[Federal Register: June 12, 2008 (Volume 73, Number 114)]
[Notices]
[Page 33529-33590]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jn08-142]
[[Page 33529]]
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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
2009; Notice
[[Page 33530]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5223-N-01]
Proposed Fair Market Rents for the Housing Choice Voucher Program
and Moderate Rehabilitation Single Room Occupancy Program Fiscal Year
2009
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Proposed Fiscal Year (FY) 2009 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 FY 2009 to be 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 FY 2009 FMR areas are based on current Office of
Management and Budget (OMB) metropolitan area definitions and include
HUD modifications that were first used in the determination of FY 2006
FMR areas. OMB changes to the metropolitan area definitions through
November 2007 are incorporated. This means that there are six
Metropolitan Statistical Area (MSA) name changes that reorder, add, or
delete a primary city name.\1\ Proposed FY 2009 FMRs are based on 2000
Census data updated with more current survey data. For FY 2009, FY 2008
FMRs are updated using 2006 American Community Survey (ACS) data,
Random Digit Dialing (RDD) telephone rent surveys conducted since the
release of the final FY 2008 FMRs, and more recent Consumer Price Index
(CPI) rent and utility indexes. HUD continues to use ACS data in
different ways according to how many two-bedroom standard-quality and
recent-mover sample cases are available in the FMR area or its Core-
Based Statistical Area (CBSA). Revised 2006 FMRs based on Census and
ACS data have been updated with CPI data through the end of 2007 and
then trended to April 2009, the mid-point of FY 2009.
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\1\ The change from Sarasota-Bradenton-Venice, FL MSA to
Bradenton-Sarasota-Venice, FL MSA includes a change in the primary
city name and a change in the metropolitan code, from 42260 to
14600.
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This notice also provides revised FY 2008 FMRs for 10 areas based
on RDD surveys conducted in early 2008. These areas are small
metropolitan or nonmetropolitan areas from the oil- and gas-producing
regions of Colorado, Texas, Utah, and Wyoming that have experienced
increased pressure on their rental housing market over the past 2 years
or more.
DATES: Comment Due Date: August 1, 2008.
ADDRESSES: Interested persons are invited to submit comments regarding
HUD's estimates of the FMRs, as published in this notice, to the Office
of 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 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 2 weeks in
advance of the public comment deadline.
Electronic Submission of Comments. Interested persons may 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
instructions provided on that site to submit comments electronically.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Comments. All comments and communications
submitted to HUD will be available, without charge, 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 FMRs or a listing of all FMRs, please call
the HUD USER information line at 1-800-245-2691 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 FY 2009 FMR
documentation system at http://www.huduser.org/datasets/fmr/fmrs/
index.asp?data=fmr09.
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 concerning 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 1-800-877-8339. (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 geographic areas. In the Housing Choice Voucher
program, the FMR is the basis for determining the ``payment standard
amount'' used to calculate the maximum monthly subsidy for an
[[Page 33531]]
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 (nonluxury) 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 at http://
www.hudclips.org. Federal Register notices also are available
electronically from http://www.gpoaccess.gov/fr/index.html, the U.S.
Government Printing Office Web site. Complete documentation of the
methodology and data used to compute each area's proposed FY 2009 FMRs
is available at http://www.huduser.org/datasets/fmr/fmrs/
index.asp?data=fmr09.
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 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. No new areas became eligible for 50th percentile rents. HUD
reviewed 24 50th-percentile FMR areas for these proposed FY 2009 FMRs.
The 24 areas are listed in the table below. As shown in the table, HMFA
is an acronym for HUD Metro FMR Area, which is an MSA subarea, or the
remaining portions of an MSA after subareas have been determined.
FY 2008 50th-Percentile FMR Areas Reviewed for Eligibility as FY 2009 50th-Percentile FMR Areas
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Albuquerque, NM MSA........................ Austin-Round Rock, TX MSA.
Baltimore-Towson, MD MSA................... Bradenton-Sarasota-Venice, FL MSA.
Chicago-Naperville-Joliet, IL HMFA......... Denver-Aurora, CO MSA.
Fort Worth-Arlington, TX HMFA.............. Grand Rapids-Wyoming, MI HMFA.
Hartford-West Hartford-East Hartford, CT Honolulu, HI MSA.
HMFA.
Houston-Baytown-Sugar Land, TX HMFA........ Kansas City, MO-KS, HMFA.
Las Vegas-Paradise, NV MSA................. Milwaukee-Waukesha-West Allis, WI MSA.
New Haven-Meriden, CT HMFA................. Orange County, CA HMFA.
Phoenix-Mesa-Scottsdale, AZ MSA............ Providence-Fall River, RI-MA HMFA.
Richmond, VA HMFA.......................... Riverside-San Bernardino-Ontario, CA MSA.
Tacoma, WA HMFA............................ Tucson, AZ MSA.
Virginia Beach-Norfolk-Newport News, VA-NC Washington-Arlington-Alexandria, DC-VA-MD HMFA.
MSA.
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Fourteen of the 24 current 50th-percentile areas eligible for
review fail to qualify for the 50th-percentile FMR program for FY 2009.
Two of these areas, as shown below, no longer qualify for the 50th-
percentile FMR program because, based on current tenant data, less than
25 percent of the tenant-based rental program participants reside in
the 5 percent of census tracts in the metropolitan areas with the
largest number of program participants. These areas can be reviewed
annually to see if this concentration changes and may be reinstated as
50th-percentile areas as early as the FY 2010 FMRs.
FY 2008 50th-Percentile FMR Areas Not Eligible for FY 2009 50th-Percentile FMRs Because Voucher Tenant
Concentrations Have Fallen Below the Eligibility Threshold
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Grand Rapids-Wyoming, MI HMFA.................. Providence-Fall River, RI-MA HMFA.
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Three additional areas did not meet the minimum reporting criteria
of 85 percent of resident records. These areas are denied eligibility
until their reporting rate increases to 85 percent. Areas with
reporting rate deficiencies can be reviewed annually, so these areas
may be eligible for reinstatement of 50th-percentile FMRs in FY 2010.
These areas are listed below:
FY 2008 50th-Percentile FMR Areas Not Eligible for FY 2009 50th-Percentile FMRs Because FMR Area Voucher
Reporting Rates Are Too Low
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Baltimore-Towson, MD MSA............................. New Haven-Meriden, CT HMFA.
Washington-Arlington-Alexandria, DC-VA-MD HMFA .........................................................
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The table below shows nine areas that failed to deconcentrate over
the 3-year period. Deconcentration of tenants is the primary objective
of the 50th-percentile program and failure to make any progress to
deconcentrate tenants over a 3-year period disqualifies an otherwise
eligible area for 3 years. These areas are not eligible for
reevaluation until FY 2012.
[[Page 33532]]
FY 2008 50th-Percentile FMR Areas Not Eligible For FY 2009 50th-Percentile FMRs for Failure to Deconcentrate
Voucher Tenants
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Austin-Round Rock, TX MSA......................... Fort Worth-Arlington, TX HMFA.
Honolulu, HI MSA.................................. Las Vegas-Paradise, NV MSA.
Orange County, CA HMFA............................ Phoenix-Mesa-Scottsdale, AZ MSA.
Riverside-San Bernardino-Ontario, CA MSA.......... Tucson, AZ MSA.
Virginia Beach-Norfolk-Newport News, VA-NC MSA.... ............................................................
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Ten of the 24 areas reviewed will stay in the 50th-percentile FMR
program. The ten areas will not be re-evaluated until FY 2012.
FY 2008 50th-Percentile FMR Areas Evaluated and Continuing With 50th-Percentile FMRs in FY 2009
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Albuquerque, NM MSA............................... Bradenton-Sarasota-Venice, FL MSA.
Chicago-Naperville-Joliet, IL HMFA................ Denver-Aurora, CO MSA.
Hartford-West Hartford-East Hartford, CT HMFA..... Houston-Baytown-Sugar Land, TX HMFA.
Kansas City, MO-KS HMFA........................... Milwaukee-Waukesha-West Allis, WI MSA.
Richmond, VA HMFA................................. Tacoma, WA HMFA.
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Four current 50th-percentile FMR areas were not evaluated this year
because they have not completed 3 years of program participation. These
four areas, listed below, will be evaluated for the FY 2010 FMRs:
FY 2008 50th-Percentile FMR Areas Not Slated For Eligibility Evaluation and Continuing With 50th-Percentile FMRs
in FY 2009
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Dallas, TX HMFA.............................. Fort Lauderdale, FL HMFA.
San Diego-Carlsbad-San Marcos, CA MSA........ West Palm Beach-Boca Raton, FL HMFA.
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III. FMR Methodology
This section provides a brief overview of how the FY 2009 FMRs are
computed. For complete information on how FMR areas are determined, and
on how each area's FMRs are derived, see the online documentation at:
http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr09.
The FY 2009 FMRs are based on current OMB metropolitan area
definitions that were first used in the FY 2006 FMRs. OMB changes to
the metropolitan area definitions through November 2007 are
incorporated. This means there are six MSA name changes that reorder,
add, or delete a primary city name. The area definitions based on 2000
Census data have the advantages of providing more relevant commuting
interchange standards, and more current measures of housing market
relationships than those based on 1990 Census data and used prior to
the FY 2006 FMRs.
A. Data Sources--2000 Census and American Community Survey
FY 2009 FMRs are based on changes in rents measured by differences
in ACS data collected in 2005 and 2006 and updated with CPI data. For
FY 2008 FMRs, HUD developed 2005 rent estimates based on updating 2000
Census gross rent data with more current survey data from the Census
Bureau's 2005 ACS. The first full year of implementation for the ACS
was 2005, and these data were available to use in the FY 2008 FMRs. FY
2009 FMRs use data from the 2006 ACS to update these 2005 rent
estimates. While the Census Bureau intends for the ACS to replace the
Decennial Census sample ``long form'' for collecting detailed
socioeconomic data, the ACS has several important distinctions from the
decennial long form. These include:
The ACS is conducted on a continuous ``rolling'' basis
throughout the year, so survey responses do not correspond to a
particular date, whereas the long form responses were as of the Census
date of April 1. This has implications for the ``as-of'' date assumed
for ACS-based rents. The ``as-of'' date for ACS-based rents is set at
June 30 of the ACS year.
The ACS has an initial sample size (before nonresponse
attrition) of about one-fifth that of the decennial long form, which
surveyed approximately one out of every six households. This means that
an adequate sample size for one-year ACS data will be available only
for very large population geographic areas, and that data for smaller
areas will be accumulated over 3 or 5 years to form the basis of
decennial long-form-equivalent estimates.
As detailed in the notices announcing the proposed and final FY
2008 FMRs, HUD replaced the accumulated 2001 through 2005 FMR update
factors from various sources with 2005 ACS data. The preamble for the
final FY 2008 FMR Notice (72 FR 55940) provides a description of how
the 2005 ACS data, and in some cases RDDs conducted in 2001 through
2005, were used in the FY 2008 FMRs. Further details regarding the
calculation of FY 2008 FMRs are available using HUD's online Final FY
2008 Documentation System, available at http://www.huduser.org/
datasets/fmr/fmrs/index.asp?data=fmr08.
B. Updates From 2005 to 2006
State or local 2006 ACS data are used to update a June-2005-
calculated gross rent from the FY 2008 FMRs to June 2006. The same
categories of use, depending upon the sizes of the available rental
unit samples in the FMR areas, were applied to the 2006 ACS data as had
been applied to the 2005 data. There are two exceptions to the
similarity of processing 2005 ACS data and 2006 ACS data. First, the
update factor reflecting changes in rents for the parts of the state
not included in FMR areas covered by local ACS data was discontinued
for two reasons: (1) The variance in rent change between 2005 and 2006
for these areas was much larger than that for full states and it was
not clear whether these changes reflected differences in markets or
area
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composition, or if they reflected survey anomalies; and (2) basing an
underlying geography on factors that change annually (such as the
identity of FMR areas covered by local ACS data) and which cannot be
determined until the survey data have been processed presents a
complexity that could not be resolved in a manner that allowed for
timely delivery of data. Consequently, for FY 2009, all state-based
update factors are calculated for the entire state.
Second, HUD-defined ``HMFAs'' in metropolitan areas (CBSAs) where
no subarea uses the CBSA gross rent as the basis of its FMR, are no
longer tested to determine which update factor, the state or the CBSA,
brings the subarea closer to the CBSA. The state update factor is now
used for these cases. This change was made because review of the data
and discussions with field economists indicated that forcing these
subareas toward CBSA-area values was the opposite of market trends for
some subareas.
C. Updates From 2006 to 2007
The 2006 ACS data brought the 2005 data used in the FY 2008 FMRs
forward by 12 months to June 2006. The CPI is used to update the June
2006 FMRs to the end of 2007. Local CPI data are used for FMR areas
with at least 75 percent of their population within Class A
metropolitan areas covered by local CPI data. Census region CPI data
are used for FMR areas in Class B and C size metropolitan areas and
nonmetropolitan areas without local CPI update factors.
D. Updates From 2007 to 2009
The national 1990 to 2000 average annual rent increase trend of
1.03 is applied to end-of-2007 rents for 1.25 years, to derive the
proposed FY 2009 FMRs.
E. Additional Rent Surveys and Other Data
In early 2008, surveys were conducted in several areas of Wyoming,
Colorado, Utah, and Texas where, as a result of increased oil and gas
drilling activity, housing agencies have experienced significant rental
housing market pressure. Most of these areas have experienced problems
managing the voucher program over the past couple of years. These
surveys show that rents in these areas are higher than previously
estimated. All of these surveys met HUD standards for statistical
significance (i.e., the survey result trended to April 2008 was
statistically different from the April 2008 FY 2008 FMRs at a 95
percent level of confidence). Effective upon publication of this
notice, and through September 30, 2008, FMRs for these areas are listed
below.
Revised FY 2008 FMRs Based on RDD Results
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0 BR 1 BR 2 BR 3 BR 4 BR
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Casper, WY..................................... $448 $490 $619 $901 $1,085
Duchesne County, UT............................ 620 673 747 964 1,312
Garfield County, CO............................ 832 947 1,050 1,296 1,335
Grand Junction, CO............................. 544 546 655 954 1,153
Midland, TX MSA................................ 541 585 770 1,122 1,329
Moffat County, CO.............................. 499 545 684 897 1,201
Odessa, TX MSA................................. 492 521 683 984 1,143
Sweetwater County, WY.......................... 446 542 680 951 987
Uinta County, WY............................... 463 585 666 909 1079
Uintah County, UT.............................. 534 580 643 845 950
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The FMR bonuses related to the impact of Hurricane Katrina for
Baton Rouge, LA, and New Orleans, LA, first applied March 6, 2006,
continue to be applied in the proposed FY 2009 FMRs, though the bonuses
have been reduced as ACS data have started to capture the market rent
increases for these areas. Continuing research shows that rental market
conditions in both areas remain tight, and that FMRs should not be
reduced. Similarly, and in accordance with the revised FY 2008 FMRs for
Gulfport-Biloxi, MS MSA and Pascagoula, MS MSA (73 FR 6197), bonuses
will continue in these Mississippi areas in the FY 2009 FMRs, although,
as in the Louisiana areas, the bonus amounts are reduced.
The area-specific data and computations used to calculate proposed
FY 2009 FMRs and FMR area definitions can be found at http://
www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr09.
F. Bedroom Rent Adjustments
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 for the derivations of rent ratios is available at http://
www.huduser.org/datasets/fmr/CensusRentData/index.html.
Adjustments were made using 2000 Census data to establish rent
ratios for areas with local bedroom-size intervals above or below what
are considered 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 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 (i.e., efficiency rents were not allowed to be higher
than one-bedroom rents and four-bedroom rents were not allowed to be
lower than three-bedroom rents).
The rents for three-bedroom and larger units are further adjusted
to continue to reflect HUD's policy to set
[[Page 33534]]
higher rents for these units than would result from using unadjusted
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 occupancy units are 0.75 times
the zero-bedroom (efficiency) FMR.
For low-population, nonmetropolitan counties with small 2000 Census
samples of recent-mover rents, Census-defined county group data were
used to determine 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.
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 FY
2008 were updated to FY 2009 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 $35,000. Areas with 2,000 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, non-metropolitan
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 where 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
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 at 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
may find it appropriate 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: June 3, 2008.
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. HUD is using
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the metropolitan CBSAs, which are made up of one or more counties,
as defined by the Office of Management and Budget (OMB), 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 FY 2008 proposed FMRs incorporates
the current OMB definitions of metropolitan areas based on the 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 subareas 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 area CBSAs (referred to as MSAs) may be modified to
allow for subarea 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 FY 2005 FMRs. Collectively they include
1999-definition MSAs/Primary Metropolitan Statistical Areas (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 nonmetropolitan counties.)
Subareas of MSAs are assigned their own FMRs when the subarea 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 subarea
differs by at least 5 percent from the MSA 2000 Census Median Family
Income. MSA subareas, and the remaining portions of MSAs after
subareas have been determined, are referred to as 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 Schedule B.
2. Bedroom Size Adjustments
Schedule B shows the FMRs for zero-bedroom through four-bedroom
units. 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-occupancy
(SRO) units are 0.75 times the zero-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 non-metropolitan county listings.
d. The New England towns and cities included in a
nonmetropolitan county are listed immediately following the county
name.
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[FR Doc. E8-13005 Filed 6-11-08; 8:45 am]
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