The U.S. Department of Housing and Urban Development today announced its annual Fair Market Rents (FMRs), which are used to determine the eligibility of rental housing units for the Section 8 Housing Assistance Payments program. Section 8 Rental Certificate program participants cannot rent units whose rents exceed the FMRs.

FMRs are gross rent estimates, which include the shelter rent plus the cost of all utilities, except telephones. HUD sets FMRs to assure that a sufficient supply of rental housing is available to program participants. To accomplish this objective, FMRs must be both high enough to permit a selection of units and neighborhoods and low enough to serve as many low-income families as possible.

The new FMRs, which reflect the latest 2000 Census data and recent local rental-market surveys, will appear in the Federal Register on Friday, Oct. 1, 2004, and will take effect immediately. FMRs also serve as the payment standard used to calculate subsidies under the Rental Voucher program.

“The goal of FMRs is to help ensure HUD’s resources reflect community need,” said HUD Secretary Alphonso Jackson.

HUD received more than 350 comments on the proposed 2005 FMRs published in early August. Those FMRs utilized both 2000 Census data and new Office of Management Budget definitions of metropolitan statistical areas.

Many of the comments HUD received from industry partners centered around the new OMB area definitions, which caused wide swings for certain communities. To alleviate these concerns, HUD will implement the new rent levels using 2000 Census data, as required by Congress, but without using the new OMB area definitions.

HUD has also conducted 24 local market surveys, also known as Random Digit Dialing surveys, in communities nationwide to ensure the new rent calculations are in line with actual rents in those areas. Another 29 surveys are underway and are expected to be completed by the end of October. RDD surveys use randomly selected samples to get data on current rents paid in one- and two-bedroom rental units occupied by recent movers.

HUD is a federal agency that implements housing policy, and annually estimates FMRs for 354 metropolitan areas and 2,350 nonmetropolitan county FMR areas.

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