Rent Reasonableness
The HUD requirement that gross rent for a voucher-assisted unit not exceed rents for comparable unassisted units in the same market. PHAs must document comparability before approving any unit. See 24 CFR § 982.507.
Also known as: comparable rent determination, HCV rent reasonableness
Definition
Rent reasonableness is a mandatory determination that PHAs must make before approving a Housing Choice Voucher (HCV) unit and annually thereafter, pursuant to 24 CFR § 982.507.
Regulatory Requirement
Per 24 CFR § 982.507(a): "The PHA must determine whether the rent to owner is a reasonable rent in comparison to rent for other comparable unassisted units." The determination applies to the gross rent (contract rent plus any utility allowance).
Comparability Factors
Under 24 CFR § 982.507(b), PHAs must consider:
- Location, quality, size, unit type, and age of the assisted unit
- Amenities, housing services, maintenance, and utilities provided by the owner
- Rents charged for comparable unassisted units in the same market
Documentation Requirements
PHAs must document the basis for rent reasonableness determinations. HUD's Office of Inspector General has repeatedly cited inadequate documentation as a finding in PHA audits. Acceptable documentation includes:
- PHA-maintained comparable rent databases
- Independent appraisals
- HUD's Rental Voucher Management System (RVMS) comparable units
- Published rent surveys
When Re-Determination Is Required
A new rent reasonableness determination is required when:
- The owner requests a rent increase
- HUD directs the PHA to re-examine rents in the market area
- The PHA receives information that market rents have changed significantly
Sources
- 24 CFR § 982.507, eCFR —
ecfr - HUD.gov: HCV Landlord Information —
hud-gov
Frequently asked questions
Regulatory Requirement
Per 24 CFR § 982.507(a): "The PHA must determine whether the rent to owner is a reasonable rent in comparison to rent for other comparable unassisted units." The determination applies to the gross rent (contract rent plus any utility allowance).
Comparability Factors
Under 24 CFR § 982.507(b), PHAs must consider: Location, quality, size, unit type, and age of the assisted unit Amenities, housing services, maintenance, and utilities provided by the owner Rents charged for comparable unassisted units in the same market
Documentation Requirements
PHAs must document the basis for rent reasonableness determinations. HUD's Office of Inspector General has repeatedly cited inadequate documentation as a finding in PHA audits. Acceptable documentation includes: PHA-maintained comparable rent databases Independent appraisals HUD's Rental Voucher Management System (RVMS) comparable units Published rent surveys
When Re-Determination Is Required
A new rent reasonableness determination is required when: The owner requests a rent increase HUD directs the PHA to re-examine rents in the market area The PHA receives information that market rents have changed significantly
Sources
CFR § 982.507, eCFR — ecfr HUD.gov: HCV Landlord Information — hud-gov