Local Public Housing Authorities (PHA’s) establish utility allowances each year per HUD’s guidelines. To keep assisted housing affordable for lower income households, federal housing law directs that the resident’s share of rent in federally assisted public housing should equal 30% of the household’s adjusted monthly income. HUD defined that the total resident payment for includes both “rent” and the costs for reasonable amounts of utilities. The amount that a PHA or other housing program determines is necessary to cover the resident’s reasonable utility costs is considered the “utility allowance”.
Utility allowances are estimates of the costs needed for different types of utilities and their uses in the housing situation. Depending on the unit, this may include electricity, natural gas, propane, fuel oil, water and sewage, etc. The functions of the utilities can include things like water heating, refrigeration, lighting or appliances. There are no allowances for items such as cable or telephone.
Utility consumption tend to vary according to the characteristics of a unit (for instance a larger home will cost more to heat than a small one bedroom unit). To account for this, the utility allowance chart groups units of similar characteristics together.
For more detailed information on how utility allowances are calculated please visit: http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/phecc/allowances
Community Housing Network uses guidelines established by MSHDA (the Michigan State Housing Development Authority).