[Federal Register Volume 65, Number 186 (Monday, September 25, 2000)]
[Rules and Regulations]
[Pages 57658-57717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24333]
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Part II
Department of Housing and Urban Development
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24 CFR Part 888
Fair Market Rents for Fiscal Year 2001; Final Rule
Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 /
Rules and Regulations
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 888
[Docket No. FR-4589-N-02]
Fair Market Rents for Fiscal Year 2001
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of Final Fiscal Year (FY) 2001 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 to establish payment standards
for the Housing Choice Voucher program; to determine initial contract
rents in new commitments for Section 8 project-based assistance (e.g.,
the project-based voucher program); to determine whether comparability
applies to adjustment of contract rents during the term of an existing
HAP contract in the Section 8 new construction, substantial
rehabilitation and moderate rehabilitation programs; and as a limit on
renewal rents for certain Section 8 projects. The FMRs also apply to
any other programs requiring their use. Today's notice establishes
final FY 2001 FMRs for all areas. These FMRs reflect the estimated 40th
percentile rent levels trended to April 1, 2001.
EFFECTIVE DATE: The FMRs published in this notice are effective on
October 1, 2000.
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 Lynn A. Rodgers,
Economic and Market Analysis Division, Office of Economic Affairs,
telephone (202) 708-0590, Extension 5735 (e-mail: Lynn_A._Rodgers
@hud.gov). 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 safe and habitable 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 24 CFR 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 FMRs, including determination of the
intervals between the FMRs for bedroom size category, are generally
based on data for the specific area. Although intervals are generally
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 used were the minimum bedroom intervals
(determined after excluding outliers) from the distribution of bedroom
intervals for all metropolitan areas.
Higher intervals 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 April 28, 2000 proposed FMRs, HUD received
public comments covering 33 FMR areas. Rental housing survey
information was provided for 22 of those FMR areas. All of the survey
information submitted was evaluated. Based on that review, HUD
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has revised the proposed FMRs for 16 areas. The information submitted
for the other FMR areas was not considered sufficient to provide a
basis for revising the FMRs. HUD has increased the proposed FMRs for
the following areas.
Bennington County, VT
Brown County, SD
Caledonia County, VT
Clay County, SD
Codington County, SD
Davidson County, SD
Essex County, VT
Franklin County, VT
Grand Isle County, VT
Hughes County, SD
Reno, NV, MSA (Manufactured Home Space FMRs only)
Rutland County, VT
San Jose, CA PMSA
Vallejo-Fairfield-Napa, CA PMSA (Manufactured Home Space FMRs only)
Windham County, VT
Windsor County, VT
RDD Surveys
This notice makes effective the FMRs for 5 areas proposed with
reductions based on RDD surveys conducted from January through April,
2000.
Of these five areas, comments were received from:
Lake Charles, LA MSA
Providence-Fall River-Warwick, RI--MA MSA
Springfield, MA MSA
None of the comments received pertaining to these three FMR areas
contained sufficient rental housing survey information to provide a
basis for revising the FMRs.
No comments were received from the other two areas with proposed
decreases:
Brownsville-Harlingen-San Benito, TX MSA
Utica-Rome, NY MSA
Based on RDDs conducted by HUD in summer, 2000, FMRs for the
following areas are being increased more than the normal inflation
based increase:
Athens County, OH
Burlington, VT MSA
Burnet County, TX
Goldsboro, NC MSA
Jonesboro, AR MSA
Montcalm County, MI
Oakland, CA PMSA
Oklahoma City, OK MSA
Portland, ME MSA
Stamford-Norwalk, CT PMSA
Ventura, CA PMSA
Summer, 2000 RDDs were conducted for the following areas with no
change in the FMRs indicated:
Boulder-Longmont, CO PMSA
Harrison County, OH
Los Angeles-Long Beach, CA PMSA
Rocky Mount, NC MSA
Santa Barbara-Santa Maria-Lompoc, CA MSA
A summer, 2000 RDD indicates a decrease of approximately 16 percent
in the FMR for the Dutchess County, NY PMSA. This reduction will be
proposed for the FY 2002 FMRs.
American Housing Survey
There were no applicable AHS surveys to include in the FY 2001
FMRs.
Calculation Errors
San Diego, CA and Orange County, CA FMRs have been increased by 2
percent and 1.1 percent, respectively, due to corrections of
calculation errors in the proposed FMRs.
FMR Area Definition Changes
There were no changes in OMB metropolitan area definitions
affecting the FY 2001 FMRs.
Three areas requested changes to their FMR areas: the Public
Housing Agency (PHA) for Santa Barbara, CA requested a north/south
split in the county, and the Fairfax County, VA and Rockland County, NY
PHAs requested that they be removed from their respective FMR areas and
made separate FMR areas. HUD does not support splitting FMR areas for
these areas. FMR areas are intended to correspond to housing market
areas, which HUD defines based on the Office of Management and Budget's
metropolitan area definitions. While many FMR areas have large
differentials of market rent between the highest and lowest cost parts
of an FMR area, current rules for the Section 8 Voucher Program provide
that a PHA may establish a separate payment standard for a designated
part of an FMR area up to 110 percent of the published standard amounts
that exceed this limit. In specified circumstances, with sufficient
justification, HUD headquarters may even approve a voucher payment
standard amount that exceeds 120 percent of the published FMR--the
maximum subsidy limit in the old Section 8 certificate program. These
exceptions are sufficient to account for market rent differentials.
Manufactured Home Space Surveys
FMRs for the rental of manufactured home spaces in the Housing
Choice Voucher program are 40 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 40 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 (including 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 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 about $5,000.
PHAs in nonmetropolitan areas may, in certain circumstances, do
surveys of groups of counties. All grouped county surveys must be
approved in advance by HUD. PHAs 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.
PHAs 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 PHAs should request ``Random Digit Dialing Surveys; A Guide to
Assist Larger Housing Agencies in Preparing Fair Market Rent
Comments.'' Smaller PHAs 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 PHA
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
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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 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. A PHA
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 13132, 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).
Dated: September 15, 2000.
Andrew Cuomo,
Secretary.
Accordingly, the Fair Market Rent Schedules,which will not be
codified in 24 CFR Part 888, are amended as follows:
Fair Market Rents for the Housing Choice Voucher 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 manufactured home spaces in the Housing Choice Voucher
program are 40 percent of the two-bedroom Housing Choice Voucher
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 Housing Choice Voucher program FMRs.
The FMR area definitions used for the rental of manufactured home
spaces are the same as the area definitions used for the other FMRs.
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
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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. 00-24333 Filed 9-22-00; 8:45 am]
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