Rent reasonableness

Per Section 582.305 (b) of the Shelter Plus Care regulations: Rent reasonableness. HUD will only provide assistance for a unit for which the rent is reasonable. For TRA, PRA, and SRA, it is the responsibility of the recipient to determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit, as well as not in excess of rents currently being charged by the same owner for comparable unassisted units.

Taking these steps provides compliance with this regulation:

1. Upon locating a unit for a client, go to this website, select ‘Census 2000’ from the dropdown list of year and program options (default), enter the full address, and click ‘go’. Near the top of the information listed, you should see ‘Census Tract’ followed by a number.

2. Find the census tract number* that was provided online in one of the market columns on this chart. ** Once you find which local market your unit falls under, look at the corresponding bedroom number to find the appropriate rent for a unit in that market.

3. If contract rent is over the local market or the FMR, you must explain why the higher rent is a justifiable exception. Here is an example of a form you may use, or you may incorporate the elements of this form into your own format appropriate for the population you serve.

4. Finally, you should include in the client’s file a copy of the market chart with the market rent highlighted/circled, and an attached explanation for an exception if applicable. This way, when audited you have tangible evidence that you have taken steps to ensure rent reasonableness, as well as to stay within market and FMR guidelines except when truly necessary to exceed them.

Notes:

* It is possible that your census tract number is not on the chart. In this case, use this map, locate the census tract you tried to find on the chart, find the closest tract to it, and look for that number on the chart.

** This chart is based on CMHA comprehensive market analysis.