Impact of Utility Allowances on Rent

Impact of Utility Allowances on Rent

How do utility allowances affect the amount of rent that a site manager can request for a unit? The Delaware State Housing Authority (DSHA) provides this guidance.

All utilities—electric, oil, water/sewer, etc.—that a resident would be required to pay must be included in the calculation of housing assistance for a family and in determining if the unit is within the applicable payment standard. The amount of contract rent requested for a unit and utility allowance are added together and cannot exceed the payment standard for the applicable bedroom size of the voucher.

For example, in Kent County, Delaware, the two-bedroom payment standard is $817. If the landlord is requesting $600 for a two-bedroom unit and the tenant-paid utilities are estimated to be $200 per month, the total of the rent and utilities would be $800, which is less than the payment standard, and makes the unit eligible for the HVC program.

If all the utilities are included in the rent requested by the landlord, the contract rent amount can be approved up to the applicable payment standard without deducting anything for the utilities. In this instance, the landlord cannot request the participant to pay for any utilities anytime during the lease period.

For example, using the same two-bedroom payment standard of $817, if a landlord includes all utilities in the contract rent, the housing authority would be able to approve a rent amount up to the payment standard, which is $817. But, the landlord could not have the tenant pay any additional funds for utilities, even if there was an increase in energy or water/sewer costs.

The DSHA annually updates its utility allowance charts that show the applicable utility allowance for each tenant-provided utility, based on usage and average costs for the local counties.