Tomorrow, HUD will publish the Fair Market Rents (FMRs) for Fiscal Year (FY) 2020 on its website. A pre-publication copy of the notice was published today in the Federal Register–titled “Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs Fiscal Year 2020.” These FMRs will become effective on October 1, 2019. Comments for these FMRs (or requests for reevaluation for specific FMRs) are due within 30 days of their official publication.
Click below to read more.
These FMRs incorporate methodological changes that were previously proposed by HUD earlier this summer in a Federal Register notice titled “Proposed Changes to the Methodology Used for Estimating Fair Market Rents.” For standard FMRs, these changes include incorporating more local data via one of three models in the trending factor used in calculating FMRs. The model selected for each area is selected to provide the most accurate estimate for the area. For small area FMRs, these changes include averaging ZIP code tabulation areas (ZCTAs) for locations surrounding a ZCTA that may not have reliable rent data.
NAHRO submitted comments on these changes. In its comments, NAHRO suggests that HUD provide funding for research surveys; create new administrative mechanisms to cope with inaccurate FMRs (including expanding the payment standard range; which NAHRO acknowledges requires a statutory change); and continue to refine HUD’s methodology for calculating FMRs.
While HUD did not directly respond in this notice to NAHRO’s call to fund research surveys, earlier this month HUD published a document titled “Impediments to PHA Reimbursement for Surveys and Solutions to Address Delays in HUD’s Annual Calculation of Fair Market Rents.” In this document, HUD dismisses the suggestion that HUD reimburse PHAs for research surveys because the aggregate survey costs would be too high for HUD to reimburse. The Department estimates that random digit dialing surveys would cost $75,000 per survey, while noting that address-based mail surveys would also be expensive (though HUD declined to attach a figure to address-based mail survey costs). NAHRO questions whether the $75,000 per survey figure is accurate. In a recent complimentary NAHRO webinar titled “Using Research Surveys to Raise Your FMR,” NAHRO discusses pursuing research surveys for FMRs at substantially cheaper prices.
The Department also responded to NAHRO’s comment to expand the payment standard range beyond the current 90 percent to 110 percent (and 120 percent in certain cases). The Department notes—echoing NAHRO’s acknowledgment in its comments–that statutory changes are required to implement this, but also notes that “this may be done as part of a larger package of regulatory reforms.”