Wednesday, March 9, 2011

Yep, FMRs don't consider rent control

Earlier today I wrote a post expressing slightly uncertain worries that HUD's calculation of Fair Market Rents doesn't consider rent control.

Sara Shortt, executive director at the Housing Rights Committee of San Francisco, confirms this really is a problem. Yes, in towns with rent control like San Francisco and New York City, the average rent being paid by all tenants (who include long-term rent-controlled tenants) is a lot lower than the average new rent available to a new tenant. However, HUD's calculation of "Fair Market Rents" is derived from census data that doesn't consider this difference.

Sara says in email, "This whole thing has been a huge issue for San Francisco but it's increasingly hard to address nationally because in some other cities, such as Baltimore, the problem is starting to be that FMRs are too high or at least just fine. Often it's San Francisco and New York City where advocates are concerned that FMR calculations are screwing us."

and

"As for the rent control issue, if I understand your question... Yes, it skews the market surveys which HUD then bases its FMR calculations on, when you don't account for rent control! It's apples and oranges."

In fact, back in 2005, she was one of several San Francisco area housing advocates who wrote to HUD complaining that the FMRs for our area were unfair, and were in some cases forcing low-income tenants to pay hundreds of dollars more out of pocket per month.

[UPDATE: Looking back over my files, I'm pretty sure I wrote up that 2005 protest letter for Affordable Housing Finance magazine at the time. So really the news is, it's a pity so little has changed in six years.]

So, yes, if you agree this doesn't make sense, it may be worth writing to HUD in answer to today's request for comments on FMR methodology.

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