Housing of Last Resort: When the Payment Limits Fall Short

The URA promises that no one will be required to move until a comparable replacement dwelling is available within their financial means. In expensive housing markets, the regular replacement housing payment limits are not always enough to keep that promise. Housing of last resort, found at 49 CFR 24.404, is how the agency fills the gap.

When it applies

Housing of last resort comes into play when comparable replacement housing is not available within the regular payment limits. The agency must then take steps to make comparable housing available, which may mean paying above the normal limit.

Methods the regulations allow

The regulations give agencies flexibility in how they provide housing of last resort. Methods may include:

• a replacement housing payment above the regular maximum;
• rehabilitating or adding to an existing dwelling;
• building a new replacement dwelling;
• a direct loan or other financial help to make a unit affordable;
• relocating and rehabilitating a dwelling;
• removing barriers for persons with disabilities.

Agencies must apply housing of last resort on a reasonable cost basis and document why it is needed.

Why it matters for public housing

Most public housing residents who relocate keep rental assistance, which often keeps their costs within means. Housing of last resort is more likely to come up for households that lose or decline assistance, for larger families that need units the market rarely offers, and in very tight markets. Spotting those cases early prevents last-minute surprises.

Practical steps

• Run a market study of comparable unit rents early in planning.
• Identify households likely to need housing of last resort and estimate the cost.
• Document the determination and the method chosen in each household's file.
• Include a housing of last resort allowance in the relocation budget where the market is tight.