Title
Resolution to Approve the FY23 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 receives 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 the utility costs in the community annually. The AAHC hired a consultant, HAPPY Software, to conduct the analysis and provide a recommendation for the utility allowance based on utility rate changes 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 FY22 to FY23.
The utility increases below are extremely high and will have a significant impact on tenants and landlords participating in the program. A tenant's voucher amount is based on the combined rent and utilities. Landlords can choose which utilities to include in the rent. If gas and electric are included and increase significantly, landlords will likely increase the rent to cover those costs. This may cause even more housing in the community to exceed the amount our voucher tenants can afford. If gas and electric are not included in the rent, the AAHC must calculate a utility allowance, which reduces the amount of subsidy available for ren...
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