[Federal Register Volume 84, Number 50 (Thursday, March 14, 2019)]
[Notices]
[Pages 9369-9371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04691]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6125-N-02]


Fair Market Rents for the Housing Choice Voucher Program and 
Moderate Rehabilitation Single Room Occupancy Program Fiscal Year 2019; 
Revised

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

ACTION: Notice of Revised Fiscal Year (FY) 2019 Fair Market Rents 
(FMRs) and Discussion of Comments on FY 2019 FMRs.

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SUMMARY: This notice updates the FY 2019 FMRs for ten areas based on 
new survey data: Boston-Cambridge-Quincy, MA-NH HUD Metropolitan FMR 
Area (HMFA); Burlington-South Burlington, VT Metropolitan Statistical 
Area (MSA), Coos County, OR; Curry County, OR; Douglas County, OR; 
Oakland-Fremont, CA HMFA; Portland-Vancouver-Hillsboro, OR-WA MSA; San 
Diego-Carlsbad, CA MSA; San Francisco, CA HMFA; and San Jose-Sunnyvale-
Santa Clara, CA HUD Metro FMR Area. Further, HUD responds to comments 
received on the FY 2019 FMRs.

DATES: The revised FY 2019 FMRs for these 10 areas are effective on 
April 15, 2019.

FOR FURTHER INFORMATION CONTACT: Questions on how to conduct FMR 
surveys or concerning further methodological explanations may be 
addressed to Marie L. Lihn or Peter B. Kahn, Program Parameters and 
Research Division, Office of Economic Affairs, Office of Policy 
Development and Research, telephone 202-402-2409. Persons with hearing 
or speech impairments may access this number through TTY by calling the 
toll-free Federal Relay Service at 800-877-8339 (toll-free).
    Questions related to use of FMRs or voucher payment standards 
should be directed to the respective local HUD program staff.
    For technical information on the methodology used to develop FMRs 
or a listing of all FMRs, please call the HUD USER information line at 
800-245-2691 (toll-free) or access the information on the HUD USER 
website: http://www.huduser.gov/portal/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 2019 FMR documentation 
system at https://www.huduser.gov/portal/datasets/fmr.html#2019_query 
and 50th percentile rents for all FMR areas are published at http://www.huduser.gov/portal/datasets/50per.html.

SUPPLEMENTARY INFORMATION: On August 31, 2018 HUD published the FY 2019 
FMRs, requesting comments on the FY 2019 FMRs, and outlining procedures 
for requesting a reevaluation of an area's FY 2019 FMRs (83 FR 44644). 
This notice revises FY 2019 FMRs for 10 areas based on data provided to 
HUD. Nine of these areas requested a reevaluation and one did not, but 
data for reevaluation was submitted by the January 11, 2019 due date. 
This notice also provides responses to the public comments HUD received 
on the previous notice referenced above. Data supporting a reevaluation 
request for the Akron, OH MSA were supplied to the Department by the 
due date; however, there was insufficient recent mover observations to 
implement the survey. The FY 2019 American Community Survey (ACS)-based 
FMRs in the Akron, OH MSA become effective with this notice.

I. Revised FY 2019 FMRs

    The FMRs appearing in the following table supersede the use of the 
FY 2018 FMRs for the enumerated areas. The updated FY 2019 FMRs are 
based on surveys conducted by the area public housing agencies (PHAs) 
and reflect the estimated 40th or 50th percentile rent levels trended 
to April 1, 2019.
    The FMRs for the affected area are revised as follows:

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                                                         FMR by number of bedrooms in unit
   2019 Fair market rent area    -------------------------------------------------------------------------------
                                       0 BR            1 BR            2 BR            3 BR            4 BR
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Boston-Cambridge-Quincy, MA-NH            $1,608          $1,801          $2,194          $2,749          $2,966
 HMFA...........................
Burlington-South Burlington, VT              992           1,202           1,544           2,008           2,087
 MSA............................
Coos County, OR.................             538             684             837           1,210           1,394
Curry County, OR................             629             777             979           1,416           1,574
Douglas County, OR..............             657             773           1,023           1,479           1,796
Oakland-Fremont, CA HMFA........           1,409           1,706           2,126           2,925           3,587
Portland-Vancouver-Hillsboro, OR-          1,131           1,234           1,441           2,084           2,531
 WA MSA.........................
San Diego-Carlsbad, CA MSA*.....           1,422           1,590           2,068           2,962           3,632
San Francisco, CA HMFA..........           2,069           2,561           3,170           4,153           4,392
San Jose-Sunnyvale-Santa Clara,            1,952           2,316           2,839           3,829           4,394
 CA.............................
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* San Diego-Carlsbad, CA MSA is a 50th percentile FMR area. As part of the Small Area FMR Rulemaking (81 FR
  80567), 50th percentile FMRs were abolished. FMRs for San Diego-Carlsbad, CA MSA will complete the three-year
  period of use under previous regulations and revert to 40th percentile rents in FY 2020.

    The FY 2019 FMRs are amended and are available on the HUD USER 
website: http://www.huduser.gov/portal/datasets/fmr.html. The FY 2019 
Small Area FMRs (SAFMRs) for the revised metropolitan areas have also 
been updated and may be found at https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html.

II. Public Comments on FY 2019 FMRs

    A total of 67 comments were received and posted on regulations.gov, 
https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&D=HUD-2018-0071. 
Fifty-seven of these comments were requests for reevaluation or 
comments in support of requests for reevaluation of the FY 2019 FMRs in 
13 FMR areas. HUD granted requests for reevaluation for 12 FMR areas, 
and rejected one area's request, by community partners in Lenawee 
County, MI. HUD could not approve this request because the request was 
not made by the housing agency administering the voucher program in the 
county. HUD discussed these requests for reevaluation in a posting 
available at https://www.huduser.gov/portal/datasets/fmr.html#2019_data.
    These 12 areas continued to use FY 2018 FMRs until the PHAs 
provided local survey rent data, which was due no later than January 
11, 2018. Due to the lapse in Federal appropriations, HUD first 
assessed which areas delivered data on January 28, 2019. Ten

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of these 12 areas have continued to use FY 2018 FMRs because they 
provided sufficient data. HUD published a list of the two FMR areas not 
providing data on January 30, 2019 stating that the FY 2019 FMRs become 
effective on January 30, 2019 (https://www.huduser.gov/portal/datasets/fmr.html#2019_data). This notice provides the reevaluated FY 2019 FMRs 
for 9 of these areas plus the one area that did not request a 
reevaluation but provided data by the reevaluation date of January 11, 
2019 and the one area where the submitted information was unable to be 
implemented.

General Comments

    Most of the comments not related to specific areas requesting a 
reevaluation discussed inaccuracies of the FMRs and a need for more 
current and local data. These comments and their responses are 
discussed in greater detail below. Before addressing specific issues, 
HUD would like to remind commenters that HUD receives no geographic 
information from regulations.gov for the location of the commenter. 
Therefore, HUD cannot respond to or take action on comments regarding 
the level of the FMR when there is no corresponding information about 
the FMR area in question.
    Comment: FMRs in the town of Windham, CT are going down and this 
will impact Housing Choice Voucher (HCV) holders' ability to find 
units.
    HUD Response: While HUD wants to be responsive to comments 
regarding the level of FMRs, HUD cannot reevaluate the FMRs in an area 
without data more current than what was originally used to calculate 
FMRs. Additionally, valid reevaluation requests must be submitted by or 
supported by public housing agencies servicing at least 50 percent of 
the voucher holders in the FMR area. Finally, Windham Town, CT is part 
of the Windham County, CT HUD Metro FMR Area, which consists of the 
following towns: Ashford town, CT; Brooklyn town, CT; Canterbury town, 
CT; Chaplin town, CT; Eastford town, CT; Hampton town, CT; Killingly 
town, CT; Plainfield town, CT; Pomfret town, CT; Putnam town, CT; 
Scotland town, CT; Sterling town, CT; Thompson town, CT; Windham town, 
CT; and Woodstock town, CT. Any data collected in support of a future 
reevaluation request would need to be representative of the rental 
units across the entire FMR area.
    Comment: Baltimore City, MD requested a reevaluation to maintain 
their FMRs at the 50th percentile.
    HUD Response: 50th percentile FMRs were abolished as part of the 
Small Area FMR Rulemaking (81 FR 80567) and Baltimore's three-year use 
of 50th percentile FMRs ended with the FY 2018 FMRs. Public housing 
agencies operating in metropolitan areas that revert to 40th percentile 
FMRs from 50th percentile FMRs and where Small Area FMR are not 
required have several avenues to maintain current payment standards or 
maintain the use of 50th percentile rents. These options include:
    1. The Housing Opportunities Through Modernization Act allows PHAs 
to maintain their current payment standard amounts (regardless of their 
percentage relative to the new FMRs) for in-place tenants. The Small 
Area FMR rule further provides that PHAs may select a payment standard 
between the current in-place payment standard down to 110 percent of 
the new FMR. This is characterized as a gradual reduction in the 
family's payment standard. For more information, please see PIH Notice 
2018-01 (https://www.hud.gov/sites/dfiles/PIH/documents/PIH-2018-01.pdf), item (4)(e).
    2. HUD's regulations at 24 CFR 982.503(f) provides a mechanism for 
PHAs in this position to request approval to maintain payment standards 
based on 50th percentile rents.
    3. HUD's regulations at 24 CFR 982.503(e), Success Rate Payment 
Standards, allows PHAs to set payment standards based on 50th 
percentile rents if they qualify based on HCV holders having limited 
success in finding suitable units.
    4. The PHA may adopt exception payment standards of up to 110 
percent of the applicable Small Area FMRs as described in 24 CFR 
982.503(b)(iii).
    Comment: One of the comments requesting a reevaluation of the FY 
2019 FMRs in the Oakland-Freemont, CA HMFA also included several 
comments regarding the use of their December 2015 rent survey, an 
objection to the use of 5-year ACS data, an objection to the use of a 
national trend factor, and a comment that the ``public housing cut 
off'' rent is too low for one county within the metropolitan area.
    HUD Response: Due to the nature of the questions posed regarding 
the need to conduct a new survey within the comment, HUD has already 
provided in-depth responses to the commenter; however, HUD is providing 
additional commentary here for the benefit of all FMR commenters.
    HUD cannot continue to use the survey conducted in the area in 
December 2015 because data collected through the 2016 ACS are more 
recent than the survey. This is true even though the Department 
received the local survey in early 2016 and used the information to 
revise the FY 2016 FMRs, and used the local survey as the basis of the 
FY 2017 and FY 2018 FMR calculations. Due to the rolling nature of the 
ACS, HUD has adopted the following policy concerning the longevity of 
local area surveys. Surveys with an ``as-of'' date of January through 
June ARE NOT considered to be more current than the same year ACS 
survey since at least 50 percent of the ACS responses are newer than 
the local area survey. Local area surveys with ``as-of'' dates in July 
through December ARE considered to be more current than the same year 
ACS since less than 50 percent of the ACS responses are more current 
than the locally conducted survey.
    For the purposes of uniformity and transparency, HUD's FMR 
documentation systems shows the 5-year ACS data for each FMR area along 
with the calculation of a recent-mover factor for each area based on 
information available from the 1-year ACS data. In practice, for large 
areas with statistically reliable 2-bedroom recent-mover estimates from 
the 1-year ACS tabulations, the recent mover ``factor'' is an 
explanation artifact for conformity in HUD's online documentation 
systems . The 1-year recent mover data replaces the 5-year ACS data in 
the FMR calculation. That is, the FMR for the area is based solely on 
the 40th percentile 2-bedroom recent mover rent calculated from the 1-
year ACS data and this is true for the Oakland area.
    HUD has addressed the issue of local trend factors in prior FMR 
Federal Register notices. Beyond HUD's own research into this topic, 
HUD has employed third-party researchers to assist with this important 
component of the FMR calculation. Following the successful completion 
of this research, should local trend factors be viable, HUD is 
compelled to announce the new trend factor calculation methodology in a 
notice of FMR material changes and solicit public comments on such 
changes prior to implementing them. Due to the lapse in Federal 
appropriations at the end of 2018, HUD is not able to commit to this 
change being ready for a material change notice prior to the 
calculation of the FY 2020 FMRs.
    Finally, HUD reiterates that the ``public housing cut-off rent'' 
used to eliminate the bottom end of the distribution of rental units 
from the ACS before the 40th percentile rent is calculated is a proxy 
because the ACS does not collect whether or not a respondent is 
receiving some form of housing assistance. HUD uses a

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consistent method to calculate this distribution cut off for each HUD 
region and sees no reason to make a change to this method at this time.
    Comment: Several commenters suggested that HUD should provide 
additional funding to PHAs who undertake local area surveys.
    HUD Response: HUD reminds PHAs that paying for local area rent 
surveys is an eligible expense to be paid from on-going administrative 
fees or their administrative fee reserve account.
    Comment: HUD received several comments from the Lenawee, MI 
community regarding the level of their FMRs. The commenters noted that 
the FMRs were too low and one commenter requested information on how 
information is gathered to calculate FMRs.
    HUD Response: The requests for reevaluation of the FY 2019 FMRs in 
Lenawee County, MI were not accompanied by supporting statements from 
PHAs representing at least 50 percent of the voucher holders in the 
area and HUD was unable to grant the request. As for information on how 
HUD calculates the FMRs, HUD provides comprehensive documentation on 
how FMRs are calculated for each area. For FY 2019, please visit 
https://www.huduser.gov/portal/datasets/fmr.html#2019_query and follow 
the prompts after selecting the ``Click Here For FY 2019 FMRs'' button.
    Comment: HUD should use more timely data when calculating FMRs. HUD 
should request more money to reimburse surveys. HUD should continue to 
refine the FMR calculation methodology.
    HUD Response: There are no other data on gross rents paid that are 
consistently collected on a nationwide basis, available to HUD, that 
are more current than the data we receive from the ACS dataset. 
Proprietary rental data cannot be used as the basis for the FMR 
calculations because they are not consistently available for all areas 
and frequently are not statistically representative of the rental 
markets they cover. Some of these sources focus on rents for major 
apartment projects only. Other sources include single family homes, 
which are at least 30 percent of the rental market in major 
metropolitan areas and a greater portion in rural areas, are typically 
compiled from internet-based ads, or the small subset of professionally 
managed single-family rental units. Online listings of rents are 
similar to newspaper ads which have been excluded as a source of rent 
data for FMRs since the mid-1980s due to a directive issued by HUD's 
Inspector General.
    As HUD has stated before, the Federal Government invests a 
substantial amount of resources in collecting socio-economic data 
through the ACS. Furthermore, the Census Bureau has statutory 
advantages in compelling responses to the ACS and receives 
significantly higher response rates than HUD could achieve if it was to 
undertake its own survey program.
    Comment: Annual ``erratic fluctuations'' in FMRs within the same 
area do not follow established housing market dynamics and represent 
serious flaws in the FMR calculation methodology.
    HUD Response: HUD has implemented steps to attenuate the 
fluctuations found in the annually updated survey data; however, with 
the statutory directive to use the most recent data available, HUD is 
compelled to update the data behind each area's FMR calculation when 
new data is released. Consequently, FMRs will change from year to year 
in accordance with changes in the underlying survey data. Furthermore, 
the commenter provides no references to academic literature that seeks 
to establish that it is impossible for rents to move both up and down 
over time. HUD emphasizes that the primary data source for FMRs is a 
survey (ACS) and while surveyors do their best to select unbiased 
random samples of the population they wish to study, sampling error 
still persists within survey statistics.

III. Environmental Impact

    This Notice makes changes in FMRs for multiple FMR areas and 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: March 8, 2019.
Todd M. Richardson,
General Deputy Assistant Secretary, Office of Policy Development and 
Research.
[FR Doc. 2019-04691 Filed 3-13-19; 8:45 am]
 BILLING CODE 4210-67-P