Daily Rules, Proposed Rules, and Notices of the Federal Government
HUD is considering reforms and several changes to the methodology for calculating FMRs that are not reflected in these proposed FMRs. HUD will publish a separate
Questions related to use of FMRs or voucher payment standards should be directed to the respective local HUD program staff. Questions on how to conduct FMR surveys or concerning further methodological explanations may be addressed to Marie L. Lihn or Lynn A. Rodgers, Economic and Market Analysis Division, Office of Economic Affairs, Office of Policy Development and Research, telephone number 202-708-0590. Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Information Relay Service at 800-877-8339. (Other than the HUD USER information line and TDD numbers, telephone numbers are not toll free.)
Section 8 of the USHA (42 U.S.C. 1437f) authorizes housing assistance to aid lower-income families in renting safe and decent housing. Housing assistance payments are limited by FMRs established by HUD for different geographic areas. In the Housing Choice Voucher program, the FMR is the basis for determining the “payment standard amount” used to calculate the maximum monthly subsidy for an assisted family (
Section 8(c) of the USHA requires the Secretary of HUD to publish FMRs periodically, but not less frequently than annually. Section 8(c) states, in part, as follows:
Proposed fair market rentals for an area shall be published in the
HUD's regulations at 24 CFR 888 provide that HUD will develop proposed FMRs, publish them for public comment, provide a public comment period of at least 30 days, analyze the comments, and publish final FMRs. (
In addition, HUD's regulations at 24 CFR 888.113 set out procedures for HUD to assess whether areas are eligible for FMRs at the 50th percentile. Minimally qualified areas are reviewed each year, unless not qualified to be reviewed. Areas are not qualified to be reviewed if they have been made a 50th-percentile area within the last 3 years or have lost 50th-percentile status for failure to deconcentrate within the last 3 years. Twelve FMR areas, listed below, were reviewed for proposed FY 2010 FMRs.
Six of the 12 areas eligible for review become or remain 50th percentile areas: The Baltimore-Towson, MD MSA; the Fort Lauderdale, FL HMFA; the Grand Rapids-Wyoming, MI HMFA; the New Haven-Meriden, CT HMFA; and the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA; and the West Palm Beach-Boca Raton, FL HMFA. Grand Rapids did not meet the concentration-of-tenants criterion in FY 2009, but now meets it and is designated a 50th- percentile area for FY 2010. Fort Lauderdale, FL HMFA; and the West Palm Beach-Boca Raton, FL HMFA continue to meet the criteria for 50th percentile status and have made progress in the deconcentration of tenants, so they will remain 50th percentile areas for another 3 years.
The Baltimore-Towson, MD MSA; the New Haven-Meriden, CT HMFA; and the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA have large PHAs operating within their jurisdiction under HUD's Moving to Work (MTW) program. MTW reporting requirements differ from non-MTW agencies and have limited HUD's ability to evaluate some metropolitan areas' eligibility for 50th percentile FMRs. Reporting by the MTW agencies in these three metropolitan areas has improved such that HUD is now able to assess the criteria for eligibility for 50th percentile FMRs and determine that they now qualify. Under current program rules, these six areas will not have their 50th percentile FMR status reevaluated until FY 2013.
Six of the 12 areas eligible for review fail to qualify for the 50th-percentile FMR program for FY 2010. Of these six areas, one area, San Diego-Carlsbad-San Marcos, CA MSA, no longer qualifies for the 50th-percentile FMR program because, based on current tenant data, less than 25 percent of the tenant-based rental program participants reside in the 5 percent of census tracts in the metropolitan area with the largest number of program participants (the concentration-of-tenants test). Three areas with FY 2009 40th-percentile FMRs that were evaluated for FY 2010 50th-percentile FMRs also fail the concentration-of-tenants test: The Providence-Fall River, RI-MA HMFA; the Bergen-Passaic, NJ HMFA; and the Sacramento—Arden-Arcade—Roseville, CA HMFA. These areas will be reviewed next year; if this concentration changes, they may be made 50th-percentile areas for the FY 2011 FMRs.
Voucher tenants in the Dallas, TX HMFA have not materially deconcentrated over its 3-year eligibility period for a 50th percentile FMR. Deconcentration of tenants is the primary objective of the 50th-percentile program, and failure to make progress on the deconcentration of tenants over a 3-year period disqualifies an otherwise eligible area for 3 years. This area is not currently eligible for reevaluation until the FY 2013 FMRs. HUD solicits public comments on this aspect of the 50th percentile regulation.
The Washington-Arlington-Alexandria, DC-VA-MD HMFA still does not meet the minimum reporting criteria of 85 percent of resident records after an extensive search for useable data on assisted tenants. The District of Columbia Housing Authority is encouraged to submit to HUD by the end of the comment period any additional tenant data available in order to improve the reporting rate for the metropolitan area in which they operate. The Washington-Arlington-Alexandria, DC-VA-MD HMFA will be re-evaluated for 50th percentile FMR status in time for publication of the final FY 2010 FMRs based on all additional data submitted or refinements of analysis of data already at HUD based on comments from the PHAs. Please contact Lynn Rodgers at
Ten current 50th-percentile FMR areas were not evaluated this year because they have not completed 3 years of program participation since their last review. These 10 areas, listed below, continue in FY 2010 as 50th-percentile FMR areas. They will be up for review again in computation of the FY 2012 FMRs:
In total, 16 areas will be 50th-percentile areas for FY 2010, the 10 areas listed above and the six that passed review this year: Baltimore, Fort Lauderdale, Grand Rapids, New Haven, Philadelphia, and West Palm Beach.
This section provides a brief overview of how the FY 2010 FMRs are computed. For complete information on how FMR areas are determined, and on how each area's FMRs are derived, see the online documentation at:
The FY 2010 FMRs are based on current OMB metropolitan area definitions and standards that were first used in the FY 2006 FMRs. OMB changes to the metropolitan area definitions through November 2008 are incorporated. As of November 2008, three micropolitan areas were redefined as metropolitan areas: Cape Girardeau-Jackson, MO-IL MSA; Manhattan KS MSA; and Mankato-North Mankato, MN MSA.
As in all post-FY 2006 FMR publications, FY 2010 FMRs start with base rents generated using Census 2000 long-form survey data. They are updated with American Community Survey (ACS) data and Bureau of Labor Statistics Consumer Price Index (CPI) data. FY 2010 FMRs are FY 2009 FMRs updated by replacing the CPI data used for FY 2009 FMRs with ACS 2007 survey data and updated CPI data. Specifically, the FY 2009 rent (as of date: April 2009) is deflated to June 2006 by dividing it by 18 months of CPI data representing June 2006 through December 2007 inflation, and the usual 15-month trend factor. This June 2006 rent is the best and most recent rent estimate available using only ACS survey data and eliminating all other update data. It is this rent that will be updated with additional ACS data and new CPI data.
In order to preserve additional information gathered by HUD through random digit dialing (RDD) surveys, areas surveyed after June 2007 are updated separately, the details of which can be found at the Web site listed above.
ACS survey data continues to be applied to areas based on the type of area (CBSA, metropolitan subarea, or nonmetropolitan county), the amount of survey data available, and the reliability of the survey estimates. Both 1- and 3-year ACS 2007 data are used to update June 2006 rents. All areas are updated with the change from 2006 to 2007 in State or metropolitan one-year standard-quality median rents. In a methodological update from previous years' estimates intended to minimize fluctuations in rents due to survey error, these rent changes are tested for statistical significance
After all areas have been updated with a standard-quality median rent change, local areas with estimates that reflect more than 200 one-year recent-mover cases are evaluated further. If the updated rent is outside the confidence interval of the ACS recent-mover estimate, the updated rent is replaced with the ACS recent-mover rent estimate. In areas without 200 or more one-year ACS recent-mover observations, but with 200 or more 3-year ACS recent mover observations, the 3-year estimate
ACS 2007 data updates the June 2006 rents used in the FY 2009 FMRs forward by 12 months to June 2007. Six months of 2007 and 12 months of 2008 CPI rent and utilities price index data are used to update the June 2007 rents to the end of 2008. Local CPI data are used for FMR areas with at least 75 percent of their population within Class A metropolitan areas covered by local CPI data. Census region CPI data are used for FMR areas in Class B and C size metropolitan areas and nonmetropolitan areas without local CPI update factors.
The national 1990 to 2000 average annual rent increase trend of 1.03 is applied to end-of-2008 rents for 15 months, to derive the proposed FY 2010 FMRs.
The area-specific data and computations used to calculate proposed FY 2010 FMRs and FMR area definitions can be found at
FMR estimates are calculated for two-bedroom units. This generally is the most common size of rental units and, therefore, the most reliable to survey and analyze. After each Decennial Census, rent relationships between two-bedroom units and other unit sizes are calculated and used to set FMRs for other units. This is done because it is much easier to update two-bedroom estimates and to use pre-established cost relationships with other bedroom sizes than it is to develop independent FMR estimates for each bedroom size. This was last done using 2000 Census data. A publicly releasable version of the data file used for the derivations of rent ratios is available at
Adjustments were made using 2000 Census data to establish rent ratios for areas with local bedroom-size intervals above or below what are considered reasonable ranges or where sample sizes
The rents for three-bedroom and larger units are further adjusted to continue to reflect HUD's policy to set higher rents for these units than would result from using unadjusted market rents. This adjustment is intended to increase the likelihood that the largest families, who have the most difficulty in leasing units, will be successful in finding eligible program units. The adjustment adds bonuses of 8.7 percent to the unadjusted three-bedroom FMR estimates and adds 7.7 percent to the unadjusted four-bedroom FMR estimates. The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four-bedroom FMR for each extra bedroom. For example, the FMR for a five-bedroom unit is 1.15 times the four-bedroom FMR, and the FMR for a six-bedroom unit is 1.30 times the four-bedroom FMR. FMRs for single-room occupancy units are 0.75 times the zero-bedroom (efficiency) FMR.
For low-population, nonmetropolitan counties with small 2000 Census samples of recent-mover rents, Census-defined county group data were used to determine rents for each bedroom size. This adjustment was made to protect against unrealistically high or low FMRs due to insufficient sample sizes. The areas covered by this estimation method had less than the HUD standard of 200 two-bedroom, Census-tabulated observations.
The FMR used to establish payment standard amounts for the rental of manufactured home spaces in the Housing Choice Voucher program is 40 percent of the FMR for a two-bedroom unit. HUD will consider modification of the manufactured home space FMRs where public comments present statistically valid survey data showing the 40th-percentile manufactured home space rent (including the cost of utilities) for the entire FMR area.
All approved exceptions to these rents that were in effect in FY 2008 were updated to FY 2010 using the same data used to estimate the Housing Choice Voucher program FMRs, if the respective FMR area's definition remained the same. If the result of this computation was higher than 40 percent of the new two-bedroom rent, the exception remains and is listed in Schedule D. The FMR area definitions used for the rental of manufactured home spaces are the same as the area definitions used for the other FMRs. Areas with definitional changes that previously had manufactured housing space rental exception FMRs are requested to submit new surveys to justify higher-than-standard space rental FMRs, if they believe higher-space rental allowances are needed.
HUD seeks public comments on FMR levels for specific areas. Comments on FMR levels must include sufficient information (including local data and a full description of the rental housing survey methodology used) to justify any proposed changes. Changes may be proposed in all or any one or more of the unit-size categories on the schedule. Recommendations and supporting data must reflect the rent levels that exist within the entire FMR area.
For the supporting data, HUD recommends the use of professionally conducted RDD telephone surveys to test the accuracy of FMRs for areas where there is a sufficient number of Section 8 units, to justify the survey cost of approximately $35,000 to $50,000. Areas with 2,000 or more program units usually meet this cost criterion, and areas with fewer units may meet it if actual rents for two-bedroom units are significantly different from the FMRs proposed by HUD.
PHAs in nonmetropolitan areas may, in certain circumstances, conduct surveys of groups of counties. HUD must approve all county-grouped surveys in advance. PHAs are cautioned that the resulting FMRs will not be identical for the counties surveyed; each individual FMR area will have a separate FMR based on the relationship of rents in that area to the combined rents in the cluster of FMR areas. In addition, PHAs are advised that counties where FMRs are based on the combined rents in the cluster of FMR areas will not have their FMRs revised, unless the grouped survey results show a revised FMR above the combined rent level.
PHAs that plan to use the RDD survey technique should obtain a copy of the appropriate survey guide. Larger PHAs should request HUD's survey guide entitled “Random Digit Dialing Surveys: A Guide to Assist Larger Public Housing Agencies in Preparing Fair Market Rent Comments.” Smaller PHAs should obtain the guide entitled “Rental Housing Surveys: A Guide to Assist Smaller Public Housing Agencies in Preparing Fair Market Rent Comments.” These guides are available from HUD USER at 800-245-2691, or from HUD's Web site, in Microsoft Word or Adobe Acrobat format, at:
Other survey methodologies are acceptable in providing data to support comments, if the survey methodology can provide statistically reliable, unbiased estimates of the gross rent. Survey samples, preferably, should be randomly drawn from a complete list of rental units for the FMR area. If this is not feasible, the selected sample must be drawn to be statistically representative of the entire rental housing stock of the FMR area. Surveys must include units at all rent levels and be representative by structure type (including single-family, duplex, and other small rental properties), age of housing unit, and geographic location. The Decennial Census should be used as a means of verifying if a sample is representative of the FMR area's rental housing stock.
Most surveys cover only one- and two-bedroom units, which has statistical advantages. If the survey is statistically acceptable, HUD will estimate FMRs for other bedroom sizes using ratios based on the Decennial Census. A PHA or contractor that cannot obtain the recommended number of sample responses after reasonable efforts should consult with HUD before abandoning its survey; in such situations, HUD may find it appropriate to relax normal sample-size requirements.
HUD will consider increasing manufactured home space FMRs where public comment demonstrates that 40 percent of the two-bedroom FMR is not adequate. In order to be accepted as a basis for revising the manufactured home space FMRs, comments must
Accordingly, the Fair Market Rent Schedules, which will not be codified in 24 CFR part 888, are proposed to be amended as shown in the Appendix to this notice:
Metropolitan area CBSAs (referred to as MSAs) may be modified to allow for subarea FMRs within MSAs based on the boundaries of old FMR areas (OFAs) within the boundaries of new MSAs. (OFAs are the FMR areas defined for the FY 2005 FMRs. Collectively they include 1999-definition MSAs/Primary Metropolitan Statistical Areas (PMSAs), metro counties deleted from 1999-definition MSAs/PMSAs by HUD for FMR purposes, and counties and county parts outside of 1999-definition MSAs/PMSAs referred to as nonmetropolitan counties.) Subareas of MSAs are assigned their own FMRs when the subarea 2000 Census Base Rent differs by at least 5 percent from (
The specific counties and New England towns and cities within each State in MSAs and HMFAs are listed in Schedule B.
Schedule B shows the FMRs for zero-bedroom through four-bedroom units. The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four-bedroom FMR for each extra bedroom. For example, the FMR for a five-bedroom unit is 1.15 times the four-bedroom FMR, and the FMR for a six-bedroom unit is 1.30 times the four-bedroom FMR. FMRs for single-room-occupancy (SRO) units are 0.75 times the zero-bedroom FMR.
a. The FMR areas in Schedule B are listed alphabetically by metropolitan FMR area and by nonmetropolitan county within each State. The exception FMRs for manufactured home spaces in Schedule D are listed alphabetically by State.
b. The constituent counties (and New England towns and cities) included in each metropolitan FMR area are listed immediately following the listings of the FMR dollar amounts. All constituent parts of a metropolitan FMR area that are in more than one State can be identified by consulting the listings for each applicable State.
c. Two nonmetropolitan counties are listed alphabetically on each line of the non-metropolitan county listings.
d. The New England towns and cities included in a nonmetropolitan county are listed immediately following the county name.