[Federal Register Volume 60, Number 157 (Tuesday, August 15, 1995)]
[Rules and Regulations]
[Pages 42230-42288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19835]
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Part III
Department of Housing and Urban Development
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Office of the Secretary
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24 CFR Part 888
Section 8 Housing Assistance Payments Program, Fair Market Rent
Schedules; Final Rule
Federal Register / Vol. 60, No. 157 / Tuesday, August 15, 1995 /
Rules and Regulations
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Part 888
[Docket No. FR-3699-N-04]
Section 8 Housing Assistance Payments Program; Fair Market Rent
Schedules for Use in the Rental Certificate Program, Loan Management
and Property Disposition Programs, Moderate Rehabilitation Single Room
Occupancy Program and Rental Voucher Program
AGENCY: Office of the Secretary, HUD.
ACTION: Final fiscal year (FY) 1995 fair market rents.
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SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937
requires the Secretary to publish Fair Market Rents (FMRs) annually to
be effective on October 1 of each year. FMRs are used for the Section 8
Rental Certificate program (part 882, subparts A and B), including
space rentals by owners of manufactured homes under the Section 8
Rental Certificate program (part 882, subpart F) and project-based
Certificate assistance (part 882, subpart G); the Section 8 Moderate
Rehabilitation program (part 882, subparts D and E); Section 8 housing
assisted under part 886, subparts A and C (Section 8 Loan Management
and Property Disposition programs); and to determine payment standard
schedules in the Rental Voucher program (part 887).
There have been several Federal Register publications leading to
this final publication of the FY 1995 FMRs at the 40th percentile rent
level. On June 23, 1994, HUD published separate sets of proposed FMRs
at the 45th and the 40th percentile rent levels. The proposed 40th
percentile FMRs were included in that publication to alert the public
that the Administration was considering lowering the FMR standard as a
cost saving measure. On July 13, the FMR comment period was extended to
October 14 to give small PHAs in nonmetropolitan areas the opportunity
to use HUD's recently issued rental housing survey guide. Because of
the extended comment period, HUD could not review the comments in time
to meet the October 1 deadline for publishing the final FMRs. On
September 28, therefore, HUD published final 45th percentile FMRs for
all areas at the proposed FMR levels and announced that there would be
a later publication that would include revised FMRs for the areas whose
rental housing surveys were still being evaluated.
On March 2, 1995, HUD published the proposed rule to revise 24 CFR
part 888 to change the FMR rent standard from the 45th to 40th
percentile rent level. The comment period ended on April 3, 1995, and,
in a separate Federal Register publication on August 15, 1995, the
changes were published.
This document concludes the process by providing final FY 1995 FMRs
at the 40th percentile level. Included in this publication are
increased FMRs for 131 areas that submitted rental housing surveys that
HUD determined provided a sufficient basis for revising the FMRs. Five
areas also are being added to Schedule D on the basis of surveys
submitted on manufactured home space rentals in these areas. In
addition, HUD has increased the FMRs for 325 nonmetropolitan counties
after discovering that the original analysis of 1990 Census data
comparing low rent nonmetropolitan counties with minimum rent values
computed for States had led to an unintended result. HUD is continuing
to study this issue, and is considering a further change in the way the
State minimums are determined in the FY 1996 proposed FMRs.
EFFECTIVE DATE: The FMRs published in this document are effective on
September 14, 1995.
FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Rental Assistance
Division, Office of Elderly and Assisted Housing, telephone (202) 708-
0477 or TDD: (202) 708-0850. For technical information on the
development of schedules for specific areas or the method used for the
rent calculations, contact Michael R. Allard, Economic and Market
Analysis Division, Office of Economic Affairs, telephone (202) 708-0577
or TDD: (202) 708-0770. (These are not toll-free numbers.)
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
The 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
the 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). Public housing units and newly built units
less than two years old are excluded.
Data Sources
HUD used the most accurate and current data available to develop
the FMR estimates. Three sources of survey data were used for the base-
year estimates. They are: (1) the 1990 Census; (2) RDD telephone
surveys conducted of individual FMR areas since the 1990 Census; and
(3) the post-1990 Census American Housing Surveys (AHSs) available at
the time the FMR estimates were prepared. The base-year FMRs were then
updated using Consumer Price Index (CPI) data for rents and utilities
or the HUD regional rent change factors developed from RDD surveys.
Annual average CPI data are available individually for 103 metropolitan
FMR areas. RDD regional rent change factors are developed annually for
the metropolitan and nonmetropolitan parts of each of the 10 HUD
geographic regions (a total of 20 separate factors). The RDD factors
are used to update the base year estimates for all FMR areas that do
not have their own local CPI survey.
The decennial Census provides statistically reliable rent data for
use in establishing base-year FMRs. AHSs are conducted by the Bureau of
the Census for HUD and have accuracy comparable to the decennial
Census. These surveys enable HUD to develop between-census revisions
for the largest metropolitan areas on a revolving schedule. The RDD
telephone survey technique is based on a sampling procedure that uses
computers to select random samples of rental housing, dial and keep
track of the telephone numbers and tabulate the responses.
Manufactured Home Space FMRs
Manufactured home space FMRs are established at 30 percent of the
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applicable Section 8 Rental Certificate program two-bedroom FMR. HUD
accepts public comments requesting modifications of manufactured home
space FMRs. To be accepted for approval, such comments must contain
statistically valid survey data that show the 40th percentile space
rent (excluding the cost of utilities) for the FMR area. This program
uses the same FMR area definitions as the Section 8 Rental Certificate
program. 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 Rental Certificate program FMRs.
Public Comments
In response to the June 23 proposed FMRs, HUD received 175 comments
covering 267 FMR areas, for which rental housing survey information was
included for 188 areas. HUD carefully evaluated all information
submitted and, based on this review, revised the FMRs for 131 areas.
The information submitted for the 57 other areas was not considered
sufficient to provide a basis for revising the FMRs.
The 131 FMR areas with approved FMR revisions included 87 areas for
which RDD surveys were conducted either by the Public Housing Agency or
by a professional survey firm. Successful surveys were submitted for 18
areas using the more traditional landlord/owner type surveys. FMR
increases were also approved for 26 other areas that submitted
incomplete survey information but for which HUD was able to make
adjustments using available information on assisted housing.
AHS and HUD Sponsored RDD Surveys
HUD received public comments with survey data from two of the eight
areas identified in the September 28 FMR publication with RDD or AHS
surveys indicating FMR reductions. Based on the rental housing survey
conducted for Gage County, NE, the FMRs have been increased. The survey
data provided for the Memphis metropolitan area was not sufficient to
provide a basis for revising the FMRs.
Based on RDD survey results obtained since the last publication of
final FMRs on September 28, 1994, the FMRs for the following 14
additional areas are being increased in today's notice:
Allentown-Bethlehem-Easton, PA
Corpus Christi, TX
Davenport-Moline-Rock Island, IA-IL
Greensboro-Winston Salem-Highpoint, NC
Greenville-Spartanburg-Anderson, SC
Louisville, KY-IN
Medford-Ashland, OR
Olympia, WA
Pensacola, FL
Salem, OR
Shreveport-Bossier City, LA
Syracuse, NY
Utica-Rome, NY
Columbus County, NC
HUD Rental Housing Survey Guides
HUD recommends use of professionally-conducted Random Digit Dialing
(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-$15,000. Areas with 500 or more program units usually
meet this criterion, and areas with fewer units may meet it if the
actual two-bedroom FMR rent standard is significantly different than
that proposed by HUD. In addition, HUD has developed a simplified
version of the RDD survey methodology for smaller, nonmetropolitan
PHAs. This methodology is designed to be simple enough to be done by
the PHA itself, rather than by professional survey organizations, at a
cost of around $6,000. In addition, PHAs in nonmetropolitan areas may,
in certain circumstances, do surveys of clusters of counties. All
clustered surveys must be approved in advance by HUD. PHAs are
cautioned that the resultant FMRs will not be identical within the
cluster: each individual FMR area will have a separate FMR based on its
relationship to the combined rent of the cluster of FMR areas. HUD does
not mandate the use of either the RDD telephone survey or the modified
RDD telephone survey methodology. Other survey methodologies are
acceptable as long as they provide statistically reliable unbiased
estimates of the 40th percentile gross rent. All survey results must be
fully documented.
Because it takes two months to obtain survey estimates, interested
organizations concerned about FMR accuracy may wish to begin their FMR
surveys in the next few months to assure that the results will be
available in time to be incorporated into the FY 1996 FMRs. The
starting point is to carefully review one of the two following
publications, both obtainable from HUD USER at 1-800-245-2691. Larger
PHAs should obtain ``Random Digit Dialing Surveys; A Guide to Assist
Larger Public Housing Agencies in Preparing Fair Market Rent
Comments.'' Smaller PHAs should obtain ``Rental Housing Surveys; A
Guide to Assist Smaller Public Housing Agencies in Preparing Fair
Market Rent Comments.''
FMRs for Flood Damaged Areas in the Southeast and Midwest
Under the authority granted in 24 CFR part 899, the Secretary will
continue to waive the regulatory requirements that govern requests for
geographic area FMR exceptions for the flood-impacted areas in the
midwest and southeast. The flood-related FMR exceptions will be
approved by the HUD field office with jurisdiction for: (1) Single-
county FMR areas and for individual county 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 PHA certifies
that damage to the rental housing stock is so substantial that it has
increased the prevailing rent levels. Such exceptions must be requested
in writing by the responsible PHAs. Once approved by HUD, they will
remain in effect until superseded by final FY 1996 FMRs.
Other Matters
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).
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.
The General Counsel, as the Designated Official under Executive
Order No. 12606, The Family, has determined that this notice will not
have a significant impact on family formation, maintenance, or well-
being. The notice amends Fair Market Rent schedules for various Section
8 assisted housing programs, and does not affect the amount of rent a
family receiving rental assistance pays, which is based on a percentage
of the family's income.
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
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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: August 4, 1995.
Henry G. Cisneros,
Secretary.
Section 8 Housing Assistance Payments Program; Fair Market Rent
Schedules for Use in the Rental Certificate Program, Loan Management
and Property Disposition Programs, Moderate Rehabilitation Program and
Rental Voucher Program
Schedules B and D--General Explanatory Notes
1. Geographic Coverage
a. The FMRs shown in Schedule B incorporate the Office of
Management and Budget's (OMB) 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. 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.
b. The exceptions are counties deleted from seven large
metropolitan areas whose revised OMB 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
Atlanta, GA--Carroll, Pickens, and Walton Counties.
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.
Lafayette, LA--St. Landry and Acadia Parishes.
New Orleans, LA--St. James Parish.
Washington, DC--Berkeley and Jefferson Counties in West Virginia; and
Clarke, Culpeper, King George and Warren counties in Virginia.
c. 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. 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 Virginia Independent Cities
Included With County
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County Cities
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Allegheny.......................... Clifton Forge and Covington.
Augusta............................ Staunton and Waynesboro.
Carroll............................ Galax.
Frederick.......................... Winchester.
Greensville........................ Emporia.
Halifax............................ South Boston.
Henry.............................. Martinsville.
Montgomery......................... Radford.
Rockbridge......................... Buena Vista and Lexington.
Rockingham......................... Harrisonburg.
Southhampton....................... Franklin.
Wise............................... Norton.
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e. FMRs for Section 8 manufactured home spaces are established at
30 percent of the two-bedroom Section 8 Rental Certificate program
FMRs, with the exception of the areas listed in Schedule D whose FMRs
have been revised 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
Rental Certificate program FMRs. The FMR area definitions used for
manufactured home spaces are the same as for the Section 8 Certificate
program.
2. 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.
e. The FMRs are listed by dollar amount on the first line beginning
with the FMR area name.
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[FR Doc. 95-19835 Filed 8-14-95; 8:45 am]
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