[Federal Register Volume 64, Number 190 (Friday, October 1, 1999)]
[Rules and Regulations]
[Pages 53450-53509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25265]



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Part II





Department of Housing and Urban Development





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24 CFR Part 888



Fair Market Rents for the Section 8 Housing Assistance Payments 
Program--Fiscal Year 2000; Final Rule

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

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 888

[Docket No. FR-4496-N-02]


Fair Market Rents for the Section 8 Housing Assistance Payments 
Program--Fiscal Year 2000

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of Final Fiscal Year (FY) 2000 Fair Market Rents (FMRs).

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SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937 
requires the Secretary to publish FMRs annually to be effective on 
October 1 of each year. FMRs are used for the Section 8 housing choice 
voucher program, the Moderate Rehabilitation Single Room Occupancy 
program, the project-based voucher program, and any other programs 
requiring their use. Today's notice provides final FY 2000 FMRs for all 
areas.

EFFECTIVE DATE: The FMRs published in this notice are effective on 
October 1, 1999.

FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Operations Division, 
Office of Rental Assistance, telephone (202) 708-0477. For technical 
information on the development of schedules for specific areas or the 
method used for the rent calculations, contact Alan Fox, Economic and 
Market Analysis Division, Office of Economic Affairs, telephone (202) 
708-0590, Extension 5863 (e-mail: [email protected]). Hearing- or 
speech-impaired persons may use the Telecommunications Devices for the 
Deaf (TTY) by contacting the Federal Information Relay Service at 1-
800-877-8339. (Other than the ``800'' TTY number, telephone numbers are 
not toll free.)

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. Housing assistance payments are limited by FMRs established by 
HUD for different areas. In the voucher program, the FMR is used to 
determine the ``payment standard'' (the maximum monthly subsidy) for 
assisted families (see Section 982.503.) 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

    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 40th percentile rent, the dollar amount below which 40 percent of 
standard quality rental housing units rent. The 40th 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). Newly built units less than two years old are 
excluded, and adjustments have been made to correct for the below 
market rents of public housing units included in the data base.

Data Sources

    HUD used the most accurate and current data available to develop 
the FMR estimates. The sources of survey data used for the base-year 
estimates are:
    (1) The 1990 Census, which provides statistically reliable rent 
data for all FMR areas;
    (2) The Bureau of the Census' American Housing Surveys (AHSs), 
which are used to develop between-Census revisions for the largest 
metropolitan areas and which have accuracy comparable to the decennial 
Census; and
    (3) Random Digit Dialing (RDD) telephone surveys of individual FMR 
areas, which are based on a sampling procedure that uses computers to 
select statistically random samples of rental housing.
    The base-year FMRs are updated using trending factors based on 
Consumer Price Index (CPI) data for rents and utilities or HUD regional 
rent change factors developed from RDD surveys. Annual average CPI data 
are available individually for 99 metropolitan FMR areas. RDD regional 
rent change factors are developed annually for the metropolitan and 
nonmetropolitan parts of each of the 10 HUD regions. The RDD factors 
are used to update the base year estimates for all FMR areas that do 
not have their own local CPI survey.

State Minimum FMRs

    FMRs are established at the higher of the local 40th percentile 
rent level or the Statewide average of nonmetropolitan counties, 
subject to a ceiling rent cap. The State minimum also affects a small 
number of metropolitan areas whose rents would otherwise fall below the 
State minimum.

Bedroom Size Adjustments

    FMRs have been calculated separately for each bedroom size 
category. For areas whose FMRs are based on the State minimums, the 
rents for each bedroom size are the higher of the rent for the area or 
the Statewide average of nonmetropolitan counties for that bedroom 
size. For all other FMR areas, the bedroom intervals are based on data 
for the specific area. Exceptions have been made for some areas with 
local bedroom size rent intervals below an acceptable range. For those 
areas the intervals selected were the minimums determined after 
outliers had been excluded from the distribution of bedroom intervals 
for all metropolitan areas. Higher ratios continue to be used for 
three-bedroom and larger size units than would result from using the 
actual market relationships. This is done to assist the largest, most 
difficult to house families in finding program-eligible units. The FMRs 
for unit sizes larger than 4 bedroom are calculated by adding 15 
percent to the 4 bedroom FMR for each extra bedroom. For example, the 
FMR for a 5 bedroom unit is 1.15 times the 4 bedroom FMR, and the FMR 
for a 6 bedroom unit is 1.30 times the 4 bedroom FMR. FMRs for single-
room-occupancy (SRO) units are 0.75 times the 0 bedroom FMR.

Public Comments

    In response to the May 7, 1999 proposed FMRs, HUD received public 
comments covering 21 FMR areas. Rental housing survey information was 
provided for 12 of those FMR areas. All of the survey information 
submitted was evaluated and, based on that review, the FMRs for 10 
areas are being revised. The information submitted for the other FMR 
areas was not considered sufficient to provide a basis for revising the 
FMRs.
    Areas with approved FMR increases:

Sacramento, CA
San Benito County, CA
San Diego, CA
San Francisco, CA
Waterloo-Cedar Falls, IA
Rochester, MN
Moore County, NC

    Many comments were received from the Cape Cod, Massachusetts area 
in

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response to the proposed FMR decrease. An important methodological 
comment was that the RDD survey on which the reduction was based might 
not have accurately identified what are locally referred to as winter 
rental units. The units that were surveyed in March 1999 were therefore 
re-surveyed with a more detailed set of questions to identify these 
winter rentals. Results of the re-survey revealed that the winter 
rentals had influenced the original survey and also indicated more 
rapid rent increases than previously thought. On this basis the FMRs 
have been revised upward. These areas are:

Barnstable-Yarmouth, MA
Barnstable County, MA
Dukes County, MA

    The Housing Authority of the City of Santa Barbara, CA, requested 
that FMRs be increased or that the FMR area be split into two parts. In 
response to earlier comments, in December 1998 HUD conducted an RDD 
survey of the entire metropolitan area. The results were similar to the 
FMR then in effect. In addition, the survey found that the differential 
between the southern part (mainly the City of Santa Barbara) and the 
rest of the FMR area was within the limits of the FMR geographic 
exception range. HUD also received a comment from the Santa Barbara 
County housing authority explaining that it was having no problems 
running the program under the current FMR, and did not support a 
request to split the FMR area into two parts. For these reasons, the 
FMR for Santa Barbara is being adjusted with the normal update factor.
    Areas with FMR increase by normal update factor:

Oakland, CA
Santa Barbara-Santa Maria-Lompoc, CA

    HAs and other interested parties should be aware that FMR comments 
received too late for adjusting the current year's final FMRs will be 
held for use in the following year. In such cases HUD will trend the 
survey results to the date of the FMR estimate. If the HA is concerned 
that rents are changing rapidly, surveys should be timed to be received 
as close as possible to HUD's deadline for public comments.

AHS and RDD Surveys

    This notice makes effective the FMRs for 3 areas proposed with 
reductions based on recent RDD surveys and about which no comments were 
received:

Modesto, CA
Middlesex-Somerset-Hunterdon, NJ
Allentown-Bethlehem-Easton, PA

American Housing Survey

    Based on detailed rent data from the 1998 metropolitan AHSs, HUD is 
increasing FMRs for the following two areas:

Birmingham, AL
Tampa-St. Petersburg-Clearwater, FL

FMRs for the following AHS areas are being increased by the normal 
update factor:

Oakland, CA
San Jose, CA
Baltimore, MD
Boston, MA-NH
Minneapolis-St. Paul, MN-WI
Rochester, NY
Cincinnati, OH-KY-IN
Houston, TX
Salt Lake City-Ogden, UT
Norfolk-Virginia Beach-Newport News, VA-NC

    The AHS results for two areas indicate a decrease in FMRs, which 
will be proposed for the 2001 FMRs. They are:
Washington, DC-MD-VA
Providence-Fall River-Warwick, RI-MA

FMR Area Definition Changes

    This notice includes FMRs for two new metropolitan FMR areas based 
on new metropolitan statistical area definitions made effective by OMB 
on June 30, 1999. They are the Corvallis, Oregon FMR area, which 
consists of Benton County, and Auburn-Opelika, Alabama, which consists 
of Lee County.

Manufactured Home Space Surveys

    FMRs for the rental of manufactured home spaces in the Section 8 
Existing certificate and voucher program and the new merged tenant-
based certificate and voucher program are 30 percent of the applicable 
Section 8 existing housing program FMR for a two-bedroom unit. HUD 
accepts public comments requesting modifications of these FMRs where 
the 30 percent FMRs are thought to be inadequate. In order to be 
accepted as a basis for revising the FMRs, comments must contain 
statistically valid survey data that show the 40th percentile space 
rent (excluding the cost of utilities) for the entire FMR area. 
Manufactured home space FMR revisions are published as final FMRs in 
Schedule D. Once approved, the revised manufactured home space FMRs 
establish new base year estimates that are updated annually using the 
same data used to update the other FMRs.

HUD Rental Housing Survey Guides

    HUD recommends the use of professionally-conducted 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 program units usually meet this 
criterion, and areas with fewer units may meet it if local rents are 
thought to be significantly different than the FMR proposed by HUD. In 
addition, HUD has developed a simplified version of the RDD survey 
methodology for smaller, nonmetropolitan HAs. This methodology is 
designed to be simple enough to be done by the HA itself, rather than 
by professional survey organizations, at a cost of about $5,000.
    HAs in nonmetropolitan areas may, in certain circumstances, do 
surveys of groups of counties. All grouped county surveys must be 
approved in advance by HUD. HAs are cautioned that the resulting FMRs 
will not be identical for the counties surveyed; each individual FMR 
area will have a separate FMR based on its relationship to the combined 
rent of the group of FMR areas.
    HAs that plan to use the RDD survey technique may obtain a copy of 
the appropriate survey guide by calling HUD USER on 1-800-245-2691. 
Larger HAs should request ``Random Digit Dialing Surveys; A Guide to 
Assist Larger Housing Agencies in Preparing Fair Market Rent 
Comments.'' Smaller HAs should obtain ``Rental Housing Surveys; A Guide 
to Assist Smaller Housing Agencies in Preparing Fair Market Rent 
Comments.'' These guides are also available on the Internet at http://
www.huduser.org/datasets/fmr.html.
    HUD prefers, but does not mandate, the use of RDD telephone 
surveys, or the more traditional method described in the small HA 
survey guide. Other survey methodologies are acceptable as long as they 
provide statistically reliable, unbiased estimates of the 40th 
percentile gross rent. Survey samples should preferably be randomly 
drawn from a complete list of rental units for the FMR area. If this is 
not feasible, the selected sample must be drawn so as to be 
statistically representative of the entire rental housing stock of the 
FMR area. In particular, surveys must include units of all rent levels 
and be representative by structure type (including single-family, 
duplex and other small rental properties), age of housing unit, and 
geographic location. The decennial Census should be used as a starting 
point and means of verification for determining whether the sample is 
representative of the FMR area's rental housing stock. All survey 
results 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 telephone 
surveys) of some non-metropolitan areas have been unusually expensive 
because of telephone system characteristics. An HA or contractor that 
cannot obtain the recommended number of sample responses after 
reasonable efforts should consult with HUD before abandoning its 
survey; in such situations HUD is prepared to relax normal sample size 
requirements.

Other Matters

Environmental Impact

    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).

Regulatory Flexibility Act

    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.

Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 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.

Catalog of Federal Domestic Assistance

    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 17, 1999.
Andrew M. Cuomo,
Secretary.

Fair Market Rents for the Section 8 Housing Assistance Payments 
Program

Schedules B and D--General Explanatory Notes

1. Geographic Coverage
    a. Metropolitan Areas--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. The FMRs shown in Schedule B incorporate OMB's 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.
    b. Exceptions to OMB Definitions--The exceptions are counties 
deleted from several large metropolitan areas whose revised OMB 
metropolitan area 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

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
Flagstaff, AZ-UT
    Kane County, UT
New Orleans, LA
    St. James Parish
Washington, DC-MD-VA-WV
    Berkeley and Jefferson Counties in West Virginia; and Clarke, 
Culpeper, King George and Warren Counties in Virginia
    c. Nonmetropolitan Area FMRs--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. Virginia Independent Cities--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 Independent Cities Included
                               With County
------------------------------------------------------------------------
                 County                               Cities
------------------------------------------------------------------------
Allegheny...............................  Clifton Forge and Covington
Augusta.................................  Staunton and Waynesboro
Carroll.................................  Galax
Frederick...............................  Winchester
Greensville.............................  Emporia
Henry...................................  Martinsville
Montgomery..............................  Radford
Rockbridge..............................  Buena Vista and Lexington
Rockingham..............................  Harrisonburg
Southhampton............................  Franklin
Wise....................................  Norton
------------------------------------------------------------------------

2. Bedroom Size Adjustments
    Schedule B shows the FMRs for 0-bedroom through 4-bedroom units. 
The FMRs for unit sizes larger than 4 bedrooms are calculated by adding 
15 percent to the 4-bedroom FMR for each extra bedroom. For example, 
the FMR for a 5-bedroom unit is 1.15 times the 4-bedroom FMR, and the 
FMR for a 6-bedroom unit is 1.30 times the 4 bedroom FMR. FMRs for 
single-room-occupancy (SRO) units are 0.75 times the 0 bedroom FMR.
3. FMRs for Manufactured Home Spaces
    FMRs for Section 8 manufactured home spaces in the Section 8 
Existing certificate and voucher program and the new merged tenant-
based certificate and voucher program are 30 percent of the two-bedroom 
Section 8 existing housing program FMRs, with the exception of the 
areas listed in Schedule D whose manufactured home space FMRs have been 
modified on the basis of public comments. Once approved, the revised 
manufactured home space FMRs establish new base-year estimates that are 
updated annually using the same data used to estimate the Section 8 
existing housing FMRs. The FMR area definitions used for the rental of 
manufactured home spaces in the Section 8 Existing certificate and 
voucher program and the new merged tenant-based certificate and voucher 
program are the same as the area definitions used for other FMRs.

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4. 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.

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