JCHA's flat rate rents to rise

Sue Guinn Legg • Apr 20, 2012 at 10:09 PM

The executive directors of the Johnson City Housing Authority and the East Tennessee Field Office of the U.S. Department of Housing and Urban Development on Friday announced a new set of increased flat rate rents for the housing authority’s 740 tenants set to take effect on Aug. 1.

While the increases are slightly less than the quadruple hikes announced by JCHA in November, JCHA’s flat rate rents are going up 2.3 to 3.9 times the current rates.

JCHA Director Richard McClain and Ed Ellis, director of HUD’s Field Office in Knoxville, emphasized all JCHA tenants will have the option of paying a 30 percent “adjustable income rent” that in most cases will result in much less of an increase than the new flat rate, and in some cases may be a decrease from their current flat rate rent.

Case in point, 77-year-old Verna Bradley flushed with tears when she saw the flat rate rent on her four-bedroom apartment will rise from $206 to $500 a month. “I can’t make that,” she whispered from behind the hand she pressed to her mouth in shock. But a quick call to McClain’s office confirmed that if Bradley, who lives on less than $700 a month in Social Security benefits, chooses the 30 percent income adjustable rent option, her rent will actually decrease.

Legislation pending in the 2013 federal budget currently being debated by Congress will for the first time set the minimum rent HUD-supported housing authorities charge residents with zero income at $75 per month. The current rate charged by JCHA is $25 per month. Ellis said the authority’s flat rate increases are intended to ease residents through the transition. JCHA’s new minimum rent for residents with no income will be $50 per month beginning Aug. 1.

Ellis and McClain said the income-based adjustable rents will vary widely according to tenants’ individual circumstances, including the number of children in their home and medical expenses that will be deducted. “There’s no doubt it will impact the elderly on fixed incomes but we do have a lot of services here to help them through it,” including hardship waivers, McClain said.

Ellis emphasized that JCHA has not raised its flat rate rents in more than 14 years and that the new rates are in line with rents charged by other housing authorities in the area and below private sector rents in the local market area surveyed in three separate studies conducted since January.

“The rate is probably going to increase for all tenants. But none of them are any more than what the law requires.” Ellis said. “The (HUD) regulations do not tell the Johnson City Housing Authority what the rates have to be, but they do have to stay in line with the market area. That’s where all these studies came from,” Ellis said.

“We are not trying to displace anyone but there are people who live in the housing authority who have higher incomes. If they chose to leave it it will free up units for someone else in true need because our housing authority is really and truly for people who need help with their housing expenses.”

Bradley’s 66-year-old friend and neighbor Shirley Lyon also shed a few tears Friday when she saw the flat rate rent on her one-bedroom home will rise from $74 to $290 a month in August. Like Bradley, Lyon lives on less than $700 a month in Social Security disability and was anticipating her new rent would be about $195 as she was told when the JCHA first announced the flat rate increases in November. She was unaware of the distinction between flat rate and income-based adjustable rent when JCHA calculated income-based rent last fall and seeing the $216 increase in her flat rate on Friday shocked her.

Lyon said she grew up in Keystone and after beginning her family elsewhere she returned to the development 30 years ago when her son was a teenager. Along with Bradley, who has lived in Keystone for 50 years and raised eight children there, she believes she is among its most tenured residents.

“I’ll be calling my sister in Asheville to come and get me,” she declared before McClain clarified that the 30 percent income adjusted rate option will increase her rent by about $120 rather than the $220 increase in the flat rate. Even at that, Lyon said, “I’ll have to stretch it. I do pay for my medicine, phone, TV and electricity when it goes over” the cap on monthly power and water usage included in all JCHA rents.

McClain said tenant notices of the flat rate increases will be mailed today and Monday along with letters requesting the tenants call the housing authority office to schedule appointments to have their income adjusted rents calculated and to sign new leases that have been modified to include a new stipulation that JCHA’s flat rent rates will be adjusted periodically based on changes in private rents in the local market.

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