[Federal Register Volume 81, Number 221 (Wednesday, November 16, 2016)]
[Notices]
[Pages 80678-80679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27112]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5855-N-04]
Small Area Fair Market Rents in Housing Choice Voucher Program
Values for Selection Criteria and Metropolitan Areas Subject to Small
Area Fair Market Rents
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice.
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SUMMARY: On June 16, 2016, HUD sought comment on applying Small Area
Fair Market Rents (Small Area FMRs) to certain metropolitan areas for
administration of the Housing Choice Voucher (HCV) program based on
certain selection criteria and selection values. Found elsewhere in
this issue of the Federal Register is a final rule adopting the use of
Smalls Area FMRs for the HCV program and the selection criteria. The
final rule also requires HUD to set forth the values used to determine
those metropolitan areas that are subject to Small Area FMRs through a
Federal Register notice. This notice sets forth the values for the
selection criteria and lists the metropolitan areas that will be
subject to Small Area FMRs implemented in the Small Area FMRs final
rule.
DATES: Effective: January 17, 2017.
FOR FURTHER INFORMATION CONTACT: For information about this rule,
contact Peter B. Kahn, Director, Economic and Market Analysis Division,
Office of Economic Affairs, Office of Policy Development and Research,
U.S. Department of Housing and Urban Development, 451 7th Street SW.,
Washington, DC 20410, telephone (202) 402-2409; email:
[email protected]. The listed telephone number is not a toll-free
number. Persons with hearing or speech impairments may access this
number through TTY by calling Federal Relay Service at 1-800-877-8339
(this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
On June 2, 2015, at 80 FR 31332, HUD published an advance notice of
final rulemaking (ANPR) entitled ``Establishing a More Effective Fair
Market Rent (FMR) System; Using Small Area Fair Market Rents (Small
Area FMRs) in Housing Choice Voucher Program Instead of the Current
50th Percentile FMRs.'' In this ANPR, HUD announced its intention to
amend HUD's FMR regulations applicable to the HCV program and sought
public comment on the use of certain criteria for setting Small Area
FMRs for the HCV program within certain metropolitan areas.
On June 16, 2016, at 81 FR 39218, HUD published a proposed rule
that would require the use of Small Area FMRs in place of the 50th
percentile rent to address high levels of voucher concentration. The
proposed rule addressed the issues and suggestions raised by public
commenters on the ANPR, and in response to public comments proposed new
criteria for setting Small Area FMRs for the HCV program.
The proposed regulation provided, in 24 CFR 888.113(c), to set
Small Area FMRs for metropolitan areas where at least 2,500 HCVs are
under lease; at least 20 percent of the standard quality rental stock,
within the metropolitan area, is in small areas (that is ZIP codes)
where the Small Area FMR is more than 110 percent of the metropolitan
FMR; and the measure of the percentage of voucher holders living in
concentrated low-income areas relative to all renters within these
areas over the entire metropolitan area exceeds 155 percent (or 1.55).
The proposed regulation also provided, in 24 CFR 888.113(c)(2),
that ``concentrated low-income areas'' means those census tracts in the
metropolitan FMR area with a poverty rate of 25 percent or more; or any
tract in the metropolitan FMR area where more than 50 percent of the
households earn incomes at less than 60 percent of the area median
income (AMI) and are designated as Qualified Census Tracts in
accordance with section 42 of the Internal Revenue Code (26 U.S.C. 42).
Lastly, the proposed regulation provided, in 24 CFR 888.113(c)(3), that
if a metropolitan area meets the criteria for application of Small Area
FMRs to the area, all PHAs administering HCV programs in that area will
be required to use Small Area FMRs.
In addition to setting forth new proposed criteria, HUD
specifically requested comment on whether HUD should codify in
regulatory text the selection parameters for Small Area FMRs or if they
should be incorporated into each annual FMR notice, subject to public
comment, to provide HUD, PHAs, and other stakeholders with flexibility
to offer changes to the selection parameters. HUD also asked for
comments on the criteria that HUD selected for determining which
metropolitan areas should be impacted by the shift to a Small Area FMR
instead of the current 50th percentile policy.
The final rule, found elsewhere in the Federal Register, responded
to the
[[Page 80679]]
public comments received on the questions posed by HUD and sets forth
new selection criteria for HUD to use in determining which metropolitan
areas would be impacted by the shift to a Small Area FMR and provides
that the criteria values would be set by notice in the Federal
Register. Specifically, HUD codified in the final rule the selection
parameters in regulatory text for setting Small Area FMRs but provided
that HUD would set the selection values through this Federal Register
notice and that subsequent Small Area FMR Area designations will be
specified through Federal Register notice with opportunity for public
comment as new Small Area FMR designations are made.
In response to comments, HUD also adds two new selection criteria
to those provided in the proposed rule. First, HUD adds the vacancy
rate of an area as a criterion to the selection parameters for Small
Area FMRs and excludes metropolitan areas with a certain ACS vacancy
rate from being designated a Small Area FMR area. Second, HUD adds a
threshold for the voucher concentration ratio to better target
communities where voucher concentration is most severe. Consequently,
in addition to the voucher concentration ratio included in the proposed
rule, the final rule also requires the numerator of this measure, the
concentration of voucher holders within concentrated low income areas,
to meet a minimum standard level.
II. Selection Values for Selecting Small Area FMRs
Through this notice, HUD is setting the selection values to
determine the first-set of metropolitan FMR areas subject to Small Area
FMRs for use in the administration of tenant-based assistance under the
HCV program. Metropolitan FMR areas that meet the following requirement
will be subject to Small Area FMRs consistent with 24 CFR 888.113(c):
(i) There are at least 2,500 HCV under lease;
(ii) At least 20 percent of the standard quality rental stock,
within the metropolitan FMR area is in small areas (ZIP codes) where
the Small Area FMR is more than 110 percent of the metropolitan FMR;
(iii) The percentage of voucher families living in concentrated low
income areas relative to all renters within the area must be at least
25 percent;
(iv) The measure of the percentage of voucher holders living in
concentrated low income areas relative to all renters within these
areas over the entire metropolitan area exceeds 155 percent (or 1.55);
and
(v) The vacancy rate for the metropolitan area is higher than 4
percent. The vacancy rate is calculated using data from the 1-year
American Community Survey (ACS) tabulations, the vacancy rate is the
number of Vacant For Rent Units divided by the sum of the number of
Vacant For Rent Units, the number of Renter Occupied Units, and the
number of Rented, not occupied units. The vacancy rate will be
calculated from the 3 most current ACS 1 year datasets available and
average the 3 values.
The metropolitan FMR Areas that meet these requirements are as
follows:
Atlanta-Sandy Springs-Marietta, GA HUD Metro FMR Area
Bergen-Passaic, NJ HUD Metro FMR Area
Charlotte-Gastonia-Rock Hill, NC-SC HUD Metro FMR Area
Chicago-Joliet-Naperville, IL HUD Metro FMR Area
Colorado Springs, CO HUD Metro FMR Area
Dallas-Plano-Irving, TX Metro Division
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL Metro Division
Fort Worth-Arlington, TX HUD Metro FMR Area
Gary, IN HUD Metro FMR Area
Hartford-West Hartford-East Hartford, CT HUD Metro FMR Area
Jackson, MS HUD Metro FMR Area
Jacksonville, FL HUD Metro FMR Area
Monmouth-Ocean, NJ HUD Metro FMR Area
North Port-Bradenton-Sarasota, FL MSA
Palm Bay-Melbourne-Titusville, FL MSA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
Pittsburgh, PA HUD Metro FMR Area
Sacramento-Arden-Arcade-Roseville, CA HUD Metro FMR Area
San Antonio-New Braunfels, TX HUD Metro FMR Area
San Diego-Carlsbad-San Marcos, CA MSA
Tampa-St. Petersburg-Clearwater, FL MSA
Urban Honolulu, HI MSA
Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
West Palm Beach-Boca Raton-Delray Beach, FL Metro Division
Dated: November 1, 2016.
Katherine M. O'Regan,
Assistant Secretary for Policy Development and Research.
[FR Doc. 2016-27112 Filed 11-15-16; 8:45 am]
BILLING CODE 4210-67-P