A Utility Analysis is required annually accompanying your rent adjustment request. Per 4350.1 Ch. 7, 7-24,
” For each request for an increase in the HUD authorized rent potential, the owner must recommend a utility allowance for each unit type. The recommended utility allowance should represent the owner's best estimate of the average monthly utility cost that an energy conscious resident will incur for the year. The utility allowance is not meant to pay all actual utility costs, but rather it is to reimburse a prudent utility consumer for their utility expense.”
What Must Be Included in the Utility Analysis?
- Identify the types of utilities covered in the Utility Allowance (Gas, Electricity etc.)
- State whether utility rate increases or decreases were implemented in the past 12 months and if the rates are expected to change over the next 12 months.
- State how any conservations initiatives will impact consumption.
- The Owner/Agent must provide an appropriate sample per bedroom type.
What is an appropriate sample size?
- 10% sample of each bedroom size or at least 5 units.
When to Request an Increase or Decrease.
- An Owner/Agent may elect to increase or decrease the Utility Allowance when there is less than a 10% cumulative change in the UA.
- An Owner/Agent must increase or decrease the Utility Allowance when there is a 10% or greater cumulative change in the UA.
How to obtain a Utility Analysis
There are several acceptable methods an Owner/Agent may use to obtain a Utility Analysis for their property.
- Call your electricity or gas provider to obtain a summary for all units at your property.
- Ensure that the summary provided by the company is on their letterhead.
- Some companies may charge a fee, but keep in mind this is an eligible budgetary expense.
- Obtain bills from your tenants.
- This may be difficult, as many tenants do not retain copies of their bills.
- Try setting up a private computer for the residents to print copies of their bills.
- Utilize a third party contractor to obtain the figures for your property.
- Several companies prepare utility allowances that are in compliance with programmatic regulations.