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Rent reporting (15)

In June 2022, HUD’s Office of Policy Development and Research (PD&R) made a posting on California’s rent reporting pilot, Understanding the Implementation of Rent Reporting Programs for Residents of Affordable Housing in California.

In 2020, the California State Legislature passed Senate Bill 1157 (S.B. 1157), which requires private landlords with 15 or more subsidized housing units to offer their tenants the opportunity to have their rent payments reported to major credit bureaus. The bill allows landlords to charge their tenants the lesser of $10 per month or the actual cost of providing the service. SB 1157 went into effect on July 1, 2021, and sunsets on July 1, 2025. About a year after the law’s passage, “PD&R staff interviewed eight property owners and managers in California who use HUD’s project-based rental assistance program to understand their experiences with the implementation of S.B. 1157.”

PD&R looked at several areas:

  • Landlord Awareness of Rent Reporting
  • Initial Setup
  • Outreach and Enrollment
  • Program Components
  • Program Costs and Enrollment Fees
  • Initial Effects on Tenant Credit
  • Challenges

PD&R reported that

Several themes emerged from the conversations, including varying levels of landlord awareness of rent reporting, initial difficulties with setup and resident uptake, and a variety of program designs and per-unit costs. One common refrain was how difficult it was to overcome residents’ distrust of the initiative and communicating the tangible benefits of rent reporting. These conversations also allowed landlords to recommend changes for future programs like S.B. 1157.

PD&R offered several recommendations and conclusions

  • Implement an education campaign that targets low-income renters in subsidized housing before rolling out similar programs.
  • Incorporate rent reporting into broader financial literacy and economic empowerment programs.
  • Require that policies include a mechanism to allow landlords to confirm that third-party vendors can execute the program regulations.
  • Consider a more realistic timeframe to establish procedures and systems for implementing policies.
  • Use standardized forms or preapproved templates to clarify reporting, contact information, and legal rights.
  • Consider landlord capacity when developing similar policies. Program implementation varied depending on the level of resources a landlord managing affordable housing could provide with limited funds. Leveraging third-party vendors was the most cost-effective way for landlords to implement the law.
  • Fund dedicated staff to help enroll residents.
  • Create incentives to encourage companies to reach out directly to residents rather than relying on landlords to run the program.

PD&R added that its post

only offers the perspectives of one small set of stakeholders. PD&R also recognizes that the credit outcomes for the tenants discussed in this article are not yet known. Although some landlords were able to report changes in average credit scores, data were not sufficient to make claims about the program’s overall impact.