Owner Update “Question of The Month”

Q: How does TMHA factor in the cost of utilities when calculating the amount of subsidy paid for a family?

A:The Housing Assistance Payment on every unit assisted on the TMHA Voucher program takes into account the type of utilities provided at the unit, and who pays for them (Owner or Tenant). In the case that the Tenant is paying for some or all utilities, TMHA factors an estimate of those utilities into the Gross Rent, the total of the Rent to the Owner PLUS the estimate of utilities.

The subsidy calculation that TMHA does figures the amount that the tenant will pay toward the unit based on their income and the amount that will be subsidized by TMHA. The subsidy or Housing Assistance Payment is applied first to the rent. The tenant then pays the remainder of the rent, plus any utilities that are not included in the rent.

When the tenant is very low income, TMHA may be paying ALL of the rent. If there is subsidy left over after the rent is paid, the remaining subsidy will be sent to tenant in the form of a Utility Allowance Payment (UAP) to help them pay their utilities.

In the case that the Rent to the Owner includes ALL the utilities, then ALL the subsidy is paid toward the rent. In that instance, there is no reason to estimate the utilities since the tenant is not responsible for paying for them.

2nd Q. How does TMHA figure the utility estimate?

A:TMHA has to reconsider the Utility Estimates at least annually. If there has been a 10% increase, the utility schedule has to be revised. As you may guess, the significant increases in utilities in recent years has caused changes to the schedules. TMHA re-estimates in October or November.

To track utility changes, TMHA keeps news articles and gathers information directly from utility companies to track rates. TMHA also uses information from our program software company which tracks utility information, and has a database of average utility consumption rates on over 2000 units of all types.

An estimate is always an estimate, so to increase accuracy, TMHA has developed three geographic schedules for our area: one for Dover, one for New Philadelphia, and the third for Tuscarawas Co. (units not in Dover or Phila.). Within each schedule, four different unit types are represented: Single Family Homes, Duplex/Triplex – type Unit, Mobile Home, and Row House/Low Rise – type Unit. The three geographic areas allow us to account for differences particularly with water/sewer rates and trash rates. Dover in having its own Municipal Plant and unique multi-utility billing system needs to have a dedicated schedule. The various unit types make some allowance for the different consumption rates of different types of units.

Shared Utilities – a Caution!

While discussing utilities, it’s a good time to remind owners that shared utilities cannot be allowed on the Voucher program. A shared utility is one where the owner is taking one bill and splitting it between two or more tenants. This can happen for example in older home conversions where there is one meter for electric or gas. The owner gets the bill and splits it between however many tenants are in the building. HUD has stated that practice is a no-no, since the actual usage for each tenant is not known. On the Voucher program, TMHA will ask the Owner to pay the bill for the shared utility and pass the cost on to the Tenant by including it in the rent amount.

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