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Exception Rent Increase Request Path

OHCS's Rent Increase Requests Policy establishes four paths for rent increase requests. The Streamlined Rent Increase Path is described below.

The Exception Rent Increase Request Path is for those owners seeking increases above 7% + CPI limitations will require a robust exception review. The exception rent increase category is offered primarily for dire financial or very unique circumstances. It is expected that requests under this category will offer a detailed explanation and substantive documentation to support their exception request. There is a high bar associated with this request. Owners will be able to implement this rent increase as soon as they receive approval from OHCS (consistent with the State of Oregon notice requirements).

Path Details

An Exception Rent Increase Path is defined as:
  • ​Any rent increase greater than 7% plus the Consumer Price Index (CPI) market maximum on existing and new tenants.
Approved rents will not exceed program rent limit maximums.
Exception rent increase path requests are highly risk adverse. Because of the risk posed to both the tenant (for obvious affordability reasons) and the property (risking an inability to lease units) the highest measure of review is warranted. Specific information related to operational needs, replacement reserves, capital plans, resident impact, etc. and specific to the property needs justifying the request, may be required with the submittal. Because of the detail involved, it is very possible that OHCS may require additional information but this additional detail will depend largely on the conditions associated with the exception request.

Under the Exception Review Rent Increase Assessment Criteria OHCS will do an assessment that may include, but is not limited to, the following to determine the need for the requested rent increase:
  • ​A review of current rents and utility allowance, subsidy information and household income.
  • A comparison of the request to the maximum allowable programmatic rent.
  • Property’s vacancy history. OHCS will place particular weight on those properties with occupancy rates lower than 90% and properties with extended vacancies (units vacant for longer than 90 days).
  • Property needs including, but not limited to, capital repair needs, maintenance, services, and staffing
  • Reasonableness to area market comparable rents
  • Assessment of resources including replacement reserve
  • Unresolved compliance issues determined by OHCS to be of a severe nature. Examples include but are not limited to:
    • ​unapproved rent increases
    • unresolved health and safety issues - as outlined in your most recent compliance audit
    • unresponsiveness to reporting requirements such as a history of not reporting timely or unaddressed compliance issues
  • ​Rent burden of current residents.
  • A thorough review of the need for the exception request.​

​​OHCS requires the following documentation to be submitted with the Exception Rent Increase Path Submittal:

  • Current Rent Roll
  • 12-Month Occupancy Report
  • Utility Allowance Documentation
  • Audited Financials
  • Replacement Reserve Analysis
  • Capital Needs Information
    • third party reports
    • capital needs assessment, if applicable
    • updated replacement schedule
  • ​Other Health/Safety Documentation
  • Other Staffing Needs, cost documentation
  • Explanation of property need
Due to the risk associated with increases of this nature, all Exception Rent Increase Requests will go through an internal approval process involving a recommendation from the OHCS Housing Finance Committee and approval from the Executive Director.

In determining staff recommendations of partner requests, some of the general standards that would indicate property or portfolio need would be looked upon favorably when determining a rent increase request. Some of these need standards include, but are not limited to:
  • Analysis of cash flow trends; cash flow before obligations.
  • Clear explanation and documented need for additional resources
  • Limited impact to existing residents. Specifically, OHCS tracks the percentage of families that are considered severely rent burdened (over 50% of income toward housing costs). Projects with a high percentage of families severely rent burdened are more likely to displace residents with large rental increases.
  • Clear demonstration of capital needs and a subsequent explanation of how rental increase will be utilized to resolve those capital needs.
Projects that have maintained an occupancy rate of 97% or higher for over 12 months or projects that can clearly articulate why a rental increase would have limited impact on vacancy rates (example: the rental increase corresponds with capital investments in the property).

Owners wishing to request an increase meeting for the Exception Rent Increase path must submit the appropriate rent request form and any required supplemental information to MFRent.Request@oregon.gov​.​
Return to OHCS Rent Increase Requests Policy webpage here.
Image: Portfolio Administration, Compliance Monitoring

Contact

For Rent Increase Request Information, please email us at:
MFRent.Request@oregon.gov


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