Part of the math behind every area’s fair market rent for fiscal year 2027 now runs through a single national number instead of a local or regional one. HUD’s annual calculation adjusts each area’s base rent for expected utility cost changes, and for the water, sewer and trash portion of that adjustment, the department has stopped using state or regional data entirely in favor of one nationwide figure from the Bureau of Labor Statistics. The change, described in the fiscal year 2027 fair market rents notice HUD published September 1, traces back to a data problem at the statistics agency rather than a policy choice at HUD.
Why BLS Stopped Publishing the Old Utility Index
For years, HUD built its utility inflation estimate for fair market rents using a Consumer Price Index series that tracked local and regional housing, fuel and utility costs. That series is being discontinued by the agency that produces it, forcing HUD to rebuild the utility side of its rent calculation using different underlying data sources for the first time since it last overhauled the formula.
The department lays out the fix in its fiscal year 2027 fair market rents notice: instead of one blended local utility index, HUD now builds a weighted-average composite from four separate household cost categories, electricity, natural gas, fuel oil, and water, sewer and trash collection, tracking each one with whichever data source still publishes reliable numbers at the right level of geography.
For electricity, natural gas and fuel oil, HUD still relies on state-level survey data from the U.S. Energy Information Administration, the same approach used in past years. Water, sewer and trash collection costs are the exception: because no equivalent state-level survey exists, HUD pulls those from the Bureau of Labor Statistics’ national data and applies the same nationwide number to every area’s utility calculation, regardless of what local water and sewer rates are actually doing.
Because the EIA survey data is priced at the state level, HUD assigns each of the metropolitan sampling areas it tracks a utility price based on the state where that area sits, using a population-weighted average across states for any sampling area that spans more than one. The Washington-Arlington-Alexandria area, for instance, stretches across three states and the District of Columbia, so HUD blends the state-level electricity, gas and fuel oil prices for all of them, weighted by county population, before calculating that area’s utility inflation factor.
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How the New Four-Part Formula Feeds Into the Rent Number
That utility inflation factor does not set a rent ceiling by itself. HUD combines it with a separate measure of shelter-rent inflation to produce what the notice calls a gross rent inflation factor, then applies that combined figure to bring each area’s base rent, built from census survey data collected between 2020 and 2024, up to a 2025 estimate.
The shelter-rent side of that calculation blends two different inputs: a measure built from six private rent-data providers and a measure based on the Bureau of Labor Statistics’ rent of primary residence index, weighted at roughly 55 percent and 45 percent respectively. Only after that blended shelter number is combined with the new four-part utility factor does HUD trend the result forward to the 2027 level the published fair market rents actually reflect.
Starting with fiscal year 2027, that same national utility figure also feeds the separate trend-factor models HUD uses to project rents forward, which means a change originating entirely from a Bureau of Labor Statistics data decision now touches both halves of the fair market rent calculation rather than just the initial inflation step, a detail the notice flags explicitly as new for this cycle.
What a National Number Means for Local Rent Ceilings
The practical effect is that an area where local water and sewer rates are rising sharply, from an aging pipe system or an expensive treatment-plant upgrade, no longer gets that local pressure reflected in its own utility inflation factor. Its fair market rent moves with the national water, sewer and trash trend instead, even if that trend understates what tenants and landlords in that specific area are actually paying for water service.
The reverse holds too: an area where utility costs have been unusually flat no longer benefits from that local calm the way it would have under the old, more localized index. HUD’s notice frames the change as a data-availability fix rather than an attempt to move rents in either direction, but the practical result is the same regardless of intent, a piece of every area’s rent ceiling that no longer reflects that area at all.
HUD has posted the full set of fiscal year 2027 figures, along with the underlying methodology, on its fair market rents data portal, the same site the department uses to publish reevaluation results and prior years’ numbers for comparison. Nothing on that portal breaks the utility inflation factor out by its four components for public view; the composite figure is folded into each area’s overall base-rent adjustment before it ever reaches a published table.
For landlords accepting vouchers and the housing agencies setting payment standards, the shift is largely invisible in the published fair market rent itself, since HUD folds the utility factor into one combined number rather than breaking it out by category. It is nonetheless a real change in how that number is built, one that the National Association of Housing and Redevelopment Officials flagged to its members as soon as the fiscal year 2027 rents were published, and one that traces directly back to a discontinued government data series rather than any change in what water actually costs to deliver.
Where Real Utility Bills Get Their Own Relief
A national water, sewer and trash number can move a metro area’s voucher rent ceiling without any connection to what a specific household’s own utility bill is doing. Older homeowners and renters covering heating, cooling and water costs directly, not through a voucher payment standard, are dealing with the same rising bills through entirely separate state and local relief programs.
The Senior Property Tax & Home-Cost Relief Kit is an 11-page kit devoted partly to heating, cooling and home-repair help, alongside the circuit-breaker credit that includes renters.
Check the heating and cooling assistance listed in The Senior Property Tax & Home-Cost Relief Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
