Rental Housing:

HUD's Methods of Determining Fair Market Rents

RCED-86-209: Published: Aug 22, 1986. Publicly Released: Aug 26, 1986.

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In response to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) method of determining fair market rents for its rental assistance program.

GAO found that: (1) HUD establishes the base level of rent by using the census, the American Housing Survey, and the consumer price index; (2) because HUD recognizes that limitations exist in its data, its procedures provide for appeals to improve its rent estimates; (3) HUD headquarters and field offices may take different actions regarding appeals that could result in disparities in the levels of rent allowed for new and existing units; and (4) HUD does not maintain data concerning possible disparities in allowed rent levels, such as exist in Suffolk County, New York.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: HUD determined: (1) the appropriate rent levels for Suffolk County; and (2) that significant disparities do not exist in other locations. GAO will assess the appropriateness of HUD actions in an ongoing GAO evaluation of fair market rents in the New York City area, being done at the request of Senator Moynihan.

    Recommendation: The Secretary, HUD, should determine: (1) the appropriate levels of rent for new and existing units in Suffolk County, which will resolve the rent disparities; and (2) whether similar rent disparities exist in other areas of the country, and take actions, as appropriate, to resolve them and to minimize their recurrence.

    Agency Affected: Department of Housing and Urban Development


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