FY2012 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
FY2011 FMR documentation which can be found at (Bath County FY2011 FMR Documentation system).
No changes have been made to these OMB-defined areas since the publication of Final FY2011 FMRs
Fair Market Rent Calculation Methodology - New for FY2012
Fair Market Rents for metropolitan areas and non-metropolitan FMR areas are developed as follows:
2005-2009 5-year ACS estimates of 2-bedroom adjusted standard quality rents calculated for each FMR area are used as the new basis for FY2012.
In areas where the 2009 5-year ACS estimates are smaller than the reported margin of error, the state non-metro estimate of 2-bedroom adjusted standard quality rent is used.
HUD calculates a recent-mover adjustment factor by comparing a 2009 1-year adjusted recent-mover 2-bedrooom rent to the 5-year adjusted standard quality rent for the same area in the following manner:
In areas where there are at least 100 observations included in the 2009 1-year ACS estimate of 2-bedroom recent-mover rents, a statistical comparison is made between the 5-year 2-bedroom adjusted standard quality rent and the 1-year 2-bedroom recent-mover rent available from the ACS.
If the 1-year data are statistically different than the 5-year data, HUD calculates a recent-mover adjustment factor between the 5-year data and the 1-year data and applies this to the 5-year data. This recent-mover adjustment factor is floored at 1.0.
If the 1-year data are not statistically different than the 5-year data, HUD applies a recent-mover adjustment factor of 1 to the 5-year data.
In areas where there are less than 100 observations of 2009 1-year ACS estimate of 2-bedroom recent-mover rent, a statistical comparison is made between the 5-year 2-bedroom adjusted standard quality rent and the 1-year 2-bedroom recent-mover rent for smallest geographic area containing the FMR area with at least 100 available observations of 2009 1-year ACS estimate of 2-bedroom recent-mover rent. For metropolitan areas, the order of geographies examined is: Entire Metropolitan Area (for Metropolitan Sub-Areas), State Metropolitan Portion, Entire State, and Entire US; for non-metropolitan areas, the order of geographies examined is: State Non-Metropolitan Portion, Entire State, and Entire US.
If the 1-year data are statistically different than the 5-year data, HUD calculates a recent-mover adjustment factor between the 5-year data and the 1-year data and applies this to the 5-year data.
If the 1-year data are not statistically different than the 5-year data, HUD applies a recent-mover adjustment factor of 1 to the 5-year data.
Rents are calculated as of December 2010 using one half of the relevant (regional or local) 2008-2009 CPI change and all of the relevant (regional or local) 2009-2010 CPI change.
All estimates are then trended from December 2010 to April 2012 (15 months) with a trending factor of 3 percent per year.
FY2012 FMRs are then compared to a state minimum rent, and any area whose preliminary FMR falls below this value is raised to the level of the state minimum.
The results of the Fair Market Rent Step-by-Step Process
Bath County, KY Results
The following are the 2009 American Community Survey 5-year 2-Bedroom Adjusted Standard Quality Rent estimate and margin of error for Bath County, KY:
Area
ACS2009 5-Year 2-Bedroom Adjusted Standard Quality Rent
ACS2009 5-Year 2-Bedroom Adjusted Standard Quality Rent Margin of Error
Use ACS2009 5-Year Bath County, KY 2-Bedroom Adjusted Standard Quality Rent
Since the ACS2009 Margin of Error ratio is less than 1, the ACS2009 Bath County, KY value is used for the estimate of 2-Bedroom Adjusted Standard Quality Rent:
Area
ACS2009 Rent
Bath County, KY
$388
A recent-mover adjustment factor is applied based on the smallest area of geography which contains Bath County, KY and has at least 100 Adjusted Standard Quality Recent-Mover observations in the ACS2009 1-year estimate:
Geography
100 ACS2009 1-Year Adjusted Standard Quality Recent-Mover Observations?
County
No
State Non-Metro
Yes
The smallest area of geography which contains Bath County, KY and has at least 100 Adjusted Standard Quality Recent-Mover observations in the ACS2009 1-year estimate is the non-metropolitan portion of Kentucky.
The calculation of the relevant Recent-Mover Adjustment Factor for Bath County, KY is as follows:
ACS2009 5-Year Area
ACS2009 5-Year 2-Bedroom Adjusted Standard Quality Rent
ACS2009 5-Year 2-Bedroom Adjusted Standard Quality Rent Margin of Error
ACS2009 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Rent
ACS2009 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Rent Margin of Error
The calculation of the relevant 2009-to-2012 Update Factors for Bath County, KY is as follows:
HUD updates the 2009 intermediate rent (as of June 2009) with the appropriate CPI change (local or regional) to establish rents as of December 2010.
HUD then applies additional trending or results of Random Digit Dialing (RDD) surveys to update rents to April, 2012, the mid-point of FY 2012.
Final FY2012 Rents for All Bedroom Sizes for Bath County, KY
The following table shows the Final FY 2012 FMRs by bedroom sizes.
The State Minimum-Based FMRs for units with different numbers of bedrooms are computed from the ratio of the
unadjusted 2005 Revised FMRs (based on 2000 Decennial Census Data) for the different unit sizes to the
unadjusted 2005 2-Bedroom Revised Final FMR. These Rent Ratios are applied to the the Final FY2012 State Minimum 2-Bedroom FMR for Kentucky of
$491
to determine the Final FY2012 FMRs for the different size units.
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 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.
or
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($182 + $52)