[Federal Register Volume 60, Number 208 (Friday, October 27, 1995)]
[Proposed Rules]
[Pages 54979-54981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26659]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
24 CFR Part 882
[Docket No. FR-3709-C-02]
RIN 2577-AB48
Section 8 Moderate Rehabilitation; Rent Adjustments; Annual and
Special Adjustments; Comparability Studies; Rent Reductions; Technical
Correction
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule; technical correction.
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SUMMARY: On October 2, 1995 (60 FR 51658), HUD published a proposed
rule that would revise the current regulations on adjusting Section 8
Moderate Rehabilitation Contract Rents. The rule proposed to modify the
method used by Public Housing Agencies (PHAs) to determine the amount
of the annual increase in the Contract Rents by providing for PHAs to
conduct comparability studies for Moderate Rehabilitation projects to
prevent the application of the Annual Adjustment Factors from resulting
in a material difference between rents charged for assisted units and
similar unassisted units.
The purpose of this document is to correct certain technical errors
that appeared in the October 2, 1995 proposed rule.
DATES: Comment Due Date: December 1, 1995.
[[Page 54980]]
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Rules Docket Clerk, Office of General
Counsel, room 10276, Department of Housing and Urban Development, 451
Seventh Street SW, Washington, DC 20410. Communications should refer to
the above docket number and title. Facsimile (FAX) comments are not
acceptable. A copy of each communication submitted will be available
for public inspection and copying during regular business hours.
FOR FURTHER INFORMATION CONTACT: Madeline Hastings, Rental Assistance
Division, Room 4226, Department of Housing and Urban Development, 451
Seventh Street SW, Washington, D.C. 20410; telephone (202) 708-2841
(voice) or (202) 708-4594 (TDD). (These are not toll free numbers.)
SUPPLEMENTARY INFORMATION: On October 2, 1995 (60 FR 51658), HUD
published a proposed rule that would revise the current regulations on
adjusting Section 8 Moderate Rehabilitation Contract Rents. The rule
proposed to modify the method used by Public Housing Agencies (PHAs) to
determine the amount of the annual increase in the Contract Rents by
providing for PHAs to conduct comparability studies for Moderate
Rehabilitation projects to prevent the application of the Annual
Adjustment Factors from resulting in a material difference between
rents charged for assisted units and similar unassisted units.
The proposed rule also provides a substitute method of determining
the initial difference between Moderate Rehabilitation rents and rents
charged for comparable unassisted units, if the PHA failed to establish
the amount of the difference when the initial Contract Rents were
determined. Additionally, the proposed rule provides, subject to the
availability of appropriations, for special adjustments when an
exemption from real property tax expires under certain circumstances,
and insurance to the categories of cost increases that may result in a
special adjustment.
The October 2, 1995 proposed rule would be applicable to all
projects which are currently, or will be in the future, under a Section
8 Moderate Rehabilitation Housing Assistance Payments (HAP) Contract,
as provided in the regular Section 8 Moderate Rehabilitation Program,
and the Section 8 Moderate Rehabilitation Single Room Occupancy (SRO)
Program for Homeless Individuals.
The purpose of this document is to correct certain technical errors
that appeared in the October 2, 1995 proposed rule.
Technical Corrections to October 2, 1995 Proposed Rule
Corrections to the Preamble. In the preamble to the proposed rule,
under the discussion in Section B on Comparability Studies, which
begins at the bottom of page 51658, HUD notes in the last paragraph of
this section (page 51659, first column) that: ``The rule also would
provide that Contract Rents will never be reduced as a result of a
comparability study.'' The word ``never'' also should have been
inserted in the last sentence of the first full paragraph, first column
of that page. The last sentence of the first paragraph should read:
``However, the Contract Rent would never be reduced below its current
level based upon the comparability study.''
In the second full paragraph of the first column on page 51659, a
phrase was inadvertently omitted from the first sentence pertaining to
monthly rehabilitation debt service. The first sentence should have
read as follows: ``A material difference between the assisted and
comparable unassisted rents exists if the adjusted base rent plus any
amount attributable to the monthly rehabilitation debt service is
greater than the maximum allowable Contract rent plus any amount
attributable to an initial difference.''
In the second sentence of that same second paragraph, the word
``contract'' rather than ``base'' should have been inserted in between
the words ``allowable'' and ``rent'' so that it reads as follows: ``The
maximum allowable Contract rent is a dollar amount equal to 105 percent
of the comparable rent.''
Corrections to Regulatory Text. Two corrections need to be made to
the text of the regulation, and both corrections involve substituting
the word ``contract'' for ``base.'' This correction needs to be made in
the last sentence of Sec. 882.410(b)(1) and in the last clause of
Sec. 882.410(c)(3).
Accordingly, the foregoing corrections are made by this document.
List of Subjects in 24 CFR Part 882
Grant programs--housing and community development, Homeless, Lead
poisoning, Manufactured homes, Rent subsidies, Reporting and
recordkeeping requirements.
Accordingly, FR Doc. 95-24368, Section 8 Moderate Rehabilitation;
Rent Adjustments; Annual and Special Adjustments; Comparability
Studies, Rent Reductions, Proposed Rule, published on October 2, 1995
at 60 FR 51658 is corrected as follows.
1. On page 51659, in the preamble, in column one, under item B.,
the last sentence of the first full paragraph beginning with ``Under
the proposed rule, when the application of the AAF to the base rent,* *
*'', and the second full paragraph, are corrected to read as follows:
B. Comparability Studies
* * * * *
Under the proposed rule, when the application of the AAF to the
base rent, * * *. However, the Contract Rent would never be reduced
below its current level based upon the comparability study.
A material difference between the assisted and comparable
unassisted rents exists if the adjusted base rent plus any amount
attributable to the monthly rehabilitation debt service is greater than
the maximum allowable Contract rent plus any amount attributable to an
initial difference. The maximum allowable Contract rent is a dollar
amount equal to 105 percent of the comparable rent.
* * * * *
2. On page 51661, in column one, in Sec. 882.410, paragraphs (b)(1)
and (c)(3) are corrected, to read as follows:
Sec. 882.410 Rent adjustments.
* * * * *
(b) Overall limitation. (1) Notwithstanding any other provisions of
this part, adjustments as provided in this section must not result in
material differences between the rents charged for assisted and
unassisted units of similar age, quality, and type in the same market
area, as determined by the PHA (and approved by HUD in the case of
adjustments under paragraph (d) of this section). A material difference
between the assisted and comparable unassisted rent is determined to
exist if the adjusted Contract rent is greater than the maximum
allowable Contract rent plus any difference which may have existed
initially. The maximum allowable Contract rent is a dollar amount equal
to 105 percent of the comparable rent.
* * * * *
(c) * * *
(3) If the Contract rent, adjusted by the AAF, plus the utility
allowance, is 110 percent or more of the current Existing Housing FMR
or if an exception rent limit (if granted for a geographical area in
accordance with Sec. 882.408(b)), the PHA will conduct a comparability
study to determine and approve an adjusted Contract rent that is not
materially different from rents charged for comparable unassisted
units.
* * * * *
[[Page 54981]]
Dated: October 20, 1995.
Kevin Emanual Marchman,
Deputy Assistant Secretary for Distressed and Troubled Housing
Recovery.
[FR Doc. 95-26659 Filed 10-26-95; 8:45 am]
BILLING CODE 4210-33-P