Source: National Low Income Housing Coalition, Aug 6
HUD’s proposed FY11 Fair Market Rents (FMRs) were posted in the Federal Register on August 4. This year, along with the usual FMR tables and data files, HUD also released the proposed small area FMRs for the Dallas, TX, HUD Metro FMR Area. This is the first area that will participate in HUD’s Small Area FMR Demonstration Project, which aims to make all neighborhoods in a metropolitan area accessible to voucher holders by setting FMRs at the better-defined ZIP code level (see Memo, 5/14).
According to the notice, FMRs are meant to reflect “the amount that would be needed to pay the gross rent (shelter rent plus utilities) of privately owned, decent, and safe rental housing of a modest (non-luxury) nature with suitable amenities.” FMRs are generally set at a level that HUD determines is the 40th percentile rent for standard quality rental units in a metropolitan area or rural county, and are primarily used by HUD to determine payment standards and rent levels in the Housing Choice Voucher program.
In some metropolitan areas, where vouchers and affordable units appear to be concentrated in a limited number of neighborhoods, the FMR is set at the 50th percentile instead of the 40th. HUD regularly assesses whether given areas meet the criteria for using 50th percentile rents, to increase the number and the geographic distribution of the units a voucher holder can afford. All 17 areas that used 50th percentile FMRs in FY10 will continue to use these rents in FY11, since none of these were up for review this year. In addition, one new area, Bergen-Passaic, NJ, is now eligible to use 50th percentile rents.
HUD did not make any methodological changes to the FMRs for FY11, but it did include the methodology for determining small area FMRs in the notice along with confirmation that the Dallas area will be a participant in the small area FMR demonstration project. HUD also updated the hypothetical individual small area FMRs and the small area FMR data file available on their website in order to incorporate the proposed FY11 FMRs. These are tools that allow readers to compare small area FMRs to the currently proposed FMRs.
Advocates have 30 days to comment on the methodology used by HUD to calculate the FMRs or on the proposed rent levels in a specific area. Final FMRs for FY11 must be released by HUD on or before the fiscal year begins on October 1. The comment period for the May 18 notice regarding the small area FMR demonstration project has ended, but HUD is currently reviewing these comments and may make changes to the methodology for creating small area FMRs based on the public comments that were submitted. NLIHC submitted comments on this project in July (see Memo, 7/16).
The proposed FY11 FMRs, along with supporting material, historical data, and a system to see how individual areas’ FMRs are determined can be found at: http://www.huduser.org/datasets/fmr.html
