Rent for hundreds of low-income families living in federally-subsidized housing may double to $50 a month due to the financial mismanagement revealed late last year at the San Francisco Housing Authority.
The agency’s reliance on faulty data and error-plagued accounting led to an approximate $30 million shortfall in funding for tenant rental vouchers. A federal and city bailout was approved to close the funding gap for the agency, which remains under an internal audit to straighten out its books.
Now, the San Francisco Housing Authority Commission is set to vote Tuesday on a number of amendments to its annual plan that it is required to submit to the US Department of Housing and Urban Development.
Amendments include a proposal to raise minimum monthly rents from $25 to $50.
“As a result of the shortfall, it was recommended by the HUD shortfall team to increase its minimum rent from $25 to $50 in the Housing Choice Voucher Program,” according to a staff report by Linda Martin-Mason, director of policy and government affairs for the San Francisco Housing Authority. “The Authority is proposing following HUD’s recommendation to increase the minimum rent from $25 to $50.”
Households who live in subsidized housing generally pay 30 percent of their annual income on rent, but those households earning no or little income pay the minimum rent, which the San Francisco Housing Authority has kept at $25 for years. Minimum rent can go up to $50 under HUD’s rules.
Notably, HUD secretary Ben Carson announced a plan last year to triple the allowed minimum rent to $150, but later dropped that idea.
Bay Area Legal, a group that provides legal assistance to low-income residents, is opposing San Francisco’s proposed rent hike.
“This increase of the minimum rent from $25 to $50 is an unreasonable increase of 100 percent for the neediest families participating in the Section 8 program,” Bay Area Legal wrote to the agency. “Further, such an increase will not save SFHA enough money to make a significant impact on the current shortfall of approximately $30,000,000.”
The group said the families who are currently paying the minimum “already have difficulty paying $25 each month due to their lack of income and the high cost of living in San Francisco.”
The agency’s staff report said that tenants would receive a 60 day notice before the rent hike went into effect and could apply for a financial hardship rent reduction. Hardships are granted for a variety of reasons and their durations vary.
There are 757 households whose rents are set at the $25 per month minimum, according to the agency’s report. Of those households, 574 are currently paying reduced rents after applying for hardships and 182 are paying the $25 minimum rent, the report said.
The report notes that if the 182 households pay the increased rent amount it would total an additional $54,600 in rent annually paid to the agency, or $300 more from each household.
Rose Marie Dennis, spokesperson for the San Francisco Housing Authority, told the San Francisco Examiner Monday that the agency is aware that it is “extremely expensive in not only San Francisco but the Bay Area” and that “we’re highly sensitive to any changes to people’s overall household budget.”
“If they feel they can’t handle that impact of $25, we welcome and are willing to walk any household through the process of applying for hardship.”
Dennis defended the staff recommended proposal.
“The San Francisco Housing Authority needs to do what is not only required of us, but what will ultimately improve the agency and keep us in line with what high-performing housing authorities do.”
Bay Area Legal said while it opposes any minimum rent hike, if the agency must impose one “we recommend a more manageable step to $30 per month, which is still a 20 percent increase over the current minimum rent amount.”
The San Francisco Housing Authority Commission meets Tuesday at 4 p.m. in Room 408 at City Hall.