Small Area Fair Market Rents Proposed Rule

Date Published: 
October 5th, 2017

Small Area Fair Market Rents (SAFMR) were first conceived as a demonstration program to test the policy in five cities around the country over a five-year period.

While CLPHA strongly supports the policy goals of SAFMR to improve low-income tenants’ access to higher opportunity areas, local housing authorities need the flexibility to create rent structures based on variations in their local housing markets. SAFMRs do not produce the same results for all housing authorities, which is why CLPHA has argued against making the one-size-fits-all policy mandatory. HUD should continue supporting local flexibilities for PHAs to address their unique market conditions through programs like Moving to Work (MTW). MTW agencies, including King County Housing Authority, San Diego Housing Commission, and Seattle Housing Authority, have successfully created tiered ZIP code based rent systems to account for cost variations in their submarkets. But, if presented as a one-size-fits-all policy, SAFMRs will not work.

The Trump Administration’s August 2017 decision to make SAFMRs voluntary was a direct response to mixed findings from that evaluation, which troublingly reported that the SAFMRs produced a 3.4 percent net loss of units that would otherwise be available to current HCV voucher holders. Even more concerning is the finding that low-income tenants in low-rent ZIP codes experiences a 22 percent increase to their rents.

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