The Efficiency FMR for Henry County-Martinsville city, VA HUD Nonmetro FMR Area is based on the ratio of the rent estimate for Efficiency Units to the rent estimate rent estimate for 2 bedroom units. For geographic levels smaller than metropolitan areas, the estimate of Efficiency rent is the average of the past three estimates from the most recent American Community Survey 5-Year releases. If an area does not have a reliable local rent estimate, the ratio is based on rent estimates for its larger containing geographic area. This ratio is multiplied by the 2 bedroom FY 2016 Fair Market Rent (FMR) to obtain the Efficiency for FY 2016.
The tables below provide the relevant steps for computing the FY 2016 Efficiency FMR:
Check the Margin of Error Ratios for Henry County-Martinsville city, VA HUD Nonmetro FMR Area. If either the Efficiency or 2 bedroom Margin of Error Ratio is greater than .5 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 Henry County-Martinsville city, VA HUD Nonmetro FMR Area for which there is acceptable data.
| ACS Release | Adjusted Standard Quality Efficiency Estimate of Gross Rent | Adjusted Standard Quality Efficiency Margin of Error of Gross Rent | Efficiency Margin of Error Ratio | Adjusted Standard Quality 2 Bedroom Estimate of Gross Rent | Adjusted Standard Quality 2 Bedroom Margin of Error of Gross Rent | 2 Bedroom Margin of Error Ratio |
|---|---|---|---|---|---|---|
| 2013 | $388 | $172 | $172 / $388 = 0.44 |
$528 | $16 | $16 / $528 = 0.03 |
| 2012 | $363 | $185 | $185 / $363 = 0.51 |
$522 | $20 | $20 / $522 = 0.04 |
| 2011 | $395 | $201 | $201 / $395 = 0.51 |
$517 | $15 | $15 / $517 = 0.03 |
Because only 1 out of 3 local level ratios are reliable, examine the reliability of estimates higher levels of geography until a reliable ratio is found.
| Area | Adjusted Standard Quality Efficiency Estimate of Gross Rent for | Adjusted Standard Quality Efficiency Margin of Error of Gross Rent for | Efficiency Margin of Error Ratio | Adjusted Standard Quality Efficiency Estimate of Gross Rent for | Adjusted Standard Quality Efficiency Margin of Error of Gross Rent for | 2 Bedroom Margin of Error Ratio |
|---|---|---|---|---|---|---|
| Virginia Non-Metropolitan Portion | N/A | N/A | N/A | $582 | $8 | $8 / $582 = 0.01 |
The preliminary Efficiency bedroom ratio is that of Virginia Metropolitan Portion at $499 / $582 = 0.857.
The preliminary Efficiency bedroom ratio is checked against the caps and floors for that bedroom size. The floor is set at the 10th percentile of the national distribution of Efficiency bedroom ratios (weighted by population), while the cap is set at the 90th percentile of the same distribution.
| Henry County-Martinsville city, VA HUD Nonmetro FMR Area Preliminary Efficiency Bedroom Ratio | National Efficiency Floor | National Efficiency Ceiling | Henry County-Martinsville city, VA HUD Nonmetro FMR Area Preliminary Efficiency Bedroom Ratio |
|---|---|---|---|
| 0.857 | 0.617 | 0.823 |
0.857 > 0.823 Use ceiling ratio of 0.823 |
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.
| Henry County-Martinsville city, VA HUD Nonmetro FMR Area Preliminary Efficiency Bedroom Ratio | Henry County-Martinsville city, VA HUD Nonmetro FMR Area 1 Bedroom Ratio | Comparison |
|---|---|---|
| 0.823 | 0.864 | 0.823 ≤ (0.864 - 0.005) 0.823 ≤ 0.859 Use 0.823 |
Multiply the Efficiency Rent Ratio by the 2-Bedroom Fair Market Rent to determine the Efficiency Fair Market Rent for Henry County-Martinsville city, VA HUD Nonmetro FMR Area.
| Computation of Efficiency FMR for Henry County-Martinsville city, VA HUD Nonmetro FMR Area | ||
|---|---|---|
| Efficiency Rent Ratio | FY 2016 2-Bedroom FMR | FY 2016 Efficiency FMR |
| 0.823 | $658 | $658 * 0.823 = $542 |
Prepared by the Economic and Market Analysis Division, HUD. Technical Problems or questions? Contact Us.