How Rent is Determined for the Section 8 Voucher Program

The Boston Housing Authority determines rent for Section 8 properties according to two factors. First, the BHA calculates rent reasonableness based on comparable units in your area. Second, the reasonable rent, plus the estimated utilities paid by the tenant, cannot exceed ZIP Code level “Small Area Fair Market Rent” payment standard by more than 10% of the tenant’s monthly adjusted gross income. Note that the payment standard does not equal the rent BHA will pay for a unit; rather it is the absolute maximum the BHA will reimburse.

To calculate how much you might be able to rent your apartment for, follow these two steps.

1. Use the Landlord Rent Estimator at GoSection8.com. Create a free account and enter your address and bedroom size, and it will estimate your apartment’s rental value. Note that this is just an estimate, and that depending on the amenities in your unit, your allowed rent may be higher than the amount shown. Please note: GoSection8.com is not run by the Boston Housing Authority and is only meant to provide a rough estimate of the value of your rental property.

2. Check that the number determined in step 1, plus estimated utilities, is below the ZIP Code level payment standard for your bedroom size, which you can look up here. Make sure to add estimated utilities the tenant pays to your estimated rent, and ensure that the combined number is at or below the payment standard listed for your zip code and bedroom size.

For example, if the Rent Estimator suggests your apartment is worth $2000, and average utilities for the tenant cost $200, you can rent your apartment with BHA if the payment standard for your bedroom size and zip code is $2,200 or higher.

Rent Concepts for the Voucher Program

1. Contract Rent:  This is the owner's requested rent for the unit. The requested Contract Rent cannot exceed what BHA determines to be the reasonable rent when compared to the market. 
 
2. Utility Allowance:  This is the amount that BHA has determined that the tenant will likely pay for utilities based on annual studies in the area.  The more utilities a tenant is responsible for, the higher the allowance becomes.  See the Utility Chart
 
3. Gross Rent:  The Gross rent is the Contract Rent + the Utility Allowance.
 
4. Payment Standard:  The Payment Standard establishes a maximum BHA subsidy.  The BHA sets a Payment Standard for each zip code and unit size, typically close to the median rent.
 
5. Voucher size: This is the size of unit that the family has been determined eligible for by BHA. It is important to confirm the prospective tenant's voucher size, because the applied payment standard will be the smaller of the voucher size or the unit size.

Affordability

When Gross Rent is Less than the Payment Standard the Unit will always be affordable for the Tenant:  If the Gross Rent (Contract Rent + Utility Allowance) is equal to or less than the Payment Standard, the unit will be deemed affordable because the tenant will pay exactly 30% of their income towards rent and utilities. 
 
When Gross Rent is Greater than the Payment Standard, the rent may not be affordable for the tenant:   BHA tenants are not permitted to enter new leases if they will pay more than 40% of their income toward rent and utilities. Therefore, a unit will be deemed unaffordable if the Gross Rent exceeds the Payment Standard by an amount greater than 10% of a prospective tenant's monthly adjusted income. In such cases, the tenant will not be permitted to move in, unless the rent is reduced to an affordable amount.   
 
Check Affordability Online

To better understand whether a prospective tenant can afford your unit, you can use the affordability tool with the prospective tenant.

Rent Must be Reasonable

Please keep in mind, that in addition to being affortable for the tenant, the rent must also be determined reasonable by BHA as compared to the market. 
 
Example Rent Calculation

Approved Contract Rent: $3,200
Utility Allowance: $174
Gross Rent: $3,200 + $174 = $3,374
Unit Size: 4 bedrooms
Voucher Size: 3 bedrooms
Payment Standards for unit's zip code:  4 bedroom -- $3,650  / 3 bedroom -- $3,350
Tenant's Adjusted Monthly Income: $1,000
 
In this example, the prospective tenant is seeking to rent a 4 bedroom unit, however they have only been approved for a 3 bedroom voucher. Therefore, the smaller 3 bedroom payment standard will be applied.
 
The Gross Rent (the requested contract rent plus the anticipated utility allowance) exceeds the applied Payment Standard by $24. Because this overage is less than 10% of the tenant's monthly income, the unit is considered affordable and the tenant can move in.
 
The BHA would pay the unit owner the Payment Standard (the maximum possible subsidy) minus 30% of the tenant's monthly income ($1,000 x 30% = $300). So the monthly BHA payment to the owner would be $3,350 - $300 = $3,050.
 
The tenant is then responsible for paying the owner the remainder of the Contract Rent ($3,200 - $3,050 = $150). In addition to this monthly payment of $150 from the tenant to the owner, it is estimated that the tenant will be responsible for an additional $174 per month in utilities. So, in total, the tenant will pay $324 per month toward rent and utilities, which is 30% of their monthly income ($300), plus the $24 by which the Gross Rent exceeds the Payment Standard.   
 
What Rent Should I Request?  

The rent you request should be the same amount that you would advertise and expect to receive for a market rate tenant.   Please note, if there are other market rate tenants in your building with similar units, the contract rent for the Section 8 unit cannot exceed the contract rent of the similar market rate units.
 

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