[Federal Register Volume 60, Number 208 (Friday, October 27, 1995)]
[Proposed Rules]
[Pages 54979-54981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26659]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Public and Indian Housing

24 CFR Part 882

[Docket No. FR-3709-C-02]
RIN 2577-AB48


Section 8 Moderate Rehabilitation; Rent Adjustments; Annual and 
Special Adjustments; Comparability Studies; Rent Reductions; Technical 
Correction

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

ACTION: Proposed rule; technical correction.

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SUMMARY: On October 2, 1995 (60 FR 51658), HUD published a proposed 
rule that would revise the current regulations on adjusting Section 8 
Moderate Rehabilitation Contract Rents. The rule proposed to modify the 
method used by Public Housing Agencies (PHAs) to determine the amount 
of the annual increase in the Contract Rents by providing for PHAs to 
conduct comparability studies for Moderate Rehabilitation projects to 
prevent the application of the Annual Adjustment Factors from resulting 
in a material difference between rents charged for assisted units and 
similar unassisted units.
    The purpose of this document is to correct certain technical errors 
that appeared in the October 2, 1995 proposed rule.

DATES: Comment Due Date: December 1, 1995.


[[Page 54980]]

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Rules Docket Clerk, Office of General 
Counsel, room 10276, Department of Housing and Urban Development, 451 
Seventh Street SW, Washington, DC 20410. Communications should refer to 
the above docket number and title. Facsimile (FAX) comments are not 
acceptable. A copy of each communication submitted will be available 
for public inspection and copying during regular business hours.

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 
(voice) or (202) 708-4594 (TDD). (These are not toll free numbers.)

SUPPLEMENTARY INFORMATION: On October 2, 1995 (60 FR 51658), HUD 
published a proposed rule that would revise the current regulations on 
adjusting Section 8 Moderate Rehabilitation Contract Rents. The rule 
proposed to modify the method used by Public Housing Agencies (PHAs) to 
determine the amount of the annual increase in the Contract Rents by 
providing for PHAs to conduct comparability studies for Moderate 
Rehabilitation projects to prevent the application of the Annual 
Adjustment Factors from resulting in a material difference between 
rents charged for assisted units and similar unassisted units.
    The proposed rule also provides a substitute method of determining 
the initial difference between Moderate Rehabilitation rents and rents 
charged for comparable unassisted units, if the PHA failed to establish 
the amount of the difference when the initial Contract Rents were 
determined. Additionally, the proposed rule provides, subject to the 
availability of appropriations, for special adjustments when an 
exemption from real property tax expires under certain circumstances, 
and insurance to the categories of cost increases that may result in a 
special adjustment.
    The October 2, 1995 proposed rule would be applicable to all 
projects which are currently, or will be in the future, under a Section 
8 Moderate Rehabilitation Housing Assistance Payments (HAP) Contract, 
as provided in the regular Section 8 Moderate Rehabilitation Program, 
and the Section 8 Moderate Rehabilitation Single Room Occupancy (SRO) 
Program for Homeless Individuals.
    The purpose of this document is to correct certain technical errors 
that appeared in the October 2, 1995 proposed rule.

Technical Corrections to October 2, 1995 Proposed Rule

    Corrections to the Preamble. In the preamble to the proposed rule, 
under the discussion in Section B on Comparability Studies, which 
begins at the bottom of page 51658, HUD notes in the last paragraph of 
this section (page 51659, first column) that: ``The rule also would 
provide that Contract Rents will never be reduced as a result of a 
comparability study.'' The word ``never'' also should have been 
inserted in the last sentence of the first full paragraph, first column 
of that page. The last sentence of the first paragraph should read: 
``However, the Contract Rent would never be reduced below its current 
level based upon the comparability study.''
    In the second full paragraph of the first column on page 51659, a 
phrase was inadvertently omitted from the first sentence pertaining to 
monthly rehabilitation debt service. The first sentence should have 
read as follows: ``A material difference between the assisted and 
comparable unassisted rents exists if the adjusted base rent plus any 
amount attributable to the monthly rehabilitation debt service is 
greater than the maximum allowable Contract rent plus any amount 
attributable to an initial difference.''
    In the second sentence of that same second paragraph, the word 
``contract'' rather than ``base'' should have been inserted in between 
the words ``allowable'' and ``rent'' so that it reads as follows: ``The 
maximum allowable Contract rent is a dollar amount equal to 105 percent 
of the comparable rent.''
    Corrections to Regulatory Text. Two corrections need to be made to 
the text of the regulation, and both corrections involve substituting 
the word ``contract'' for ``base.'' This correction needs to be made in 
the last sentence of Sec. 882.410(b)(1) and in the last clause of 
Sec. 882.410(c)(3).
    Accordingly, the foregoing corrections are made by this document.

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, FR Doc. 95-24368, Section 8 Moderate Rehabilitation; 
Rent Adjustments; Annual and Special Adjustments; Comparability 
Studies, Rent Reductions, Proposed Rule, published on October 2, 1995 
at 60 FR 51658 is corrected as follows.
    1. On page 51659, in the preamble, in column one, under item B., 
the last sentence of the first full paragraph beginning with ``Under 
the proposed rule, when the application of the AAF to the base rent,* * 
*'', and the second full paragraph, are corrected to read as follows:

B. Comparability Studies

* * * * *
    Under the proposed rule, when the application of the AAF to the 
base rent, * * *. However, the Contract Rent would never be reduced 
below its current level based upon the comparability study.
    A material difference between the assisted and comparable 
unassisted rents exists if the adjusted base rent plus any amount 
attributable to the monthly rehabilitation debt service is greater than 
the maximum allowable Contract rent plus any amount attributable to an 
initial difference. The maximum allowable Contract rent is a dollar 
amount equal to 105 percent of the comparable rent.
* * * * *
    2. On page 51661, in column one, in Sec. 882.410, paragraphs (b)(1) 
and (c)(3) are corrected, to read as follows:


Sec. 882.410  Rent adjustments.

* * * * *
    (b) Overall limitation. (1) Notwithstanding any other provisions of 
this part, adjustments as provided in this section must not result in 
material differences between the rents charged for assisted and 
unassisted units of similar age, quality, and type in the same market 
area, as determined by the PHA (and approved by HUD in the case of 
adjustments under paragraph (d) of this section). A material difference 
between the assisted and comparable unassisted rent is determined to 
exist if the adjusted Contract rent is greater than the maximum 
allowable Contract rent plus any difference which may have existed 
initially. The maximum allowable Contract rent is a dollar amount equal 
to 105 percent of the comparable rent.
* * * * *
    (c) * * *
    (3) If the Contract rent, adjusted by the AAF, plus the utility 
allowance, is 110 percent or more of the current Existing Housing FMR 
or if an exception rent limit (if granted for a geographical area in 
accordance with Sec. 882.408(b)), the PHA will conduct a comparability 
study to determine and approve an adjusted Contract rent that is not 
materially different from rents charged for comparable unassisted 
units.
* * * * * 

[[Page 54981]]

    Dated: October 20, 1995.
Kevin Emanual Marchman,
Deputy Assistant Secretary for Distressed and Troubled Housing 
Recovery.
[FR Doc. 95-26659 Filed 10-26-95; 8:45 am]
BILLING CODE 4210-33-P