Housing Choice Voucher - Property Owners

Payment Standards and Rent Reasonableness: What Is the Difference?

The Housing Authority of the City and County of San Francisco (Authority) must look at two things when reviewing the rent charged by a property owner: the payment standard and the rent reasonableness. While they have some overlap, there are a lot of differences between these two terms and how they are used!

Payment Standards

Payment standards are the maximum monthly assistance payment for a family in the voucher program (this includes both the rent to the owner and the utility amount the tenant must pay). They are set by the Authority each year based on fair market rents published by the U.S. Department of Housing and Urban Development. The fair market rents represent the cost to rent a moderately-priced dwelling unit in the local housing market. There are different payment standards depending on the size of the unit rented. The payments standards are updated each year by the Authority and can be found here.

Calculating Assistance Payments

The Authority must pay a monthly housing assistance payment (HAP) to the property owner for each assisted family that is the lower of: 

1. The payment standard for the family minus the family’s total tenant portion of rent.

2. The gross rent (the total cost of rent and utilities) for the family’s unit minus the family’s total tenant portion of rent. 

This is where the payment standard and rent reasonableness come in to play! The HAP cannot exceed the payment standard but may be less than the payment standard if the gross rent for the unit is less than the payment standard. To determine if the gross rent should be less than the payment standard, the Authority much run a rent reasonableness test!

Rent Reasonableness

Rent reasonableness ensures that property owners do not charge more rent than what is charged for comparable unassisted units on the market. Rent reasonableness is determined at initial occupancy of a unit or when a property owner requests a rent adjustment for each unit in the Housing Choice Voucher (HCV) program. The rent reasonableness processes compares the proposed rent for the unit, or the proposed rent increase to unassisted units in the area. The Authority uses an automated process that selects at least two units that most closely match the proposed unit’s description based on structure, size, year built, utilities, amenities, quality, location, and maintenance. The rent will be compared to the rent charged for comparable unassisted units within the City and County of San Francisco or up-to a 3-mile radius. If no comparable units can be found within a 3-mile radius, the comparable will be increased by one mile up to a 10-mile radius of the to-be assisted unit until a comparable is located. 

To summarize, if the rent is equal to the payment standard and is deemed reasonable, payment standards are used to determine how much of the rent is paid by the Authority, and how much of the rent is paid by the tenant. Payment standards are not used to determine the rent an owner can charge for their unit. For example, if the payment standard for a particular unit size is $2,000, it does not mean all property owners in in San Francisco can charge $2,000 for gross rent! 

Whether you are a new participant in the HCV program, a current participant who wants to move, or a property owner, it can be difficult to keep track of all the steps in the lease-up process! Below is a description of each step in the process, from applying to a specific unit (Request for Tenancy Approval submission) to the first assisted payment made to the property owner from the Authority (Housing Assistance Payment).

Step 1: Request for Tenancy Approval (RTA) Submission

When a family has found a unit that they want to rent and the property owner is willing to participate in the Housing Choice Voucher (HCV) program, the family or the property owner must request the Authority to approve the assisted tenancy. This is accomplished by submitting a Request for Tenancy Approval (RTA). The RTA contains important information about the rental unit selected by the family necessary for the Authority to determine whether to approve the assisted tenancy in this unit. The RTA must be submitted on or before the expiration date of the family’s voucher. 

Step 2: RTA Processing

Information in the RTA packet is reviewed to determine unit, property owner, and payee eligibility. The Authority reviews documents for proof of ownership, if debts are owed to any Public Housing Agency, property management agreement and/or authorized agent(s), direct deposit form and a voided check or letter from financial institution. New property owners must obtain approval and be issued a Vendor Number by the Authority prior to requesting an inspection!

Step 3: HQS Inspection

To provide decent, safe, and sanitary conditions in all assisted homes, the Authority conducts preliminary and annual inspections on all housing units participating in the HCV program to determine whether the unit meets HUD’s basic housing quality standards (HQS).

The Authority’s inspections team will contact the property owner to schedule an initial inspection. Inspections will include an assessment of the unit according to the federal housing quality standards.

The property owner will receive a letter and phone call with the confirmed date and time of the inspection. The unit must be unoccupied and move-in ready, unless the family is already living in the unit, and will lease in place. The inspection results will determine the next step in the lease up process:

• If the unit does not pass the inspection, the property owner will be allowed 15 days to make repairs.

• If the unit does not pass the re-inspection, the Authority will cancel the RTA for that unit/property.

• If the unit passes the inspection, the Authority will finalize the rent and affordability of the unit. The family should not move in the unit without Authority prior approval.

Step 4: Determining Rent and Affordability 

The Authority will determine whether the rent being charged for the unit is reasonable and whether the unit is affordable to the participant. To do this, the Authority will review the rent requested by the property owner and compare it to comparable unassisted units in the building and/or neighborhood to ensure that the rent is reasonable. The Authority will then evaluate the participant’s income to ensure they can afford the rent. To pass the affordability test, the participant’s portion of rent and utilities may not exceed 40 percent of the family’s monthly adjusted income. If any adjustments need to be made to the rent, the Authority will contact the property owner. 

Step 5: HAP Letter

Once the rent amount is accepted by the property owner and the Authority, the Authority will produce a HAP letter and provide it to the property owner. The HAP letter contains information on the family, owner, unit, lease term, total rent, rent paid to owner by the Authority, and which utilities the owner is responsible for.

• If the HAP letter offer is not accepted, the Authority will cancel the RTA for that unit.

• If the HAP letter offer is accepted, the Authority will coordinate the execution of the HAP contract.

Step 6: Lease Signing HAP Contract Execution 

After the unit passes inspection and the HAP letter is accepted, the family will sign a lease agreement and the HUD-required Tenancy Addendum with the property owner. Although the property owner will have their own lease and “house” rules, HUD’s Tenancy Addendum must be attached to the property owner’s lease to ensure that both parties adhere to the HCV program rules.

The property owner is required to execute a lease, in the form and manner used to execute leases with non-assisted (non-HCV) families. The lease will be reviewed by Authority. The Authority will execute the HAP contract with the property owner after obtaining a copy of the lease.

Step 7: HAP Payment 

Once the HAP contract has been executed, the family may move into the unit and Housing Assistance Payments will be issued by the Authority. Housing Assistance Payments for the first month shall be prorated for a partial month based on the move-in date. 

If you would like to rent out one of your units in the HCV program, you can list your unit at affordablehousing.com. Potential applicants will be able to view your unit(s) on the site once it is listed and contact you if they are interested in your unit. If you decide to lease to an assisted family, they will give you a packet to complete, which includes some forms that will get you set up as a vendor in our program and an inspection form that allows the Housing Authority of the City and County of San Francisco to come out and approve the property. For more information, contact our Customer Care Center. 

 Section 8 Housing Choice Voucher Program

Program Seeking New Landlords

SAN FRANCISCO, CA - September 21, 2023

The Housing Authority of the City and County of San Francisco (Authority) is actively seeking new property owners to participate in the Section 8 Housing Choice Voucher (HCV) program. The Section 8 HCV program provides housing assistance to eligible individuals and families by paying a portion of their rent to private property owners. It benefits tenants by making housing more affordable and property owners by ensuring a consistent rental income stream.

Key benefits of participating in the Section 8 HCV program include:

1. Guaranteed Monthly Rent: Property owners can rely on timely direct deposit rental payments from the Housing Authority.

2. Expanded Tenant Pool: Property owners gain access to a broader pool of prospective tenants, increasing the likelihood of finding responsible renters.

3. Community Impact: Partnering with the Housing Authority demonstrates a commitment to affordable housing and positively impacts the community by helping families find stable homes.

We are interested in expanding housing opportunities for voucher participants in San Francisco zip codes 94129, 94123, 94127, 94131, 94114, 94116, 94118, 94117, 94107, 94122, 94112, 94121, 94110 and the immediate suburban areas. For more information, please contact us at customercare@sfha.org or learn more at www.sfha.org.

The Authority is a public housing authority, as authorized by the U.S. Department of Housing and Urban Development (HUD) with a mission to assist our residents in attaining and maintaining a better quality of life.

How can I request a rent increase?

You must submit a Rent Increase Request Form to the Authority 120 days prior to the anniversary date of the HAP contract and at least sixty (60) days prior to the effective date of the requested rent increase. The Authority will conduct a rent reasonableness test to ensure the increase in rent does not exceed the reasonable rent for units in the area. The property owner may not increase the family’s share without prior written approval from the Authority. Property owners can submit a Rent Increase Request Form to the Authority’s Customer Care Center.

When a PBV unit becomes vacant, what steps must I take to house another resident?

When a unit becomes vacant, the process for housing another resident is as follows:

• Contact the Authority as soon as the unit becomes vacant

• The Authority will pull names from the waitlist and screen them to ensure those pulled are eligible and interested in the program

• The Authority will send the property manager a list of eligible and interested participants for each unit reported vacant

• The property manager will then screen applicants from the list of eligible participants sent by the Authority for the applicant they want to move into their unit(s) and notify the Authority of their selection

• The tenant and the property manager enter into a written lease agreement that is signed by both parties.