U.S. Northeast Market Studies - Contract Renewed

Client

U. S. Department of Housing & Urban Development

Skills

Appraisal, Market Study – Affordable Housing

Project Description

Clarendon’s contract with the U.S. Department of Housing and Urban Development (HUD) to provide Section 8 Rent Comparability Studies (RCS) was 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.

HUD mandates Rent Comparability Studies (RCS) to review and renew most Section 8 contracts. The market rents derived from these studies dictate the rental income owners can receive under the program, significantly impacting their decision to renew Section 8 contracts or transition to market rent housing. Additionally, these market rents play a vital role in HUD’s expenditure on Section 8 project-based subsidies.

For more detailed information on Rent Comparability Studies (RCS) and the market rent threshold test, read our article "HUD Introduces New 150% Mandatory Market Rent Threshold Test."

Resources:

Search Rents: Map- HUD FY 2025 Small Area Fair Market Rents (SAFMR) - Sec.8 RCS 150% Threshold

Market Overview

The major markets covered include the New York Metropolitan Area and the Boston Metropolitan Area. The New York Metropolitan Area is ethnically and geographically diverse, including the largest city in the United States – New York City. The regional economy is the largest in the country and one of the most important in the world. Finance, international trade, media, real estate, manufacturing, tourism, biotechnology, and education are leading industries. Other industries include entertainment and news media. Along with its wealth, the area has a cost of living that is among the highest in the United States.

New York is one of the premier apartment markets in the country, featuring some of the highest rents and boasting an extremely affluent tenant base. The outer boroughs of the Bronx, Brooklyn, and Queens, traditionally more working class, have seen their rents rise in upturns as rising Manhattan rents drive even fairly upscale tenants to consider alternative locations.

The Boston Metropolitan Area is the most intensively developed section of the State as well as the most populated area in New England. The Boston metropolitan area consists of 92 municipalities covering over 1,000 square miles in Eastern Massachusetts. In the New England Region historic employment growth in health care, information, communications and a range of business and professional services fueled the demand for housing goods and services.

The Boston apartment market is one of the top markets in the country, comprised of several geographic sub markets from Downtown Boston, Boston neighborhoods, Western suburbs to the South Shore. During the current cycle, all markets have generally experienced high rent growth, low vacancies and the resulting increases in competitive supply.