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FY 2016 Fair Market Rent Documentation System

The Final FY 2016 FMRs for All Bedroom Sizes

Final FY 2016 FMRs By Unit Bedrooms
Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
$542 $544 $658 $871 $1,018

The Office of Management and Budget release new Core Based Statistical Area definitions in February 2013. The Census American Community Survey incorporated these definitions in the ACS2013 release, which are the basis for FY2016 Fair Market Rents. HUD has elected to continue use of the pre-2013 definitions except where the post-2013 definitions result in a smaller FMR area. This is consistent with HUD's objective to maximize tenant choice by allowing FMRs to vary locally.

Bath County, VA is a non-metropolitan county.

Fair Market Rent Calculation Methodology

Show/Hide Methodology Narrative

Fair Market Rents for metropolitan areas and non-metropolitan FMR areas are developed as follows:

  1. 2009-2013 5-year American Community Survey (ACS) estimates of 2-bedroom adjusted standard quality gross rents calculated for each FMR area are used as the new basis for FY2016 provided the estimate is statistically reliable. The test for reliability is whether the margin of error for the estimate is less than 50% of the estimate itself.

    If an area does not have a reliable 2009-2013 5-year, HUD checks whether the area has had a reliable estimate in any of the past 5 years. If so, the most recent reliable estimate is updated by the change in the area's corresponding State metropolitan or non-metropolitan area from the year of the most recent reliable estimate to 2009. This update value becomes the basis for FY2016.

    If an area has not had a reliable estimate in the past 5 years, the estimate State for the area's corresponding metropolitan area (if applicable) or State non-metropolitan area is used as the basis for FY2016.

  2. HUD calculates a recent mover adjustment factor by comparing a 2013 1-year 40th percentile recent mover 2-bedroom rent to the 2009-2013 5-year 40th percentile adjusted standard quality gross rent. If either the recent mover and non-recent mover rent estimates are not reliable, HUD uses the recent mover adjustment for a larger geography. For metropolitan areas, the order of geographies examined is: FMR Area, 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: FMR Area, State Non-Metropolitan Portion, Entire State, and Entire US. The recent mover adjustment factor is floored at one.
  3. HUD calculates the appropriate recent mover adjustment factor between the 5-year data and the 1-year data and applies this to the 5-year base rent estimate.
  4. Rents are calculated as of 2014 using the relevant (regional or local) change in gross rent Consumer Price Index (CPI) from annual 2013 to annual 2014.
  5. All estimates are then inflated from 2014 to FY2016 using a trend factor based on the forecast of gross rent changes through FY2016.
  6. FY2016 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

  1. The following are the 2013 American Community Survey 5-year 2-Bedroom Adjusted Standard Quality Gross Rent estimate and margin of error for Bath County, VA.
    Area ACS2013 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent ACS2013 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent Margin of Error Ratio Result
    Bath County, VA $549 $224 $224 / $549=0.408 0.408 < .5 Use ACS2013 5-Year Bath County, VA 2-Bedroom Adjusted Standard Quality Gross Rent
    Since the ACS2013 Margin of Error Ratio is less than .5, the ACS2013 Bath County, VA value is used for the estimate of 2-Bedroom Adjusted Standard Quality Gross Rent:
    Area ACS2013 Rent
    Bath County, VA $549
  2. A recent mover adjustment factor is applied based on the smallest area of geography which contains Bath County, VA and has an ACS2013 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than .5.
    Area ACS2013 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent ACS2013 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent Margin of Error Ratio Result
    Bath County, VA N/A N/A N/A No ACS2013 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent Produced For Bath County, VA
    Virginia Non-metropolitan Portion $590 $32 0.054 0.054 < .5
    Use ACS2013 1-Year Non-metropolitan Portion 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent

    The smallest area of geography which contains Bath County, VA and has an ACS2013 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than .5 is Virginia Non-metropolitan Portion.

  3. The calculation of the relevant Recent-Mover Adjustment Factor for Bath County, VA is as follows:
    ACS2013 5-Year Area ACS2013 5-Year 40th Percentile 2-Bedroom Adjusted Standard Quality Gross Rent ACS2013 1-Year 40th Percentile 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent
    Virginia Non-metropolitan Portion $582 $590
    Area Ratio Recent-Mover Adjustment Factor
    Bath County, VA $590 / $582
    =1.014    		 1.014 ≥ 1.0 Use calculated Recent-Mover Adjustment Factor of 1.014
  4. The calculation of the relevant CPI Update Factors for Bath County, VA is as follows: HUD updates the 2013 intermediate rent with the ratio of the annual 2014 local or regional CPI to the annual 2013 local or regional CPI to establish rents as of 2014.
    Update Factor Type
    CPI Update Factor 1.0346 Region CPI
  5. The calculation of the Trend Factor is as follows: HUD uses the forecasted change in national gross rents from 2014 to 2016. This makes Fair Market Rents "as of" FY2016. For more information on the calculation of the trend factor, please see here.
    Trend Factor
    1.0457
  6. The FY 2016 2-Bedroom Fair Market Rent for Bath County, VA is calculated as follows:
    Area ACS2013 5-Year Estimate Recent-Mover Adjustment Factor Annual 2013 to 2014 CPI Adjustment Trending 1.0457 to FY2016 FY 2016 2-Bedroom FMR
    Bath County, VA $549 1.014 1.0346 1.0457 $549 * 1.014 * 1.0346 * 1.0457=$602

  7. In keeping with HUD policy, the preliminary FY 2016 FMR is checked to ensure that is does not fall below the state minimum.

    Area Preliminary FY2016 2-Bedroom FMR FY 2016 Virginia State Minimum Final FY2016 2-Bedroom FMR
    Bath County, VA $602 $658 $602 ≤ $658 Use Virginia minimum of $658

Final FY2016 Rents for All Bedroom Sizes for Bath County, VA

The following table shows the Final FY 2016 FMRs by bedroom sizes.

Click on the links in the table to see how the bedroom rents were derived.

Final FY 2016 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
Final FY 2016 FMR $542 $544 $658 $871 $1,018

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.

Permanent link to this page: http://www.huduser.gov/portal/data sets/fmr/fmrs/FY2016_code/2016summary.odn?&year=2016&fmrtype=Final&selection_type=county&fips=5101799999

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Prepared by the Economic and Market Analysis Division, HUD. Technical problems or questions? Contact Us.