[Federal Register Volume 76, Number 110 (Wednesday, June 8, 2011)]
[Notices]
[Pages 33333-33334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14123]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5525-N-01]


Use of Small Area Fair Market Rents for Project Base Vouchers in 
the Dallas TX Metropolitan Area

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

ACTION: Notice.

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SUMMARY: This notice clarifies the use of Small Area Fair Market Rents 
(SAFMRs) for Project-Based Vouchers (PBVs) located in the Dallas, TX, 
metropolitan area. This notice follows Federal Register notices 
published on August 4, 2010, and October 4, 2010, that proposed and 
established, respectively, Fiscal Year (FY) 2011 SAFMRs for the Housing 
Choice Voucher (HCV) program in the Dallas, TX, HUD Metropolitan Fair 
Market Rent Area (MHFA). The October 4, 2010, notice provides that all 
public housing agencies (PHAs) in the 8-county Dallas, TX, MHFA are 
required to use SAFMRs for the voucher program. Today's notice 
clarifies the use of the SAFMRs by PBV projects located in the 8-county 
Dallas, TX, MHFA.

FOR FURTHER INFORMATION CONTACT: Laure Rawson, Director, Housing 
Voucher Management and Operations Division, Office of Public and Indian 
Housing, Room 4210, 451 7th Street, SW., Washington, DC 20410-0500; 
telephone number 202-402-2425 (this is not a toll-free number). Persons 
with hearing or speech impairments may access this number through TTY 
by calling the toll-free Federal Relay Service at telephone number 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 4, 2010 (75 FR 46958), HUD published for public comment 
its proposed FY 2011 Fair Market Rents (FMRs) in accordance with 
Section 8(c)(1) of the United States Housing Act of 1937 (USHA) (42 
U.S.C. 1437f(c)(1)). In the HCV program, the FMR is the basis for 
determining the ``payment standard amount'' used to calculate the 
maximum monthly subsidy for an 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 HCV 
program must meet reasonable rent standards.
    The August 4, 2010, notice also proposed SAFMRs for the Dallas, TX 
MHFA. HUD described the methodology for determining SAFMRs in a May 18, 
2010, (75 FR 27808) Federal Register notice. Specifically, HUD noted 
that the methodology for calculating FMRs based on current Office of 
Management and Budget (OMB) metropolitan area definitions allows HUD 
Section 8 Voucher Tenants access to different parts of a metropolitan 
area. However, because FMRs are generally set at the 40th percentile of 
the metropolitan rent distribution, certain neighborhoods may not have 
many units available in the FMR range. To provide voucher holders with 
the opportunity to move to areas of greater opportunity, HUD's May 18, 
2010, notice proposed the use of a methodology to set FMRs at a more 
granular level, using areas defined by U.S. Postal Service ZIP Codes in 
metropolitan areas. For nonmetropolitan areas, HUD would continue to 
use counties as the basis for publishing FMRs. HUD published its final 
notice establishing its SAFMR Demonstration on April 20, 2011 (76 FR 
22122).
    HUD's October 4, 2010 notice (75 FR 61253), established FY 2011 
SAFMRs for the HCV program in the Dallas, TX, HMFA. Specifically, the 
October 4, 2010, notice provided that all PHAs operating in the 8-
county, Dallas TX, HMFA are required to use the SAFMRs. Specific SAFMRs 
for the 8-county Dallas TX, HMFA were provided in Schedule B Addendum 
to the October 4, 2010, notice. All other programs that use FMRs were 
instructed to use area-wide FMRs as provided by Schedule B of the 
notice for Dallas, TX, HMFA.

II. Use of SAFMRs for Project-Based Vouchers in the Dallas Metropolitan 
Area

    HUD's notice requiring the use of SAFMRs has created a concern for 
the financial viability of some properties with PBVs in the Dallas TX, 
HMFA. In the PBV program, the amount of rent to the owner may not 
exceed the lowest of an amount determined by the PHA not to exceed 110% 
of the FMR, the reasonable rent, or the rent requested by the owner. 
Some of the Zip Codes in the 8-county, Dallas TX HMFA, SAFMR have FMRs 
that decreased in value by as much as 35 percent. These decreases may 
put the some PBV properties at risk for financial failure because the 
original financing was based on the higher area wide FMR.
    As a result, this notice clarifies that PBV units for which a 
notice of owner selection was issued in accordance with 24 CFR 
983.51(d) prior to June 8, 2011, will not be subject to the SAFMRs. 
This includes PBVs that are currently under a Housing Assistance 
Payment (HAP) contract. The area-wide FMRs will continue to apply to 
these PBV units, thus ensuring the viability of PBV projects that were 
in the development pipeline and had obtained financing based on area-
wide FMRs. However, any PBVs for which a notice-of-owner selection is 
issued after June 8, 2011 will be subject to the SAFMRs.


[[Page 33334]]


    Dated: May 31, 2011.
Deborah Hernandez,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 2011-14123 Filed 6-7-11; 8:45 am]
BILLING CODE 4210-67-P