As a result of representing a tenant group in Texas (Crowder v. HUD), HPP uncovered a serious flaw in HUD’s administration of Section 8 properties across the country.  In short, HUD’s failure to instruct all Section 8 administrators on the need to regularly update tenant utility allowances has meant that thousands of low income tenants have been overcharged in rent, for years in some cases.  See previous HPP article and utility allowance report here.

After repeated efforts to get HUD to address this problem, HPP and its partners (the Shriver Center and the National Housing Law Project) finally wrote to HUD Secretary Shaun Donovan on May 19, 2011 and suggested that HUD’s continuing failure to address this serious problem could leave tenants with no other option but to sue HUD.  Although HUD never responded directly to HPP, less than a month later, on June 20, HUD sent out a memo to all Section 8 administrators which for the first time made clear that for all Section 8 projects, utility allowances must be adjusted whenever owners seek rent increases or where utility rates have increased by 10% or more.  See HUD memo.

This policy change will result in increased utility allowances, and therefore lower rents– for thousands of economically hard pressed HUD tenants across the country.  But two other challenges remain, ensuring that HUD’s new directive gets fully implemented by administrators, and addressing the thousands of tenants who should have retroactive claims for rent overcharges.  HPP and its partners are now attempting to get HUD to address these issues.