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Rents Charged for Other Units on the Premises The Request for Tenancy Approval (HUD-52517) requires owners to provide information, on the form itself, about the rent charged for other unassisted comparable units on the premises if the premises include more than 4 units. By accepting SARA payment each month the owner certifies that the rent is not more than the rent charged for comparable unassisted units on the premises. If asked to do so, the owner must give SARA information regarding rents charged for other units on the premises. 8-III.D. SAHA RENT REASONABLENESS METHODOLOGY How Market Data is Collected SARA will collect and maintain data on market rents in SAHA's jurisdiction. Information sources include newspapers, realtors, market surveys, inquiries of owners and other available sources. The data will be maintained by bedroom size and market areas. Market areas maybe defined by zip codes, census tract, neighborhood, and identifiable natural or man-made boundaries. The data will be updated on an ongoing basis and rent information that is more than 12 months old will be eliminated from the database. SARA may use a third party vendor to provide software which provides rent reasonableness data. How Rents are Determined The rent for a unit proposed for HCV assistance will be compared to the rent charged for comparable units in the same market area. SARA will develop a range of prices for comparable units by bedroom size within defined market areas. Units proposed for HCV assistance will be compared to the units within this rent range. Because units maybe similar, but not exactly like the unit proposed for HCV assistance, SAHA may make adjustments to the range of prices to account for these differences. Each of the factors listed above on the unit to be assisted will be compared, using a point adjustment system, to those factors of comparable unassisted units in the database. The average will be adjusted up or down based on the dollar value of all HUD required comparable items in comparison with the total. The adjustment must reflect the rental value of the difference -not its construction costs (e.g., it might cost $20,000 to put on a new roof, but the new roof might not make any difference in what a tenant would be willing to pay because rents units are presumed to have functioning roofs). When a comparable project offers rent concessions (e.g., first month rent-free, or reduced rent) reported monthly rents will be adjusted accordingly. For example, if a comparable project reports rents of $500/month but new tenants receive the first month's rent free, the actual rent for the unit would be calculated as follows: $500 x 11 months = 5500/12 months =actual monthly rent of $488. SARA will notify the owner of the rent SAHA can approve based upon its analysis of rents for comparable units. The owner may submit information about other comparable units in the market area. SARA will confirm the accuracy of the information provided and consider this additional information when making rent determinations. The owner must submit any additional ~~02~12 Page 8-15