Final FY 2009 Fair Market Rent Documentation System
The Final FY 2009 Hennepin County FMRs for All Bedroom Sizes
The following table shows the Final FY 2009 FMRs by unit bedrooms.
Final FY 2009 FMRs By Unit Bedrooms
Efficiency
One-Bedroom
Two-Bedroom
Three-Bedroom
Four-Bedroom
Final FY 2009 FMR
$610
$719
$873
$1,143
$1,284
The remainder of this page provides complete documentation of the development of the
Final FY 2009 Fair Market Rents (FMRs) for
Hennepin County, Minnesota.
This page provides a summary of how the Final FY 2009 FMRs
were developed and updated starting with the formation of the FY 2009 FMR Areas from the
metropolitan Core-Based Statistical Areas (CBSAs) as established by the Office of Management and Budget
and incorporating newly available 2006 American Community Survey (ACS) Data.
FY 2009 FMRs include information from local Random Digit Dialing (RDD) surveys conducted during the first
quarter of 2008. Aspects of the derivation of Final FY 2009 rents exlusive to FY 2009 are made explicit in the following text.
Aspects unchanged from FY 2008 can be reviewed by clicking on the associated link.
FY 2009 FMR Area Geography
FY 2009 FMR Areas Follow FY 2008 Area Definitions with Modifications
FY 2009 FMR areas continue to use the revised Office of Management and Budget (OMB)
area definitions that were first issued in 2003 along with HUD defined Metropolitan areas (HMFAs) as described in the
FY 2008 FMR documentation which can be found at (Hennepin County FY 2008 FMR Documentation system).
FY 2009 areas reflect changes made to metropolitan areas by OMB through November 20, 2007 as published in OMB bulletin 08-01.
Hennepin County is in the new Minneapolis-St. Paul-Bloomington, MN-WI MSA, so all information presented here applies to all of the Minneapolis-St. Paul-Bloomington, MN-WI MSA.
Minneapolis-St. Paul-Bloomington, MN-WI MSA is made up of the following:
Anoka County, MN
; Carver County, MN
; Chisago County, MN
; Dakota County, MN
; Hennepin County, MN
; Isanti County, MN
; Ramsey County, MN
; Scott County, MN
; Sherburne County, MN
; Washington County, MN
; Wright County, MN
; Pierce County, WI
; and St. Croix County, WI
.
Hennepin County FMR Area Derivation (RECAP)
Minneapolis-St. Paul-Bloomington, MN-WI MSA is entirely within the old Minneapolis--St. Paul, MN--WI MSA;
therefore, no evaluations were made with regard to 2000 Census base rents or
2000 Census Median Family Incomes.
Final FY 2009 FMRs
HUD continues its use of ACS data in FY 2009, by building upon the FY 2008 Final FMRs (Hennepin County FY 2008 FMR Documentation system).
As in FY 2008, HUD uses 2006 ACS data in four different ways according to how many two-bedroom standard quality and recent mover sample cases are available in the FMR area or its
Core-Based Statistical Area (CBSA). ACS-1 through ACS-4 areas are described in detail here.
In most cases, Final FY 2009 FMRs are based on changes in rents measured by differences in ACS data collected in 2005 and 2006 and updated
CPI rent and utility inflation indexes. Depending on the size of the ACS survey sample, State or Local ACS data is used to update a June 2005-calculated
gross rent from the Final FY 2008 FMRs (Hennepin County FY 2008 FMR Documentation system)
to June 2006. In some cases, as described below, the 2006 ACS Survey result is used instead of a 2005 to 2006 updated value. The ACS updated 2006
rent is then adjusted with CPI inflation factors that measure changes from mid-2006 though year end 2007 and 1.25 years of trending to arrive at
Final FY 2009 FMRs. RDD survey results are applied where available and appropriate.
Minneapolis-St. Paul-Bloomington, MN-WI MSA is an ACS-1 area.
ACS-1 areas are FMR Areas which have at least 200 sample cases of two-bedroom standard quality rents.
ACS-1 areas may be MSAs, subareas that are assigned CBSA base rents, subareas that have their own base rents, or
large nonmetropolitan counties.
In ACS-1 FMR areas, the update factor used to generate the June 2006 value is the ratio of the 2006 ACS two-bedroom standard quality
rent to the 2005 ACS two-bedroom standard quality rent for the FMR Area.
Generating a June, 2005 Rent from FY 2008 Final FMRs
In order to apply 2005 to 2006 ACS changes to FMRs (ACS data are assumed to be as of June of their respective survey years), FY 2008 FMRs are first
deflated to mid-2005 values by removing the CPI inflation and trend factors used to update mid-2005 values to April, 2008 inherint in the Final FY
2008 FMRs. (Hennepin County FY 2008 FMR Documentation system.)
Rent2005
=
Final FY 2008 Rent (CPI Change2005).5 x (CPI Change2006) x (Trend)
Rent2005
=
$848 (1.0040).5 x (0.9960) x (1.0376)
Rent2005
=
$848 (1.0020) x (0.9960) x (1.0376)
Rent2005
=
$848 (0.9980) x (1.0376)
Rent2005
=
$848 1.0356
Rent2005 = $819
The 2005 to 2006 Update Factor using 2006 ACS Data
As stated earlier, Minneapolis-St. Paul-Bloomington, MN-WI MSA is an ACS-1 area.
ACS-1 areas are areas that have at least 200 ACS standard quality survey results in both the 2005 and 2006 surveys.
The 2006 ACS data contains enough Recent Mover observations for Minneapolis-St. Paul-Bloomington, MN-WI MSA to evaluate whether the 2006 Updated rent is statistically
different from the survey result. As will be shown in the table below, the 2006 Updated rent is not statistically different from the 2006 Recent Mover
ACS Survey result for Minneapolis-St. Paul-Bloomington, MN-WI MSA.
The 2005 and 2006 ACS results for Minneapolis-St. Paul-Bloomington, MN-WI MSA are used in the calculation of the 2005 to 2006 update factor.
The 2005 ACS result is $854
and the 2006 ACS result is $858.
This leads to an update factor of:
UpdateFactor05-06 = $858 / $854
UpdateFactor05-06 = 1.0047
Therefore, the 2006 Updated intermediate rent for Minneapolis-St. Paul-Bloomington, MN-WI MSA is:
2006 ACS Recent Mover Survey Result Evaluation for Minneapolis-St. Paul-Bloomington, MN-WI MSA
Rent2005
Local SQ Update Factor
Local SQ Updated Rent
2006 ACS Local Recent Mover Rent
2006 ACS Survey Confidence Interval
Is the Local SQ-Updated Rent Outside The Confidence Interval of RM Rent?
NO Recent Mover Rent is not statistically different from updated rent
SQ updated rent
$823
NOTE: The update factor shown in the calculation above may not match exactly the 2005 - 2006 update factor shown throughout the demonstration
due to the rounding of Fair Market Rents to whole dollar amounts
The 2006-to-2009 Update Factors
HUD updates the 2006 itermediate rent (as of June 2006) with the appropriate CPI change (local or regional) to establish rents as of December 2007.
HUD then applies additional trending or results of Random Digit Dialing (RDD) surveys to update rents to April, 2009, the mid-point of FY 2009.
The Minneapolis-St. Paul-Bloomington, MN-WI MSA has the following 2006-to-2009 Update Factor:
Update Factors used between June 2005 and April 2008
The Final FY 2009 2-Bedroom FMR is simply the product of the
2005 Rent from deflated from FINAL FY 2008 FMRs, the 2005-to-2006 Update Factor and the 2006-to-2009 Update Factors for Minneapolis-St. Paul-Bloomington, MN-WI MSA as determined above:
Minneapolis-St. Paul-Bloomington, MN-WI MSA Final FY 2009 FMR
= $819 x 1.0047 x 1.0229 x 1.0376
= $823 x 1.0229 x 1.0376
= $842 x 1.0376
= $874
NOTE: Due to rounding, the FMR shown in this demonstration differs from the actual published 2 bedroom FMR shown below
The Final FY 2009 Rents for All Bedroom Sizes
The following table shows the
Final FY 2009 FMRs by unit bedrooms.
The FMRs for units
with different numbers of bedrooms are computed from the ratio of the
2005 Revised Final FMRs (based on 2000 Decennial Census Data) for the different unit sizes to the
2005 2-Bedroom Revised Final FMRs. These Rent Ratios are applied to the
Final FY 2009 2-Bedroom FMR
to determine the Final FY 2009 FMRs
for the different size units.
Click on the links in the table to see how the bedroom rents were derived.
The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom.
For example, the FMR for a five bedroom unit is 1.15 times the four bedroom FMR, and the FMR for a six bedroom unit is 1.30 times the four bedroom
FMR. FMRs for single-room occupancy units are 0.75 times the zero bedroom (efficiency) FMR.
