Is the HUD Fair Market Rent guideline a Villain?
The rising cost of Rents in every Market in the United states continue to increase for every economic group. What is the cause and effect of these increase when by Federal government agency HUD reports that a single person to a family of 6 more are finding themselves paying 50 percent of their income toward housing needs. HUD issues what is called a Fair Market Rent guideline annually for national, regional, and local areas based economic data for each area on what an efficiency to a one bedroom to four bedroom and more should cost. This data is used to determine the cost of rent limits for HUD housing programs like Section 8 subsidies and subsidized housing projects. As a single person on SSI and receiving Section 8 for the last 28 years, my small two bedroom by the Fair Market Rent (FMR) for 2023 in my area states my two-bedroom apartment is worth $1049.00 to my landlord. Recently that landlord increased my rent to $1,150 above that guideline and section 8 approved that increase resulting in a tenant payment share from $269.00 to $436.00 more per month or $5232.00 a year for me out of my annual SSI income of $11,1136 (Federal poverty level is at $12,800 for a single person), nearly half my income. When you have renter insurance cost, gleaning supplies cost and other non-covered utilities fees not included in the rent, that brings my housing cost to just under $6,000 a year. More than the 50% of my disability income. The FMR is also used by landlords with no HUD affiliation.
Recently I learned from a legal agency entity whom I was asking for legal advice on that increase, I was told the FMR guidelines is a Law not just a guideline for landlords or HUD but a legal mandated law of congress. Implying that a landlord is legally obligated to raise my rent to the FMR guidelines put out by HUD a federal agency annually. Therefore, I have no choice but to pay the rent increase (my tenant share section 8) or move and find something cheaper. If it is a law, then what landlord in my community is going to charge less for a two bedroom or a one bedroom which by the FMR says is $855.00 a month. Is the FMR figures the minimal a landlord must charge if a legal law, and they can charge more if they desire by law. Charging the minimum in most cases would still be near that 50% of your income when you factor in the other cost of housing such as renters insurances, household supplies, internet, phone, etc. And for non-snap households, more. Is the FMR a law mandating a landlord to charge a rent required by congress to charge or the HUD program?
Moving was not an option given I am 72, have health issues. No family support emotionally or financially in my state, to aid me with the expenses of moving and the physical moving factor. Nor is my credit rating high enough to show a new landlord I am a good credit risk. I literary have no rent payment history showing I have been renting for 30 years from the same landlord. He does not report to any credit bureaus nor does Section 8 (HUD) report my tenant share. I have in the recent past been denied entry into a senior complex because of that factor. I like many under these circumstances adjusted my budget down to the bare bones, disconnecting my phone services, 3 TV streaming services (was already under $40 a month total), reduced my household needs budget to barest level possible. Gave up the idea of paying for haircuts, any new clothes, T-shirts/boxers/sox. Etc., certainly reduced my transportation cost on the city bus for food shopping (don’t drive). These budget factors are no different from others facing the same issues to stay put in a home. In my case I saw myself living on the streets because of the credit factor as so many ends up faced to do these days. I made my sacrifices but the next time there will be no budget left to cut. As the rent cost crises increase, so does the rate of homelessness increase when you see a new dynamic of families homeless and individuals homeless from the traditional dynamics. In many situations homelessness leads to loss of work as an employer can’t count on an employee to show up to work. It is like a Morbius strip, always twisted with no end in sight. As for homelessness there are many factors as to why a person is homeless or a family is homeless. The high cost of rent is raising to the top of that list.
HUD puts out a Fair Market Rent guideline, if it is a law forcing and binding a landlord to charge rent equal to or greater than the guidelines states. I would question why congress would artificially create the problem of high rents and homelessness, by making the FMR a law, forcing the high rents taking up 50% or more of a person or family income. If it isn’t a law, only a guideline a tool for HUD to base budget increases, then those guidelines should clearly inform a landlord HUD has an invested interest in keeping their rent increase demands in check with a law forcing a landlord to justify rent increases based on factual expenses they claim the business of being a landlord is higher now and they must demand higher rents vs a landlord being greedy and taking advantage of the FMR and tenant for person gain like illegal price gouging. I reside in a wood frame house some 80+ years old in an older neighborhood. It has 3 units or apartments in it, two efficiencies and my small two bedroom. The landlord maintains the minimal in code requirements and puts very little back in capital improvements for obvious reasons which is he wishes to reduce his cost to ensure his profit margin as a landlord. The HUD FMR guidelines do not reflect the standards of an older building as compared to a new construction standard with the latest modern amenities, like flooring and fixtures. I have been in my two bedrooms since 2005 and I have an old iron claw tub that was put in most likely at the time the house was built. It is difficult for me to get in that tub. I have kitchen flooring that has to be at least 30 + years old stained and worn. The ceiling show years of wear and tear from leaking roofs and patch up jobs. The walls much the same layers of paint. The last time the kitchen cabinets where updated could be at least 30 years ago or less showing their age. As for other infrastructure of the building there are cast iron plumbing in the basement, and a few light fixture dating back 50 years. As long as the walls and ceilings are not falling down or the kitchen floor a hazard to where I can trip and fall, city codes play no part in updating the infrastructure. The Fair Market Rent guidelines, law or not, takes no consideration for the age of the dwelling, but clearly state those guidelines are generated based on new construction and new HUD projects. Therefore, the current rent increase I have is what a landlord could charge for a newly built complex with apartments with the latest modern conveniences and infrastructure, the same price I pay for my apartment in an 80-year-old house.
Is the HUD FMR the real villain behind the rent crisis when it encourages either by law or just guidelines give the right of the landlord to make a higher profit or fair profit on the strugglingly backs of individuals and families to meet the high cost of rent. Should HUD and congress change that attitude at the federal level to assure a landlord can still make a fair profit and a tenant can afford to rent under fair rent rates in relationship to their income earnings. Which would mean a fair living wage while having a fair rent rate that does not burden that fair living wage or in the case of social security benefits and disabled renters, they are not paying out 50% or more of their limited income to house themselves. The FMR isn’t a tool that solves problems it increases the problem when a landlord takes advantage of a tenant when he uses that FMR to do so, while in many cases earning an unfair profit margin off the backs of tenants. More tax breaks for landlords to make it possible for them to earn a fair profit in the business of being a landlord. More tax incentives for a landlord to update their aging dwellings to justify higher rent in comparison to new structures thus would it decrease their yearly maintenance cost, keeping those rent cost down. And more penalties for those landlords who put greed ahead of the welfare of tenants. Thus, could we see a decrease in homelessness when the margin between affordable rents, and a wage keeps an individual or family under a roof they can afford. As well as more tenant rights to give a tenant a right to challenge those rent increases asking a landlord to prove the validity of those increases by exposure of their business records in legal court procedures if needed. Better check and balances that prevent unfair rent increases, and an FMR that reflect those check and balances.
