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Working Paper: How Well do Section 8 FMRs Match the Cost of Rental Housing


Authors: Follain, James R.    

Report Acceptance Date: October 1978 (33 Pages)

Posted Date: June 14, 2012

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The FMR (Fair Market Rent) idea was built into the Section 8 lower income rental assistance program to provide a means to reflect variations in the rental cost of comparable housing in different market areas and also rental cost differences within a market area due to size and quality variations in housing units. Does the FMR schedule for the Section 8 Existing Housing Program parallel the actual differences in rents? The purpose of this paper is to provide an answer to this question by comparing the FMR schedule with an index of rental housing costs developed at the Urban Institute (UI) for 39 different SMSAs (Standard Metropolitan Statistical Areas).

The comparisons are of two basic types. Intermetropo1itan comparisons examine the relationship between the FMRs and the UI rent index for a modest two bedroom walk-up apartment in the 39 SMSAs. This comparison addresses the question of whether the schedule accurately reflects variations in the rental cost of comparable housing in different housing markets. Intrametropo1itan comparisons examine the accuracy of the adjustments currently made in the FMR schedule for number of bedrooms and the presence of elevators. Possible future adjustments are also examined.

This report is part of the collection of scanned historical documents available to the public.

Publication Categories: Historical     Publications     Affordable Housing    


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