[Federal Register: June 15, 2006 (Volume 71, Number 115)]
[Notices]
[Page 34725-34786]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn06-82]
[[Page 34725]]
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Part III
Department of Housing and Urban Development
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Proposed Fair Market Rents for the Housing Choice Voucher Program and
Moderate Rehabilitation Single Room Occupancy Program; Fiscal Year
2007; Notice
[[Page 34726]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5068-N-01]
Proposed Fair Market Rents for the Housing Choice Voucher Program
and Moderate Rehabilitation Single Room Occupancy Program; Fiscal Year
2007
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Proposed Fiscal Year (FY) 2007 Fair Market Rents
(FMRs).
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SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937
(USHA) requires the Secretary to publish FMRs periodically, but not
less than annually, adjusted to be effective on October 1 of each year.
Today's notice proposes FMRs for FY2007. The proposed numbers would
amend FMR schedules used to determine payment standard amounts for the
Housing Choice Voucher program, to determine initial renewal rents for
some expiring project-based Section 8 contracts, and to determine
initial rents for housing assistance payment (HAP) contracts in the
Moderate Rehabilitation Single Room Occupancy program. Other programs
may require use of FMRs for other purposes.
The proposed FY2007 FMRs continue to use the revised Office of
Management and Budget (OMB) area definitions that were issued in 2003
and were used in establishing FY2006 FMR areas and FMRs. They also
continue to use the same calculation methodology. They differ, however,
in that a limited number of additional modifications to the county-
based statistical areas as defined by OMB have been made in response to
public comments received on the December 16, 2005, Federal Register
notice on the proposed FY2006 income limit calculation methodology.
In the FY2006 FMRs, HUD disaggregated OMB-defined areas when the
FMRs of their components as defined by FY2005 FMR areas differed by
more than 5 percent to better reflect housing market relationships.
Most FY2006 FMR areas consisting of multiple FY2005 FMR areas after the
5 percent test was applied to rents had similar income limits among the
component parts. A few such areas would have substantial declines in
income limits for some of their component parts under the FY2006 FMR
area definitions. Income limit decreases are disruptive to certain HUD
and other Federal housing subsidy programs. Income limit areas
generally have the same boundaries as FMR areas.
In order to minimize large changes in income limits in these
combined areas with similar rents but differing income levels, HUD is
proposing for FY2007 FMRs to form FMR sub-areas within OMB-defined
metropolitan areas in all cases where sub-area median family incomes
differ from OMB-defined area median family incomes by more than 5
percent. The FMR estimates have been trended to April 2007, the mid-
point of FY2007.
DATES: Comments Due Date: August 1, 2006.
ADDRESSES: Interested persons are invited to submit comments regarding
HUD's estimates of the FMRs as published in this notice to the Office
of the General Counsel, Rules Docket Clerk, Department of Housing and
Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC
20410-0001. Communications should refer to the above docket number and
title and should contain the information specified in the ``Request for
Comments'' section.
Submission of Hard Copy Comments. To ensure that the information is
fully considered by all of the reviewers, each commenter that is
submitting hard copy comments, by mail or by hand delivery, is
requested to submit two copies of its comments to the address above,
one addressed to the attention of the Rules Docket Clerk and the other
addressed to the attention of Economic and Market Analysis Division
staff in the appropriate HUD field office. Due to security measures at
all Federal agencies, submission of comments by mail often result in
delayed delivery. To ensure timely receipt of comments, HUD recommends
that any comments submitted by mail be submitted at least two weeks in
advance of the public comment deadline to ensure timely receipt by HUD.
Electronic Submission of Comments. Since July 2004, HUD has been
able to receive comments electronically. Interested persons may now
submit comments electronically through the Federal eRulemaking Portal
at http://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
http://www.regulations.gov Web site can be viewed by other commenters
and interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
In all cases, communications must refer to the docket number and title.
Public Inspection of Public Comments. All comments and
communications submitted to HUD will be available, without change, for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at (202) 708-3055 (this
is not a toll-free number). Copies of all comments submitted are
available for inspection and downloading at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For technical information on the
methodology used to develop fair market rents or a listing of all fair
market rents, please call the HUD USER information line at 800-245-2691
or access the information on the HUD Web site, http://www.huduser.org/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 FY2007 FMR documentation system at: http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07.
Any questions related to use of
FMRs or voucher payment standards should be directed to the respective
local HUD program staff. Questions on how to conduct FMR surveys or
further methodological explanations may be addressed to Marie L. Lihn
or Lynn A. Rodgers, Economic and Market Analysis Division, Office of
Economic Affairs, Office of Policy Development and Research, telephone
(202) 708-0590. Persons with hearing or speech impairments may access
this number through TTY by calling the toll-free Federal Information
Relay Service at (800) 877-8339. (Other than the HUD USER information
line and TDD numbers, telephone numbers are not toll free.)
SUPPLEMENTARY INFORMATION:
I. Background
Section 8 of the USHA (42 U.S.C. 1437f) authorizes housing
assistance to aid lower income families in renting safe and decent
housing. Housing assistance payments are limited by FMRs established by
HUD for different areas. In the Housing Choice Voucher program, the FMR
is the basis for
[[Page 34727]]
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 (non-luxury) nature with
suitable amenities. In addition, all rents subsidized under the Housing
Choice Voucher program must meet reasonable rent standards. The interim
rule published on October 2, 2000 (65 FR 58870), established 50th
percentile FMRs for certain areas.
Electronic Data Availability: This Federal Register notice is
available electronically from the HUD news page: http://www.hudclips.org.
Federal Register notices also are available
electronically from the U.S. Government Printing Office Web site:
http://www.gpoaccess.gov/fr/index.html. Complete documentation of the
methodology and data used to compute each area's Proposed FY2007 FMRs
is available at: http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07
.
II. Procedures for the Development of FMRs
Section 8(c) of the USHA requires the Secretary of HUD to publish
FMRs periodically, but not less frequently than annually. Section 8(c)
states in part as follows:
Proposed fair market rentals for an area shall be published in
the Federal Register with reasonable time for public comment and
shall become effective upon the date of publication in final form in
the Federal Register. Each fair market rental in effect under this
subsection shall be adjusted to be effective on October 1 of each
year to reflect changes, based on the most recent available data
trended so the rentals will be current for the year to which they
apply, of rents for existing or newly constructed rental dwelling
units, as the case may be, of various sizes and types in this
section.
HUD's regulations at 24 CFR part 888 provide that HUD will develop
proposed FMRs, publish them for public comment, provide a public
comment period of at least 30 days, analyze the comments, and publish
final FMRs. (See 24 CFR 888.115.)
In addition, HUD's regulations at 24 CFR 888.113 set out procedures
for HUD to assess whether areas are eligible for FMRs at the 50th
percentile and, for areas that were formerly eligible for FMRs at the
50th percentile three years ago, whether these areas continue to remain
eligible to use 50th percentile FMRs. The regulations provide that once
an area is determined eligible for 50th percentile FMRs, that area is
eligible to use 50th percentile FMRs for a period of three years. In a
notice published February 14, 2006, HUD designated the 24 areas
determined eligible for the 50th percentile FMRs, and these changes
became effective on March 1, 2006 (see http://www.huduser.org/datasets/fmr.html
for further information on the designation of 50th percentile
FMR areas). These areas will not be evaluated for three years. Of the
areas that did not meet the test for continued use of 50th percentile
FMRs, HUD found only one area ineligible because of lack of progress in
alleviating concentration of voucher tenants, the Bergen-Passaic
metropolitan area. This area is ineligible to use FMRs set at the 50th
percentile for the next three years, however, it may be eligible for a
higher payment standard, as discussed in 24 CFR 982.503(f). All other
areas are evaluated annually to determine if they become newly
eligible.
The following areas have been determined to be newly eligible based
on the rules specified in the February 14, 2006, notice and on Housing
Choice Voucher program data as of December 31, 2005: Dallas, TX HMFA,
Fort Lauderdale, FL HMFA, San Diego-Carlsbad-San Marcos, CA MSA, West
Palm Beach-Boca Raton, FL HMFA.
III. FMR Methodology
The proposed FY2007 FMRs generally follow the same calculation
methodology used for FY2006, but include a limited number of changes in
metropolitan area definitions resulting from an alteration in HUD's
formula for dividing OMB-defined metropolitan areas. HUD continues to
use the most recent core-based metropolitan statistical areas in
calculating FMRs as defined by OMB in OMB Bulletin 06-01 with some
modifications that disaggregate some OMB areas (see http://www.whitehouse.gov/omb/bulletins/fy2006/b06-01.pdf
). The most recent
OMB definitions have been implemented with modifications intended to
minimize changes in both FMRs and income limits due solely to the use
of the most recent OMB definitions. All proposed metropolitan FMR areas
consist of areas within OMB metropolitan areas. The FY2006 FMRs created
separate FMR areas for any parts of old metropolitan areas, or formerly
nonmetropolitan counties, that would have more than a 5 percent
increase or decrease in their 2000 Census base 40th percentile 2-
bedroom rent as a result of implementing the new OMB definitions. Most
FY2006 FMR areas consisting of multiple parts of old metropolitan areas
and/or formerly nonmetropolitan counties after the 5 percent test was
applied to rents had similar income limits among the component parts. A
few such areas would have substantial declines in income limits for
some of their component parts under the FY2006 FMR area definitions.
Income limit decreases are disruptive to certain HUD and other federal
housing subsidy programs where unit rents are tied to current income
limits. HUD, therefore, generally does not allow income limits to
fall--a ``hold harmless'' policy. Without an income limit hold harmless
policy, program rent revenue in subsidized rental projects with rents
tied to income limits may fall below expense and debt service levels
potentially leading to default on debt or departure from the program.
Income limit areas generally have the same boundaries as FMR areas (the
only difference being statutorily mandated exceptions). In order to
minimize large changes in income limits in these combined areas with
similar rents but differing income levels, HUD is proposing for the
FY2007 FMRs to create separate FMR areas for any parts of old
metropolitan areas, or formerly nonmetropolitan counties, that would
have: More than a 5 percent increase or decrease in their 2000 Census
base area median family income as a result of implementing the new OMB
definitions; and a sufficiently large sample of 2000 Census recent
mover rents to compute an individual FMR.
The addition of the 2000 Census base median family income analysis
can have three possible effects on an FMR area and its FMRs as defined
in FY2006: (1) A new sub-area may be formed e.g., Kendall County, IL
HMFA removed from the Chicago-Naperville-Joliet, IL HMFA); (2) an
existing sub-area may be assigned its own 2000 Census base rent instead
of the CBSA base rent (e.g., Danbury, CT HMFA); or (3) an existing sub-
area may lose a component which affects the computation of the sub-
area's 2000-to-2005 update factor (e.g., Youngstown-Warren-Boardman, OH
HMFA lost the new Sharon, PA HMFA). A complete list of changes from the
FY2006 FMRs due to the use of the 2000 Census Base Median Family Income
comparison in forming metropolitan sub-areas is provided in subsection
F below.
For nonmetropolitan areas, FMRs continue to be calculated at the
county level.
A. Data Sources: 2000 Census Base Rents
FY2005 FMRs were benchmarked for most areas using 2000 Decennial
Census
[[Page 34728]]
data, which served to correct estimation errors that accumulated since
1994 when FMRs were benchmarked with 1990 Decennial Census data. At
HUD's request, the Census Bureau prepared a publicly-releasable data
file that permits almost exact replication of HUD's 2000 Census base
rent calculations in all areas except those with few rental units. This
data set is located on HUD's HUD USER Web site at: http://www.huduser.org/datasets/fmr/CensusRentData/index.html.
An area-
specific explanation of how FY2005 FMRs were benchmarked to the 2000
Census and updated can be found at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=docs
.
The proposed FY2007 FMRs are also benchmarked to the 2000 Census.
The 2000 Census base rents computed for the proposed FY2007 FMRs use
the same computational techniques as used in the FY2005 benchmarking.
The 2000 Census base rents for old FMR areas are used, along with the
Revised Final FY2005 FMRs, to determine the 2000 to 2005 portion of the
2000 to 2007 update factor for the new FMR areas. CPI gross rent and
utility indexes are used for the remainder. A publicly releasable
version of the data used in preparing the proposed FY2007 FMRs is
available at the following Web site: http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07
.
B. FMR Updates: 2000 Census to 2005
For the new FMR areas, used in the FY2006 FMRs and revised for the
proposed FY2007 FMRs, update factors from the 2000 Census base rent to
2005 are computed using weighted average update factors derived from
Old FMR Area Revised Final FY2005 FMRs, Old FMR Area 2000 Census Base
Rents and 2000 Census 100 Percent Population Counts as described at
http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07.
After 2000 Census base rent estimates were established for each old
FMR area and bedroom size; they are updated from the estimated Census
date of April 1, 2000 to April 1, 2005 (the midpoint of FY2005). Update
factors for the period were based either on the area-specific Consumer
Price Index (CPI) survey data that were available for the largest
metropolitan areas or on HUD random digit dialing (RDD) survey data by
region.
For areas with local CPI surveys, CPI annual data on rents and
utilities were used to update the Census rent estimates. Three-quarters
of the 2000 CPI change factor was used to bring the FMR estimates
forward from April to December of 2000. Annual CPI survey data could
then be used for calendar years 2001, 2002, and 2003. Trending to cover
the period from December 2003 to April 1, 2005, was then needed. An
annual trending factor of 3 percent, based on the average annual
increase in the median Census gross rent between 1990 and 2000, was
used to update estimates from the end of 2003 (i.e., the last date for
which CPI data were available) until the midpoint of the fiscal year in
which the estimates were used. The 15-month trending factor was 3.75
percent (3 percent times 15/12).
For areas without local CPI surveys, the same process was used
except that regional RDD survey data were substituted for CPI data.
Regional RDD surveys were done for 20 areas--the metropolitan and non-
metropolitan part of each of the 10 HUD regions. Areas covered by CPI
metropolitan surveys were excluded from the RDD metropolitan regional
surveys.
HUD also conducted random digit dialing telephone surveys for
selected areas and incorporated these into FMR update factors. The
specific 2000-to-2005 update factors that apply to each FY2007 FMR
area's constituent parts are described at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07
.
C. Updates From 2005 to Proposed FY2007
After using the old FMR area data to update rents to 2005,
metropolitan area and non-metropolitan county update factors from 2005
to 2007 are applied to derive the proposed FY2007 FMRs. All new FMR
areas that are parts of new metropolitan areas are generally updated
with the same metropolitan area-level 2005 to 2007 update factor.
Specifically, local CPI data is used to move rents from the end of
2003 to the end of 2005 and the same 15-month trending factor is then
applied. Regional RDDs, however, were not conducted in 2004 or 2005 in
anticipation of the arrival of American Community Survey (ACS) data.
Therefore, for proposed FY2007 FMRs, Census region level CPI data for
Class B and C size cities is being used to update areas without local
CPI update factors. Data from the 2005 ACS will be used to replace
regional CPI data if it becomes available in time for inclusion in the
final FY2007 publication. Once full-scale ACS data collections become
available in the latter part of 2006, sample sizes will be large enough
to estimate FMRs for the larger metropolitan areas on an annual basis
and for other areas on a two- to four-year basis.
Random digit dialing (RDD) surveys are conducted for areas HUD has
reason to believe may have unusual rent movements. One RDD was
completed in time for publication of FY2007 proposed FMRs. The RDD for
Miami-Miami Beach-Kendall, FL HMFA indicated an increase in the 2-
bedroom FMR from $937 to $1,018. HUD is conducting special RDD surveys
in several Gulf Coast FMR areas using a special protocol to detect
possible changes in rents since Hurricanes Katrina and Rita. The
addition of the post-hurricane protocols delayed results of these
surveys so they are not available for inclusion in this notice.
Significant changes in rents revealed by these surveys will be included
in final FY2007 FMRs.
The area-specific data and computations used to determine FMR area
definitions and calculate proposed FY2007 FMRs can be found at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07
.
D. Large Bedroom Rents
FMR estimates are calculated for two-bedroom units. This is
generally the most common size of rental units, and therefore the most
reliable to survey and analyze. After each decennial Census, rent
relationships between two-bedroom units and other unit sizes are
calculated and used to set FMRs for other units. This is done because
it is much easier to update two-bedroom estimates and to use pre-
established cost relationships with other bedroom sizes than it is to
develop independent FMR estimates for each bedroom size. This was last
done using 2000 Census data. A publicly releasable version of the data
file used that permits derivations of rent ratios is available at
http://www.huduser.org/datasets/fmr/CensusRentData/index.html.
The rents for three-bedroom and larger units continue to reflect
HUD's policy to set higher rents for these units than would result from
using normal market rents. This adjustment is intended to increase the
likelihood that the largest families, who have the most difficulty in
leasing units, will be successful in finding eligible program units.
The adjustment adds bonuses of 8.7 percent to the unadjusted three-
bedroom FMR estimates and adds 7.7 percent to the unadjusted four-
bedroom FMR estimates. The FMRs for unit sizes larger than four
bedrooms are calculated by adding 15 percent to the four-bedroom FMR
for each extra bedroom. For example, the FMR for a five-bedroom unit is
1.15 times the four-bedroom FMR, and the FMR for a six-bedroom unit is
1.30 times the four-bedroom FMR. FMRs for single-room
[[Page 34729]]
occupancy units are 0.75 times the zero-bedroom (efficiency) FMR.
A further adjustment was made using 2000 Census data in
establishing rent ratios for areas with local bedroom-size intervals
above or below what are considered to be reasonable ranges or where
sample sizes are inadequate to accurately measure bedroom rent
differentials. Experience has shown that highly unusual bedroom ratios
typically reflect inadequate sample sizes or peculiar local
circumstances that HUD would not want to utilize in setting FMRs (e.g.,
luxury efficiency apartments in New York City that rent for more than
typical one-bedroom units). Bedroom interval ranges were established
based on an analysis of the range of such intervals for all areas with
large enough samples to permit accurate bedroom ratio determinations.
The ranges used were: Efficiency units are constrained to fall between
0.65 and 0.83 of the two-bedroom FMR; one-bedroom units must be between
0.76 and 0.90 of the two-bedroom unit; three-bedroom units must be
between 1.10 and 1.34 of the two-bedroom unit; and four-bedroom units
must be between 1.14 and 1.63 of the two-bedroom unit. Bedroom rents
for a given FMR area were then adjusted if the differentials between
bedroom-size FMRs were inconsistent with normally observed patterns
(e.g., efficiency rents were not allowed to be higher than one-bedroom
rents and four-bedroom rents were set at a minimum of 3 percent higher
than three-bedroom rents).
For low-population, non-metropolitan counties with small Census
recent-mover rent samples, Census-defined county group data were used
in determining rents for each bedroom size. This adjustment was made to
protect against unrealistically high or low FMRs due to insufficient
sample sizes. The areas covered by this new estimation method had less
than the HUD standard of 200 two-bedroom Census-tabulated observations.
E. Future FMR Annual Updates
HUD believes the current OMB definitions of metropolitan
statistical areas (MSAs) are reasonable definitions of housing markets
whose relevance will increase with time. That is, while HUD makes
distinctions among housing markets within some of these areas based on
differences in rents and incomes measured in 2000, the new MSAs are
probably better reflections of current rental housing markets than of
2000 rental housing markets, and will be shown to be increasingly good
approximations of housing markets as more data are gathered in the
future. Therefore, future updates to FMRs will be made at the
metropolitan area level and applied to all FMR areas within
metropolitan areas where they have been separately designated.
HUD-funded random digit dialing (RDD) telephone surveys will
generally be conducted at the metropolitan area level and compared to
the metropolitan area rent estimate to see if adjustments need to be
made. If an RDD indicates that a metropolitan area rent needs to be
changed, the metropolitan area-level change factor will be computed and
applied to FMR area FMRs within the metropolitan area. HUD will accept
information supplied by local housing authorities to make adjustments
to FMRs.
The release of 2005 Census American Community Survey data later
this year will initiate a major change in FMR calculations. Starting in
2005, the Census fully implemented ACS surveys, which are annual
surveys that collect essentially all of the data that were collected on
the 2000 Census long form (sample survey). The surveys are large enough
to provide annual FMR estimates for large metropolitan areas, and two
or more years of data can be combined to provide reliable estimates for
smaller areas. The ACS offers more current and accurate rent data than
have ever been systematically available for calculating FMRs. HUD will
re-benchmark all metropolitan areas and FMR areas when sufficient ACS
or other data are available to estimate rents at the same level of
accuracy for all FMR areas. To the extent such detailed data are
available, the FY2007 separation of sub-areas within metropolitan areas
will be re-examined to determine if FMR area base rents and median
family incomes from the new survey are sufficiently different to
warrant their continued separation within the metropolitan area for
areas separated based on 2000 Census base rent and base median family
income differentials.
F. FMR Area Changes Resulting From 2000 Census Base Median Family
Income Comparisons
For this notice, HUD created separate FMR areas based on 2000
Census base median family incomes for any parts of old metropolitan
areas, or formerly nonmetropolitan counties, that have a differential
of more than 5 percent from the current OMB area 2000 Census base
median family income. The limited number of areas in question did not
qualify as separate areas based on the 2000 Census base rent analysis
that was used to determine FMR areas in FY2006. Therefore, these areas
should not have substantial increases or decreases in their FMRs if
they are treated as separate income limit/FMR sub-areas. The addition
of the 2000 Census base median family income analysis can have three
possible effects on an FMR area and its FMRs as defined in FY2006: (1)
A new sub-area may be formed; (2) an existing sub-area may be assigned
its own 2000 Census base rent instead of the CBSA base rent; or (3) an
existing sub-area may lose a component which affects the computation of
the sub-area's 2000-to-2005 update factor.
The table below provides a list of the areas affected by this new
approach. It compares the FY2006 FMR to the Revised FY2006 Rent that
reflects the impact of the 2000 Census base median family income
comparison for the new metropolitan area and its former FMR area
components. The difference shown is the difference between the
currently effective FY2006 FMR and what it would have been if the new
area had been used to calculate FY2006 FMRs (the FY2006 Equivalent Rent
with Income Comparison). The FY2006 Equivalent Rent, which is provided
for informational purposes only and is not intended to be effective,
provides the link between the current and the proposed FMRs for an
area. For a complete explanation of how each FMR area definition is
determined and how the proposed FY2007 FMRs for the area are computed,
see http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07.
Areas Changed by 2000 Census Base Median Family Income Comparison
----------------------------------------------------------------------------------------------------------------
FY2006 FY2006
Final FY2006 equivalent equivalent
Areas FMR (no income rent with rent less Proposed
comparison) income final FY2006 FY2007 FMR
comparison FMR
----------------------------------------------------------------------------------------------------------------
Areas Changed From CBSA Base to Sub-Area Base
----------------------------------------------------------------------------------------------------------------
Bangor, ME HMFA................................. 642 670 28 704
[[Page 34730]]
Bloomington, IN HMFA............................ 621 648 27 668
Danbury, CT HMFA................................ 1148 1195 47 1267
Hagerstown, MD HMFA............................. 629 639 10 673
Iowa City, IA HMFA.............................. 653 662 9 682
Jefferson City, MO HMFA......................... 504 507 3 522
Jonesboro, AR HMFA.............................. 490 503 13 523
Manchester, NH HMFA............................. 1013 966 -47 1001
Miami-Miami Beach-Kendall, FL HMFA.............. 911 883 -28 \1\ 1018
New York, NY HMFA............................... 1133 1123 -10 1189
San Juan-Guaynabo, PR HMFA...................... 403 \2\ 486 83 506
----------------------------------------------------------------------------------------------------------------
New Sub-Areas
----------------------------------------------------------------------------------------------------------------
Kendall County, IL HMFA......................... 901 878 -23 911
Union County, OH HMFA........................... 655 691 36 712
Martinsburg, WV HMFA............................ 629 622 -7 655
Calloway County, MO HMFA........................ 504 503 -1 518
Shelby County, KY HMFA.......................... 563 580 17 602
Monroe County, GA HMFA.......................... 542 524 -18 545
Fort Lauderdale, FL HMFA *...................... 911 993 82 1054
West Palm Beach-Boca Raton, FL HMFA *........... 911 996 85 1057
Monmouth-Ocean, NJ HMFA......................... 1133 1105 -28 1170
Sharon, PA HMFA................................. 541 543 2 562
----------------------------------------------------------------------------------------------------------------
Areas Whose Rent Changed Solely Due to Loss of Part to New Sub-Area and Its Effect on Update Factors
----------------------------------------------------------------------------------------------------------------
Columbus, OH HMFA............................... 655 654 -1 674
Louisville, KY-IN HMFA.......................... 563 562 -1 584
Youngstown-Warren-Boardman, OH HMFA............. 541 539 -2 558
----------------------------------------------------------------------------------------------------------------
\1\ Includes an RDD-based adjustment.
\2\ This rent includes the results of the Puerto Rico RDD revision described in a separate notice published June
2, 2006 at 71 FR 32123-4.
* Also becomes 50th percentile FMR area in FY2007.
IV. Manufactured Home Space Surveys
The FMR used to establish payment standard amounts for the rental
of manufactured home spaces in the Housing Choice Voucher program is 40
percent of the FMR for a two-bedroom unit. HUD will consider
modification of the manufactured home space FMRs where public comments
present statistically valid survey data showing the 40th percentile
manufactured home space rent (including the cost of utilities) for the
entire FMR area.
All approved exceptions to these rents that were in effect in
FY2006 were updated to FY2007 using the same data used to estimate the
Housing Choice Voucher program FMRs if the respective FMR area's
definition had remained the same. If the result of this computation was
higher than 40 percent of the re-benchmarked two-bedroom rent, the
exception remains and is listed in Schedule D. The FMR area definitions
used for the rental of manufactured home spaces are the same as the
area definitions used for the other FMRs. Areas with definitional
changes that previously had exception manufactured housing space rental
FMRs are requested to submit new surveys to justify higher than
standard space rental FMRs if they believe higher space rental
allowances are needed.
V. Request For Public Comments
HUD seeks public comments on FMR levels for specific areas.
Comments on FMR levels must include sufficient information (including
local data and a full description of the rental housing survey
methodology used) to justify any proposed changes. Changes may be
proposed in all or any one or more of the unit-size categories on the
schedule. Recommendations and supporting data must reflect the rent
levels that exist within the entire FMR area.
For the supporting data, HUD recommends the use of professionally
conducted RDD telephone surveys to test the accuracy of FMRs for areas
where there is a sufficient number of Section 8 units to justify the
survey cost of approximately $20,000 to $30,000. Areas with 500 or more
program units usually meet this cost criterion, and areas with fewer
units may meet it if actual rents for two-bedroom units are
significantly different from the FMRs proposed by HUD. In addition, HUD
has developed a version of the RDD survey methodology for smaller,
nonmetropolitan PHAs. This methodology is designed to be simple enough
to be done by the PHA itself, rather than by professional survey
organizations, at a cost of $5,000 or less.
PHAs in nonmetropolitan areas may, in certain circumstances,
conduct surveys of groups of counties. HUD must approve all county-
grouped surveys in advance. PHAs are cautioned that the resulting FMRs
will not be identical for the counties surveyed; each individual FMR
area will have a separate FMR based on the relationship of rents in
that area to the combined rents in the cluster of FMR areas. In
addition, PHAs are advised that counties whose FMRs are based on the
combined rents in the cluster of FMR areas will not have their FMRs
revised unless the grouped survey results show a revised FMR above the
combined rent level.
PHAs that plan to use the RDD survey technique should obtain a copy
of the appropriate survey guide. Larger PHAs should request HUD's
survey guide entitled ``Random Digit Dialing Surveys; A Guide to Assist
Larger Public Housing Agencies in Preparing Fair Market Rent
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Comments.'' Smaller PHAs should obtain the guide entitled ``Rental
Housing Surveys; A Guide to Assist Smaller Public Housing Agencies in
Preparing Fair Market Rent Comments.'' These guides are available from
HUD USER on 800-245-2691, or from HUD's Web site, in Microsoft Word or
Adobe Acrobat format, at the following address: http://www.huduser.org/datasets/fmr.html
.
Other survey methodologies are acceptable in providing data to
support comments, if the survey methodology can provide statistically
reliable, unbiased estimates of the gross rent. Survey samples should
preferably be randomly drawn from a complete list of rental units for
the FMR area. If this is not feasible, the selected sample must be
drawn to be statistically representative of the entire rental housing
stock of the FMR area. Surveys must include units at all rent levels
and be representative by structure type (including single-family,
duplex, and other small rental properties), age of housing unit, and
geographic location. The decennial Census should be used as a means of
verifying if a sample is representative of the FMR area's rental
housing stock.
Most surveys cover only one- and two-bedroom units, which has
statistical advantages. If the survey is statistically acceptable, HUD
will estimate FMRs for other bedroom sizes using ratios based on the
decennial Census. A PHA or contractor that cannot obtain the
recommended number of sample responses after reasonable efforts should
consult with HUD before abandoning its survey; in such situations HUD
is prepared to relax normal sample size requirements.
HUD will consider increasing manufactured home space FMRs where
public comment demonstrates that 40 percent of the two-bedroom FMR is
not adequate. In order to be accepted as a basis for revising the
manufactured home space FMRs, comments must include a pad rental survey
of the mobile home parks in the area, identify the utilities included
in each park's rental fee, and provide a copy of the applicable public
housing authority's utility schedule.
Accordingly, the Fair Market Rent Schedules, which will not be
codified in 24 CFR part 888, are proposed to be amended as shown in the
Appendix to this notice:
Dated: May 30, 2006.
Darlene F. Williams,
Assistant Secretary for Policy Development and Research.
Fair Market Rents for the Housing Choice Voucher Program
Schedules B and D--General Explanatory Notes
1. Geographic Coverage
a. Metropolitan Areas--FMRs are market-wide rent estimates that are
intended to provide housing opportunities throughout the geographic
area in which rental-housing units are in direct competition. The
proposed FY2007 FMRs reflect a change in metropolitan area definitions.
HUD is using the metropolitan Core-Based Statistical Areas (CBSA),
which are made up of one or more counties, as defined by the Office of
Management and Budget, with some modifications. HUD is generally
assigning separate FMRs to the component counties of CBSA Micropolitan
Areas.
b. Modifications to OMB Definitions-- Following OMB guidance, the
estimation procedure for the FY2007 proposed FMRs incorporates the
current OMB definitions of metropolitan areas based on the Core-Based
Statistical Area (CBSA) standards as implemented with 2000 Census data,
but makes adjustments to the definitions to separate subparts of these
areas where FMRs or median incomes would otherwise change significantly
if the new area definitions were used without modification. In CBSAs
where sub-areas are established, it is HUD's view that the geographic
extent of the housing markets are not yet the same as the geographic
extent of the CBSAs, but may become so in the future as the social and
economic integration of the CBSA component areas increases.
Modifications to metropolitan CBSA definitions are made according to a
formula as described below.
Metropolitan Areas CBSAs (referred to as Metropolitan Statistical
Areas or MSAs) may be modified to allow for sub-area FMRs within MSAs
based on the boundaries of old FMR areas (OFAs) within the boundaries
of new MSAs. (OFAs are the FMR areas defined for the FY2005 FMRs.
Collectively they include 1999 definition MSAs/PMSAs, metro counties
deleted from 1999 definition MSAs/PMSAs by HUD for FMR purposes, and
counties and county parts outside of 1999 definition MSAs/PMSAs
referred to as non-metropolitan counties.) Sub-areas of MSAs are
assigned their own FMRs when the sub-area 2000 Census Base Rent differs
by at least 5 percent from (i.e., is at most 95 percent or at least 105
percent of) the MSA 2000 Census Base Rent, or when the 2000 Census
Median Family Income for the sub-area differs by at least 5 percent
from the MSA 2000 Census Median Family Income. MSA sub-areas, and the
remaining portions of MSAs after sub-areas have been determined, are
referred to as HUD Metro FMR Areas (HMFAs) to distinguish these areas
from OMB's official definition of MSAs.
The specific counties and New England towns and cities within each
state in MSAs and HMFAs are listed in the FMR tables.
2. Bedroom Size Adjustments
Schedules B shows the FMRs for 0-bedroom through 4-bedroom units.
The FMRs for unit sizes larger than 4 bedrooms are calculated by adding
15 percent to the 4-bedroom FMR for each extra bedroom. For example,
the FMR for a 5-bedroom unit is 1.15 times the 4-bedroom FMR, and the
FMR for a 6-bedroom unit is 1.30 times the 4-bedroom FMR. FMRs for
single-room-occupancy (SRO) units are 0.75 times the 0-bedroom FMR.
3. Arrangement of FMR Areas and Identification of Constituent Parts
a. The FMR areas in Schedule B are listed alphabetically by
metropolitan FMR area and by nonmetropolitan county within each state.
The exception FMRs for manufactured home spaces in Schedule D are
listed alphabetically by state.
b. The constituent counties (and New England towns and cities)
included in each metropolitan FMR area are listed immediately following
the listings of the FMR dollar amounts. All constituent parts of a
metropolitan FMR area that are in more than one state can be identified
by consulting the listings for each applicable state.
c. Two nonmetropolitan counties are listed alphabetically on each
line of the nonmetropolitan county listings.
d. The New England towns and cities included in a nonmetropolitan
part of a county are listed immediately following the county name.
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[FR Doc. 06-5411 Filed 6-14-06; 8:45 am]
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