The Efficiency FMR for Alexander County, IL is computed from the ratio of the 2005 Efficiency Intermediate Rent to the 2005 2-Bedroom Intermediate Rent. This Efficiency Rent Ratio is applied to the Final FY 2007 2-Bedroom FMR to determine the Final FY 2007 Efficiency FMR.
The 2005 Efficiency Intermediate Rent is computed from a 2000 Census Efficiency Base Rent that is updated to 2005 using the efficiency 2000-to-2005 update factor derived from the Revised Final FY 2005 Efficiency FMR for the old FMR area that contained Alexander County, IL.
The Efficiency FMR may be separately rebenchmarked from the 2-Bedroom FMR by a special RDD of efficiency rental units.
The table below provides the relevant summary figures for computing the Final FY 2007 Efficiency FMR
| Summary Computation of Efficiency FMR for Alexander County, IL | |||||
|---|---|---|---|---|---|
| 2000 Census Efficiency Base Rent | 2005 Efficiency Intermediate Rent | 2005 2-Bedroom Intermediate Rent | Efficiency Rent Ratio | Final FY 2007 2-Bedroom FMR | Final FY 2007 Efficiency FMR |
| $304 | $340 | $417 | $340 / $417 = 0.815 | $439 | $439 x 0.815 = $358 |
The remainder of this page demonstrates how the 2000 Census Efficiency Base Rent and 2005 Efficiency Intermediate Rent are 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 base rent. In Alexander County, IL, the efficiency unit base Rent is restricted to be between $242 and $310.
Bedroom rents for a given FMR area are further adjusted if the differentials between bedroom-size FMRs were inconsistent with normally observed patterns.
Alexander County, IL has an insufficient 2000 Census sample of recent movers to compute its own recent mover rent. The number of units in the standard quality sample is also too small to compute a standard quality rent for Alexander County, IL alone. HUD requires a sample of at least 200 recent movers, but Alexander County, IL has fewer than 200 units in the protected data sample. Therefore, Alexander County, IL is assigned the recent mover rent for the combination of counties listed below, even though some members of the group may have a sufficient sample size for their own FMR or may be parts of metropolitan areas. Other FMR areas that use the same county group recent mover data are indicated by "*". Other FMR areas that use the same county group standard quality sample data are indicated by "#".
Members of the county group: Alexander County, IL*#; Edwards County, IL*#; Gallatin County, IL*#; Hamilton County, IL*; Hardin County, IL*#; Johnson County, IL*#; Massac County, IL; Pope County, IL*#; Pulaski County, IL*#; Saline County, IL; Union County, IL; Wabash County, IL*; White County, IL*.
In computing 2000 Census FMR Bedroom 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 RENT 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
A Microsoft Excel file containing the unsummarized versions of the publicly releasable recent mover and standard quality Efficiency rent distributions for Alexander County, IL is available here.
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 Alexander County, IL is $199.
The following table and calculations demonstrate how the 40th percentile Census 2000 Efficiency FMR Rent is determined for Alexander County, IL using the public distribution of recent mover rents for efficiency units in the county group specified above.
| 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 $199 |
$1 to $174 | 69 | Not in Distribution | Not in Distribution |
| Units in interval containing public houising rent level of $199 |
$175 to $198 | 9.60 | Not in Distribution | Not in Distribution |
| $199 to $199 | 0.40 | 0.4% | 0.4% | |
| Units below interval containing 40th percentile recent mover rent of $315 |
$200 to $299 | 39 | 37.4% | 37.7% |
| Units in interval containing 40th percentile recent mover rent of $315 |
$300 to $324 | 4 | 3.8% | 41.6% |
| Units above interval containing 40th percentile recent mover rent of $315 |
$325 or more | 61 | 58.4% | 100.0% |
| Total units Above Public Housing Rent in Recent Mover Rent Distribution | 104.40 |
The numbers of units with recent mover rents above and below the Public Housing Rent level of $199 are determined using linear interpolation over the 10 units in the rent range $175 to $199. Linear interpolation uses the assupmtion that the 10 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 (10) that have rents below the Public Housing Rent level.
Proportion of rent interval below the Public Housing Rent Level: ($199 - $175) / $25 = 0.9600
Units in the Public Housing Rent Level Interval below the Public Housing Rent Level: 0.9600 x 10 = 9.60
The 40th percentile recent mover rent for Alexander County, IL is computed by linear interpolation over the 4 units in the rent range $300 to $324. Linear interpolation uses the assupmtion that the 4 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 104.40 = 41.76
Units below the 40th percentile rent interval = 39.00 + 0.40 = 39.40
Units in 40th percentile rent interval needed to reach 40 percent of units = 41.76 - 39 = 2.36
Additional Units as Proportion of Interval = 2.36 / 4 = 0.59
Dollars Added to Lower Limit of Interval to reach 40th percentile rent = 0.59 x $25 = $15
40th percentile recent mover rent = $300 + $15 = $315
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 Alexander County, IL 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 $199 |
$1 to $174 | 15 | Not in Distribution | Not in Distribution |
| Units in interval containing public houising rent level of $199 |
$175 to $198 | 0.00 | Not in Distribution | Not in Distribution |
| $199 to $199 | 0.00 | 0.0% | 0.0% | |
| Units below interval containing 40th percentile standard quality rent of $245 |
$200 to $224 | 0 | 0.0% | 0.0% |
| Units in interval containing 40th percentile standard quality rent of $245 |
$225 to $249 | 4 | 50.0% | 50.0% |
| Units above interval containing 40th percentile standard quality rent of $245 |
$250 or more | 4 | 50.0% | 100.0% |
| Total Units Above Public Housing Rent in Standard Quality Rent Distribution | 8.00 |
There were no standard quality efficiency units in the rent interval containing the Public Housing Rent level of $199.
The 40th percentile standard quality rent for Alexander County, IL is computed by linear interpolation over the 4 units in the rent range $225 to $249. Linear interpolation uses the assupmtion that the 4 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 8.00 = 3.20
Units below the 40th percentile rent interval = 0.00 + 0.00 = 0.00
Units in 40th percentile rent interval needed to reach 40 percent of units = 3.20 - 0 = 3.20
Additional Units as Proportion of Interval = 3.20 / 4 = 0.8
Dollars Added to Lower Limit of Interval to reach 40th percentile rent = 0.8 x $25 = $20
40th percentile standard quality rent = $225 + $20 = $245
Since the standard quality rent of $245 is not higher than the recent mover rent of $315, the recent mover rent of $315 is the unadjusted 2000 Census Efficiency Base Rent for Efficiency Units in Alexander County, IL.
The unadjusted 2000 Census Efficiency Base Rent of $315 is outside of the reasonable range of $242 to $310. It is therefore decreased to $310.
The difference between the actual 2000 Census Efficiency Base Rent of $304 and the demonstration 2000 Census Efficiency Base Rent of $310 computed here is due to the effects of rounding on the public distribution as described above.
Alexander County, IL has the same FMR Area geography as in the Revised Final FY 2005 FMRs, so the 2000-to-2005 Efficiency Update Factor is simply the Revised Final FY 2005 Efficiency FMR for Alexander County, IL ($340) divided by the 2000 Census Efficiency Base Rent for Alexander County, IL ($304), or $340 / $304 = 1.1184.
The 2005 Efficiency Intermediate Rent is simply the 2000 Census Efficiency Base Rent times the 2000-to-2005 Efficiency update factor:
2005 Efficiency Intermediate Rent for Alexander County, IL
= $304 x 1.1184 = $340
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