Finding 1086127 (2023-011)

Assistance Listing 14.267 Continuum of Care Program Condition: For three out of 25 sampled units receiving rental assistance, the Office of Homeless Services (OHS) did not ensure that contract rents being paid were comparable with those paid for unassisted units. For these three units, OHS only included Continuum of Care (CoC) Program assisted units in their rental comparability analyses. Funding for this program is received from the U.S. Department of Housing and Urban Development. Criteria: Per 24 CFR 578.51(g), the recipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units. Effect: OHS is not in compliance with 24 CFR 578.51(g). Additionally, by relying solely on assisted units, they may have established rent rates that do not accurately reflect the broader market. Cause: OHS does not have written policies and procedures in place that clearly communicate the rent reasonableness requirements internally or to their providers. Recommendation: We recommend that OHS create written policies and procedures that clearly communicate rent reasonableness requirements internally and to their providers. Views of the Responsible Officials and Corrective Action Plan: OHS will make the needed changes to all Rent Reasonable policies, standard operating procedures, housing standards, scopes of service, and monitoring tools to reflect the requirement above. Additionally, this will be communicated to internal staff and the provider community, especially those that have been allowed to complete their own rent reasonable assessments. It is also a possibility that we will no longer allow the Providers to conduct the rent reasonable verification themselves. This has yet to be determined. Contact Person: Jerome R. Hill, Director of Compliance, Office of Homeless Services, 215-686-037, 215-520-3556