Question regarding section 8 denying my rental increase

[Abed Sara]

Hello,

I purchased my first rental 3 unit home in which the tenants is paying 700 per month with the help of section 8 housing. The previous landlords kept rent the same for the past 15 years or so. The tenants renewal is coming up which I filled out a section 8 rental increase form requesting to raise the rent to $1000 per month which is below fair market rent in that general area.

The section 8 request was denied stating they can only approve a 50 dollar increase. What are my options given the increase to 750 per month leaves me about 300-400 below fair market rent. Is there another argument I can use given the rent hasn’t been raised in some year. Thank you in advance.

Abed Sara

[Kyle J.]

As @Jennifer Donley pointed out, each Housing Authority can operate differently.  And you don't mention where your rental is located, or if there's any rent control laws there.  So I'm writing this from the perspective that there's not, and just sharing what I do in hopes that it may be of some help to you.  (Your mileage may vary.)

When I request a rent increase, I always submit three rent comps to justify my requested rent increase.  I pick three comparable properties that are nearby, of similar building type and bedroom count, and that are actively being advertised at or above what I am asking to show that my increase is reasonable (and actually slightly below the going market rate).  I feel this makes their job easier because I'm picking the comps for them.  Plus, if they pick the comps, who knows what they'll pick (they may pick comps that aren't really comps or that are lower than mine).

Only once in all my years have they ever denied me.  (They approved a partial increase but not the full amount I requested.)  And in that case, I simply called them up and asked them why they denied the full amount I requested.  They told me it was too large of an increase to do at once.  I then explained to them that they don't have the right to tell me what I can rent my property for.  And if they didn't approve it, I would simply issue my tenant a notice to terminate her rental agreement (since I keep my Section 8 tenants on month-to-month agreements for exactly this reason) and I'd find a new tenant willing to pay that amount since, as the comps showed, it was well within the market rate.  They quickly agreed and said to just re-submit the rent increase request and they'd approve it (which they did).

Now again, your results may vary and perhaps there's a formal appeals process.  If there is, just follow that.  But at the end of the day, I personally would not accept $750 if $1100 is truly market rate.  You just need to push them to get it up.  

Best of luck to you.