HUD Issues Clarification of Services Valuation In Rent Setting
In November 2021, HUD issued an updated memo clarifying the valuation of non-shelter services during Rent Comparability Studies for Section 8 properties. The memo explains HUD’s interpretation of existing policies related to an appraiser’s determination of market comparable rents for a Section 8-assisted property.
RCS are conducted at five-year intervals at certain HUD-assisted Multifamily Housing properties. In valuing services at properties during an RCS, an appraiser determines how the services are offered and funded, compares similar properties, and assigns a market value to the services. These are capped at a maximum of $50 per unit or 5% of rent.
Specifically, the memo discusses the following components of an appraiser’s rent comparability analysis related to non-shelter services valuation during a Rent Comparability Study (RCS):
- Identifying which services at a property are to be included in the valuation;
- Identifying the funding source for a property’s services;
- Identifying properties that offer comparable services;
- Assigning market value to each service at the property; and
- Documenting service valuation following each rent grid.
The clarification will impact the value of services that are included in rent setting. LeadingAge had previously argued for greater flexibility to incorporate accurate reflections of services costs into rent setting for HUD properties, and will continue to advocate for changes to the renewal guide policy and interpretation.
A deeper LeadingAge analysis on the impacts of service-enriched affordable housing options for low-income older adults is forthcoming. The memo is available here.
Most Recommended
April 22, 2024
CMS Finalizes Nursing Home Minimum Staffing Standards
April 21, 2024
Older Americans Month 2024: Suggested Schedule
April 24, 2024
Salary Threshold for White Collar Overtime Exemptions Raised
April 12, 2024
Improving Medicare Advantage
Recently Added
April 26, 2024
HUD Publishes Updated Flood Risk Rule
April 26, 2024
Final Nursing Home Staffing Mandate: Analysis
April 25, 2024