HUD Releases FY 2022 Fair Market Rents

HUD has published the fiscal year 2022 Fair Market Rents (FMRs). The FMRs are effective Oct. 1. FMRs are used to determine payment standards for HUD’s various housing programs. In general, the FMR for an area is the amount that a tenant would need to pay the gross rent (shelter rent plus utilities) of privately owned, decent, and safe rental housing of a modest nature; HUD’s housing assistance payments for residents are limited by FMRs for different geographic areas, including Small Area Fair Market Rents (SAFMRs). The FMRs can be found at www.huduser.gov/portal/datasets/fmr.html.

In the Housing Choice Voucher (HCV) program, the FMR is the basis for determining the “payment standard amount” used to calculate the maximum monthly subsidy for an assisted family. HUD also uses the FMRs to determine 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, rent ceilings for rental units in both the HOME Investment Partnerships program and the Emergency Solution Grants program, calculation of maximum award amounts for Continuum of Care recipients, and calculation of flat rents in Public Housing units.

This year, the Department of the Treasury’s Emergency Rental Assistance program allows grantees to make payments to households up to the maximum of the applicable FMR or SAFMR in cases where the household doesn’t have documentation of actual rent paid.

Methodology. The FMRs are calculated using the U.S. Census Bureau’s five-year American Community Survey (ACS) data collected between 2015 and 2019, a “recent mover factor based on 1-year American Community Survey data from 2019,” the Consumer Price Index, and trend factor forecasts. Additional calculations are made to adjust for the number of bedrooms. FMRs are subject to state or national minimums and to a limit on year-to-year decreases. Additionally, some public housing agencies use SAFMRs, which are calculated for ZIP codes within Metropolitan Areas.

FMR reevaluations. Occasionally, an interested party will believe that the FMRs calculated by HUD don’t accurately reflect the rents for the area. For this scenario, the Federal Register notice announcing the FMRs contains the procedures for FMR reevaluation requests.

While any interested party can request a reevaluation, for a reevaluation to be granted by HUD, the request must be made by the local PHA. In an area with multiple PHAs, a collection of PHAs that when combined represent at least half of voucher tenants in the area must agree the reevaluation is necessary.

In addition, the interested party is required to gather sufficient data and incur the costs associated with gathering the data. In the Federal Register, HUD states, “PHAs may continue to fund such surveys independently, as specified below, using ongoing administrative fees or their administrative fee reserve if they so choose.”

For HUD to perform a reevaluation, the requesting party must collect data that is more recent than that data used by HUD in establishing the FMRs. So, parties requesting a reevaluation of the 2022 FMRS must provide HUD with data that’s more recent than the 2019 ACS data. The Federal Register states the data must contain the following information: “HUD requires data on gross rents paid in the FMR area for standard quality rental housing units. The data delivered must be sufficient for HUD to calculate a 40th and 50th percentile two-bedroom rent.”

If this type of data isn’t available, HUD states that requestors may gather this information using the survey guidance available in “Revised Area Survey Procedures” and “Principles for Conducting Area Rent Surveys.” The Federal Register provides more detail about how to obtain the data, appropriate sample sizes, and other information.

Request for public comments. HUD is accepting public comments on the methods it uses to calculate FY 2022 FMRs and requests for reevaluation of FMRs for specific areas prior to Oct. 1. HUD says it lacks the resources to conduct local surveys of rents to address comments filed regarding the FMR levels for specific areas. And PHAs may continue to fund such surveys independently using ongoing administrative fees or their administrative fee reserve if they so choose. HUD continually strives to calculate FMRs that meet the statutory requirement of using “the most recent available data” while also serving as an effective program parameter.