Proposed FY 2011 Fair Market Rent Documentation System

The Proposed FY 2011 Portland-Vancouver-Hillsboro, OR-WA MSA FMRs for All Bedroom Sizes

The following table shows the Proposed FY 2011 FMRs by unit bedrooms.

Proposed FY 2011 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
Proposed FY 2011 FMR $675 $783 $905 $1,318 $1,583
Final FY 2010 FMR $626 $726 $839 $1,222 $1,467
Percentage Change 7.8% 7.9% 7.9% 7.9% 7.9%

The remainder of this page provides complete documentation of the development of the Proposed FY 2011 Fair Market Rents (FMRs) for Portland-Vancouver-Hillsboro, OR-WA MSA. This page provides a summary and details of how the Proposed FY 2011 FMRs were developed and updated starting with the formation of the FY 2011 FMR Areas from the metropolitan Core-Based Statistical Areas (CBSAs) as established by the Office of Management and Budget and incorporating newly available 2008 one and three year American Community Survey (ACS) Data. FY 2011 FMRs include information from local Random Digit Dialing (RDD) surveys conducted through 2009. Aspects of the derivation of Proposed FY 2011 rents exclusive to FY 2011 are made explicit in the following text. Aspects unchanged from FY 2010 can be reviewed by clicking on the associated link.

The following defines a summary of the steps taken to generate the Proposed FY 2011 FMR:

Portland-Vancouver-Hillsboro, OR-WA MSA Proposed FY 2011 FMR Calculation Summary
Process Step Step Result
1. Begin with Final FY 2010 2 Bedroom FMR $839
2. Remove Trending and CPI Updates from Final FY 2010 2 Bedroom FMR $758
3. Determine Update Factor through 2008 1.0639
4. Apply Update Factor (#2 x #3) $806
5. Evaluate ACS Survey Result and Determine 2008 Rent $831
6a. Calculate Update Factors to 2009 and
6b. Trend Factor to April 1, 2011
1.0494
1.0376
7. Apply Update Factor to 2009 and Trend to Get Proposed FY 2011 2BR FMR
(#5 x #6a x #6b)
$905

FY 2011 FMR Area Geography

FY 2011 FMR Areas Follow FY 2010 Area Definitions with Modifications

FY 2011 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 2009 FMR documentation which can be found at (Portland-Vancouver-Hillsboro, OR-WA MSA FY 2010 FMR Documentation system). FY 2011 areas reflect changes made to metropolitan areas by OMB through December 1, 2009 as published in OMB bulletin 10-02.

Portland-Vancouver-Hillsboro, OR-WA MSA is made up of the following:

Clackamas County, OR ; Columbia County, OR ; Multnomah County, OR ; Washington County, OR ; Yamhill County, OR ; Clark County, WA ; and Skamania County, WA .

Portland-Vancouver-Hillsboro, OR-WA MSA FMR Area Derivation (RECAP)

The table below displays the parts of the new Portland-Vancouver-Hillsboro, OR-WA MSA that were in different FY 2005 FMR areas.

Parts of Portland-Vancouver-Hillsboro, OR-WA MSA from Different FY 2005 FMR Areas
FY 2005 FMR Area Components of Portland-Vancouver-Hillsboro, OR-WA MSA in FY 2005 FMR Area Sub-Area Created?
Portland--Vancouver, OR--WA PMSA Clackamas County, OR; Columbia County, OR; Multnomah County, OR; Washington County, OR; Yamhill County, OR; Clark County, WA No
Skamania County, WA Skamania County, WA No


Proposed FY 2011 FMRs

HUD continues its use of ACS data in FY 2011, by building upon the FY 2010 Final FMRs (Portland-Vancouver-Hillsboro, OR-WA MSA FY 2010 FMR Documentation system). As in FY 2010, HUD uses 2008 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, Proposed FY 2011 FMRs are based on changes in rents measured by differences in ACS data collected in either 2006 or 2007 and 2008 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 2007-calculated gross rent from the Final FY 2010 FMRs (Portland-Vancouver-Hillsboro, OR-WA MSA FY 2010 FMR Documentation system) to June 2008. In some cases, as described below, the 2008 ACS Survey result is used instead of the updated value. The ACS updated 2008 rent is then adjusted with CPI inflation factors that measure changes from mid-2008 though year end 2009 and 1.25 years of trending to arrive at Proposed FY 2011 FMRs. RDD survey results are applied where available and appropriate.

Portland-Vancouver-Hillsboro, OR-WA MSA is an ACS-4 area.

ACS-4 areas are FMR Areas that have at least 200 sample cases of two-bedroom recent mover rents where the recent mover estimate is statistically different from the standard quality updated rent. ACS-4 areas may be entire MSAs, subareas assigned CBSA base rents, other subareas, or large nonmetropolitan counties. By definition, these areas are a subset of ACS-1 areas.

In ACS-4 FMR areas, the local 2008 ACS recent mover rent becomes a new base rent for 2008 if the updated 2008 ACS-generated rent is outside its 90 percent confidence interval and the recent mover rent is greater than the local standard quality rent. This means the 2008 ACS is used to replace the updated 2008 base rent with a 2008 local ACS base rent. If the statistical criteria are met and the standard quality rent is higher than the recent mover rent, the standard quality rent estimate is used.


Generating a June, 2007 Rent from FY 2010 Final FMRs

In order to apply changes in ACS surveys to FMRs (ACS data are assumed to be as of June of their respective survey years), FY 2010 FMRs are first deflated to mid-2007 values by removing the CPI inflation and trend factors used to update mid-2007 values to April, 2010 inherent in the Final FY 2010 FMRs.(Portland-Vancouver-Hillsboro, OR-WA MSA FY 2010 FMR Documentation system.)

Rent2007=
Final FY 2010 Rent

(CPI Change2007).5 * (CPI Change2008) * (Trend)

Rent2007=
$839

(1.0520).5 * (1.04) * (1.0376)

Rent2007=
$839

(1.0257) * (1.04) * (1.0376)

Rent2007=
$839

(1.0667) * (1.0376)

Rent2007=
$839

1.1068

Rent2007 = $758

The Updated Rent using 2008 ACS Data

As stated earlier, Portland-Vancouver-Hillsboro, OR-WA MSA is an ACS-4 area. Portland-Vancouver-Hillsboro, OR-WA MSA is large enough to have a 2008 ACS survey that contains at least 200 Recent Mover cases. Therefore, HUD compares the 2007 to 2008 updated rent using the change in Standard Quality Rents from the 2007 to the 2008 ACS for the Portland-Vancouver-Hillsboro, OR-WA MSA to the 2008 ACS Recent Mover survey result. If the 2008 updated rent using the standard quality update factor is outside the confidence interval of the recent mover rent and the recent mover rent is larger than the local standard quality rent, then the 2008 intermediate rent is set at the 2008 ACS recent mover survey result. If the 2008 recent mover rent is smaller than the 2008 standard quality rent for Portland-Vancouver-Hillsboro, OR-WA MSA then the 2008 intermediate rent is set at the 2008 ACS standard quality survey result. Otherwise, the 2008 intermediate rent is set using the standard quality update factor calculated for Portland-Vancouver-Hillsboro, OR-WA MSA.

The 2007 to 2008 standard quality update factor for Portland-Vancouver-Hillsboro, OR-WA MSA is 1.0639. The 2007 to 2008 updated rent for comparison is $758 x 1.0639 = $806.

The 2008 ACS Recent Mover survey result for Portland-Vancouver-Hillsboro, OR-WA MSA is $831 with a survey error of ±$18.

The following table summarizes the decision criteria for using the 2008 ACS survey rent result for Portland-Vancouver-Hillsboro, OR-WA MSA:

2008 Local ACS Survey Rent for Portland-Vancouver-Hillsboro, OR-WA MSA
Rent2007 Local SQ Update Factor SQ Updated 2008 Rent 2008 ACS Survey Local Recent Mover Rent 2008 ACS Survey Confidence Interval Is SQ-updated Local Rent outside confidence Interval of RM Rent? ACS Survey Local Standard Quality Rent 2008 Basis 2008 Intermediate Rent
$758 1.0639 $806 $831 $813-$849 YES - survey estimate is statistically significant and is Higher than updated rent $794 - Recent Mover Rent Higher 2008 ACS Survey Local Recent Mover Result $831

This yields an effective change factor for Portland-Vancouver-Hillsboro, OR-WA MSA of $831 / $758 = 1.0963

NOTE: The update factor shown in the calculation above may not match exactly the 2008 update factor shown throughout the demonstration due to the rounding of Fair Market Rents to whole dollar amounts


The 2008-to-2011 Update Factors

HUD updates the 2008 intermediate rent (as of June 2008) with the appropriate CPI change (local or regional) to establish rents as of December 2009. HUD then applies additional trending or results of Random Digit Dialing (RDD) surveys to update rents to April, 2011, the mid-point of FY 2011.

The Portland-Vancouver-Hillsboro, OR-WA MSA has the following 2008-to-2011 Update Factor:

Update Factors used between June 2008 and April 2011
Year Update Factor Type
6/2008 to 2009 1.0494 Local CPI Factor
2009 to 2011 1.0376 Trend Factor
3% for 1.25 Years
=1.031.25

Proposed FY 2011 2-Bedroom FMR

The Proposed FY 2011 2-Bedroom FMR is simply the product of the 2007 Rent from deflated from final FY 2010 FMRs, the 2008 update factor and the 2008-to-2011 Update Factors for Portland-Vancouver-Hillsboro, OR-WA MSA as determined above:

Portland-Vancouver-Hillsboro, OR-WA MSA Proposed FY 2011 FMR

= $758 * 1.0963 * 1.0494 * 1.0376

= $831 * 1.0494 * 1.0376

= $872 * 1.0376

= $905


The Proposed FY 2011 Rents for All Bedroom Sizes

The following table shows the Proposed FY 2011 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 Proposed FY 2011 2-Bedroom FMR to determine the Proposed FY 2011 FMRs for the different size units.

Click on the links in the table to see how the bedroom rents were derived.

Proposed FY 2011 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
Proposed FY 2011 FMR $675 $783 $905 $1,318 $1,583

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.



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