How long will I have to be in the Stepped Rent program?
The Stepped Rent policy is being tested for six years. Stepped Rent households will have a minimum of 5 Annual Step increases.
Understanding Stepped Rents
Stepped Rents
The U.S. Department of Housing and Urban Development, Office of Policy Development and Research (HUD) is sponsoring a study to learn about how the Stepped Rent policy affects households. A HUD-contracted nonprofit research organization, and its consultants, are conducting this study. Under the Stepped Rent program, a household’s monthly rent payment is set once based on the household’s income. After that, the monthly rent payment goes up a bit at the same time every year, but those increases are not connected to household income. Public Housing and Housing Choice Voucher households are chosen to be a part of the Stepped Rent program by random selection.
There are several benefits of Stepped Rent, including:
- When household income increases, those increases do not lead to an increase in the monthly rent payment.
- Households know when their rent will increase and know that it will increase by a relatively predictable amount.
- Households only have to provide income information once every three years.
A household’s monthly rent payment for the first year of Stepped Rent is set at 30% of the household’s adjusted income. Then, each year after that, the monthly rent payment will increase, or step up, by 3% of Fair Market Rents for the household’s unit size. After the first year, the monthly rent payment is no longer tied to household income. Rather, a household’s monthly rent payment will increase by a small amount, called a “step” each year; regardless if household income has changed or not.
Under Stepped Rent, households will only need to do an income reexamination and report updated income once every three years. However, these reexaminations are only to verify continued eligibility for housing assistance and do not affect the household’s monthly rent payment. Households do not need to report income decreases between the 3-year income reexaminations but if the household is facing a financial burden, the household may be eligible for a temporary hardship rent. If a household experiences a financial hardship, the monthly rent payment can be temporarily lowered.
What qualifies as a financial hardship?
A household is eligible for a Stepped Rent hardship if the household’s existing monthly rent payment is more than 40% of the household’s current monthly adjusted income. Circumstances that could lead the household to qualify include:
- The household has had a decrease in income that makes the monthly rent payment more than 40% of current adjusted income.
- The household has an increase in eligible childcare expenses that that makes the monthly rent payment more than 40% of current adjusted income.
- The household’s annual step increase makes the monthly rent payment more than 40% of current adjusted income.
Other circumstances, such as the following, may be considered when determining hardship eligibility:
- The household has experienced a death in the household that causes a financial hardship.
- The household has experienced a sudden increase in expenses (such as funeral costs or medical bills) that causes a financial hardship.
Households in the Stepped Rent program are protected by the hardship policy.
To request a hardship, the household must obtain, complete and submit a hardship request form. Forms can be found on this page under the Forms tab, at public housing management offices, or at the Central Office located at 601 -24th Street, Bakersfield, CA 93301. The completed form and supporting documentation can be mailed and/or delivered to the Housing Authority’s Central Office or handed to the appropriate management office.
Depending upon the timing of receipt of a complete Form, the Authority will either:
1. Suspend the stepped rent activity beginning the month following the household’s hardship request or
2. Make a retro-active correction to the stepped rent activity.
Determination will be made as soon as possible and in most cases within fourteen (14) working days of receipt of all required documentation. If the request does not meet the hardship criteria, the stepped rent will resume and the Authority may collect any TTP that was suspended upon the submission of the form and other fees, if applicable, through a reasonable repayment agreement. If the request meets the hardship criteria, the Housing Authority will grant an exemption.
The Housing Authority will notify those participant households subject to the stepped rent activity of their right to request an exemption as part of the initial intake and triennial recertification processes. The Housing Authority’s notification will advise the household that exemption determinations are subject to its grievance procedures.
What if my household composition changes between reexaminations?
Households must report changes in who lives in the householdhether someone leaves the household, or someone joins between income reexaminations. If someone joins the household and the change results in an increase in household income, that increase will not affect the household’s monthly rent payment. If someone leaves the household and the change results in a financial burden due to a decrease in income, the household can request a temporary hardship reduction, which may result in a lower monthly rent payment.
What if my household income increases?
Households do not need to report income increases between the 3-year income reexaminations and the household’s monthly rent payment does not change as a result of household income increases after the first certification.
What income is used to calculate my monthly rent payment?
A household’s gross past income from a prior 12-month period is used to determine a household’s Stepped Rent monthly payment for the first year. However, if the household is newly receiving housing assistance, then the household’s current income is used to determine a household’s Stepped Rent monthly payment for the first year. After the first year, a household’s monthly rent payment will increase by a small amount every year. This small increase is called an annual Step Rent increase and is not related to household income.
Will my household income be adjusted to account for my expenses?
Yes, the Stepped Rent monthly rent payment is set at 30% of the household’s adjusted income (or the income minus any allowable deductions such as for childcare costs).
What income documentation will I need to provide?
The documentation needed is different for households that are receiving housing assistance for the first time than for those that are recertifying their income.
- For households that are newly receiving housing assistance: current income has been calculated based on the information provided in the application.
- For households that already receive housing assistance and are having an income reexamination: Households need to provide 12-months of prior income documentation. At Stepped Rent income reexamination appointment, the household is provided with a list of acceptable documentation and the date range the documentation needs to cover.