HUD Publishes 2014 Operating Cost Adjustment Factors
HUD recently published its “Notice of Certain Operating Cost Adjustment Factors for 2013” in the Federal Register.
The notice establishes operating cost adjustment factors (OCAFs) for project-based assistance contracts for eligible multifamily housing projects having an anniversary date on or after Feb. 11, 2014. OCAFs are annual factors used to adjust Section 8 rents renewed under Section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA).
The OCAFs provided in the notice are calculated as the sum of weighted average cost changes for wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas, and water/sewer/trash using publicly available indices. The weights used in the OCAF calculations for each of the nine cost component groupings are set using current percentages attributable to each of the nine expense categories. Average expense proportions were calculated using three years of audited Annual Financial Statements from projects covered by OCAFs. The nine cost component weights were calculated at the state level, which is the lowest level of geographical aggregation with enough projects to permit statistical analysis.
The 2014 OCAFs and more information can be found by clicking here.