HUD has posted material to assist public housing agencies (PHAs) implement Small Area Fair Market Rents (Small Area FMRs or SAFMRs). The new guidance includes a 69-page Implementation Guidebook, a set of frequently asked questions, and sample implementation documents. PHAs in 24 metropolitan areas are required to start using Small Area FMRs instead of metropolitan-wide FMRs by April 1, 2018. Other PHAs may voluntarily implement SAFMRs. This informal guidance complements formal guidance issued as Notice PIH 2018-1 (see Memo, 1/22).
Small Area FMRs reflect rents for U.S. Postal ZIP codes, while traditional FMRs reflect a single rent standard for an entire metropolitan region. The intent of SAFMRs is to provide voucher payment standards that are better aligned with neighborhood-scale rental markets, resulting in relatively higher subsidies in neighborhoods that have higher rents but greater opportunities, and relatively lower subsidies in neighborhoods that have lower rents and higher concentrations of voucher households. The primary goal of Small Area FMRs is to help households use vouchers in areas of higher opportunity and lower poverty, thus reducing voucher concentrations high-poverty areas.
Although the guidance is written for PHAs, residents and advocates might benefit from the materials. For instance, the Implementation Guidebook explains SAFMRs; discusses communicating with residents, owners, and other stakeholders; and offers options regarding establishing PHA policies when the switch to Small Area FMRs results in a decrease in voucher payment standards. Resident leaders and advocates will want to convince their PHA to not lower the payment standard of residents who already have a voucher if a new SAFMR is less than the previous FMR and owners do not lower the rent. Among the 13 sample implementation documents are “Tenant Notification of Potential Payment Standard Reduction” and “New Tenant Frequently Asked Questions.”
HUD’s SAFMR material is only on the Public Housing and Voucher Programs page of the HUD Exchange website, not the basic Public and Indian Housing website. Actual Small Area FMRs for all jurisdictions are on yet another website, the HUD User website of HUD’s Office of Policy Development and Research.
The final SAFMR rule was published on November 16, 2016 (see Memo, 11/21/16) after a year-and-a-half rulemaking process that included multiple rounds of comments (see Memo, 6/8/15, 7/6/15, 6/20/16 and 8/22/16). Without public notice, however, HUD abruptly suspended the Small Area FMR rule for two years on August 10, 2017. Five civil rights organizations representing three plaintiffs sued HUD over the suspension (see Memo, 10/30/17). On December 23, 2017, the U.S. District Court for the District of Columbia granted a preliminary injunction against HUD, finding that HUD had neither the authority nor compelling reasons to suspend implementation of the use of SAFMRs.