OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-146
AN ACT CONCERNING THE ADMINISTRATION OF THE RENTAL
ASSISTANCE PROGRAM AND OTHER HOUSING VOUCHER
PROGRAMS.
Primary Analyst: MP 3/25/24
Contributing Analyst(s):
Reviewer: JS
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 25 $ FY 26 $
Department of Housing GF - Cost 100,000 -
550,000
At least
175,000
Department of Housing GF - Potential
Cost
Potential
Significant
Potential
Significant
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill makes changes to the Rental Assistance Program (RAP) that
result in various costs and potential costs to the Department of Housing
(DOH) beginning in FY 25, as described below.
The bill also contains provisions related to federal rental assistance
that are discussed below.
Maximum Allowable Rent (MAR) Study
The bill results in a cost to DOH between $100,000 to $500,000 in FY
25 and annually thereafter, to assess if the maximum allowable rents for
RAP are set high enough for RAP participants to have housing
opportunities in every zip code.
1
It is anticipated that DOH will need to
1
Families with a RAP certificate can rent a unit with a rent that does not exceed the
maximum allowable rent (MAR) set by DOH. The MAR schedule is posted on DOH’s
website, https://portal.ct.gov/-/media/DOH/RAP -MAR-2024.pdf 2024SB-00146-R000091-FN.DOCX Page 2 of 4
hire a vendor to conduct an extensive rental market survey each year,
unless up-to-date, statistically representative rent data at zip code level
becomes available. DOH’s RAP vendor conducts ad hoc rent studies in
single towns at a cost of $30,000 to $50,000 each; the bill requires a more
comprehensive analysis.
Online Tool
The bill results in a cost to DOH of at least $75,000 for website
development, anticipated in FY 26, to meet the bill’s requirement for
DOH to develop an online maximum allowable rent and RAP subsidy
calculator tool for the department’s website by June 1, 2026. The cost
could vary significantly depending on the complexity of the tool and the
department’s approach for establishing and maintaining it (e.g.,
building or licensing it).
A lower-cost tool could provide general information, but a larger
investment would likely be necessary for a tool like the one DOH’s RAP
administrator currently uses to generate precise figures. To the extent
DOH licenses such a tool, there would be ongoing licensing costs in the
out years.
Administrative Costs
The bill is anticipated to increase RAP administration costs by at least
$300,000 annually beginning in FY 25, as the bill shortens RAP housing
unit inspection and reinspection time frames and requires the RAP
administrator to commence payments to landlords of newly leased units
within ten days. These provisions are anticipated to increase staff costs
for the RAP administrator, which will be passed on to DOH in the form
of higher contract costs when the RAP administrator contract is rebid
for FY 25. The current administrative cost is $48 per leased unit per
month.
As the RAP program operates within available appropriations,
higher administration costs will be offset by DOH issuing fewer
turnover RAPs (from households leaving the program), to align 2024SB-00146-R000091-FN.DOCX Page 3 of 4
program operating costs with available funding.
RAP Subsidies
The bill results in a potential, significant cost annually to DOH for
higher RAP subsidies, to the extent DOH: (1) raises the MAR schedule
rents higher than it otherwise would have, based on the annual
assessment’s findings, and (2) cannot offset higher per-certificate costs
(including the higher administrative costs as described above) by
reducing the number of certificates through attrition.
Because RAP is not an entitlement and operates within available
funding, the cost increase will be temporary unless annual inflation
pressures continuously exceed the value of turnover RAPs that DOH
can eliminate.
2
For reference, the program supported 6,530 RAP
certificates totaling $73,485,912 in FY 23 and the average annualized
state cost of a RAP certificate was approximately $12,300 in January 2024
(including administrative fees).
As an example of the potential cost, if the allowable rents increased
by $100 per month on average (approximately 10%) because of the
assessment, annualized subsidy costs could be more than $7.5 million
higher per year.
3
DOH would incur higher per-voucher costs both for
new RAP certificates and a large portion of existing certificates as leases
are renewed over time. Actual costs will depend on how DOH’s MAR
schedule compares to current rental market conditions and how many
leases take advantage of the higher maximum allowable rents.
Regulations
The bill requires DOH to adopt certain implementing regulations and
allows DOH to adopt regulations concerning electronic submission of
2
The program is likely to require additional funding during periods of higher rent
inflation, if operating at full capacity.
3
RAP participants pay 40% of their adjusted gross income (or 30% of adjusted gross
income if the participant is elderly or disabled) toward rent and utilities and the DOH
rental subsidy pays the remainder of the contract rent directly to the landlord. Given
this structure, changes to contract rent are fully borne by the state, all else equal. 2024SB-00146-R000091-FN.DOCX Page 4 of 4
program documentation. To the extent DOH requires outside assistance
to do so, there is a potential one-time cost for legal services of up to
$50,000, likely to be incurred in FY 25.
Federal Housing Choice Vouchers
The bill appears to require DOH to set the payment standard for the
federal Section 8 Housing Choice Voucher (HCV) program at the same
assessment-determined level as RAP. It is not clear if or how this could
be achieved given several factors: (1) the current payment standard for
HCV is lower than RAP for many locations; (2) DOH receives a set
amount of federal funding to support HCV vouchers; and (3) DOH
spends all or nearly all available program funding annually.
4
DOH voucher holders can already use their voucher anywhere in the
state and have access to the same mobility counseling as RAP
recipients.
5
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.
4
HUD Housing Choice Voucher (HCV) Data Dashboard,
https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/da
shboard
5
DOH is one of 45 public housing authorities (PHA) administering HCV in
Connecticut.