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Chapter VII: Rent Reasonableness/Surveys

Effective: September 2007

Note: “Surveys” (Elite language) are the same as Rent Comparables.

Introduction

Ensuring rent reasonableness is essential for effective program operations. If a Public Housing Agency (PHA) approves rents that are too high, government funds are wasted and limited housing subsidies are squandered. If rents are approved at levels lower than comparable units in the private market, the better owners do not participate in the program, or they participate only with their lowest-cost and lowest-quality units. In addition, participants may be inappropriately restricted in where they can live.

Rent reasonableness surveys must be completed when negotiating rent amounts. The Elite data system used by MSHDA is to catalog and provide individual unit data to support the rent requested for the subject unit. Rent surveys ensure the Gross Rent requested for the subject unit is reasonable and the rent requested for the unit does not exceed rents currently being charged for comparable unassisted units.

Submission of the case by the Housing Agent (HA) for approval is certification that the rent is: 1) reasonable in relation to the rents currently being charged for comparable units on the private unassisted market, and 2) not in excess of rents currently being charged by the owner for comparable unassisted units.

Section A: Required Initial Verifications

Surveys are required in the following circumstances:

  1. All re-examinations with contract rent changes, utility allowance changes, and FMR decreases.
  2. All New Contracts (i.e. Initial, Move)
  3. Re-examinations where the Gross Rent is increased or decreased. NOTE: New surveys are not required if Gross Rent remains the same unless the FMR decreases (discussed below); however, three surveys must be present in Elite for the subject unit.
  4. Gross Rent increase occurring at a time other than re-examination.
  5. Counties where there has been a 5% decrease in the FMR 60 days prior to the anniversary date. [Note: The decrease refers to the FMR – not the Payment Standard (PS). A memo will be issued to affected counties if/when a FMR decrease occurs.]