HUD to Expand Mandatory Use of Small Area FMRs
On October 23, a pre-publication copy of a notice titled “Small Area Fair Market Rents in the Housing Choice Voucher Program Metropolitan Areas Subject to Small Area Fair Market Rents” was made publicly available. The notice would add additional metropolitan areas to the list of areas in which PHAs are required to adopt the use of Small Area Fair Market Rents (FMRs). Small Area FMRs are Fair Market Rents calculated over a zip code, instead of a larger geography. The Department’s regulations require that HUD update the list of areas that must adopt Small Area FMRs every 5 years. The designation is permanent. These designations will take effect on October 1, 2024, but affected PHAs have until January 1, 2025 to update their payment standards.
In deciding which areas must use Small Area FMRs, HUD considers the following factors:
- at least 2,500 vouchers must be under lease in the metropolitan FMR area;
- at least 20% of the standard quality rental stock within the metropolitan FMR area is in zip codes where the Small Area FMR is more than 110% of the metropolitan FMR;
- the percentage of voucher families living in within low-income areas within the area must be at least 25%;
- the percentage of voucher holders living in low-income areas relative to all renters within these areas over the entire metropolitan area exceeds 155%; and
- the vacancy rate for the metropolitan area is higher than 4 percent.
Through recent research, HUD has found that “[n]ew voucher recipients were more likely to move to low-poverty neighborhoods after [Small Area FMRs] were implemented . . . [though] the magnitude of these positive effects is modest.” The research also found that Small Area FMRs “did not affect the success of households with vouchers in leasing up (i.e., the number of households leasing up within 180 days), even for high-barrier households or those living in zip codes where [Small Area FMRs] were lower than FMRs.” Additionally, HUD staff analysis found “little discernable difference in the annual change in [per unit cost] in [Small Area FMR areas].”
In implementing Small Area FMRs, HUD has committed to providing the following: “adequate technical assistance, opportunities for peer-to-peer training, additional program materials, and additional training for HUD field office staff.”
The full pre-publication notice can be found here.
The new mandatory Small Area FMRs designations are the following:
Akron, OH MSA
Augusta-Richmond County, GA-SC HUD Metro FMR Area
Beaumont-Port Arthur, TX MSA
Birmingham-Hoover, AL HUD Metro FMR Area
Buffalo-Cheektowaga-Niagara Falls, NY MSA
Charleston-North Charleston, SC MSA
Chattanooga, TN-GA MSA
Cincinnati, OH-KY-IN HUD Metro FMR Area
Cleveland-Elyria, OH MSA
Columbus, OH HUD Metro FMR Area
Dayton-Kettering, OH MSA
Des Moines-West Des Moines, IA HUD Metro FMR Area
Detroit-Warren-Livonia, MI HUD Metro FMR Area
Fort Wayne, IN MSA
Greensboro-High Point, NC HUD Metro FMR Area
Harrisburg-Carlisle, PA MSA
Indianapolis-Carmel, IN HUD Metro FMR Area
Jersey City, NJ HUD Metro FMR Area
Kansas City, MO-KS HUD Metro FMR Area
Knoxville, TN HUD Metro FMR Area
Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
Louisville, KY-IN HUD Metro FMR Area
Memphis, TN-MS-AR HUD Metro FMR Area
Miami-Miami Beach-Kendall, FL HUD Metro FMR Area
Mobile, AL HUD Metro FMR Area
Montgomery, AL MSA
Nashville-Davidson–Murfreesboro–Franklin, TN HUD Metro FMR Area
Oklahoma City, OK HUD Metro FMR Area
Omaha-Council Bluffs, NE-IA HUD Metro FMR Area
Orlando-Kissimmee-Sanford, FL MSA
Oxnard-Thousand Oaks-Ventura, CA MSA
Phoenix-Mesa-Scottsdale, AZ MSA
Raleigh, NC MSA
San Jose-Sunnyvale-Santa Clara, CA HUD Metro FMR Area
Seattle-Bellevue, WA HUD Metro FMR Area
St. Louis, MO-IL HUD Metro FMR Area
Tucson, AZ MSA
Tulsa, OK HUD Metro FMR Area
Virginia Beach-Norfolk-Newport News, VA-NC HUD Metro FMR Area
Wichita, KS HUD Metro FMR Area
Winston-Salem, NC HUD Metro FMR Area