By Jonathan Zimmerman
The calculation of Fair Market Rents (FMRs) includes three parts: An estimate of gross rents paid by recent movers from the American Community Survey (ACS), an inflation adjustment measured using components of the Consumer Price Index (CPI), and a trend factor. There are also relationships between HUD’s FMRs and its formulation of Rental Housing Inflation Factors (RFIFs), which affect every HA’s renewal HAP funding eligibility each year.
Going back many years over the history of HUD’s Fair Market Rent (FMR) and Renewal Funding Inflation Factor (RFIF) data sources and methods, the Department did not dilute and distort the combination of several local areas’ FMRs and RFIFs values by utilizing a national percentage increase per unit Housing Assistance Payment (HAP) cost cap for the voucher program. However, since that time HUD implemented a national percentage increase per unit HAP cost cap for the voucher program that resulted in lower and less accurate FMRs, SAFMRs and RFIFs in local areas than would otherwise be the case if it did not use this national cap in the way it has.
Read More >