On August 15th, HUD published its list of proposed Fair Market Rents (FMRs) for 2015. FMRs are used as subsidy limits in HUD’s Housing Choice Voucher Program, but also figure into other housing programs in various ways. A preliminary, proposed list is circulated in advance to allow for public comment before the final version is published, as required by law, on or before October 1.
Sometimes, the term “Fair Market” Rent can lead to confusion and problems. Technically, an FMR is the 40th percentile gross rent for a 2-bedroom housing unit in an area, after excluding housing units on lots of more than 10 acres, those without full plumbing or a full kitchen, cases where meals are included in the rent, rents below the 75th percentile for public housing in the area, and housing units built recently. A problem may arise if, for example, it assumed this is what an average new apartment should rent for in an area because it is “fair” and “market” based.
From one year to the next, FMRs may increase or decline. On HUD’s 2015 proposed list, the increases outnumbered the declines by about 2 to 1. Of the 2,557 U.S. metro areas, parts of metro areas and non-metro counties on the list, FMRs increased in 1,718, declined in 822, and were unchanged in 17. The shares of increases and declines were roughly similar inside and outside of metro areas, although the average change was somewhat higher inside—1.9 percent, compared to 1.4 across counties outside of metros. Below is a table showing the metro areas where FMRs declined by more than 10 percent.
In terms of population, the metros in the table are relatively small. The largest percentage drop for a metro area with a population of at least a quarter of a million was an 8.3 percent decline in the Utica Rome MSA in New York. The largest for a metro with a population of at least a million was a 6.6 percent decline in Las Vegas.
This post highlighted the larger declines for anyone who may wish to challenge or otherwise comment on them, because large declines have the most potential to cause problems for housing programs in an area. September 15 is the deadline for comments. Unfortunately, HUD no longer has resources to conduct its own surveys to check the numbers, so any successful challenge will have to include results from a survey conducted in a way HUD finds acceptable. As usual, NAHB will submit its own comments on the proposed FMRs.