Funding residential housing developments

In addition to funding residential housing developments, one of the many ways that the U.S. Department of Housing and Urban Development (HUD) supports low- and moderate-income families is by setting Fair Market Rents (FMR). Fair Market Rents, according to HUD’s documentation, “assure that a sufficient supply of rental housing is available to program participants.” The programs referred to are Section 8, Housing Choice Voucher, HOME rental assistance, and Mod Rehab – or Moderate Rehabilitation Single Room Occupancy. Fair Market Rents are determined by region, and include not only rental cost, but also utilities (excluding phone, cable and Internet service). Fair market rent is currently defined as the “dollar amount below which 40 percent of standard-quality rental housing units are rented.” In order to determine the dollar amount of the 40th or 50th percentile, HUD uses a variety of data, including the 2000 Census and the American Community Surveys. As data becomes available from the 2010 Census, HUD uses that information as well. It also engages in Random Digit Dialing (RDD), an automated system that gathers samples of housing information through randomized phone calls. All of that information is aggregated and analyzed to determine how many rental units are available in a given market, and the price range in which they are marketed. Fair Market Rent areas are divided into metropolitan and non-metropolitan, determined primarily by population. HUD recalculates Fair Market Rents each year, using the Consumer Price Index to adjust for inflation and other changes in the cost of living. Those updates are made available through a database that allows potential residents and others to search for fair market rents by city, county or state.