Small Area Fair Market Rent Demonstration Evaluation - Interim Report

Housing Choice Vouchers allow residents with vouchers to choose their own housing units, as long as the units meet certain rent and quality guidelines. Voucher program rents are based currently on a rent standard—the Fair Market Rent (FMR)—which is established by HUD for each metro area or non metropolitan county.

Using a metropolitan-wide standard as the basis for setting the maximum subsidy for voucher holders often means that they must rent units in lower rent portions of their jurisdictions.  These lower rent neighborhoods often have poorer quality schools, and higher poverty and crime rates compared with high-opportunity areas, where rents also tend to be higher. Understanding this challenge, the Department of Housing and Urban Development wanted to find an effective way for voucher holders to move to higher-opportunity areas without significantly raising overall subsidy costs.

To tackle the question, Abt is leading an evaluation of the Small Area Fair Market Rent (SAFMR) Demonstration. Under SAFMR, the Fair Market Rent is established for each ZIP code.  Local agencies can increase their housing voucher subsidies in ZIP codes where rents are higher than the metro average, and decrease subsidies in ZIP codes where rents are lower. The evaluation design offers administrators a clearer view as to whether and to what extent this switch from FMRs to SAFMRs helps increase voucher holders’ access to neighborhoods of opportunity.

Abt is working with HUD and seven public housing agencies across the United States with differing characteristics to assess the potential access to opportunity, the actual access to opportunity and the total costs and rents associated with implementation of SAFMRs.

This early impact report show greater potential access to opportunity neighborhoods following the introduction of SAFMRs.  Additional findings are expected in 2018.