Household Energy Costs and the Housing Choice Voucher Program: Do Utility Allowances Pay the Bills?

ABSTRACT

Utility bills present a hidden threat to the affordability of a family’s housing—unknown before a household moves into a unit, and unpredictable from one month to the next. In theory, tenants receiving Housing Choice Vouchers are shielded from energy cost burdens through utility allowances built into rent subsidies. However, tenants may face actual energy costs that far outstrip allowances, effectively rendering their housing unaffordable. This study compares utility allowances with electric bills for over 19,000 Housing Choice Voucher households in four Florida cities and identifies household and unit characteristics associated with excessive costs. Nearly half of tenants in the sample faced bills in excess of posted allowances, with households renting single-family homes particularly at risk. On the other hand, state-sponsored affordable housing developments, such as those subsidized by the Low Income Housing Tax Credit, offered voucher tenants the chance to live in modern units with lower energy use and a better fit between costs and the utility allowance. The findings have implications for housing authorities and tenants seeking to reduce energy cost burdens.

KEYWORDS:

• energy
• vouchers
• affordability
• multifamily
• tax credits

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1. The American Community Survey and earlier decennial census data sets define “gross rent” as “the contract rent plus the estimated average monthly cost of utilities (electricity, gas, and water and sewer) and fuels (oil, coal, kerosene, wood, etc.) if these are paid by the renter (or paid for the renter by someone else)” (U.S. Census Bureau, 2015).

2. In most cases, the family share is approximately 30% of household income. In two main cases, however, the tenant’s share may exceed 30% of income. First, PHAs are allowed to charge a $50 minimum gross rent for voucher holders, with waivers available in some cases of financial hardship (24 CFR 5.630). Households reporting annual incomes below $2,000 ($167 per month) will face cost burdens above 30% if the $50 minimum rent is in place. Second, if the rent for a selected unit exceeds the PHA’s payment standard for that unit type and number of bedrooms, the voucher holder may choose to pay the difference between the payment standard and the unit rent, as long as the resulting tenant payment does not exceed 40% of income.

3. Based on an analysis of 2016 income certification data submitted to Florida Housing by managers of LIHTC-funded developments.

4. County property appraiser data were provided by the Florida Department of Revenue, Name-Address-Legal File.

5. Most dramatically, the Gainesville Housing Authority used very high allowances before mid-2012, averaging $250 per month across structure types and number of bedrooms. GHA’s subsequent allowance schedule, put into place in April 2012, reduced the average allowance to $101.

6. The year 2015 is outside of the 2010–2013 study period for this analysis, but billing structures and rates changed little over the entire 2010–2015 period in the four utility areas. In fact, the largest change, between 2011 and 2015 in the rate structure for Gainesville Regional Utilities, may result in a slightly underestimated bills for GRU customers in 2011 when the 2015 rate structure is applied.

Additional information

Funding

This work was supported by the John D. and Catherine T. MacArthur Foundation [13-103380-000-USP].

Notes on contributors

Anne Ray

Anne Ray manages the Florida Housing Data Clearinghouse at University of Florida’s Shimberg Center for Housing Studies. Her research interests include the preservation of subsidized rental housing, public housing, the housing needs of persons with disabilities, farmworker housing, and child and family homelessness. She received a Master’s degree in Urban Planning and Policy from the University of Illinois at Chicago.

Ruoniu Wang

Ruoniu Wang is a researcher with the Shimberg Center for Housing Studies at the University of Florida. His research interests lie in the geography of opportunity, housing mobility, and transportation. Wang received his PhD in Urban and Regional Planning from the University of Florida.

Diep Nguyen

Diep Nguyen is the Database Manager for the Shimberg Center for Housing Studies. Her duties include design and management of the center's database and developing the center's website and its applications. Ms. Nguyen received her Master’s degree in Translation and Interpretation and an ABD in Linguistics from Moscow State Linguistics University and a Master’s degree in Computer Science from the University of Florida.

Jim Martinez

Jim Martinez is a senior systems architect for the Shimberg Center for Housing Studies. His technical duties include software engineering, developing web applications, system administration, and database administration and maintenance. He received a Master’s degree in Mathematics from the University of Florida.

Nicholas Taylor

Nicholas Taylor works with the University of Florida - Program for Resource Efficient Communities (PREC) as a State Specialized Extension Agent. Dr. Taylor’s research interests include utility data analysis to identify effective water and energy conservation measures and evaluation of land development impacts. He also coordinates research and outreach efforts between PREC, regional utility providers, governmental agencies and non-profit groups. He received his PhD from the M.E. Rinker School of Construction Management at the University of Florida.

Jennison Kipp Searcy

Jennison Kipp Searcy is a Resource Economist with the Program for Resource Efficient Communities at the University of Florida Institute of Food and Agricultural Sciences.  Her research interests include water and energy efficiency policy, sustainable development, climate change adaptation, and civic engagement with environmental issues.  She has dual Master’s degrees from the Pennsylvania State University.