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How Section 8 Decides if Your Rent Is Reasonable

How Section 8 Decides if Your Rent Is Reasonable

According to the Boise/ADA County Homeless Coalition, approximately 30% of Boise residents are renters. For the median renter's wage of just under $15, affordable rent is about $776.

The National Low Income Housing Coalition recommends not paying over 30% of income for housing. The analysis shows about 43% of Boise renters exceed that amount.

Housing Choice Vouchers (Section 8) subsidize rent, making it affordable for families at 50% or less of the area's median income. The homeless coalition indicates needing to add 2,770 affordable rentals annually between now and 2030 to meet demands.

Ensuring that your property management team charges a reasonable rent and accepts Section 8 vouchers increases the number of potential renters. The key is calculating rental income that qualifies as reasonable.

Calculating Reasonable Rent

When pricing a rental property, you need a rate that attracts tenants and maximizes your income. Accomplishing this requires comparing other comparable properties and knowledge of market demand.

Section 8 vouchers pay approximately 70% of a tenant's rent and utilities. The tenant covers the remaining 30% using their income. Tenants wanting to pay higher rent can only spend up to 40% of their adjusted monthly gross income.

The Public Housing Agency (PHA) conducts a rent reasonableness analysis by comparing the unit to other comparable unassisted rentals. The top three factors determining reasonableness are:

  • Location of the unit
  • Size and number of bedrooms
  • Unit type: i.e., garden apartment, duplex, single-family home, high-rise

Consideration may also be given to:

  • Age of unit
  • Amenities
  • Condition
  • Housing services
  • Maintenance
  • Utilities included in the lease

When determining rent reasonableness, the PHA excludes comparisons with units occupied by voucher program participants, assisted under other local, state, or federal government programs, or subject to rent control or housing conversion actions.

The owner of the rental property must certify that the rent for Section 8 is no higher than the rent it charges for comparable, unassisted units on the premises. Upon request, the owner must complete a Request for Tenancy Approval Form HUD-52517 that requests information on comparable unassisted units.

Section 8 Rules for Landlords

Section 8 landlords must agree to rental property inspections to ensure compliance with HUD standards. If your rental property does not pass inspection, they will provide a specific time for you to make improvements.

When presented with a housing choice voucher, the landlord completes a request for tenancy approval. The PHA will conduct unit inspections and approve the rent amount.

After approval, the landlord and tenant sign a lease. The landlord also signs a Housing Assistance Payments Contract. This guarantees receipt of the subsidy rent payment.

You cannot raise your rent without prior notice to the PHA. They will verify if the increase is a fair market rent. Increases are permitted once a year.

You must treat all renters equally, whether or not they qualify for a rental subsidy. This includes the amount of rent per unit.

Managing Section 8 Housing

With the growing need for Section 8 housing in Boise, it is an excellent option for expanding rental income. It is essential to make informed decisions about where to invest, determining a reasonable rent that qualifies for Section 8 vouchers, and what utilities or amenities to include.

1st Rate Property Management handles marketing, tenant screening, building maintenance, and rent collection, making rental property ownership a breeze. Request a free property consultation today and enjoy rental ownership with property manager services tomorrow.

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