Sample Rent Calculation

Minimum Rent

What to Do If the Rent Is Too High

Ceiling Rents

When Rent Changes Go into Effect

Rent Calculation

The amount of the rent is usually based upon a percentage of the family’s income. The income of every family member is used in calculating rent. Some types of income are not included. Earned income is counted by gross pay (before taxes are taken out) and not by take home pay.

To calculate the rent, first take the family’s annual gross income. There are three possible deductions from annual income:

1. $500 per year for any family with at least one family member employed 20 hours per week or more;
2. The annual cost of Medicare, Medicaid and/or health insurance premiums for elderly or disabled households (for definitions of “elderly” and “disabled” see link PHA’s admissions preference for working/work ready, elderly, disabled and veteran families); and
3. $500.00 per year for income obtained from assets, such as interest on a bank account.

Subtract any applicable deductions from the family’s gross annual income to get “adjusted annual income”. Then multiply the adjusted annual income by applicable percentage (based on family size) below:

1-2 persons 28%
3-5 persons 27%
6 or more 26%

The figure derived by this multiplication is called “annual rent”. To get the monthly rent, divide the annual rent figure by 12.

PHA tenants living in scattered site units may have a further adjustment to their rent as a result of utility allowances.

PHA also has minimum rent, hardship rent and ceiling rent. Tenants should check these links to see if these rents apply to them.

EXAMPLE: Timothy tenant lives in a PHA unit with his wife and two children. He is 65 and receives $700.00 per month from Social Security. His wife works 20 hours per week and earns $450.00 per month. They also receive SSI disability of $500.00 per month for one of their children. The monthly income for the family is $1,650.00 ($700.00 plus $450.00 plus $500.00). The annual gross income for the family is $19,800.00 ($1,650.00 times 12).

Timothy pays $30.00 per month for Medicare coverage and also has a supplemental health insurance policy that costs $50.00 dollars per month. As Timothy is 62 or older, he is considered to be “elderly” and can deduct these expenses from annual gross income. His monthly deductible expenses are $80.00 ($30.00 plus $50.00) and his annual deductible expenses are $960.00 ($80.00 times 12).

An additional $500.00 deduction can be taken because Timothy’s wife works 20 or more hours per week.

To get his adjusted annual income, Timothy can deduct a total of $1,460.00 ($960.00 plus $500.00) from gross annual income. His adjusted annual income would be $18,340.00 ($19,800.00 minus $1,460.00).

PHA has a minimum monthly rent of $50.00, so if the monthly rent calculates to a figure less than that amount, the tenant will still have to pay $50.00 per month. In the event that a tenant suffers some sort of catastrophic loss of income, such as the loss of a job, PHA can waive the minimum rent period for three months. This is called a “grace period”.

Where unique or extraordinary circumstances exist (such as extraordinarily high medical expenses), PHA will consider calculating the rent in a different manner, if the tenant applies for a “hardship exception.” In order to apply for a hardship exception, the tenant must fill out the attached form and provide a copy to the Hardship Committee. PHA must suspend the minimum rent requirement, starting the month after the hardship request is made, and continuing until the Hardship Committee makes a determination on the request.

In order to encourage working families to remain in public housing, PHA has also established “ceiling rents”. These are amounts beyond which the rent will not increase, no matter how high the family income may become. The amounts are based on bedroom size, as follows:

Studio $344.00
One Bedroom $423.00
Two Bedroom $523.00
Three Bedroom $654.00
Four Bedroom $683.00
Five Bedroom $786.00
Six Bedroom $904.00

PHA also uses ceiling rents as penalty rents, when tenants do not complete the recertification process.  PHA must provide advance written notice of the increase to the ceiling rent and, if the tenant was prevented from completing that process due circumstances to beyond the tenant’s control, PHA must retroactively remove the ceiling rent charges. If PHA does not do these things, the tenant can file a grievance hearing request form.

PHA must give the tenant 30 days advance written notice of any rent increase. Rent decreases are effective the month after the tenant reports a drop in family income. Note that, if the tenant fails to timely report an increase in income, PHA may make the rent increase retroactive to the month following the month in which the increase in income occurred.  For more information go to PHA’s recertification process and What to do if there are changes in family composition or in income in between recertifications.