The cost of rental housing in the St. Louis region is rising faster than almost anywhere else in the U.S., with a 17-percent jump in median rents from 2023 to 2024.
The rising prices coincide with a decrease in the number of new units available in the local area, adding to the pressure on renters looking for housing that fits their budget.
For low-income renters who qualify for the Housing Choice Voucher program, federal payment standards limit the maximum monthly assistance a household can receive to 110 percent of what HUD determines to be the fair market rent in the area. As rents rise, the payment standards may not keep pace with local prices.
But local officials at County Housing are optimistic that a new HUD mandate will help the vouchers they issue stay competitive. In October, HUD announced that St. Louis County was one of 41 metropolitan areas that will begin to use Small Area Fair Market Rents to determine the amount of assistance households participating in the Housing Choice Voucher program receive.
This means that starting Jan. 1, 2025, payment standards for St. Louis County’s largest income-based voucher program will be calculated by ZIP code. Under this new approach, County Housing will zoom in on 53 small areas to determine the maximum amount it will pay toward a household’s rent and utilities based on typical costs in each one.
If a rental unit is in a higher-cost area, the Housing Choice Voucher amount will go up. Likewise, payment standards in low-cost areas will most likely be reduced.
Households eligible for the Housing Choice Voucher program contribute no more than 40 percent of their adjusted monthly income to rent and utilities—something that will not change when the mandate takes effect.
HUD’s goal with this mandate is for families and individuals to be able to move to neighborhoods that weren’t accessible before, places where they are more likely to find high-performing schools, low levels of poverty, and amenities such as grocery stores. There are already 24 metropolitan areas where the mandate is in place, including the City of St. Louis.
Just as they do now, County Housing’s landlord liaisons can help households connect to available rental housing when the mandate goes into effect, explained Emily Smith, County Housing’s director of program compliance and training. But it’s still up to each individual to apply for the unit, pass whatever background checks are needed, abide by the terms of the lease, and so on.
Local impacts of the national change
Using Small Area Fair Market Rents as a tool to increase the availability of rental options and the efficiency of administration in the Housing Choice Voucher program is not totally new within St. Louis County.
County Housing recently participated in a research project about household mobility, implementing the approach in three ZIP codes: 63119, 63122, and 63144. When the study ended, County Housing chose to continue to offer higher payment standards in those areas, where rent tends to be more expensive.
“The mandated Small Area Fair Market Rents are going to help us compete in the real world,” said Nicole Alexander, who directs the Housing Choice Voucher program for St. Louis County and is responsible for making sure the organization doesn’t overspend. “We have to draw from a fixed pot of money, but it will be interesting to see what happens, because all our residents will not necessarily want to move to those more expensive neighborhoods.”
Smith agrees that some residents may choose to stay in neighborhoods they are already familiar with. Another unpredictable factor is how many landlords will choose to accept Housing Choice Vouchers once they are competitive in more neighborhoods.
“It can be difficult, because there’s a stigma around the voucher program,” Smith said. “Teaching landlords about the benefits will be huge in the coming year.”
Alexander added that a common misconception among landlords is that their property is more likely to be poorly maintained or damaged by renters with vouchers. “In fact, most people follow all the guidelines,” she said.
In addition, Alexander continued, “Whenever you’re renting to a voucher holder, County Housing is here as a mutual party, and we can provide support over and above what a fair market renter would receive.”
To learn more about how County Housing will communicate this expanded opportunity to residents and landlords, please contact Nicole Alexander at nicolea@countyhousing.org.
