HUD HCV Guidebook § 4.1

At least annually, PHAs must review its payment standards in accordance with its policy to determine whether
adjustments are needed for some or all unit sizes.71 The PHA must describe in its Administrative Plan the
process for applying changes in payment standard amounts during a HAP contract term, establishing and
revising voucher payment standards, including whether the PHA has voluntarily adopted the use of SAFMRs.72
If the PHA establishes different payment standard amounts for designated areas within its jurisdiction,
including exception areas, then the criteria used to determine the designated areas and the payment
standard amounts for those designated areas must be included in the PHA’s Administrative Plan.73 All such
areas must be described in the PHA's Administrative Plan or payment standard schedule. Since the PHA uses
its applicable FMRs to determine its payment standards, and FMRs are published annually by HUD, the PHA
must review its payment standards when the new FMRs are published to ensure the payment standards fall
within the basic range of 90 percent to 110 percent of the new FMRs.74 When reviewing the adequacy of its
payment standards, PHAs are encouraged to consider the following non-exclusive list of items:

69
   24 CFR 982.503(c)
70
   24 CFR 888.115(a)
71
   24 CFR 982.503(c)(3)
72
   24 CFR 982.54(d)(14)
73
   24 CFR 982.503(a)(3)
74
   24 CFR 982.503(c)(3)

•     Assisted Families’ Rent Burdens. The PHA should review the percentage of income families with vouchers
      use to pay rent to determine the extent to which rent burdens exceed 30 percent of income due to the fact
      that gross rent levels are above the PHA’s payment standards. This information can be obtained from the
      rent burden subsection of the Key Management Indicators report in IMS/PIC, or its successor system.
•     Availability of Suitable Vacant Units with Rents Below the Payment Standards. The PHA should review its
      rent reasonableness data, vacancy rate data, and other relevant information to determine whether there
      is an ample supply of vacant units with rents below the payment standards, particularly in areas with low
      concentrations of poor and minority families.
•     Size and Amenities of Units Selected. The PHA should review the size and amenities of units selected by
      assisted families before concluding that there is a need for a change in the payment standards. Payment
      standard increases should be made only when they are needed to access units of adequate size and
      amenities in the rental market.
•     Time to Locate Housing. The PHA should review the average time required for voucher holders to find
      units. If the PHA determines that the amount of time required is excessive (i.e. 90 days or more), an
      increase in the payment standard may be needed.
•     Vouchers Expired without Leasing. PHA should also review the number of voucher holders whose vouchers
      expire without leasing a unit. While some barriers to successfully lease a unit are to be expected, the fact
      that there are a substantial number of families unable to lease units with assistance under the HCV
      program suggests that the payment standards may be too low.
•     Large Numbers of Families Moving Out of the PHA’s Jurisdiction. The PHA may review the number of
      families exercising the portability option to lease in other jurisdictions. While some exercise of portability
      is to be expected and may indicate that the PHA is meeting its objectives in expanding housing
      opportunities for participating families, an excessively high number of families moving out may be an
      indicator that the PHA’s payment standards are too low.