In the Housing Choice Voucher (HCV) program, subsidy levels are based on Fair Market Rents (FMRs) that are set for each metropolitan area (or non-metropolitan county) and vary by unit size (number of bedrooms). Public Housing Agencies (PHAs) generally have only a limited ability to adjust the maximum subsidy level to reflect differences in rent levels between neighborhoods within their jurisdiction. Rents tend to be higher in certain neighborhoods than others, and neighborhoods with higher rents tend to have better access to amenities that provide opportunity. For this reason, using a single metropolitan-wide standard as the basis for setting the maximum subsidy available to HCV holders makes it difficult for them to access housing located in areas of opportunity. The Small Area Fair Market Rent (SAFMR) demonstration was developed to evaluate if more local rents (at the ZIP Code) could provide an effective means for HCV holders to move into higher-opportunity areas without significantly raising overall subsidy costs. To test how SAFMRs may potentially affect a range of public housing agency (PHA) types, HUD selected five PHAs for the demonstration whose conditions differed across various economic and demographic characteristics. The five demonstration PHAs are the Housing Authority of the City of Laredo (Texas), the Town of Mamaroneck Housing Authority (New York), the Chattanooga Housing Authority (Tennessee), the Housing Authority of Cook County (Illinois), and the City of Long Beach Housing Authority (California). In addition to these five PHAs that agreed to participate in the SAFMR demonstration, this evaluation study also includes two (of 12) PHAs in the Dallas (Texas) metropolitan area. All metropolitan Dallas PHAs have been using SAFMRs under a legal settlement. The two included in the study are the Housing Authority of the City of Dallas, the largest PHA operating in the Dallas metropolitan area, and the Housing Authority of Plano, which serves a smaller number of HCV holders and whose HCV holders are less likely than those of the Dallas PHA to be a racial or ethnic minority. This interim report examines the potential access to opportunity, the actual access to opportunity and the costs and rents associated with the implementation of SAFMRs.

Small Area Fair Market Rent Demonstration Evaluation: Final Report