Public housing tenants brace for rent increase under federal changes
Marilyn Sullivan figured she would never move again when she arrived at Frank Mazza Pavilion in Brookline, where the retired nurse was among the first tenants in the renovated public housing complex in December 2011.
Sullivan, 60, paid about $423 a month for her one-bedroom apartment without having an increase. Her neighbors Karen and Carl Neely had paid the same flat price since they signed up about five years earlier with the Housing Authority of the City of Pittsburgh.
Now Sullivan and the Neelys are girding for a 20 percent increase — about $84 more a month — that they say caught them by surprise this spring. Similar rate hikes this year will hit about 300 families who live in city public housing, though the authority said most increases will be less than 35 percent as the federal government toughens rules for flat-rate assisted rent.
The Pittsburgh authority hosts about 4,300 families overall.
“I'm actually quite devastated,” said Sullivan, a breast cancer survivor who is considering whether she can find a cheaper place to help balance her expenses. “This is just downright getting away with murder.”
Housing authority officials said they have no choice but to increase rates for some lower-income families under the federal budget law for 2014. It requires that public housing tenants who pay flat rates cover at least 80 percent of their units' fair-market value by June, housing officials said.
The federal Department of Housing and Urban Development estimated the change will save about $40 million a year nationwide, said Sharon Wilson Geno, a Washington-based lawyer who represents housing authorities.
Geno said HUD proposed and Congress approved the rent requirement in an effort to stretch the department's budget.
A HUD spokesman said he could not estimate how many families might see their rent increase. A provision in the legislation prevents any household from paying an increase of more than 35 percent in a single year.
About 8 percent of public housing tenants pay flat-rate rents, which housing experts said can vary enormously from city to city. The prices set by each local housing authority are an alternative to traditional pricing, which calls for tenants to pay 30 percent of their income toward rent and utilities.
Lawmakers in 1998 feared that approach discouraged tenants from growing their income and working their way up, so Congress introduced flat rates as an option. Now tenants in public housing can pay 30 percent of their income or a flat rate — whichever is cheaper for them.
Housing officials said those trying to skirt increases in flat rates can request to pay the 30 percent of their income instead.
“No one is going to pay more than 30 percent of their income unless they choose to,” said David Weber, government relations and special services officer for the Pittsburgh housing authority. He was unsure of the average increase in the flat rate among local affected families.
The Allegheny County Housing Authority, which manages more than 3,300 dwelling units, reviews its flat rates every few years and charges at least 80 percent of fair-market prices, said Executive Director Frank Aggazio. He said the county agency is in compliance with the new federal standard.
Still, the more uniform pricing could uproot some tenants of agencies that have kept flat rates lower, said Kathi Whalen, a policy analyst at the Public Housing Authorities Directors Association in Washington. She said agencies across the country are worried they will lose senior citizens and working families over higher rates.
“The family that would replace them would be much lower-income, which would require a higher subsidy. Housing authorities aren't getting paid adequately right now,” Whalen said.
The policy could help make money available to help more people in need, said Will Fischer, a senior policy analyst at the Center on Budget and Policy Priorities in Washington.
In the meantime, Carl Neely, 70, said the $84 monthly increase in his rent will force him and his wife, Karen, 63, to cut back elsewhere. He said they have just several hundred dollars left each month after making rent and car payments.
“I can see the rent going up,” he said. “But I can't see the rent going up $84.”
Adam Smeltz is a staff writer for Trib Total Media. He can be reached at 412-380-5676 or email@example.com.