Subsidized versus market leases


By Marianne Delorey
Photo Marianne Delorey, Photo submitted

Low income housing and market rate housing have more in common than not. The leases for these apartments, however, often have notable differences that warrant closer review. This article seeks to describe the general differences between a typical subsidized lease and a typical market rate lease. Since each lease individual’s lease may have unique provisions, any questions about your specific situation should be directed to an attorney.

Most leases have three primary provisions for tenants – pay your rent, don’t damage the unit, and don’t bother your neighbors. The lease also spells out the landlord’s obligation – primarily to fix anything that breaks. But there are substantial differences in provisions for certain areas. Here are some highlights:

Rent – One of the biggest differences by definition is that with a market rate apartment, the landlord can ask for whatever rent he or she wants. With a subsidized rent, tenants pay either a reduced rent or an amount based on their income.

Term – Market rate apartments often start with a 12 month term and will often renew for the same term length. Subsidized units are usually month to month.

Occupants – Most leases specify who will live in the unit and you will need permission to add people to the lease or take people off the lease. In a subsidized apartment, typically the landlord is required to screen applicants to insure they will be good neighbors. Along these lines, visitor policies tend to be more restricted in affordable settings to insure that guests do not become occupants without being properly screened.

Unit size – In a market rate situation, you can rent a 5 bedroom apartment for one person if you can afford the rent. In an apartment with a subsidy, typically the size is limited to the smallest reasonable for the household (occupancy generally is 1-2 people per bedroom).

Absence from unit – In a market rate apartment, if you rent something for your occasional convenience when you are in the area but primarily live elsewhere, the landlord would likely see this as a win (easier to manage when people are not there often). In a subsidized unit, you are expected to live there and not be away from your unit for long stretches of time.

Charges other than rent – There is more flexibility for private landlords to charge tenants than with subsidized housing. Last month’s rent is a common example of a charge that private landlords can request.

Utilities – Typically, in subsidized housing the tenant’s rent factors in the total cost of housing including utilities. In market rate units, the utilities are not counted when determining the rent.

Other rules – Private landlords of all types may have other rules such as no smoking policies or pet policies. Depending on the housing program, HUD may encourage no smoking policies and encourage allowing pets whereas private landlords may not.

Oversight – Private landlords are seldom inspected by regulators. In subsidized housing, there are more frequent inspections and the lease defers to regulatory agreements, mortgages and often a Section 8 contract.

In sum, there are provisions in a market rate lease that may not be suitable to all elders. Similarly, there are some provisions in an affordable lease that won’t work for all elders, either. Since there are some people who may be able to choose between a subsidized apartment and a market rate apartment, looking at how the lease obligations differ can be helpful. A careful review of the lease you are asked to sign is always warranted, if only to make sure you understand your obligations.

Marianne Delorey, Ph.D. is the executive director of Colony Retirement Homes. She can be reached at 508-755-0444 or and  Archives of articles from previous issues can be read at