Builder Review Daily is highlighting the top 12 actions taken on behalf of Home Builders so far this Spring.
Accomplishment number 6: Providing Recommendations That Were Implemented Within HUD’s Proposal on Fair Market Rent
In releasing its proposed fair market rents (FMRs) for fiscal year 2013, HUD employed several important NAHB recommendations that should help to avoid large and unpredictable changes in the future.
The new FMRs, which are scheduled to be implemented on Oct. 1, are used to determine payment standards for the Housing Choice Voucher program, to determine initial renewal rents for some expiring project-based Section 8 contracts, to determine initial rents for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy program, and to serve as rent ceilings for the HOME program.
Because housing costs are variable, HUD needs to publish FMRs for each local market area in the country every year. In proposing its latest FMRs, HUD used a new trend factor recommended by NAHB, which is based on the average rent changes in the American Community Survey between 2005 and 2010. NAHB believes this change is highly desirable to avoid large, unpredictable and difficult to manage swings in local FMRs. Also per NAHB’s suggestion, HUD made changes for calculating its “recent mover factor,” which compensates for rent data that does not distinguish recent movers from other tenants. The overall effect on the 2013 FMRs was an average increase of 5.7% across the 524 metropolitan FMR areas (excluding Guam and Puerto Rico) with actual declines limited to 90 of these metro FMR areas.