out of affordable units when they exceed income limits. PHB does not enforce re-certification rules. People making more than the income limits should move to make room for new, qualified low-income residents.
- Assure that people have a livable income so they can keep their houses once they get them.
I am pleading with President Joe Biden and HUD Secretary Marcia Fudge to call for an immediate moratorium on rent increases. If it was possible during the pandemic, it is possible now! Please use the power of the pen to save many more Americans from homelessness! This is doable.