With a perfect storm of rising costs of living and funding cuts to HUD programing, the Housing Authority of Cook County (HACC) has released a letter announcing that they will be adjusting payments as of May 1st for new moves and rent increases.
The Housing Authority of Cook County administers the Section 8 program for suburban Cook County, but not Chicago proper as that is a separate organization. The 2025 payment standards started to take effect in March of this year and saw increases across the board for those who asked for a rent increase or were taking in a new participant to their property. It looks like those increases are to be short lived, though, due to shortfall funding to the program and to Housing and urban development in general. Low-income households are going to find it harder to find housing, as well as be restricted from moving in certain cases. I will break down the changes below.
The Housing Authority of Cook County is predicting a funding shortfall, and so it is making some changes that investors need to be aware of.
To help combat the shortfall, starting May 1st, they will be reverting back to the payment standards of 2024. This means that if you had a tenant last year, the odds of a rent increase if you maxed out the 2024 standards are very low. Also, if you have a new rental on the market, the rent prices you may have seen and counted on will no longer be available, and you will need to review the 2024 standards.
Further, the number of bedrooms on each voucher holder's voucher may be reduced to a strict rule of two people per bedroom. This means a single mother with three kids no longer gets her own room plus two rooms for her kids; they now all have to share two bedrooms.
Beyond this, tenants' move-in dates will be restricted to the 1st of the month; no moves will be allowed in the middle or end of a month. Also, if a tenant wants to move to a house that costs more than their current home, they will most likely be denied.
This will currently only affect Cook County housing, which serves the Cook County suburbs and not the city of Chicago. However, as the administration continues to make DOGE cuts, we may see more subsidies cut for lower-income housing. This is a pivotal strategy for landlords who invest in underserved areas to provide a better place to live than the current options in these neighborhoods.
So at the end of the day, what does this mean to investors in the suburbs of Cook County? A few things: the rise in rent that was meant to offset the rise in property taxes we are seeing across Cook County may not be coming this year as planned. The good news is this seems like it may be temporary as they figure out if and when more funding will be coming. If you're looking to buy property, this scare in the market may help you to get a better deal. However, if you are a Section 8 landlord, I still believe you're better off holding onto the tenants you have in Cook County with Section 8, as the rate they pay is still going to be well above market rent in a lot of lower-income areas across the suburbs. This includes places like Dolton, Calumet Park, Harvey, and Chicago Heights. It may also be worth waiting for them to update later in the year to request a rent increase so that you can hold onto your one chance a year to apply for the increase. The worst case is they don't change anything and you still get denied later in the year.
