City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01086 6/11/2024 Discussion Item 6.
Housing Choice Voucher (HCV) Program Update
File ID: 2024-01086
Location: Citywide
Recommendation: Receive and file.
Contact: MaryLiz Paulson, Director, Housing Choice Vouchers and SERA, (916) 449-6346, [email protected]; Sacramento Housing and Redevelopment Agency Presenter: MaryLiz Paulson, Director, Housing Choice Vouchers and SERA, (916) 449-6346, [email protected]; Sacramento Housing and Redevelopment Agency Attachments:
1-Description/Analysis
Description/Analysis
Issue Detail: The cost of rent in Sacramento County has increased dramatically in the past four years with the fair market rent (FMR) going from $1072 in 2020 to $1666 in 2024 -- a 55 percent increase. The Housing Choice Voucher (HCV) program uses FMRs in order to determine the rent subsidies that families receive. FMRs are regularly published by HUD and represent the cost to rent a moderately-priced dwelling unit in the local housing market.
Sacramento utilizes Small Area Fair Market Rents (SAFMRs) which account for differences in housing costs across zip codes and enables our HCV participants to find rental housing opportunities across the County. Today in Sacramento, a one-bedroom SAFMR in Sacramento ranges from $1,050 to $2,500 depending on the zip code and a two-bedroom ranges from $1,300 to $3,100.
Rents are increasing seemingly everywhere, and this nationwide trend is causing downstream impacts on Public Housing Authorities (PHAs) across the country. The funding PHAs receive to cover the rental subsidies are not increasing as much as the increased rent.
During this time, incomes have not kept pace with this 55 percent increase in rental costs - a phenomenon many Sacramento families are feeling the effects of, including those on our HCV program. Families on the HCV program pay 30 percent of their monthly adjusted gross income for
File ID: 2024-01086 6/11/2024 Discussion Item 6.
rent and utilities. This 30 percent of participant income has not increased, meaning the Housing Authority is covering a higher total cost for each voucher. Due to rising rent costs, the Housing Authority is paying more for the average voucher while still needing to operate within the budget allocated by the U.S. Department of Housing and Urban Development (HUD). This will require modifications to how the Housing Authority has been operating in the past four years.
Staff from HUD have been meeting monthly with staff since February and have directed the Housing Authority to begin efforts immediately to stay within the budget parameters allocated to Sacramento.
The Housing Authority is focused on optimizing our voucher utilization while remaining within HUD’s allocated budget.
The Housing Authority of Sacramento County will receive $185,103,221 in 2024 for rental assistance.
The Housing Authority is balancing leasing as many vouchers as possible while staying under the HUD allocation. Due to Federal budget delays, PHAs were informed of their annual budget in May of 2024.
Given the aforementioned rent increases, HUD has notified the Housing Authority that Sacramento Housing and Redevelopment Agency (SHRA) is projecting a funding shortfall in 2024. The amount of the shortfall depends on many variables outside of the Housing Authority’s control such as the current condition of the rental market. Certain programs administered by the Housing Authority are funded differently and thus are not impacted by the projected shortfall including VASH (Veterans Affairs Supportive Housing), FYI (Foster Youth Initiative), and Shelter Plus Care.
At the direction of HUD, the Housing Authority is now taking measures to stay within the funds available given the projected shortfall. One of these measures is updating the Housing Authority’s Voucher Extension Policy. Households receive an initial 120 days to find a unit once they are issued a voucher. They are also offered a final 60-day extension if needed. This provides voucher holders a total of 180 days (about 6 months) to find a unit once they are issued a voucher. While this same policy was in place prior to 2020, during the COVID-19 pandemic years from 2020 to 2024, the Housing Authority allowed for unlimited voucher extensions. As of March 2024, as families request an extension on their voucher, they are given a final extension of 60 days. By returning to the pre- pandemic policy, the Housing Authority is seeking to balance the increased demand for housing with the increasingly scarce rental assistance funds.
The Housing Authority is taking additional measures given the projected shortfall. The Housing Authority is not currently processing new applications and focusing on getting current voucher holders into units. Additionally, Project-Based Voucher (PBV) voucher holders who remain in their current affordable unit will continue receiving rental assistance. Families on this program can continue to move without continued rental assistance. Finally, the Housing Authority is not able to issue Requests for Proposals (RFPs) for PBV developments.
File ID: 2024-01086 6/11/2024 Discussion Item 6.
When implementing these new changes, the Housing Authority sent emails and letters to program participants regarding the new voucher extension policy. The Housing Authority also held webinars and forums with residents, service providers, and project-based developments to communicate the additional changes. The Housing Authority has provided additional information on its website for participants about how to find a unit to lease, including educational videos.
The Housing Authority is focused on ensuring that the maximum amount of funding available is utilized to serve the maximum number of households needing assistance. As rental costs have risen, the Housing Authority is experiencing similar constraints and dynamics that families across Sacramento, California, and the U.S. have experienced. The Housing Authority is focused on keeping families housed, following HUD’s direction regarding budget shortfall, and will continue to monitor and make adjustments as necessary.
Policy Considerations: Not applicable.
Economic Impacts: None.
Environmental Considerations: California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA): There is no action being taken, therefore this is not a project pursuant to CEQA Guidelines Section 15378 and is an administrative action under NEPA and is therefore exempt pursuant to 24 Code of Federal Regulations 58.34(a)(3).
Sustainability: Not applicable.
Commission/Committee Action: This topic was presented to the Sacramento Housing and Redevelopment Commission on May 1, 2024.
Rationale for Recommendation: Not applicable.
Financial Considerations: Not applicable.
Local Business Enterprise (LBE): Not applicable.