[Federal Register Volume 59, Number 187 (Wednesday, September 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23987]
[Federal Register: September 28, 1994]
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Part IV
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 Rents; Final
Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Part 888
[Docket No. N-94-3754; FR-3699-N-03]
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
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of final 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).
HUD published the proposed Fiscal Year (FY) 1995 FMRs in the
Federal Register on June 23, 1994 (59 FR 32492), and in another
publication on July 13, 1994 (59 FR 35739), announced that the public
comment period was extended to October 14, 1994. The public comment
period was extended to give Public Housing Agencies (PHAs) the
opportunity to use the new rental housing survey guide that HUD had
recently developed for smaller, nonmetropolitan areas.
Two separate sets of proposed FMRs were published on June 23--one
based on the 45th percentile rent standard and the other based on the
40th percentile rent standard. The authorization bill now moving
through Congress establishes FMRs at the 45th percentile rent standard.
This notice, therefore, makes effective the final FY 1995 FMRs at the
45th percentile level.
As announced in the Federal Register on July 13, there will be two
final FY 1995 FMR publications. Today's notice makes effective final
FMRs for all areas on October 1, 1994. The FMRs in this notice are
based on the proposed FMRs included in the June 23 notice for all areas
except eight with RDD and AHS surveys that will have proposed
reductions in their FMRs postponed pending the outcome of the review of
comments submitted (see AHS and RDD surveys). A second publication
later this year will announce revised final FMRs for the areas for
which HUD makes a determination that the rental housing surveys
submitted as public comments provided a sufficient basis for such
revision.
EFFECTIVE DATE: The FMRs published in this notice are effective on
October 1, 1994.
FOR FURTHER INFORMATION CONTACT: Shirley C. Stone, Rental Assistance
Division, Office of Elderly and Assisted Housing, telephone (202) 708-
0477. (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
(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 45th percentile rent, the dollar amount below which 45 percent
of the standard quality rental housing units rent. The 45th 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 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: The final manufactured home space
FMRs are established at 30 percent of the 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 45th 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. All
manufactured home space FMR revisions approved will be published as
final FMRs in Schedule D. In addition HUD has retained all of the
modifications approved since 1990 because they are based on recent
survey data that HUD had determined to be valid.
New Metropolitan Area
This publication makes final the FMRs for the newly designated
Hattiesburg, Mississippi Metropolitan Statistical Area (MSA), which was
defined by OMB on July 1, 1994 (OMB Bulletin 94-07) to include Forrest
and Lamar Counties. HUD has determined that the new metropolitan area
definition is appropriate for use as an FMR area definition.
AHS and RDD Surveys
The eight areas identified in the proposed FMR notice with reduced
FMRs resulting from RDD and AHS surveys will continue to use the FY
1994 FMRs, which are republished in this notice. Final FY 1995 FMRs for
these areas, including any revisions resulting from public comments,
will be included in the second publication later this year. The eight
areas are:
RDD AREAS
Gage County, NE
Holmes County, FL
Jamestown, NY, MSA
Las Cruces, NM, MSA
Reading, PA, MSA
Washington County, FL
AHS AREAS
Memphis, TN-AR-MS, MSA
Oklahoma City, OK, MSA
HUD Rental Housing Survey Guides
HUD continues to recommend 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-$12,000. Areas with 500 or more 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, non-metropolitan
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 $5,000. The smallest PHAs 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--e.g., 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 45th
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 finds
good cause to waive the regulatory requirements that govern requests
for geographic area FMR exceptions for the flood-impacted areas in the
midwest and southeast that have been declared Federal disaster areas.
The FMR areas eligible for exceptions are those declared Federal
disaster areas. Recognizing that the substantial losses resulting from
the floods will have a direct effect on local rent levels, HUD is
prepared to grant FMR exceptions up to 10 percent above the final FY
1995 FMRs for single-county FMR areas and for individual county parts
of multi-county FMR areas. The flood-related FMR exceptions will be
approved by the HUD field office with jurisdiction for: (1) Counties
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 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 20, 1994.
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 which have been 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, Spalding, 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 modified on the basis of public comments. 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.
BILLING CODE 4210-32-P
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[FR Doc. 94-23987 Filed 9-27-94; 8:45 am]
BILLING CODE 4210-32-C
