To: Honorable Chair and Commissioners
From: Steve Potter, Executive Director
Prepared By: Kasey Lyons, Housing Supervisor
TITLE:
Title
Administrative Plan Amendment to Chapter 16 and Housing Choice Voucher Program Payment Standards 2027
LABEL
RECOMMENDED ACTION:
Recommendationle
1. Adopt a resolution approving an amendment to the Section 8 Housing Choice Voucher Program Administrative Plan; and
2. Adopt a resolution approving updated Section 8 Housing Choice Voucher Program Payment Standards effective January 1, 2027.
Body
DISCUSSION:
The Section 8 Housing Choice Voucher Program Administrative Plan (the “Administrative Plan”) establishes local policies for the administration of the Housing Authority of the City of Napa’s (the “Housing Authority”) rental assistance programs in accordance with U.S. Department of Housing and Urban Development (“HUD”) requirements. The Administrative Plan is amended as necessary to incorporate changes in federal requirements and Housing Authority policies. While comprehensive updates to the Administrative Plan are currently underway, the amendment proposed with this item is limited to Chapter 16 and is necessary to address changes to Payment Standards and establish a policy for applying decreases in Payment Standards during the term of a Housing Assistance Payments (“HAP”) contract.
The Emergency Housing Voucher (“EHV”) program was established by HUD in 2021 to assist individuals and families experiencing or at risk of homelessness and other housing instability. The program provided housing authorities with additional flexibility to serve these households, including allowing EHV Payment Standards of up to 120% of Fair Market Rent (“FMR”) without HUD approval, compared to the 110% of FMR limit for the Housing Choice Voucher (“HCV”) program. Accordingly, the Housing Authority adopted a policy in the Administrative Plan establishing EHV Payment Standards at 120% of FMR.
On August 10, 2026, HUD issued Notice PIH 2026-20, rescinding the waiver that allowed housing authorities to establish EHV Payment Standards up to 120% of FMR without HUD approval. EHV Payment Standards are therefore subject to the same 90% to 110% of FMR basic range applicable to the HCV Program. Housing authorities are required to comply with the revised requirements within 60 days of the Notice. Staff recommends the EHV Payment Standards be aligned with the HCV Payment Standards effective October 9, 2026, resulting in a decrease from the current EHV Payment Standards of 120% of FMR. Aligning the EHV Payment Standards will provide administrative consistency and greater clarity for participants if and when they transition from the EHV program to the HCV program.
HUD also requires housing authorities to establish a policy governing reductions in Payment Standards for families under an existing HAP contract. The Housing Authority’s Administrative Plan does not currently include such a policy. Staff recommends amending Chapter 16 to provide that the Housing Authority will not reduce the Payment Standard used to calculate a family’s subsidy for as long as the family continues to reside in the unit for which the family receives assistance.
HUD recently published the 2027 FMRs, effective October 1, 2026. As a result of the increased FMRs, the Housing Authority’s existing HCV Payment Standards will fall below HUD’s required basic range of 90% to 110% of the applicable FMR. The Housing Authority is therefore required to revise its Payment Standards within three months of the new FMR effective date.
Although the Housing Authority recently updated the HCV Payment Standards effective August 1, 2026, following HUD’s revision of the 2026 FMRs, the subsequent release of the 2027 FMRs requires an additional adjustment to maintain compliance with HUD’s required basic range. Staff recommends that the revised Payment Standards become effective January 1, 2027.
Staff recommends setting the Payment Standards at:
90% of FMR for zero-bedroom units (studios) at $2,115
90% of FMR for one-bedroom units at $2,322
90% of FMR for two-bedroom units at $3,038
90% of FMR for three-bedroom units at $3,800
90% of FMR for four-bedroom units at $4,585
90% of FMR for five-bedroom units at $5,273
90% of FMR for six-bedroom units at $5,961
The recommended Payment Standards maintain the Housing Authority’s Payment Standards within HUD’s required basic range.
FINANCIAL IMPACTS:
Staff estimates that raising the Payment Standard will increase the voucher program's per unit cost (“PUC”) by approximately $20.36, or 1.2%, resulting in an estimated annual increase of approximately $20,000 of rental assistance payments.
For Fiscal Year 2026-27, the cost associated with the increase in Payment Standards can be absorbed within the Housing Authority’s existing Section 8 budget.
CEQA:
The Executive Director has determined that the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060 (c).
DOCUMENTS ATTACHED:
ATCH 1 - Admin Plan Amendments Resolution
EX A - Redlines to Admin Plan Chapter 16
ATCH 2 - 2027 Payment Standards Resolution
EX A - Summary of Fair Market Rents and Payment Standards
NOTIFICATION:
Notice of this agenda item was publicly posted 72 hours before the meeting.