How PHAs Determine a 'Comparable' Unit: An Investor's Guide to the Process

The term “comparable” can feel subjective, but when a Public Housing Authority (PHA) performs a Rent Reasonableness analysis, it follows a structured and defined process. Understanding how the PHA evaluates your property against others in the market gives you a powerful advantage, allowing you to set realistic rent expectations and present your unit in the best possible light.

This isn’t about guesswork; it’s about a methodical comparison based on specific criteria.

The 9 Factors of Comparison

According to HUD guidelines, the PHA must consider nine specific factors when determining if another property is truly comparable to yours. While some factors carry more weight than others depending on the local market, all are part of the official evaluation.

Location: This includes the neighborhood, school district, and proximity to services and amenities like public transportation, shopping, and parks. A unit in a highly desirable, walkable neighborhood will not be compared to one in a more remote, car-dependent area.
Size: This primarily refers to the number of bedrooms, but can also include overall square footage.
Unit Type: The structure of the building is a key differentiator. A single-family home will be compared to other single-family homes, a unit in a high-rise elevator building will be compared to others in similar buildings, and a garden-style apartment will be compared to other walk-ups.
Quality: This assesses the physical condition of the unit. Is it newly constructed or completely renovated? Is it well-maintained, or is it merely adequate with some repairs needed?
Age of the Unit: The age of the building and the date of the most recent renovations are taken into account.
Amenities: This covers the features inside and outside the unit. Key amenities include central A/C, in-unit washer/dryer (or hookups), a dishwasher, a balcony or patio, and provided appliances.
Housing Services: This refers to services included in the rent, such as on-site management, security systems, or concierge services.
Maintenance: This considers who is responsible for maintenance and the quality of that service.
Utilities: The PHA looks at which utilities the owner pays versus the tenant. A unit where the owner covers heat and hot water is not directly comparable to one where the tenant is responsible for all utilities.

Important

While all nine factors are on the checklist, the handbooks note that the three most significant drivers of rent differences are typically Location, Number of Bedrooms, and Unit Type. Mastering how your unit stacks up in these three categories is the first step to understanding its market value.

The Golden Rule: Comparing to the Unassisted Open Market

The most critical rule in this process is that your unit must only be compared to unassisted units. The PHA is explicitly prohibited from using other HCV (Section 8) units or other subsidized properties as comparables.

This is to prevent a closed-loop system where program rents inflate each other over time, becoming disconnected from the actual market.

What counts as an “assisted” unit that must be excluded from comparison?

Units occupied by other Housing Choice Voucher participants.
Units assisted by other federal, state, or local government rent subsidy programs.
Units subject to local rent control ordinances.
Units in “converted properties” where the owner is charging below-market rents to former tenants who did not receive a voucher (e.g., after a Section 8 project-based contract opted out).

Caution

The PHA is very strict about this exclusion. Including assisted units in a comparison is a common error that can lead to an inaccurate (and often disallowed) rent determination. The entire process is designed to tether program rents to the true, unsubsidized market rate.

The PHA’s Toolkit: How They Find Comparables

PHAs use two primary methods to gather the data needed to make a rent reasonableness determination.

The Comparables Database This is the most common method. The PHA maintains or subscribes to a database of available rental units in its jurisdiction. When evaluating your unit, an analyst will search this database for unassisted units that are a close match based on the nine factors. If a direct match isn’t available, they will find the closest options and make value adjustments.

Tip

Common Data Sources: PHAs often build their databases by researching public rental listings on websites like Zillow, Apartments.com, ForRent.com, and Craigslist, as well as local newspaper ads and property management websites.
Rental Market Survey or Study In some cases, a PHA might commission or use an existing rental market study. This is a more formal, statistical analysis of the local market that can determine the value of certain features (e.g., adding a second bathroom increases the market rent by an average of $75). This method is often used to understand broad market trends rather than to price a single, specific unit.

By understanding that the PHA is using a defined set of factors, adhering to a strict “unassisted only” rule, and drawing from real-world market data, you can see Rent Reasonableness not as an obstacle, but as a fair market valuation process that keeps the program stable and your investment sound.

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