Expanding Housing Choices: The Implementation of Small Area Fair Market Rents
The landscape of affordable housing is evolving. In addition, the tools to ensure families have access to quality housing options. The implementation of Small Area Fair Market Rents (SAFMR) represents a significant shift in how Public Housing Agencies (PHAs) administer the Housing Choice Voucher (HCV) program. This initiative isn’t just a policy change but also a step towards empowering people and revitalizing communities.
In October 2023, the Department of Housing and Urban Development (HUD) designated 41 new metropolitan areas for the mandatory use of SAFMRs, a move set to take effect from October 1, 2024. This change aims to foster equitable housing choice, enable lower-income families to move into higher-opportunity areas, and optimize voucher utilization.
The new metropolitan areas include:
Akron, OH MSA
Augusta-Richmond County, GA-SC HUD Metro FMR Area
Beaumont-Port Arthur, TX MSA
Birmingham-Hoover, AL HUD Metro FMR Area
Buffalo-Cheektowaga-Niagara Falls, NY MSA
Charleston-North Charleston, SC MSA
Chattanooga, TN-GA MSA
Cincinnati, OH-KY-IN HUD Metro FMR Area
Cleveland-Elyria, OH MSA
Columbus, OH HUD Metro FMR Area
Dayton-Kettering, OH MSA
Des Moines-West Des Moines, IA HUD Metro FMR Area
Detroit-Warren-Livonia, MI HUD Metro FMR Area
Fort Wayne, IN MSA
Greensboro-High Point, NC HUD Metro FMR Area
Harrisburg-Carlisle, PA MSA
Indianapolis-Carmel, IN HUD Metro FMR Area
Jersey City, NJ HUD Metro FMR Area
Kansas City, MO-KS HUD Metro FMR Area
Knoxville, TN HUD Metro FMR Area
Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
Louisville, KY-IN HUD Metro FMR Area
Memphis, TN-MS-AR HUD Metro FMR Area
Miami-Miami Beach-Kendall, FL HUD Metro FMR Area
Mobile, AL HUD Metro FMR Area
Montgomery, AL MSA
Nashville-Davidson—Murfreesboro—Franklin, TN HUD Metro FMR Area
Oklahoma City, OK HUD Metro FMR Area
Omaha-Council Bluffs, NE-IA HUD Metro FMR Area
Orlando-Kissimmee-Sanford, FL MSA
Oxnard-Thousand Oaks-Ventura, CA MSA
Phoenix-Mesa-Scottsdale, AZ MSA
Raleigh, NC MSA
San Jose-Sunnyvale-Santa Clara, CA HUD Metro FMR Area
Seattle-Bellevue, WA HUD Metro FMR Area
St. Louis, MO-IL HUD Metro FMR Area
Tucson, AZ MSA
Tulsa, OK HUD Metro FMR Area
Virginia Beach-Norfolk-Newport News, VANC HUD Metro FMR Area
Wichita, KS HUD Metro FMR Area
Winston-Salem, NC HUD Metro FMR Area
Traditionally, PHAs utilized a single Fair Market Rent (FMR) for the entire metropolitan area to set payment standards. However, with SAFMRs, these standards are set according to ZIP code-based FMRs, offering a more localized approach that acknowledges the diversity in rental markets within a metropolitan area. This system was first introduced in a 2016 notice, with the initial areas implementing SAFMRs in April 2018.
Criteria and Impact
The selection of new SAFMR areas was based on data-driven criteria identifying so that these rents can be most effectively used to improve housing choice. The requirements remain consistent with those used in the 2016 notice. For PHAs, this means transitioning to a more granular and equitable system of rent determination, which could significantly affect where vouchers are utilized and the types of properties available to voucher holders.
Supporting PHAs in Transition
Recognizing the administrative challenges of this transition, HUD has offered financial support to the affected PHAs. As of October 26, 2023, PHAs in newly designated SAFMR areas are eligible for special administrative fees to offset the costs of transitioning, further emphasizing HUD’s commitment to smooth implementation.
Guidance and Resources
HUD is set to update the guidance on FMR, Payment Standards, and Rent Reasonableness Requirements in the HCV Program to incorporate the new SAFMR designations. Until this update is published, the existing provisions remain effective. Notice PIH 2018-01 outlines the procedures for agencies eager to opt in early.
A Vision for the Future
For Navigate Affordable Housing Partners, such policy advancements align perfectly with our mission to invest in communities and our vision to be an instrument of change. The implementation of SAFMRs presents an opportunity for us to further our goal of creating innovative, affordable housing solutions. It’s a chance to reassess how we support PHAs, provide educational materials, and potentially shape our services.
As the SAFMR notice unfolds, it’s crucial for PHAs—and all stakeholders in the affordable housing sector—to stay informed and prepared. Our role as thought leaders and educators is to translate these high-level policies into actionable, understandable strategies that ultimately lead to a more equitable and accessible housing market for all.