How are "fair market rents" determined?

Fair market rents are determined based on the rent amounts for properties that are reasonably competitive within the market. This approach considers various factors, including the location, type of property, condition, and amenities, to ensure that the rent reflects the current market conditions. By evaluating rents for comparable properties, this method aims to establish a baseline that accurately represents what tenants can expect to pay in a competitive environment, thereby providing a fair estimate for both landlords and tenants.

The other options do not align with the established principles of determining fair market rents. Calculating the average rent of the entire state may not reflect local market conditions, as rental prices can vary significantly between different areas. Assessing the structural integrity of a property focuses on the physical condition rather than market-driven pricing factors. Lastly, negotiations between sellers and buyers do not establish fair market rents, as these are instead determined by market conditions and competitive pricing rather than individual negotiations.