Sec 8 increase to fmr wants to see rent roll

Jersey City, New Jersey
General Landlording & Rental Properties
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Sec 8 increase to fmr wants to see rent roll

Tom Server
Member since 2023 · 118 posts · 26 votes

I have a triplex with one Section 8 tenant. Pays $950

Since I inherited the tenant, and the prior owner never raised the rent of section 8.

When I emailed DCA agent with the increase, I told her i wanted to raise it closer to the HUD FMR. So I wanted to raise it to $1200, she responded with "that's a lot" I asked her what the FMR for a 1 bd she responded $1316. I am $116 dollars less than what the FMR and no rent control. Why would she respond with "that's a lot" when it's not even at the set standard they assign?

I am new with dealing with DCA. is this a scare tactic to not raise the rents?

She also wanted me to send a rent control log of my other units.

They are 2bd and their rents are $1050.

Am, I going to have an issue increasing the 1 bedroom to 1200 since my 2 bedrooms are paying $1050?

I plan on raising to 2bedrooms to $1200- $1300 down the line.

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
2y
Quote from @Tom Server:

I have a triplex with one Section 8 tenant. Pays $950

Since I inherited the tenant, and the prior owner never raised the rent of section 8.

When I emailed DCA agent with the increase, I told her i wanted to raise it closer to the HUD FMR. So I wanted to raise it to $1200, she responded with "that's a lot" I asked her what the FMR for a 1 bd she responded $1316. I am $116 dollars less than what the FMR and no rent control. Why would she respond with "that's a lot" when it's not even at the set standard they assign?

I am new with dealing with DCA. is this a scare tactic to not raise the rents?

She also wanted me to send a rent control log of my other units.

They are 2bd and their rents are $1050.

Am, I going to have an issue increasing the 1 bedroom to 1200 since my 2 bedrooms are paying $1050?

I plan on raising to 2bedrooms to $1200- $1300 down the line.


"Why would she respond with "that's a lot" when it's not even at the set standard they assign?"

You don't think they are hiring geniuses to work the phones over there do you? It's the government. When have you ever had a interaction with a government employee and thought to yourself, "wow, that was a great experience."
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  • James Mc Ree
    Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
    2y

    Rent increases are based loosely on FMR and on what the tenant can afford. Your $1,200 ask may be fair for your market and property, especially if supported by comps, but they might not approve it if the tenant cannot afford it. HUD won't approve something their model says can't work. They aren't always initially forthcoming on the limits though. Sometimes you have to probe a bit.

    You should ask the case worker for how their approval is being modeled. Knowing that you are hitting either the FMR rules or affordability rules helps you know which steps to take next. FMR takes you down a path of justifying your ask with comps. Affordability is tougher since it's based on any other income your tenant has. For that, I've asked what is the max they will approve for the tenant, then deciding if I would rather have that or a turnover.

    1Reply
  • Rino I.
    Rental Property Investor · Member since 2023 · 8 posts · 3 votes
    2y

    When I asked how much the tenant would get from Sec 8, the DCA response was 

    "I don’t know anything about who pays what, until it comes back and gets put in the system"

    0Reply
  • David Krulac
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    2y

    Had a similar situation, inherited a tenant from a former building owner, where the 3br rent was $550 month.  Obviously this is way below market, surprisingly there are a lot of below market rents out there. 4 months before the lease expired I informed the tenant in writing that the new rent if they chose to renew would be $750, a $200 a month increase.  They complained loudly and reported me to Section 8 and the head of the office called me and said that the rent increse was too high and unconsiencable.  My repose to both the tenant and Section 8 was that the $200 increase was still below maket rent and the tenants was free to move somewhere else where rents were cheaper.  The tenants looked hard for 4 months and could not find any property with lower rent and ended up sign the renewal, and subsequent renewals with annual rent increases for 3 more years. If the tenant had chose to leave, Iwould have rented the place either market or section 8 for more rent that they paid.  

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    2y
    Quote from @Tom Server:

    I have a triplex with one Section 8 tenant. Pays $950

    Since I inherited the tenant, and the prior owner never raised the rent of section 8.

    When I emailed DCA agent with the increase, I told her i wanted to raise it closer to the HUD FMR. So I wanted to raise it to $1200, she responded with "that's a lot" I asked her what the FMR for a 1 bd she responded $1316. I am $116 dollars less than what the FMR and no rent control. Why would she respond with "that's a lot" when it's not even at the set standard they assign?

    I am new with dealing with DCA. is this a scare tactic to not raise the rents?

    She also wanted me to send a rent control log of my other units.

    They are 2bd and their rents are $1050.

    Am, I going to have an issue increasing the 1 bedroom to 1200 since my 2 bedrooms are paying $1050?

    I plan on raising to 2bedrooms to $1200- $1300 down the line.


    "Why would she respond with "that's a lot" when it's not even at the set standard they assign?"

    You don't think they are hiring geniuses to work the phones over there do you? It's the government. When have you ever had a interaction with a government employee and thought to yourself, "wow, that was a great experience."
    2Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    2y

    She wants to know what the others rent for because those are her best non-SEC 8 rented comps.  Take the smaller increase for now.  Increase the other units either by raising their rent or moving them out and getting new tenants.  Next year submit a new increase.  You get top SEC 8 rents over time, with regular annual increases.  I manage 120 SEC 8 units and have been working the program for over 15 years.  I am giving you reliable advice.

    757-472-2547
    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Tom Server:

    It really doesn't matter what her opinion is or how she expresses it. Follow the rules, stay close to market rate, and move on.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    1Reply
  • Byrne McKenna
    Rental Property Investor · Evergreen, CO · Member since 2014 · 10 posts · 3 votes
    2y

    Hi Tom, I did not see any posts that mention "Payment Standard". In Colorado, we also have the HUD FMR but each PHA will publish its own Payment Standard and Utilities Standard for what they are willing to pay on a voucher. Naturally we push the limit to the point that the Housing Specialist might request a small adjustment to meet the calculations. Each PHA is different. Search Payment Standards in NJ or your area as a starting point. Timing is also important. Generally you want to request it on their annual recertification date. Always with 60 to 90 day notice depending on your state.

    0Reply
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