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At the time
we began this web site, the government did not put up the preamble to
the Fair Market Rents, except in formats difficult for the average person
to access. This has improved -- but it's sometimes hard to find things
on the HUD site, because
there are so many things under HUD's umbrella.
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Therefore,
we've left up the introduction to the Fiscal Year 2002 50th Percentile
and 40th Percentile Fair Market Rents so that readers can get
an idea of what the entire topic is about. We hope you find it useful.
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For the more
recent 50th Percentile and 40th Percentile Fair Market Rents, visit
other portions of our web site.
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| AGENCY: Office of the Secretary, HUD |
| ACTION: Notice of Fair Market Rents (FMRs) for Fiscal Year (FY) 2002. |
| EFFECTIVE DATE: FMRs published in this notice as of October 1, 2001. |
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FMR Standard |
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FMRs are gross rent estimates; they include shelter rent and the cost of utilities, except telephone. HUD sets FMRs to assure that a sufficient supply of rental housing is available to program participants. To accomplish this objective, FMRs must be both high enough to permit a selection of units and neighborhoods and low enough to serve as many families as possible. The level at which FMRs are set is expressed as a percentile point within the rent distribution of standard quality rental housing units. The current definition used is the 40th percentile rent, the dollar amount below which 40 percent of standard quality rental housing units rent. The 40th percentile rent is drawn from the distribution of rents of units which are occupied by recent movers (renter households who moved into their unit within the past 15 months). FMRs have been increased to the 50th percentile rent in those metropolitan areas where a FMR increase is most needed to promote residential choice, help families move closer to areas of job growth, and deconcentrate poverty. 50thPercentile is indicated by an "*". Newly built units less than two years old are excluded, and adjustments have been made to correct for the below market rents of public housing units included in the data based. |
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METROPOLITAN
FMR AREAS
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LIVING
WAGE ($/hour)
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FAIR
MARKET RENT ($/month)
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0BR
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1BR
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0BR
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1BR
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2BR
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3BR
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4BR
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| Metropolis, ST MSA | $11.12 | $12.65 | 578 | 658 | 804 | 1093 | 1265 |
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The above table is an example of the FMR Standard. |
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Interested in how FMRs are established, and why? |
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Here's the introductory material from the Department of Housing and Urban Development (HUD). This information prefaced the January 2, 2001 version of Fair Market Rents for Fiscal Year 2001; Final Rule. This document is copyrighted by the United States government, and all rights are reserved. Short cuts:Fair Market Rents for the Housing Choice Voucher Program What are FMRs used for by the government? Preamble
to the 2004 FMR HUD document (.pdf format) |
| SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937 requires the Secretary of HUD to publish FMRs periodically, but not less frequently than annually to be effective on October 1 of each year. FMRs are used (1) to establish payment standards for the Housing Choice Voucher program; (2) to determine initial contract rents in new commitments for Section 8 project-based assistance (currently available chiefly in the project-based voucher program); (3) to determine whether comparability applies to adjustment of contract rents during the term of existing HAP contracts for the former new construction, substantial rehabilitation and moderate rehabilitation programs; (4) as a limit on renewal rents for certain Section 8 projects (including mark-up-to-market projects); and (5) to determine maximum subsidy levels for HOME tenant-based rental assistance, and maximum rent levels in HOME multifamily rental housing. Other programs may also require the use of FMRs. |
| This notice sets final FMRs that reflect the 50th percentile rent levels for 39 areas, as determined by applying the criteria specified in HUD’s interim rule amending the HUD regulation that establishes the methodology for setting FMRs for existing housing (24 CFR 888.113). The interim was published on October 2, 2000 (65 FR 58870), and became effective on December 1, 2000. To combine final Fiscal Year 2001 FMRs for all areas in one publication, this notice also republishes the 40th percentile rents for all other areas. |
| EFFECTIVE DATE: The 50th percentile FMRs published in this notice are effective on January 2, 2001. The 40th percentile FMRs were previously effective on October 1, 2000. Electronic Data Availability: This Federal Register Notice is available electronically from the HUD news page: http://www.hudclips.org/cgi/index.cgi. |
| The data set of the 50th percentile FMRs is available electronically on the HUD web page: http://www.huduser.org/datasets/pdrdatas.html. |
| FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Director, Real Estate and Housing Performance Division, Office of Public and Assisted Housing Delivery, telephone (202) 708–0477. For technical information on the development of schedules for specific areas or the method used for the rent calculations, contact Marie L. Lihn, Economic and Market Analysis Division, Office of Economic Affairs, telephone (202) 708– 0590, Extension 5866 (e-mail: Marie_L._Lihn@hud.gov). Hearing-or speech-impaired persons may use the Telecommunications Devices for the Deaf (TTY) by contacting the Federal Information Relay Service at 1–800– 877–8339. (Other than the ‘‘800’’ TTY number, telephone numbers are not toll free.) |
| SUPPLEMENTARY INFORMATION: Section 8 of the United States Housing Act of 1937 (the Act) (42 U.S.C. 1437f) authorizes housing assistance to help lower income families rent decent, safe, and sanitary housing. The amounts of the housing assistance payments are limited by ‘‘fair market rents’’ (FMRs) established by HUD for all areas, and for different size units (expressed as number of bedrooms in a unit). In the HUD voucher program, the FMR is used to determine the ‘‘payment standard’’ (the maximum monthly subsidy) for assisted families (see Section 982.503.) In general, the FMR for an area is the amount that would be needed to pay the gross rent (shelter rent plus utilities) of privately owned, decent, safe, and sanitary rental housing of a modest (non-luxury) nature with suitable amenities. |
| FMRs are estimates of rent plus the cost of utilities, except telephone. FMRs are housing market-wide estimates of rents that provide opportunities to rent standard quality housing throughout the geographic area in which rental housing units are in competition. |
| The level at which FMRs are set is expressed as a percentile point within the rent distribution of standard quality rental housing units in the FMR area. FMRs are set at either the 40th or 50th percentile rent—the dollar amount below which the rent for 40 or 50 percent of standard quality rental housing units falls. The 40th or 50th percentile rent is drawn from the distribution of rents of all units that are occupied by recent movers. Adjustments are made to exclude public housing units, newly built units and substandard units. |
Manufactured Home Space FMRs |
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Based on 50th Percentile Rent As in the past, FMRs for the rental of manufactured home spaces in the tenant-based Housing Choice Voucher program are set at 40 percent of the applicable Section 8 existing housing program FMRs for two-bedroom units (section 888.113(e)). The manufactured home space FMR for each of the 39 areas for which HUD has set 50th percentile FMR, is set a 40 percent of the two-bedroom 50th percentile FMR. |
Consideration of Public Comment |
| In response to the October 6, 2000 proposed 50th percentile FMRs for 39 areas, HUD received six public comments. No rental housing survey information was submitted with any of the comments. Two comments specifically discussed the implementation of the provisions under the interim rule and were not related to FMR areas. The six comments received and responses are summarized below: |
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Comment: The Housing Authority of the City of New Braunfels, Texas says its jurisdiction has high rents that are more comparable to Austin than San Antonio and that it has a very high turn-back rate for its Housing Choice Voucher program. Response: The New Braunfels PHA does not appear to have taken advantage of its discretion to raise payment standards to 110 percent of the FMR. If the PHA were to continue to experience high turn-back rates, despite having increased its payment standard to 110 percent of the FMR, it could qualify for the success rate payment standard based on a 50th percentile rent. HUD also provides several additional mechanisms for obtaining exception payment standards above 110 percent of the 40th percentile FMR. (See 24 CFR 982.503.) |
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Comment: Two Public Housing Authorities (PHAs), The Housing Authority of the City of New Braunfels, Texas and the Oklahoma City Housing Authority request additional funding from HUD for their voucher programs. The New Braunfels PHA requests additional funding for a higher payment standard, the Oklahoma City PHA requests additional funding for the new 50th percentile FMRs. Response: HUD’s current procedures provide sufficient funding for PHAs to cover the increased costs resulting from higher payment standards or an FMR increase. Any additional costs resulting from the higher payment standard or higher FMR would be reflected in the PHA’s costs per unit for the current year. Under HUD’s renewal regulations (see 24 CFR 982.102), a PHA experiencing increased per-unit costs in year 1 will generally receive an increase in its funding in the following year in light of these higher per-unit costs. This enables PHAs to increase payment standards where necessary to ensure the successful use of Housing Choice Vouchers. |
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Comment: Foothill-West Associates, the administrator of a senior apartment complex, notes that rents in Butte County, California have increased countywide by an average of 12–13 percent and requests a survey by HUD. Response: HUD is currently developing a list of potential areas that will be surveyed during the upcoming winter and summer. Chico-Paradise MSA (Butte County) will be placed on this list as a potential candidate and its need for a survey will be evaluated in comparison with the needs of other FMR areas. |
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Comment: The Council of Large Public Housing Authorities finds that the proposed rule is too restrictive in that it limits increasing the FMRs to only 39 metropolitan market areas. CLPHA also is concerned that the proposed rule lacks transparency because HUD has not identified the sources of information used to determine eligibility and has not established a method to appeal the designation of ineligibility. Response: These comments go to the merits of the interim rule that provides for increased FMRs and success rate payment standards, rather than to HUD’s calculations of the 50th percentile rent in accordance with the rule. |
| Comment: The Dallas Housing Authority supports the efforts of HUD to increase FMRs. |
Calculation Errors |
| This notice corrects the 3-bedroom FMR for Utica-Rome, NY and makes it $626. |
Other Matters |
Environmental Impact |
| A Finding of No Significant Impact with respect to the environment as required by the National Environmental Policy Act (42 U.S.C. 4321–4374) is unnecessary, since the Section 8 Rental Certificate Program is categorically excluded from the Department’s National Environmental Policy Act procedures under 24 CFR 50.20(d). |
Regulatory Flexibility Act |
| The undersigned, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), hereby certifies that this notice does not have a significant economic impact on a substantial number of small entities, because 50th percentile FMRs do not change the rent from that which would be charged if the unit were not in the Section 8 Program. |
Catalog of Federal Domestic Assistance |
| Assistance program number is 14.156, Lower-Income Housing Assistance Program (Section 8). Accordingly, the Fair Market Rent Schedules, which will not be codified in 24 CFR part 888, are amended as follows: Dated: December 21, 2000. Andrew M. Cuomo, Secretary. |
by Universal Living Wage
PO Box 2312, Austin, TX 78768. All rights reserved.
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