National fair rent update to help affordable housing market

National fair rent update to help affordable housing market
Published: Aug. 31, 2023 at 7:02 AM AKDT
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ANCHORAGE, Alaska (KTUU) - The U.S. Department of Housing and Urban Development announced an additional $113 million in Housing Choice Vouchers to assist families in meeting rising rent costs in 36 states.

While Alaska is not one of those states getting additional financial help, the Housing Choice Vouchers allocate specific amounts of money to some states that need it most, in order to help families afford rental units in the private sector.

The agency also announced its annual increases in fair market rates, which determine the value of housing assistance vouchers.

For the 2024 fiscal year, Anchorage’s fair market rate will increase 7.6%. In 2023, the rate was raised by 8.3%. Fair market rates in Kenai, which saw an increase of 10% in 2023, will increase by 10.3%.

Compared on a national scale, the 2010s decade saw a nationwide average annual increase of around 4%, according to the department.

Fair market rate is defined as an estimate of “gross rent” — defined as the combined cost of rent and utilities — for 40% of rental units in a given area. Fair market rates are utilized by HUD to determine the maximum value of housing vouchers.

Rates are adjusted annually, and the changes for the 2024 fiscal year go into effect on Oct. 1, 2023. The adjustment means more housing units will fall within the maximum rental limits for the voucher program, which should allow more households to qualify for voucher assistance.

This year’s estimation will also include data gathered from private real estate companies like Zillow and Apartment List, which can display rent prices in real-time and utilizing them in determining FMR is intended to keep housing voucher values in pace with the private rental market.

“Increases in Fair Market Rents help families find homes of their choosing in competitive housing markets,” said Solomon Greene, Principal Deputy Assistant Secretary for Policy Development and Research. “This year we are continuing improvements we made last year to how we calculate Fair Market Rents to make sure they are keeping up with rising rents. We’ve already seen these improvements help more voucher holders find housing that is affordable, and we expect these new updates will help even more families.”