To: Contra Costa County Board of Supervisors
From: Joseph Villarreal, Executive Director
Report Title: Memorandum of Understanding with the City of Alameda Housing Authority, the Housing Authority of the County of Alameda, the Oakland Housing Authority, and the Livermore Housing Authority for the implementation of a Fair Market Rent (FMR) reevaluation study for the Oakland- Fremont, CA HUD Metro FMR Area
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Executive Director to enter into a Memorandum of Understanding with the City of Alameda Housing Authority, the Housing Authority of the County of Alameda, the Oakland Housing Authority, and the Livermore Housing Authority obligating the HACCC to a payment limit of $300,000 for its share of one or more Fair Market Rent (FMR) reevaluation studies for the Oakland-Fremont, CA HUD Metro FMR Area to be conducted as needed over a five-year period.
BACKGROUND:
The Housing Authority of the County of Contra Costa (Authority) is committed to maximizing support for Contra Costa County residents while using resources efficiently. To achieve this goal, the Authority requires accurate data on the typical rents in its jurisdiction. The Authority intends to execute a Memorandum of Understanding (MOU) and work in collaboration with several other local public housing authorities (PHAs) in the Oakland-Fremont, CA HUD Metro Area to reevaluate the region's fair market rents (FMRs), which are used by the U.S. Department of Housing and Urban Development (Department) as the foundation for Housing Choice Voucher funding as well as to establish payment standards and allocate funding.
FMRs represent an estimate of the 40th percentile of standard-quality gross rents for a given region, calculated using 2018-2022 five-year American Community Survey (ACS) data- adjusted for inflation and other factors. Because these estimates are not based on current, direct rent sampling, the Department allows PHAs to contest and revise FMRs annually. An accurate FMR can result in a more equitable distribution of federal funds and broader housing choices for residents.
The Oakland-Fremont, CA HUD Metro FMR Area is made up of several jurisdictions in Alameda and Contra Costa counties. Any changes to the region's FMRs would affect all PHAs within those counties. PHAs in these two counties have an opportunity to work collaboratively to reevaluate the region's FMRs as needed by procuring a research consultant vendor. In previous reevaluations, which also were conducted in partnership with other PHAs, the region saw a 33% increase (in 2016) and a 0.8% increase (in 2019). By regularly reviewing FMRs, PHAs can help ensure the fair allocation of federal subsidies and ensure competitive rents broaden housing opportunities for residents.
Accurate FMRs are integral to the Department's funding allocations to PHAs. Underestimated FMRs reduce the subsidies available, limiting housing choices for residents. To address this, this MOU establishes an agreement between all of the following local PHAs to collaboratively conduct an FMR study:
• The Housing Authority of the County of Contra Costa (HACCC)
• The Oakland Housing Authority (OHA)
• The City of Alameda Housing Authority (AHA)
• The Housing Authority of the County of Alameda (HACA)
• The Livermore Housing Authority (LHA)
The coordination of this project is being led by the Oakland Housing Authority. AHA will procure and manage a vendor for the study. Together, the members will manage all steps of this research project.
By submitting updated FMR data to the Department according to its established deadlines- January for a mid-year adjustment (effective April) or June for incorporation into the Department's initial FMR publication (effective October)-the participating PHAs aim to keep pace with evolving market conditions. Improved accuracy in FMRs will help expand affordable housing options for residents, address cost burdens, and enhance the overall efficiency of subsidy distribution.
The Authority intends to submit results by January 2026 for the reevaluation of the 2026 FMRs. In future years, the Authority may choose to submit the data before June in order to put the reevaluated FMRs into effect six months earlier. However, the MOU does not oblige the Authority or any other participating agency to commission a study every year. Instead, each PHA, including the Authority, will annually decide whether a study is warranted.
AHA will procure the vendor in compliance with 24 CFR 200 and execute a five-year contract with a Fair Market Rent (FMR) Reevaluation Study vendor on behalf of all MOU partners for services to be provided annually on an as-needed basis. This will streamline procurement for studies in future years and facilitate our ability to meet the Department's deadlines.
The partner agencies will allocate costs based upon the total number of units under Annual Contributions Contract (ACC) for programs that use FMR. An approximation of the ACC breakdown is below:
|
Table A: Calculation of Contributions |
ACCs |
New percent |
Est. Cost, Yr 1 |
|
County of Alameda HA |
7110 |
21% |
$33,303.08 |
|
City of Alameda HA |
2059 |
6% |
$9,644.31 |
|
County of Contra Costa HA |
9792 |
29% |
$45,865.51 |
|
Livermore HA |
938 |
3% |
$4,393.57 |
|
Oakland HA |
14260 |
42% |
$66,793.52 |
|
Total Contributions |
34159 |
100% |
$160,000.00 |
The total yearly cost of the proposed Fair Market Rent (FMR) reevaluation study is estimated at up to $160,000. The Authority represents approximately 29% of the total ACC among the collaborating agencies, resulting in an annual cost share of up to $50,000, and up to $300,000 over five years should the study be conducted every year. If the group decides not to proceed with a study in any particular year, no costs will be incurred for that year. All parties to this MOU agree to pay their respective shares to the AHA within 21 days of receiving an invoice. The Authority's share of the costs may be reduced in future years if additional jurisdictions join the collaborative or increased if any of the participating PHAs elect not to participate in any given year.
In previous FMR studies, the region received financial support from local nonprofit organizations involved in housing and FMR issues. Two such organizations have already pledged $2,500 each for this year's study. Any additional nonprofit contributions not mentioned in the MOU will be deducted from the overall cost before the remaining expenses are split among the agencies, per the ACC allocation described above.
FISCAL IMPACT:
The financial impact of this item totals an amount not to exceed $300,000 to be paid over the next five years for studies conducted on an as-needed basis.
CONSEQUENCE OF NEGATIVE ACTION:
Failure to authorize the Executive Director to enter into the Memorandum of Understanding (MOU) may result in the Authority being excluded from the collaborative Fair Market Rent (FMR) reevaluation process. Without participation, the Authority would forgo the opportunity to contribute to and benefit from more accurate, locally informed FMR data that better reflects current market conditions in Contra Costa County and the broader Oakland-Fremont Metro Area.
Absent updated FMRs, the Authority risks operating with outdated federal rent benchmarks, which may lead to inadequate subsidy levels for voucher holders. This would limit tenant access to competitive rental units, constrain landlord participation, and ultimately reduce housing choice and stability for low-income residents.
In sum, non-participation could result in diminished federal funding opportunities, inefficient use of resources, and weakened positioning in regional housing policy efforts.