[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]


_______________________________________________________________________

Part IV





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Secretary



_______________________________________________________________________



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.

-----------------------------------------------------------------------

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                          
------------------------------------------------------------------------
              County                                Cities              
------------------------------------------------------------------------
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.                            
------------------------------------------------------------------------

    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

TR28SE94.000


TR28SE94.001


TR28SE94.002


TR28SE94.003


TR28SE94.004


TR28SE94.005


TR28SE94.006


TR28SE94.007


TR28SE94.008


TR28SE94.009


TR28SE94.010


TR28SE94.011


TR28SE94.012


TR28SE94.013


TR28SE94.014


TR28SE94.015


TR28SE94.016


TR28SE94.017


TR28SE94.018


TR28SE94.019


TR28SE94.020


TR28SE94.021


TR28SE94.022


TR28SE94.023


TR28SE94.024


TR28SE94.025


TR28SE94.026


TR28SE94.027


TR28SE94.028


TR28SE94.029


TR28SE94.030


TR28SE94.031


TR28SE94.032


TR28SE94.033


TR28SE94.034


TR28SE94.035


TR28SE94.036


TR28SE94.037


TR28SE94.038


TR28SE94.039


TR28SE94.040


TR28SE94.041


TR28SE94.042


TR28SE94.043


TR28SE94.044


TR28SE94.045


TR28SE94.046


TR28SE94.047


TR28SE94.048


TR28SE94.049


TR28SE94.050


TR28SE94.051


TR28SE94.052


TR28SE94.053


TR28SE94.054


TR28SE94.055


TR28SE94.056


[FR Doc. 94-23987 Filed 9-27-94; 8:45 am]
BILLING CODE 4210-32-C