HUD Proposes New Voucher Administrative Fee Formula

HUD recently proposed a new formula for determining the amount of funding that a public housing agency (PHA) receives to administer the Housing Choice Vvoucher program. The administrative fee formula currently in use is based on the number of vouchers under lease and a percentage of the 1993 or 1994 local fair market rent, plus an annual inflation factor.

The new formula would be based on program size, a wage index, cost of benefits, percent of households with earned income, rate of new admissions, and percent of voucher households living more than 60 miles from a PHA’s headquarters. The fee would be calculated each year using these factors, plus a revised inflation factor. The proposed rule would also change the current voucher portability billing rule by eliminating billing between PHAs for administrative fees.

HUD seeks comments on how to structure an incentive fee for improving locational outcomes for voucher households. Examples include a fee based on the number of families that initially lease in low-poverty areas or that move out of areas with high concentrations of poverty. Another proposed alternative is a fee based on the number of families that move from racially or ethnically concentrated areas of poverty to less concentrated areas. Another option is a fee based on the extent to which the overall percentage of a PHA’s families residing in areas with high concentrations of poverty decreases from year to year.