Section 8 & Utilities: How Rent is Calculated & Utility Costs
A Section 8 housing choice voucher supplements the cost of renting a house in the private sector. Tenants who are eligible for Section 8 typically have to spend between 30 and 40 percent of their incomes on overall housing costs. Those housing costs include utility expenses.
Fair Market Rent
Landlords who rent to Section 8 tenants must charge a fair market rent, or FMR, and the general level for that rent is set in a series of tables by the local public housing agency that administers Section 8. This FMR aims to represent a gross housing cost that includes the cost of utilities.
Utility Allowance
The amount allowed for utilities included in gross rent in a Section 8 rental depends on the typical cost of utilities for an "energy-conservative" family living in similar accommodations in the local area. The Public Housing Authority, or PHA, has the discretion to allow a slightly higher utility allowance for a family that includes someone with disabilities.
Calculation
The PHA will calculate your voucher amount by taking the lesser of two amounts. The first calculation is the standard fair market rent minus 30 percent of your monthly adjusted income. The second is the actual gross rent of your unit, including average utility costs, minus 30 percent of your monthly adjusted income. Either way, the voucher will cover at least a portion of your utility costs.
Metering
If you as the tenant must pay the utility bills separately from your rent, the unit you are living in must have metering for each utility service. This means you receive charges for your actual usage. Checking the metering will be part of the inspection process before the PHA approves the unit for use by a Section 8 tenant.
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