HUD Releases FY 2023 Fair Market Rents
On Sept. 1, HUD released the FY 2023 Fair Market Rents (FMRs). HUD is required by law to set FMRs every year. FMRs are an estimate of the amount of money that would cover gross rents (rent and utility expenses) on 40 percent of the rental housing units in an area. They go into effect on Oct. 1 and are used in the determination of payment standards for the Housing Choice Voucher (HCV) program; initial renewal rents for some expiring project-based Section 8 contracts; initial rents in the Moderate Rehabilitation Single Room Occupancy program; and rent ceilings for the HOME Investment Partnerships program and the Emergency Solutions Grants program. They are also used to calculate flat rents in public housing. The FY 2023 FMRs are available at www.huduser.gov/portal/datasets/fmr.html.
For FY 2023, HUD is using private sector data to estimate changes in FMRs to address a temporary data availability challenge and to align with market conditions. The COVID-19 pandemic caused significant interruptions in the public data sources that HUD has traditionally used to set FMRs. To address these issues, HUD supplemented public data with data from private sources to ensure the accuracy of the FY 2023 FMRs. This methodological change is applicable to FY 2023 only.
According to HUD, because rents have risen so quickly recently, voucher holders are increasingly unable to find units available to rent within HUD payment standards. The new FMR levels announced will enable the voucher program to keep up with rent increases in the private market. And these new FMRs will allow voucher holders to access and secure leases in more units so that they can benefit from the housing affordability and stability that vouchers provide.
The updated FMR levels are designed to help voucher holders keep up with the rising cost of rent. Typically, depending on the area, FMRs increase by between 2 to 4 percent. This year, however, the fair market rents are up by 10 percent, on average, from FY 2022, with significantly greater increases in metropolitan areas with even faster rent growth. The biggest increases are over 30 percent in places where rents spiked the most over the past year.