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Housing Costs Rising? Learn When to Appeal a HUD FMR

Housing Costs Rising? Learn When to Appeal a HUD FMR

Fair market rent graphic

The U.S. Department of Housing and Urban Development (HUD) estimates fair market rent (FMR) for almost 2,600 areas nationwide as a basis for rent subsidy programs. When a HUD FMR fails to meet the housing needs of income-qualified residents in a community, it may be time to appeal by commissioning an FMR survey.

According to the government, a HUD FMR represents the cost to rent a moderately-priced dwelling in the local housing market. FMRs are typically determined by a predictive algorithm using data from the U.S. Census Bureau’s annual American Community Survey. When the cost of housing spikes, like it has the last few years, it can outpace the federal funding prediction methodology and the annual budgets for FMR-based subsidies.

 As a result, rent subsidy payments required to be based on the FMR can fall short, leaving a gap between the maximum subsidies allowed and the actual cost of renting an adequately sized, decent, safe, and sanitary dwelling. Inadequate subsidies can lead to fewer housing choices, affect the quality of housing people can afford, and lead to fewer vouchers available for those in need.

How Do You Know When the Rental Market Is Outpacing Your FMR?

If you are a housing authority or other community-based housing organization that distributes federal housing subsidies, such as Housing Choice Vouchers, it is important to know how to request that HUD reevaluate (increase) your annual FMR. The following are key indicators that the market is far out-pacing the current HUD FMR for your area and bringing hardship to your program participants:

    • Extended housing searches or returned vouchers: Subsidy recipients take longer than the typical 90 days to find housing or even have to turn their vouchers back in, because the pool of available and affordable rental properties narrows.
    • Fewer homes to choose from: The number of landlords accepting vouchers for rental properties, based on the payment standard, decreases because landlords cannot operate their property at payment standard rents or they can easily fill their property at higher rents.
    • Housing authorities are spending more per person: Providers are having to set voucher payments that push the upper threshold of what HUD allows (110% to 120% of FMR) in order to help people find available rental properties.
    • People are spending more: Voucher recipients are requesting to use more than 30 percent of their income toward their rent, because the only rents they can find are above the payment standard. Thus, jeopardizing their families financial stability and/or leaving less money for other necessities.
    • Waitlists are growing: If waitlists are open, which is often not the case due to the extreme demand for rental subsidies throughout much of the country, then they are growing longer as more people find themselves income qualified or spending more than 50 percent of income toward rent.

How to Find an FMR Survey Firm

To effect change, it is vital to conduct a successful FMR survey. HUD allows any FMR area housing authority to request a reevaluation of its FMR. In order to do so, the PHA must submit a valid data sample collected based upon HUD’s requirements with at least 100 qualified responses for areas with rental populations under 50,000 and at least 200 for those over 50,000. Generally speaking, at least 15,000 to 25,000 surveys are required in order to obtain 100 to 200 qualified responses. Accurate FMRs help families find and afford housing in areas of greater opportunity for safety, education, employment, and transportation. Who you select to complete the survey is also important. Look for a consultant to perform the FMR survey who has:

    • Deep expertise: Frederick Eggers, former chief economist and deputy assistant secretary for Economic Affairs at HUD, established Econometrica’s FMR survey program.
    • Customer service: Econometrica is dedicated to increasing housing opportunities for underserved populations and as a result is ready to work with communities where they are, helping them partner to work around budget issues or change methods to adjust to calendar constraints or a host of other techniques to meet the community’s ultimate goal.
    • Customized solutions: Our specialists have designed and implemented successful FMR surveys for urban, suburban, and rural communities, ranging from New York City to Transylvania County, North Carolina.
    • Demonstrated success: We completed half of all successful FMR reevaluations in the nation in 2022, achieving as much as a 24 percent increase in FMRs in one locality. 

Fair Market Rent Surveys for Large and Small Communities

The Housing Authority of the City of Asheville (HACA) in North Carolina recently had two successful FMR appeals based on FMR survey data and reports completed by Econometrica. In 2018, HACA noted that rents in the community were fluctuating from year to year. HACA clients were finding it more difficult to find affordable housing in neighborhoods of greater opportunity. HACA engaged Econometrica to perform an FMR survey. As a result, HUD increased 2020 FMRs by 21 percent. Asheville’s rental market boom continued, and HACA engaged Econometrica for a second FMR survey in 2021. This time, Econometrica’s report resulted in a 16.6 percent increase in HUD’s 2022 FMRs for HACA.

In addition, Econometrica was able to piggyback Asheville’s most recent FMR appeal with one for a rural neighboring community that failed to obtain a successful solo appeal in the past. With a small population in general and few renters, it was difficult for Transylvania County to garner a sufficient sample size to meet HUD survey requirements. Econometrica worked with HUD and the involved PHAs to determine ways to combine rural communities like Transylvania County with FMR surveys for more populated metropolitan areas. Consequently, HUD granted Transylvania County a 19.5 percent increase in FMRs for 2022 based on our survey completed in combination with Asheville in 2021. 

HUD FMR Surveys: Work With Us, Work for Us

Econometrica has 6 years of experience conducting FMR surveys and developing reports that lead to successful HUD appeals. Our team of the best and brightest in housing and community development, data science, and survey distribution collaborates to develop FMR surveys to meet the needs of your community, no matter the size. To learn more about Econometrica’s FMR survey process, contact us at HUDFMR@econometricainc.com. We will run a quick analysis to determine whether a local FMR survey makes sense for you and your community and guide you through the next steps.

If you are a specialist in housing and community development and want to expand your career, explore the benefits of working for Econometrica by visiting our careers page.

Fair Market Rents

Fair Market Rents

Is rent rising unpredictably fast in your community?

Econometrica specializes in conducting surveys to help communities get accurate HUD Fair Market Rents (FMRs) so that families using House Choice Vouchers can find affordable housing in areas of greater opportunity.

In fact, last year, Econometrica completed 50% of all successful FMR reevaluations in the entire country!

To learn more or to find out if your housing authority might be a good candidate for an FMR survey, visit https://econometricainc.com/fair-market-rents/

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Kurt von Tish

FMR Infographic Flyer web LR

President Biden’s Budget Plan Includes Major Expansion in Funding for Housing Programs

President Biden recently previewed his request for fiscal year (FY) 2022 discretionary funding, including substantial investments in affordable housing and increases to housing assistance programs.

The FY 2022 blueprint includes $68.7 billion for HUD, a $9 billion, or 15 percent, increase from FY 2021. The budget request aims to significantly expand rental assistance programs, modernize housing stock to improve energy efficiency, reduce health hazards such as lead-based paint, address the critical shortage of affordable housing, and invest in programs to strengthen communities facing underinvestment and prevent and redress housing-related discrimination. The request also aims to further support access to homeownership for underserved borrowers through the Federal Housing Administration’s mortgage insurance programs.

Some aspects of the budget request include:

  • $30.4 billion to expand the Housing Choice Voucher program to 200,000 additional households and improve mobility-related services to low-income families.
  • $800 million for the rehabilitation and modernization of public and HUD-assisted housing to further climate resilience and energy efficiency.
  • $3.2 billion in public housing modernization grants.
  • $3.8 billion for the Community Development Block Grant Program.
  • $1.9 billion in the HOME Investment Partnership Program to build and rehabilitate affordable rental homes and support other housing-related needs, as well a $1800 million targeting new affordable housing for the elderly and persons with disabilities.
  • $85 million in grants to support state and local fair housing enforcement organizations and to further education, outreach, and training on rights and responsibilities under federal fair housing laws.
  • $400 million for HUD’s Lead Hazard and Healthy Homes grants, enabling state and local governments and nonprofits to reduce lead-based paint and other health hazards in the homes of low-income families with young children.
  • $3.5 billion to support those who are homeless and at risk of homelessness.
  • $900 million to fund efforts among Tribal communities to expand affordable housing and improve housing infrastructure.

The full budget blueprint can be found at:

Econometrica has provided technical assistance and training, policy and program analysis, statistical surveys and research, market and feasibility analysis, and knowledge management to HUD, housing authorities, and other organizations nationwide over the years. Since 2011, Econometrica has provided technical assistance through HUD’s OneCPD/Community Compass initiative, which has convened a community of technical assistance providers to serve the Office of Public and Indian Housing, Office of Community Planning and Development (CPD), and other HUD programs and customers. Through OneCPD/Community Compass, Econometrica has provided a variety of services, with a focus on housing, community development, economic development, and neighborhood stabilization.

Econometrica also has evaluated the Rental Assistance Demonstration program, examining the new opportunities RAD creates for public housing authorities to improve public housing physical conditions, how RAD helps PHAs preserve those units over the long term, and the impact of these changes on tenants.

Our staff and business associates comprise a diverse mix of personnel, including former government employees with decades of experience in housing and community development programs, academic researchers from distinguished universities, and highly skilled housing professionals with hands-on experience in housing management, finance, grants monitoring, and other types of support. We are dedicated to supporting our clients in their diverse missions to expand and improve affordable housing, promote homeownership opportunities, stimulate community transformation, assist with disaster recovery, comply with reporting requirements, and enhance their performance.

Econometrica also has evaluated the Rental Assistance Demonstration program, examining the new opportunities RAD creates for public housing authorities to improve public housing physical conditions, how RAD helps PHAs preserve those units over the long term, and the impact of these changes on tenants.