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Sue Guinn Legg

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Housing Authority increase to force out higher income renters

June 11th, 2013 9:26 pm by Sue Guinn Legg

Housing Authority increase to force out higher income renters

Johnson City Housing Authority

The Johnson City Housing Authority is implementing a second round of HUD mandated flat-rate rent increases intended to bring the rents within 80 percent of the local fair market rate and force the authority’s higher income residents to move on.

Flat rate rent increases were first mandated by HUD at JCHA in November 2010 to address underpayment by long-term residents whose income had grown above the level for which public housing intended.

JCHA Executive Director Richard McClain said, at that time, the housing authority objected to increase, arguing 80 percent of fair market rate was too much of an increase for its residents to handle, and over the next six months successfully negotiated with HUD to lower the increase to 60 percent of fair market rate.

The first flat-rate increase went into effect on Aug. 1 at which time McClain said about 90 percent of housing authority residents effected by the increase chose the option available to all public housing residents to pay rents equal to 30 percent of their adjusted household income.

As a result, only about 100 housing authority renters, or about 10 percent of the authority’s more than 750 renters, will be impacted by the second flat rate increases set to take effect Sept. 1. 

And this time, McClain said, the increase is intended to force out about 50 higher earning housing authority residents, including some with annual household incomes of $50,000 to $80,000.

“We have people who live here who are not low income,” he said. “That’s the reason we’re doing it, to get these people to move out because they’re taking the space that can go to somebody who needs it. There are some people who live here who make $80,000 and drive BMWs. We want them to move on.”

According to McClain, about 80 percent of the housing authority’s residents are currently paying rents set at 30 percent of their adjusted household income and about 20 percent paying flat rent rates because the current flat rates are below 30 percent of their adjusted income and because utilities are included.

Housing Authority residents must have low income in order to enter public housing but are not required to leave if their income increases, he said. “People come here and go to school and get jobs and their income increases but don’t leave because (the rent is) so low. By law we can’t force them to go unless they violate the rules or regulations.”

Some of the public housing residents currently paying the flat-rate rent are expected to switch to 30 percent of their adjusted income and remain in public housing, while other, higher income residents may choose to move out, providing space for another low income family to enter public housing.

“Last year, when 90 percent were paying flat rate rent, it affected almost everybody. This time only the high income will be affected,” McClain said.

“There’s still a chance 30 percent of their adjusted income will be cheaper than somewhere else because it includes utilities. ... With the 80 percent we’re still quite a bit below somewhere else and higher flat rate may not force them out. But we hope it does.”

In the end, McClain said, the desired result of the increase is to improve public housing availability to low income individuals and families. 

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