Richmond Redevelopment and Housing Authority’s Board of Commissioners voted to change its billing processes on Wednesday. This comes after advocates took legal action against the agency for wrongfully charging tenants.
The Legal Aid Justice Center filed the federal class-action in 2017, criticizing RRHA for the way it set, implemented and charged tenants’ electric utility allowances.
Brenda Castañeda is the legal director for the center’s economic justice program.
“We argued that the utility rates were not set properly according to the HUD regulations, and secondly that the rates were substantively too high,” Castañeda said.
The case was resolved in 2018, and resulted with residents receiving utility checks or account credits. However, since it was a settlement, it’s possible that tenants only received a portion of the amounts they were overcharged with.
RRHA tenants’ rents are income-based, calculated at 30% of their annual wages — but they don’t include utilities. When residents of public housing paid RRHA each month, the money went towards utility charges before being applied to rent. That sometimes meant that tenants would come up short on their rent payment, resulting in a cascade of late fees. This went on for nearly a decade and prompted several evictions.
The housing authority’s general counsel, Cory Wolfe, said RRHA will change that practice. He added that it’s also applying the new billing process to tenants’ statements that date back to February, 2013.
“The effect of this is that every tenant payment that we receive will first be applied to the tenants current month rent, which is what we believe equitable,” Wolfe said.
On Wednesday, the agency added it will do away with charging residents late fees for anything other than a present month’s overdue rent — each month will be evaluated separately so that penalties don’t add up, and result in tenants facing significant debts. RRHA will also reduce late charges from $15 to $5.
