Public housing is a subsidized housing program funded and overseen by the Department of Housing and Urban Development. As HUD's public housing program website notes, local public housing agencies from across the nation manage dwellings that provide affordable rents for an estimated 1.2 million households. Your PHA (Public Housing Authority) may use one of several formulas to calculate your public housing rent, also known as the Total Tenant Payment. The nationally accepted standard is that a family should devote no more than 30 percent of its income toward the cost of housing.
Calculating Your Income
Determine annual income derived from all sources, including, but not limited to, wages from a job and Social Security, for all household members who are 18 years of age and older. For instance, if you are the head of a two-person household, earning $1,000 a month and your spouse earns $500 a month, your annual income equals $18,000.
If you receive public assistance, such as Welfare, your TTP will equal the amount of money the agency providing your public assistance deems as appropriate housing costs.
Read More: How to Apply for HUD Housing
Calculating Your Deductions
To determine TTP, your housing authority will allow you to subtract allowable deductions from your annual income. HUD allows you to deduct $480 from your annual income for each dependent and $400 for each elderly or disabled family member. You can also exclude some medical expenses from your income. If you are a member of a two-person household with no dependents or elderly family members, you would not have any deductions.no
Once you've subtracted your deductions from your income, divide that number by 12. For a two-person household earning $18,000 annually with no deductions, your monthly income would be $1,500.
Calculate the Percentage
Calculate 30 percent of your monthly adjusted gross income. For a two-person household with no deductions making $18,000 per year, 30 percent of $1,500 monthly equals $450. Using this method, your public housing rent, or TTP, would be $450 a month.
Each PHA has its own procedures to calculate a renter's TTP. In some cases, particularly when dealing with families with extremely low incomes – significantly less than 30 percent of their area's median income – your TTP equals 10 percent of your monthly income or a minimum rent of between $25 and $50, depending on the area housing authority. Once you've gathered your annual income, put some time into researching the income rules specific to your area.
Exploring National Averages
According to HUD's Resident Characteristics Report, the average annual income of public housing residents is $15,201 as of 2020. Nationwide, the average monthly TTP is $362. The federal poverty level in 2020 for a one-person household is $12,760, while households with two members are below poverty if they make less than $17,240.
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