Fair Market Rent is the estimated amount of money a property with a certain number of bedrooms, in a certain area of the country, will rent for.
It is a gross rent estimate that includes the base rent, as well as any essential utilities that the tenant would be responsible for paying, such as gas or electric. It does not include non-essential utilities such as telephone, television or internet.
HUD arrives at the numbers for each area with the help of census data and through renter surveys. Every year, HUD compiles a list of the Fair Market Rents for over 2,500 metropolitan and non-metropolitan counties.
Fair Market Rents are used to determine rental voucher amounts for government assistance housing programs such as Section 8 (Housing Choice Voucher Program).
In the city of Newark, New Jersey, the fair market rent for a two bedroom apartment is $1200. The fair market rent for a one bedroom is $1000.