[Federal Register Volume 79, Number 81 (Monday, April 28, 2014)]
[Notices]
[Pages 23368-23369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09543]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5780-N-01]


Section 8 Housing Assistance Payments Program--Fiscal Year (FY) 
2014 Inflation Factors for Public Housing Agency (PHA) Renewal Funding

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

ACTION: Notice.

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SUMMARY: The Consolidated Appropriations Act, 2014 requires that HUD 
apply ``an inflation factor as established by the Secretary, by notice 
published in the Federal Register'' to adjust FY 2014 renewal funding 
for the Tenant-based Rental Assistance Program or Housing Choice 
Voucher (HCV) Program of each PHA. HUD began using Renewal Funding 
Inflation Factors in FY 2012. These Renewal Funding Inflation Factors 
incorporate economic indices to measure the expected change in per unit 
costs (PUC) for the HCV program. The methodology for FY 2014 is similar 
to that used in FY 2013.

DATES: Effective Date: April 28, 2014.

FOR FURTHER INFORMATION CONTACT: Michael S. Dennis, Director, Housing 
Voucher Programs, Office of Public Housing and Voucher Programs, Office 
of Public and Indian Housing, telephone number 202-708-1380; or, for 
technical information regarding the development of the schedules for 
specific areas or the methods used for calculating the inflation 
factors, Peter B. Kahn, Director, Economic and Market Analysis 
Division, Office of Policy Development and Research, telephone number 
202-402-2409, Department of Housing and Urban Development, 451 7th 
Street SW., Washington, DC 20410. Hearing- or speech-impaired persons 
may contact the Federal Relay Service at 800-877-8339 (TTY). (Other 
than the ``800'' TTY number, the above-listed telephone numbers are not 
toll free.)

SUPPLEMENTARY INFORMATION: 

I. Background

    Tables showing Renewal Funding Inflation Factors will be available 
electronically from the HUD data information page at: http://www.huduser.org/portal/datasets/rfif/FY2014/FY2014_IF_Table.pdf.
    Division L, Title II, Consolidated Appropriations Act, 2014 (Pub. 
L. 113-76, approved January 17, 2014) requires that the HUD Secretary, 
for the calendar year 2014 funding cycle, provide renewal funding for 
each public housing agency (PHA) based on validated voucher management 
system (VMS) leasing and cost data for the prior calendar year and by 
applying an inflation factor as established by the Secretary, by notice 
published in the Federal Register. This notice provides the FY 2014 
inflation factors and describes the methodology for calculating them.

II. Methodology

    The Department has focused on measuring the change in average per 
unit cost (PUC) as captured in HUD's administrative data in VMS. In 
order to predict the likely path of PUC over time, HUD has implemented 
a model that uses three economic indices that capture key components of 
the economic climate and assist in explaining the changes in PUC. These 
economic components are the seasonally-adjusted unemployment rate 
(lagged twelve months), the Consumer Price Index from the Bureau of 
Labor Statistics, and the ``wages and salaries'' component of personal 
income from the National Income and Product Accounts from the Bureau of 
Economic Analysis. This model subsequently forecasts the expected 
annual change in average PUC from Calendar Year (CY) 2013 to CY 2014 
for the voucher program on a national basis by incorporating comparable 
economic variables from the Administration's economic assumptions. For 
reference, these economic assumptions are described in the FY 2015 
Budget.
    The inflation factor for an individual geographic area is based on 
the change in the area's Fair Market Rent (FMR) \1\ between FY 2013 and 
FY 2014. These changes in FMR are then scaled such that the voucher-
weighted average of all individual area inflation factors is equal to 
the expected annual change in national PUC from FY 2013 to FY 2014, and 
also such that no area has a factor less than one. HUD subsequently 
applies these calculated individual area inflation factors to eligible 
renewal funding for each PHA based on VMS leasing and cost data for the 
prior calendar year. For the CY 2014 PHA HCV allocation uses 0.23 
percent as the annual change in PUC. This figure was calculated by 
using VMS data through December of 2013 and actual performance of 
economic indices through December of 2013.
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    \1\ Most FMRs are set at the 40th percentile of the distribution 
of gross rents in the area. Several FMR areas have their FMRs based 
on 50th percentile rents as a tool for deconcentrating voucher 
holders within the FMR area. For consistency, changes in rents from 
FY 2013 to FY 2014 are measured using 40th percentile rents for all 
areas.
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III. The Use of Inflation Factors

    The inflation factors have been developed to account for relative 
differences in the PUC of vouchers so that HCV funds can be allocated 
among PHAs. HUD will continue to update the current model with 
available data in order to assess the expected annual change in PUC and 
may update the methodology for future funding estimates, if necessary. 
HUD is also continuing to review and refine the methodology, especially 
for area differences in the factors, which will be described in future 
inflation factor notices.

[[Page 23369]]

IV. Geographic Areas and Area Definitions

    Inflation factors based on PUC forecasts are produced for all FMR 
areas. The tables showing the Renewal Funding Inflation Factors 
available electronically from the HUD data information page list the 
inflation factors for each FMR area and are created on a state by state 
basis. The inflation factors use the same OMB metropolitan area 
definitions, as revised by HUD, that are used in the FY 2014 FMRs. To 
make certain that they are referencing the correct inflation factors, 
PHAs should refer to the Area Definitions Table on the following Web 
page: http://www.huduser.org/portal/datasets/rfif/FY2014/FY2014_AreaDef.pdf. The Area Definitions Table lists areas in alphabetical 
order by state, and the counties associated with each area. In the six 
New England states, the listings are for counties or parts of counties 
as defined by towns or cities.

V. Environmental Impact

    This notice involves a statutorily required establishment of a rate 
or cost determination which does not constitute a development decision 
affecting the physical condition of specific project areas or building 
sites. Accordingly, under 24 CFR 50.19(c)(6), this notice is 
categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

    Dated: April 21, 2014.
Jean Lin Pao,
General Deputy Assistant Secretary, for Policy Development and 
Research.
[FR Doc. 2014-09543 Filed 4-25-14; 8:45 am]
BILLING CODE 4210-67-P