The Efficiency FMR for Baltimore-Towson, MD HUD Metro FMR Area is computed as a function of the ratio of the 2010 5-Year Efficiency American Community Survey Rent to the 2010 5-Year 2-Bedroom American Community Survey Rent. This Efficiency Rent Ratio is applied to the Final FY 2015 2-Bedroom FMR to determine the Efficiency FMR.
The tables below provide the relevant steps for computing the Final FY 2015 Efficiency FMR:
Check the Margin of Error Ratios for Baltimore-Towson, MD HUD Metro FMR Area. If either Margin of Error Ratio is greater than 1 or if there is not sufficient data to calculate the ratio, then the bedroom ratio is determined using data for the smallest geographic area encompassing Baltimore-Towson, MD HUD Metro FMR Area for which there is acceptable data.
Check Margin of Error Ratios for Baltimore-Towson, MD HUD Metro FMR Area | ||||||
---|---|---|---|---|---|---|
Area | 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Margin of Error | Efficiency Margin of Error Ratio | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Margin of Error | 2-Bedroom Margin of Error Ratio |
Baltimore-Towson, MD MSA | $665 | $42 | $42 / $665 = 0.0632 | $988 | $9 | $9 / $988 = 0.0091 |
The smallest geographic area for which both Margin of Error Ratios can be computed and are less than 1 is Baltimore-Towson, MD MSA.
The Preliminary Efficiency Rent Ratio for Baltimore-Towson, MD HUD Metro FMR Area is caluclated by dividing the 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate for Baltimore-Towson, MD MSA by the 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate for Baltimore-Towson, MD MSA.
Preliminary Computation of Efficiency Rent Ratio for Baltimore-Towson, MD HUD Metro FMR Area | ||
---|---|---|
2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate | Preliminary Efficiency Rent Ratio |
$665 | $988 | $665 / $988 = 0.673 |
The Preliminary Efficiency Rent Ratio is checked against the caps and floors for that bedroom size. The floor is set at the 10^{th} percentile of the national distribution of geographic areas with at least 100 2006-2010 5-Year ACS Adjusted Standard Quality observations, while the cap is set at the 90^{th} percentile of the same distribution.
Check Caps and Floors | |||
---|---|---|---|
Baltimore-Towson, MD HUD Metro FMR Area Preliminary Efficiency Rent Ratio | Efficiency Rent Ratio Floor | Efficiency Rent Ratio Cap | Baltimore-Towson, MD HUD Metro FMR Area Preliminary Efficiency Rent Ratio |
0.673 | 0.5949 | 0.8078 | Ratio of 0.673 is subject to neither caps nor floors |
In order to ensure that Efficiency Fair Market Rents are not greater than the corresponding 1-Bedroom Fair Market Rent, the Efficiency Rent Ratio must be at least 0.005 less than the corresponding 1-Bedroom Rent Ratio.
Efficiency Rent Ratio Consistency Check | ||
---|---|---|
Baltimore-Towson, MD HUD Metro FMR Area Preliminary Efficiency Rent Ratio | Baltimore-Towson, MD HUD Metro FMR Area 1-Bedroom Rent Ratio | Efficiency Rent Ratio Comparison |
0.6731 | 0.7994 | 0.6731 <= (0.7994 - 0.005) 0.6731 <= 0.7944 Keep efficiency preliminary rent ratio |
Multiply the Efficiency Rent Ratio by the 2-Bedroom Fair Market Rent to determine the Efficiency Fair Market Rent for Baltimore-Towson, MD HUD Metro FMR Area.
Final Computation of Efficiency FMR for Baltimore-Towson, MD HUD Metro FMR Area | ||
---|---|---|
Final Efficiency Rent Ratio | Final FY 2015 2-Bedroom FMR | Final FY 2015 Efficiency FMR |
0.6731 | $1,232 | $1,232 * 0.6731 = $829 |
Prepared by the Economic and Market Analysis Division, HUD. Technical Problems or questions? Contact Us.