What is a “fair market” rent?
It’s more complex than one number
How much is an apartment worth? It’s a tough question to answer. You can look at the price of other units in your area with the same number of bathrooms, but it can be hard to compare. Apartments are different sizes, can have amenities like laundry machines in the unit, and can include utilities in the monthly price. It’s also difficult to choose when there isn’t enough housing available. You can’t compare apples to apples if the orchard only has a few trees to pick from.
“Fair market rent” isn’t the same thing as “market rent.” While “market rent” is what an apartment generally costs in an area, “fair market rent” is a government term. The U.S. Department of Housing and Urban Development uses it when making decisions about housing vouchers, the cost of rent in public housing, and government contracts. What’s “fair” according to the government also doesn’t necessarily match up with what people can realistically afford.
“Fair market rent” looks at the price of 40% of apartments in an area. If a fair market rent is $1,000 for example, that means 40% of apartments in the area cost less than that. Because it’s not the full picture, it can make it look like rent is lower than it is. But, “market rent” isn’t always accurate, either, because not every apartment is the same, and “market rent” is different depending on who you ask.
For example: The fair market rent for a two-bedroom apartment is $1,967 for Bridgeport, $1,653 for the Hartford area, and $1,867 for the New Haven area. This means 40% of apartments in Bridgeport cost less than $1,967, for instance, but many cost more than that.
So how much is rent, really? The Census groups all apartments of all sizes together, and includes the cost of utilities, so it doesn’t give an accurate picture of what you should expect to pay. Real estate websites can also vary greatly.
Compared to the government’s definition of “fair market rent,” Zillow states that the average cost of a two-bedroom apartment is $1,975 a month for Bridgeport, $1,550 a month for Hartford, and $1,900 a month in New Haven. According to Apartments.com, however, a two-bedroom apartment is $1,824 a month in Bridgeport, $1,547 a month in Hartford, and $2,412 a month in New Haven.
Greedy landlords can use those higher numbers to justify increasing rent, and the government uses the data to decide how many people in an area need help paying rent. And, when a few apartments go up in price in an area, landlords can use them to claim that’s the “market rent.” Landlords have also been caught using computer programs to raise rents and claim that everyone is increasing prices, so they should be able to, as well.
No matter what source you’re using, rent is going up, and it’s becoming harder to pay for it. According to HUD, the price of rent in Connecticut has increased nearly 30% for units all sizes since 2021.
Paychecks aren’t keeping up. If rent has to be less than 30% of your income (before taxes) to be considered “affordable,” then most households in Bridgeport can afford to pay up $1,415 a month, most households in Hartford can pay up to $1,133 a month, and most New Haven households can pay up to $1,334 a month.
The “fair market rent” in those areas is hundreds of dollars more per month. And remember: fair market rent only includes the less expensive units, not what most people are actually paying.
Everyone needs a safe, affordable place to live. But with the price of rent, food, and utilities increasing, it’s becoming harder for many people to make ends meet. There already aren’t enough housing vouchers to match the need, and with potential massive cuts to federal housing assistance on the horizon, Connecticut isn’t ready to step in and fill the gap.
If most people can’t afford what’s considered a “fair” rent, then it isn’t fair. Connecticut must dedicate itself to making housing more affordable so that everyone has the freedom to live in a quality, safe place without worrying about sacrificing between rent, food, electricity and other needs.
