HUD published the FY 2027 Fair Market Rents and Small Area Fair Market Rents on September 1. They take effect October 1, and they are the reference point underneath every Section 8 contract renewal in the fiscal year that starts next month.

Nationally the two-bedroom SAFMR rose 1.7 percent. That is the smallest increase in five years, and read on its own it looks like a market that has stopped moving. The market has not stopped moving. What has happened is that the benchmark has finally caught up to a period that ended some time ago.

The offset, in eight years of data

Set HUD’s annual SAFMR change against what the market actually did in the twelve months immediately before each fiscal year took effect, and the relationship is visible without interpretation.

Two rows carry it. In FY 2022 the market had just run 12.0 percent and the benchmark moved 3.1. Two years later, in FY 2024, the benchmark moved 11.4 percent into a market that had just posted 1.1.

That is not an error. SAFMRs are 40th-percentile recent-mover gross rent estimates built from American Community Survey data and trended forward. The survey data is already a few years old at the effective date, and the trending factors correct for inflation rather than for a turn in the market. In a stable market the lag is invisible. Through a surge and a correction it produces exactly what the table shows: the benchmark climbing hardest in the years the market was flattest.

Where that leaves the arithmetic

Over the full eight fiscal years, national SAFMRs rose 44.0 percent. Actual market rent, weighted across every asset class from luxury to the affordable floor, rose 28.1 percent. The OCAF escalator over the same span compounded to about 30 percent.

Both administrative measures outran the market, and they did it for different reasons. The SAFMR overshot because it was still processing 2021 and 2022. OCAF ran ahead because operating costs — insurance above all — genuinely rose faster than rents did.

Worth being precise about that last figure. OCAF applies to the operating-cost portion of contract rent, net of debt service, so 30 percent is the escalator applied to a share of the rent rather than the increase in the rent itself. The actual contract rent increase is lower and varies with capital structure. But the direction is not in question, and neither is the gap.

The first position: contracts that ran past the market

That combination — a benchmark that overshot and an escalator that compounded — put a meaningful set of contracts above the market they sit in.

Across the 23,735 HUD contracts that can be matched to a ZIP-level FY 2027 SAFMR, 37.6 percent now carry rents above their ZIP benchmark. The median contract sits at 92 percent of it. At the far end, 553 contracts — covering roughly 41,000 assisted units — exceed 150 percent of their ZIP SAFMR.

The concentration is structural rather than random. It clusters where contract rents were set at a favorable moment and escalated steadily afterward, in ZIP codes whose benchmarks did not keep pace — and it is thinnest in the metros where the benchmark ran hardest over the last four years.

For an owner in that position, nothing about it is a failing. The rent was set correctly at the time and adjusted by the formula HUD provides. But it does mean the renewal conversation will turn on what the market currently supports, and that is a question the published federal data cannot answer at the property level.

The second position: Cleveland

Cleveland shows the second position: a benchmark that went quiet in a market that did not. Where the first position develops slowly — a contract drifting upward over years of formula adjustments — this one opened in a single year, which makes it both easier to see and easier to document.

Cleveland-Akron market rents rose 40.3 percent over the same eight years while the metro’s SAFMRs rose 45.9 — close enough that the two tracked each other most of the way. Then FY 2027 separated them. The Cleveland SAFMR came in at −0.6 percent. Cleveland market rents in July were running +3.3 percent year over year, roughly eight times the national rate of +0.4 and among the strongest of the large Midwest metros.

That is the first year in the series the two moved in opposite directions, and it is the year the benchmark stopped while the market did not.

The effect already shows in the contracts. In the Cleveland MSA, 53.3 percent of Section 8 contracts sit above their ZIP SAFMR against 37.6 percent nationally, at a median of 103 percent of the benchmark versus 92. Cleveland owners are not above market. They are above a benchmark that has gone quiet in a market that has not.

What “flat” actually looks like at the ZIP level

Cleveland’s metro figure is an average of 113 ZIP codes, and the average conceals how little movement there was in either direction. Seventy ZIP codes came in below FY 2026, but the median decline was $20 a month. Forty-five of those seventy fell by $20 or less and twenty-seven by $10 or less, against a series HUD rounds to the nearest ten dollars. Seventeen ZIP codes did not move at all.

The right reading is flat, not falling.

Ohio as a whole is a useful reminder that a state figure is no better. The statewide two-bedroom SAFMR rose 3.4 percent. Underneath it, Columbus rose 9.0 percent across 142 ZIP codes, Toledo 6.6, Cincinnati 5.7, Youngstown-Warren 3.0 — while Cleveland came in at −0.6, Dayton −0.6, Canton-Massillon −1.2, and Akron −1.7. Ten and a half points separate Columbus from Akron. Both are in Ohio, which matters more than it sounds, because OCAF is set at the state level. Every assisted property in Ohio receives the same operating-cost adjustment each year — the 2026 factor was 4.9 percent — whether the benchmark in its own ZIP code rose nine percent or fell nearly two. The adjustment cannot see the ZIP, and after this release the two ends of the state are further apart than a single statewide factor can account for.

Columbus’s nine percent is worth reading carefully, though. It is a benchmark catching up to growth that already occurred as the survey vintage rolled forward, not a forecast of growth to come. Anyone reading it as a leading indicator has the direction of the instrument backwards.

The sharpest single figure in the Ohio data is not a metro at all. Akron’s downtown ZIP, 44308, went from $1,120 to $1,560 — up 39.3 percent — inside a metro that averaged −1.7 percent and where five of six ZIP codes moved down. An owner reading the metro number would conclude the benchmark moved against them. The ZIP says it rose by nearly two-fifths.

These figures are not final

One more thing about the September release: it is a first draft.

Under the Housing Opportunity Through Modernization Act, HUD runs a reevaluation process on the same calendar every year. Requests are due October 1, and revised figures typically appear the following spring. FY 2025 was revised effective April 28, 2025. FY 2026 was revised effective May 21, 2026, covering seven markets.

The FY 2025 cycle is the instructive one. As originally published on August 14, 2024, FY 2025 would have cut New York’s FMRs below the prior year. Reevaluation reversed it: the revised notice raised FMRs for New York City, Boston and several other areas, effective April 28, 2025 (Federal Register FR-6479-N-02, 90 FR 14158, March 28, 2025). A flat or declining initial publication is not the end of the process.

The FY 2026 cycle showed something further, and it is the part most owners miss. A reevaluation does not adjust one year and expire. It resets the base that every subsequent year is built from.

Los Angeles is the clearest illustration. Its FY 2026 SAFMRs were revised upward last May, and HUD then calculated FY 2027 from the corrected figures. Measured against that revised base, Los Angeles looks like a market that barely moved this year — up 2.5 percent. Measured against what HUD originally published for FY 2026, the same ZIP codes are up 13.8 percent. Asheville reads +6.6 percent against its revised base and +19.5 against the original. Napa reads +7.2 and +20.0.

The difference in each case is the reevaluation, carried forward. Those markets did not get a one-year adjustment that lapsed; they got a permanently higher starting point, and the compounding runs from here.

The pathway has real constraints. It is initiated by the housing authority rather than by owners, and it runs in two stages: the October 1 deadline is for the request, with the local rental market survey after. In FY 2026, thirteen requests covering fifteen areas produced eleven HUD found valid, of which seven ultimately submitted survey data. The survey cost sits with the PHA. And every FY 2026 revision moved upward, which is a selection effect rather than a statement about market direction — only areas that believe they are understated go to the expense of surveying.

Where to look

The FY 2027 data is live on marketrent.us. MarketRent is built as an app rather than a website — it runs in any browser, but it's made for a phone.

The SAFMR heat map covers every ZIP code in the country and returns Small Area Fair Market Rents by bedroom count alongside the year-over-year change. The calculator does the same for a single ZIP and computes the 150 percent threshold, so you can see where the line falls for a specific property rather than for a metro. There are two, one for each fiscal year — FY 2027 for anything renewing on or after October 1, FY 2026 for what is in effect until then.

Both are free and both sit behind a MarketRent™ account, which also opens the market briefs.

There is also Ask MarketRent, which answers questions against everything published here and points to the underlying analysis. If you want to know what happened in a particular ZIP code or metro this year, that is the fastest way to find out.

Two owners can look at the same September release and be in opposite positions — one whose contract has drifted above what the market supports, one whose benchmark stalled while the market kept moving. The published federal data will not tell either of them which one they are. That is what a study is for.

Pulse — What We're Tracking

• FY 2027 opens on a stopgap. The President signed H.R. 6500, the Continuing Appropriations and Extensions Act, 2027, on September 2, funding federal agencies through December 11 at FY 2026 levels. Section 8 contract renewals continue uninterrupted, which is the immediate answer most owners want. The longer answer is that the actual FY 2027 decision now lands in a lame-duck session after the November midterms, so anyone modeling a renewal that closes in the first quarter is working against a funding level that has not been set. White House — H.R. 6500 signed into law

  Project-based assistance is holding its ground. HUD is funded through the annual Transportation, Housing and Urban Development appropriations bill — THUD, in the shorthand everyone in Washington uses. The House version for FY 2027 runs about eight percent below the FY 2026 enacted level for HUD overall and cuts or freezes most program lines, but it increases project-based rental assistance by $432 million. In a shrinking bill, project-based assistance is among the few accounts moving up. The Senate has not released its version, so this is a signal rather than an outcome — but it is the signal this readership should be watching. Bipartisan Policy Center — FY2027 HUD Appropriations Tracker

  The 2027 OCAF has not published. Operating Cost Adjustment Factors normally appear in the fall for a February effective date, but the 2026 factors slipped to February 3 after last year’s shutdown, and a stopgap running to December 11 creates the same conditions. Owners building renewal budgets on an assumed January factor should hold that assumption loosely. The 2026 national average was 5.1 percent; Ohio was 4.9. Federal Register — Operating Cost Adjustment Factors for 2026

Eve Moss is the founder of Clarendon and editor of MarketRent™. The MarketRent™ Monthly, with current market rents across all five regions, publishes later this month.

Archive • About • Tools • Services •Contact

About Clarendon: Clarendon is a commercial real estate advisory firm specializing in affordable and multifamily housing — providing brokerage, valuation, HUD Rent Comparability Studies, market studies, and appraisals for owners, investors, housing authorities and agencies nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Each year, owners of project-based Section 8 housing receive an adjustment to their contract rents through HUD’s Operating Cost Adjustment Factor. It arrives as a single percentage, applied on the contract anniversary, and for most owners it is simply accepted as the number the year produced. This year the national average was 5.1 percent.

It is worth pausing on what that figure is, because its name is precise and easily missed. The Operating Cost Adjustment Factor or OCAF is a measure of operating-cost inflation. It is built from a basket of expense categories — electricity, natural gas, water and sewer, employee wages and benefits, insurance, property taxes, goods and supplies — weighted and calculated at the state level. It answers one question: how much more did it cost to operate the property this year than last. It is a careful, defensible answer to that question.

It is not, and was never intended to be, a measure of what rents did in the local market.

Those are two different numbers, and in any given year they can diverge sharply. Operating costs and market rents respond to different forces. Costs are driven by energy prices, labor, insurance, and tax assessments — largely regional and national pressures. Market rents are driven by local supply and demand: what is being built in the submarket, how fast it is absorbed, whether jobs are arriving or leaving, what comparable units actually lease for. The two can move together, or they can pull apart — and the Operating Cost Adjustment Factor reflects only the cost side either way. It is measuring one side of the ledger while the market moves on the other.

This year they pulled apart, and in a direction worth noticing. The cost adjustment averaged about 5 percent nationally. National market rents, by contrast, were essentially flat over the same stretch — advertised apartment rents ended 2025 at roughly zero percent year-over-year growth, the weakest showing in over a decade, as a record wave of new supply met cooling demand. So the cost side rose while the revenue side stood still. An owner reading only the 5 percent adjustment might reasonably assume the market had moved in their favor. In most places, it hadn’t.

But “flat nationally” is itself an average concealing enormous variation — and this is the part that matters most for any single owner. Behind that roughly-zero national figure, some markets posted solid rent growth while others fell outright. Gateway and Midwest metros ran well ahead — New York up 5.8 percent year-over-year, Chicago 3.6 percent, the Twin Cities 3.2 percent — while much of the Sun Belt and West, still absorbing a glut of new deliveries, saw rents decline, with Austin down 5.2 percent, Phoenix down 4.1 percent, and Denver down 3.9 percent. The same year that produced flat national rents produced a nearly eleven-point spread between the strongest and weakest markets. The operating cost adjustment, calculated on cost baskets, reflected none of it. Every owner received a cost-based adjustment; what their market actually did was a separate question the factor never asked.

Flat nationally. Not anywhere in particular.

Year-over-year market rent growth, top 30 metros — a 0.0% national figure spans +5.8% to −5.2%

The variation in the cost factor itself only underscores the point. This year’s 5.1 percent national average concealed a wide range at the state level: from 3.3 percent in Maine to 9.8 percent in Louisiana among the states, with an outlier of 12.3 percent in the Virgin Islands. An owner’s actual adjustment depended entirely on which state’s cost basket applied — nearly a threefold difference for the same category of expense, in the same year. So the single number an owner receives varies wildly by geography on the cost side and bears no fixed relationship to what rents did on the market side. It is doubly removed from the specific question an owner actually needs answered: what would this property’s units command in its own market today.

One factor, fifty answers

FY 2026 OCAF by state — a 5.1% national average conceals a 3.3% - 12.3% range

There is also a timing gap built into the factor, and it is deliberate. The cost changes that feed the adjustment are measured on a lag — this year’s factor draws on tax data through early 2025, insurance figures comparing 2024 to 2023, and cost weights averaged over three years of audited financial statements, a method HUD uses expressly to smooth short-term swings. The result is stable, but it is not current: the adjustment an owner receives in a given year reflects a cost picture from roughly a year or more earlier. Market rents carry no such lag; they are repriced continuously against current demand — increasingly by revenue-management systems that adjust asking rates in near-real time. So the two figures are not only measuring different things — costs versus rents — they are moving on entirely different clocks: one smoothed and backward-looking, the other immediate and forward-looking. Part of why this year’s cost factor sits near 5 percent while market rents are flat is precisely that decoupling: the factor still reflects elevated operating costs and the tail of an earlier surge, while asking rents have already flattened in response to current supply and demand. In a heating market the gap can run the other way, with asking rents climbing well before the cost factor reflects anything. Either direction, the adjustment is anchored to smoothed, backward-looking cost data rather than to where the market is now.

That question has a defined instrument, and it is a different one from the cost factor. A Rent Comparability Study measures the market side — what comparable units in the same market actually rent for, established by a state-certified appraiser to HUD’s methodology. Where the annual cost adjustment tells an owner how their expenses moved, the study tells them where the market moved. That the two are distinct is not merely an outside observation: in this year’s notice, HUD itself asked the public how OCAF-adjusted rents have compared with the rents paid by recent movers into comparable units — an acknowledgment, in the agency’s own rulemaking, that the cost adjustment and the market are not the same measurement. In programs where an owner’s contract rents can be supported by demonstrated market rent, the study is how that case gets made — and in a market that has outpaced the cost adjustment, it can be the difference between rents set by a cost basket and rents set by the market itself.

None of this is a criticism of the cost factor. It does its job precisely; the annual adjustment is real and it matters. The point is narrower and more useful: it is one of two numbers, and it answers the cost question, not the market question. An owner who relies on it alone is measuring half the ledger. In a year when costs and rents happen to move together, the distinction is academic. In a year like this one — costs up around 5 percent, national rents flat, and individual markets ranging from strong growth to outright decline — the distinction is the whole story. Knowing which market you are in, and what your own units would actually command in it, is not something the annual factor can tell you. It is a different question, answered by a different instrument.

Related Resources

For why a required study’s outcome is not a foregone conclusion, see The Study Is Required. The Outcome Isn’t.

For how a phased approach fits contract timing, see Market Alignment with the Phased RCS Approach.

Pulse — What We're Tracking

• The ROAD to Housing Act becomes law (enacted July 11, 2026) — The most significant federal housing package in decades is now on the books, and several provisions land on the affordable side of the ledger: the Rental Assistance Demonstration cap rises by 100,000 units with extended tenant protections, FHA multifamily loan limits are updated and their formula reformed, and environmental review is streamlined for qualifying developments. For owners and investors in assisted housing, the signal is directional — the federal posture is tilting toward preservation and supply — but the specifics will matter deal by deal.

• The Fed holds, and the inflation read stays cautious (FOMC minutes, June 2026 meeting) — The minutes show a committee still watching inflation before easing — the backdrop for this issue’s point. The operating-cost pressures that drive the annual adjustment don’t move in isolation; they track the same inflation picture the Fed is weighing, and they don’t turn on a dime. When the macro read stays cautious, the cost side of an owner’s ledger tends to stay elevated even as local rent markets move on their own.

• Builder sentiment stays weak on affordability (NAHB, July 2026) — Homebuilder confidence remains subdued as affordability pressures persist — a signal that the supply response has limits even where demand exists. It’s a useful counterweight to the rent data: the same affordability math that keeps renters in place also slows the new construction that would eventually ease it, and the markets absorbing the least new supply are the ones where rents held up best this cycle.
  

Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: brokerage, appraisals, rent comparability studies, market studies, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

Share MarketRent™

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

The Notice

On April 21, 2026, HUD published a revision to the FY2026 Fair Market Rents on the Federal Register, with revised FMRs taking effect May 21, 2026. The revisions apply to the Housing Choice Voucher Program, the Moderate Rehabilitation Single Room Occupancy Program, and other programs that rely on Section 8 FMRs. The revisions follow reevaluation requests submitted by Public Housing Agencies under HUD’s reevaluation request process, which allows PHAs to challenge published FMRs based on local rental market survey data they have commissioned.

HUD received 21 comments on the FY 2026 FMRs during the comment period, including 13 reevaluation requests covering 15 FMR areas. HUD determined that requests for 11 areas were valid; 4 requests did not meet HUD requirements. Of the 11 valid requests, 7 markets ultimately submitted the required local rental market survey data, and those 7 received revised FMRs in this notice.

The seven affected markets are the Los Angeles–Long Beach–Glendale HUD Metro FMR Area in California, the Napa MSA in California, the San Luis Obispo–Paso Robles MSA in California, the Asheville HUD Metro FMR Area in North Carolina, Transylvania County in North Carolina, the Albany MSA in Oregon, and the Corvallis MSA in Oregon. For every other market in the country, the original FY2026 FMRs published October 1, 2025 remain in effect through September 30, 2026.

What Changed in the Seven Markets

Every revision moved upward, with magnitude ranging from 6.33% in San Luis Obispo–Paso Robles to 19.55% in Napa — the Los Angeles HMFA saw an 11.61% increase across all bedroom sizes.

The pattern across all seven markets is consistent. Every market increased, and every bedroom size within each market increased proportionally. The metro-level rent index resets reflect new PHA-conducted survey data submitted through the formal reevaluation process.

The revision updates the full FMR schedule (0–4 bedrooms) for seven markets where local Public Housing Agencies submitted new survey data that HUD determined warranted an adjustment. The revised FMRs reflect estimated 40th percentile rent levels trended to FY 2026, derived from PHA-conducted surveys. The Small Area Fair Market Rents (SAFMRs) for affected ZIP codes within these markets were updated in parallel as of May 21.

Subscribe now

The Methodology Behind the Revisions

The magnitude of these revisions raises a methodological question worth examining. Why would a Federally-published FMR — based on the most recent American Community Survey data trended forward by HUD’s recent-mover and inflation factors — diverge from current market reality by 6% to 19% in select markets, requiring revision through PHA-conducted local surveys?

Three structural mechanisms drive the magnitude of these adjustments.

The base-year ACS data is two to three years old before it reaches the FMR calculation. FY 2026 FMRs use 2019–2023 5-year ACS data as the base year rents. The midpoint of that range is 2021. By the time the FY 2026 FMRs took effect on October 1, 2025, the underlying base-rent observation was already four years stale. HUD applies a recent-mover adjustment factor (using 2023 1-year ACS data) and an inflation trend factor to bring the figures forward, but in markets experiencing rapid rent growth — wildfire-affected Napa, post-Helene Asheville, and the California Coast tourism markets — the trend factor often understates actual rent appreciation.

The recent-mover adjustment factor is also lagged. The recent-mover adjustment is calculated by comparing 2023 1-year ACS recent-mover rents to the 2019–2023 5-year base rent. In high-volatility markets, by the time those 2023 figures are processed, the actual current market may have moved significantly further. The methodology has built-in correction for the data gap, but the correction itself is based on data that is two years old by the effective date.

PHA-conducted local surveys can capture conditions ACS cannot. When a PHA commissions an independent rental survey using HUD-approved survey protocols, the resulting data reflects market conditions much closer to the survey date — typically within 3 to 6 months. When that survey produces a 40th percentile two-bedroom rent meaningfully different from the ACS-derived figure, HUD will revise the FMR. The 19.55% Napa revision and the 11.61% Los Angeles revision tell us something specific: the gap between the ACS-derived FMR and current market reality, in these specific markets, was substantial enough that a properly conducted local survey produced a fundamentally different answer. That is not a quirk of the methodology — that is the methodology working as designed when local survey data is available and is more current than ACS data.

Case Study: The Los Angeles HMFA

The Los Angeles revision provides a useful look at how mid-year reevaluations flow through to Small Area Fair Market Rent data at the ZIP code level. The Los Angeles HMFA contains 474 ZIP codes. Of those, 460 ZIP codes — or 97% — saw a SAFMR increase. Fourteen ZIP codes held steady at original FY2026 levels. Zero ZIP codes decreased. Among the ZIP codes that changed, 434 — or 92% of those affected — landed within a tight band of 10 to 12.5%. The median two-bedroom SAFMR change was $300 per month.

The 14 unchanged ZIP codes span a range of submarket profiles, some are fringe exurban areas and others are in-metro locations. The common thread is not geography or rent tier. It is that the original SAFMRs for those ZIP codes already aligned with neighborhood-level market rents. For Section 8 owners with properties in the affected Los Angeles ZIP codes, the revised SAFMRs increase the 150% threshold ceiling correspondingly.

The Public Comment Response

The April 21 Federal Register notice also includes HUD’s response to the 21 public comments received during the FY 2026 FMR comment period (initially opened with the August 22, 2025 publication and extended via the September 19, 2025 corrected notice). The comments raised structural questions about the data lag between ACS observation periods and FMR effective dates, the responsiveness of the recent-mover adjustment factor to rapidly changing markets, and the geographic granularity of FMR areas relative to actual rental sub-markets.

HUD’s response acknowledges the data-lag concerns and notes that the reevaluation request process exists specifically to address situations where local data demonstrates that published FMRs understate current rent levels. The notice does not commit to methodology changes for FY 2027 but does signal that HUD is studying the comment record for potential improvements in future fiscal years.

On FMR accuracy and data lag, one commenter stated that FMRs in fast-moving markets are perpetually behind the curve due to the built-in lag in American Community Survey data, and requested semi-annual or quarterly FMR updates in high-volatility markets. HUD responded that ACS data remains the only nationwide rent dataset with statutory advantages sufficient to compel responses and generate statistically representative results. HUD stated that proprietary rent data cannot serve as the sole basis for FMR calculations because such sources do not consistently produce the 40th percentile recent-mover estimate required by regulation. HUD indicated it will evaluate the feasibility of more frequent updates alongside available resources but made no commitment to change the current annual schedule.

On the reevaluation process, several commenters questioned the equity of requiring PHAs to bear the full cost of independent market surveys when pursuing FMR reevaluations, noting that survey costs come at the expense of voucher holders and core PHA functions. Commenters requested a HUD grant program to fund reevaluations, acceptance of private data where appropriate, and proactive HUD identification of areas warranting reevaluation. HUD responded that local rental market survey costs are eligible expenses from Housing Choice Voucher administrative fees or administrative fee reserves. HUD noted that its existing private data sources cannot serve as the sole basis for FMR calculations and that its ability to fund PHA surveys is subject to appropriations. No new funding mechanism was announced.

On mandatory Small Area FMRs, one commenter requested elimination of mandatory SAFMRs, arguing that PHAs better understand their specific markets. HUD declined the request and confirmed that mandatory SAFMRs remain in effect across all 65 designated metropolitan areas. The 150% SAFMR Threshold Test for Section 8 Rent Comparability Study submissions is unchanged.

The pattern across HUD’s responses is consistent. Acknowledgment of the underlying critiques, defense of the current framework, and no near-term structural changes. The responses document that FMRs lag actual market conditions, and that the reevaluation pathway, while open, remains PHA-dependent and resource-intensive.

What This Means for the Broader Audience

The seven-market revision exists because seven PHAs submitted requests with new survey data. The precedent now exists for owners and PHAs in other markets where the original FY2026 FMRs may be misaligned with current rent reality — particularly in markets with active development pipelines, significant rent growth since the FMR survey window, or supply constraints.

For Section 8 owners and contract administrators, the lesson is structural: in any market that has experienced meaningful rent growth between 2021 and 2025, the published FMR likely understates what current market rents support. The FMR revision process is one mechanism for correcting that gap. A property-specific Rent Comparability Study, conducted with current market comparables, is the other.

For the SAFMR process specifically, the metro-level FMR revision flows through to every ZIP code within that metro. Because the SAFMR for a ZIP code is calculated as a ratio of that ZIP’s median rent to the metro median rent, applied to the metro FMR, when the metro FMR is revised upward, every SAFMR within that metro is revised upward proportionally. For RCS practitioners, this means the 150% SAFMR Threshold Test for any property in the affected ZIP codes has effectively just moved.

For owners in the seven affected markets, timing considerations matter. An RCS signed by the owner’s appraiser on or after May 21, 2026 will reference the revised FMRs.

Managing a portfolio of HUD-assisted properties? Clarendon’s Portfolio Program offers preferred terms, priority scheduling, and a single point of contact — reply or contact rfp@clarendon.com.

Related Resources

For background on SAFMR methodology and the 150% Threshold Test, see Four Markets. Four Different Stories: What FY 2026 SAFMRs Reveal. For a deeper look at how PHA survey data interacts with the FMR system, see HUD's FMR Reevaluation FAQs.

Share MarketRent™

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

HUD published the FY2026 Small Area Fair Market Rents in the fall of 2025. The data is public, ZIP-level, and updated annually. It is the same data source that determines the threshold test in every Section 8 Rent Comparability Study conducted this year. Most Section 8 owners have never looked at it for their own property.

What it shows across four markets right now is striking — and the variation is not what a national headline about rental market conditions would suggest.

The National Story Is Not Your Story

The FY2026 national average Operating Cost Adjustment Factor — the annual percentage by which Section 8 contract rents are automatically adjusted at renewal — is 5.1%. That figure, published in the Federal Register on February 3, 2026 and effective February 11, represents HUD’s composite estimate of how much operating costs have increased across nine expense categories: electricity, employee wages, insurance, property taxes, fuel, and four others.

For most Section 8 owners renewing a contract right now, OCAF is the default. It requires no study, no engagement, no analysis. The adjustment happens automatically. And for properties in markets where SAFMR is growing at roughly the same rate as OCAF — or faster — that default may be broadly reasonable in any given year.

But OCAF is a state-level factor — HUD calculates it at the state level because, as the Federal Register notice states directly, that is “the lowest level of geographical aggregation with enough projects to permit statistical analysis.” It does not know what ZIP code your property is in. It does not know whether the market supporting your contract rent has appreciated by 5.8% or declined by 9.6% since the last fiscal year. It adjusts operating costs. It does not adjust market position.

That gap — between what OCAF tracks and what the local rental market is actually doing — is what the SAFMR data makes visible. And across four markets in FY2026, that gap looks very different depending on where you are.

Cleveland — The Midwest Appreciation Story

ZIP code 44106 sits in the University Circle and East Side corridor that has been central to Cleveland’s multifamily narrative for the past several years. The FY2026 SAFMR for a two-bedroom unit in this ZIP is $1,450 — up from $1,370 in FY2025. That is a 5.8% annual increase, roughly in line with Ohio’s FY2026 OCAF of 4.9%.

For a Section 8 owner in this ZIP, that alignment between SAFMR growth and OCAF is relatively favorable in the current year — operating costs and market rents are moving in the same direction at approximately the same pace. A property that has renewed on OCAF through a period of sustained SAFMR growth, however, may carry a contract rent that reflects market conditions from an earlier cycle — the current year’s alignment does not close a gap that accumulated across prior years.

For a multifamily investor evaluating Cleveland assets, the 5.8% SAFMR growth in this ZIP is a market intelligence signal — fundamentals are strengthening, demand is absorbing new supply, and the neighborhood trajectory continues to reflect upward rent movement at the ZIP level.

Boston — High Absolute, Negligible Movement

ZIP code 02119 — Roxbury — tells a different story. The FY2026 SAFMR for a two-bedroom unit is $2,560, up from $2,550 in FY2025. That is a 0.4% annual change. Massachusetts FY2026 OCAF is 4.8%.

The math here is straightforward but its implications are not immediately obvious. OCAF is adjusting contract rents upward by 4.8% while the SAFMR moved only 0.4%. In the current year, OCAF is outpacing SAFMR movement in Roxbury. For an owner whose contract rent is already well below the $2,560 SAFMR — the relevant observation is not the current year movement but the absolute position: the gap between contract rents and SAFMR in this ZIP is measured in hundreds of dollars per unit per month, accumulated over years of prior appreciation that OCAF never captured.

The Boston story is also a study in intra-metro variation. The heat map across the Boston metro shows a range from deep red to deep green within a few miles — some ZIPs declining, others appreciating, others flat. The metro-level FMR obscures all of it. This is precisely why the Section 9-14 threshold test in the RCS uses the ZIP-level SAFMR rather than the metro FMR — and why a property in Roxbury and a property in a suburban Boston ZIP can have completely different market position stories even though they are in the same HUD Metro FMR Area.

For a multifamily investor, the negligible FY2026 SAFMR movement in Roxbury after years of significant prior appreciation is a market maturation signal — not a deterioration, but a plateau following a long run-up. The absolute rent levels remain among the highest in the dataset.

Atlanta — The City That Is Two Markets

Atlanta’s heat map does something none of the other cities do quite as dramatically: it shows the intra-metro contrast in a single frame. The screenshots from the MarketRent™ SAFMR Heat Map show two Atlanta ZIPs within a few miles of each other telling opposite stories.

ZIP 30310 — recorded a FY2026 2BR SAFMR of $1,440, down from $1,590 in FY2025. That is a 9.4% annual decline. Georgia’s FY2026 OCAF is 5.4% — which means a Section 8 owner in this ZIP is receiving an automatic 5.4% operating cost adjustment while the market rent benchmark HUD uses for the threshold test dropped 9.4%. The OCAF is moving in one direction; the SAFMR is moving in the opposite direction at nearly double the rate.

ZIP 30318 — recorded a FY2026 2BR SAFMR of $2,050, up from $1,990 in FY2025. A 3.0% increase. Same metro, same FY2026 OCAF - completely different market position signal.

For Section 8 owners in Atlanta, the ZIP code is not a detail — it is the analysis. An owner in 30310 whose contract rent was set against FY2025 SAFMR levels is now holding a rent structure that may look more aligned to the current market than it did a year ago, but that still may reflect years of accumulated below-market positioning from prior periods of appreciation. An owner in 30318 is in a market that has been growing steadily and where the SAFMR-to-contract-rent gap may be widening rather than closing.

For a multifamily investor in Atlanta, this intra-metro variation is the story. Two ZIPs, four miles apart, with a 12.4 percentage point spread in FY2026 SAFMR movement. Neighborhood-level analysis is not optional in this market — it is the only analysis that produces actionable intelligence.

Los Angeles — When the Market Moves Against You

ZIP 90011 — South Los Angeles — recorded a FY2026 2BR SAFMR of $2,070, down from $2,290 in FY2025. A 9.6% annual decline. California FY2026 OCAF is 4.9%.

This is the data point that carries the most strategic weight for Section 8 owners in the LA market. OCAF is adjusting contract rents upward by 4.9% on the operating cost side while the market rent benchmark that determines the RCS threshold test dropped 9.6%. A property in this ZIP that was planning to commission an RCS based on its FY2025 SAFMR position — when the 2BR threshold sat at $2,290 — is now working against a FY2026 threshold that is $220 per unit per month lower. The market has moved against the study’s premise between the planning and execution stages.

This does not mean an RCS is not worth pursuing for a property in this market. Properties with contract rents significantly below the FY2026 SAFMR still have a legitimate market alignment opportunity to pursue. What it means is that the SAFMR data from the current fiscal year — not the prior year, not a general sense of “the LA market is expensive” — is the right starting point for evaluating whether and when to commission the study.

What the Four Markets Tell You Together

The table below summarizes what the FY2026 SAFMR data shows across the four markets and how it relates to the current-year OCAF for each state.

The pattern that emerges from these five data points is not a single market narrative. It is a framework. OCAF moves in one direction at the state level. SAFMR moves in a different direction at the ZIP level. The gap between where those two lines sit — for a specific property in a specific ZIP with a specific contract rent history — is what determines whether pursuing a market-based rent adjustment through the RCS process is likely to produce a meaningful result in the current renewal cycle.

That determination cannot be made at the metro level. It cannot be made from OCAF alone. It requires ZIP-level market position analysis — which is precisely what HUD’s own SAFMR data is designed to support.

What the SAFMR Data Is — and What It Is Not

The FY2026 SAFMR figures in this analysis are the most current published data available. They are not, however, a real-time picture of market conditions. HUD calculates SAFMR annually using American Community Survey data that reflects rental market conditions from a prior period — the reference data underlying the FY2026 schedule was collected in earlier years and adjusted forward using inflation factors. By the time a fiscal year’s SAFMR is published and in effect, the market it describes may have already moved.

In an appreciating market, this lag means the published SAFMR is running behind where rents actually are. The threshold test in the Section 9-14 analysis — which compares a property’s gross renewal rent potential against 150% of the SAFMR gross renewal rent potential — is set against a benchmark that may understate current market rents. HUD sizes the threshold at 150% specifically to create enough headroom that a properly prepared RCS, using current verified comparable data, can support rents that reflect conditions as of the appraisal date rather than conditions of the prior reference period. The threshold accommodates the lag by design.

In a declining market, the lag works in the other direction. A ZIP where SAFMR dropped 9.6% in a single fiscal year — as ZIP 90011 in Los Angeles did between FY2025 and FY2026 — experienced that deterioration in the underlying market before the published data reflected it. The verified comparable rents that an appraiser will find in that market today may be lower still than the FY2026 SAFMR suggests. An owner planning a renewal strategy around last year’s SAFMR position, or around a general sense that Los Angeles rents are high, may find the RCS conclusion lands below their expectations.

For forward-thinking investors, SAFMR trajectory functions as a confirmation signal rather than a leading indicator. A ZIP with consecutive years of SAFMR growth is a ZIP where the underlying rental market has been performing — the published data is confirming a trend the comp market already established. A single-year SAFMR decline of the magnitude seen in Los Angeles and Atlanta’s 30310 reflects a deterioration that was already underway before the data captured it. For acquisition underwriting, understanding which direction the lag is running — whether the published SAFMR is understating or overstating current market conditions — is as important as the SAFMR figure itself.

Part 2 of this series will examine the multi-year SAFMR trend across these four markets against the OCAF compounding history — the analysis that shows how the lag accumulates over time and what it means for properties that have been renewing without a market-based rent adjustment for several consecutive cycles.

What This Means for Your Renewal Strategy

For Section 8 owners approaching contract renewal in any of these markets: the SAFMR calculator at clarendon.com will show you your current ZIP-level gap in minutes. If the gap is meaningful — and in several of these markets it is, even accounting for the current-year SAFMR movement — the Phase 1 Market Position Assessment is the next step. A structured review of your SAFMR position, the current comp landscape, and your non-shelter services inventory gives you the information needed to make the renewal decision with data rather than assumption.

If any of these markets intersect with a decision you are working through — renewal timing, acquisition underwriting, or portfolio positioning — we welcome the conversation. Clarendon provides HUD Rent Comparability Studies, market studies, brokerage, and advisory services across major United States markets.

Let’s talk →

Share MarketRent™

Related Resources

Explore the FY2026 SAFMR data behind this analysis — SAFMR Heat Map and SAFMR Calculator

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

A Rent Comparability Study is required at renewal. What it finds isn’t. Two appraisers working the same property and the same market can produce materially different conclusions — and both may satisfy HUD’s submission requirements. This article covers the three factors that consistently determine whether an RCS captures the full value the market supports: how comparables are selected, whether eligible non-shelter services are identified and properly documented, and what Chapter 9 expertise actually looks like in practice.

A Rent Comparability Study isn’t a formality. It’s an appraisal, and like any appraisal, the conclusion depends on who conducts it and how.

Two appraisers can examine the same property, draw on the same market, and arrive at materially different rent conclusions. Both studies may satisfy HUD’s submission requirements. Only one is structured to capture the full value the market supports.

The difference lies in three areas: how comparables are selected and adjusted, whether eligible non-shelter services are identified and properly valued, and whether the appraiser has the Chapter 9 expertise to build a conclusion that holds up under review. This article covers all three — and what owners should understand about each before a study is ordered.

Comparable Selection: The Foundation of the Conclusion

The rent conclusion in a HUD RCS is built from comparable properties — similar units in the market that the appraiser identifies, analyzes, and adjusts to establish what the subject property’s units would lease for in an unassisted market. The quality of the conclusion depends almost entirely on the quality of that comparable set.

This is the most consequential judgment call in the study, and the one owners are least positioned to evaluate. A generalist appraiser working a standard renewal will typically identify comparables that cluster toward the middle of the available market evidence. A Chapter 9 specialist will identify the full defensible range of support and build the strongest case the data allows.

Geographic Scope

The default comparable search radius is often drawn conservatively. Where genuine market evidence exists to support a broader area — because the subject property draws from a larger trade area, or because nearby comparables are limited — a qualified appraiser knows how to establish and defend that expanded scope. Restricting the search unnecessarily limits the pool of support and can anchor the conclusion below what the full market evidence would justify.

Adjustment Methodology

Every difference between the subject property and a comparable requires a documented adjustment. Adjustments for unit size, condition, amenities, location, and services must be supportable and consistently applied. Adjustments that are thin or inconsistent are the most common basis for HUD to challenge a conclusion. Chapter 9 expertise means knowing how to document each adjustment so that it withstands scrutiny — not just that an adjustment was made, but why it was made at that amount.

What This Means in Practice

The owner cannot select the comparables — that’s the appraiser’s function and independence is required. But the owner can select the appraiser. Asking specifically about Chapter 9 experience, the number of Section 8 RCS assignments completed, and familiarity with the subject property’s market type is not overreach. It’s the first quality control decision in the process.

Non-Shelter Services: Valuing What’s Already There

HUD’s March 2023 update to the Section 8 Renewal Policy Guidebook, Chapter 9, created a formal framework for valuing non-shelter services within a Rent Comparability Study. Services that are consistently provided to residents and included in the lease can support a higher rent conclusion — but only if they are properly documented and formally incorporated into the analysis.

For elderly and special needs properties in particular, this represents one of the most significant and least-captured sources of value in the current RCS environment. Many of these properties have been providing eligible services for years, often as a direct expression of their mission and in alignment with HUD’s age-in-place priorities. The services exist. The documentation and valuation often don’t.

What Qualifies

The 2023 guidance explicitly recognizes internet and broadband access as an eligible non-shelter service — the first time HUD had formally named it. Beyond broadband, eligible services commonly include on-site security and monitoring, resident transportation and shuttle services, health and wellness programming, community programming and organized activities, and computer labs or digital access resources. The list is not exhaustive, but these represent the services most frequently present in elderly and special needs properties and most consistently absent from prior RCS valuations.

The Documentation Requirement

To qualify for valuation, services must meet three conditions: they must be regularly available to all residents, included in the lease or occupancy agreement, and documented in a form the appraiser can use. The difference between services that are provided and services that are valued in the study is almost always a documentation question. An appraiser who doesn’t ask won’t find it. An owner who hasn’t inventoried and documented what they provide can’t support the claim.

Before the Study Begins

Take inventory of every service your property provides to residents. For each one, ask three questions: Is it available to all residents, not just some? Is it referenced in the lease or occupancy agreement? Is there written documentation that confirms it’s being provided consistently? If the answer to all three is yes, that service is a candidate for valuation. Bring that documentation to the initial conversation with your appraiser.

Chapter 9 Expertise: Why Appraisal Experience Isn’t Enough

An RCS is not a standard appraisal assignment. HUD’s Section 8 Renewal Policy Guidebook, Chapter 9, governs every aspect of the study: the methodology for selecting and adjusting comparables, the documentation standards for services and amenities, the format of the rent grid, and the narrative that supports the final conclusion. These requirements are specific to the program and not part of standard appraisal practice.

An appraiser without direct Chapter 9 experience may produce a technically competent study that nonetheless undervalues the property — through conservative comparable selection, incomplete adjustment documentation, or failure to identify and value eligible services. The rent conclusion satisfies the form. It doesn’t capture what the market supports.

The distinction matters because the owner has one opportunity to present the market case at each renewal. A study that leaves value on the table cannot be corrected retroactively.

Questions Worth Asking

Before engaging an appraiser for a Section 8 RCS, a few questions quickly surface whether they have direct Chapter 9 experience or are approaching it as a standard appraisal assignment. Start by asking how many Section 8 HAP contract RCS assignments they’ve completed and across what property types and markets — volume and variety both matter. Ask whether they’re current with the non-shelter services provisions in HUD’s 2023 Renewal Policy Guidebook update, since that change is recent enough that many appraisers haven’t internalized it. Ask how they approach comparable selection when the immediate area has limited market evidence, and what their documentation approach is for adjustment support. The answers will tell you whether you’re talking to someone who has worked the full range of Chapter 9 situations or primarily handled standard renewals.

These questions don’t require technical expertise to ask. The quality of the answers is the evaluation.

Three factors determine whether a Rent Comparability Study captures the full value the market supports: the scope and rigor of comparable selection, the identification and documentation of eligible non-shelter services, and the appraiser's direct experience with Chapter 9 methodology. The case study that follows shows what happens when all three come together — and what had been missed before they did.

Case Study: Services That Were There All Along

A national non-profit organization owned an elderly development in a high-growth West Coast market. The property was well-managed and occupied. The organization was also operating under a familiar constraint: revenues were limited, capital needs had accumulated, and expanding resident services — consistent with HUD’s age-in-place model — required income the property wasn’t generating.

When a full RCS was commissioned, the study found contract rents 31% below current market and well below the applicable SAFMR benchmarks for the ZIP code. The analysis also identified services that had been provided to residents for years — high-speed internet access, on-site security, a community room with computer access, and resident activity programming — that had never been formally valued in an RCS.

The study identified more than $190,000 in additional annual rent potential.

The income gap that had made capital improvements difficult to justify had been present throughout. It simply hadn’t been measured. The services that contributed to a higher supportable rent had been provided consistently — they hadn’t been documented in a form that allowed the appraiser to incorporate their value.

The lesson: value that exists in a property is only captured when the study is thorough enough to find it.

Starting Point: The Preliminary Assessment

For most owners, the right first step before ordering a full RCS is a preliminary assessment. A preliminary assessment uses current contract rents, ZIP-level SAFMR benchmarks, and a review of services provided to establish whether meaningful additional value exists before committing to a full study.

It answers the threshold question — is there enough here to justify a full study? — and identifies what documentation needs to be assembled before the appraiser begins. For owners carrying deferred capital needs or planning service expansions, it also provides the documented rent gap that strengthens the case with lenders, boards, and mission funders.

The preliminary assessment is not a replacement for the RCS. It’s the information that makes the RCS more likely to succeed. To discuss whether a preliminary assessment makes sense for your property, visit clarendon.com/rcs.

Share MarketRent™

Related Resources

Three resources worth having before any RCS conversation begins. The SAFMR Calculator returns FY2026 ZIP-level benchmarks by bedroom size in under a minute — the figures HUD uses as reference points at renewal. The SAFMR Heat Map shows how your ZIP code compares to surrounding markets, useful for understanding whether your neighborhood tracks with or diverges from the broader metro. And for background on the threshold test that determines which review path your RCS takes, HUD’s New 150% Market Rent Threshold Test covers the mechanics in full.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

The Strategic Context

HUD’s Small Area Fair Market Rents (SAFMRs) represent one of the most precise and actionable data sets available to Section 8 property owners, appraisers, and housing agencies — and they’re updated every October.

For FY 2026, these figures are effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after October 1, 2025. That makes this the essential reference point for any Section 8 contract renewal strategy initiated this fiscal year.

What You Can Do With This Tool

Preliminary Rent Assessment Before commissioning a full Rent Comparability Study, use SAFMR data to get an early read on where your property’s contract rents stand relative to the ZIP-code-level market. A gap of more than 10% between your current rents and the SAFMR benchmark is a meaningful signal worth investigating further.

Market Alignment Verification SAFMRs are calculated at the ZIP code level — not the broader metropolitan area — making them significantly more sensitive to neighborhood-specific market conditions. A thorough SAFMR analysis can reveal market alignment opportunities that metro-wide FMR comparisons would miss entirely.

RCS 150% Threshold Planning Under HUD’s updated Section 8 Renewal Policy Guidebook, the mandatory market rent threshold test for HUD Rent Comparability Studies is set at 150% of the applicable SAFMR — not the broader FMR. This distinction is critical for property owners pursuing mark-up-to-market renewals. Knowing where the 150% ceiling falls in your market before engaging an appraiser is a straightforward way to enter the RCS process with a stronger strategic foundation.

Portfolio-Wide Screening For property management companies and acquisition teams managing multiple Section 8 contracts across markets, this tool enables efficient identification of below-market Section 8 rent positions across an entire portfolio — informing both renewal sequencing and acquisition due diligence.

Understanding What These Numbers Mean for Your Renewal Strategy

SAFMRs are a starting point, not a conclusion. The figures you find here will tell you whether a deeper analysis is warranted — but the full picture of your property’s market position requires evaluating comparable properties, neighborhood conditions, non-shelter services valuation, and the specific requirements of your Contract Administrator.

That’s precisely where a Phased RCS Approach adds strategic value. Rather than committing to the full cost of a Rent Comparability Study before confirming market support, a Phase 1 preliminary rent assessment uses SAFMR data alongside comparable market research to deliver a clear go/no-go recommendation — at a fraction of the full RCS investment.

For more on the 150% threshold and how it affects your Section 8 contract renewal options, see our companion article: HUD Introduces New 150% Mandatory Market Rent Threshold Test →

About This Data

These figures reflect HUD’s officially published FY 2026 Small Area Fair Market Rents. SAFMRs are updated annually — property owners and advisors should confirm the applicable fiscal year at the time of RCS engagement.

For questions about how to apply SAFMR data to a specific renewal strategy or portfolio assessment, contact the Clarendon team.

Share MarketRent™

Related Resources

Three resources worth having before any RCS conversation begins. The SAFMR Calculator returns FY2026 ZIP-level benchmarks by bedroom size in under a minute — the figures HUD uses as reference points at renewal. The SAFMR Heat Map shows how your ZIP code compares to surrounding markets, useful for understanding whether your neighborhood tracks with or diverges from the broader metro. And for background on the threshold test that determines which review path your RCS takes, HUD’s New 150% Market Rent Threshold Test covers the mechanics in full.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Navigating HUD guidelines can be complex, but our custom solutions for market alignment simplify the process. This article explores how our phased approach can help you efficiently align rents with the market.

Section 8 Renewal Policy Guidebook

HUD guidelines ensure that rents for affordable housing are fair and reflective of the market. The Section 8 Renewal Policy Guidebook provides detailed instructions on conducting Rent Comparability Studies (RCS), emphasizing accuracy and compliance.

The latest updates introduce more streamlined processes for preparing and submitting RCS, reducing administrative burdens and improving efficiency. Key changes include simplified submission processes, enhanced accuracy requirements, updated compliance guidelines, and the incorporation of previous notices.

Advantages of Our Custom Solutions

Our custom solutions for market alignment are designed to provide flexibility and cost savings, ensuring you get the most accurate and actionable insights for your property.

• Flexible Approach: We offer a phased approach that allows you to start with a preliminary analysis to quickly obtain initial rent data. This cost-effective option provides the flexibility to decide if a more comprehensive report is necessary based on the initial findings.

• Comprehensive Insights: For those needing a deeper dive, our comprehensive report includes detailed market trends, property comparisons, and ensures compliance with HUD guidelines. This seamless transition from preliminary analysis to a full report offers a thorough understanding of your property's rental potential.

• Cost-Effective Packages: We also offer discounted packages for clients who choose to commit to both phases upfront, providing an economical solution for thorough rent analysis.

This approach allows property owners and managers to make informed decisions efficiently, ultimately improving the quality of life for residents while ensuring financial stability and compliance with HUD regulations. 

Real-World Success Story

A non-profit owner of an elderly development was interested in investing in capital improvements and resident services to enhance their resident experience. They used our custom solutions to navigate the latest HUD guidelines and align their rents with the market. Starting with a preliminary analysis, they made quick decisions and later upgraded to a comprehensive report, which provided the detailed insights needed to ensure compliance and secure additional funding.

This approach allowed them to make informed decisions efficiently, ultimately improving the quality of life for their residents while ensuring financial stability and compliance with HUD regulations.

Next Steps for Owners and Managers

By leveraging our custom solutions, property owners and managers can navigate HUD guidelines with ease and align rents with the market. Start with a preliminary analysis and upgrade to a comprehensive report when you’re ready. Contact us today to get started.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

HUD Rent Comparability Studies (RCS) play a crucial role in ensuring the financial viability and regulatory compliance of Section 8 developments. These studies provide accurate market rent data, which is essential for making informed decisions about rent adjustments and property management.

Key Components of a HUD Rent Comparability Study (RCS)

1. Rent Comparability Grid: A detailed grid comparing the subject property to the selected comparable properties, highlighting differences and similarities.

2. Adjustments and Analysis: Adjustments made to the comparable properties’ rents to account for differences in features, location, and condition, along with a rationale for each adjustment.

3. Conclusion and Market Rent Estimate: The final estimated market rent for the subject property, based on the analysis and adjustments.

4. Compliance and Guidelines: Assurance that the study complies with relevant guidelines and regulations.

Why HUD-Compliant RCS is Crucial

1. Regulatory Compliance: HUD guidelines require accurate and up-to-date rent data to ensure compliance. A HUD-compliant RCS helps property owners meet these requirements, avoiding potential penalties and ensuring smooth operations.

2. Financial Viability: Accurate rent data is essential for adjusting rates to fair market levels, securing funding, and maintaining the financial health of the property. This is particularly important for Section 8 developments, where rent adjustments can significantly impact revenue.

3. Informed Decision-Making: An RCS provides the necessary data to make informed decisions about rent adjustments, property improvements, and overall management strategies. This helps property owners and managers optimize their operations and enhance tenant satisfaction.

Our Expertise in HUD-Compliant Rent Comparability Studies (RCS)

At Clarendon, we specialize in providing HUD-compliant Rent Comparability Studies for a wide range of properties, including family and senior housing in urban, suburban, and rural markets. Our experience spans developments from 20 to 5,900 units, located in various structures such as garden, walk-up, townhouse, mid and high-rise, as well as scattered site and large-scale developments. Our reports are accepted by both HUD and State Housing Agencies, ensuring reliable and actionable insights for our clients.

Success Story: A non-profit organization with a national portfolio used our HUD RCS service to bring a Los Angeles property’s rents in line with surrounding market-rate properties, ensuring they had the necessary capital to fund capital improvements and service enhancements for their elderly residents.

HUD Rent Comparability Studies are vital for maintaining fair market rents and compliance with HUD guidelines. By understanding and following these guidelines, property owners and managers can ensure their rents are competitive, fair, and compliant with regulations. This not only helps in securing funding and maintaining financial viability but also in providing quality housing for tenants.

By leveraging our RCS services, property owners and managers can ensure their rents are competitive and compliant with HUD guidelines. Contact us today to learn more about how we can help you achieve your goals.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

HUD Rent Comparability Studies (RCS) are essential tools for property owners and managers, especially those involved in project-based Section 8 developments. These studies ensure that rents are set at fair market levels and that the properties maintain financial viability and regulatory compliance.

What is a HUD Rent Comparability Study (RCS)?

A HUD Rent Comparability Study (RCS) is an analysis used to determine the market rent for a property by comparing it to similar market-rate properties in the area. The goal is to establish a rent level that is competitive and fair, ensuring the property remains financially viable.

HUD Guidelines for Rent Comparability Studies (RCS)

HUD has specific guidelines for conducting Rent Comparability Studies, particularly for Section 8 project-based developments. These guidelines are detailed in Chapter Nine of the Section 8 Renewal Policy Guidebook. Here are some key points:

1. Purpose and Applicability: The RCS is used to determine market rents for Section 8 units, ensuring they are comparable to unassisted units in the area. This is crucial for contract renewals and rent adjustments.

2. Selection of Comparable Properties: The RCS must include at least five comparable properties that are similar in terms of location, size, and amenities. These properties should be unassisted to provide a true market comparison.

3. Adjustments: Adjustments must be made to account for differences between the subject property and the comparables. These adjustments should be clearly documented and supported.

4. Review and Approval: The RCS is subject to review and approval by HUD or the Contract Administrator. This ensures that the study meets all regulatory requirements and provides an accurate market rent estimate.

Key Components of a HUD Rent Comparability Study (RCS)

1. Property Description: Detailed information about the subject property, including location, size, amenities, and condition.

2. Market Area Analysis: Examination of the broader market area, including economic conditions, demographic trends, and housing market dynamics.

3. Comparable Properties: Identification and description of similar market-rate properties in the area, including their rents, amenities, and condition.

Our Expertise in HUD-Compliant Rent Comparability Studies (RCS)

At Clarendon, we specialize in providing HUD-compliant Rent Comparability Studies for a wide range of properties, including family and senior housing in urban, suburban, and rural markets. Our experience spans developments from 20 to 5,900 units, located in various structures such as garden, walk-up, townhouse, mid and high-rise, as well as scattered site and large-scale developments. Our reports are accepted by both HUD and State Housing Agencies, ensuring reliable and actionable insights for our clients.

Clarendon’s contract with the U.S. Department of Housing and Urban Development (HUD) to provide Section 8 Rent Comparability Studies (RCS) was recently renewed for the Northeast Region of the United States. This region, headquartered in New York City, encompasses 14 states: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia. The market rents determined from these studies greatly influence whether an owner will renew and continue providing assisted housing or opt-out of the Section 8 contract and convert to unassisted, market rent housing.

HUD Rent Comparability Studies are vital for maintaining fair market rents and compliance with HUD guidelines. By understanding and following these guidelines, property owners and managers can ensure their rents are competitive, fair, and compliant with regulations. This not only helps in securing funding and maintaining financial viability but also in providing quality housing for tenants.

Ensure your rents are competitive and compliant with HUD guidelines by leveraging our expert RCS services. Contact us today to learn how we can help you achieve regulatory compliance, maintain financial viability, and optimize your property management strategy.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Investigate this page to search for rental rates by city or zip code and utilize them in the mandatory market rent threshold test for Rent Comparability Studies - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after October 1, 2024. 

For more information on the market rent threshold test, read our article HUD Introduces New 150% Mandatory Market Rent Threshold Test.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Search the recently published HUD FY 2025 Small Area Fair Market Rents (SAFMR) - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after October 1, 2024. 

For more information on the market rent threshold test, read our article HUD Introduces New 150% Mandatory Market Rent Threshold Test.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Search the recently published HUD FY 2024 Small Area Fair Market Rents (SAFMR) - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after October 1, 2023.

For more information on the market rent threshold test, read our article HUD Introduces New 150% Mandatory Market Rent Threshold Test.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Investigate this page to search for rental rates by city or zip code and utilize them in the mandatory market rent threshold test for Rent Comparability Studies - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after October 1, 2023. 

For more information on the market rent threshold test, read our article HUD Introduces New 150% Mandatory Market Rent Threshold Test.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

The U.S. Department of Housing and Urban Development (HUD) is mandated by Section 8 laws and procedures to procure and scrutinize Rent Comparability Studies (RCS) during the renewal of most Section 8 contracts. The market rents derived from these studies dictate the rents that owners can charge under the program. These rents significantly impact an owner’s decision to renew and continue offering affordable housing or to opt-out of the Section 8 contract and switch to market rent housing. The market rents established in these studies also determine HUD’s expenditures for Section 8 project-based subsidies.

In March 2023, HUD unveiled a new Section 8 Renewal Policy Guide, which revised the mandatory market rent threshold. Instead of using the HUD 140% median gross rent as a benchmark, the new threshold is now pegged at 150% of the Small Area Fair Market Rents (SAFMRs) gross rent for the property’s Zip code.

SAFMRs are Fair Market Rents that are computed for Zip Codes within Metropolitan Areas and are published annually. They are adjusted to take effect on October 1 of each federal fiscal year.

The mandatory market rent threshold test involves a 3-step process:

• Step 1: Calculate the Subject Project’s gross renewal rent as determined by RCS

• Step 2: Determine the 150 percent SAFMR Rent Threshold by the Subject Project’s Zip Code

• Step 3: Compare the Project’s gross renewal rent to 150 percent of SAFMR Gross Rent

According to the HUD Section 8 Renewal Guide, if the RCS-based gross renewal rent for the subject project’s assisted units surpasses 150 percent of the SAFMR gross rent for the project’s ZIP code, then a HUD-commissioned RCS will be necessitated. In such a case, HUD will employ independent third-party appraisal services procured through its Contracting Officer to prepare an RCS for the subject project.

For an RCS that encompasses both “as-is” and “post-rehabilitation” market rent estimates, if either the “as-is” estimate or the “post-rehabilitation” estimate exceeds the threshold, then a HUD-commissioned RCS will be necessitated. If the “as-is” rents do not surpass the mandatory market rent threshold, then a HUD-commissioned RCS will be procured solely for the “post-rehabilitation” condition of the property.

The HUD 150% Mandatory Market Rent Threshold Test will be applicable for any RCS signed by the owner’s appraiser on or after May 1, 2023.

Investigate this page to search for rental rates by city or zip code and utilize them in the mandatory market rent threshold test for Rent Comparability Studies.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

HUD recently released the 2023 median rents by zip code to be used in the mandatory market rent threshold test for Rent Comparability Studies or RCS.

Section 8 laws and procedures require the U. S. Department of Housing and Urban Development (HUD) to obtain and review Rent Comparability Studies (RCS) when renewing most Section 8 contracts. The market rents resulting from these studies determine the rents owners can receive under the program and greatly influence whether an owner will renew and continue providing affordable housing or opt-out of the Section 8 contract and convert to market rent housing. The market rents set in these studies also drive HUD’s outlays for Section 8 project-based subsidy.

“If the rents in the owner’s study exceed 140% of median zip code rent threshold, then HUD will require a third-party Rent Comparability Study (RCS).”

— HUD SECTION 8 RENEWAL GUIDE

Median Gross Rents are used to determine when HUD will procure a third-party RCS in conjunction with Section 8 Project-based Rental Assistance rent setting. Section 9-14 of the Section 8 Renewal Policy Guide provides instructions for comparing the median rents as derived by an owner’s appraiser in an RCS with Census Bureau estimates of the median rents in the project’s zip code. If the rents in the owner’s study exceed 140% of median zip code rent threshold, then HUD will require a third-party Rent Comparability Study (RCS).

For more information on the market rent threshold test, read our article “HUD Releases Mandatory Market Rent Threshold Test”.

HUD has recently published the new median zip code rents and the 140% thresholds - these numbers will be effective for any RCS signed by the owner’s appraiser on or after March 9, 2023.

Explore this page to search for rents by city or zip code and use them in the mandatory market rent threshold test for Rent Comparability Studies.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Search the recently published HUD median zip code rents and the 140% thresholds - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after March 9, 2023. 

For more information on the market rent threshold test, read our article “HUD Releases Mandatory Market Rent Threshold Test”.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Search the recently published HUD median zip code rents and the 140% thresholds - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after March 17, 2022. 

For more information on the market rent threshold test, read our article “HUD Releases Mandatory Market Rent Threshold Test”.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

HUD recently released the 2022 median rents by zip code to be used in the mandatory market rent threshold test for Rent Comparability Studies or RCS.

Section 8 laws and procedures require the U. S. Department of Housing and Urban Development (HUD) to obtain and review Rent Comparability Studies (RCS) when renewing most Section 8 contracts. The market rents resulting from these studies determine the rents owners can receive under the program and greatly influence whether an owner will renew and continue providing affordable housing or opt-out of the Section 8 contract and convert to market rent housing. The market rents set in these studies also drive HUD’s outlays for Section 8 project-based subsidy.

“If the rents in the owner’s study exceed 140% of median zip code rent threshold, then HUD will require a third-party Rent Comparability Study (RCS).”

— HUD SECTION 8 RENEWAL GUIDE

Median Gross Rents are used to determine when HUD will procure a third-party RCS in conjunction with Section 8 Project-based Rental Assistance rent setting. Section 9-14 of the Section 8 Renewal Policy Guide provides instructions for comparing the median rents as derived by an owner’s appraiser in an RCS with Census Bureau estimates of the median rents in the project’s zip code. If the rents in the owner’s study exceed 140% of median zip code rent threshold, then HUD will require a third-party Rent Comparability Study (RCS).

For more information on the market rent threshold test, read our article “HUD Releases Mandatory Market Rent Threshold Test”.

HUD has recently published the new median zip code rents and the 140% thresholds - these numbers will be effective for any RCS signed by the owner’s appraiser on or after March 17, 2022.

Explore this page to search for rents by city or zip code and use them in the mandatory market rent threshold test for Rent Comparability Studies.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Search the recently published HUD median zip code rents and the 140% thresholds - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after February 11, 2021. 

For more information on the market rent threshold test, read our article “HUD Releases Mandatory Market Rent Threshold Test”.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure

Search the recently published HUD median zip code rents and the 140% thresholds - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after February 11, 2020. 

For more information on the market rent threshold test, read our article “HUD Releases Mandatory Market Rent Threshold Test”.

Podcast • Tools • Services • Archive • About • Contact

About: Clarendon is a trusted partner for government compliance and advisory solutions, specializing in HUD-compliant services: HUD RCS, appraisals, brokerage, inspections, facility support and strategic guidance for agencies, housing authorities and property owners nationwide.

© 2026 The Clarendon Group, Inc. All Rights Reserved. Disclosure