[Federal Register Volume 80, Number 173 (Tuesday, September 8, 2015)]
[Notices]
[Pages 53817-53886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22023]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5885-N-01]
Proposed Fair Market Rents for the Housing Choice Voucher
Program, Moderate Rehabilitation Single Room Occupancy Program and
Other Programs; Fiscal Year 2016
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Proposed Fiscal Year (FY) 2016 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.
The primary uses of FMRs are to determine payment standards for the
Housing Choice Voucher (HCV) program, to determine initial renewal
rents for some expiring project-based Section 8 contracts, to determine
initial rents for housing assistance payment contracts in the Moderate
Rehabilitation Single Room Occupancy program, and to serve as rent
ceilings for rental assistance units in the HOME Investment
Partnerships program. FMRs are used in the calculation of maximum award
amounts for Continuum of Care grantees and are also used in the
calculation of flat rents in Public Housing units. Today's notice
provides proposed FY 2016 FMRs for all areas that reflect the estimated
40th and 50th percentile rent levels trended to April 1, 2016. The FY
2016 FMRs are based on ``5-year'' data collected by the American
Community Survey (ACS) from 2009 through 2013. These data are updated
by one-year 2013 ACS data for areas where statistically valid one-year
ACS data is available. HUD continues to use ACS data in different ways
according to the statistical reliability of rent estimates. The
Consumer Price Index (CPI) rent and utility indexes are used to further
update the data to 2014. These values are then trended forward to FY
2016 using the annualized change in median gross rents as measured
across the most recent 5 years of available 1 year ACS data. While HUD
will continue to use this trend factor for the calculation of FY 2016
FMRs, the Department is considering replacing it with a forward-looking
forecast for the FY 2017 FMRs. For example, HUD is evaluating the use
of a model that would forecast national rent and utility CPI indices
based on economic assumptions used in the formulation of the
President's Budget. HUD seeks public comments on this or alternative
methodologies, as well as other data sources, for trending rent levels
forward.
The proposed FY 2016 FMRs in this notice incorporate a change in
the level of statistical reliability that is allowed for an ACS
estimate to be used in the calculation of FMRs. Previously, if the
error of the estimate was less than the estimate itself, HUD used the
estimate. The Proposed FMRs in this notice use ACS estimates where the
size of the error is limited to half of the estimate.
An additional change to the proposed FY 2016 FMRs is the
incorporation of the February 28, 2013, Office of Management and Budget
(OMB) metropolitan area definition update based on the 2010 Decennial
Census data. The 2013 ACS data are the first to use the new area
definitions in the compilation of the ACS data.
In a June 2, 2015 advanced notice of proposed rulemaking, HUD
solicited comments on several topics related to the calculation of
FMRs, including possible measures the Department is considering that
would reduce the concentration of Section 8 voucher tenants. For
example, HUD is evaluating alternatives to the current 50th percentile
FMR program, which was implemented to mitigate excessive geographic
concentration of voucher tenants. Comments were requested to determine
interest in a program that is based on different measures for
determining how many and which areas would receive special FMRs to
encourage deconcentration, as well as on alternative FMR-based tools
for promoting deconcentration, such as Small Area FMRs estimated at the
ZIP code level. The Department appreciates the comments provided and is
currently analyzing this input to inform the next steps in the
rulemaking process. For the FY 2016 FMRs, however, the current 50th
percentile FMR program is still in place with no change to existing
regulations.
DATES: Comment Due Date: October 8, 2015.
ADDRESSES: Interested persons are invited to submit comments regarding
the proposed FMRs to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 Seventh
Street SW., Room 10276, Washington, DC 20410-0001. Communications must
refer to the above docket number and title and should contain the
information specified in the ``Request for Comments'' section. There
are two methods for submitting public comments.
1. Submission of Comments by Mail. Comments may be submitted by
mail to
[[Page 53818]]
the Regulations Division, Office of General Counsel, Department of
Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500. Due to security measures at all federal
agencies, however, submission of comments by mail often results in
delayed delivery. To ensure timely receipt of comments, HUD recommends
that comments submitted by mail be submitted at least two weeks in
advance of the public comment deadline.
2. 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.
Note: To receive consideration as public comments, comments must be
submitted through one of the two methods specified above. Again, all
submissions must refer to the docket number and title of the notice.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications regarding this notice submitted to HUD will
be available 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). Individuals with speech or
hearing impairments may access this number through TTY by calling the
Federal Relay Service at 800-877-8339. 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 800-245-2691 or access the information
on the HUD USER Web site http://www.huduser.org/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 2016 FMR
documentation system at http://www.huduser.org/portal/datasets/fmr/fmrs/docsys.html&data=fmr16 and 50th percentile rents for all FMR areas
will be published at http://www.huduser.org/portal/datasets/50per.html
after publication of final FY 2016 FMRs.
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 may be addressed to Marie L. Lihn or
Peter B. Kahn of the Economic and Market Analysis Division, Office of
Economic Affairs, Office of Policy Development and Research at HUD
headquarters [451 7th Street SW., Room 8208, Washington, DC 20410];
telephone number 202-402-2409 (this is not a toll-free number), or they
may be reached at [email protected]. Persons with hearing or speech
impairments may access HUD numbers through TTY by calling the toll-free
Federal Relay Service at 800-877-8339.
Electronic Data Availability. This Federal Register notice will be
available electronically from the HUD User page at http://www.huduser.org/datasets/fmr.html. Federal Register notices also are
available electronically from https://www.federalregister.gov/, the
U.S. Government Printing Office Web site. Complete documentation of the
methodology and data used to compute each area's proposed FY 2016 FMRs
is available at http://www.huduser.org/portal/datasets/fmr/fmrs/docsys.html&data=fmr16. Proposed FY 2016 FMRs are available in a
variety of electronic formats at http://www.huduser.org/datasets/fmr.html. FMRs may be accessed in PDF format as well as in Microsoft
Excel. Small Area FMRs based on proposed FY 2016 Metropolitan Area
Rents are available in Microsoft Excel format at the same web address.
Please note that these Small Area FMRs are only applicable to the
public housing agencies (PHAs) participating in the Small Area FMR
demonstration. Small Area FMRs for non-demonstration areas are
available at: http://www.huduser.org/portal/datasets/fmr/smallarea/index.html.
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 HCV program, the FMR is the
basis for 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 is typically set at the 40th percentile of the
distribution of gross rents. In addition, all rents subsidized under
the HCV program must meet reasonable rent standards. HUD's regulations
at 24 CFR 888.113 permit the Department to establish 50th percentile
FMRs for certain areas.
II. Procedures for the Development of FMRs
Section 8(c)(1) of the USHA requires the Secretary of HUD to
publish FMRs periodically, but not less frequently than annually.
Section 8(c)(1) states, in part:
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 the market
area suitable for occupancy by persons assisted under 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. Minimally qualified areas \1\ are reviewed each year
[[Page 53819]]
unless not qualified to be reviewed. Areas are not qualified to be
reviewed if they have been made a 50th-percentile area within the last
three years or have lost 50th-percentile status for failure to
deconcentrate within the last three years.
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\1\ As defined in 24 CFR 888.113(c), a minimally qualified area
is an area with at least 100 census tracts where 70 percent or fewer
of the census tracts with at least 10 two bedroom rental units are
census tracts in which at least 30 percent of the two bedroom rental
units have gross rents at or below the two bedroom FMR set at the
40th percentile rent. This continues to be evaluated with 2000
Decennial Census information. In light of HUD's June 6, 2015
Advanced Notice of Proposed Rulemaking, HUD has chosen not to update
the area selection criteria with 2010 tract delineations in order to
ease the anticipated future implementation of a Small Area FMR based
deconcentration rule.
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In FY 2015 there were 16 areas using 50th-percentile FMRs. Of these
16 areas, 6 areas completed three years of program participation and
were evaluated. Only two of the 6 areas will continue as 50th-
percentile FMR areas; three of the remaining four areas do not show
measurable deconcentration over the three-year period, will not
continue as 50th-percentile FMR areas, and will not be evaluated for
three years. One area that was evaluated, the New Haven-Meriden, CT HUD
Metro FMR Area, graduated from the program and will be evaluated each
year. Housing authorities operating in these areas are encouraged to
review the rules at 24 CFR 982.503(f) to determine if they qualify for
continued use of the 50th percentile rents when setting their payment
standards. The table below lists the three areas that are not eligible
for 50th percentile FMRs until 2019.
FMR Areas That Failed To Deconcentrate and Year of Next Reevaluation
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Baltimore, MD MSA.............................................. 2019
Fort Lauderdale, FL HUD Metro FMR Area......................... 2019
Richmond, VA HUD Metro FMR Area................................ 2019
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The Washington, DC-VA-MD HUD Metro FMR Area returns as a 50th
percentile area after failing to deconcentrate in FY 2013. In summary,
there will be 13 50th-percentile FMR areas in FY 2016. These areas are
indicated by an asterisk in Schedule B, where all FMRs are listed by
state. The following table lists the FMR areas along with the year of
their next evaluation.
FY 2016 50th-Percentile FMR Areas and Year of Next Reevaluation
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Albuquerque, NM MSA............................................ 2018
Chicago-Joliet-Naperville, IL HUD Metro FMR Area............... 2018
Denver-Aurora-Broomfield, CO MSA............................... 2018
Hartford-West Hartford-East Hartford, CT HUD Metro FMR Area.... 2018
Honolulu, HI MSA............................................... 2018
Kansas City, MO-KS HUD Metro FMR Area.......................... 2018
Milwaukee-Waukesha-West Allis, WI MSA.......................... 2018
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA................ 2019
Riverside-San Bernardino-Ontario, CA MSA....................... 2018
Tacoma, WA HUD Metro FMR Area.................................. 2018
Virginia Beach-Norfolk-Newport News, VA-NC MSA................. 2018
Washington, DC-VA-MD HUD Metro FMR Area........................ 2019
West Palm Beach-Boca Raton, FL HUD Metro FMR Area.............. 2019
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III. FMR Methodology
This section provides a brief overview of how the FY 2016 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/portal/datasets/fmr/fmrs/docsys.html&data=fmr16.
The proposed FY 2016 FMRs are based on the updated metropolitan
area definitions published by OMB on February 28, 2013. Counties that
have been removed from metropolitan areas will be nonmetropolitan
counties. Counties that have been added to metropolitan areas will be
treated as metropolitan county subareas. They will receive rents based
on their own data if the local data is statistically reliable (with an
error that is less than one-half of the estimate) or receive the
metropolitan rent if their subarea estimate does not exist or is
statistically unreliable.\2\ New multi-county metropolitan areas will
be treated as individual county metropolitan subareas using county
based gross rent estimates (if statistically reliable); otherwise, a
metropolitan, area-wide gross rent estimate is used.
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\2\ The metropolitan subarea of Columbia, MD no longer exists.
This subarea, developed in the 1970s was based on data collected in
the field before the exception payment standard regulations were
developed. This level of geography cannot be continued as it does
not comport with any current subarea rules.
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A. Base Year Rents
The U.S. Census Bureau released standard tabulations of 5-year ACS
data collected between 2009 through 2013 in December of 2014. For
Proposed FY 2016 FMRs, HUD uses the 2009-2013 5-year ACS data to update
the base rents. HUD has updated base rents each year based on new 5-
year data since FY 2012, for which HUD used 2005-2009 ACS data. HUD is
also updating base rents for Puerto Rico FMRs using the 2009-2013
Puerto Rico Community Survey (PRCS); HUD first updated the Puerto Rico
base rents in FY 2014 based on 2007-2011 PRCS data collected through
the ACS program.
HUD historically based FMRs on gross rents for recent movers (those
who have moved into their current residence in the last 24 months).
However, due to the way Census constructs the 5-year ACS data, HUD
developed a new methodology for calculating recent-mover FMRs in FY
2012. As in FY 2012, HUD assigns all areas a base rent, which is the
two-bedroom standard quality 5-year gross rent estimate from the
ACS.\3\ Because HUD's regulations mandate that FMRs must be published
as recent mover gross rents, HUD continues to apply a recent mover
factor to the standard quality base rents assigned from the 5-year ACS
data. The calculation of the recent mover factor is described below.
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\3\ For areas with a two-bedroom standard quality gross rent
from the ACS that have a margin of error greater than 50 percent of
the estimate or no estimate due to inadequate sample in the 2009-
2013 5-year ACS, HUD uses the two-bedroom state non-metro area rent.
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B. Recent Mover Factor
Following the assignment of the standard quality two-bedroom rent
described above, HUD applies a recent mover factor to these rents. The
calculation of the recent mover factor for FY 2016 is similar to the
methodology HUD used in FY 2015, with the only difference being the use
of updated ACS data and the change to the statistical reliability
assessment of the ACS data. The following describes the process for
determining the appropriate recent mover factor.
In general, HUD uses the 1-year ACS-based two-bedroom recent mover
gross rent estimate from the smallest geographic area encompassing the
FMR area for which the estimate is statistically reliable to calculate
the recent mover factor.\4\ HUD calculates some areas' recent mover
factors using data collected just for the FMR area. However, HUD bases
other areas' recent mover factors on larger geographic areas if this is
necessary to obtain statistically reliable estimates. For metropolitan
areas that are subareas of larger metropolitan areas, the order is FMR
area, metropolitan area, aggregated metropolitan parts of the state,
and state. Metropolitan areas that are not divided follow a similar
path from FMR area, to aggregated metropolitan parts of the state, to
state. In nonmetropolitan areas HUD bases the recent mover factor on
the FMR area, the aggregated non-metropolitan parts of the state, or if
that
[[Page 53820]]
is not available, on the basis of the whole state. HUD calculates the
recent mover factor as the percentage change between the 5-year 2009-
2013 standard quality two-bedroom gross rent and the 1 year 2013 recent
mover two-bedroom gross rent for the recent mover factor area. HUD does
not allow recent mover factors to lower the standard quality base rent;
therefore, if the 5-year standard quality rent is larger than the
comparable 1-year recent mover rent, the recent mover factor is set to
1. The process for calculating each area's recent mover factor is
detailed in the FY 2016 Proposed FMR documentation system available at:
http://www.huduser.org/portal/datasets/fmr/fmrs/docsys.html&data=fmr16.
Applying the recent mover factor to the standard quality base rent
produces an ``as of'' 2013 recent mover two-bedroom base gross rent for
the FMR area.
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\4\ For the purpose of the recent mover factor calculation,
statistically reliable is where the recent mover gross rent has a
margin of error that is less than the estimate itself.
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C. Other Rent Survey Data
A base rent has also been calculated for the insular areas using
the 2010 decennial census of American Samoa, Guam, the Northern Mariana
Islands, and the Virgin Islands. This is the first time American Samoa
and the Northern Mariana Islands will have an FMR that is separate from
Guam. In addition St. Johns, VI will receive a separate FMR; previously
it was combined with St. Thomas. The 2010 rent data is updated to 2013
using the change in national ACS rents from 2010 to 2013.\5\
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\5\ The ACS is not conducted in the Pacific Islands (Guam,
Northern Marianas and American Samoa) or the U.S. Virgin Islands. As
part of the 2010 Decennial Census, the Census Bureau conducted
``long-form'' sample surveys for these areas. The results gathered
by this long form survey have been incorporated into the FY 2016
FMRs.
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HUD does not use the ACS as the base rent or recent mover factor
for eight areas where the FY 2016 FMR was adjusted based on survey data
collected in 2012 for Hood River County, OR, Mountrail County, ND, Ward
County, ND, and Williams County, ND and data collected from PHAs in
2014 for Bennington County, VT, Windham County, VT, Windsor County, VT,
and Seattle, WA. HUD has not allocated funds to conduct surveys of FMR
areas, and so future surveys must be paid for by the PHAs.
D. Updates From 2013 to 2014 and Forecast to April 2016
HUD updates the ACS-based ``as of'' 2013 rent through the end of
2014 using the annual change in CPI from 2013 to 2014. As in previous
years, HUD uses local CPI data coupled with Consumer Expenditure Survey
(CEX) data for FMR areas with at least 75 percent of their population
within Class A metropolitan areas covered by local CPI data. HUD uses
Census region CPI data for FMR areas in Class B and C size metropolitan
areas and nonmetropolitan areas without local CPI update factors.
Additionally, HUD is using CPI data collected locally in Puerto Rico as
the basis for CPI adjustments from 2013 to 2014 for all Puerto Rico FMR
areas. Following the application of the appropriate CPI update factor,
HUD trends the estimate from 2014 to the middle of FY 2016. As in FY
2015, HUD continues to calculate the trend factor as the annualized
change in median gross rents as measured across the most recent 5 years
of available 1 year ACS data. The national median gross rent in 2008
was $824 and $905 in 2013. The overall change between 2008 and 2013 is
1.098 percent and the annualized change is 1.0189 percent. This annual
trend factor is applied from the middle of 2014 (the mid-point of the
annual 2014 CPI update) to the middle of FY 2016, or for a period of
seven quarters. The trend factor for the seven quarter period is 1.0334
percent.
E. Puerto Rico Utility Adjustments
The gross rent data from the 2009 to 2013 Puerto Rico Community
Survey (PRCS) coupled with the CPI data measured across Puerto Rico
includes the utility rate increases from Commonwealth-owned utility
companies that gave each FMR area in Puerto Rico an adjustment in both
FY 2014 and FY 2015. The FY 2016 FMRs no longer include the utility
adjustment; any changes in the Puerto Rico energy tariffs have been in
effect long enough to be included in the Puerto Rico CPI.
G. Bedroom Rent Adjustments
HUD calculates the primary FMR estimates for two-bedroom units.
This is generally the most common sized rental unit and, therefore, the
most reliable to survey and analyze. Formerly, after each Decennial
Census, HUD calculated rent relationships between two-bedroom units and
other unit bedroom counts and used them to set FMRs for other units.
HUD did this because it is much easier to update two-bedroom estimates
and to use pre-established cost relationships with other unit bedroom
counts than it is to develop independent FMR estimates for each unit
bedroom count. When calculating FY 2013 FMRs, HUD updated the bedroom
ratio adjustment factors using 2006-2010 5-year ACS data. The bedroom
ratio methodology used in this update was the same methodology that was
used when calculating bedroom ratios using 2000 Census data. The
bedroom ratios HUD used in the calculation of FY 2016 FMRs have been
updated using average data from three five-year data series (2007-2011,
2008-2012, and 2009-2013).
HUD establishes bedroom interval ranges based on an analysis of the
range of such intervals for all areas with large enough samples to
permit accurate bedroom ratio determinations. These ranges are:
Efficiency FMRs are constrained to fall between 0.59 and 0.81 of the
two-bedroom FMR; one-bedroom FMRs must be between 0.74 and 0.84 of the
two-bedroom FMR; three-bedroom FMRs must be between 1.15 and 1.36 of
the two-bedroom FMR; and four-bedroom FMRs must be between 1.24 and
1.64 of the two-bedroom FMR. (The maximums for the three-bedroom and
four-bedroom FMRs are irrespective of the adjustments discussed in the
next paragraph.) HUD adjusts bedroom rents for a given FMR area if the
differentials between bedroom-size FMRs were inconsistent with normally
observed patterns (i.e., efficiency rents are not allowed to be higher
than one-bedroom rents and four-bedroom rents are not allowed to be
lower than three-bedroom rents). The bedroom ratios for Puerto Rico
follow these constraints.
HUD further adjusts the rents for three-bedroom and larger units to
reflect HUD's policy to set higher rents for these units. 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 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 or
statistically insignificant data for any two of the three 5-year ACS
standard quality rents series used in the average, HUD uses state non-
metropolitan data to determine bedroom ratios for each unit bedroom
count. HUD made this adjustment to protect against unrealistically high
or low FMRs due to insufficient sample sizes.
[[Page 53821]]
IV. Manufactured Home Space Surveys
The FMR used to establish payment standard amounts for the rental
of manufactured home spaces in the HCV 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
2015 were updated to FY 2016 using the same data used to estimate the
HCV program FMRs. If the result of this computation was higher than 40
percent of the new 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.
V. Small Area Fair Market Rents
Public housing authorities (PHA) in the Dallas, TX HUD Metro FMR
Area (HMFA), along with the Housing Authority of the County of Cook
(IL), the City of Long Beach (CA) Housing Authority, the Chattanooga,
TN Housing Authority, the Town of Mamaroneck (NY) Housing Authority,
and the Laredo, TX Housing Authority continue to be the only PHAs
managing their voucher programs using Small Area Fair Market Rents
(SAFMRs). These FMRs are listed in the Schedule B addendum.
SAFMRs are calculated using a rent ratio determined by dividing the
median gross rent across all bedrooms for the small area (a ZIP code)
by the similar median gross rent for the metropolitan area of the ZIP
code. This rent ratio is multiplied by the current two- bedroom rent
for the entire metropolitan area containing the small area to generate
the current year two-bedroom rent for the small area. In small areas
where the median gross rent is not statistically reliable, HUD
substitutes the median gross rent for the county containing the ZIP
code in the numerator of the rent ratio calculation. HUD has been
criticized for continuing to use 2010 5-year ACS data as the basis for
the Small Area FMR rent ratios, instead of updating these each year.
HUD kept the rent ratios based on 2006-2010 5-year ACS data in order to
provide stability in the Small Area FMRs and proposed only updating
these ratios with the 2011-2015 ACS 5-year data, when all the
underlying survey data would have been replaced. However, HUD's current
experience with 5-year data for small areas reveals that this may
create a greater disruption to Small Area FMRs than if HUD adjusted the
ratios annually by applying a smoothing technique such as averaging of
several years of 5-year ACS data. By implementing a rolling-average
Small Area FMR rent ratio calculation, the Department believes more
current data could be used without introducing excessive year-to-year
variability in Small Area FMR rent ratios due to sampling variance.
Therefore, for proposed FY 2016 SAFMRs, HUD has updated the rent ratios
to use an average of the rent ratios calculated from the 2007-2011,
2008-2012, and 2009-2013 5-year ACS estimates.
VI. Request for Public Comments
HUD seeks public comments on the methodology used to calculate FY
2016 Proposed FMRs including Small Area FMRS, and the FMR levels for
specific areas. Due to its current funding levels, HUD no longer has
sufficient resources to conduct local surveys of rents to address
comments filed regarding the FMR levels for specific areas. Commenters
submitting comments on FMR levels must include sufficient information
(including local data and a full description of the rental housing
survey methodology used or a description of the methodology intended to
be used to collect the necessary data) to justify any proposed changes.
Questions on how to conduct FMR surveys may be addressed to Marie L.
Lihn or Peter B. Kahn of the Economic and Market Analysis Division,
Office of Economic Affairs, Office of Policy Development and Research
at HUD headquarters [451 7th Street SW., Room 8208, Washington, DC
20410]; telephone number 202-402-2409, or they may be reached at [email protected].
For small metropolitan areas without one-year ACS data and
nonmetropolitan counties, HUD has developed a methodology using mail
surveys that is discussed on the bottom of the FMR Web page: http://www.huduser.org/portal/datasets/fmr.html. This methodology allows for
the collection of as few as 100 one-bedroom, two-bedroom and three-
bedroom recent mover (tenants that moved in last 24 months) units.
While HUD has not developed a specific methodology for mail surveys
in areas with 1-year ACS data, HUD would apply the standard established
for Random-Digit Dialing (RDD) telephone rent surveys. The statistical
difference of these survey results will be compared with the current
FMR which means that the survey confidence interval must be outside the
FMR. The survey should collect results based on 200 one-bedroom and
two-bedroom eligible recent mover units to provide a small enough
confidence interval for significant results in large market mail
surveys. Areas with statistically reliable 1-year ACS data are not
considered to be good candidates for local surveys due to the size and
completeness of the ACS process.
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 of the entire FMR area.
In general, recommendations for FMR changes and supporting data must
reflect the rent levels that exist within the entire FMR area and
should be statistically reliable.
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
may 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
statistically different from the combined rent level.
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 2008-2012 5-year ACS data
should be used as a means of verifying if a sample is representative of
the FMR area's rental housing stock.
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.
The Department has developed guidance on how to provide data-
supported comments on Small Area FMRs using HUD's special tabulations
of the distribution of gross rents by bedroom unit size for ZIP Code
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Tabulation Areas. This guidance is available at http://www.huduser.org/portal/datasets/fmr.html in the Proposed FY 2016 FMR section and should
be used by interested parties in commenting on whether or not the level
of Proposed Small Area FMRs are too high or too low (i.e. Proposed
Small Area FMRs that are larger than the gross rent necessary to make
40 percent of the units accessible for an individual zip code or that
are smaller than the gross rent necessary to make 40 percent of the
units accessible for a given zip code).
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.
As stated earlier in this notice, HUD is required to use the most
recent data available when calculating FMRs. Therefore, in order to re-
evaluate an area's FMR, HUD requires more current rental market data
than the 2013 ACS. HUD encourages a PHA or other interested party that
believes the FMR in their area is incorrect to file a comment even if
they do not have the resources to provide market-wide rental data. In
these instances, HUD will use the comments, should survey funding be
restored, when determining the areas HUD will select for HUD-funded
local area rent surveys.
VII. Environmental Impact
This Notice involves the establishment of fair market rent
schedules, which do 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).
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: August 31, 2015.
Katherine M. O'Regan,
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--Most 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 the metropolitan Core-Based Statistical Areas
(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 2016 proposed FMRs incorporates the OMB
definitions of metropolitan areas based on the CBSA standards as
implemented with 2000 Census data and updated by the 2010 Census in
February 23, 2013. The adjustments made to the 2000 definitions to
separate subparts of these areas where FMRs or median incomes would
otherwise change significantly are continued. To follow HUDs policy of
providing FMRs at the smallest possible area of geography, no counties
were added to existing metropolitan areas. All counties added to
metropolitan areas will still be treated as separate counties. New
multicounty metropolitan areas are not subdivided. All metropolitan
areas that have at least one subarea will also receive a subarea, that
is the rents from a county that is a subarea will not be used for the
remaining metropolitan subarea rent determination.
The specific counties and New England towns and cities within each
state in MSAs and HMFAs were not changed by the February 28, 2013 OMB
metropolitan area definitions. These areas are listed in Schedule B.
2. Unit Bedroom Count Adjustments
Schedule B shows the FMRs for zero-bedroom through four-bedroom
units. The Schedule B addendum shows Small Area FMRs for all PHAs
operating using Small Area FMRs (please see section V of this notice
for a list of participating PHAs). 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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Schedule D--FY 2016 Exception Fair Market Rents for Manufactured Home
Spaces in the Section 8 Housing Choice Voucher Program
------------------------------------------------------------------------
State Area name Space rent
------------------------------------------------------------------------
California.................. Los Angeles-Long Beach, $714
CA HUD Metro FMR Area.
Santa Anna-Anaheim- 867
Irvine, CA HMFA.
Riverside-San 565
Bernardino-Ontario, CA
MSA*.
San Diego-Carlsbad-San 859
Marcos, CA MSA.
Santa Rosa-Petaluma, CA 814
MSA.
Vallejo-Fairfield, CA 655
MSA.
Maryland.................... California-Lexington 536
Park, MD MSA.
Oregon...................... Bend, OR MSA........... 371
Salem, OR MSA.......... 548
Pennsylvania................ Gettysburg, PA MSA..... 589
Washington.................. Olympia, WA MSA........ 659
Seattle-Bellevue, WA 728
HMFA.
West Virginia............... Logan County........... 485
McDowell County........ 485
Mercer County.......... 485
Mingo County........... 485
Wyoming County......... 485
------------------------------------------------------------------------
* 50th percentile FMR area.
[FR Doc. 2015-22023 Filed 9-4-15; 8:45 am]
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