For decades, Chattanooga public housing residents have been charged only a $5 penalty for late rent.
This month CHA board Chairman Eddie Holmes asked state legislators to boost the late fee up to 10 percent of a person's rent.
The bill has passed in the House and Senate and the proposed increase will be presented to Chattanooga Housing Authority board members in May.
CHA will have a 30-day public comment period starting this month. Housing officials expect to have information concerning the proposed increase on its website today at www.chahousing.org.
"We're at a point now, because we are rated on how well we collect rent, we just want to send a message that rent is very important and it must be paid on time every single month," said CHA Executive Director Betsy McCright.
She said the days are gone when the housing authority could allow a tenant to go three or four months without paying rent. It's just not economically feasible, she said.
She hopes raising the late fee will motivate tenants to pay on time.
Holmes said the U.S. Department of Housing and Urban Development gave CHA a low score because of its many late and unpaid rents. That could affect the agency's HUD funding, he said.
Hamilton and Rutherford counties were the only two counties in the state whose housing authority late fees were less than 10 percent, Holmes said.
Nonpayment of rent is an ongoing problem for CHA.
In July 2011, CHA reported it had evicted 378 people and lost more than $368,000 in unpaid rental fees from 2008 to 2010.
In 2012 HUD gave CHA a substandard grade on its annual assessment because of the way the housing agency collects rents. CHA was $11,000 short of the threshold for a standard mark.
Joe Clark, Westside Community Association vice president, blamed poor management, not deadbeat tenants, for the losses.
"If you raise the fee and you hadn't already been getting it, what makes you think you're going to get it when you raise it?" said Clark.
He said the higher fee will only hurt people who already are struggling.
CHA had a bad reputation with HUD because it misused $3 million by giving raises and bonuses, not because of late rent payments, said Clark.
"If the housing authority wants to be a good leader, it should start paying its bills better first," he said.
CHA got on HUD's troubled housing list in 2009 because of issues with fiscal accountability. The agency came back into good standing in 2011.
Contact staff writer Yolanda Putman at firstname.lastname@example.org or 423-757-6431.