On Aug. 26, HUD published a notice in the Federal Register announcing the Fiscal Year (FY) 2017 Fair Market Rents (FMRs). This year, the Housing Opportunities Through Modernization Act of 2016 (HOTMA) revised the procedure by which HUD publishes its annual FMRs. Specifically, HUD is no longer required to publish proposed FMRs for comment in the Federal Register. Instead, HUD may post the FMRs on HUD’s website and announce such posting by notice published in the Federal Register.

In addition, HOTMA provides that HUD’s FMRs shall be effective no earlier than 30 days after the date of the publication of HUD’s Federal Register notice. However, public housing agencies (PHAs) and other interested parties may comment on the FMR and request re-evaluation of FMRs in a jurisdiction before such FMRs become effective. Consequently, any comments are due by Sept. 26, 2016, and the effective date of the FMRs is Oct. 1, 2016.

HOTMA also requires HUD to publish proposed material changes to the methodology for comment. The recent notice doesn’t change the methodology for calculating the FY 2017 FMRs estimates from that used to determine the FY 2016 FMRs. However, the notice requests public comments on defining the scope of material changes that will trigger notice and comment in future calculations of FMRs.

The FMRs in this notice are used to determine the standard payment amounts for the Housing Choice Voucher program; initial renewal rents for some expiring project-based Section 8 contracts; initial rents for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy program; and to serve as a rent ceiling in the HOME program. FMRs are also used in calculating flat rents in Public Housing units.

FMRs are typically set at the 40th percentile of gross rents in most metropolitan areas, the top end of the price range that movers could expect to pay for the lowest priced 40 percent of apartments. In select metropolitan areas where voucher holders are concentrated in certain neighborhoods, FMRs are set at the 50th percentile for a three-year time period. The 50th percentile FMRs are intended to expand the range of housing opportunities available to voucher households, enabling them move out of low-opportunity areas. In FY 2017, there will be 17 50th percentile FMR areas: Albuquerque, Baltimore, Bergen-Passaic, Chicago, Denver, Hartford, Honolulu, Kansas City, Milwaukee, Philadelphia, Riverside, San Diego, Spokane, Tacoma, Virginia Beach, West Palm Beach and Washington, D.C.

Comments and requests for reevaluations must be submitted by Sept. 26 through http://www.regulations.gov/ or by mail to HUD at: Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW, Room 10276, Washington, DC 20410-0500. HUD encourages electronic submissions.