HUD Publishes Final Small Area FMR Rule - November 16, 2016

On November 15, HUD announced the publication of a final rule requiring the use of small area fair market rents (SAFMRs) in 24 metropolitan areas where housing choice voucher use is particularly concentrated in high-poverty neighborhoods (none in Massachusetts).  To avoid displacement, it limited the mandate to metro areas with rental vacancy rates of at least 4%.   However, it allows PHAs in other metro areas to voluntarily use SAFMRs.  Mandated metro areas will be required to start using SAFMRs in FY2018.  Because SAFMRs are calculated at the zip code level, they are expected to raise payment standards in higher cost areas and possibly reduce them in lower cost areas.  As detailed in HUD’s summary of changes from June draft rule, the final rule allows PHAs a number of flexibilities to protect tenants in neighborhood where FMRs decrease.  Use of SAFMRs for project-based vouchers will be optional.