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AGENDA RECOMMENDATION

Item No: 4.D.

Economic Development Authority

Meeting Date:: 04/13/2026

Agenda Item:

Resolution adopting the payment standard schedule for the Housing Choice Voucher Program in Rock County.

Recommendation/Action(s):

Adoption of the attached resolution.

Summary:

With the transfer of the Pipestone Housing Choice Voucher (HCV) Program, it has been determined that the Pipestone HRA’s program was expanded to include Rock County, where no Public Housing Authority (PHA) currently administers an HCV Program. The U.S. Department of Housing and Urban Development (HUD) requires that a PHA administer the program and allows for expanded jurisdiction to address geographic gaps in program coverage.

To implement assistance in Rock County, the EDA is required to establish payment standards. Payment standards determine the maximum monthly subsidy a family may receive from the EDA. These standards are based on Fair Market Rents (FMRs), which are published annually by HUD for each county. FMR's are typically set at the 40th percentile of rents for standard-quality rental housing units within a given market area.

The EDA must establish payment standards within a HUD-approved “basic range” of 90 to 110 percent of the published FMR for each unit size. The recommended Payment Standards fall within this range and are set between 100 and 110 percent of FMR's.

The EDA is required to review the appropriateness of its payment standards annually upon publication of new FMRs, as well as at other times as needed. In addition to ensuring compliance with the basic range, the EDA considers the following factors when determining whether adjustments are necessary:

Funding Availability: The EDA reviews its budget to assess the impact of projected subsidy adjustments on available funding and the number of families served. Currently, voucher utilization is constrained by funding limitations, which restricts the ability to increase Payment Standards.
Rent Burden of Participating Families: The EDA evaluates the percentage of families paying more than 30 percent of their adjusted monthly income toward rent. If 40 percent or more of families in a given unit size exceed this threshold, an increase in the Payment Standard may be considered.
Quality of Units Selected: The EDA reviews the quality of units leased by participants to ensure Payment Standard increases are necessary to access mid-range market units. Staff conduct rent reasonableness determinations at lease-up, encourage leasing in areas outside low-income census tracts, and monitor rental trends through housing studies.
Changes in Rent to Owner: The EDA may analyze a sample of units to determine how frequently rents change and the average percentage of increases or decreases by bedroom size.
Unit Availability: The EDA evaluates the availability of units by size, particularly in areas with lower concentrations of low-income and minority households.
Lease-Up Time and Success Rate: The EDA considers the rate at which families successfully lease units before voucher expiration and whether participants are leaving the jurisdiction to secure affordable housing.

With the establishment of these Payment Standards, they will take effect on May 1, 2026, and thereafter each December. However, if proposed FMR's indicate that one or more current Payment Standards will fall outside the basic range upon publication of final FMRs, the effective date will instead be October 1.

These Payment Standards, set between 100 and 110 percent of HUD-published FMR's, are recommended for approval effective May 1, 2026. The Board is requested to approve the Payment Standards as presented by resolution.

Attachments

Resolution