Rent Increase Logic

This document outlines the program logic used by the system to perform rent increases. The logic is evaluated every month in an automated procedure.
  1. If the potential occupancy of the micro community is greater than or equal to 93% then increase to average effective rent + the minimum % increase specified in the budget.
  2. If the potential occupancy of the micro community is greater than or equal to 97% then increase to average effective rent + the maximum % increase specified in the budget.
  3. If the tenant has not had a rent increase in two years then increase by the maximim increase percent specified in the budget. If this percentage is zero, then use 5%.
  4. Never increase by more than the Maximum Dollars as specified in the budget.
  5. Never increase by less than the Minumum Dollars as specified in the budget.
  6. Once all of the above have been evaluated, check the street rate and the Percent Below Street Rate and Dollars Below Street Rate parameters as specified in the budget. These are used to keep the rent increase below street rate by either the percentage, or dollar amount indicated. If BOTH are available, then the percentage is used as the overriding element.

Note that at budget time, the system performs a slightly different calculation as a "snapshot" of its best-guess for the increases for the upcoming year. This amount is overridden by the logic above. The logic it uses for this initial calculation is as follows:
  1. Increase by the actual effective rent + the minimum % increase specified by the budget.
  2. If this amount is less than the minimum dollar amount then increase by the effective rent + the minimum dollar amount.
  3. If the user has entered a maximum percentage amount and the amount is calculated as above that percentage, then trim to that percentage.
  4. If the user has entered a maximum dollar amount and the amount is calculated as above that dollar amount, then trim to the dollar amount.