November 2002 Owners Update

Owner Update "Question Of The Month"

What is meant by the Gross Rent on a unit?

Gross Rent is a term that Owners will frequently hear when discussing the
rent amount on a program unit. It refers to a figure that is made up of:
the rent to the Owner (unit rent), an estimate of the monthly amount that the Tenant will have to pay for utilities not included in the rent. UTILITY estimate includes heat and water heating, cooking, electricity, water & sewer, trash collection, and range / refrigerator. Telephone and cable are NOT included as utilities.

Using the Gross Rent scenario allows TMHA to equitably consider the total
housing costs on each unit. Some examples:

a 3 BR unit in Dennison has a Rent to Owner of $475. Rent INCLUDES trash
collection, and the Owner is providing the range and refrigerator. Utilities NOT included in the rent are the gas heat and water heating, electric, and water & sewer. The monthly estimate for the Tenant to pay for these utilities is $146. Therefore, the Gross Rent is $621.

a 3 BR unit in Dover has a Rent to Owner of $635. This rent includes ALL
the above utilities. Therefore, the Gross Rent is $635.

In the examples cited, if all you know is the Rent to Owner, the second unit might appear much more expensive. However, when you take into account that the Owner - not the Tenant - is paying all the utilities, the rent amount is understandable.

The second example would be unusual. Generally Owners want the Tenant to
pay some portion of the utilities. Using the Gross Rent method allows TMHA
to be consistent when considering all the rent/utility arrangements that we
encounter.

You might be wondering how TMHA comes up with the utility estimate used in
the Gross Rent. We develop a schedule that establishes a monthly amount
for each bedroom size, and each type of heat (natural gas, bottled gas, oil, electric), cooking and water heating type, water & sewer, trash collection, and a monthly amount if the Tenant is providing the range and/or refrigerator.

Annually, we review the schedule to see if it needs to be updated. For example, in the last few years, water and sewer costs have been rising faster than inflation. We took that into account in the schedule. As you might guess, this process is not an exact one. Costs fluctuate from town to town, and provider to provider. Usage varies widely from one unit to another because of construction, equipment, and usage habits. So the estimate schedule is just that - a well-considered estimate. This schedule is a public document, and is available if you ask us for a copy. We will consider comments to it.

TMHA Office Closings For November
The Tuscarawas Metropolitan Housing Authority office will observe the
following holidays in the month of November and will be closed for business these days:

November 11th - Veterans Day
November 28, 29 - Thanksgiving Holiday