WASHINGTON — The Department of Housing and Urban Development is providing more aid for 2024 housing voucher programs as it deals with rising rents.
The department is establishing an average increase for fair market rents in fiscal year 2024 of about 12% nationwide. The increase, which goes into effect Oct. 1, sets a higher level for the maximum payments for beneficiaries of housing vouchers, allowing them to keep up with rising rents in more competitive rental markets, HUD said in an announcement obtained first by NBC News.
HUD also will release $113 million next week in housing choice voucher funds for public housing agencies in 36 states, which aims to help about 9,500 additional households, the department said.
“When rents go up, obviously, the money that has been provided to [public housing authorities] doesn’t go as far, so these funds are going to augment that,” said Richard Monocchio, head of public and Indian housing at HUD.
The new aid will give tenants “more choice of where they can live, the neighborhoods that they can live in,” Monocchio said.
HUD had seen a decline in the use of vouchers in recent years, in part because the fair market rents were not keeping up with what landlords were demanding, said Solomon Greene, head of HUD’s Office of Policy Development and Research. The use of the vouchers has since increased, which the department attributes in part to updated fair market rent calculation methods. The number of families using housing choice vouchers went up by more than 40,000 from October through May, according to the latest data available from HUD.
Housing choice is restricted when rents rise, so “keeping up with those rent increases in terms of the parameters for the program” is important, Greene said.
The national average rent increased by about 5.45% in the last year, according to a July report by the financial technology company SmartAsset, though the average varies widely depending on the state and the city. New York’s statewide increase was about 8.8%, while a dozen cities across the country had rent increases of over 20% from May 2022 to this May, according to the company.
But rising rent rates are starting to soften, Greene said.
“Our data is still capturing the height of the pandemic increases and catching up, but we are seeing signs in many markets of softening in rents in the past year,” he said.
The increase in aid from HUD comes as President Joe Biden is facing low approval numbers for his handling of the economy. An AP-NORC poll this month found that only 36% of U.S. adults approve of the president’s handling of the economy.