June 24, 2008

Subsidized vs. Market-Rate

How does DC Section 8 measure up?

In terms of Section 8 housing, understanding Fair Market Rent (FMR) and voucher amounts for the Housing Choice Voucher Program is essential. I'll try to summarize...

The Department of Housing and Urban Development (HUD) determines FMR through national surveys and census reports. FMR is a gross rent estimate that excludes below-market rent and uses the 40th percentile rent definition with adjustments for utility and shelter fees. The final step compares the adjusted rent to the state-minimum and takes the higher of the two. Rent vouchers are determined on an individual basis. A person or family will have to pay up to 30% of their household monthly income while the voucher will cover the remaining balance, as long as the rent for the housing is equal to or greater than the FMR in the area (and less than an established maximum).

To kick off our Affordable Housing segment, I have compiled a list of example FMR for 2008, current subsidized apartment rents, and current market-level rents for 2 bedroom apartments in DC. The list is not comprehensive of the entire DC Metro area, just a sample of current postings organized by Ward.

HUD FMR: 2 bedroom: $1324.00 up to $1456.00/mth.

Affordable Housing:
Ward 1: Columbia Heights (Housing Community): 1137/mth
Ward 5: Eckington: 1350/mth
Ward 6: Capitol Hill: 1400/mth
Ward 7: Kenilworth: 1329/mth
Deanwood: 1200/mth
Greenway: 1280/mth
Ward 8: Shipley Terrace: 1240/mth
Fairlawn: 1356/mth

Private Market Apartments:
Ward 1: Adams Morgan: 3850/mth
Columbia Heights/Shaw: 2200/mth
Ward 2: Dupont Circle: 3750/mth
Foggy Bottom: 3300/mth
Georgetown: 2500/mth
Ward 3: Cleveland Park : 4500/mth
Ward 4: 16th Street Heights NW: 2450/mth
Petworth: 1500/mth
Takoma: 1200/mth
Colonial Village: 1950/mth
Ward 5: Northeast: 1750/mth
Ivy City Northeast: 1050/mth
Ward 6: Capitol Hill: 2250/mth
Ward 7: Northeast: 1375/mth
Southeast: 1450/mth
Ward 8: Anacostia Southeast: 1450/mth

The difference between private or affordable rents and FMR is anywhere from $5 to $3,000. When rent exceeds FMR maximum, the tenant has to seek additional vouchers, or incur the cost, to pay the difference for apartments in more affluent wards. A tenant is also is obligated to have the property inspected and approved by HUD before the voucher can be used at the desired property. Voucher holders are forced to search for housing in certain neighborhoods. The neighborhoods with the most affordable housing options are in wards 7 & 8, thus, HUD’s Section 8 is just preserving, not improving, the historically poor areas of DC.

Low-income families, disabled, and elderly applicants have been told that vouchers make it easier for them to live in ‘better’ neighborhoods, but the procedure of applying, waiting for approval, and finding affordable apartments that meet HUD requirements is long and tiresome. In coming blog posts, experts on housing will discuss ways to improve the system so that Bread for the City clients and other DC residents may benefit from Section 8 and not be misled or worn-out from the process.

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