[Federal Register Volume 59, Number 113 (Tuesday, June 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14343]


[[Page Unknown]]

[Federal Register: June 14, 1994]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner

24 CFR Parts 880, 881, 883, 884 and 886

[Docket No. R-94-1732; FR-2960-P-01]
RIN 2502-AG05

 

Drug-Related Rent Adjustments

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend HUD regulations to authorize 
rent adjustments for certain privately owned Section 8 projects to 
combat drug-related criminal activities.

DATES: Comments due date: August 15, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Office of General Counsel, Rules Docket 
Clerk, room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410. Facsimile (FAX) are not 
acceptable. A copy of each communication submitted will be available 
for public inspection and copying on weekdays between 7:30 a.m. and 
5:30 p.m. at the above address.

FOR FURTHER INFORMATION CONTACT: James Tahash, Director, Planning and 
Procedures Division, room 6280, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC, 20410-0500; 
telephone: (voice) (202) 708-3944 and (TDD) (202) 708-4594. (These are 
not toll-free numbers).

SUPPLEMENTARY INFORMATION: This proposed rule would amend title 24 of 
the Code of Federal Regulations by adding new Secs. 880.609(c), 
881.609(c), 883.210(c), 884.109(d), 886.112(d) and 886.312(d), which 
would allow HUD to grant additional rental adjustments to privately 
owned Section 8 projects to combat drug-related criminal activity. The 
proposed rule would implement section 542 of the Cranston-Gonzalez 
National Affordable Housing Act, which amended section 8(c)(2)(B) of 
the U.S. Housing Act of 1937.

Other Matters

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
which implement section 102(2)(C) of the National Environmental Policy 
Act of 1969. The finding is available for public inspection between 
7:30 a.m. and 5:30 p.m. weekdays in the office of the Rules Docket 
Clerk at the above address.
    This proposed rule was listed as item 1581 in the Department's 
Semiannual Agenda of Regulations published on April 25, 1994 (59 FR 
20424, 20446) in accordance with Executive Order 12866 and the 
Regulatory Flexibility Act.
    In accordance with 5 U.S.C. 605(b) (the Regulatory Flexibility 
Act), the undersigned hereby certifies that this proposed rule does not 
have a significant economic impact on a substantial number of small 
entities. This proposed rule would have a minimal effect on small 
entities. It would not result in any windfall adjustments for owners 
because they have to substantiate to HUD the need to combat drug 
related crime to recoup expenses incurred.
    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this proposed rule will not have substantial direct 
effects on States or their political subdivisions, or the relationship 
between the Federal government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
As a result, the proposed rule is not subject to review under the 
Order. Specifically, the requirements of this proposed rule are 
directed to private owners of Section 8 projects and do not impinge 
upon the relationship between the Federal government and State and 
local governments.
    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this proposed rule does 
not have potential for significant impact on family formation, 
maintenance, and general well-being, and, thus, is not subject to 
review under the Order. The proposed rule involves additional rental 
adjustments which would be provided to private owners of Section 8 
projects. Any effect on the family would likely be indirect and 
insignificant. 
List of Subjects
24 CFR Part 880
    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.
24 CFR Part 881
    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 883

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 884

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements, Rural areas.

24 CFR Part 886

    Grant programs--housing and community development, Lead poisoning, 
Rent subsidies, Reporting and recordkeeping requirements.

    Accordingly, title 24 of the Code of Federal Regulations, parts 
880, 881, 883, 884, and 886, would be amended as follows:

PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION

    1. The authority citation for part 880 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
    2. Section 880.609 would be amended by revising the section 
heading, redesignating the existing paragraph (c) as paragraph (d), and 
adding a new paragraph (c), to read as follows:


Sec. 880.609  Rent adjustments.

* * * * *
    (c) Adjustments for drug-related criminal activity. (1) HUD may (at 
the discretion of the Secretary and subject to the availability of 
appropriations), on a project by project basis, approve adjustments to 
the gross rent, to a level no greater than 120 percent of the monthly 
gross rents for the project (multiply 1.20 by the current gross rents 
for each unit size under Housing Assistance Payments Contract) to cover 
the cost of maintenance, security, capital repairs, and reserves 
required for the private owner to address the drug-related criminal 
activity problem.
    (2)(i) HUD Field Offices or contract administrators shall approve 
special rent increases based on a written submission from the owner 
which is to include all supporting data as may be required by HUD. In 
order to be eligible for such an adjustment, the project rent increases 
must be determined by the Annual Adjustment Factors.
    (ii) In order to be considered for a special adjustment, owners 
shall submit sufficient evidence, as required by HUD, to the Field 
Offices or contract administrator that will allow HUD to determine 
that:
    (A) The project is located in a community where the drug-related 
criminal activity is community-wide and not project specific; and
    (B) The drug-related criminal activity has resulted in substantial 
increases in the project's operating, maintenance and capital repair 
expenses.
    (iii) Prior to approval of a special adjustment to cover the cost 
of physical improvements, HUD will perform an environmental review to 
the extent required by HUD's environmental regulations at 24 CFR part 
50, including the applicable related authorities at 24 CFR 50.4.
    (3)(i) The special adjustment remains in effect (subject to the 
availability of funds) until the security problems at the project are 
rectified or costs decrease.
    (ii) HUD Field Offices or contract administrators are authorized to 
``back out'' the special adjustment when the need for the special rent 
increase can no longer be justified. Prior to computing an annual 
adjustment of rents, all special rent increases approved should be 
reviewed by HUD Field Offices or contract administrators to determine 
if the special adjustment needs to be ``backed out.''
* * * * *

PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR 
SUBSTANTIAL REHABILITATION

    3. The authority citation for part 881 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

    4. Section 881.609 would be amended by revising the section 
heading, redesignating the existing paragraph (c) as paragraph (d), and 
adding a new paragraph (c), to read as follows:


Sec. 881.609  Rent adjustments.

* * * * *
    (c) Adjustments for drug-related criminal activity. (1) HUD may (at 
the discretion of the Secretary and subject to the availability of 
appropriations), on a project by project basis, approve adjustments to 
the gross rent, to a level no greater than 120 percent of the monthly 
gross rents for the project (multiply 1.20 by the current gross rents 
for each unit size under Housing Assistance Payments Contract) to cover 
the cost of maintenance, security, capital repairs, and reserves 
required for the private owner to address the drug-related criminal 
activity problem.
    (2)(i) HUD Field Offices or contract administrators shall approve 
special rent increases based on a written submission from the owner 
which is to include all supporting data as may be required by HUD. In 
order to be eligible for such an adjustment, the project rent increases 
must be determined by the Annual Adjustment Factors.
    (ii) In order to be considered for a special adjustment, owners 
shall submit sufficient evidence, as required by HUD, to the Field 
Offices or contract administrator that will allow HUD to determine 
that:
    (A) The project is located in a community where the drug-related 
criminal activity is community-wide and not project specific; and
    (B) The drug-related criminal activity has resulted in substantial 
increases in the project's operating, maintenance and capital repair 
expenses.
    (iii) Prior to approval of a special adjustment to cover the cost 
of physical improvements, HUD will perform an environmental review to 
the extent required by HUD's environmental regulations at 24 CFR part 
50, including the applicable related authorities at 24 CFR 50.4.
    (3)(i) The special adjustment remains in effect (subject to the 
availability of funds) until the security problems at the project are 
rectified or costs decrease.
    (ii) HUD Field Offices or contract administrators are authorized to 
``back out'' the special adjustment when the need for the special rent 
increase can no longer be justified. Prior to computing an annual 
adjustment of rents, all special rent increases approved should be 
reviewed by HUD Field Offices or contract administrators to determine 
if the special adjustment needs to be ``backed out.''
* * * * *

PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE 
HOUSING AGENCIES

    5. The authority citation for part 883 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    6. Section 883.710 would be amended by revising the section 
heading, redesignating the existing paragraph (c) as paragraph (d), and 
adding a new paragraph (c), to read as follows:


Sec. 883.710   Rent adjustments.

* * * * *
    (c) Adjustments for drug-related criminal activity. (1) HUD may (at 
the discretion of the Secretary and subject to the availability of 
appropriations), on a project by project basis, approve adjustments to 
the gross rent, to a level no greater than 120 percent of the monthly 
gross rents for the project (multiply 1.20 by the current gross rents 
for each unit size under Housing Assistance Payments Contract) to cover 
the cost of maintenance, security, capital repairs, and reserves 
required for the private owner to address the drug-related criminal 
activity problem.
    (2) (i) HUD Field Offices or contract administrators shall approve 
special rent increases based on a written submission from the owner 
which is to include all supporting data as may be required by HUD. In 
order to be eligible for such an adjustment, the project rent increases 
must be determined by the Annual Adjustment Factors.
    (ii) In order to be considered for a special adjustment, owners 
shall submit sufficient evidence, as required by HUD, to the Field 
Offices or contract administrator that will allow HUD to determine 
that:
    (A) The project is located in a community where the drug-related 
criminal activity is community-wide and not project specific; and
    (B) The drug-related criminal activity has resulted in substantial 
increases in the project's operating, maintenance and capital repair 
expenses.
    (iii) Prior to approval of a special adjustment to cover the cost 
of physical improvements, HUD will perform an environmental review to 
the extent required by HUD's environmental regulations at 24 CFR part 
50, including the applicable related authorities at 24 CFR 50.4.
    (3) (i) The special adjustment remains in effect (subject to the 
availability of funds) until the security problems at the project are 
rectified or costs decrease.
    (ii) HUD Field Offices or contract administrators are authorized to 
``back out'' the special adjustment when the need for the special rent 
increase can no longer be justified. Prior to computing an annual 
adjustment of rents, all special rent increases approved should be 
reviewed by HUD Field Offices or contract administrators to determine 
if the special adjustment needs to be ``backed out.''
* * * * *

PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW 
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING 
PROJECTS

    7. The authority citation for part 884 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    8. Section 884.109 would be amended by redesignating the existing 
paragraph (d) as paragraph (e), and adding a new paragraph (d), to read 
as follows:


Sec. 884.109   Rent adjustments.

* * * * *
    (d) Adjustments for drug-related criminal activity. (1) HUD may (at 
the discretion of the Secretary and subject to the availability of 
appropriations), on a project by project basis, approve adjustments to 
the gross rent, to a level no greater than 120 percent of the monthly 
gross rents for the project (multiply 1.20 by the current gross rents 
for each unit size under Housing Assistance Payments Contract) to cover 
the cost of maintenance, security, capital repairs, and reserves 
required for the private owner to address the drug-related criminal 
activity problem.
    (2) (i) HUD Field Offices or contract administrators shall approve 
special rent increases based on a written submission from the owner 
which is to include all supporting data as may be required by HUD. In 
order to be eligible for such an adjustment, the project rent increases 
must be determined by the Annual Adjustment Factors.
    (ii) In order to be considered for a special adjustment, owners 
shall submit sufficient evidence, as required by HUD, to the Field 
Offices or contract administrator that will allow HUD to determine 
that:
    (A) The project is located in a community where the drug-related 
criminal activity is community-wide and not project specific; and
    (B) The drug-related criminal activity has resulted in substantial 
increases in the project's operating, maintenance and capital repair 
expenses.
    (iii) Prior to approval of a special adjustment to cover the cost 
of physical improvements, HUD will perform an environmental review to 
the extent required by HUD's environmental regulations at 24 CFR part 
50, including the applicable related authorities at 24 CFR 50.4.
    (3) (i) The special adjustment remains in effect (subject to the 
availability of funds) until the security problems at the project are 
rectified or costs decrease.
    (ii) HUD Field Offices or contract administrators are authorized to 
``back out'' the special adjustment when the need for the special rent 
increase can no longer be justified. Prior to computing an annual 
adjustment of rents, all special rent increases approved should be 
reviewed by HUD Field Offices or contract administrators to determine 
if the special adjustment needs to be ``backed out.''
* * * * *

PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAMS--SPECIAL 
ALLOCATIONS

    9. The authority citation for part 886 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    10. Section 886.112 would be amended by redesignating the existing 
paragraphs (d) and (e) as paragraphs (e) and (f), respectively, and 
adding a new paragraph (d), to read as follows:


Sec. 886.112   Rent adjustments.

* * * * *
    (d) Adjustments for drug-related criminal activity. (1) HUD may (at 
the discretion of the Secretary and subject to the availability of 
appropriations), on a project by project basis, approve adjustments to 
the gross rent, to a level no greater than 120 percent of the monthly 
gross rents for the project (multiply 1.20 by the current gross rents 
for each unit size under Housing Assistance Payments Contract) to cover 
the cost of maintenance, security, capital repairs, and reserves 
required for the private owner to address the drug-related criminal 
activity problem.
    (2) (i) HUD Field Offices or contract administrators shall approve 
special rent increases based on a written submission from the owner 
which is to include all supporting data as may be required by HUD. In 
order to be eligible for such an adjustment, the project rent increases 
must be determined by the Annual Adjustment Factors.
    (ii) In order to be considered for a special adjustment, owners 
shall submit sufficient evidence, as required by HUD, to the Field 
Offices or contract administrator that will allow HUD to determine 
that:
    (A) The project is located in a community where the drug-related 
criminal activity is community-wide and not project specific; and
    (B) The drug-related criminal activity has resulted in substantial 
increases in the project's operating, maintenance and capital repair 
expenses.
    (iii) Prior to approval of a special adjustment to cover the cost 
of physical improvements, HUD will perform an environmental review to 
the extent required by HUD's environmental regulations at 24 CFR part 
50, including the applicable related authorities at 24 CFR 50.4.
    (3)(i) The special adjustment remains in effect (subject to the 
availability of funds) until the security problems at the project are 
rectified or costs decrease.
    (ii) HUD Field Offices or contract administrators are authorized to 
``back out'' the special adjustment when the need for the special rent 
increase can no longer be justified. Prior to computing an annual 
adjustment of rents, all special rent increases approved should be 
reviewed by HUD Field Offices or contract administrators to determine 
if the special adjustment needs to be ``backed out.''
* * * * *
    11. Section 886.312 would be amended by redesignating the existing 
paragraphs (d) and (e) as paragraphs (e) and (f), respectively, and 
adding a new paragraph (d), to read as follows:


Sec. 886.312  Rent adjustments.

* * * * *
    (d) Adjustments for drug-related criminal activity. (1) HUD may (at 
the discretion of the Secretary and subject to the availability of 
appropriations), on a project by project basis, approve adjustments to 
the gross rent, to a level no greater than 120 percent of the monthly 
gross rents for the project (multiply 1.20 by the current gross rents 
for each unit size under Housing Assistance Payments Contract) to cover 
the cost of maintenance, security, capital repairs, and reserves 
required for the private owner to address the drug-related criminal 
activity problem.
    (2)(i) HUD Field Offices or contract administrators shall approve 
special rent increases based on a written submission from the owner 
which is to include all supporting data as may be required by HUD. In 
order to be eligible for such an adjustment, the project rent increases 
must be determined by the Annual Adjustment Factors.
    (ii) In order to be considered for a special adjustment, owners 
shall submit sufficient evidence, as required by HUD, to the Field 
Offices or contract administrator that will allow HUD to determine 
that:
    (A) The project is located in a community where the drug-related 
criminal activity is community-wide and not project specific;
    (B) The drug-related criminal activity has resulted in substantial 
increases in the project's operating, maintenance and capital repair 
expenses.
    (iii) Prior to approval of a special adjustment to cover the cost 
of physical improvements, HUD will perform an environmental review to 
the extent required by HUD's environmental regulations at 24 CFR part 
50, including the applicable related authorities at 24 CFR 50.4.
    (3)(i) The special adjustment remains in effect (subject to the 
availability of funds) until the security problems at the project are 
rectified or costs decrease.
    (ii) HUD Field Offices or contract administrators are authorized to 
``back out'' the special adjustment when the need for the special rent 
increase can no longer be justified. Prior to computing an annual 
adjustment of rents, all special rent increases approved should be 
reviewed by HUD Field Offices or contract administrators to determine 
if the special adjustment needs to be ``backed out.''
* * * * *
    Dated: June 7, 1994.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 94-14343 Filed 6-13-94; 8:45 am]
BILLING CODE 4210-27-P