A Reminder to Owners of HUD Multifamily Properties Regarding Rising Utility Costs

Rapidly rising utility costs, especially for heat, are impacting residents of multifamily properties that are assisted under HUD programs. The U. S. Department of Energy is forecasting a three-year high in 2022 for average residential utility costs across the country. Projected increases for the period 2020 – 2022 are:

  • Heating oil: From $2.44 per gallon in 2020 to $3.45 in 2022 (41.39% increase);
  • Natural gas: From $10.76 per cubic foot in 2020 to $12.56 in 2022 (16.73% increase); and
  • Electricity: From $13.16 per kilowatt hour in 2020 to $14.26 in 2022 (8.36% increase).

Owners of Multifamily-assisted HUD properties for which HUD provides a utility allowance (UA) are reminded they are required to adjust their properties’ utility allowances every year at the time of the annual and special adjustments of contract rents.

To do this, owners/agents (O/As) must follow the guidance in Housing Notice H-2015-04, which provides instructions on how to complete a Multifamily Housing Utility Allowance. O/As should also review the associated Frequently Asked Questions for additional guidance.

O/As are also required to submit documentation and a request for an increase in utility allowances to their Contract Administrator/HUD when changes in utility rates result in a cumulative increase in utility allowances of 10% or more from the most recently approved utility allowance.

Other Steps O/As Should Take

  • Request residents to report observed increases in utility bills and any outstanding unit repairs that could affect energy efficiency and household utility costs.
  • Encourage residents with medical needs who have extraordinary utility bills to seek a reasonable accommodation for a higher UA.
  • Use sample sizes larger than the minimum requirements in Notice H-2015-04 to derive utility allowances that more closely reflect the utility costs for all tenants of a particular property. Stay informed about utility rate changes approved by state Public Utilities Commissions (PUC) by signing up for email or text alerts or closely reviewing owner-paid utility bills for rate-change notifications.
  • Perform routine maintenance on all building systems and components to improve energy conservation measures.
  • Review Chapter 12 of HUD Handbook 4350.1 and the U.S. Department of Energy’s Energy Saver Webpage for more tips on how to improve overall energy efficiency.