On July 2, the multifamily industry responded to a HUD proposed rule that would change how Section 8 Housing Choice Voucher (HCV) Program Fair Market Rents (FMRs) are set in many areas nationwide. The proposal calls for certain areas to set FMRs by zip code - what HUD calls Small Area Fair Market Rents (SAFMRs) - instead of at the metro level.
NMHC/NAA joined a
coalition of industry groups in a comment letter outlining our continued
support for the HCV program overall, but concerns that the SAFMRs proposal is
based on a single study of one geographic area. We also noted the limited
evidence that SAFMRs are more effective than raising FMRs to 50th percentile
rents across a metro area.
In addition, we emphasized that if SAFMRs were implemented, there could be a negative impact on residents in neighborhoods that experience a decrease in the FMR. That includes both residents that choose to stay and use their voucher in the area, but also other residents that may experience a loss of investment in their neighborhood.
The Section 8 program uses FMRs to establish maximum allowable rents the government will pay to a private apartment owner who rents to a family with a voucher. It is not a cap on the rent a private apartment owner can charge, but a cap on the amount HUD will pay. The voucher holder would be responsible for paying the remaining difference between the payment standard and the private owner’s rent.
Members who participate in the HCV program are encouraged to review the NMHC analysis showing the effect of SAFMRs by zip code, compared to existing FMRs, and how the proposal would impact their portfolios.