[Federal Register Volume 85, Number 46 (Monday, March 9, 2020)]
[Notices]
[Pages 13669-13670]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04768]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6202-N-01]


Section 8 Housing Assistance Payments Program--Fiscal Year 2020 
Inflation Factors for Public Housing Agency Renewal Funding

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

[[Page 13670]]


ACTION: Notice.

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SUMMARY: This notice establishes Renewal Funding Inflation Factors to 
adjust Fiscal Year (FY) 2020 renewal funding for the Housing Choice 
Voucher (HCV) program of each public housing agency (PHA), as required 
by the Further Consolidated Appropriations Act, 2020. The notice 
apportions the expected percent change in national Per Unit Cost (PUC) 
for the HCV program, 4.25 percent, to each PHA based on the change in 
Fair Market Rents for their operating area to produce the FY 2020 
RFIFs. HUD's FY 2020 methodology is the same as that which was used in 
FY 2019.

DATES: Applicable Date: March 9, 2020.

FOR FURTHER INFORMATION CONTACT: Miguel A. Fontanez, Director, Housing 
Voucher Financial Division, Office of Public Housing and Voucher 
Programs, Office of Public and Indian Housing, telephone number 202-
402-4212; 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, Program Parameters and 
Research Division, Office of Policy Development and Research, telephone 
number 202-402-2409. Their mailing address is: 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

    Division H, Title II of the Further Consolidated Appropriations 
Act, 2020 states that the HUD Secretary ``for the calendar year 2020 
funding cycle shall provide renewal funding for each public housing 
agency 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 announces the availability of the 
FY 2020 inflation factors and describes the methodology for calculating 
them. Tables in PDF and Microsoft Excel formats showing Renewal Funding 
Inflation Factors (RFIFs) by HUD Fair Market Rent (FMR) Area are 
available electronically from the HUD data information page at: https://www.huduser.gov/portal/datasets/rfif/rfif.html.

II. Methodology

    RFIFs are used to adjust the allocation of Housing Choice Voucher 
(HCV) program funds to PHAs for local changes in rents, utility costs, 
and tenant incomes. To calculate the RFIFs, HUD first forecasts a 
national inflation factor, which is the predicted annual change in the 
national average Per Unit Cost (PUC). HUD then calculates individual 
area inflation factors, which are based on the annual changes in the 
two-bedroom FMR for each area. Finally, HUD adjusts the individual area 
inflation factors to be consistent with the national inflation factor.
    HUD's forecast of the national average PUC is based on forecasts of 
gross rent and tenant income. Each forecast is produced using 
historical and forecasted macroeconomic data as independent variables, 
where the forecasts are consistent with the Economic Assumptions of the 
Administration's FY 2021 Budget. The forecast of gross rent is itself 
based on forecasts of the Consumer Price Index (CPI) Rent of Primary 
Residence Index and the CPI Fuels and Utilities Index. Forecasted 
values of these two CPI series are applied to the FY 2020 national 
average two-bedroom FMR to produce a CY 2020 gross rent value. A 
``notional'' PUC is calculated as the difference between gross rent 
value and 30 percent of tenant income (the standard for tenant rent 
contribution in the voucher program). The forecast of tenant income is 
based on a model that uses HUD administrative data and employment data 
from the Bureau of Labor Statistics. The change between the forecasted 
CY 2020 notional PUC and the CY 2019 notional PUC is the expected 
national change in PUC, or 4.25 percent. HUD uses notional PUCs as 
opposed to actual PUCs because notional PUCs are not affected by 
differences in the number and quality of units among PHAs. For more 
information on HUD's forecast methodology, see 82 FR 26710.
    The inflation factor for an individual geographic area is based on 
the annualized change in the area's FMR between FY 2019 and FY 2020. 
These changes in FMRs are then scaled such that the voucher-weighted 
average of all individual area inflation factors is equal to the 
national inflation factor, i.e., the expected annual change in national 
PUC from CY 2019 to CY 2020, and such that no area has a factor less 
than one. For PHAs operating in multiple FMR areas, HUD calculates a 
voucher-weighted average inflation factor based on the count of 
vouchers in each FMR area administered by the PHA as captured in HUD 
administrative data as of December 31, 2019.

III. The Use of Inflation Factors

    HUD subsequently applies the calculated individual area inflation 
factors to eligible renewal funding for each PHA based on VMS leasing 
and cost data for the prior calendar year.

IV. Geographic Areas and Area Definitions

    As explained above, inflation factors based on area FMR changes are 
produced for all FMR areas and applied to eligible renewal funding for 
each PHA. The tables showing the RFIFs, available electronically from 
the HUD data information page, list the inflation factors for each FMR 
area on a state-by-state basis. The inflation factors use the same OMB 
metropolitan area definitions, as revised by HUD, that are used for the 
FY 2020 FMRs. PHAs should refer to the Area Definitions Table on the 
following web page to make certain that they are referencing the 
correct inflation factors: http://www.huduser.org/portal/datasets/rfif/FY2020/FY2020_RFIF_FMR_AREA_REPORT.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. HUD is 
also releasing the data in Microsoft Excel format to assist users who 
may wish to use these data in other calculations. The Excel file is 
available at https://www.huduser.gov/portal/datasets/rfif/rfif.html. 
Note that, as described earlier, the actual renewal funding inflation 
factor applied to agency funding will be the voucher-weighted average 
of the FMR area factors when the PHA operates in multiple FMR areas.

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: March 2, 2020.
Todd M. Richardson,
General Deputy, Assistant Secretary for Policy, Development and 
Research.
[FR Doc. 2020-04768 Filed 3-6-20; 8:45 am]
BILLING CODE 4210-67-P