HUD Expands Metro Areas Required to Use Small Area FMRs

HUD recently announced that it will cover expanded housing and neighborhood choices for more than 800,000 total households using Housing Choice Vouchers to find and secure affordable housing. PHAs in an additional 41 metropolitan areas that cover more than 440,000 housing vouchers will now be required to use Small Area Fair Market Rents (SAFMR) under HUD’s 2016 Small Area Fair Market Rent Final Rule when setting the maximum rent that Housing Choice Vouchers will cover, instead of setting rent maximums for the entire metropolitan area.

“SAFMR allows Public Housing Agencies (PHAs) to set the maximum rent that housing vouchers will cover at the ZIP code level instead of the entire metropolitan area,” HUD says. “This policy allows voucher payments that more accurately reflect the local market and enable voucher holders to choose from a wider range of neighborhoods that suit their and their family’s preferences and meet their needs, at no additional cost to them.”

At the beginning, based on a set of criteria outlined in the original rule, HUD identified 24 metropolitan areas where it would require PHAs to use SAFMRs in their voucher programs. PHAs in these areas began using SAFMRs as of April 1, 2018. The rule also required HUD to evaluate new data every five years to determine whether additional metropolitan areas met the requirements for the mandatory use of SAFMRs.

The recently announced 41 metropolitan areas are joining the 24 metropolitan areas that covered almost 370,000 vouchers and bringing the total number of metropolitan areas covered by the rule to 65, covering more than 800,000 households or 45 percent of families in the Housing Choice Voucher program. According to HUD, this action ensures that a portion of units in every neighborhood are affordable to tenants renting with a voucher, including higher-rent neighborhoods with high-performing schools and other life-enriching opportunities.

HUD says that increasing choice for households who rely on Housing Choice Vouchers can positively impact families’ health and well-being. “For instance,” HUD says, “when children in low-income families grow up in low-poverty, well-resourced neighborhoods, they are much more likely to attend college and earn more as young adults. And there’s evidence that PHAs that have used SAFMRs in the past expand housing choices for families, allowing them to use their vouchers in neighborhoods with lower poverty rates and better performing schools.”