Calculating Tenant Rent
Total Tenant Payment (TTP) is the amount a tenant is expected to pay for rent and utilities based on the tenant’s income. THA sets TTP as the highest of the following amounts, rounded to the nearest dollar:
- 28.5% of the lower edge of the tiered rent income band or
- minimum rent.
Example:
A tenant with an annual adjusted income of $22,000 would fall in the $20,000 – $24,999 tier. To calculate their TTP, THA uses the lowest income in the tier ($20,000), divided by 12 to determine their monthly adjusted income ($1,667), then multiplies it by .285. Their monthly TTP is $475.
THA uses three Tiered TTP schedules to calculate the tenant’s rent to owner. This amount is based on their adjusted annual income and which utilities, if any, a tenant is responsible for.
The Utility Allowance (UA) is an estimate of reasonable, monthly, tenant-paid utility costs, used to reduce the tenant’s rent contribution. THA has established standardized UAs based on the bedroom count. (See THA’s 2011 MTW Plan)
For assigning the utility allowance, the bedroom count is whichever is smaller: the unit’s actual bedrooms or voucher size. When a tenant is responsible for tenant-paid utilities, THA subtracts the utility allowance amount from the tenant’s TTP. The remaining amount is what the tenant is responsible for paying to the landlord.
Example:
If the utility allowance for a 2bdrm is $212, our example tenant rents a 2bdrm house for $1,500 and they are responsible for all utilities; they would pay $263 in rent to the landlord ($475 – $212).
- (The utility allowance amount of $212 in this example is retained by the tenant and is expected to be used to pay for tenant-responsible utilities.)
If the landlord pays all utilities, then the UA is $0. The tenant’s entire TTP ($475) would go towards their rent payment to the landlord ($475 TTP – $0 UA = $475).
The Payment Standard is the maximum monthly subsidy payment a Public Housing Authority (PHA) can provide for a unit. It covers gross rent (rent + utilities) and determines the maximum housing assistance payment (HAP) for voucher holders.
THA has set the Maximum Subsidy it will pay out to the landlord as the Payment Standard minus the Utility Allowance. The tenant’s TTP is applied first to the utilities (if a tenant is responsible for utilities) and the remaining portion is applied to the tenant’s rent to owner. THA does not split the HAP between rent and utilities, nor does THA issue utility reimbursements.
THA’s Housing Assistance Payment (HAP) is equal to the lesser of:
- the Payment Standard minus the family’s TTP (tenant rent + UA) or
- the Gross Rent minus the family’s TTP (tenant rent + UA).
Examples:
- Payment Standard ($1,725) – (TTP: Rent ($281) + Utility Allowance ($194)) = $1,250 HAP
- Gross Rent (Rent $1,500 + Utility Allowance $194 = $1,694) – (TTP: Rent (281) +Utility Allowance ($194)) = $1,219 HAP
THA’s Rent Calculation Worksheet provides a step-by-step process for calculating rent to owner and HAP.
Calculating Tenant Rent for Minimum Rent Households
PHAs set minimum rents, requiring that tenants make some contribution to their housing. A tenant is required to pay minimum rent when TTP – UA falls below the lowest rent amount set by the PHA.
THA requires that senior and disabled households pay a minimum rent of $25. Tenants that are not senior or disabled, as defined by THA, have a minimum rent of $75.
Note:
- To qualify as a senior or disabled household for the purpose of rent calculations, the tenant’s income must be 90% fixed income.
- THA developed a hardship policy designed to assist tenants who found themselves unable to pay THA’s minimum rents. (See 2011 Moving to Work Plan (Amended 2011-10-30)).
Calculating Tenant Rent when Gross Rent exceeds the Payment Standard
Gross rent is the contract rent plus the utility allowance. The tenant must pay the difference in the amount in excess of the payment standard. The amount of gross rent over the payment standard is often referred to as the Payment Standard Difference.
Example:
The payment standard for a 2-bedroom unit is $1,725, and the utility allowance for a 2-bedroom is $194. If our example tenant rents a 2-bedroom house for $1,600 and they are responsible for all utilities, they would pay $350 in rent to their landlord.
- Gross Rent (Contract Rent ($1,600) + UA ($194) = $1,794) – Payment Standard ($1,725) = Payment Standard Difference ($69).
- Tenant Rent (TTP ($475) – UA ($194) = $281) + Payment Standard Difference ($69) = Tenant Rent to Owner $350.
