Final FY 2010 Fair Market Rent Documentation System

The Final FY 2010 District of Columbia FMRs for All Bedroom Sizes

The following table shows the Final FY 2010 FMRs by unit bedrooms.

Final FY 2010 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
Final FY 2010 FMR $1,156 $1,318 $1,494 $1,927 $2,522

The remainder of this page provides complete documentation of the development of the Final FY 2010 Fair Market Rents (FMRs) for District of Columbia, District of Columbia. This page provides a summary and details of how the Final FY 2010 FMRs were developed and updated starting with the formation of the FY 2010 FMR Areas from the metropolitan Core-Based Statistical Areas (CBSAs) as established by the Office of Management and Budget and incorporating newly available 2007 one and three year American Community Survey (ACS) Data. FY 2010 FMRs include information from local Random Digit Dialing (RDD) surveys conducted during 2008. Aspects of the derivation of Final FY 2010 rents exclusive to FY 2010 are made explicit in the following text. Aspects unchanged from FY 2009 can be reviewed by clicking on the associated link.

The following defines a summary of the steps taken to generate the Final FY 2010 FMR:

Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area Final FY 2010 FMR Calculation Summary
Process Step Step Result
1. Begin with Final FY 2009 2 Bedroom FMR $1,411*
2. Remove Trending and CPI Updates from Final FY 2009 2 Bedroom FMR $1,256
3. Determine 2006 to 2007 Update Factor 1.0520
4. Apply Update Factor (#2 x #3) $1,321
5. Evaluate ACS Survey Result and Determine 2007 Rent $1,321
6a. Calculate Update Factors to 2008 and
6b. Trend Factor to April 1, 2010
1.0893
1.0376
7. Apply Update Factor to 2008 and Trend to Get Final FY 2010 2BR FMR
(#5 x #6a x #6b)
$1,494

NOTE: Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area was awarded 50th percentile FMR status in FY2010. Therefore, the rent shown in the table is the FY2009 50th percentile rent for the area and not the Final FY2009 FMR of $1,288 published for FY2009.


FY 2010 FMR Area Geography

FY 2010 FMR Areas Follow FY 2009 Area Definitions with Modifications

FY 2010 FMR areas continue to use the revised Office of Management and Budget (OMB) area definitions that were first issued in 2003 along with HUD defined Metropolitan areas (HMFAs) as described in the FY 2009 FMR documentation which can be found at (District of Columbia FY 2009 FMR Documentation system). FY 2010 areas reflect changes made to metropolitan areas by OMB through November 20, 2008 as published in OMB bulletin 09-01.

District of Columbia is in the new Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area, so all information presented here applies to all of the Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area.

Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area is made up of the following:

District of Columbia, DC ; Calvert County, MD ; Charles County, MD ; Frederick County, MD ; Montgomery County, MD ; Prince George's County, MD ; Arlington County, VA ; Clarke County, VA ; Fairfax County, VA ; Fauquier County, VA ; Loudoun County, VA ; Prince William County, VA ; Spotsylvania County, VA ; Stafford County, VA ; Alexandria city, VA ; Fairfax city, VA ; Falls Church city, VA ; Fredericksburg city, VA ; Manassas city, VA ; and Manassas Park city, VA .

District of Columbia FMR Area Derivation (RECAP)

The Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area is a HUD-defined metropolitan FMR area that is part of the Washington-Arlington-Alexandria, DC-VA-MD-WV MSA, but differs from the OMB defined CBSA because some other part of the Washington-Arlington-Alexandria, DC-VA-MD-WV MSA has a 2000 Census 40th Percentile Base Rent and/or a 2000 Census Median Family Income that differs from the official metropolitan area's 2000 Census 40th Percentile Base Rent and/or 2000 Census Median Family Income by at least 5 percent.

The 2000 Census 40th Percentile Base Rent for Washington-Arlington-Alexandria, DC-VA-MD Evaluated Metro FMR Area ($857) does not differ from the 2000 Census 40th Percentile Base Rent for Washington-Arlington-Alexandria, DC-VA-MD-WV MSA ($852) by at least 5 percent:

($857 / $852) - 1 = 1.006 - 1 = 0.6 percent < 5.0 percent.

Additionally, HUD compared the 2000 Census Median Family Income for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area ($73,809) to the 2000 Census Median Family Income for Washington-Arlington-Alexandria, DC-VA-MD-WV MSA ($73,245) to see if the difference is more than 5.0 percent. As can be seen from the calculation below, the difference is less than 5.0 percent:

($73,809 / $73,245) - 1 = 1.008 - 1 = 0.8 percent < 5.0 percent.


Final FY 2010 FMRs

HUD continues its use of ACS data in FY 2010, by building upon the FY 2009 Final FMRs (District of Columbia FY 2009 FMR Documentation system). As in FY 2009, HUD uses 2007 ACS data in four different ways according to how many two-bedroom standard quality and recent mover sample cases are available in the FMR area or its Core-Based Statistical Area (CBSA). ACS-1 through ACS-4 areas are described in detail here.

In most cases, Final FY 2010 FMRs are based on changes in rents measured by differences in ACS data collected in 2006 and 2007 and updated CPI rent and utility inflation indexes. Depending on the size of the ACS survey sample, State or Local ACS data is used to update a June 2006-calculated gross rent from the Final FY 2009 FMRs (District of Columbia FY 2009 FMR Documentation system) to June 2007. In some cases, as described below, the 2007 ACS Survey result is used instead of a 2006 to 2007 updated value. The ACS updated 2007 rent is then adjusted with CPI inflation factors that measure changes from mid-2007 though year end 2008 and 1.25 years of trending to arrive at Final FY 2010 FMRs. RDD survey results are applied where available and appropriate.

Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area is an ACS-1 area.

ACS-1 areas are FMR Areas which have at least 200 sample cases of two-bedroom standard quality rents. ACS-1 areas may be MSAs, subareas that are assigned CBSA base rents, subareas that have their own base rents, or large nonmetropolitan counties.

In ACS-1 FMR areas, the update factor used to generate the June 2007 value is the ratio of the 2007 ACS two-bedroom standard quality rent to the 2006 ACS two-bedroom standard quality rent for the FMR Area.

New for FY2010 Final FMRs, HUD has implemented a statistical test to determine if the change in the survey estimates from the 2006 ACS survey estimate to the 2007 ACS survey is statistically signficant. This test is described and completed below.


Generating a June, 2006 Rent from FY 2009 Final FMRs

In order to apply 2006 to 2007 ACS changes to FMRs (ACS data are assumed to be as of June of their respective survey years), FY 2009 FMRs are first deflated to mid-2006 values by removing the CPI inflation and trend factors used to update mid-2006 values to April, 2009 inherint in the Final FY 2009 FMRs.(District of Columbia FY 2009 FMR Documentation system.)

Rent2006=
Final FY 2009 Rent

(CPI Change2006).5 x (CPI Change2007) x (Trend)

Rent2006=
$1,411

(1.0510).5 x (1.0560) x (1.0376)

Rent2006=
$1,411

(1.0252) x (1.0560) x (1.0376)

Rent2006=
$1,411

(1.0826) x (1.0376)

Rent2006=
$1,411

1.1233

Rent2006 = $1,256

The 2006 to 2007 Update Factor using 2007 ACS Data

As stated earlier, Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area is an ACS-1 area.

ACS-1 areas are areas that have at least 200 ACS standard quality survey results in both the 2006 and 2007 surveys.

The 2007 ACS data contains enough Recent Mover observations for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area to evaluate whether the 2007 updated rent is statistically different from the survey result. As will be shown in the table below, the 2007 updated rent is not statistically different from the 2007 Recent Mover ACS Survey result for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area.

The 2006 and 2007 for Washington-Arlington-Alexandria, DC-VA-MD-WV MSA are used in the calculation of the 2006 to 2007 update factor for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area

The 2006 ACS result is $1,153 and the 2007 ACS result is $1,213. This leads to an unadjusted update factor of:

UpdateFactor06-07 = $1,213 / $1,153

UpdateFactor06-07 = 1.0520

New for Final FY 2010 FMRs, HUD tests to see if the change in ACS survey results from 2006 to 2007 is statistically significant. This is done by computing a "Z-Score". If the Z-Score value is greater than 1.645 the 2 survey results are considered to statistically different from each other. If the Z-Score is less than 1.645 then the change is considered to be statistically insignificant and the change factor is set to 1.

The Z-Score is calculated as:

Z=
EST07 - EST06

(SE072 + SE062)

Where EST06 is the 2006 ACS Survey Estimate, EST07 is the 2007 ACS Survey Estimate, SE06 is the standard error of the 2006 ACS Survey Estimate and SE07 is the standard error of the 2007 ACS Survey Estimate.

Z=
1,213 - 1,153

(6.0792 + 7.9032)

Z=
60

(36.955 + 62.453)

Z=
60

99.408

Z=
60

9.970

Z = 6.018

As can be seen from the calculation above the z-score is greater than 1.645. Therefore the 2006 to 2007 update factor is 1.0520. Consequently, the 2007 updated intermediate rent for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area is:

2007 ACS Recent Mover Survey Result Evaluation for
Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
Rent2006 Local SQ Update Factor Local SQ Updated Rent 2007 ACS Local
Recent Mover Rent
2007 ACS Survey
Confidence Interval
Is the Local SQ-Updated Rent Outside The Confidence Interval of RM Rent? 2007 Basis 2007 Intermediate Rent
$1,256 1.0520 $1,321 $1,310 $1,284-$1,336 NO
Recent Mover Rent is not statistically different from updated rent
SQ updated rent $1,321

NOTE: The update factor shown in the calculation above may not match exactly the 2006 to 2007 factor shown throughout the demonstration due to the rounding of Fair Market Rents to whole dollar amounts


The 2007-to-2010 Update Factors

HUD updates the 2007 intermediate rent (as of June 2007) with the appropriate CPI change (local or regional) to establish rents as of December 2008. HUD then applies additional trending or results of Random Digit Dialing (RDD) surveys to update rents to April, 2010, the mid-point of FY 2010.

The Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area has the following 2007-to-2010 Update Factor:

Update Factors used between June 2006 and April 2008
Year Update Factor Type
6/2007 to 2008 1.0893 Local CPI Factor
2008 to 2010 1.0376 Trend Factor
3% for 1.25 Years
=1.031.25

Final FY 2010 2-Bedroom FMR

The Final FY 2010 2-Bedroom FMR is simply the product of the 2006 Rent from deflated from FINAL FY 2009 FMRs, the 2006 to 2007 update factor and the 2006-to-2010 Update Factors for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area as determined above:

Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area Final FY 2010 FMR

= $1,256 x 1.0520 x 1.0893 x 1.0376

= $1,321 x 1.0893 x 1.0376

= $1,439 x 1.0376

= $1,493

NOTE: The difference between the demonstration calculated FMR and the actual published FMR shown below is due to rounding.


The Final FY 2010 Rents for All Bedroom Sizes

The following table shows the Final FY 2010 FMRs by unit bedrooms. The FMRs for units with different numbers of bedrooms are computed from the ratio of the 2005 Revised Final FMRs (based on 2000 Decennial Census Data) for the different unit sizes to the 2005 2-Bedroom Revised Final FMRs. These Rent Ratios are applied to the Final FY 2010 2-Bedroom FMR to determine the Final FY 2010 FMRs for the different size units.

Click on the links in the table to see how the bedroom rents were derived.

Final FY 2010 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
Final FY 2010 FMR $1,156 $1,318 $1,494 $1,927 $2,522

The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom. For example, the FMR for a five bedroom unit is 1.15 times the four bedroom FMR, and the FMR for a six bedroom unit is 1.30 times the four bedroom FMR. FMRs for single-room occupancy units are 0.75 times the zero bedroom (efficiency) FMR.

NOTE: This is a 50th Percentile Final FY 2010 FMR as established by HUD regulations. Under current regulations, the Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area 50th percentile status will be re-evaluated in 2013.

To see the Final FY 2010 40th Percentile Rents for Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area, click here.


Data file last updated Wed., Jun 02, 2010.


Other HUD Metro FMR Areas in the Same MSA


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