The Efficiency FMR is computed from a 2000 Census Base Efficiency Rent and updated using the same update factors derived for the 2-Bedroom FMR. The Efficiency FMR may be separately rebenchmarked from the 2-Bedroom FMR by a special RDD of Efficiency rental units.
The actual 2000 Census Efficiency Base Rent and Revised Final 2005 Efficiency FMR for Grafton County, NH are: $429 and $496. All FMRs are 40th percentile rents. The update factors used to derive the Revised Final 2005 Efficiency FMR are summarized in the table below. The sources of the update factors are the same as the sources for the 2-Bedroom FMR update factors.
| Efficiency FMR Update Process for Grafton County, NH |
||
|---|---|---|
| Data Year | Amount | Change from Previous* |
| 2000 Census Base | $429 | - |
| 2001 | $443 | 3.3% |
| 2002 | $459 | 3.6% |
| 2003 | $465 | 1.4% |
| 2004 | $481 | 3.5% |
| FY 2005 Final | $496 | 3.0% |
| FY 2005 Revised Final | $496 | No Change |
The remainder of this page demonstrates how the 2000 Census Efficiency Base Rent is computed.
FMR estimates are calculated for 2-bedroom units, the most common size of rental units, and therefore the most reliable to survey and analyze. After each decennial Census, rent relationships between 2-bedroom units and other unit sizes are calculated and used to set FMRs for other units. This is done because it is much easier to update 2-bedroom estimates and to use pre-established cost relationships with other bedroom sizes than it is to develop independent FMR estimates for each bedroom size.
Adjustments are made to the Census results for areas with local bedroom-size intervals above or below what are considered to be reasonable ranges or where sample sizes are inadequate to accurately measure bedroom rent differentials. Experience has shown that highly unusual bedroom ratios typically reflect inadequate sample sizes or peculiar local circumstances that HUD would not want to utilize in setting FMRs (e.g., luxury efficiency apartments in New York City that rent for more than typical one-bedroom units). Bedroom interval ranges were established based on an analysis of the range of such intervals for all areas with large enough samples to permit accurate bedroom ratio determinations. The final range for efficiency units is between 0.65 and 0.83 of the 2-bedroom unit FMR. In Grafton County, NH, the efficiency unit base FMR is restricted to be between $389 and $496.
Bedroom rents for a given FMR area are further adjusted if the differentials between bedroom-size FMRs were inconsistent with normally observed patterns.
The FMR area Grafton County, NH consists of: Alexandria town, NH; Ashland town, NH; Bath town, NH; Benton town, NH; Bethlehem town, NH; Bridgewater town, NH; Bristol town, NH; Campton town, NH; Canaan town, NH; Dorchester town, NH; Easton town, NH; Ellsworth town, NH; Enfield town, NH; Franconia town, NH; Grafton town, NH; Groton town, NH; Hanover town, NH; Haverhill town, NH; Hebron town, NH; Holderness town, NH; Landaff town, NH; Lebanon city, NH; Lincoln town, NH; Lisbon town, NH; Littleton town, NH; Livermore town, NH; Lyman town, NH; Lyme town, NH; Monroe town, NH; Orange town, NH; Orford town, NH; Piermont town, NH; Plymouth town, NH; Rumney town, NH; Sugar Hill town, NH; Thornton town, NH; Warren town, NH; Waterville Valley town, NH; Wentworth town, NH; Woodstock town, NH.
In computing 2000 Census RentBedroom Rents, HUD actually uses data on rent distributions
that are prohibited from public release under Title XIII to protect the
confidentiality of respondents. The distributions used in this demonstration
are rounded versions of the actual, protected data.
The rounding scheme is as follows:
0, count = 0
1 to 7, count = 4
all other counts are rounded to the nearest 5 (e.g., 10, 15, 20, 25, etc.)
CALCULATIONS USING THE ROUNDED DATA MAY NOT PRODUCE THE SAME RESULT AS CALCULATIONS
USING THE PROTECTED DATA. THE DIFFERENCE BETWEEN HUD'S ACTUAL RESULTS AND THOSE
DEMONSTRATED HERE IS INVERSELY RELATED TO THE SIZE OF THE FMR AREA. THAT IS,
THE LARGER THE AREA, THE CLOSER THE CALCULATION BASED ON THE
ROUNDED DATA IS LIKELY TO BE TO THE CENSUS BASE FMR COMPUTED FROM THE PROTECTED DATA.
HUD uses rents for recent movers in standard quality units to set the Census 2000 Base Rent.
"Standard Quality" units and rents are determined by limiting the full Census sample by including only responses
meeting the following criteria:
a. Occupied rental units paying cash rent
b. Specified renter ? on 10 acres or less
c. with full plumbing
d. with full kitchen
e. built before 1999
f. meals not included in rent
"Recent Mover" rents are determined by further limiting the "Standard Quality" sample with the following
additional criterion:
g. moved in within the last two years
The 2000 Census did not include a question that could be used to filter public or assisted housing from the rental distributions, however HUD is required to ensure that FMRs exclude non-market rental housing in their computation. Therefore, HUD excludes all units falling below a specified rent level determined from public housing rents in HUD's program databases as likely to be either assisted housing or otherwise at a below-market rent (perhaps due to quality problems not otherwise captured by the Census questions). The "public housing" rent cut-off for efficiency units in Grafton County, NH is $235.
The following table and calculations demonstrate how the 40th percentile Census 2000 Efficiency Base Rent is determined for Grafton County, NH using the public distribution of recent mover rents for efficiency units in the FMR area.
| Portion of Recent Mover Rent Distribution | Gross Rent Dollar Range | Number of Units | Percent of Eligible Distribution | Cumulative Percent |
|---|---|---|---|---|
| Units below interval containing public housing rent level of $235 |
$1 to $224 | 20 | Not in Distribution | Not in Distribution |
| Units in interval containing public houising rent level of $235 |
$225 to $234 | 3.20 | Not in Distribution | Not in Distribution |
| $235 to $249 | 4.80 | 1.4% | 1.4% | |
| Units below interval containing 40th percentile recent mover rent of $424 |
$250 to $399 | 96 | 28.3% | 29.7% |
| Units in interval containing 40th percentile recent mover rent of $424 |
$400 to $424 | 37 | 10.9% | 40.6% |
| Units above interval containing 40th percentile recent mover rent of $424 |
$425 or more | 202 | 59.4% | 100.0% |
| Total units Above Public Housing Rent in Recent Mover Rent Distribution | 339.80 |
The numbers of units with recent mover rents above and below the Public Housing Rent level of $235 are determined using linear interpolation over the 8 units in the rent range $225 to $249. Linear interpolation uses the assupmtion that the 8 units' rents are uniformly distributed in the rent range around the Public Housing Rent level. Under this assumption, the proportion of the rent interval ($25) that is below the Public Housing Rent level is the same as the proportion of units with rents in the interval (8) that have rents below the Public Housing Rent level.
Proportion of rent interval below the Public Housing Rent Level: ($235 - $225) / $25 = 0.4000
Units in the Public Housing Rent Level Interval below the Public Housing Rent Level: 0.4000 x 8 = 3.20
The 40th percentile recent mover rent for Grafton County, NH is computed by linear interpolation over the 37 units in the rent range $400 to $424. Linear interpolation uses the assupmtion that the 37 units' rents are uniformly distributed in the rent range around the 40th percentile. Under this assumption, the proportion of the rent interval ($25) that needs to be added to the lower limit of the interval to reach the 40th percentile rent is the same as the proportion of units in the interval that needs to be added to the units in lower rent intervals to reach 40 percent of units in the distribution.
40 percent of units = 0.4 x 339.80 = 135.92
Units below the 40th percentile rent interval = 96.00 + 4.80 = 100.80
Units in 40th percentile rent interval needed to reach 40 percent of units = 135.92 - 100.80 = 35.12
Additional Units as Proportion of Interval = 35.12 / 37.00 = 0.9492
Dollars Added to Lower Limit of Interval to reach 40th percentile rent = 0.9492 x $25 = $24
40th percentile recent mover rent = $400 + $24 = $424
Before using the Census 2000 recent mover rent as the base FMR, HUD checks the standard quality rent for the area to ensure that the recent mover rent is high enough to reach as the 40th percentile standard quality units. The recent mover rent may be below the standard quality rent in areas where rental housing markets are particularly stressed such that recent mover rents will not cover the expenses of operating standard quality units.
The following table and calculations demonstrate how the 40th percentile Census 2000 standard quality is determined for Grafton County, NH using the public distribution of standard quality rents for the FMR area.
| Portion of Standard Quality Rent Distribution | Gross Rent Dollar Range | Number of Units | Percent of Eligible Distribution | Cumulative Percent |
|---|---|---|---|---|
| Units below interval containing public housing rent level of $235 |
$1 to $224 | 88 | Not in Distribution | Not in Distribution |
| Units in interval containing public houising rent level of $235 |
$225 to $234 | 9.60 | Not in Distribution | Not in Distribution |
| $235 to $249 | 14.40 | 2.9% | 2.9% | |
| Units below interval containing 40th percentile standard quality rent of $400 |
$250 to $374 | 138 | 27.9% | 30.8% |
| Units in interval containing 40th percentile standard quality rent of $400 |
$375 to $399 | 46 | 9.3% | 40.1% |
| Units above interval containing 40th percentile standard quality rent of $400 |
$400 or more | 296 | 59.9% | 100.0% |
| Total Units Above Public Housing Rent in Standard Quality Rent Distribution | 494.40 |
The numbers of units with standard quality rents above and below the Public Housing Rent level of $235 are determined using linear interpolation over the 24 units in the rent range $225 to $249. Linear interpolation uses the assupmtion that the 24 units' rents are uniformly distributed in the rent range around the Public Housing Rent level. Under this assumption, the proportion of the rent interval ($25) that is below the Public Housing Rent level is the same as the proportion of units with rents in the interval (24) that have rents below the Public Housing Rent level.
Proportion of rent interval below the Public Housing Rent Level: ($235 - $225) / $25 = 0.4000
Units in the Public Housing Rent Level Interval below the Public Housing Rent Level: 0.4000 x 24 = 9.60
The 40th percentile standard quality rent for Grafton County, NH is computed by linear interpolation over the 46 units in the rent range $375 to $399. Linear interpolation uses the assupmtion that the 46 units' rents are uniformly distributed in the rent range around the 40th percentile. Under this assumption, the proportion of the rent interval ($25) that needs to be added to the lower limit of the interval to reach the 40th percentile rent is the same as the proportion of units in the interval that needs to be added to the units in lower rent intervals to reach 40 percent of units in the distribution.
40 percent of units = 0.4 x 494.40 = 197.76
Units below the 40th percentile rent interval = 138 + 14.40 = 152.40
Units in 40th percentile rent interval needed to reach 40 percent of units = 197.76 - 152.40 = 45.36
Additional Units as Proportion of Interval = 45.36 / 46 = 0.9861
Dollars Added to Lower Limit of Interval to reach 40th percentile rent = 0.9861 x $25 = $25
40th percentile standard quality rent = $375 + $25 = $400
Since the standard quality rent of $400 is not higher than the recent mover rent of $424, the recent mover rent of $424 is the unadjusted 2000 Census Base Rent for Efficiency Units in Grafton County, NH.
The unadjusted 2000 Census Efficiency Base Rent of $424 is inside of the reasonable range of $389 to $496 and is therefore not adjusted for reasonableness.
The difference between the actual 2000 Census Efficiency Base Rentof $429 and the demonstration 2000 Census Efficiency Base Rent of $424 computed here is due to the effects of rounding on the public distribution as described above.
| HUD Home Page | HUD User Home | Data Sets | Fair Market Rents | Income Limits |
Problems or questions? Contact Peter_B._Kahn@hud.gov.