On December 23, 2017, HUD was ordered to implement the published final rule for Small Area Fair Market Rents (SAFMR), requiring 24 metropolitan areas nationwide, including Philadelphia, to implement Payment Standards utilizing Zip-Code based SAFMRs.
Historically, HUD publishes Fair Market Rents (FMR) annually for the entire city of Philadelphia, which is used to set the payment standards for each unit size. The established payment standard determines the maximum allowable subsidy levels for HCV-assisted units.
By utilizing zip codes as the basis for fair market rents, HUD hopes to provide tenants with greater ability to move into higher opportunity neighborhoods with jobs, public transportation, and good schools by offering higher rents. Additionally, HUD hopes to reduce overpayment in lower-rent areas and address high levels of voucher concentration in certain areas.
As a result, effective October 1, 2023, the Philadelphia Housing Authority (PHA) is implementing changes to the method of establishing PHA’s payment standard and introducing PHA’s new payment standard schedule.
The rule allows grouping of zip codes into a one payment standard as long as the payment standard is within a basic range of 90 to 110% of the zip codes’ SAFMR.
PHA has established three payment standard groups:
Group 1 – Basic Rents
Group 2 – Traditional Range Rents
Group 3 – Mid Range Rents
Group 4 – Opportunity Rents
Group 5 – High Opportunity Rents