24 cfr part 888 fair market rents for the section 8 ... · 53558 federal register/vol. 64, no....

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FridayOctober 1, 1999

Part II

Department ofHousing and UrbanDevelopment24 CFR Part 888Fair Market Rents for the Section 8Housing Assistance Payments Program—Fiscal Year 2000; Final Rule

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53558 Federal Register / Vol. 64, No. 190 / Friday, October 1, 1999 / Rules and Regulations

DEPARTMENT OF HOUSING ANDURBAN DEVELOPMENT

24 CFR Part 888

[Docket No. FR–4496–N–02]

Fair Market Rents for the Section 8Housing Assistance PaymentsProgram—Fiscal Year 2000

AGENCY: Office of the Secretary, HUD.ACTION: Notice of Final Fiscal Year (FY)2000 Fair Market Rents (FMRs).

SUMMARY: Section 8(c)(1) of the UnitedStates Housing Act of 1937 requires theSecretary to publish FMRs annually tobe effective on October 1 of each year.FMRs are used for the Section 8 housingchoice voucher program, the ModerateRehabilitation Single Room Occupancyprogram, the project-based voucherprogram, and any other programsrequiring their use. Today’s noticeprovides final FY 2000 FMRs for allareas.EFFECTIVE DATE: The FMRs published inthis notice are effective on October 1,1999.FOR FURTHER INFORMATION CONTACT:Gerald Benoit, Operations Division,Office of Rental Assistance, telephone(202) 708–0477. For technicalinformation on the development ofschedules for specific areas or themethod used for the rent calculations,contact Alan Fox, Economic and MarketAnalysis Division, Office of EconomicAffairs, telephone (202) 708–0590,Extension 5863 (e-mail:[email protected]). Hearing- orspeech-impaired persons may use theTelecommunications Devices for theDeaf (TTY) by contacting the FederalInformation Relay Service at 1–800–877–8339. (Other than the ‘‘800’’ TTYnumber, telephone numbers are not tollfree.)SUPPLEMENTARY INFORMATION: Section 8of the United States Housing Act of1937 (the Act) (42 U.S.C. 1437f)authorizes housing assistance to aidlower income families in renting decent,safe, and sanitary housing. Housingassistance payments are limited byFMRs established by HUD for differentareas. In the voucher program, the FMRis used to determine the ‘‘paymentstandard’’ (the maximum monthlysubsidy) for assisted families (seeSection 982.503.) In general, the FMRfor an area is the amount that would beneeded to pay the gross rent (shelterrent plus utilities) of privately owned,decent, safe, and sanitary rental housingof a modest (non-luxury) nature withsuitable amenities.

Method Used to Develop FMRs

FMR Standard

FMRs are gross rent estimates; theyinclude shelter rent and the cost ofutilities, except telephone. HUD setsFMRs to assure that a sufficient supplyof rental housing is available to programparticipants. To accomplish thisobjective, FMRs must be both highenough to permit a selection of unitsand neighborhoods and low enough toserve as many families as possible. Thelevel at which FMRs are set is expressedas a percentile point within the rentdistribution of standard quality rentalhousing units. The current definitionused is the 40th percentile rent, thedollar amount below which 40 percentof standard quality rental housing unitsrent. The 40th percentile rent is drawnfrom the distribution of rents of unitswhich are occupied by recent movers(renter households who moved intotheir unit within the past 15 months).Newly built units less than two yearsold are excluded, and adjustments havebeen made to correct for the belowmarket rents of public housing unitsincluded in the data base.

Data Sources

HUD used the most accurate andcurrent data available to develop theFMR estimates. The sources of surveydata used for the base-year estimatesare:

(1) The 1990 Census, which providesstatistically reliable rent data for allFMR areas;

(2) The Bureau of the Census’American Housing Surveys (AHSs),which are used to develop between-Census revisions for the largestmetropolitan areas and which haveaccuracy comparable to the decennialCensus; and

(3) Random Digit Dialing (RDD)telephone surveys of individual FMRareas, which are based on a samplingprocedure that uses computers to selectstatistically random samples of rentalhousing.

The base-year FMRs are updatedusing trending factors based onConsumer Price Index (CPI) data forrents and utilities or HUD regional rentchange factors developed from RDDsurveys. Annual average CPI data areavailable individually for 99metropolitan FMR areas. RDD regionalrent change factors are developedannually for the metropolitan andnonmetropolitan parts of each of the 10HUD regions. The RDD factors are usedto update the base year estimates for allFMR areas that do not have their ownlocal CPI survey.

State Minimum FMRs

FMRs are established at the higher ofthe local 40th percentile rent level orthe Statewide average ofnonmetropolitan counties, subject to aceiling rent cap. The State minimumalso affects a small number ofmetropolitan areas whose rents wouldotherwise fall below the Stateminimum.

Bedroom Size Adjustments

FMRs have been calculated separatelyfor each bedroom size category. Forareas whose FMRs are based on theState minimums, the rents for eachbedroom size are the higher of the rentfor the area or the Statewide average ofnonmetropolitan counties for thatbedroom size. For all other FMR areas,the bedroom intervals are based on datafor the specific area. Exceptions havebeen made for some areas with localbedroom size rent intervals below anacceptable range. For those areas theintervals selected were the minimumsdetermined after outliers had beenexcluded from the distribution ofbedroom intervals for all metropolitanareas. Higher ratios continue to be usedfor three-bedroom and larger size unitsthan would result from using the actualmarket relationships. This is done toassist the largest, most difficult to housefamilies in finding program-eligibleunits. The FMRs for unit sizes largerthan 4 bedroom are calculated byadding 15 percent to the 4 bedroomFMR for each extra bedroom. Forexample, the FMR for a 5 bedroom unitis 1.15 times the 4 bedroom FMR, andthe FMR for a 6 bedroom unit is 1.30times the 4 bedroom FMR. FMRs forsingle-room-occupancy (SRO) units are0.75 times the 0 bedroom FMR.

Public Comments

In response to the May 7, 1999proposed FMRs, HUD received publiccomments covering 21 FMR areas.Rental housing survey information wasprovided for 12 of those FMR areas. Allof the survey information submitted wasevaluated and, based on that review, theFMRs for 10 areas are being revised. Theinformation submitted for the otherFMR areas was not considered sufficientto provide a basis for revising the FMRs.

Areas with approved FMR increases:Sacramento, CASan Benito County, CASan Diego, CASan Francisco, CAWaterloo-Cedar Falls, IARochester, MNMoore County, NC

Many comments were received fromthe Cape Cod, Massachusetts area in


53451Federal Register / Vol. 64, No. 190 / Friday, October 1, 1999 / Rules and Regulations

response to the proposed FMR decrease.An important methodological commentwas that the RDD survey on which thereduction was based might not haveaccurately identified what are locallyreferred to as winter rental units. Theunits that were surveyed in March 1999were therefore re-surveyed with a moredetailed set of questions to identifythese winter rentals. Results of the re-survey revealed that the winter rentalshad influenced the original survey andalso indicated more rapid rent increasesthan previously thought. On this basisthe FMRs have been revised upward.These areas are:

Barnstable-Yarmouth, MABarnstable County, MADukes County, MA

The Housing Authority of the City ofSanta Barbara, CA, requested that FMRsbe increased or that the FMR area besplit into two parts. In response toearlier comments, in December 1998HUD conducted an RDD survey of theentire metropolitan area. The resultswere similar to the FMR then in effect.In addition, the survey found that thedifferential between the southern part(mainly the City of Santa Barbara) andthe rest of the FMR area was within thelimits of the FMR geographic exceptionrange. HUD also received a commentfrom the Santa Barbara County housingauthority explaining that it was havingno problems running the program underthe current FMR, and did not support arequest to split the FMR area into twoparts. For these reasons, the FMR forSanta Barbara is being adjusted with thenormal update factor.

Areas with FMR increase by normalupdate factor:

Oakland, CASanta Barbara-Santa Maria-Lompoc, CA

HAs and other interested partiesshould be aware that FMR commentsreceived too late for adjusting thecurrent year’s final FMRs will be heldfor use in the following year. In suchcases HUD will trend the survey resultsto the date of the FMR estimate. If theHA is concerned that rents are changingrapidly, surveys should be timed to bereceived as close as possible to HUD’sdeadline for public comments.

AHS and RDD Surveys

This notice makes effective the FMRsfor 3 areas proposed with reductionsbased on recent RDD surveys and aboutwhich no comments were received:

Modesto, CAMiddlesex-Somerset-Hunterdon, NJAllentown-Bethlehem-Easton, PA

American Housing Survey

Based on detailed rent data from the1998 metropolitan AHSs, HUD isincreasing FMRs for the following twoareas:Birmingham, ALTampa-St. Petersburg-Clearwater, FLFMRs for the following AHS areas arebeing increased by the normal updatefactor:Oakland, CASan Jose, CABaltimore, MDBoston, MA–NHMinneapolis-St. Paul, MN–WIRochester, NYCincinnati, OH–KY–INHouston, TXSalt Lake City-Ogden, UTNorfolk-Virginia Beach-Newport News,

VA–NCThe AHS results for two areas

indicate a decrease in FMRs, which willbe proposed for the 2001 FMRs. Theyare:Washington, DC–MD–VAProvidence-Fall River-Warwick, RI–MA

FMR Area Definition Changes

This notice includes FMRs for twonew metropolitan FMR areas based onnew metropolitan statistical areadefinitions made effective by OMB onJune 30, 1999. They are the Corvallis,Oregon FMR area, which consists ofBenton County, and Auburn-Opelika,Alabama, which consists of Lee County.

Manufactured Home Space Surveys

FMRs for the rental of manufacturedhome spaces in the Section 8 Existingcertificate and voucher program and thenew merged tenant-based certificate andvoucher program are 30 percent of theapplicable Section 8 existing housingprogram FMR for a two-bedroom unit.HUD accepts public commentsrequesting modifications of these FMRswhere the 30 percent FMRs are thoughtto be inadequate. In order to be acceptedas a basis for revising the FMRs,comments must contain statisticallyvalid survey data that show the 40thpercentile space rent (excluding the costof utilities) for the entire FMR area.Manufactured home space FMRrevisions are published as final FMRs inSchedule D. Once approved, the revisedmanufactured home space FMRsestablish new base year estimates thatare updated annually using the samedata used to update the other FMRs.

HUD Rental Housing Survey Guides

HUD recommends the use ofprofessionally-conducted RDDtelephone surveys to test the accuracy ofFMRs for areas where there is a

sufficient number of Section 8 units tojustify the survey cost of $10,000–$12,000. Areas with 500 or moreprogram units usually meet thiscriterion, and areas with fewer unitsmay meet it if local rents are thought tobe significantly different than the FMRproposed by HUD. In addition, HUD hasdeveloped a simplified version of theRDD survey methodology for smaller,nonmetropolitan HAs. Thismethodology is designed to be simpleenough to be done by the HA itself,rather than by professional surveyorganizations, at a cost of about $5,000.

HAs in nonmetropolitan areas may, incertain circumstances, do surveys ofgroups of counties. All grouped countysurveys must be approved in advance byHUD. HAs are cautioned that theresulting FMRs will not be identical forthe counties surveyed; each individualFMR area will have a separate FMRbased on its relationship to thecombined rent of the group of FMRareas.

HAs that plan to use the RDD surveytechnique may obtain a copy of theappropriate survey guide by callingHUD USER on 1–800–245–2691. LargerHAs should request ‘‘Random DigitDialing Surveys; A Guide to AssistLarger Housing Agencies in PreparingFair Market Rent Comments.’’ SmallerHAs should obtain ‘‘Rental HousingSurveys; A Guide to Assist SmallerHousing Agencies in Preparing FairMarket Rent Comments.’’ These guidesare also available on the Internet athttp://www.huduser.org/datasets/fmr.html.

HUD prefers, but does not mandate,the use of RDD telephone surveys, or themore traditional method described inthe small HA survey guide. Othersurvey methodologies are acceptable aslong as they provide statisticallyreliable, unbiased estimates of the 40thpercentile gross rent. Survey samplesshould preferably be randomly drawnfrom a complete list of rental units forthe FMR area. If this is not feasible, theselected sample must be drawn so as tobe statistically representative of theentire rental housing stock of the FMRarea. In particular, surveys must includeunits of all rent levels and berepresentative by structure type(including single-family, duplex andother small rental properties), age ofhousing unit, and geographic location.The decennial Census should be used asa starting point and means ofverification for determining whether thesample is representative of the FMRarea’s rental housing stock. All surveyresults 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 telephonesurveys) of some non-metropolitan areashave been unusually expensive becauseof telephone system characteristics. AnHA or contractor that cannot obtain therecommended number of sampleresponses after reasonable efforts shouldconsult with HUD before abandoning itssurvey; in such situations HUD isprepared to relax normal sample sizerequirements.

Other Matters

Environmental Impact

A Finding of No Significant Impactwith respect to the environment asrequired by the National EnvironmentalPolicy Act (42 U.S.C. 4321–4374) isunnecessary, since the Section 8 RentalCertificate Program is categoricallyexcluded from the Department’sNational Environmental Policy Actprocedures under 24 CFR 50.20(d).

Regulatory Flexibility Act

The undersigned, in accordance withthe Regulatory Flexibility Act (5 U.S.C.605(b)), hereby certifies that this noticedoes not have a significant economicimpact on a substantial number of smallentities, because FMRs do not changethe rent from that which would becharged if the unit were not in theSection 8 Program.

Federalism Impact

The General Counsel, as theDesignated Official under section 6(a) ofExecutive Order 12611, Federalism, hasdetermined that this notice will notinvolve the preemption of State law byFederal statute or regulation and doesnot have Federalism implications. TheFair Market Rent schedules do not haveany substantial direct impact on States,on the relationship between the Federalgovernment and the States, or on thedistribution of power and responsibilityamong the various levels of government.

Catalog of Federal Domestic Assistance

The Catalog of Federal DomesticAssistance program number is 14.156, Lower-Income Housing Assistance Program (Section8).

Accordingly, the Fair Market RentSchedules, which will not be codified in24 CFR Part 888, are amended asfollows:

Dated: September 17, 1999.Andrew M. Cuomo,Secretary.

Fair Market Rents for the Section 8Housing Assistance Payments Program

Schedules B and D—GeneralExplanatory Notes

1. Geographic Coverage

a. Metropolitan Areas—FMRs arehousing market-wide rent estimates thatare intended to provide housingopportunities throughout the geographicarea in which rental housing units arein direct competition. The FMRs shownin Schedule B incorporate OMB’s mostcurrent definitions of metropolitanareas, with the exceptions discussed inparagraph (b). HUD uses the OMBMetropolitan Statistical Area (MSA) andPrimary Metropolitan Statistical Area(PMSA) definitions for FMR areasbecause they closely correspond tohousing market area definitions.

b. Exceptions to OMB Definitions—The exceptions are counties deletedfrom several large metropolitan areaswhose revised OMB metropolitan areadefinitions were determined by HUD tobe larger than the housing market areas.The FMRs for the following counties(shown by the metropolitan area) arecalculated separately and are shown inSchedule B within their respectiveStates under the ‘‘Metropolitan FMRAreas’’ listing:

Metropolitan Area and CountiesDeleted

Chicago, ILDeKalb, Grundy and Kendall Counties

Cincinnati-Hamilton, OH–KY–INBrown County, Ohio; Gallatin, Grant

and Pendleton Counties inKentucky; and

Ohio County, IndianaDallas, TX

Henderson CountyFlagstaff, AZ–UT

Kane County, UTNew Orleans, LA

St. James ParishWashington, DC–MD–VA–WV

Berkeley and Jefferson Counties inWest Virginia; and Clarke,Culpeper, King George and WarrenCounties in Virginia

c. Nonmetropolitan Area FMRs—FMRs also are established fornonmetropolitan counties and forcounty equivalents in the United States,for nonmetropolitan parts of counties inthe New England states and for FMRareas in Puerto Rico, the Virgin Islandsand the Pacific Islands.

d. Virginia Independent Cities—FMRsfor the areas in Virginia shown in thetable below were established by

combining the Census data for thenonmetropolitan counties with the datafor the independent cities that arelocated within the county borders.Because of space limitations, the FMRlisting in Schedule B includes only thename of the nonmetropolitan County.The full definitions of these areas,including the independent cities, are asfollows:

VIRGINIA NONMETROPOLITAN COUNTYFMR AREA AND INDEPENDENT CIT-IES INCLUDED WITH COUNTY

County Cities

Allegheny ......... Clifton Forge and CovingtonAugusta ........... Staunton and WaynesboroCarroll .............. GalaxFrederick ......... WinchesterGreensville ...... EmporiaHenry ............... MartinsvilleMontgomery .... RadfordRockbridge ...... Buena Vista and LexingtonRockingham .... HarrisonburgSouthhampton FranklinWise ................ Norton

2. Bedroom Size Adjustments

Schedule B shows the FMRs for 0-bedroom through 4-bedroom units. TheFMRs for unit sizes larger than 4bedrooms are calculated by adding 15percent to the 4-bedroom FMR for eachextra bedroom. For example, the FMRfor a 5-bedroom unit is 1.15 times the4-bedroom FMR, and the FMR for a 6-bedroom unit is 1.30 times the 4bedroom FMR. FMRs for single-room-occupancy (SRO) units are 0.75 timesthe 0 bedroom FMR.

3. FMRs for Manufactured Home Spaces

FMRs for Section 8 manufacturedhome spaces in the Section 8 Existingcertificate and voucher program and thenew merged tenant-based certificate andvoucher program are 30 percent of thetwo-bedroom Section 8 existing housingprogram FMRs, with the exception ofthe areas listed in Schedule D whosemanufactured home space FMRs havebeen modified on the basis of publiccomments. Once approved, the revisedmanufactured home space FMRsestablish new base-year estimates thatare updated annually using the samedata used to estimate the Section 8existing housing FMRs. The FMR areadefinitions used for the rental ofmanufactured home spaces in theSection 8 Existing certificate andvoucher program and the new mergedtenant-based certificate and voucherprogram are the same as the areadefinitions used for other FMRs.



4. Arrangement of FMR Areas andIdentification of Constituent Parts

a. The FMR areas in Schedule B arelisted alphabetically by metropolitanFMR area and by nonmetropolitancounty within each State. The exceptionFMRs for manufactured home spaces inSchedule D are listed alphabetically byState.

b. The constituent counties (and NewEngland towns and cities) included ineach metropolitan FMR area are listedimmediately following the listings of theFMR dollar amounts. All constituentparts of a metropolitan FMR area thatare in more than one State can beidentified by consulting the listings foreach applicable State.

c. Two nonmetropolitan counties arelisted alphabetically on each line of thenonmetropolitan county listings.

d. The New England towns and citiesincluded in a nonmetropolitan part of acounty are listed immediately followingthe county name.

BILLING CODE 4210–32–P



[FR Doc. 99–25265 Filed 9–30–99; 8:45 am]BILLING CODE 4210–32–C


24 cfr part 888 fair market rents for the section 8 ... · 53558 federal register/vol. 64, no....

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