[Federal Register Volume 67, Number 189 (Monday, September 30, 2002)]
[Notices]
[Pages 61382-61440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24619]



[[Page 61381]]

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

Part II





Department of Housing and Urban Development





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



Fair Market Rents for the Housing Choice Voucher Program and Moderate 
Rehabilitation Single Room Occupancy Program Fiscal Year 2003; Notice

  Federal Register / Vol. 67, No. 189 / Monday, September 30, 2002 / 
Notices  

[[Page 61382]]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4741-N-02]


Fair Market Rents for the Housing Choice Voucher Program and 
Moderate Rehabilitation Single Room Occupancy Program Fiscal Year 2003

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of final fiscal year (FY) 2003 fair market rents (FMRs).

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

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 determine payment standard 
amounts for the Housing Choice Voucher program, to determine initial 
renewal rents for some expiring project-based Section 8 contracts, and 
to determine initial rents for housing assistance payments (HAP) 
contracts in the Moderate Rehabilitation (Mod Rehab) Single Room 
Occupancy (SRO) program. Other programs may require use of FMRs for 
other purposes. Today's notice provides final FY 2003 FMRs for all 
areas that reflect the estimated 40th and 50th percentile rent levels 
trended to April 1, 2003.

EFFECTIVE DATE: The FMRs published in this notice are effective on 
October 1, 2002.

FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Director, Real Estate 
and Housing Performance Division, Office of Public and Assisted Housing 
Delivery, telephone (202) 708-0477, responsible for decisions on how 
fair market rents are used. Allison Manning, Community Assistance 
Division, telephone (202) 708-1234, responsible for administration of 
the Mod Rehab Single Room Occupancy (SRO) program. For technical 
information on the methodology used to develop fair market rents or a 
listing of all fair market rents, please call HUD USER at 1-800-245-
2691 or access the information on the HUD Web site, http://www.huduser.org/datasets/fmr.html. Further questions on the methodology 
may be addressed to Marie L. Lihn, Economic and Market Analysis 
Division, Office of Economic Affairs, telephone (202) 708-0590, (e-
mail: [email protected]). Hearing- or speech-impaired persons may 
use the Telecommunications Devices for the Deaf (TTY) at 1-800-927-
7589. (Other than the ``800'' HUD User and TTY numbers, 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 decent housing. Housing 
assistance payments are limited by FMRs established by HUD for 
different areas. In the Housing Choice Voucher program, the FMR is used 
to determine the ``payment standard amount'' used to calculate the 
maximum monthly subsidy for an assisted family (see 24 Code of Federal 
Regulations 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 and safe rental housing of a 
modest (non-luxury) nature with suitable amenities.

How HUD Sets FMRs

HUD Standard for Setting the FMR

    FMRs are gross rent estimates that include both shelter rent paid 
by the tenant to the landlord and the cost of tenant-paid 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 
in various neighborhoods and low enough to serve as many families as 
possible.
    FMRs are set at a percentile within the rent distribution for 
standard quality rental housing units in each FMR area (see 24 Code of 
Federal Regulations 888.113). FMRs are based on the distribution of 
rents for units that are occupied by recent movers--renter households 
who moved into their units within the past 15 months. The distribution 
does not include rents for units less than two years old or for public 
housing units. Rents for subsidized housing units are adjusted by 
adding back the amount of the subsidy.
    HUD sets FMRs either at the 40th percentile rent or at the 50th 
percentile rent. For most FMR areas, the FMR is set at the 40th 
percentile rent, the rent for 40 percent of standard rental housing 
units is at or below this dollar amount. For some FMR areas, the FMR is 
set at the 50th percentile rent, the median rent for 50 percent of 
standard units is at or below this dollar amount. An asterisk in 
Schedule B identifies each of the 39 FMR areas for which HUD Public 
Housing Agencies (PHAs) set 50th percentile FMRs.

Data Sources

    HUD PHAs 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 (AHS), 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 on HUD 
regional rent change factors developed from regional RDD surveys. Area-
specific annual average CPI data are available 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

    With the exception of areas with FMRs set at the 50th percentile, 
FMRs are established at the higher of the local 40th percentile rent or 
a State minimum equal to the Statewide average 40th percentile rent for 
nonmetropolitan counties. The State minimum also affects a small number 
of metropolitan areas whose rents would otherwise fall below the State 
minimum.

Bedroom Size Adjustments

    FMRs are calculated separately for each bedroom size category. In 
FMR areas where FMRs are based on the State minimums, the FMR for each 
bedroom size category is the higher of the 40th percentile rent for 
that bedroom size category (1) for the FMR area or (2) for the 
Statewide average of nonmetropolitan counties. For all other FMR areas, 
the bedroom intervals are based on 1990 census data indicating the rent 
for that bedroom size for the specific FMR area.
    There are some areas where the bedroom intervals were adjusted 
because the rent intervals between bedroom sizes were above or below an 
acceptable range. The acceptable range for intervals between bedroom 
intervals was determined from a distribution of bedroom intervals for 
all metropolitan areas. Areas where the intervals were outside these 
standard ranges were increased or decreased to bring them

[[Page 61383]]

back within the range. Higher ratios continue to be used for 3-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 SRO units are 
0.75 times the 0 bedroom FMR.

Public Comments

    In response to the May 23, 2002, proposed FMRs, HUD received 10 
public comments covering 10 FMR areas. Rental housing survey 
information of some form was provided for four of those FMR areas. The 
Housing Authority of the County of Merced notified us that a survey was 
being conducted, but the survey was not submitted. All survey 
information submitted was evaluated and, based on that review, the FMRs 
for one area are being revised upward. The information submitted for 
the other FMR areas was not considered sufficient to provide a basis 
for revising the FMRs. The area with an approved FMR increase is:
    Adams County, PA (Manufactured Home Space FMRs only)
    Most of the commenters requested higher FMRs for their area. Some 
(Lebanon Housing Authority and the Housing Authority of the City of Los 
Angeles) suggested that FMRs be set at the 50th percentile for all 
areas. HUD conducted RDD surveys this summer for three areas (Los 
Angeles, CA, Washington, DC, and Oklahoma City, OK) that stated that 
the proposed FMRs were inadequate. The RDDs resulted in FMR increases 
for Los Angeles and Washington, DC; the RDD for Oklahoma City, OK, 
showed a slight decline in rents that will be incorporated into the 
proposed FMRs for FY 2004.
    The Housing Authority of the City of Santa Barbara again requested 
that its FMR area be split into North and South Santa Barbara, or that 
HUD immediately approve its 146 percent exception for the southern area 
with the institution of the new FMRs on October 1. HUD agreed last year 
and continues to agree that the 146 percent exception rent for southern 
Santa Barbara should be effective October 1, 2002.

RDD Surveys

Summer RDDs

    Based on RDDs conducted by HUD during the summer of 2002, FMRs for 
the following areas are being increased by more than the normal 
adjustments:

Fresno, CA
Los Angeles, CA
Sacramento, CA
Salinas, CA
Bridgeport, CT
Hartford, CT
Washington, DC
Pocatello, ID
Brockton, MA
Lawrence, MA
Lowell, MA
Rochester, MN
St Louis, MO
Middlesex-Somerset-Hunterdon, NJ
Eugene-Springfield, OR

    Summer 2002 RDDs also were done for the following areas, but they 
resulted in no change in the FMRs:

Birmingham, AL
Riverside-San Bernardino, CA
Jacksonville, FL
Rocky Mount, NC
Philadelphia, PA-NJ
Pittsburgh, PA
Tacoma, WA

    Two summer 2002 RDDs produced lower FMR estimates than those 
proposed in the May 23, 2002, publication. These areas will receive the 
proposed FY 2003 FMRs, but reductions will be in the Federal Register 
publication that contains proposed FY 2004 FMRs. The two areas are:

San Francisco, CA
Oklahoma City, OK

American Housing Survey

    There were no AHS surveys with results that alter proposed FY 2003 
FMRs.

FMR Area Definition Changes

    There were no changes in Office of Management Budget (OMB) 
metropolitan area definitions affecting the FY 2003 FMRs. Although a 
new county has been formed in Colorado, Broomfield County, this new 
area definition will not be incorporated into an FMR area until OMB 
decides which Metropolitan Statistical Area (MSA) (Denver or Boulder) 
will include this county. OMB will not make this decision until it 
finishes its review of the 2000 Census data. The area that makes up the 
new county of Broomfield was split between the Denver and Boulder MSAs, 
and will remain split until Broomfield County is assigned to the 
Boulder or Denver metropolitan area.

Manufactured Home Space Surveys

    The FMR used to establish payment standard amounts for the rental 
of manufactured home spaces in the Housing Choice Voucher program is 40 
percent of the FMR for a 2-bedroom unit. HUD will consider modification 
of the manufactured home space FMRs where public comments present 
statistically valid survey data showing the 40th percentile 
manufactured home 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 are 
sufficient numbers of Section 8 units to justify the survey cost of 
$14,000-$20,000. 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 PHAs 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.
    A PHA that plans 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

[[Page 61384]]

more traditional method described in the small PHA survey guide. Other 
survey methodologies are acceptable if 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.
    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.
    Accordingly, the Fair Market Rent Schedules, which will not be 
codified in 24 CFR part 888, are amended as follows:

    Dated: September 20, 2002.
Mel Martinez,
Secretary.

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.
    HUD uses the OMB Metropolitan Statistical Area (MSA) and Primary 
Metropolitan Statistical Area (PMSA) definitions. Schedule B FMRs are 
issued for the metropolitan areas as defined by OMB, with the 
exceptions discussed in paragraph (b). The OMB-defined metropolitan 
areas 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 2-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 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.

BILLING CODE 4210-62-P

[[Page 61385]]

[GRAPHIC] [TIFF OMITTED] TN30SE02.000


[[Page 61386]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.001


[[Page 61387]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.002


[[Page 61388]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.003


[[Page 61389]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.004


[[Page 61390]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.005


[[Page 61391]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.006


[[Page 61392]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.007


[[Page 61393]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.008


[[Page 61394]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.009


[[Page 61395]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.010


[[Page 61396]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.011


[[Page 61397]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.012


[[Page 61398]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.013


[[Page 61399]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.014


[[Page 61400]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.015


[[Page 61401]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.016


[[Page 61402]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.017


[[Page 61403]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.018


[[Page 61404]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.019


[[Page 61405]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.020


[[Page 61406]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.021


[[Page 61407]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.022


[[Page 61408]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.023


[[Page 61409]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.024


[[Page 61410]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.025


[[Page 61411]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.026


[[Page 61412]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.027


[[Page 61413]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.028


[[Page 61414]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.029


[[Page 61415]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.030


[[Page 61416]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.031


[[Page 61417]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.032


[[Page 61418]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.033


[[Page 61419]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.034


[[Page 61420]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.035


[[Page 61421]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.036


[[Page 61422]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.037


[[Page 61423]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.038


[[Page 61424]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.039


[[Page 61425]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.040


[[Page 61426]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.041


[[Page 61427]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.042


[[Page 61428]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.043


[[Page 61429]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.044


[[Page 61430]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.045


[[Page 61431]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.046


[[Page 61432]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.047


[[Page 61433]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.048


[[Page 61434]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.049


[[Page 61435]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.050


[[Page 61436]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.051


[[Page 61437]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.052


[[Page 61438]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.053


[[Page 61439]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.054


[[Page 61440]]


[GRAPHIC] [TIFF OMITTED] TN30SE02.055

[FR Doc. 02-24619 Filed 9-27-02; 8:45 am]
BILLING CODE 4210-62-C