Tuesday, February 2, 2016

Portland Metro Gets Unprecedented 28% Annual Increase in HUD Fair Market Rents for 2 BR Vouchers, Thanks to Locally Paid Survey of 11,000 Households.

HUD has agreed to a unprecedented 28% increase in the FY 2016 PDX 2 BR FMR to $1,208, instead of the previously published 8.7% increase to $1,026.  The highest prior 2 BR FMR annual increase for Portland since 1983 was 8.8% in 2000. 

HUD's announcement in the Public Inspection Federal Register is HERE

At $1.523 the Seattle 2 BR FMR is still substantially higher than Portland's 2 BR FMR.

The HUD action was prompted by the submission of a contracted survey from Washington State University of some 11,000 households conducted from Oct 20-Dec 8th 2015. That survey was funded by 6 Portland metro area housing authorities and the Portland Housing Bureau. Kudos to those agencies for initiating and funding this study.

New vs Old FMR Comparisons, Impact on Payment Standards:
A comparison of the previously approved FY 2016 FMR and the newly approved FMR's are in the table pasted at the bottom of this post. Since FY 2014 the 2 year increase in the PDX 2 BR FMR is 31%/$264-- that is more than the 13 year 2 BR PDX FMR increase of 29.9% /$210 per month from 2000-2013. [PDX FMR history is in one of the worksheets in the Excel file in my prior FMR post

Minimum Payment Standard Impacts.
Now that a new FMR has been adopted by HUD, PDX area housing authorities will be reviewing their payment standards to stay within a  range of 90% to 110% of the new FMR's. 

This means that in the 7 county Portland metro area [Clackamas, Clark, Columbia, Multnomah, Skamania, Washington, and Yamhill) the lowest 2 BR payment standard will be $1,087. ( 90% of $1,208). That would be an increase of $164 from the current [FY 2016] lowest permissible payment standard of $923 ($1,087-$923=$164). Since the HUD FMR FY 2016 original publication did not occur until late December it is likely that PHA's are still using payment standards based on the FY 2015 FMR's, so the ACTUAL increase in the lowest permissable 2 BR payment standard could be as high as $238. (see last section of table pasted below)

Home Forward for Multnomah County has special MTW rent setting authority that allows them to go up to 120% of the FMR and they will be reviewing and revising their zip code level payment standards now that the new FMR has been published by HUD. I anticipate/speculate that Home Forward will revise those standards at their March board meeting.

On a unit by unit basis note that vouchers are also subject to a rent reasonableness test.

Housing Choice and Families Served Impacts

Coupled with source of income legislation from last year revised PDX payment standards have the potential to expand the choice of housing available to voucher families. However, because HUD funding is unlikely to increase to cover the increased costs that higher payment standards will require, it seems inevitable that the number of families served by the voucher program will decline. This failure to provide funding to match increased costs is one of the weaknesses of what is supposed to be a "market based" program.

Originally created and posted on the Oregon Housing Blog.

1 comment:

  1. Congrats to those who funded the study! It would be nice if Linn & Benton counties would do the same.