WASHINGTON - Today, the U.S. Department of Housing and Urban Development (HUD) announced action that will cover expanded housing and neighborhood choices for more than 800,000 total households using Housing Choice Vouchers to find and secure affordable housing. Today’s action requires an additional 41 metropolitan areas that cover more than 440,000 housing vouchers to use Small Area Fair Market Rents (SAFMR) under HUD’s 2016 Small Area Fair Market Rent Final Rule, joining 24 metropolitan areas that covered almost 370,000 vouchers and bringing the total number of metropolitan areas covered by the rule to 65 covering more than 800,000 households (or 45% of families in the Housing Choice Voucher program). This action ensures that a portion of units in every neighborhood are affordable to tenants renting with a voucher, including higher-rent neighborhoods with high performing schools and other life-enriching opportunities. Find the notice, pending publication in the Federal Register, linked here.

Small Area Fair Market Rents allow Public Housing Agencies (PHAs) to set the maximum rent that housing vouchers will cover at the ZIP code level instead of the entire metropolitan area. This policy allows voucher payments that more accurately reflect the local market and enable voucher holders to choose from a wider range of neighborhoods that suit their and their family's preferences and meet their needs, at no additional cost to them.

“Today’s action helps realize a dream that has been deferred for too long. By expanding the housing choices of 800,000 households of modest means, HUD is increasing opportunities and working to break down longstanding, harmful systems of segregation,” said Secretary Marcia L. Fudge. “While the housing crisis remains a challenge, implementing innovative solutions is crucial and will foster a more sustainable future within our communities.”

Increasing choice for households who rely on Housing Choice Vouchers can positively impact families’ health and well-being. For instance, when children in low-income families grow up in low-poverty, well-resourced neighborhoods, they are much more likely to attend college and earn more as young adults. And there's evidence that PHAs that have used SAFMRs in the past expand housing choices for families, allowing them to use their vouchers in neighborhoods with lower poverty rates and better performing schools.

“HUD is opening doors for hardworking people of modest incomes who rely on our assistance,” said Richard J. Monocchio, Principal Deputy Assistant Secretary for Public and Indian Housing. “This is the largest expansion of voucher choice ever and HUD looks forward to working with public housing authorities to implement a change that will be life changing for their residents. In addition to required metropolitan areas, HUD encourages all public housing authorities to review the available SAFMRs for use and implementation.”

While 65 metropolitan areas will be required to use Small Area Fair Market Rents to calculate rental assistance, HUD calculates and publishes Small Area Fair Market Rents for all metropolitan areas, which Public Housing Agencies can voluntarily adopt. Under the 2016 rule, PHAs in 24 metropolitan areas were required to use SAFMRs to administer vouchers. Since then, additional PHAs have voluntarily adopted SAFMRs or are utilizing SAFMRs as exception payment standards to increase neighborhood choice for their voucher families.

“This action benefits families and communities by giving families more choices and supporting more inclusive communities,” said Solomon Greene, Principal Deputy Assistant Secretary for Policy Development and Research. “A growing body of research shows that neighborhoods have a strong impact on families’ health, economic opportunity, and well-being. We know that neighborhoods matter for upward mobility, and this announcement helps ensure that more families can use their vouchers in neighborhoods that meet their families’ needs.”

Expanding the use of Small Area Fair Market Rents is a key step for HUD in its continued work to expand choices and opportunities for families and undoing years of harmful racial and economic segregation.

“With this action HUD is taking an additional step to address decades of harmful economic and racial segregation,” said Demetria McCain, Principal Deputy Assistant Secretary for Fair Housing and Equal Opportunity. “We are not only actualizing HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all, but we’re helping families realize their goals by increasing choice and breaking down barriers to low poverty well-resourced communities.”

To ensure that Public Housing Agencies (PHAs) have sufficient time to prepare to use Small Area Fair Market Rents, the agencies within the 41 new metropolitan areas will have 15 months to implement the changes. The notice is effective October 1, 2024; PHAs will have until January 1, 2025 to align their payment standards with the notice. Households that use Housing Choice Vouchers for rental assistance can start speaking to their Public Housing agencies housing specialists now to inquire how this change could impact them.

Find the list of required metropolitan areas here.

Households that rely on Housing Choice Vouchers can find frequently asked questions about this policy change here. Owners who participate in the Housing Choice Voucher program can frequently asked questions about this policy change here.

Find more information about Small Area FMRs at https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html. The final Small Area FMRs rule is available at https://www.huduser.gov/portal/datasets/fmr/fmr2016f/SAFMR-Final-Rule.pdf.