On September 8, HUD released their proposed FY 2016 Fair Market Rents (FMRs) for public comment. FMRs are set annually by the department and vary based on numerous factors, including local housing supply and demand, economic conditions and the size of the apartment unit.  For the most part, they are set at the metro or county level.  HUD has also opted to continue to use the concept of Small Area Fair Market Rents (SAFMRs), which are set at zip code level, as a demonstration project in limited areas.  As usual the change from 2016 varies by each jurisdiction - in some cases there was a decrease, while for others there was an increase.

It is important for multifamily owners and operators to review the proposed rents for every jurisdiction that they operate in. Overall, approximately 3,116 of the 4,770 areas included in the two-bedroom FMR count will experience an increase from FY 2015 to FY 2016. 

The most notable reductions will occur in 11 areas of the country and include: New Haven, CT -$71, Baltimore, MD -$45, Richmond, VA -$38, Stamford, CT -$34, Santa Barbara, CA -$26, Charleston, SC -$24, Memphis, TN -$15, Las Vegas, NV -$12, Kansas City, MO -$9, Phoenix, AZ -$5, Tallahassee, FL -$2. FMRs for individual areas for FY 2016 can be viewed by clicking here.

NMHC/NAA are pleased that HUD has included instructions for contesting an FMR and has taken steps to be more transparent with regard to their methodology.

If you would like to share your observations and any related materials, please contact NMHC’s Caitlin Walter at cwalter@nmhc.org or (202) 974-2343 before September 30 since HUD is seeking input by early October.