Section 8 rents went up for FY2027. Most landlords won't collect it.

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Section 8 rents went up for FY2027. Most landlords won't collect it.

James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 592 posts · 445 votes

Memphis operator since 2003, few hundred doors, majority Section 8, own crews and own management. This one is time-sensitive and it's the kind of money that gets left on the table quietly, so I'd rather post it now than write something cleverer next month.

WHAT HAPPENED

HUD published the FY2027 fair market rents, and they came out early this year - September 1 rather than the usual October. An analyst I've been trading notes with, Christo Wilken, re-ran his map on the new figures and pulled a cut I asked him for: the ten Memphis-area ZIPs where the typical single-family house is under a hundred thousand dollars. The three-bedroom figure went UP in nine of those ten, by six to twelve percent, with a median around ten.

If you own voucher units, a ten percent move on the three-bedroom number is real money. And most of the people it applies to are going to miss it. Here's why.

WHY MOST LANDLORDS WILL NOT COLLECT IT

A new payment standard does not flow through to an existing tenancy on October 1, or on any date the housing authority announces. It applies at that tenancy's own annual recertification, which is keyed to the lease anniversary. Your October tenant sees it in October. Your March tenant waits until March.

And in most jurisdictions it is not automatic even then. The owner has to request the rent increase in writing, ahead of a deadline that is typically sixty days before the anniversary. Miss the window and you do not get a partial year - you wait a full twelve months for the next one. Never ask and you never get it at all. The authority is not going to call and offer you more money.

THE HONEST CAVEAT

HUD publishing a number is not the same as your authority paying it. Each PHA adopts its own payment standard inside a band around the published FMR, and it adopts on its own calendar. When Christo and I checked the two Memphis-area authorities this month, the county authority still had only its 2026 schedule posted and nothing on FY2027 had surfaced from the city side. So right now there is a gap between the number that moved and the number that is collectible. That gap is the thing to watch, not to assume away.

WHAT TO DO THIS WEEK

Pull every voucher tenancy you own and write down its lease anniversary. That date, not October, is your deadline clock. Then count backward sixty days and put that on a calendar. If any of those dates fall in the next ninety days, that is this month's work.

Then go to your own authority's site and find the adopted payment standard schedule, by bedroom count and by ZIP if they publish it that way. If it still says 2026, call and ask when the new schedule is adopted and whether increase requests submitted before adoption are honored at the new rate. Get the answer from a person and write down who said it.

Then submit the written request for every unit where the new standard exceeds what you are being paid. Rent reasonableness still applies, so the request has to be supportable by comparable unassisted units - the authority is not obligated to give you the payment standard just because it went up. Ask anyway. The cost of asking is an email.

THE PART I AM LESS SURE ABOUT

The sixty-day request window is how it works where I operate. I have read enough posts from other markets to know the deadline and the paperwork vary, and a few authorities apply new standards at recertification without a request. I would rather be corrected here than have someone in another state follow my timeline and miss theirs.

So - what does your authority actually require, and how far ahead? And has anyone here successfully gotten an increase mid-lease rather than at the anniversary? That one I have never managed and I would like to be wrong about it.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2d

    Great stuff!

    The biggest challenge is getting tenants to sign the darn increase paperwork - especially if it means their part of the rent payment will increase!

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  • Jim Johnson
    Real Estate Agent · Memphis · Member since 2026 · 545 posts · 315 votes
    2d

    The local PHA piece is the one I’d want to hear more about too. The 60-day window is easy enough to calendar, but whether a new payment standard can actually be picked up mid-lease seems to be where the local rules really matter. Curious if anyone here has successfully gotten one approved before the normal annual recertification, and what their housing authority required to do it.

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  • James JonesPro Member
    OP
    Investor · Collierville, TN 38017 · Member since 2017 · 592 posts · 445 votes
    16h

    Drew - that is the failure mode I under-covered, and it is the second time you have improved one of my posts, so thank you. Let me give the mechanic behind it, because I think most of the refusals people run into are self-inflicted.

    Whether the tenant's portion moves depends entirely on whether you stayed inside the payment standard. If the new standard went up and your gross rent still sits at or below it, the family's share is driven by their income - roughly thirty percent of adjusted monthly income - not by your rent. Their number should not change at all. Push the gross rent above the payment standard and every dollar of the overage lands on the tenant, and now you are asking a household to fund your increase. Of course they stall. They should.

    So the practical rule is: ask for the increase that fits inside the new standard, and say so in the same letter. I put one sentence in writing to the tenant - your portion is not changing - and the signature problem mostly disappears. Most of the resistance I have seen over twenty-plus years was fear rather than economics. Nobody had told them, so they assumed the worst and sat on the paperwork.

    And when the tenant's share genuinely does have to move, I take the smaller number. Fighting for the last thirty dollars a month against a household that can move and take the voucher with them is how you buy yourself a sixty day vacancy and an inspection cycle to collect three hundred sixty dollars a year. That trade is bad and it looks good on a spreadsheet, which is the worst combination.

    Jim - on your question about getting one approved before the normal annual recertification. The default answer is no. In general the rent to owner changes at the annual reexamination and not in between, and most authorities will tell you exactly that if you ask the front desk.

    But there is a door that people do not use, and it is not an increase request at all. It is a correction. If the original rent reasonableness determination was made on wrong facts - bedroom count recorded wrong, square footage wrong, a bath or a garage or central air not captured, comparables pulled from the wrong submarket - then you are not asking them to raise the rent, you are asking them to fix a determination that was incorrect when it was made. That is a different conversation, a different desk in some offices, and it can be processed off cycle. I have had that work and I have had it refused, so I will not tell you it is reliable. But it is the only mid-lease path I have ever actually seen produce money, and it costs you an email to find out.

    The practical version: pull the original determination on your worst-performing voucher unit and read it against the actual house. If the facts on that sheet are wrong, you have a case. If they are right, you are waiting for the anniversary like everybody else, and your job is to not miss the window.

    If either of you gets a different answer out of your own authority, post it. This is a thing where the local rule genuinely varies and one confirmed data point from another market is worth more than my opinion.

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  • Richard (Ryszard) Cieplechowicz
    Member since 2026 · 7 posts · 2 votes
    15h

    From the admin side, the calendar is where this lives or dies. Anything tied to a lease anniversary should go in one tracker with the notice deadline counted back, not just the anniversary date. If it only sits in the lease file it gets missed.

    Same with the written request. Send it, keep a copy, and write down who you talked to and when. Agencies lose paperwork more than people think.

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