Efficiency Rent Calculation for Clackamas County

Clackamas County is in Portland-Vancouver-Hillsboro, OR-WA MSA and is assigned the Efficiency FMR for that area. The Efficiency FMR for Portland-Vancouver-Hillsboro, OR-WA MSA is computed as a function of the ratio of the 2010 5-Year Efficiency American Community Survey Rent to the 2010 5-Year 2-Bedroom American Community Survey Rent. This Efficiency Rent Ratio is applied to the Final FY 2013 2-Bedroom FMR to determine the Efficiency FMR.

For Final FY 2013 FMRs the bedroom ratio calculations have been updated from those used in the Final FY 2012 FMR process.

The tables below provide the relevant steps for computing the Final FY 2013 Efficiency FMR:


  1. Check the Margin of Error Ratios for Portland-Vancouver-Hillsboro, OR-WA MSA. If either Margin of Error Ratio is greater than 1 or if there is not sufficient data to calculate the ratio, then the bedroom ratio is determined using data for the smallest geographic area encompassing Portland-Vancouver-Hillsboro, OR-WA MSA for which there is acceptable data.

    Check Margin of Error Ratios for Portland-Vancouver-Hillsboro, OR-WA MSA
    Area 2006-2010 5-Year ACS
    Efficiency Adjusted
    Standard Quality Rent
    Estimate
    2006-2010 5-Year ACS
    Efficiency Adjusted
    Standard Quality Rent
    Margin of Error
    Efficiency
    Margin of Error Ratio
    2006-2010 5-Year ACS
    2-Bedroom Adjusted
    Standard Quality Rent
    Estimate
    2006-2010 5-Year ACS
    2-Bedroom Adjusted
    Standard Quality Rent
    Margin of Error
    2-Bedroom
    Margin of Error Ratio
    Portland-Vancouver-Hillsboro, OR-WA MSA $577 $15 $15 / $577
    =
    0.026
    $799 $5 $5 / $799
    =
    0.006

    The smallest geographic area for which both Margin of Error Ratios can be computed and are less than 1 is Portland-Vancouver-Hillsboro, OR-WA MSA.



  2. The Preliminary Efficiency Rent Ratio for Portland-Vancouver-Hillsboro, OR-WA MSA is caluclated by dividing the 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate for Portland-Vancouver-Hillsboro, OR-WA MSA by the 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate for Portland-Vancouver-Hillsboro, OR-WA MSA.

    Preliminary Computation of Efficiency Rent Ratio for Portland-Vancouver-Hillsboro, OR-WA MSA
    2006-2010 5-Year ACS
    Efficiency Adjusted
    Standard Quality Rent
    Estimate
    2006-2010 5-Year ACS
    2-Bedroom Adjusted
    Standard Quality Rent
    Estimate
    Preliminary Efficiency
    Rent Ratio
    $577 $799 $577 / $799
    =
    0.722


  3. The Preliminary Efficiency Rent Ratio is checked against the caps and floors for that bedroom size. The floor is set at the 10th percentile of the national distribution of geographic areas with at least 100 2006-2010 5-Year ACS Adjusted Standard Quality observations, while the cap is set at the 90th percentile of the same distribution.

    Check Caps and Floors
    Portland-Vancouver-Hillsboro, OR-WA MSA
    Preliminary Efficiency
    Rent Ratio
    Efficiency
    Rent Ratio Floor
    Efficiency
    Rent Ratio Cap
    Portland-Vancouver-Hillsboro, OR-WA MSA
    Preliminary Efficiency
    Rent Ratio
    0.722 0.595 0.808 Ratio of 0.722 is subject to
    neither caps nor floors


  4. In order to ensure that Efficiency Fair Market Rents are not greater than the corresponding 1-Bedroom Fair Market Rent, the Efficiency Rent Ratio must be at least 0.005 less than the corresponding 1-Bedroom Rent Ratio.

    Efficiency Rent Ratio Consistency Check
    Portland-Vancouver-Hillsboro, OR-WA MSA
    Preliminary Efficiency Rent Ratio
    Portland-Vancouver-Hillsboro, OR-WA MSA
    1-Bedroom Rent Ratio
    Efficiency
    Rent Ratio Comparison
    0.722 0.840 0.722 <= (0.840 - 0.005)
    0.722 <= 0.835

    Keep efficiency preliminary rent ratio


  5. Multiply the Efficiency Rent Ratio by the 2-Bedroom Fair Market Rent to determine the Efficiency Fair Market Rent for Portland-Vancouver-Hillsboro, OR-WA MSA.

    Final Computation of Efficiency FMR for Portland-Vancouver-Hillsboro, OR-WA MSA
    Final Efficiency
    Rent Ratio
    Final FY 2013
    2-Bedroom FMR
    Final FY 2013
    Efficiency FMR
    0.722 $912 $912 * 0.722 = $659


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