1. Evaluating Utility Allowance Options: UAs from the PHA Perspective Samantha Sowards Nan McKay & Associates

2. PHA tenant-based (HCV) – Must be determined based on the typical cost of utilities and services paid by energy-conservative households that occupy housing of similar size and type in the same locality – Must use normal patterns of consumption for the community as a whole and current utility rates 24 CFR 982.517; HCV Guidebook Ch 18

3. Things to consider… – Remember all PHAs do this differently – Typically takes a lot of time, effort, and money – Not based on actual usage – Some consider energy efficiency Doesn’t hurt to ask – Only required to change the UA when there’s a 10% or more increase since last revision Many change every year since it’s time consuming to calculate whether there’s been a change

4. HOME – For projects committed on or after 8/23/13, PJ must determine UA using either: HUD Utility Schedule Model or Project-specific methodology based on actual usage – Multifamily utility analysis per H 2015-04 – Utility company estimate – LIHTC Agency estimate – Energy Consumption Model HOMEfires- Vol 13, No. 2

5. PJ may not use PHA UA for projects committed on or after 8/23/13 – Older projects may continue to use PHA UA PJ must request a waiver if the UA requirement for another program conflicts with HOME – Think HCV tenants in HOME units HOMEfires- Vol 13, No. 2

6. Project-Based Rental Assistance (PBRA)/Multifamily – Notice H-2015-04 In the past there was no national standard – Baseline utility analysis based on actual usage at the property once every 3 years Process can be cumbersome – Factor-based analysis other years State-specific increase factor UAF (similar to an OCAF)

7. Public Housing – Must establish allowance for: PHA-furnished, checkmetered utilities and Utilities purchased directly by residents from suppliers – Many charge for excess utility usage 24 CFR 965.501; PH Occupancy Guidebook

8. Under the Rental Assistance Demonstration (RAD) Program, PHA has the option to convert public housing to either: – Project-based vouchers (PBVs) HUD’s Office of Public and Indian Housing – Project-based rental assistance (PBRA) HUD’s Office of Multifamily Housing Programs Very typical to layer in LIHTCs and perform a rehab in these situations

9. RAD PBRA – At closing must use public housing UA However PHA may submit projections of energy saving improvements for HUD approval – Contract rents increased by 75% of approved reduction » $500 contract rent + $130 PH UA= $630 gross rent » New UA is $90 x 75% = $30 » $530 contract rent + $90 new UA = $620 gross rent – Year after conversion, follows H 2015-04 PIH 2012-32(REV-2)

10. RAD PBV – At conversion, initial rents set using PH UA Unless energy conservation measures like in PBRA – PHA may request waiver from HUD to establish site-specific UAs and apply tenant utility savings HCV UA would create undue cost to families or discourage conservation/efficient use of HAP funds – After conversion, must use UA in accordance with HCV/PBV regs Effective for each family at annual recert PIH 2012-32(REV-2)

11. Example 1: Grove Gardens 20 unit project with 100% PBRA, 100% LIHTC, and 5 fixed HOME units – Multifamily UA per H 2015-04 for all 3 programs But owner needs to talk to PJ for HOME since PJ sets UA

12. Example 2: Maple Manor 30 unit project with 15 PBV RAD units, 15 public housing units, 100% LIHTC – 15 RAD PBV/LIHTC units use the PHA HCV UA (unless exception is granted for project-specific) – 15 public housing/LIHTC units use the PHA public housing UA

13. Samantha Sowards Nan McKay & Associates Manager of Curriculum Development ssowards@nanmckay.com (800)783-3100 ext.120