Housing Rental Rates Training for Tenants U S

Housing Rental Rates Training for Tenants U. S. Department of the Interior Doug Pokorney, Quarters Program Manager Laura Walters, Quarters Program Specialist Denver, Colorado

Common Misconceptions

Common Misconceptions “I shouldn’t have to pay rent. Housing should be included as a perk of the job I perform. ” Ø False: Rents are established in accordance with Federal laws & regulations. Providing free rent is considered a pay subsidy & is strictly forbidden by law. “My rent should be based on my pay grade. ” Ø False: Rents are based upon the private rental market; Employee pay is not a consideration. “My rent is unfair because my housing is so isolated, or in such bad shape, or is so old, or doesn’t have good water, or…” Ø False: Rents are adjusted for many variables such as type, size, condition, age, isolation, and/or general lack of amenities. 3

Common Misconceptions “I shouldn’t have to pay for utilities or any Govt. -provided appliances, services or furnishings. ” Ø False: Tenants are to be charged for everything provided to them at the housing unit. Not charging for something is considered a pay subsidy & forbidden by law. “My rent will never change. ” Ø 4 False: Federal regulation requires rents to be updated every year for inflation & at least every five years with a new private rental market assessment.

Common Misconceptions “There is a limit to how much my rent can increase. ” Ø False: There is nothing in the Federal regulations that limits how much rent can increase, just as there is nothing that limits increases in the private rental market. “My housing officer or manager can change my rent if I don’t like it. ” Ø False: Housing officers or managers are not authorized to alter the rent. They can review your housing data to ensure it is correct, but the law prohibits them from arbitrarily lowering the rent. “My rent will be frozen when there is a pay freeze in place. ” Ø False: Rent is based on the private rental market, not 5 an employee’s pay.

How are Rents Established? Laws & Regulations

The Law - 5 USC 5911 Authority for Government agencies to provide quarters Rental charges must be based upon the “reasonable value” 7

The Regulation - OMB Circular A-45 http: //www. whitehouse. gov/omb/circulars Purpose: “This circular sets forth policies and administrative guidance…in establishing…rental rates and other charges for Government-furnished or leased quarters. . . according to 5 USC 5911. ” [A 45, 1. ] Coverage: Applies to all civilian Government rental quarters located within the 50 states, Washington D. C. and the U. S. territories. [A-45, 1. ] 8

The Regulation - OMB Circular A-45 v Subsidies, Inducements Prohibited: “Rents and other charges may not be set so as to provide a housing subsidy, serve as an inducement in the recruitment or retention of employees, or encourage occupancy of existing government housing. ” [A-45, 5. b) 2. ] 9

The Regulation - OMB Circular A-45 Reasonable Value: “…charges for rent and related facilities should be set at levels equal to those prevailing for comparable private housing in the same area…” [A-45, 5. b) 1. ] “Reasonable value is … what an employee would pay for comparable housing in the open market. ” [A-45, 6. h)] 1 0

How is “Reasonable Value” Determined? Surveys

The Regulation - OMB Circular A-45 “The determination of reasonable value…will be based upon an impartial study of comparable private rental housing. ” [A-45, 7. a)] Must be studied at least every five years [A 45, 7. d (1) (a)] Two methods: Appraisal or Regional Survey [A 45, 7. a)] OMB prefers Surveys: “While both methods are accurate, agencies are encouraged to utilize the survey method whenever possible due to the costs & administrative burdens associated with conducting individual appraisals. ” [A-45, 7. a] DOI Quarters program uses Surveys 1 2

Survey Regions 1 3

Survey Schedule

The Regulation - OMB Circular A-45 Nearest Established Community (NEC): v Closest community v Population of 1, 500 (5, 000 in Alaska) as of last U. S. Census (2010), and v A doctor and dentist, and v A private rental market available to the general public [A-45, 6. f. ] 1 5

Survey and Data Analysis 1. Develop sampling plans 2. Collect private rental data 3. Review market data; cull outliers 4. Run statistical regression 5. Produce new rent formulas 6. Test rent formulas against comps 7. Ensure rents meet “reasonable value” test 1 6 8. Publish results in Regional Survey Report

Market Rents vs. i. QMIS Rents 1 7

Market Rents vs. i. QMIS Rents 1 8

Who Determines Rents

Participants 2 0 1. Department of Interior Quarters Program 2. Agencies with housing

DOI Quarters Program v Developed early 1980 s v Comply with A-45 v Required DOI Bureaus to Utilize v Offered to other Agencies v Economies of Scale v Uniform rates across Agencies 2 1

DOI Housing Policy Office v Michael Wright Phone: 202 -254 -5522 E-mail: Michael_C_Wright@ios. doi. gov v DOI Housing Management Policy, 400 DM 3 http: //www. doi. gov/pam/property. html v Decisions v Central on DOI Housing Policy issues point of contact with OMB v Clearinghouse 2 2 for i. QMIS rent appeals within DOI

DOI Housing Operations Office v Doug Pokorney, Quarters Rental Program Manager Phone: 303 -969 -5050 E-mail: dpokorney@nbc. gov v Laura Walters, Quarters Program Specialist Phone: 303 -969 -5696 (i. QMIS Help Desk) Fax: 303 -969 -6634 E-mail: lwalters@nbc. gov Or E-mail: nbc_iqmis_sys_mgr@nbc. gov Web: http: //www. doi. gov/ibc/services/finance/quarters/index. cfm 2 3

DOI Housing Operations Office v Establish rental rates that comply with A-45 v Survey/analyze private rental markets (3 or 4 regions annually, out of 15 total regions) v Compute CPI adjustments annually v Provide rent-setting system (i. QMIS) v Provide Help Desk support v Conduct v Defend 2 4 training rental rates

Federal Agencies Using i. QMIS 2 5

Federal Agencies Responsibilities 2 6 v Appoint National Housing Officer v Devise policy/procedures to implement A-45 v Supervise/monitor A-45 is being met v Provide process for rent appeals v Ensure tenants do not set rental rates [A-45, 9. ]

National Housing Council Responsibilities v Reviews Survey schedule v Approves i. QMIS change requests v Reviews/approves v Clearinghouse 2 7 issues program changes for common housing

National Housing Council Agency/Bureau NHC Member Telephone # Responsibilities. Holly Wood 301 -504 -4870 Agriculture - U. S. Forest Service Rita Staton 540 -441 -7281 Commerce - National Oceanic & Atmospheric Administration Kristin Byrd 206 -526 -6046 Agriculture - Agricultural Research Service v Reviews Commerce - National Weather Service Karolyn Maldonado Survey schedule 907 -271 -3459 Health & Human Services - Indian Health Service Felicia Snowden 301 -443 -0564 Homeland Security - Customs & Border Protection Paul Baranowski 202 -344 -1441 Gerald Curley 505 -563 -5179 Interior - Bureau of Indian Affairs v Approves Interior - Bureau of Land Management Interior - Bureau of Reclamation Bonnie Pomarico i. QMIS change requests 303 -236 -9428 Gary Cambron 303 -445 -2032 Interior - Fish and Wildlife Service Pete Langer 703 -358 -2242 Interior - National Park Service Pat Bantner 402 -661 -1586 v Reviews/approves Interior - U. S. Geologic Survey Justice - Bureau of Prisons State - International Boundary & Water Commission Transportation - Federal Aviation Administration v Clearinghouse Transportation - Maritime Administration U. S. Army - Corps of Engineers Veterans Affairs 2 8 issues Susan Hathaway program changes 303 -236 -9176 My Tran 202 -616 -9762 Jackie Corpus 915 -832 -4716 Susan Freericks 202 -267 -8374 Jimmy Gleaton for common housing 202 -366 -0865 Vic Bartkus 602 -230 -6963 Brenda Goodworth 202 -632 -5052

How to Decipher Your Rent

Rent Effective Dates “The new rates shall be effective at the beginning of the first pay period that starts on or after March 1 of each year. [A-45, 7. d) 2. ] 3 0 Ø 2013: March 10, 2013 Ø 2014: March 9, 2014 Ø 2015: March 8, 2015 Ø 2016: March 6, 2016

Rent Documents provided with new rent calculation (may vary depending upon agency) 3 1 Ø Rent Computation Schedule Ø Tenant Rent Notice Ø Quarters Assignment Agreement (Lease) Ø Housing Inventory Ø Lead Based Paint Disclosure

Rent Formula Monthly Base Rental Rate (MBRR) +/ – CPI (Inflation) = CPI Adjusted MBRR – Administrative Adjustments + Utilities + Govt. Provided Appliances, Services, & Furnishings 3 =2 Net Rent RENT COMPUTATION SCHEDULE

Rent Computation Schedule Survey being used; CPI being applied Date new rent will go into effect 3 3

Rent Computation Schedule MBRR Survey results; won’t change until new survey (every 4 yrs) CPI adjustment; changes every year Admin adjustments allowed for in A-45 if qualify Utilities, appliances & furnishings provided by Govt. 3 4 Biweekly amount to be deducted from paycheck

Annual Rent Changes 2002: 2003: 2004: 2005: 2006: 2007: 2008: 2009: 2010: 2011: 2012: $500 - New Survey Single Year CPI $519 - CPI ($500 + $19) +$19 $543 – CPI ($500 + $19 + $24) +$24 $562 – CPI ($500 + $19 + $24 + $19) +$19 $700 - New Survey $720 – CPI ($700 + $20) +$20 $743 – CPI ($700 + $23) +$23 $772 – CPI ($700 + $23 + $29) +$29 $750 - New Survey $760 – CPI ($750 + $10) +$10 $770 – CPI ($750 + $10) +$10

What Role Do I Play?

What can you do? Review/ensure inventory is correct Ø Don’t assume data is correct; not all users have been trained Familiarize yourself with A-45 and agency policy Ø Especially appeal procedures Familiarize yourself with survey schedule Ø Effective dates of surveys Take advantage of housing expertise Ø Ask questions; consult with your housing officer Ø Call your National Housing Officer Ø Visit our website http: //www. doi. gov/ibc/services/finance/quarters/tenant_faq. cfm Ø 3 7 Ø Tenant Brochure & Tenant Flyer Call the DOI Quarters office

What can you do? Appeal – Last Resort! ØAgency specific policies ØRequest Ø 30 -day for Reconsideration must be filed first deadline ØSpecific ØLack to A-45 of maintenance isn’t valid ØCan only appeal survey results in year it is implemented ØCannot appeal CPI adjustment ØProvide proof ØMin 5 comps from NEC ØSame housing type – house or apt or mobile home, similar size, with same number of bedrooms ØUse the “Private Rental Market Survey” Form (OS-2000) as a guide (http: //www. doi. gov/nbc/formsmgt/forms/OS 2000_2010. pdf)

What can you do? Base Tenant's Unit, 452 Pine Rd. Type Beds Baths Sq Ft Yr Built Rent Includes NEC = Page, AZ PLEX 2 2 1, 246 1998 $861 One-Car Garage Proof Collected by Tenant - May not be successful because Comps are Smaller than tenant's unit: Address Type Beds Baths Sq Ft Yr Built Rent Includes 123 Main St. , #22 B, Page, AZ PLEX 2 2 1, 000 1962 $950 Water, Sewer 49 Maple Pt, Page, AZ PLEX 2 1 900 1972 $800 Washer, Dryer HOUSE 2 1 1, 000 1995 $950 Water, Sewer, One-Car Garage 244 Greenway Rd. , #G, Page, AZ PLEX 2 1 900 1982 $775 Carport 1001 Sawhorse Dr. , Page, AZ PLEX 2 1 700 1972 $650 Heat, Trash $825 AVERAGE 45 Lakeview Dr. , Page, AZ Proof Collected by Tenant - May be Successful because Comps are Similar to tenant's unit: Address Type Beds Baths Sq Ft Yr Built Rent Includes 123 Main St. , #22 A, Page, AZ PLEX 3 2 1, 400 1962 $900 Water, Sewer 23 Maple Pt, Page, AZ PLEX 2 2 1, 300 1972 $750 Washer, Dryer HOUSE 2 2 1, 200 1995 $700 Water, Sewer, One-Car Garage 400 Greenway Rd. , #G, Page, AZ PLEX 2 2 1, 250 1982 $675 Carport 2001 Sawhorse Dr. , Page, AZ PLEX 2 2 1, 000 1972 $450 Heat, Trash $695 AVERAGE 21 Lakeview Dr. , Page, AZ