01-0151R

RESOLUTION SUPPORTING AN INCREASE BY HUD OF THE DULUTH FAIR MARKET RENTAL RATES

BY COUNCILOR GILBERT:

        WHEREAS, the United States department of housing and urban development (HUD) sets the amount of rent subsidy, or fair market rents (FMRs), for the housing choice program, formerly called Section 8; and

        WHEREAS, the city of Duluth is experiencing an extremely low rental vacancy rate; and

        WHEREAS, there has been a major increase in the cost to operate rental property, including increases in heating and other utility costs; and

        WHEREAS, FMRs set by HUD have increased minimally from last year; and

        WHEREAS, HUD set Duluth FMRs at the 40th percentile of market rents in Duluth; and

        WHEREAS, in large metropolitan areas such as Minneapolis and St. Paul, HUD set FMRs at the 50th percentile of market rent in those communities; and

        WHEREAS, approximately 45 percent of renters are unable to afford FMRs for a two-bedroom unit; and

        WHEREAS, the HRA utilizes only approximately 90 percent of available vouchers, due to the fact that persons holding ten percent of the vouchers return them because they are unable to find decent, affordable rental units; and

        WHEREAS, there is a substantial need for Section 8 vouchers, as indicated by 884 households on the December 2000 waiting list; and

        WHEREAS, the increase by HUD of the Duluth FMRs from the 40th percentile to the 50th percentile of the Duluth market rents will stimulate the deconcentration of affordable housing opportunities throughout the city;

        NOW, THEREFORE, BE IT RESOLVED, the Duluth City Council hereby supports an increase by HUD of the Duluth FMRs from the 40th percentile to the 50th percentile of the Duluth market rents.


STATEMENT OF PURPOSE:  This resolution is to support an increase by HUD of the Duluth FMRs under the Housing Choice (Section 8) program, increasing the FMRs from the 40th percentile to the 50th percentile of the Duluth market rents. A detailed explanation of the issue is found in the attached memorandum.