Industry Responds to HUD Fair Market Rents Set by Zip Code
The multifamily industry has responded to a HUD proposed rule that would change how Section 8 Housing Choice Voucher (HCV) Program Fair Market Rents (FMRs) are set in many areas nationwide. The proposal calls for certain areas to set FMRs by zip code – what HUD calls Small Area Fair Market Rents (SAFMRs) – instead of at the metro level.
NAA/NMHC joined a coalition of industry groups in a comment letter outlining our continued support for the HCV program overall, but concerns that the SAFMRs proposal is based on a single study of one geographic area. We also noted the limited evidence that SAFMRs are more effective than raising FMRs to 50th percentile rents across a metro area.
In addition, we emphasized that if SAFMRs were implemented, there could be a negative impact on residents in neighborhoods that experience a decrease in the FMR. That includes both residents that choose to stay and use their voucher in the area, but also other residents that may experience a loss of investment in their neighborhood.
The Section 8 program uses FMRs to establish maximum allowable rents the government will pay to a private apartment owner who rents to a family with a voucher. It is not a cap on the rent a private apartment owner can charge, but a cap on the amount HUD will pay. The voucher holder would be responsible for paying the remaining difference between the payment standard and the private owner’s rent.
Provided by NMHC as part of the NAA/NMHC Joint Legislative Program