If a tenant pays the utilities, the PHA will deduct the cost of a reasonable amount of utility consumption in calculating the tenant portion of rent. The amount of this allowance is determined by the PHA’s utility allowance schedule, which is based on the typical cost of utilities and services paid by energy-conservative households occupying housing of similar size and type in the same locality.1 If a tenant pays $0 rent, they should receive a utility allowance reimbursement payment each month.
In developing the schedule, the PHA must use normal patterns of consumption for the community as a whole and current utility rates. A HUD contractor has generated a spreadsheet based on a national consumption study to guide Low Income Housing Tax Credit landlords in setting utility allowances. At least one Louisiana PHA has used this spreadsheet to generate its Section 8 utility allowances. Some of the assumptions in, and so allowances projected by, this tool are questionable.
Sadly, the utility allowance is usually less than the actual amount of a voucher tenant’s utility bills. PHAs are required to review the adequacy of their utility allowances and to increase them when utility rates have increased by at least 10% since the utility allowance was last adjusted.2 Opportunity for an informal hearing is required if a family disputes whether its utility allowance is correctly calculated under the PHA utility allowance schedule.3
On request from a family that includes a person with disabilities, the PHA must approve a utility allowance that is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation.4