[Federal Register Volume 73, Number 114 (Thursday, June 12, 2008)]
[Notices]
[Pages 33530-33590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13005]



[[Page 33529]]

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Part III





Department of Housing and Urban Development





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Proposed Fair Market Rents for the Housing Choice Voucher Program and 
Moderate Rehabilitation Single Room Occupancy Program--Fiscal Year 
2009; Notice

  Federal Register / Vol. 73, No. 114 / Thursday, June 12, 2008 / 
Notices  

[[Page 33530]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5223-N-01]


Proposed Fair Market Rents for the Housing Choice Voucher Program 
and Moderate Rehabilitation Single Room Occupancy Program Fiscal Year 
2009

AGENCY: Office of the Assistant Secretary for Policy Development and 
Research, HUD.

ACTION: Notice of Proposed Fiscal Year (FY) 2009 Fair Market Rents 
(FMRs).

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SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937 
(USHA) requires the Secretary to publish FMRs periodically, but not 
less than annually, adjusted to be effective on October 1 of each year. 
Today's notice proposes FMRs for FY 2009 to be 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 
payment (HAP) contracts in the Moderate Rehabilitation Single Room 
Occupancy program. Other programs may require use of FMRs for other 
purposes.
    The proposed FY 2009 FMR areas are based on current Office of 
Management and Budget (OMB) metropolitan area definitions and include 
HUD modifications that were first used in the determination of FY 2006 
FMR areas. OMB changes to the metropolitan area definitions through 
November 2007 are incorporated. This means that there are six 
Metropolitan Statistical Area (MSA) name changes that reorder, add, or 
delete a primary city name.\1\ Proposed FY 2009 FMRs are based on 2000 
Census data updated with more current survey data. For FY 2009, FY 2008 
FMRs are updated using 2006 American Community Survey (ACS) data, 
Random Digit Dialing (RDD) telephone rent surveys conducted since the 
release of the final FY 2008 FMRs, and more recent Consumer Price Index 
(CPI) rent and utility indexes. HUD continues to use ACS data in 
different ways according to how many two-bedroom standard-quality and 
recent-mover sample cases are available in the FMR area or its Core-
Based Statistical Area (CBSA). Revised 2006 FMRs based on Census and 
ACS data have been updated with CPI data through the end of 2007 and 
then trended to April 2009, the mid-point of FY 2009.
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    \1\ The change from Sarasota-Bradenton-Venice, FL MSA to 
Bradenton-Sarasota-Venice, FL MSA includes a change in the primary 
city name and a change in the metropolitan code, from 42260 to 
14600.
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    This notice also provides revised FY 2008 FMRs for 10 areas based 
on RDD surveys conducted in early 2008. These areas are small 
metropolitan or nonmetropolitan areas from the oil- and gas-producing 
regions of Colorado, Texas, Utah, and Wyoming that have experienced 
increased pressure on their rental housing market over the past 2 years 
or more.

DATES: Comment Due Date: August 1, 2008.

ADDRESSES: Interested persons are invited to submit comments regarding 
HUD's estimates of the FMRs, as published in this notice, to the Office 
of General Counsel, Rules Docket Clerk, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410-
0001. Communications should refer to the above docket number and title 
and should contain the information specified in the ``Request for 
Comments'' section.
    Submission of Hard Copy Comments. To ensure that the information is 
fully considered by all of the reviewers, each commenter that is 
submitting hard copy comments, by mail or hand delivery, is requested 
to submit two copies of its comments to the address above, one 
addressed to the attention of the Rules Docket Clerk and the other 
addressed to the attention of Economic and Market Analysis Division 
staff in the appropriate HUD field office. Due to security measures at 
all federal agencies, submission of comments by mail often result in 
delayed delivery. To ensure timely receipt of comments, HUD recommends 
that any comments submitted by mail be submitted at least 2 weeks in 
advance of the public comment deadline.
    Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
http://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically. Electronic submission of comments 
allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt by HUD, and enables HUD to make them immediately 
available to the public. Comments submitted electronically through the 
http://www.regulations.gov Web site can be viewed by other commenters 
and interested members of the public. Commenters should follow 
instructions provided on that site to submit comments electronically.
    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Comments. All comments and communications 
submitted to HUD will be available, without charge, for public 
inspection and copying between 8 a.m. and 5 p.m. weekdays at the above 
address. Due to security measures at the HUD Headquarters building, an 
advance appointment to review the public comments must be scheduled by 
calling the Regulations Division at 202-708-3055 (this is not a toll-
free number). Copies of all comments submitted are available for 
inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For technical information on the 
methodology used to develop FMRs or a listing of all FMRs, please call 
the HUD USER information line at 1-800-245-2691 or access the 
information on the HUD Web site http://www.huduser.org/datasets/fmr.html. FMRs are listed at the 40th or 50th percentile in Schedule B. 
For informational purposes, 40th percentile recent-mover rents for the 
areas with 50th percentile FMRs will be provided in the HUD FY 2009 FMR 
documentation system at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr09.
    Questions related to use of FMRs or voucher payment standards 
should be directed to the respective local HUD program staff. Questions 
on how to conduct FMR surveys or concerning further methodological 
explanations may be addressed to Marie L. Lihn or Lynn A. Rodgers, 
Economic and Market Analysis Division, Office of Economic Affairs, 
Office of Policy Development and Research, telephone 202-708-0590. 
Persons with hearing or speech impairments may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at 1-800-877-8339. (Other than the HUD USER information line and TDD 
numbers, telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 8 of the USHA (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 geographic areas. In the Housing Choice Voucher 
program, the FMR is the basis for determining the ``payment standard 
amount'' used to calculate the maximum monthly subsidy for an

[[Page 33531]]

assisted family (see 24 CFR 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 (nonluxury) nature with suitable amenities. In addition, all 
rents subsidized under the Housing Choice Voucher program must meet 
reasonable rent standards. The interim rule published on October 2, 
2000 (65 FR 58870), established 50th percentile FMRs for certain areas.
    Electronic Data Availability: This Federal Register notice is 
available electronically from the HUD News page at http://www.hudclips.org. Federal Register notices also are available 
electronically from http://www.gpoaccess.gov/fr/index.html, the U.S. 
Government Printing Office Web site. Complete documentation of the 
methodology and data used to compute each area's proposed FY 2009 FMRs 
is available at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr09.

II. Procedures for the Development of FMRs

    Section 8(c) of the USHA requires the Secretary of HUD to publish 
FMRs periodically, but not less frequently than annually. Section 8(c) 
states, in part, as follows:

    Proposed fair market rentals for an area shall be published in 
the Federal Register with reasonable time for public comment and 
shall become effective upon the date of publication in final form in 
the Federal Register. Each fair market rental in effect under this 
subsection shall be adjusted to be effective on October 1 of each 
year to reflect changes, based on the most recent available data 
trended so the rentals will be current for the year to which they 
apply, of rents for existing or newly constructed rental dwelling 
units, as the case may be, of various sizes and types in this 
section.

    HUD's regulations at 24 CFR 888 provide that HUD will develop 
proposed FMRs, publish them for public comment, provide a public 
comment period of at least 30 days, analyze the comments, and publish 
final FMRs. (See 24 CFR 888.115.)
    In addition, HUD's regulations at 24 CFR 888.113 set out procedures 
for HUD to assess whether areas are eligible for FMRs at the 50th 
percentile. No new areas became eligible for 50th percentile rents. HUD 
reviewed 24 50th-percentile FMR areas for these proposed FY 2009 FMRs. 
The 24 areas are listed in the table below. As shown in the table, HMFA 
is an acronym for HUD Metro FMR Area, which is an MSA subarea, or the 
remaining portions of an MSA after subareas have been determined.

         FY 2008 50th-Percentile FMR Areas Reviewed for Eligibility as FY 2009 50th-Percentile FMR Areas
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Albuquerque, NM MSA........................  Austin-Round Rock, TX MSA.
Baltimore-Towson, MD MSA...................  Bradenton-Sarasota-Venice, FL MSA.
Chicago-Naperville-Joliet, IL HMFA.........  Denver-Aurora, CO MSA.
Fort Worth-Arlington, TX HMFA..............  Grand Rapids-Wyoming, MI HMFA.
Hartford-West Hartford-East Hartford, CT     Honolulu, HI MSA.
 HMFA.
Houston-Baytown-Sugar Land, TX HMFA........  Kansas City, MO-KS, HMFA.
Las Vegas-Paradise, NV MSA.................  Milwaukee-Waukesha-West Allis, WI MSA.
New Haven-Meriden, CT HMFA.................  Orange County, CA HMFA.
Phoenix-Mesa-Scottsdale, AZ MSA............  Providence-Fall River, RI-MA HMFA.
Richmond, VA HMFA..........................  Riverside-San Bernardino-Ontario, CA MSA.
Tacoma, WA HMFA............................  Tucson, AZ MSA.
Virginia Beach-Norfolk-Newport News, VA-NC   Washington-Arlington-Alexandria, DC-VA-MD HMFA.
 MSA.
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    Fourteen of the 24 current 50th-percentile areas eligible for 
review fail to qualify for the 50th-percentile FMR program for FY 2009. 
Two of these areas, as shown below, no longer qualify for the 50th-
percentile FMR program because, based on current tenant data, less than 
25 percent of the tenant-based rental program participants reside in 
the 5 percent of census tracts in the metropolitan areas with the 
largest number of program participants. These areas can be reviewed 
annually to see if this concentration changes and may be reinstated as 
50th-percentile areas as early as the FY 2010 FMRs.

     FY 2008 50th-Percentile FMR Areas Not Eligible for FY 2009 50th-Percentile FMRs Because Voucher Tenant
                           Concentrations Have Fallen Below the Eligibility Threshold
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Grand Rapids-Wyoming, MI HMFA..................  Providence-Fall River, RI-MA HMFA.
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    Three additional areas did not meet the minimum reporting criteria 
of 85 percent of resident records. These areas are denied eligibility 
until their reporting rate increases to 85 percent. Areas with 
reporting rate deficiencies can be reviewed annually, so these areas 
may be eligible for reinstatement of 50th-percentile FMRs in FY 2010. 
These areas are listed below:

    FY 2008 50th-Percentile FMR Areas Not Eligible for FY 2009 50th-Percentile FMRs Because FMR Area Voucher
                                           Reporting Rates Are Too Low
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Baltimore-Towson, MD MSA.............................  New Haven-Meriden, CT HMFA.
Washington-Arlington-Alexandria, DC-VA-MD HMFA         .........................................................
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    The table below shows nine areas that failed to deconcentrate over 
the 3-year period. Deconcentration of tenants is the primary objective 
of the 50th-percentile program and failure to make any progress to 
deconcentrate tenants over a 3-year period disqualifies an otherwise 
eligible area for 3 years. These areas are not eligible for 
reevaluation until FY 2012.

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  FY 2008 50th-Percentile FMR Areas Not Eligible For FY 2009 50th-Percentile FMRs for Failure to Deconcentrate
                                                 Voucher Tenants
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Austin-Round Rock, TX MSA.........................  Fort Worth-Arlington, TX HMFA.
Honolulu, HI MSA..................................  Las Vegas-Paradise, NV MSA.
Orange County, CA HMFA............................  Phoenix-Mesa-Scottsdale, AZ MSA.
Riverside-San Bernardino-Ontario, CA MSA..........  Tucson, AZ MSA.
Virginia Beach-Norfolk-Newport News, VA-NC MSA....  ............................................................
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    Ten of the 24 areas reviewed will stay in the 50th-percentile FMR 
program. The ten areas will not be re-evaluated until FY 2012.

         FY 2008 50th-Percentile FMR Areas Evaluated and Continuing With 50th-Percentile FMRs in FY 2009
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Albuquerque, NM MSA...............................  Bradenton-Sarasota-Venice, FL MSA.
Chicago-Naperville-Joliet, IL HMFA................  Denver-Aurora, CO MSA.
Hartford-West Hartford-East Hartford, CT HMFA.....  Houston-Baytown-Sugar Land, TX HMFA.
Kansas City, MO-KS HMFA...........................  Milwaukee-Waukesha-West Allis, WI MSA.
Richmond, VA HMFA.................................  Tacoma, WA HMFA.
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    Four current 50th-percentile FMR areas were not evaluated this year 
because they have not completed 3 years of program participation. These 
four areas, listed below, will be evaluated for the FY 2010 FMRs:

FY 2008 50th-Percentile FMR Areas Not Slated For Eligibility Evaluation and Continuing With 50th-Percentile FMRs
                                                   in FY 2009
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Dallas, TX HMFA..............................  Fort Lauderdale, FL HMFA.
San Diego-Carlsbad-San Marcos, CA MSA........  West Palm Beach-Boca Raton, FL HMFA.
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III. FMR Methodology

    This section provides a brief overview of how the FY 2009 FMRs are 
computed. For complete information on how FMR areas are determined, and 
on how each area's FMRs are derived, see the online documentation at: 
http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr09.
    The FY 2009 FMRs are based on current OMB metropolitan area 
definitions that were first used in the FY 2006 FMRs. OMB changes to 
the metropolitan area definitions through November 2007 are 
incorporated. This means there are six MSA name changes that reorder, 
add, or delete a primary city name. The area definitions based on 2000 
Census data have the advantages of providing more relevant commuting 
interchange standards, and more current measures of housing market 
relationships than those based on 1990 Census data and used prior to 
the FY 2006 FMRs.

A. Data Sources--2000 Census and American Community Survey

    FY 2009 FMRs are based on changes in rents measured by differences 
in ACS data collected in 2005 and 2006 and updated with CPI data. For 
FY 2008 FMRs, HUD developed 2005 rent estimates based on updating 2000 
Census gross rent data with more current survey data from the Census 
Bureau's 2005 ACS. The first full year of implementation for the ACS 
was 2005, and these data were available to use in the FY 2008 FMRs. FY 
2009 FMRs use data from the 2006 ACS to update these 2005 rent 
estimates. While the Census Bureau intends for the ACS to replace the 
Decennial Census sample ``long form'' for collecting detailed 
socioeconomic data, the ACS has several important distinctions from the 
decennial long form. These include:
     The ACS is conducted on a continuous ``rolling'' basis 
throughout the year, so survey responses do not correspond to a 
particular date, whereas the long form responses were as of the Census 
date of April 1. This has implications for the ``as-of'' date assumed 
for ACS-based rents. The ``as-of'' date for ACS-based rents is set at 
June 30 of the ACS year.
     The ACS has an initial sample size (before nonresponse 
attrition) of about one-fifth that of the decennial long form, which 
surveyed approximately one out of every six households. This means that 
an adequate sample size for one-year ACS data will be available only 
for very large population geographic areas, and that data for smaller 
areas will be accumulated over 3 or 5 years to form the basis of 
decennial long-form-equivalent estimates.
    As detailed in the notices announcing the proposed and final FY 
2008 FMRs, HUD replaced the accumulated 2001 through 2005 FMR update 
factors from various sources with 2005 ACS data. The preamble for the 
final FY 2008 FMR Notice (72 FR 55940) provides a description of how 
the 2005 ACS data, and in some cases RDDs conducted in 2001 through 
2005, were used in the FY 2008 FMRs. Further details regarding the 
calculation of FY 2008 FMRs are available using HUD's online Final FY 
2008 Documentation System, available at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr08.

B. Updates From 2005 to 2006

    State or local 2006 ACS data are used to update a June-2005-
calculated gross rent from the FY 2008 FMRs to June 2006. The same 
categories of use, depending upon the sizes of the available rental 
unit samples in the FMR areas, were applied to the 2006 ACS data as had 
been applied to the 2005 data. There are two exceptions to the 
similarity of processing 2005 ACS data and 2006 ACS data. First, the 
update factor reflecting changes in rents for the parts of the state 
not included in FMR areas covered by local ACS data was discontinued 
for two reasons: (1) The variance in rent change between 2005 and 2006 
for these areas was much larger than that for full states and it was 
not clear whether these changes reflected differences in markets or 
area

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composition, or if they reflected survey anomalies; and (2) basing an 
underlying geography on factors that change annually (such as the 
identity of FMR areas covered by local ACS data) and which cannot be 
determined until the survey data have been processed presents a 
complexity that could not be resolved in a manner that allowed for 
timely delivery of data. Consequently, for FY 2009, all state-based 
update factors are calculated for the entire state.
    Second, HUD-defined ``HMFAs'' in metropolitan areas (CBSAs) where 
no subarea uses the CBSA gross rent as the basis of its FMR, are no 
longer tested to determine which update factor, the state or the CBSA, 
brings the subarea closer to the CBSA. The state update factor is now 
used for these cases. This change was made because review of the data 
and discussions with field economists indicated that forcing these 
subareas toward CBSA-area values was the opposite of market trends for 
some subareas.

C. Updates From 2006 to 2007

    The 2006 ACS data brought the 2005 data used in the FY 2008 FMRs 
forward by 12 months to June 2006. The CPI is used to update the June 
2006 FMRs to the end of 2007. Local CPI data are used for FMR areas 
with at least 75 percent of their population within Class A 
metropolitan areas covered by local CPI data. Census region CPI data 
are used for FMR areas in Class B and C size metropolitan areas and 
nonmetropolitan areas without local CPI update factors.

D. Updates From 2007 to 2009

    The national 1990 to 2000 average annual rent increase trend of 
1.03 is applied to end-of-2007 rents for 1.25 years, to derive the 
proposed FY 2009 FMRs.

E. Additional Rent Surveys and Other Data

    In early 2008, surveys were conducted in several areas of Wyoming, 
Colorado, Utah, and Texas where, as a result of increased oil and gas 
drilling activity, housing agencies have experienced significant rental 
housing market pressure. Most of these areas have experienced problems 
managing the voucher program over the past couple of years. These 
surveys show that rents in these areas are higher than previously 
estimated. All of these surveys met HUD standards for statistical 
significance (i.e., the survey result trended to April 2008 was 
statistically different from the April 2008 FY 2008 FMRs at a 95 
percent level of confidence). Effective upon publication of this 
notice, and through September 30, 2008, FMRs for these areas are listed 
below.

                                    Revised FY 2008 FMRs Based on RDD Results
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                                                     0 BR         1 BR         2 BR         3 BR         4 BR
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Casper, WY.....................................         $448         $490         $619         $901       $1,085
Duchesne County, UT............................          620          673          747          964        1,312
Garfield County, CO............................          832          947        1,050        1,296        1,335
Grand Junction, CO.............................          544          546          655          954        1,153
Midland, TX MSA................................          541          585          770        1,122        1,329
Moffat County, CO..............................          499          545          684          897        1,201
Odessa, TX MSA.................................          492          521          683          984        1,143
Sweetwater County, WY..........................          446          542          680          951          987
Uinta County, WY...............................          463          585          666          909         1079
Uintah County, UT..............................          534          580          643          845          950
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    The FMR bonuses related to the impact of Hurricane Katrina for 
Baton Rouge, LA, and New Orleans, LA, first applied March 6, 2006, 
continue to be applied in the proposed FY 2009 FMRs, though the bonuses 
have been reduced as ACS data have started to capture the market rent 
increases for these areas. Continuing research shows that rental market 
conditions in both areas remain tight, and that FMRs should not be 
reduced. Similarly, and in accordance with the revised FY 2008 FMRs for 
Gulfport-Biloxi, MS MSA and Pascagoula, MS MSA (73 FR 6197), bonuses 
will continue in these Mississippi areas in the FY 2009 FMRs, although, 
as in the Louisiana areas, the bonus amounts are reduced.
    The area-specific data and computations used to calculate proposed 
FY 2009 FMRs and FMR area definitions can be found at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr09.

F. Bedroom Rent Adjustments

    FMR estimates are calculated for two-bedroom units. This is 
generally the most common size of rental units and, therefore, the most 
reliable to survey and analyze. After each Decennial Census, rent 
relationships between two-bedroom units and other unit sizes are 
calculated and used to set FMRs for other units. This is done because 
it is much easier to update two-bedroom estimates and to use pre-
established cost relationships with other bedroom sizes than it is to 
develop independent FMR estimates for each bedroom size. This was last 
done using 2000 Census data. A publicly releasable version of the data 
file used for the derivations of rent ratios is available at http://www.huduser.org/datasets/fmr/CensusRentData/index.html.
    Adjustments were made using 2000 Census data to establish rent 
ratios for areas with local bedroom-size intervals above or below what 
are considered reasonable ranges or where sample sizes are inadequate 
to accurately measure bedroom rent differentials. Experience has shown 
that highly unusual bedroom ratios typically reflect inadequate sample 
sizes or peculiar local circumstances that HUD would not want to 
utilize in setting FMRs (e.g., luxury efficiency apartments that rent 
for more than typical one-bedroom units). Bedroom interval ranges were 
established based on an analysis of the range of such intervals for all 
areas with large enough samples to permit accurate bedroom ratio 
determinations. The ranges used were: efficiency units are constrained 
to fall between 0.65 and 0.83 of the two-bedroom FMR; one-bedroom units 
must be between 0.76 and 0.90 of the two-bedroom unit; three-bedroom 
units must be between 1.10 and 1.34 of the two-bedroom unit; and four-
bedroom units must be between 1.14 and 1.63 of the two-bedroom unit. 
Bedroom rents for a given FMR area were then adjusted if the 
differentials between bedroom-size FMRs were inconsistent with normally 
observed patterns (i.e., efficiency rents were not allowed to be higher 
than one-bedroom rents and four-bedroom rents were not allowed to be 
lower than three-bedroom rents).
    The rents for three-bedroom and larger units are further adjusted 
to continue to reflect HUD's policy to set

[[Page 33534]]

higher rents for these units than would result from using unadjusted 
market rents. This adjustment is intended to increase the likelihood 
that the largest families, who have the most difficulty in leasing 
units, will be successful in finding eligible program units. The 
adjustment adds bonuses of 8.7 percent to the unadjusted three-bedroom 
FMR estimates and adds 7.7 percent to the unadjusted four-bedroom FMR 
estimates. The FMRs for unit sizes larger than four bedrooms are 
calculated by adding 15 percent to the four-bedroom FMR for each extra 
bedroom. For example, the FMR for a five-bedroom unit is 1.15 times the 
four-bedroom FMR, and the FMR for a six-bedroom unit is 1.30 times the 
four-bedroom FMR. FMRs for single-room occupancy units are 0.75 times 
the zero-bedroom (efficiency) FMR.
    For low-population, nonmetropolitan counties with small 2000 Census 
samples of recent-mover rents, Census-defined county group data were 
used to determine rents for each bedroom size. This adjustment was made 
to protect against unrealistically high or low FMRs due to insufficient 
sample sizes. The areas covered by this new estimation method had less 
than the HUD standard of 200 two-bedroom, Census-tabulated 
observations.

IV. 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 two-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.
    All approved exceptions to these rents that were in effect in FY 
2008 were updated to FY 2009 using the same data used to estimate the 
Housing Choice Voucher program FMRs if the respective FMR area's 
definition had remained the same. If the result of this computation was 
higher than 40 percent of the re-benchmarked two-bedroom rent, the 
exception remains and is listed in Schedule D. The FMR area definitions 
used for the rental of manufactured home spaces are the same as the 
area definitions used for the other FMRs. Areas with definitional 
changes that previously had exception manufactured housing space rental 
FMRs are requested to submit new surveys to justify higher-than-
standard space rental FMRs if they believe higher-space rental 
allowances are needed.

V. Request for Public Comments

    HUD seeks public comments on FMR levels for specific areas. 
Comments on FMR levels must include sufficient information (including 
local data and a full description of the rental housing survey 
methodology used) to justify any proposed changes. Changes may be 
proposed in all or any one or more of the unit-size categories on the 
schedule. Recommendations and supporting data must reflect the rent 
levels that exist within the entire FMR area.
    For the supporting data, 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 approximately $35,000. Areas with 2,000 or more program 
units usually meet this cost criterion, and areas with fewer units may 
meet it if actual rents for two-bedroom units are significantly 
different from the FMRs proposed by HUD. In addition, HUD has developed 
a 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 $5,000 or less.
    PHAs in nonmetropolitan areas may, in certain circumstances, 
conduct surveys of groups of counties. HUD must approve all county-
grouped surveys in advance. 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 the relationship of rents in 
that area to the combined rents in the cluster of FMR areas. In 
addition, PHAs are advised that counties where FMRs are based on the 
combined rents in the cluster of FMR areas will not have their FMRs 
revised unless the grouped survey results show a revised FMR above the 
combined rent level.
    PHAs that plan to use the RDD survey technique should obtain a copy 
of the appropriate survey guide. Larger PHAs should request HUD's 
survey guide entitled ``Random Digit Dialing Surveys: A Guide to Assist 
Larger Public Housing Agencies in Preparing Fair Market Rent 
Comments.'' Smaller PHAs should obtain the guide entitled ``Rental 
Housing Surveys: A Guide to Assist Smaller Public Housing Agencies in 
Preparing Fair Market Rent Comments.'' These guides are available from 
HUD USER at 800-245-2691, or from HUD's Web site, in Microsoft Word or 
Adobe Acrobat format, at the following address: http://www.huduser.org/datasets/fmr.html.
    Other survey methodologies are acceptable in providing data to 
support comments, if the survey methodology can provide statistically 
reliable, unbiased estimates of the 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 to be statistically representative of the entire rental housing 
stock of the FMR area. Surveys must include units at 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 means of 
verifying if a sample is representative of the FMR area's rental 
housing stock.
    Most surveys cover only one- and two-bedroom units, which has 
statistical advantages. If the survey is statistically acceptable, HUD 
will estimate FMRs for other bedroom sizes using ratios based on the 
Decennial Census. 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 
may find it appropriate to relax normal sample size requirements.
    HUD will consider increasing manufactured home space FMRs where 
public comment demonstrates that 40 percent of the two-bedroom FMR is 
not adequate. In order to be accepted as a basis for revising the 
manufactured home space FMRs, comments must include a pad rental survey 
of the mobile home parks in the area, identify the utilities included 
in each park's rental fee, and provide a copy of the applicable public 
housing authority's utility schedule.
    Accordingly, the Fair Market Rent Schedules, which will not be 
codified in 24 CFR part 888, are proposed to be amended as shown in the 
Appendix to this notice:

    Dated: June 3, 2008.
Darlene F. Williams,
Assistant Secretary for Policy Development and Research.

Fair Market Rents for the Housing Choice Voucher Program

Schedules B and D--General Explanatory Notes

1. Geographic Coverage

    a. Metropolitan Areas--FMRs are 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 is using

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the metropolitan CBSAs, which are made up of one or more counties, 
as defined by the Office of Management and Budget (OMB), with some 
modifications. HUD is generally assigning separate FMRs to the 
component counties of CBSA Micropolitan Areas.
    b. Modifications to OMB Definitions-- Following OMB guidance, 
the estimation procedure for the FY 2008 proposed FMRs incorporates 
the current OMB definitions of metropolitan areas based on the CBSA 
standards as implemented with 2000 Census data, but makes 
adjustments to the definitions to separate subparts of these areas 
where FMRs or median incomes would otherwise change significantly if 
the new area definitions were used without modification. In CBSAs 
where subareas are established, it is HUD's view that the geographic 
extent of the housing markets are not yet the same as the geographic 
extent of the CBSAs, but may become so in the future as the social 
and economic integration of the CBSA component areas increases. 
Modifications to metropolitan CBSA definitions are made according to 
a formula as described below.
    Metropolitan area CBSAs (referred to as MSAs) may be modified to 
allow for subarea FMRs within MSAs based on the boundaries of old 
FMR areas (OFAs) within the boundaries of new MSAs. (OFAs are the 
FMR areas defined for the FY 2005 FMRs. Collectively they include 
1999-definition MSAs/Primary Metropolitan Statistical Areas (PMSAs), 
metro counties deleted from 1999-definition MSAs/PMSAs by HUD for 
FMR purposes, and counties and county parts outside of 1999-
definition MSAs/PMSAs referred to as nonmetropolitan counties.) 
Subareas of MSAs are assigned their own FMRs when the subarea 2000 
Census Base Rent differs by at least 5 percent from (i.e., is at 
most 95 percent or at least 105 percent of) the MSA 2000 Census Base 
Rent, or when the 2000 Census Median Family Income for the subarea 
differs by at least 5 percent from the MSA 2000 Census Median Family 
Income. MSA subareas, and the remaining portions of MSAs after 
subareas have been determined, are referred to as HMFAs to 
distinguish these areas from OMB's official definition of MSAs.
    The specific counties and New England towns and cities within 
each state in MSAs and HMFAs are listed in Schedule B.

2. Bedroom Size Adjustments

    Schedule B shows the FMRs for zero-bedroom through four-bedroom 
units. The FMRs for unit sizes larger than four bedrooms are 
calculated by adding 15 percent to the four-bedroom FMR for each 
extra bedroom. For example, the FMR for a five-bedroom unit is 1.15 
times the four-bedroom FMR, and the FMR for a six-bedroom unit is 
1.30 times the four-bedroom FMR. FMRs for single-room-occupancy 
(SRO) units are 0.75 times the zero-bedroom FMR.

3. 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 non-metropolitan county listings.
    d. The New England towns and cities included in a 
nonmetropolitan county are listed immediately following the county 
name.
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[FR Doc. E8-13005 Filed 6-11-08; 8:45 am]
BILLING CODE 4210-67-C