Springdale Housing Authority To Increase Flat Rent

SPRINGDALE -- Idella Cleaver said she won't have enough money to pay for groceries and bills when her rent goes up.

Cleaver is a tenant in the Applegate Apartments off Park Street in Springdale. She is part of a group of low income renters who will be affected by a rent increase.

Fun Fact

Flat Rents In Public Housing

Public housing organizations are required to offer a flat rent option, in addition to income-based rent, under the 1998 Quality Housing Work Responsibility Act. Flat rent is based on market rents, while income-based rent is based on an individual’s income. Flat rent is helpful because residents will not be discouraged from having a job. Income-based rent can increase if a person’s income increases, but flat rent doesn’t.

Source: www.huduser.org

Tenants in apartments managed by the Springdale Housing Authority will be experiencing rent increases if they pay a flat rent, because of new federal legislation, said Debbie Bailey, executive director. There are two types of rent under the authority: income based which increases if is a renter's income increases; and flat rent which isn't based on income.

The Consolidated Appropriations Act of 2014 requires public housing agencies to set their flat rent rate at no less than 80 percent of fair market rent, said Tamar Greenspan, senior policy advisor for the National Association of Housing and Redevelopment Officials.

A fair market rent, under the act, is considered the average rent for a similar apartment in the metropolitan area, Greenspan said. Flat rent was set by comparing the property to other similar local properties before the act was enacted.

The authority receives money from state and federal programs, but won't receive the federal funding if they aren't in compliance with the act, Bailey said. The amendment with the rent changes, and the rent increase schedule, will go before the authority's board for approval on Aug. 27.

Rents will go up.

"It's a federal rule," she said. "We don't have any control over it."

The amount rent will increase each year depends on the type of apartment a person has, Bailey said. The authority will phase in the increases over the next three years on Nov. 1 of each year. For example, a one bedroom apartment, such as the one Cleaver has, costs $275 per month right now. Rent will increase by about $29 a year for three years until it reaches $356 per month.

Cleaver said she is upset, because she has a contract with the authority stating her rent won't increase for three years. Bailey said tenants will have to sign an amendment on the anniversary of their contract to renew it. The amendment will include the rent increases. Tenants who don't sign the amendment will have to move.

The rise in rent could make it more difficult for families to afford necessary items, Greenspan said. Families, in general, will cut costs on food when rent goes up. Some people might also choose to move.

Cleaver said her monthly income from Social Security is $1,231. She plans to quite smoking cigarettes to save money, but said even that won't be enough.

"I'm going to be looking for another place to live," Cleaver said. "I can't afford these prices."

Bailey explained flat rent tenants also have the option to switch to income-based rent.

Public housing agencies will have to reassess and adjust their rent rates every year to stay in compliance with federal law, Greenspan said.

The authority also operates Spring Creek Apartments near the of Success Avenue and Park Street.

NW News on 07/30/2014

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