Using Small Area FMR Data to
Maximize HAP and Expand
Opportunity
Indiana NAHRO
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Fair Market Rent (24 CFR 5.100)
• Fair Market Rent (FMR) means the rent that would be required
to be paid in the particular housing market area in order to
obtain privately owned, decent, safe and sanitary rental housing
of modest (non-luxury) nature with suitable amenities
• FMR includes utilities (except telephone and cable/satellite TV)
• Separate FMR’s will be established by HUD for dwelling units of
varying sizes (number of bedrooms) and will be published
annually in the FEDERAL REGISTER
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Fair Market Rents
• FMR’s are housing marketwide estimates of rents,
generally Metropolitan
Statistical Areas (MSA’s) or
non-metropolitan counties
• FMR’s are set at the 40th or
50th percentile rent
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Utility Allowances (24 CFR 982.517)
• Utility Allowance is the LOWER of:
• Voucher bedroom size
• Actual bedroom size of unit
• PHA MUST use actual bedroom
size if extra bedroom is authorized
as a reasonable accommodation
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Payment Standards
• PHA’s must adopt payment
standards for each unit size
• PHA’s may establish a single
payment standard for each unit
size OR a separate payment
standard for each “designated”
part of the FMR area
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HCV Access to LowLow-Poverty
Neighborhoods
• In 2010 only 1 in 5 families
with children used HCV in a
low-poverty neighborhood
(<10% poverty) 1
1 - Center on Budget and Policy Priorities
(2014) “Creating Opportunity for Children:
How Housing Location Can Make A
Difference”
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Current Policy: 50th Percentile FMR
First Attempt: 50th Percentile Rule
Issues
• Implemented in 2000
• Goal: Address metro areas with
high concentration of HCVs
• Limited success has been
achieved
• 50th percentile may be
insignificant to access significant
share of lower poverty
neighborhoods
• It also increases purchasing
power in high poverty
neighborhoods
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HUD’s Proposed Solution
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Use SAFMR Instead of 50th Percentile FMR
• Proposed rule
• Published June 16, 2016
• Comments due August 15,
2016
• HUD proposes to determine
which metro areas would be
best served by SAFMR
• Criteria includes:
• Number of vouchers in a metro
area
• Concentration of current HCV
participants in low income
areas
• Percentage of renters with
gross rents above the payment
standard
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SAFMR Proposed Rule
• PHAs operating in designated metropolitan areas would be
required to use Small Area FMRs.
• PHAs not operating in the designated areas would have the
option to use Small Area FMRs
• Other programs that use FMRs would continue to use area-wide
FMRs.
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HUD’s Rulemaking Goal
• Provide HCV tenants with a greater ability to move areas with:
• Access to jobs;
• Adequate transportation; and
• Better educational opportunities for children
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Proposed Metro Areas
• Atlanta-Sandy Springs-Marietta, GA
• North Port-Bradenton-Sarasota, FL
• Bergen-Passaic, NJ
• Oxnard-Thousand Oaks-Ventura, CA
• Charlotte-Gastonia-Rock Hill, NC- SC
• Palm Bay-Melbourne-Titusville, FL
• Chicago-Joliet-Naperville, IL
• Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
• Colorado Springs, CO
• Pittsburgh, PA
• Dallas-Plano-Irvington, TX
• Sacramento-Arden-Arcade-Roseville, CA
• Fort Lauderdale-Pompano Beach- Deerfield Beach, FL
• San Antonio-New Braunfels, TX
• Fort Worth-Arlington, TX
• San Diego-Carlsbad-San Marcos, CA
• Gary, IN
• San Jose-Sunnyvale-Santa Clara, CA
• Hartford-West Hartford-East Hartford, CT
• Tacoma-Lakewood, WA
• Jackson, MS
• Tampa-St. Petersburg-Clearwater, FL
• Jacksonville, FL
• Urban Honolulu, HI
• Monmouth-Ocean, NJ
• Virginia Beach-Norfolk-Newport News, VA-NC
• Nassau County-Suffolk County, NY
• Washington-Arlington-Alexandria, DC-VA-MD
• New York, NY
• West Palm Beach-Boca Raton-Delray Beach, FL
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Where you Live Determines:
• The schools children attend
• Neighborhood safety
• Access to public
transportation and highways
• The availability and quality of
finance and credit
• Employment opportunities
• Social networks
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Recent Research
• In the United States between
2001 and 2014, higher income
was associated with greater
longevity, and differences in life
expectancy across income groups
increased over time
• Geographic location plays an
outsized role in life expectancy for
the poor.
Source: JAMA 2016; 315 (16)
Raj Chetty, et al.
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Data and Mapping Resources
HUD’s Enterprise GIS Storefront and Open Data Portal
http://egis.hud.gov
AFFH Data and Mapping Tool
http://egis.hud.gov/affht
HUD Exchange | AFFH
https://www.hudexchange.info/programs/affh/
CPD Maps
http://egis.hud.gov/cpdmaps/
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Helpful Tools from AFFH Rule
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Use of Small Area FMR’s
• Determination of Exception
Payment Standard levels
• Justification for setting
payment standards within
the basic range (90% – 110%)
of the published FMR
• HUD now provides zip code
based “hypothetical” small
area FMR’s for all
https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html
metropolitan areas
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Worcester County, MD Hypothetical Small Area FMRs By Unit Bedrooms
ZIP Code
Efficiency
One-Bedroom
Two-Bedroom
Three-Bedroom
Four-Bedroom
ZIP/CBSA Ratio
FMR
$610
$676
$873
$1,190
$1,524
1.000
21804
$670
$720
$960
$1,280
$1,590
1.090
21811
$680
$730
$980
$1,300
$1,620
1.111
21813
$810
$870
$1,160
$1,540
$1,920
1.316
21822
$480
$520
$690
$920
$1,140
0.778
21829
$460
$490
$660
$880
$1,090
0.667
21841
$600
$640
$860
$1,150
$1,430
0.968
21842
$690
$740
$990
$1,320
$1,640
1.118
21843
$590
$630
$850
$1,130
$1,410
0.957
21851
$460
$490
$660
$880
$1,090
0.744
21862
$590
$630
$850
$1,130
$1,410
0.957
21863
$480
$520
$690
$920
$1,140
0.782
21864
$590
$630
$850
$1,130
$1,410
0.957
21872
$600
$650
$870
$1,160
$1,440
0.983
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What Happens When You Adopt Exception
Payment Standards?
12j.
12k.
12m.
12p.
12q.
12r.
12s.
Payment standard for the family
Rent to owner
Utility allowance, if any
Gross rent of unit: 12k + 12m (or Space Rent)
Lower of 12j or 12p
TTP: copy from 9j
Total HAP: 12q minus 12r
Annual HAP Savings
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100%
873
700
125
825
825
250
575
$480
90%
785
700
125
825
785
250
535
What Neighborhoods Become Accessible?
12j.
12k.
12m.
12p.
12q.
12r.
12s.
Payment standard for the family
Rent to owner
Utility allowance, if any
Gross rent of unit: 12k + 12m (or Space Rent)
Lower of 12j or 12p
TTP: copy from 9j
Total HAP: 12q minus 12r
Annual Increased HAP Cost
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110%
960
825
125
950
950
250
700
100%
873
825
125
950
873
250
623
$924
Expanding Opportunity/Maximizing HAP
• Families receive access to more units
• Families are incentivized to conduct a
wider housing search
• PHA’s can utilize more of their HAP
and/or HAP reserves
• Units in lower cost neighborhoods do
not receive the same level of subsidy as
units in higher cost neighborhoods
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Questions?
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For More Information
Jim Evans
Quadel Consulting
1200 G Street NW, Suite 700
Washington, DC 20005
(202) 789-2500
[email protected]
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