HUD Releases Proposed FY 2008 FMRs
HUD
Memo to Members: Vol 12, No. 28, July 13, 2007
On July 12, HUD released its proposed FY 2008 Fair Market Rents (FMRs), which are used in the administration of a number of HUD programs, primarily to determine payment standard amounts in the Housing Choice Voucher program. Comments, including any rent surveys submitted to request a change in an individual area’s FMR, are due to HUD on August 13, 2007.
Under the proposed FMRs, most areas would experience only moderate changes, while the vast majority of FMRs would increase in FY08. Among counties, the average increase in the two-bedroom FMR would be 7%. Some areas would have significant increases. For example, the following areas would experience increases of more than 20% from FY07: Western Worcester County, MA HUD Metro FMR Area; Louisa County, VA HUD Metro FMR Area; Santa Barbara-Santa Maria, CA Metropolitan Statistical Area (MSA); Lakeland, FL MSA; and the Honolulu, HI MSA. Roughly 100 FMR areas, however, would face declines, ranging from a nearly 11% decline in Pittsburgh (a drop of $82 on a two bedroom apartment) to a less than 0.33% decline in the Logan, UT-ID MSA.
The proposed FY08 FMRs are the first to rely on new American Community Survey (ACS) data from the Census in their calculation. The preamble to the Federal Register notice notes that the ACS presents some challenges due to the small sample sizes of recent movers in qualified rental units, particularly in smaller FMR areas, and provides the details of how the ACS was used to update FMRs in these areas.
Also, HUD continues its effort to move FMR area definitions more closely into line with the most current (December 2006) Office of Management and Budget (OMB) MSA definitions. HUD proposes the same methodology this year as it used last year to decide whether to maintain existing FMR area definitions or to alter them by newly including or excluding counties to better match OMB’s MSA definitions. Areas that are newly added or removed from larger FMR areas can see significant changes in their FMRs. This year, however, HUD does not propose any changes to the 50th percentile FMR status of FMR areas, as it did in 2007, announcing instead a review to begin in 2009.
NLIHC will continue to analyze the proposed FMRs in the coming weeks and may provide additional analysis and guidance as a result. The “Individual Area Proposed FY2008 FMR Documentation” system on HUD’s FMR website can provide detailed information on how FMRs were determined in individual cases.
The proposed FY08 FMRs and supporting materials can be found here: www.huduser.org/datasets/fmr.html
