Since the primary purpose of FMRs is to establish maximum subsidies for HUD's Housing Choice Voucher Program lower FMR limits could affect thousands of low-income families across the state who depend on government subsidies to pay rent, prompting affordable housing advocates to call for public support in an effort to block the change.
A letter to the regulations division of the office of general counsel at the Department of Housing and Urban Development signed by co-chairs of the New York Housing Conference, Sydelle Knepper and Carol Lamberg, warns about the consequences.
“These large, unpredictable swings in local FMRs will make many programs very difficult to manage and under the Housing Choice Voucher program, it will severely limit or remove the opportunity for choice for many New Yorkers in need,” they wrote, placing “additional financial burdens on needy households and accommodating property owners.”
HUD released its fiscal year 2013 list of proposed FMRs earlier in August. If approved next year FMRs in 59 of the 62 New York State counties “will experience a precipitous drop” particularly for smaller units. Overall, up to 27 counties will experience a downward adjustment in three or more categories.
According to these insiders, “a big part of the problem” is how HUD determines FMR values.
FMRs are calculated based on the Census Bureau's American Community Survey, a formula “strongly criticized” for being very complex. Furthermore, according to NHC, it has been sent to only 2.5% of homes each year and “requires an average of 38 minutes per household to review instructions and answer questions.”
At this rate, they warn, while the typical American would respond to the survey about twice in their lifetime, historically Americans with most to gain from the survey typically respond at lower rates. Plus, ACS estimates allegedly have exhibited “significant margins of error.”
Hence, it is not prudent for HUD “to make policy and budgeting decisions based on data obtained from such a small sample size and information that is so unreliable,” the letter notes.
Maximum rents for new project-based voucher deals cannot exceed 110% of FMR. For existing projects rents will be impacted if the FMR reduction is greater than 5%.
Nassau and Suffolk counties “are particularly hard hit with substantial reductions for all apartment sizes,” including a $219 reduction in studio-size apartments.
In the New York metropolitan area, which includes Westchester, Rockland and Putnam counties, compared to last year the proposed rent for a one-bedroom decreased, remained the same for a studio and increased for larger apartments.
Only Dutchess, Jefferson and Orange counties would receive increases in all categories.
NYHC is calling for urgent action before the public comment deadline expires on Sept. 4.
