The Department of Housing and Urban Development (HUD) announced on October 25 that public housing agencies (PHAs) in an additional 41 metro areas will now be required to apply Small Area Fair Market Rents (SAFMRs) when setting the maximum rent that Housing Choice Vouchers will cover, instead of setting rent maximums for the entire metropolitan area.

Small Area FMRs reflect rents based on zip code, compared with regular Fair Market Rents, which calculate a single “fair” rent standard for a whole metro area. Because they are more granular, requiring the use of SAFMRs allows voucher payments that more accurately reflect the local market and enable voucher holders to choose from a wider range of neighborhoods, at no additional cost to them.

The new requirements impact an additional 440,000 households for a total of 800,000 households, or 45% of families in the Housing Choice Voucher program.

According to HUD’s press release, the change will ensure that a portion of units in every neighborhood are affordable to tenants renting with a voucher – even higher rent neighborhoods with high performing schools and other opportunities.