How changes to Fair Market Rent affects access to affordable housing for extremely low-income renters

<p></p> <p>Housing Choice Vouchers are a critical source of funding for North Carolina’s lowest income renters to access affordable housing. As of 2023, about 72,000 North Carolina renters use vouchers to subsidize the cost of rent and utilities. Of those renters, 73% are extremely low-income, earning less than 30% of the local area median income.[1] The program works by requiring voucher holders to pay a third of their income, while HUD covers the remaining portion of the housing costs.</p> <p>Landlords can choose to accept vouchers, which includes regular inspections to ensure the quality of the units and other administrative demands. Landlord participation in the voucher program has declined both nationally and in North Carolina from around 90% in 2018 to 80% in 2024.</p> <p>Some surveys suggest that one reason why landlords may be deterred from accepting vouchers is because they could lease units to non-voucher holders at rents that exceed the maximum subsidy covered by a voucher payment.</p> <p>“In Dallas, we show how motivation is shaped by market niche: landlords with older housing near the urban core have a strong motivation to participate,” researchers wrote in 2018, “but those in opportunity neighborhoods with high-quality housing have no trouble attracting reliable market tenants.”</p> <p>As a result, changes in the maximum allowable rent covered by a voucher – known as Fair Market Rents – can have significant impacts on extremely low-income renters’ ability to find units.</p> How Fair Market Rents (FMR) are calculated <p>Fair Market Rent is set at the 40th percentile level of gross rents for each metropolitan area and nonmetropolitan county. To determine [...]</p>