Working Paper: How Well do Section 8 FMRs Match the Cost of Rental Housing

The FMR (Fair Market Rent) idea was built into the Section 8 lower income rental assistance program to provide a means to reflect variations in the rental cost of comparable housing in different market areas and also rental cost differences within a market area due to size and quality variations in housing units. Does the FMR schedule for the Section 8 Existing Housing Program parallel the actual differences in rents? The purpose of this paper is to provide an answer to this question by comparing the FMR schedule with an index of rental housing costs developed at the Urban Institute (UI) for 39 different SMSAs (Standard Metropolitan Statistical Areas).