[Federal Register Volume 63, Number 190 (Thursday, October 1, 1998)]
[Rules and Regulations]
[Pages 52858-52917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26291]
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Part VI
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 888
Fair Market Rents for the Section 8 Housing Assistance Payments
Program--Fiscal Year 1999; Final Rule
Federal Register / Vol. 63, No. 190 / Thursday, October 1, 1998 /
Rules and Regulations
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 888
[Docket No. FR-4362-N-02]
Fair Market Rents for the Section 8 Housing Assistance Payments
Program--Fiscal Year 1999
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of Final Fiscal Year (FY) 1999 Fair Market Rents (FMRs).
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SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937
requires the Secretary to publish FMRs annually to be effective on
October 1 of each year. FMRs are used for the Section 8 Rental
Certificate Program (including space rentals by owners of manufactured
homes under that program); the Moderate Rehabilitation Single Room
Occupancy program; housing assisted under the Loan Management and
Property Disposition programs; payment standards for the Rental Voucher
program; and any other programs whose regulations specify their use.
Today's notice provides final FY 1999 FMRs for all areas. It
includes increased FMRs for nine areas that submitted public comments
and for two areas as a result of HUD-contracted Random Digit Dialing
(RDD) surveys conducted through July 1998. In addition, it includes
increases for mobile home space FMRs in the five areas that submitted
comments.
Today's notice also makes effective FMR reductions for 12 areas
that were proposed for reduction in the May 5, 1998 notice (63 FR
24846), based on the results of recent RDD and American Housing Surveys
(AHSs).
EFFECTIVE DATE: The FMRs published in this notice are effective on
October 1, 1998.
FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Director, Real Estate
and Housing Performance Division, Office of Public and Assisted Housing
Delivery, telephone (202) 708-0477. For technical information on the
development of schedules for specific areas or the method used for the
rent calculations, contact Alan Fox, Economic and Market Analysis
Division, Office of Economic Affairs, telephone (202) 708-0614,
Extension 5863 (e-mail: alan____fox@hud.gov). Hearing-or speech-
impaired persons may contact the Federal Information Relay Service at
1-800-877-8339 (TTY). (Other than the ``800'' TTY number, telephone
numbers are not toll free.)
SUPPLEMENTARY INFORMATION: Section 8 of the United States Housing Act
of 1937 (the Act) (42 U.S.C. 1437f) authorizes housing assistance to
aid lower income families in renting decent, safe, and sanitary
housing. Assistance payments are limited by FMRs established by HUD for
different areas. In general, the FMR for an area is the amount that
would be needed to pay the gross rent (shelter rent plus utilities) of
privately owned, decent, safe, and sanitary rental housing of a modest
(non-luxury) nature with suitable amenities.
Method Used To Develop FMRs
FMR Standard
FMRs are gross rent estimates; they include shelter rent and the
cost of utilities, except telephone. HUD sets FMRs to assure that a
sufficient supply of rental housing is available to program
participants. To accomplish this objective, FMRs must be both high
enough to permit a selection of units and neighborhoods and low enough
to serve as many families as possible. The level at which FMRs are set
is expressed as a percentile point within the rent distribution of
standard quality rental housing units. The current definition used is
the 40th percentile rent, the dollar amount below which 40 percent of
standard quality rental housing units rent. The 40th percentile rent is
drawn from the distribution of rents of units which are occupied by
recent movers (renter households who moved into their unit within the
past 15 months). Newly built units less than two years old are
excluded, and adjustments have been made to correct for the below
market rents of public housing units included in the data base.
Data Sources
HUD used the most accurate and current data available to develop
the FMR estimates. The sources of survey data used for the base-year
estimates are:
(1) The 1990 Census, which provides statistically reliable rent
data for all FMR areas;
(2) The Bureau of the Census' American Housing Surveys (AHSs),
which are used to develop between-Census revisions for the largest
metropolitan areas and which have accuracy comparable to the decennial
Census; and
(3) Random Digit Dialing (RDD) telephone surveys of individual FMR
areas, which are based on a sampling procedure that uses computers to
select statistically random samples of rental housing.
The base-year FMRs are updated using trending factors based on
Consumer Price Index (CPI) data for rents and utilities or HUD regional
rent change factors developed from RDD surveys. Annual average CPI data
are available individually for 99 metropolitan FMR areas. RDD regional
rent change factors are developed annually for the metropolitan and
nonmetropolitan parts of each of the 10 HUD regions. The RDD factors
are used to update the base year estimates for all FMR areas that do
not have their own local CPI survey.
State Minimum FMRs
FMRs are established at the higher of the local 40th percentile
rent level or the Statewide average of nonmetropolitan counties,
subject to a ceiling rent cap. The State minimum also affects a small
number of metropolitan areas whose rents would otherwise fall below the
State minimum.
Bedroom Size Adjustments
FMRs have been calculated separately for each bedroom size
category. For areas whose FMRs are based on the State minimums, the
rents for each bedroom size are the higher of the rent for the area or
the Statewide average of nonmetropolitan counties for that bedroom
size. For all other FMR areas, the bedroom intervals are based on data
for the specific area. Exceptions have been made for some areas with
local bedroom size rent intervals below an acceptable range. For those
areas the intervals selected were the minimums determined after
outliers had been excluded from the distribution of bedroom intervals
for all metropolitan areas. Higher ratios continue to be used for
three-bedroom and larger size units than would result from using the
actual market relationships. This is done to assist the largest, most
difficult to house families in finding program-eligible units. The FMRs
for unit sizes larger than 4 bedroom are calculated by adding 15
percent to the 4 bedroom FMR for each extra bedroom. For example, the
FMR for a 5 bedroom unit is 1.15 times the 4 bedroom FMR, and the FMR
for a 6 bedroom unit is 1.30 times the 4 bedroom FMR. FMRs for single-
room-occupancy (SRO) units are 0.75 times the 0 bedroom FMR.
Public Comments
In response to the May 5, 1998 proposed FMRs, HUD received public
comments covering 38 FMR areas. Rental housing survey information was
provided for 17 of those FMR areas. All of the survey information
submitted was evaluated and, based on that review, the FMRs for 9 areas
are being revised. The
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information submitted for the other FMR areas was not considered
sufficient to provide a basis for revising the FMRs.
Areas with approved FMR revisions:
Tucson, AZ
San Diego, CA
Carbon County, MT
LaSalle County, IL
Marshall County, IA
Fayette County, IN
Lawrence, MA-NH
Portsmouth-Rochester, NH-ME
Hood River County, OR
Areas with approved manufactured home space FMR revisions:
Los Angeles, CA
Riverside-San Bernardino, CA
San Jose, CA
Reno, NV
Deschutes County, OR
HAs and other interested parties should be aware that FMR comments
received too late for adjusting the current year's final FMRs will be
held for use in the following year. In such cases HUD will trend the
survey results to the date of the FMR estimate. If the HA is concerned
that rents are changing rapidly, surveys should be timed to be received
as close as possible to HUD's deadline for public comments.
AHS and RDD Surveys
This notice makes effective the FMRs for the 12 areas proposed with
reductions based on recent RDD or AHS surveys:
Late-1997 RDD
Chicago, IL
Bergen-Passaic, NJ
Newark, NJ
Buffalo-Niagara Falls, NY
Early-1998 RDD
Fresno, CA
Santa Cruz-Watsonville, CA
Bridgeport, CT
Honolulu, HI
Jersey City, NJ
Newburgh, NY-PA
McAllen-Edinburg-Mission, TX
American Housing Survey
Sacramento, CA
HUD is increasing FMRs for the following 2 areas, based on HUD-
sponsored RDDs that were completed after the date of the proposed FMR
notice:
Franklin County, KS
Clinton County, OH
FMR Area Definition Changes
This notice includes FMRs for one new metropolitan FMR area based
on new metropolitan statistical area definitions made effective by OMB
on June 30, 1998. It is the Missoula, Montana FMR area, which consists
of Missoula County.
Manufactured Home Space Surveys
FMRs for the rental of manufactured home spaces are 30 percent of
the applicable Section 8 existing housing program FMR for two-bedroom
unit. HUD accepts public comments requesting modifications of these
FMRs where the 30 percent FMRs are thought to be inadequate. In order
to be accepted as a basis for revising the FMRs, such comments must
contain statistically valid survey data that show the 40th percentile
space rent (excluding the cost of utilities) for the entire FMR area.
However, the sampling requirements for manufactured home space rent
surveys are easier to meet than for regular FMR comments, and
interested parties should contact HUD for suggestions. HUD uses the
same FMR area definitions for manufactured home space rental as for the
Section 8 existing housing FMRs shown in Schedule B. Manufactured home
space FMR revisions are published as final FMRs in Schedule D. Once
approved, the revised manufactured home space FMRs establish new base
year estimates that are updated annually using the same data used to
update the Section 8 existing housing program FMRs.
HUD Rental Housing Survey Guides
HUD recommends the use of professionally-conducted RDD telephone
surveys to test the accuracy of FMRs for areas where there is a
sufficient number of Section 8 units to justify the survey cost of
$10,000-$12,000. Areas with 500 or more program units usually meet this
criterion, and areas with fewer units may meet it if local two-bedroom
rents are thought to be significantly different than that proposed by
HUD. In addition, HUD has developed a simplified version of the RDD
survey methodology for smaller, nonmetropolitan HAs. This methodology
is designed to be simple enough to be done by the HA itself, rather
than by professional survey organizations, at a cost of about $5,000.
HAs in nonmetropolitan areas may, in certain circumstances, do
surveys of groups of counties. All grouped county surveys must be
approved in advance by HUD. HAs are cautioned that the resulting FMRs
will not be identical for the counties surveyed; each individual FMR
area will have a separate FMR based on its relationship to the combined
rent of the group of FMR areas.
HAs that plan to use the RDD survey technique may obtain a copy of
the appropriate survey guide by calling HUD USER on 1-800-245-2691.
Larger HAs should request ``Random Digit Dialing Surveys; A Guide to
Assist Larger Housing Agencies in Preparing Fair Market Rent
Comments.'' Smaller HAs should obtain ``Rental Housing Surveys; A Guide
to Assist Smaller Housing Agencies in Preparing Fair Market Rent
Comments.'' These guides are also available on the Internet at http://
www.huduser.org/publications/publicassist/assisted/fmrsurvey.html.
HUD prefers, but does not mandate, the use of RDD telephone
surveys, or the more traditional method described in the small HA
survey guide. Other survey methodologies are acceptable as long as they
provide statistically reliable, unbiased estimates of the 40th
percentile gross rent. Survey samples should preferably be randomly
drawn from a complete list of rental units for the FMR area. If this is
not feasible, the selected sample must be drawn so as to be
statistically representative of the entire rental housing stock of the
FMR area. In particular, surveys must include units of all rent levels
and be representative by structure type (including single-family,
duplex and other small rental properties), age of housing unit, and
geographic location. The decennial Census should be used as a starting
point and means of verification for determining whether the sample is
representative of the FMR area's rental housing stock. All survey
results must be fully documented.
The cost of an RDD survey may vary, depending on the
characteristics of the telephone system used in the FMR area. RDDs (and
simplified telephone surveys) of some non-metropolitan areas have been
unusually expensive because of telephone system characteristics. An HA
or contractor that cannot obtain the recommended number of sample
responses after reasonable efforts should consult with HUD before
abandoning its survey; in such situations HUD is prepared to relax
normal sample size requirements.
FMRs for Federal Disaster Areas
Under the authority granted in 24 CFR part 899, the Secretary of
HUD finds good cause to waive and hereby waives the regulatory
requirements that govern requests for geographic area exception rents
for areas that are declared disaster areas by the Federal Emergency
Management Agency (FEMA). HUD is prepared to grant disaster-related
exceptions up to 10 percent above the applicable FMRs for those areas.
HUD field offices are authorized to approve such exceptions for (1)
single-county FMR areas and for individual county
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parts of multi-county FMR areas that qualify as disaster areas under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act; if
(2) the HA certifies that damage to the rental housing stock as a
result of the disaster is so substantial that it has increased the
prevailing rent levels in the affected area. Such exception rents must
be requested in writing by the responsible HAs. Exception rents
approved by HUD during FY 1999 will remain in effect until superseded
by the publication of the final FY 2001 FMRs.
Other Matters
Environmental Impact
A Finding of No Significant Impact with respect to the environment
as required by the National Environmental Policy Act (42 U.S.C. 4321-
4374) is unnecessary, since the Section 8 Rental Certificate Program is
categorically excluded from the Department's National Environmental
Policy Act procedures under 24 CFR 50.20(d).
Regulatory Flexibility Act
The undersigned, in accordance with the Regulatory Flexibility Act
(5 U.S.C. 605(b)), hereby certifies that this notice does not have a
significant economic impact on a substantial number of small entities,
because FMRs do not change the rent from that which would be charged if
the unit were not in the Section 8 Program.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order No. 12611, Federalism, has determined that this
notice will not involve the preemption of State law by Federal statute
or regulation and does not have Federalism implications. The Fair
Market Rent schedules do not have any substantial direct impact on
States, on the relationship between the Federal government and the
States, or on the distribution of power and responsibility among the
various levels of government.
The Catalog of Federal Domestic Assistance program number is
14.156, Lower-Income Housing Assistance Program (Section 8).
Accordingly, the Fair Market Rent Schedules, which will not be
codified in 24 CFR Part 888, are amended as follows:
Dated: September 25, 1998.
Andrew M. Cuomo,
Secretary.
Fair Market Rents for the Section 8 Housing Assistance Payments
Program
Schedules B and D--General Explanatory Notes
1. Geographic Coverage
a. Metropolitan Areas--FMRs are housing market-wide rent estimates
that are intended to provide housing opportunities throughout the
geographic area in which rental housing units are in direct
competition. The FMRs shown in Schedule B incorporate OMB's most
current definitions of metropolitan areas, with the exceptions
discussed in paragraph (b). HUD uses the OMB Metropolitan Statistical
Area (MSA) and Primary Metropolitan Statistical Area (PMSA) definitions
for FMR areas because they closely correspond to housing market area
definitions.
b. Exceptions to OMB Definitions--The exceptions are counties
deleted from several large metropolitan areas whose revised OMB
metropolitan area definitions were determined by HUD to be larger than
the housing market areas. The FMRs for the following counties (shown by
the metropolitan area) are calculated separately and are shown in
Schedule B within their respective States under the ``Metropolitan FMR
Areas'' listing:
Metropolitan Area and Counties Deleted
Chicago, IL--DeKalb, Grundy and Kendall Counties
Cincinnati-Hamilton, OH-KY-IN--Brown County, Ohio; Gallatin, Grant and
Pendleton Counties in Kentucky; and Ohio County, Indiana
Dallas, TX--Henderson County
Flagstaff, AZ-UT--Kane County, UT
New Orleans, LA--St. James Parish
Washington, DC-MD-VA-WV--Berkeley and Jefferson Counties in West
Virginia; and Clarke, Culpeper, King George and Warren Counties in
Virginia
c. Nonmetropolitan Area FMRs--FMRs also are established for
nonmetropolitan counties and for county equivalents in the United
States, for nonmetropolitan parts of counties in the New England states
and for FMR areas in Puerto Rico, the Virgin Islands and the Pacific
Islands.
d. Virginia Independent Cities--FMRs for the areas in Virginia
shown in the table below were established by combining the Census data
for the nonmetropolitan counties with the data for the independent
cities that are located within the county borders. Because of space
limitations, the FMR listing in Schedule B includes only the name of
the nonmetropolitan County. The full definitions of these areas,
including the independent cities, are as follows:
Virginia Nonmetropolitan County FMR Area and Independent Cities Included
With County
------------------------------------------------------------------------
County Cities
------------------------------------------------------------------------
Allegheny............................. Clifton Forge and Covington.
Augusta............................... Staunton and Waynesboro.
Carroll............................... Galax.
Frederick............................. Winchester.
Greensville........................... Emporia.
Henry................................. Martinsville.
Montgomery............................ Radford.
Rockbridge............................ Buena Vista and Lexington.
Rockingham............................ Harrisonburg.
Southhampton.......................... Franklin.
Wise.................................. Norton.
------------------------------------------------------------------------
2. Bedroom Size Adjustments
Schedule B shows the FMRs for 0-bedroom through 4-bedroom units.
The FMRs for unit sizes larger than 4 bedrooms are calculated by adding
15 percent to the 4-bedroom FMR for each extra bedroom. For example,
the FMR for a 5-bedroom unit is 1.15 times the 4-bedroom FMR, and the
FMR for a 6-bedroom unit is 1.30 times the 4 bedroom FMR. FMRs for
single-room-occupancy (SRO) units are 0.75 times the 0 bedroom FMR.
3. FMRs for Manufactured Home Spaces
FMRs for Section 8 manufactured home spaces are established at 30
percent of the two-bedroom Section 8 existing housing program FMRs,
with the exception of the areas listed in Schedule D whose FMRs have
been modified on the basis of public comments. Once approved, the
revised manufactured home space FMRs establish new base-year estimates
that will be updated annually using the same data used to estimate the
Section 8 existing housing FMRs. The FMR area definitions used for the
rental of manufactured home spaces are the same as the area definitions
used for the Section 8 existing FMRs.
4. Arrangement of FMR Areas and Identification of Constituent Parts
a. The FMR areas in Schedule B are listed alphabetically by
metropolitan FMR area and by nonmetropolitan county within each State.
The exception FMRs for manufactured home spaces in Schedule D are
listed alphabetically by State.
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b. The constituent counties (and New England towns and cities)
included in each metropolitan FMR area are listed immediately following
the listings of the FMR dollar amounts. All constituent parts of a
metropolitan FMR area that are in more than one State can be identified
by consulting the listings for each applicable State.
c. Two nonmetropolitan counties are listed alphabetically on each
line of the nonmetropolitan county listings.
d. The New England towns and cities included in a nonmetropolitan
part of a county are listed immediately following the county name.
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FR Doc. 98-26291 Filed 9-30-98; 8:45 am]
BILLING CODE 4210-32-C
