Title
Resolution to Approve the FY26 Utility Allowances for the Housing Voucher Programs
Memorandum
The Ann Arbor Housing Commission’s Housing Choice Voucher program includes both tenant-based and project-based vouchers. In both cases participating tenants receive a rent subsidy based on the unit’s rent and utilities. The rent and utilities for the unit must not exceed the AAHC’s payment and subsidy standards. If the rent does not include the utilities, the AAHC calculates the estimated cost of utilities for that unit based on the number of rooms, utility types, and appliances used. Once the unit is approved, the AAHC calculates the portion of the rent and utilities that the tenant pays (30% of adjusted income), and the balance is paid by the voucher.
The Ann Arbor Housing Commission (AAHC) must review utility costs in the community annually. The AAHC hired a consultant, Zappling, to conduct the analysis and provide a recommendation for the utility allowance based on utility rate charges from the previous year.
HUD regulations require PHAs to adjust allowances where any of the rates have changed 10% or more since the last time the utility schedule was revised but provide PHAs the discretion to adjust allowances to align them with any rate changes at any time. Below is a chart showing the changes from FY25 to FY26.
|
Voucher Program Utility Comparison FY25 & FY26 |
|
Utility |
$ per |
2025 |
2026 |
Change |
Percent |
|
Bottled Gas |
gallon |
2.239 |
2.233 |
-0.006 |
0% |
|
Electricity |
kWh |
0.187 |
0.762 |
+0.575 |
+307% |
|
Fuel Oil |
gallon |
3.526 |
3.187 |
-0.339 |
-10% |
|
Natural Gas |
CCF |
1.01 |
0.3728 |
-0.6372 |
-63% |
|
Water |
CCF |
3.007 |
2.55 |
-0.457 |
-15% |
|
Sewer |
CCF |
6.531 |
6.52 |
-0.011 |
0% |
Electric, Fuel Oil, Natural Gas, and Water rates have changed 10% or more and the utility allowance must be adjusted, as required by HUD. The new rates will take effect July 1, 2025.
Staff
Prepared by Weneshia Brand, Deputy Director
Approved by Jennifer Hall, Executive Director
Body
WHEREAS, HUD’s Section Eight Management Assessment Program (SEMAP) requires annual review of utility costs (rates) to ensure that utility allowances given to Housing Choice Voucher Program participants are accurately stated to ensure unit affordability; and
WHEREAS, the Ann Arbor Housing Commission last analyzed its utility allowances in 2024, with revisions effective August 1, 2024; and
WHEREAS, HUD regulations require PHAs to adjust allowances where any of the rates have changed 10% or more since the last time the utility schedule was revised, but provide PHAs the discretion to adjust allowances to align them with any rate changes at any time; and
WHEREAS, the AAHC used a contractor, Zappling, to complete this year’s review of utility rates between March 2024 to February 2025 to determine if the utility allowance needs to be adjusted; and
WHEREAS, the AAHC, is required to adjust the Electric, Fuel Oil, Natural Gas, and Water utility allowance because the rates did increase by more than 10%, but AAHC staff incurs no significant additional administrative burden to adjust for all utility rates and adjusting the rates for FY25 minimizes the impact of adjusting the FY26 rates for 2 years; and
WHEREAS, the attached utility allowance schedule proposed by Zappling for FY26 is fully compliant with HUD regulations and the Commission’s Administration Plan Utility Allowance Revision policy; and
NOW, THEREFORE BE IT RESOLVED that the Board of the Ann Arbor Housing Commission accept and approve the complete utility allowance schedule as provided by Zappling and attached hereto, which will be effective July 1, 2025.