HUD Issues Proposed FY2014 FMRs
On Aug. 5, HUD issued proposed fair market rents (FMRs) for fiscal year (FY) 2014. HUD is required by law to publish FMRs periodically, but not less than annually, adjusted to be effective on Oct. 1 of each year. Comments are due by Sept. 4, 2013. The notice can be found at https://federalregister.gov/a/2013-18792.
The primary uses of FMRs are to determine payment standards for the Housing Choice Voucher (HCV) program, to determine initial renewal rents for some expiring project-based Section 8 contracts, to determine initial rents for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy program, and to serve as rent ceilings in the HOME program. FMRs are also used in the calculation of maximum award amounts for Continuum of Care grantees.
The recent notice provides proposed FY2014 FMRs for all areas that reflect the estimated 40th and 50th percentile rent levels trended to April 1, 2014. The FY2014 FMRs are based on five-year, 2007-2011 data collected by the American Community Survey (ACS). These data are updated by one-year ACS data for areas where statistically valid one-year ACS data are available. The Consumer Price Index (CPI) rent and utility indexes are used to further update the data from 2011 to the end of 2012. HUD continues to use ACS data in different ways according to the statistical reliability of rent estimates for areas of different population sizes and counts of rental units.
The proposed FY2014 FMRs in this notice reflect several updates to the methodology used to calculate FMRs. HUD has updated the information used to calculate FMRs in Puerto Rico, where FMRs are now based on 2007-2011 Puerto Rico Community Survey (PRCS) data (the PRCS is a part of the ACS program). Moreover, HUD is using CPI data calculated specifically for Puerto Rico rather than using South Census Region CPI data. Additionally, these FMRs continue to use the annually updated trend factor calculation methodology. This trend factor for the FY2014 FMRs is based on the change in national gross rents from 2006 to 2011.