Intervention(s)
Tiered Rent: Under HUD’s tiered rent model, households are grouped by income into tiers. Within each tier, families’ total tenant payments (TTPs) for rent and utilities are fixed, and income increases within a tier do not affect the household’s TTP. HUD has established tiers in $2,500 increments. Households with income between $0 and $2,499 are in the initial tier and pay a minimum $50 in rent. The number of tiers may vary by PHA, with the maximum tier going up to the PHA’s area median income. Households are assigned to a tier based on their gross income in the prior year (referred to as “retrospective income”). The model also substitutes triennial recertifications for the traditional annual income reviews. Thus, once assigned to a tier, households do not need to report income increases to the housing agency, and their TTP remains unchanged until their next triennial recertification, when they would be placed in an income-appropriate tier based on their new retrospective income at that time. See attached analysis plan for more detail.
Stepped Rent: Under this model, TTPs are increased annually by a fixed amount that is equal to two percent to four percent of Fair Market Rent (FMR) for the household’s bedroom size. PHAs choose the size of the rent increase, within the two percent to four percent range, and can modify it each year or keep it fixed for the period of the demonstration. After the household’s initial rent is established, each household’s income has no effect on their rent. (An exception is if the household experiences an income loss – or fails to increase their income to keep up with the rent increases – that leads to severe rent burden, in which case they can request a hardship exemption to temporarily lower its TTP.) Households’ TTP automatically increases by the fixed rent increase on an annual basis. Their rent increases by that fixed amount each year until their HAP reaches $0 in the HCV program or the household’s tenant rent reaches the flat rent in public housing. Because the stepped rent model culminates in zero subsidy after the final step, it represents a time-limited subsidy policy. How long it takes for a family to reach the final step depends on its initial step and any hardship remedy it receives. Triennial income reexaminations will be used only to verify continued eligibility for a HUD subsidy, but not to calculate households’ TTPs. If a household’s income at reexamination is high enough to affordably rent a unit at the FMR (based on HUD’s current income eligibility criteria), they will no longer be eligible for assistance. See attached analysis plan for more detail.