Section 8 payment standards 2023: Everything You Need to Know!

Section 8 payment standards in 2023 are the maximum amount of rent that a public housing authority (PHA) will pay to a landlord on behalf of a Section 8 tenant. Payment standards are set by the U.S. Department of Housing and Urban Development (HUD) and are based on fair market rent (FMR) estimates for different unit sizes and locations.

How payment standards are calculated for the Section 8 program?

• The Public Housing Authority (PHA) determines a payment standard that falls between 90 percent and 110 percent of the Fair Market Rents (FMRs).
• FMRs are calculated annually by the U.S. Department of Housing and Urban Development (HUD) and represent the cost to rent a moderately-priced dwelling unit in the local housing market.
• The payment standard represents the typically required amount to rent a moderately-priced unit in the local housing market.
• The payment standard determines the housing assistance amount that a family will receive.
• The PHA is required to set payment standards for each “unit size” based on the number of bedrooms (e.g., zero-bedroom, one-bedroom, etc.).
• Setting a payment standard amount within this “basic range” does not necessitate HUD approval.
• The PHA must revise the payment standard amount no later than three months following the effective date of the published FMR if a change is necessary to stay within the basic range.
• For payment standard amounts outside of the basic range, the PHA must request HUD approval. HUD has sole discretion to grant or deny approval for higher or lower payment standard amounts.
• HUD provides specific guidance to PHAs for requesting exception payment standards when they range from 110 to 120 percent or exceed 120 percent of the FMR.

Importance of Section 8 payment standards in 2023

• Payment standards determine the rental assistance amount that a family will receive.
• They are based on Fair Market Rents (FMRs) calculated annually by the U.S. Department of Housing and Urban Development (HUD).
• Local Public Housing Authorities (PHAs) set payment standards, and these can vary based on the region.

• PHA may establish exception payment standards for all unit sizes in a designated area, or only for units with a specific number of bedrooms.
• Authorities conduct an annual review of payment standards and may modify them if they are deemed necessary to remain within the basic range.
• These standards are important for landlords because they determine the maximum amount of rental assistance that the PHA will pay.
• Likewise, they are crucial for families as they determine the maximum amount of rental assistance they can receive.
• Payment standards are crucial for PHAs, ensuring fair and efficient program administration, promoting effective assistance.

Changes to Section 8 Payment Standards in 2023

Potential Changes to Section 8 Payment Standards in 2023:

• As of October 2023, there are no official announcements or information regarding changes to Section 8 Payment Standards in 2023. However, authorities are actively considering several potential changes.
• One potential change is an increase in payment standards, with HUD proposing an average 12% increase in 2024 to address rising housing costs. If deemed necessary, this increase could potentially extend to 2023.
• Another potential change is the expansion of certain regulatory waivers. Currently, PHAs can adjust payment standards for tenants during their lease and set standards up to 120% of the Fair Market Rent (FMR) in specific areas. These waivers might potentially cease in 2024, but there is a possibility of extending them to 2023 or making them permanent.
• HUD may provide PHAs with more flexibility to set payment standards tailored to their local housing markets. For instance, PHAs might be allowed to establish different standards for different neighborhoods within their jurisdiction, targeting assistance where affordable housing is scarcer.
• These potential changes are under consideration and carry no guarantee of implementation. However, they are important for Section 8 tenants and PHAs to be aware of.

• HUD is currently conducting a review of the methodology used to calculate FMRs, and this review is anticipated to conclude in 2023. Modifications to this methodology could affect the determination of payment standards.
• HUD is working on various initiatives to increase the supply of affordable housing, which could benefit Section 8 tenants by improving their access to affordable apartments.
• The future of Section 8 payment standards remains uncertain, but there is ongoing effort to address the challenges faced by Section 8 tenants in finding affordable and safe housing.

How Changes to Section 8 Payment Standards Will Affect Section 8 Program Participants?

Impact of Increased Payment Standards:

• An increase in payment standards can help Section 8 tenants afford decent, safe, and sanitary housing.
• This reduction in rent burden can lower the proportion of Section 8 tenants spending over 30% of their income on rent.

Expanding Regulatory Waivers:

• Regulatory waivers offer PHAs greater flexibility to aid Section 8 tenants in high-cost housing areas.

New Flexibility for PHAs:

• PHAs can effectively address local housing market needs by establishing distinct payment standards for various neighborhoods in their jurisdiction.
• This allows for targeted assistance in areas with a shortage of affordable housing.

Reasons for Changes to Payment Standards:

Affordability for Section 8 Tenants:

• Rising housing costs in recent years have made it challenging for Section 8 tenants to afford rent.
• Increasing payment standards helps ensure access to affordable housing for Section 8 tenants.

Addressing Affordable Housing Shortages:

• Many regions face a shortage of apartments affordable to low- and moderate-income households.
• Increasing payment standards can make more apartments accessible to Section 8 tenants.

Simplifying and Streamlining the Program:

• HUD may consider changes to simplify and streamline the program administration.
• The current system for setting payment standards can be complex and time-consuming for PHAs.
• Streamlining could improve program efficiency.

Final Note:
HUD is considering these potential changes, and there is no guarantee of their implementation. These changes are crucial for Section 8 tenants and PHAs, as they can profoundly influence housing affordability and program management.

Impact of Section 8 Payment Standards on Housing Affordability

• Payment standards impact HAP calculation, determining rent costs for program participants in the Section 8 housing assistance program.
• Rent at or below the payment standard results in the family’s TTP, inclusive of utilities, matching the gross rent.
• Payment standards should ensure families can choose safe, decent, and sanitary housing in various neighborhoods within the PHA’s jurisdiction.
• PHAs can set higher payment standards in specific areas to assist families seeking housing in low-income and minority household-deprived neighborhoods.
• An increase in payment standards can help Section 8 tenants afford to live in decent, safe, and sanitary housing.
• Section 8 tenant rental assistance hinges on factors like household income, family size, and the housing agency’s payment standard.
• Changes to payment standards can have a significant impact on housing affordability.

Conclusion

In conclusion, Section 8 payment standards for 2023 play a pivotal role in ensuring housing affordability and access to safe, decent homes for low-income families. These standards, based on Fair Market Rents, determine the level of rental assistance provided to Section 8 tenants. Potential changes, including proposed increases and regulatory waivers, signify efforts to address rising housing costs and enhance program flexibility. These changes, if implemented, could alleviate rent burdens, expand housing options, and simplify program administration, ultimately improving the lives of Section 8 program participants and fostering greater housing stability in communities across the United States.