HUD Proposes Rule to Use Small Area Fair Market Rents in HCV Program

HUD recently published a notice in the Federal Register entitled, “Using Small Area Fair Market Rents in Housing Choice Voucher Program Instead of the Current 50th Percentile FMRs.” HUD is proposing to use Small Area Fair Market Rents (FMRs) in place of the current 50th percentile rent to address high levels of voucher concentration. HUD’s goal in pursuing this rulemaking is to provide Housing Choice Voucher (HCV) tenants with a greater ability to move into areas where jobs, transportation, and educational opportunities exist.

HUD believes that Small Area FMRs give HCV residents a more effective means to move into areas of higher opportunity and lower poverty areas. HUD officials believe that providing a subsidy adequate to make such areas accessible will reduce the number of voucher families that reside in areas of high poverty concentration.

HUD proposes to use several criteria for determining which metropolitan areas would best be served by application of Small Area FMRs in the administration of the HCV program. These criteria would include: a threshold number of vouchers within a metropolitan area, the concentration of current HCV tenants in low-income areas, and the percentage of renter-occupied units within the metropolitan area with gross rents above the payment standard basic range. Public housing agencies (PHAs) operating in designated metropolitan areas would be required to use Small Area FMRs. PHAs not operating in the designated areas would have the option to use Small Area FMRs in administering their HCV programs.

Other programs that use FMRs would continue to use area-wide FMRs. Comments on the proposed notice are due Aug. 15, 2016.