Latest Issue of Cityscape Focuses on Impacts of Small Area FMRs

Date Published: 
January 8th, 2020

The most recent issue of Cityscape, the journal from HUD’s Office of Policy Development and Research, is devoted to research on the impacts and implementation of Small Area Fair Market Rents (SAFMRs). The issue includes articles examining outcomes from HUD’s SAFMR demonstration, which was launched in 2015 to evaluate the effects of SAMFRs on voucher holders administered by five PHAs: Housing Authority of the City of Laredo, The town of Mamaroneck Housing Authority, Chattanooga Housing Authority, Housing Authority of Cook County, and the City of Long Beach Housing Authority. Other articles investigate the potential effects of SAFMRs nationally and among all PHAs mandated in 2018 to implement SAFMRs.

Key findings from this issue of Cityscape include:

  • Consistent with the basic goal of SAFMRs to increase access to units in high opportunity areas, there was an increase in the number of units available in high opportunity areas and a decline in units in low opportunity areas.
  • In addition to an increase in availability of units in high opportunity areas, voucher holders were more likely to lease up in high opportunity areas compared to low opportunity areas. This was true for current voucher holders who moved as well as new voucher holders. This finding suggests that not only are more units in high opportunity areas available, but voucher holders are having some success in securing them.
  • Nationally, most increases in available units in high opportunity areas occurred in predominantly white areas, while nearly half of low opportunity areas losing units under SAFMRs were predominantly black or racially integrated areas. Minority voucher holders must overcome racial barriers to accessing high opportunity areas and must feel comfortable living in predominantly white areas.
  • PHAs participating in the SAFMR demonstration experienced higher attrition rates as a result of SAFMR implementation. The decrease, a median of two years, was driven by program exits among voucher holders in low and moderate rent neighborhoods. The authors speculate that program exits are driven in part by landlords in low rent neighborhoods who were unwilling to accept lower payment standards.
  • SAFMRs appear to broadly reflect local rental market conditions when compared to other data sources such as Zillow and Craigslist, but there were some significant differences within rental submarkets. For example, in very high rent neighborhoods in Seattle, SAFMRs were well below rent estimates. These inconsistencies create challenges for the goals of SAFMRs and reflect the ongoing issues with FMR inaccuracies.

Overall, findings from this issue indicate that SAFMRs have successfully increased access to high opportunity areas for voucher holders. However, as authors of one study note, “If the SAFMR program is to realize its potential and if the HCV program is to affirmatively further fair housing, the SAFMR program will require significant improvements.” Needed improvements include funding for PHAs using SAFMRs to provide services such as landlord outreach, security deposit assistance, and credit repair counseling.

While this issue of Cityscape offered a thorough overview of existing programs, it lacked any critical discussion of funding for effective use of SAFMRs going forward, particularly when voucher holders live in higher cost areas and ultimately require greater expenditures, which is likely to result in serving fewer households. 

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