Small Area FMRs – What Will They Mean for Landlords?

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The Small Area Fair Market Rent (SAFMR) program may have many effects on the subsidized housing landlords.  One of the desired outcomes may be that lower income tenants will have the opportunity to move to housing in higher cost neighborhoods.  However, another effect may be that landlords in lower cost neighborhoods will see a loss of income and become reluctant to rent to Housing Choice Voucher tenants.

Each year, HUD calculates and publishes Fair Market Rents (FMRs).  The FMRs are the basis for determining payments made to landlords on behalf of lower income tenants for a variety of programs, primarily the Housing Choice Voucher.  FMRs are set for an area, most often a county or metropolitan area, and represent the amount that would have to be paid for housing (including rent plus utilities) for privately owned, decent and safe rental housing with suitable amenities within the area.  The FMR is set so that most housing within the area, excluding luxury units, would be affordable to a tenant holding a Housing Choice Voucher.

However, because counties can be very large and diverse, especially in densely developed metropolitan areas, there are some neighborhoods where the FMR is much too low to allow Voucher holding tenants to rent, and in other neighborhoods, the FMR is more than the surrounding submarket rents.  In order to try to adjust the FMR system to these market areas, HUD has developed the Small Area FMR (SAFMR), publishing applicable rents for the Housing Choice Voucher (HCA) and Moderate Rehabilitation Single Room Occupancy programs on October 5, 2012.  Read more

When Will Rent Payments Go Electronic? And Should They?

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There have been several op-eds and articles about a bill passed by the California State Legislature and signed by the Governor that prohibits landlords and property management firms from requiring tenants to pay their rent electronically (SB 1055, Lieu).  The bill was sponsored by the Coalition for Economic Survival and Western Center for Law and Poverty.

The bill originated with a notice from Jones and Jones Management Group, a family-owned property owner-management firm with three dozen properties in the Los Angeles area.  In September 2011, Jones and Jones informed their tenants that all future rent payments would have to be made by electronic funds transfer–that is, payments would have to be made “online.”

Some residents balked, either because they did not have accounts that would permit them to pay online, or they did not want to make their payments this way.    It was reported about one tenant that “the 87-year-old refused, saying that she had been a victim of identity theft and was advised by her bank not to pay rent this way.”

Jones and Jones refused to accept checks, and served tenants who would not pay electronically with eviction notices.

SB 1055, amends state law in two ways:  first, a landlord may not require tenants to pay rent or security deposits in cash, and second, if a landlord offers the option of payments online, they must also accept other forms of payment.  That is, the landlord may not limit payments to cash or electronic transfer, but must accept checks, money orders and other forms of payment.

Why does this matter?  Read more