[Federal Register Volume 59, Number 179 (Friday, September 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22972]


[[Page Unknown]]

[Federal Register: September 16, 1994]


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Part V





Department of Housing and Urban Development





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Office of the Assistant Secretary for Public and Indian Housing



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24 CFR Part 882



Low Income Housing: Housing Assistant Payments (Section 8); Special 
Rent Adjustments Reflecting Security and Expenses Due to Drug-Related 
Criminal Activity; Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Public and Indian Housing

24 CFR Part 882

[Docket No. R-94-1748; FR-3665-F-01]
[RIN 2577-AB45]

 

Section 8 Moderate Rehabilitation Rent Adjustments; Special 
Adjustments for Security and Expenses Due to Drug-Related Criminal 
Activity

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Final rule.

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SUMMARY: This final rule revises the regulations on adjusting Section 8 
Moderate Rehabilitation rents. The rule expands upon the categories of 
operating cost increases which may result in a special rent adjustment 
to reflect substantial general increases in security expenses, and 
operating, maintenance and capital repair costs primarily due to drug-
related criminal activity.

DATES: Effective Date: October 17, 1994.

FOR FURTHER INFORMATION CONTACT: Madeline Hastings, Rental Assistance 
Division, Room 4226, Department of Housing and Urban Development, 451 
Seventh Street SW, Washington, D.C. 20410; telephone (202) 708-2841; 
(TDD number for the hearing and speech impaired (202) 708-4594.) (These 
are not toll free numbers.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    The information collection requirements contained in this rule have 
been approved by the Office of Management and Budget (OMB) under 
section 3504(h) of the Paperwork Reduction Act of 1989 (44 U.S.C. 3501-
3520) and have been assigned OMB control number 2577-0196.
    Public reporting burden for the collection of information 
requirements contained in this rule is estimated to include the time 
for reviewing the instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Information on the estimated public 
reporting burden is provided under the Preamble heading, Other Matters. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden, to the Department of Housing and Urban Development, Rules 
Docket Clerk, 451 Seventh Street, SW, Room 10276, Washington, DC 20410-
0500; and to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, Attention: Desk Officer for HUD, Washington, 
DC 20503.

I. Applicability

    This rule is applicable to all projects which are under a Section 8 
Moderate Rehabilitation Housing Assistance Payments (HAP) Contract in 
the regular Section 8 Moderate Rehabilitation program. The rule revises 
the current regulations in subpart D of 24 CFR Part 882 which govern 
the special procedures for adjusting contract rents of regular Moderate 
Rehabilitation projects during the term of the HAP Contract.

II. Special Adjustments

    This rule implements 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. It provides for Public Housing Agencies (PHAs) to 
recommend, and HUD to approve, subject to the availability of 
appropriations, a special adjustment to reflect substantial general 
increases in security expenses, and operating, maintenance and capital 
repair costs primarily due to drug-related criminal activity. The Owner 
does not have a contractual or regulatory right to receive the special 
adjustment. HUD may approve a special adjustment, and the PHA may make 
a special adjustment to contract rents. A special adjustment must be 
determined in accordance with HUD procedures and be approved by HUD.

III. Justification for Final Rule

    The Department has determined that the changes made by this rule 
should be adopted without the delay occasioned by requiring prior 
notice and comment. This rule only adds statutory language that 
expands, subject to appropriations, the number of special rent 
adjustments for Section 8 Moderate Rehabilitation rents. As such, 
notice and comment are unnecessary and the rule is exempt under 24 CFR 
Part 10 from notice and comment requirements.

IV. Other Matters

A. Environmental Impact
    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 of No Significant Impact 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.
B. Federalism
    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule do not have federalism implications and, thus, 
are not subject to review under the Order. This rule adds a special 
rent adjustment for Section 8 Moderate Rehabilitation rents as 
permitted by statute and subject to appropriations. It will not have 
substantial, direct effects on States, on their political subdivisions, 
or on their relationships with the Federal government, or on the 
distribution of power and responsibilities between them and other 
levels of government.
C. Family Impact
    The General Counsel, as the Designated Official under Executive 
Order 12606, the Family, has determined that this rule will have only 
an indirect, though beneficial, impact on family formation, 
maintenance, and general well-being, since it would encourage, when 
funds are appropriated for this purpose, expenditures in the affected 
housing for increases in security expenses, and operating, maintenance 
and capital repair costs primarily due to drug-related criminal 
activity. The rule, thus, is not subject to review under the Order.
D. Regulatory Flexibility
    In accordance with 5 U.S.C. 605(b) (the Regulatory Flexibility 
Act), the Secretary by his approval of this rule for publication hereby 
certifies that this rule does not have a significant economic impact on 
a substantial number of small entities. It allows HUD to approve rent 
adjustments to private owners for substantial general increases in 
security expenses, and operating, maintenance and capital repair costs 
primarily due to drug-related criminal activity.
E. Semi-Annual Agenda
    This rule was listed as item number 1692 in the Department's 
Semiannual Agenda of Regulations published on April 25, 1994 (58 FR 
20424, 20471) under Executive Order 12866 and the Regulatory 
Flexibility Act.

The Catalog of Federal Domestic Assistance number is 14.856.

List of Subjects in 24 CFR Part 882

    Grant programs--housing and community development, Homeless, Lead 
poisoning, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements

    Accordingly, the Department amends 24 CFR Part 882 as set forth 
below:

PART 882--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--EXISTING 
HOUSING

    1. The authority citation for 24 CFR Part 882 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 11361, and 
11401.

    2. In Sec. 882.410, paragraph (a)(2) is revised and the OMB control 
number is added to the end of the section to read as follows:


Sec. 882.410  Rent adjustments.

    (a) * * *
    (2) Special Adjustments. (i) A special adjustment, to the extent 
determined by HUD to reflect increases in the actual and necessary 
expenses of owning and maintaining the unit which have resulted from 
substantial general increases in real property taxes, assessments, 
utility rates and utilities not covered by regulated rates, may be 
recommended by the PHA for approval by HUD. Subject to appropriations, 
a special adjustment may also be recommended by the PHA for approval by 
HUD when HUD determines that a project is located in a community where 
drug-related criminal activity is generally prevalent, and not specific 
to a particular project, and the project's operating, maintenance, and 
capital repair expenses have substantially increased primarily as a 
result of the prevalence of such drug-related activity. HUD may, on a 
project-by-project basis, provide adjustments to the maximum monthly 
rents, to a level no greater than 120 percent of the current gross 
rents for each unit size under a Housing Assistance Payments Contract, 
to cover the costs of maintenance, security, capital repairs and 
reserves required for the Owner to carry out a strategy acceptable to 
HUD for addressing the problem of drug-related criminal activity. 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.
    (ii) The aforementioned special rent adjustments will only be 
approved if and to the extent the Owner clearly demonstrates that these 
general increases have caused increases in the owners operating costs 
which are not adequately compensated for by annual adjustments.
    (iii) The Owner must submit financial information to the PHA which 
clearly supports the increase. For Contracts of more than twenty units, 
the Owner must submit audited financial information.
* * * * *
    (Approved by the Office of Management and Budget under OMB 
approval number 2577-0196)
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 94-22972 Filed 9-15-94; 8:45 am]
BILLING CODE 4210-33-P