HUD Suspends Mandatory Implementation of Small Area FMRs

Earlier this morning, HUD sent letters to PHAs suspending the mandatory implementation of Small Area Fair Market Rents (FMRs) for 23 of the 24 metropolitan areas which were originally designated as areas in which PHAs would have to use Small Area FMRs. Small Area FMRs are FMRs calculated by zip code, instead of a wider metropolitan area. Among other concerns, there was widespread concern among industry groups and PHAs that the mandatory imposition of Small Area FMRs would mean that new program participants would receive lower voucher subsidy amounts and without appropriate wrap-around services would be unable to find units in neighborhoods which would receive higher subsidies.

NAHRO has long stressed that the quick imposition of mandatory Small Area FMRs would lead to adverse consequences for program participants and is pleased that HUD listened to NAHRO’s concerns and made implementation of Small Area FMRs voluntary. HUD has only suspended the mandatory imposition of Small Area FMRs. PHAs may still choose to voluntarily apply them, if it is the appropriate action for their program participants and community. All other aspects of the Small Area FMR rule remain in place. The suspension will last until October 1, 2019 (for a 2020 implementation), unless the Small Area FMR rule is changed. The Small Area FMR mandatory implementation remains in effect for the Dallas-Plano-Irving, TX Metro Division.

In a letter to HUD, NAHRO previously suggested suspending the Small Area FMR designation using authority under 24 CFR § 888.113(c)(4)(iii). HUD followed NAHRO’s suggestion and suspended the mandatory imposition of Small Area FMRs using the NAHRO-suggested provision. NAHRO is pleased that HUD recognized the potential adverse impacts to program participants and is following the NAHRO-suggested steps to avoid those consequences. NAHRO looks forward to continuing to work with HUD collaboratively to find solutions to tackle tough problems.

NAHRO’s letter to HUD recommending suspending the mandatory imposition of Small Area FMRs can be found here.

NAHRO’s comment letter to HUD on the Small Area FMR rule can be found here.

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