The U.S. Department of Housing and Urban Development today proposed to change how it calculates federal subsidies that help low-income families, the elderly and the disabled afford rent in multifamily housing.
According to a statement, HUD is proposing to update the operating cost adjustment factors, or OCAFs, for eligible multifamily housing projects under its Housing Choice Voucher program, in which the department enters into contracts with property owners to cover a portion of rent and utilities for eligible individuals and families. HUD calculates OCAF using several factors and is proposing to amend some of those factors to better reflect rising costs nationwide, particularly insurance costs. Among other things, HUD is proposing to drop Bureau of Labor Statistics insurance data and instead use state-level data to calculate inflation adjustments for the insurance component in OCAFs.
“As I have traveled across the nation, I have heard from property owners who have difficulty maintaining affordable rents while keeping up with rising expenses, impeding our efforts to boost the supply of available affordable homes,” HUD Acting Secretary Adrianne Todman said. “Today, our new adjustment factors will help families and affordable housing providers keep up with increasing housing costs.”
The new OCAFs apply to eligible multifamily housing projects with contract anniversary dates on or after Feb. 11, 2025. HUD is currently seeking public comment on the proposed changes.
