[Federal Register Volume 64, Number 190 (Friday, October 1, 1999)]
[Rules and Regulations]
[Pages 53450-53509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25265]
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Part II
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 888
Fair Market Rents for the Section 8 Housing Assistance Payments
Program--Fiscal Year 2000; Final Rule
Federal Register / Vol. 64, No. 190 / Friday, October 1, 1999 / Rules
and Regulations
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 888
[Docket No. FR-4496-N-02]
Fair Market Rents for the Section 8 Housing Assistance Payments
Program--Fiscal Year 2000
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of Final Fiscal Year (FY) 2000 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 housing choice
voucher program, the Moderate Rehabilitation Single Room Occupancy
program, the project-based voucher program, and any other programs
requiring their use. Today's notice provides final FY 2000 FMRs for all
areas.
EFFECTIVE DATE: The FMRs published in this notice are effective on
October 1, 1999.
FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Operations Division,
Office of Rental Assistance, 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)
708-0590, Extension 5863 (e-mail: alan__fox@hud.gov). Hearing- or
speech-impaired persons may use the Telecommunications Devices for the
Deaf (TTY) by contacting the Federal Information Relay Service at 1-
800-877-8339. (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. Housing assistance payments are limited by FMRs established by
HUD for different areas. In the voucher program, the FMR is used to
determine the ``payment standard'' (the maximum monthly subsidy) for
assisted families (see Section 982.503.) 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 7, 1999 proposed FMRs, HUD received public
comments covering 21 FMR areas. Rental housing survey information was
provided for 12 of those FMR areas. All of the survey information
submitted was evaluated and, based on that review, the FMRs for 10
areas are being revised. The information submitted for the other FMR
areas was not considered sufficient to provide a basis for revising the
FMRs.
Areas with approved FMR increases:
Sacramento, CA
San Benito County, CA
San Diego, CA
San Francisco, CA
Waterloo-Cedar Falls, IA
Rochester, MN
Moore County, NC
Many comments were received from the Cape Cod, Massachusetts area
in
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response to the proposed FMR decrease. An important methodological
comment was that the RDD survey on which the reduction was based might
not have accurately identified what are locally referred to as winter
rental units. The units that were surveyed in March 1999 were therefore
re-surveyed with a more detailed set of questions to identify these
winter rentals. Results of the re-survey revealed that the winter
rentals had influenced the original survey and also indicated more
rapid rent increases than previously thought. On this basis the FMRs
have been revised upward. These areas are:
Barnstable-Yarmouth, MA
Barnstable County, MA
Dukes County, MA
The Housing Authority of the City of Santa Barbara, CA, requested
that FMRs be increased or that the FMR area be split into two parts. In
response to earlier comments, in December 1998 HUD conducted an RDD
survey of the entire metropolitan area. The results were similar to the
FMR then in effect. In addition, the survey found that the differential
between the southern part (mainly the City of Santa Barbara) and the
rest of the FMR area was within the limits of the FMR geographic
exception range. HUD also received a comment from the Santa Barbara
County housing authority explaining that it was having no problems
running the program under the current FMR, and did not support a
request to split the FMR area into two parts. For these reasons, the
FMR for Santa Barbara is being adjusted with the normal update factor.
Areas with FMR increase by normal update factor:
Oakland, CA
Santa Barbara-Santa Maria-Lompoc, CA
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 3 areas proposed with
reductions based on recent RDD surveys and about which no comments were
received:
Modesto, CA
Middlesex-Somerset-Hunterdon, NJ
Allentown-Bethlehem-Easton, PA
American Housing Survey
Based on detailed rent data from the 1998 metropolitan AHSs, HUD is
increasing FMRs for the following two areas:
Birmingham, AL
Tampa-St. Petersburg-Clearwater, FL
FMRs for the following AHS areas are being increased by the normal
update factor:
Oakland, CA
San Jose, CA
Baltimore, MD
Boston, MA-NH
Minneapolis-St. Paul, MN-WI
Rochester, NY
Cincinnati, OH-KY-IN
Houston, TX
Salt Lake City-Ogden, UT
Norfolk-Virginia Beach-Newport News, VA-NC
The AHS results for two areas indicate a decrease in FMRs, which
will be proposed for the 2001 FMRs. They are:
Washington, DC-MD-VA
Providence-Fall River-Warwick, RI-MA
FMR Area Definition Changes
This notice includes FMRs for two new metropolitan FMR areas based
on new metropolitan statistical area definitions made effective by OMB
on June 30, 1999. They are the Corvallis, Oregon FMR area, which
consists of Benton County, and Auburn-Opelika, Alabama, which consists
of Lee County.
Manufactured Home Space Surveys
FMRs for the rental of manufactured home spaces in the Section 8
Existing certificate and voucher program and the new merged tenant-
based certificate and voucher program are 30 percent of the applicable
Section 8 existing housing program FMR for a 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, comments must contain
statistically valid survey data that show the 40th percentile space
rent (excluding the cost of utilities) for the entire FMR area.
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 other 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 rents are
thought to be significantly different than the FMR 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/datasets/fmr.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
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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.
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 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.
Catalog of Federal Domestic Assistance
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 17, 1999.
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 in the Section 8
Existing certificate and voucher program and the new merged tenant-
based certificate and voucher program are 30 percent of the two-bedroom
Section 8 existing housing program FMRs, with the exception of the
areas listed in Schedule D whose manufactured home space FMRs have been
modified on the basis of public comments. Once approved, the revised
manufactured home space FMRs establish new base-year estimates that are
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 in the Section 8 Existing certificate and
voucher program and the new merged tenant-based certificate and voucher
program are the same as the area definitions used for other FMRs.
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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.
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. 99-25265 Filed 9-30-99; 8:45 am]
BILLING CODE 4210-32-C
