Final FY 2008 Fair Market Rent Documentation System
Final FY 2008 FMR
Summary for Sanborn County, South Dakota
This system provides complete documentation of the development of the
Final FY 2008 Fair Market Rents (FMRs) for
Sanborn County, South Dakota.
This page provides a summary of how the Final FY 2008 FMRs
were developed and updated starting with the formation of the Final FY 2008 FMR Areas from the
metropolitan Core-Based Statistical Areas (CBSAs) as established by the Office of Management and Budget,
the 2000 Census benchmark, incorporating newly available American Community Survey (ACS) Data information,
and updating to FY 2008 including information from local Random Digit Dialing (RDD) survey data.
Click on links in the tables below to see more detail on how the data were developed.
Note that Sanborn County, South Dakota is assigned
the
State Minimum 2-bedroom FMR for South Dakota of $513
and the other FMRs are derived from this base. The following sections
of this page indicate how the unadjusted 2-Bedroom FMR for Sanborn County, South Dakota
is derived, while the final section shows how the FMRs for other unit sizes are derived from the state minimum base.
Summary of Final FY2008 FMR Generation Process
HUD is largely replacing the accumulated 2001 through 2005 FMR update factors from various sources with 2005 ACS data). HUD uses ACS data in
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). Random digit dialing (RDD) surveys performed between 2001 and 2005 may also be used under certain conditions.
FMR areas are classified into four ACS data availability categories:
ACS-1: FMR Areas which have at least 200 sample cases of two-bedroom standard quality rents. ACS-1 areas may be MSAs,
subareas assigned CBSA base rents, other subareas, or large nonmetropolitan counties.
ACS-2: FMR Areas which are sub-areas of CBSAs where the subarea is not assigned the CBSA base rent, and the sub-area does not have
at least 200 sample cases of two-bedroom standard quality rents, but the CBSA containing the sub-area does have at least 200 sample cases of
two-bedroom standard quality rents.
ACS-3: FMR Areas which are MSAs or nonmetropolitan counties that have fewer than 200 sample cases of two-bedroom standard quality rents,
or sub-areas of CBSAs that have fewer than 200 sample cases of two-bedroom standard quality rents.
ACS-4: FMR Areas that have at least 200 sample cases of two-bedroom recent mover rents. ACS-4 areas may be entire MSAs, subareas assigned
CBSA base rents, other sub-areas, or large nonmetropolitan counties. By definition, these areas are a subset of ACS-1 areas.
In ACS-1 FMR areas, the 2000 Census to 2005 ACS update factor is the ratio of the 2005 ACS two-bedroom standard quality rent to the 2000 Census
two-bedroom standard quality rent for the FMR Area.
In ACS-2 FMR areas, the 2000 Census to 2005 ACS update factor is either (1) the ratio of the 2005 ACS two-bedroom standard quality rent to the
2000 Census two-bedroom standard quality rent for the CBSA containing the FMR Area, or (2) the ratio of the 2005 ACS two-bedroom standard
quality rent to the 2000 Census two-bedroom standard quality rent for the entire state (or population weighted average of states) containing
the FMR area, whichever brings its 2005 updated rent closer to the value of its CBSA's 2005 updated rent.
In ACS-3 FMR areas, the 2000 Census to 2005 ACS update factor is the ratio of the 2005 ACS two-bedroom standard quality rent to the 2000 Census
two-bedroom standard quality rent for the parts of the state not in ACS-1 or ACS-2 areas containing the FMR area, or the population-weighted
average factor across such parts of the states containing each multi-state FMR area. In cases where there are fewer than 200 sample cases of
2005 ACS two-bedroom standard quality rents in the parts of the state not in ACS-1 or ACS-2 areas, HUD uses the ratio of the 2005 ACS
two-bedroom standard quality rent to the 2000 Census two-bedroom standard quality rent for the entire state containing the FMR area as the
update factor.
In ACS-4 FMR areas, the local 2005 ACS recent mover rent becomes a new base rent for 2005 if the updated 2000 Census base rent is outside its
90 percent confidence interval and the recent mover rent is greater than the local standard quality rent. This means the ACS is used to
replace the updated 2000 base rent with a 2005 local ACS base rent.
Final FY 2008 FMR Area Derivation
Sanborn County, SD is a non-metropolitan county under the new metropolitan area definitions used for the
Final FY 2008 FMRs. As such it gets its own 2000 Census Base Rent of
$411.
Computing the 2005 Intermediate Rent
Sanborn County, SD is an ACS-3 area.
There are fewer than 200 standard quality 2005 ACS cases for Sanborn County, SD. Therefore, the 2000-2005 update factor is based on the
change in standard quality 2-bedroom rents between the 2000 Census and the 2005 ACS at the state level.
The update factor for Sanborn County, SD is 1.1411, which is calculated as the ratio of the 2005 South Dakota ACS
median rent excluding the survey results of CBSAs within South Dakota that have 200 or more standard quality observations to the 2000
South Dakota Census median standard quality rent also excluding CBSAs with South Dakota that have 200 or more standard quality observations.
This update factor yields a 2005 Intermediate rent for Sanborn County, SD of $411 x 1.1411 =
$469.
NOTE: The update factor shown in the calculation above may not match exactly the 2000 - 2005 update factor shown throughout the demonstration
due to the rounding of Fair Market Rents to whole dollar amounts
The 2005-to-2008 Update Factors
HUD updates the 2005 updated rents (as of June 2005) with the appropriate CPI change (local or regional) or RDD Result to establish rents as of December 2006.
HUD then applies additional trending or results of Random Digit Dialing (RDD) surveys to update rents to FY 2008.
The Sanborn County, SD has the following 2005-to-2006 Update Factor:
Update Factors used between June 2005 and April 2008
The Final FY 2008 2-Bedroom FMR is simply the product of the
2000 Census Base Rent, the 2000-to-2005 Update Factor and the 2005-to-2008 Update Factors for Sanborn County, SD as determined above:
Sanborn County, SD Final FY 2008 FMR
= $411 x 1.1411 x 1.0350 x 1.0376
= $469 x 1.0350 x 1.0376
= $485 x 1.0376
= $503
The Final FY 2008 FMRs for All Bedroom Sizes
The following table shows the
Final FY 2008 FMRs by unit bedrooms.
The State Minimum-Based FMRs for units
with different numbers of bedrooms are computed from the ratio of the
unadjusted 2005 Intermediate Rents for the different unit sizes to the
unadjusted 2005 2-Bedroom Intermediate Rent. These Rent Ratios are applied to the
the FY 2008 State Minimum 2-Bedroom FMR for South Dakota of
to determine the Final FY 2008 FMRs
for the different size units.
The unadjusted 2005 Intermediate Rents for different size units are computed
from 2000 Census Base Rents that are updated to 2005 using the
2000-to-2005 update factors for each unit size derived from the
Revised Final FY 2005 FMR for the
old FMR area that contained Sanborn County, SD.
Click on the links in the table to see how the unadjusted bedroom rents were derived.
The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the fourbedroom 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.