Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 12985 

records will be matched to determine 

whether they are delinquent or in 

default on a federal debt. HUD and VA 

will also publish notices concerning 

routine use disclosures in the Federal 

Register to inform individuals that a 

computer match may be performed to 

determine a loan applicant’s credit 

status with the federal government. 

Categories of Records/Individuals 

Involved: The debtor records include 

these data elements: SSN, claim 

number, program code, and indication 

of indebtedness. Categories of records 

include: Records of claims and defaults, 

repayment agreements, credit reports, 

financial statements, and records of 

foreclosures. Categories of individuals 

include: Former mortgagors and 

purchasers of HUD-owned and home 

improvement loan debtors who are 

delinquent or default on their loans or 

who have had their partial claim 

subordinate mortgage called due and 

payable and it has not been repaid in 

full. 

Period of the Match: Matching is 

expected to begin at least 40 days from 

the date copies of the signed (by both 

HUD and VA’s Data Integrity Boards) 

computer matching agreement are sent 

to both Houses of Congress or at least 30 

days from the date this notice is 

published in the Federal Register, 

which ever is later, providing no 

comments are received which would 

result in a contrary determination. The 

matching program will be in effect and 

continue for 18 months with an option 

to renew the agreement for 12 additional 

months unless one of the parties to the 

agreement advises the other in writing 

to terminate or modify the agreement. 

Dated: February 28, 2011. 

Kevin R. Cooke, 

Deputy Chief Information Officer. 

[FR Doc. 2011–5265 Filed 3–8–11; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5466–N–01] 

Request for Comments on Trend 

Factor Methodology Used in the 

Calculation of Fair Market Rents 

AGENCY: Office of the Assistant 

Secretary for Policy Development and 

Research, HUD. 

ACTION: Request for Public Comments on 

the methodology used to calculate the 

trend factor component of the Fair 

Market Rent estimates. 

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, 

for effect on October 1 of each year. 

Today’s notice requests public comment 

regarding the manner in which HUD 

calculates the trend factor used in the 

Fair Market Rent (FMR) estimates to 

meet the statutory requirement that 

FMRs be ‘‘trended so the rentals will be 

current for the year to which they 

apply’’. HUD provides several proposed 

alternatives to the current trend factor 

and requests comments on these 

alternatives as well as suggestions of 

other ideas. 

DATES: Comment Due Date: April 8, 

2011. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

HUD’s alternative proposals for trending 

FMRs and/or other ideas for trending 

FMRs, 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 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 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street, SW., Room 10276, 

Washington, DC 20410–0500. 

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 the 

instructions provided on that site to 

submit comments electronically. 

No Facsimile Comments. Facsimile 

(FAX) comments are not acceptable. 

Public Inspection of Public 

Comments. All properly submitted 

comments and communications 

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 

Information 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 current 

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 Web site http:// 

www.huduser.org/portal/datasets/ 

fmr.html. Also at this Web address, 

HUD maintains detailed on-line 

documentation systems that catalog 

each step in the calculation of FMRs for 

any area of the country selected by the 

user. 

Electronic Data Availability: This 

Federal Register notice is available 

electronically from the HUD User page 

at http://www.huduser.org/datasets/ 

fmr.html. Federal Register notices also 

are available electronically from http:// 

www.gpoaccess.gov/fr/index.html, the 

U.S. Government Printing Office Web 

site. 

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 (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. In addition, all 

rents subsidized under the HCV 

program must meet reasonable rent 

standards. 

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 


Emcdonald on DSK2BSOYB1PROD with NOTICES
12986 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 

1This timeline represents the general 

methodology used in the calculation of FMRs from 

FY 2009 through FY 2011. 

2The change is considered statistically significant 

if Z > 1.645 where Z equals the Difference between 

the new and old rent estimate (EST1-EST2) divided 

by the square root of the difference of the standard 

error of the estimates [SQRT(SE1-SE2)]. 

3The recent mover estimate from the three year 

data includes all those who moved in the most 

recent 24 month period. The 3-year data used for 

FY 2011 FMRs is 2006–2008. That means that no 

2006 survey data are included in this ‘‘three-year’’ 

recent mover classification and the likelihood of 

having a valid (with 200 or more sample cases) 

three-year recent mover rent is lower for these 

estimates. 

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. (emphasis added) 

Equivalent language is repeated in 

HUD’s regulations at 24 CFR part 888, 

which also 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 for effect at the beginning of the 

fiscal year. (See 24 CFR 888.115.) 

The part of the statute that was 

emphasized is the basis for the 

application of a trend factor that 

establishes FMRs at the midpoint of the 

fiscal year, or to the following April. 

Because Consumer Price Index (CPI) 

data series for rent and utilities are used 

to update FMRs to the end of previous 

calendar year, the FMRs are trended 

forward 15 months. For example, the FY 

2011 FMRs (75 FR 61254), were 

published for effect October 1, 2010, use 

2009 annual CPI data for rent (rent of 

primary residence) and utilities (fuels 

and utilities). This CPI data brought the 

FMRs to the end of 2009. HUD trended 

the FY 2011 FMRs from 2009 year end 

to April 2011 (15 months) using an 

annual growth rate of 3.0 percent as the 

trend factor, applied over the 15-month 

period. This trend factor represents the 

average annual rate of growth in gross 

rents between 1990 and 2000, as 

measured by the decennial censuses. 

Prior to the application of the 2000 

census data in the FMR estimation 

process (FY 2005 FMRs), HUD used a 

trend factor of 2.98 percent based on the 

average annual rate of growth in gross 

rent between 1980 and 1990, as 

measured by these decennial censuses. 

II. FMR Estimation Methodology 

This section provides a brief overview 

of how current FMRs are estimated. 

Documentation systems which 

completely describe the calculation 

processes are available for FMRs from 

FY 2005 through FY 2011 at http:// 

www.huduser.org/portal/datasets/ 

fmr.html. A timeline of the FMR 

estimation process is shown below: 1

1. Begin with Final 2–Bedroom FMR 

for Current Fiscal Year. 

2. Remove Trending and CPI Updates 

from this 2 Bedroom FMR, (do not 

remove ACS Update). 

3. Determine Current Year ACS 

Update Factor and Apply to Value in 

Step 2. 

4. Apply CPI Update Factor to Value 

in Step 3. 

5. Apply National Historical Trend 

Factor for 15 months (to the Midpoint 

of the publication Fiscal Year). 

A. Base Year Data 

FMRs start with base rents estimated 

with Census 2000 long form survey 

data. The American Community Survey 

(ACS) replaces the decennial long-form 

survey, but with less data collected over 

a longer period of time. Since FY 2008, 

FMR base rents are updated using the 

most recent ACS data available for an 

area. In large metropolitan areas the 

2000 base rents may be replaced rather 

than updated with rents from the ACS. 

Random digit dialing (RDD) surveys 

may also be used to replace 2000 base 

rents. ACS and RDD rents are compared 

with the previous year’s FMR updated 

to the time of survey. If the survey data 

(from either the ACS or an RDD) is 

statistically different from the updated 

rent, the survey data becomes the base 

year rent. 

B. Application of ACS Data 

HUD applies ACS survey data 

according to the type of area (core-based 

statistical area (CBSA), metropolitan 

subarea, or nonmetropolitan county), 

the amount of survey data available, and 

the reliability of the survey estimates. 

HUD uses both one- and three-year ACS 

tabulations to update rents. Beginning 

with the FY 2012 FMRs HUD will 

incorporate the use of five-year ACS 

data. All areas are updated with the 

annual change in state or metropolitan 

one-year standard quality median rents. 

HUD tests these rent changes for 

statistical significance 2 before applying 

them to the appropriate base rent. Any 

state- or metropolitan-level change that 

is not statistically significant is not 

applied. HUD applies this test as a 

means to minimize fluctuations in rents 

due to survey error. 

HUD uses metropolitan-level rent 

changes for CBSA areas and subareas 

that have more than 200 standard 

quality sample cases in 2007 and 2008. 

All other areas are updated with statelevel rent changes. For subareas, State 

and CBSA change factors continue to be 

selected based on which factor brings 

the subarea rent closer to the CBSAwide rent. HUD updates subareas that 

have 200 or more local standard quality 

survey observations with their local area 

update factor. 

After all areas have been updated 

with a standard quality median rent 

change, HUD further evaluates local 

areas with estimates that reflect more 

than 200 one-year recent mover cases. If 

the updated rent is outside the 

confidence interval of the ACS recent 

mover estimate, HUD replaces the 

updated rent with the ACS recent mover 

rent estimate. In areas without 200 or 

more one-year ACS recent mover 

observations, but with 200 or more 

three-year ACS recent mover 

observations, HUD uses the three year 

estimate 3 if it is statistically different 

from the updated rent based on the 

standard quality median rent change. 

This process provides a June rent 

estimate. 

C. Application of CPI 

As described above, HUD uses ACS 

data to update the rents from June of the 

previous year to June of the year of the 

ACS data. In the FY 2011 FMRs, 2008 

ACS data bring the FMRs forward 12 

months from June 2007 to June 2008. 

HUD uses half of the 2008 (the 2007 to 

2008) and all of the 2009 (the 2008 to 

2009) change in CPI rent and utilities 

price index data to update the June 2008 

rents to the end of 2009. HUD uses 

Local CPI data for FMR areas with at 

least 75 percent of their population 

within Class A metropolitan areas 

covered by local CPI data. HUD uses CPI 

data by Census regions to calculate 

update factors for FMR areas in Class B 

and C size metropolitan areas and 

nonmetropolitan areas without local CPI 

information. 

D. Application of Trend Factor 

The national 1990 to 2000 average 

annual rent increase trend of 3 percent 

is applied to end-of-2009 rents for 15 

months, to the midpoint of the FY 2011 

FMRs, or April 2011. 

The documentation system that 

provides area-specific data and 

computations used to calculate 

proposed FY 2011 FMRs and FMR area 

definitions can be found at http:// 

www.huduser.org/portal/datasets/ 

fmr.html. 


Emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 12987 

III. FMR Trend Factor Issues 

In an effort to balance programmatic 

needs with the desire to have FMRs be 

an accurate estimate of current market 

conditions, the following section 

discusses potential issues with the 

calculation of the trend factor used in 

the estimation process. The section 

poses questions that readers may choose 

to address in their comments. 

Constant Trend Factor. HUD has 

historically used a trend factor based on 

the average annual growth in gross rents 

between the decennial censuses. This 

trend factor is a constant derived from 

the measured growth in gross rents over 

a ten-year period. The growth rate of 

gross rents measured in this way was 

little changed at about 3 percent over 

the two decades of the 1980s and 1990s. 

While early indications from the ACS 

suggest that a 10-year average growth 

rate for gross rents between the 2000 

Census and the 2010 one-year ACS is 

likely again to be close to 3 percent, the 

comparison between these two surveys 

is not valid; the surveys have a 

significant difference in area coverage 

and error. HUD cannot update the 

current trend factor using the growth 

rate between the 2000 and 2010 

censuses; the 2010 census does not 

provide a gross rent value. The ACS was 

not fully implemented until 2005, so the 

2000 ACS test data is not fully 

comparable to survey results from 2005 

and later. Is this a valid concern, or is 

the gross rent data at the national level 

good enough to allow such comparisons 

from 2000 test data or 2000 Census 

data? Should a growth rate be calculated 

over a fixed ten-year period, or with the 

ACS data available annually should the 

timeframe be allowed to ‘‘roll’’ over the 

most recent years of available data? 

Should the period be reduced to five 

fixed or rolling years, or an even shorter 

period? Both the shortening of the reestimation period and the use of rolling 

years add variation to the trend factor. 

A more basic issue is whether HUD 

should continue to use a constant factor, 

based on a standard historical time 

period (e.g., five or ten years). Is a 

constant factor, that does not contribute 

additional variation to the FMR 

estimates from year to year, desirable or 

should the trend factor be adjusted 

annually as market conditions change? 

Which is of more importance for a trend 

factor, to not affect the FMR estimation, 

or to move the FMR closer to current 

market conditions? 

Contemporaneous Trend Factor. A 

different approach to trending FMRs 

would use the most current data 

available as a projection. Based on 

HUD’s experience and analysis of 

factors affecting affordable housing 

gross rents, a contemporaneous trend 

factor would be CPI (for rent and 

utilities) based. The CPI-based trend 

would make use of more current data 

that is available on a national, rather 

than local level. For example, monthly 

CPI data for all urban consumers is 

available nationally (as the U.S. City 

Average) or for the four Census regions 

(Northeast, Midwest, South and West), 

with a 6-week lag. The same trend factor 

based on the CPI for U.S. City Average 

could be applied to all areas, or the four 

regional factors CPI factors could be 

applied. The same rent and utility CPI 

data that is used on an area basis could 

be extended on a national basis, to 

provide more current data, or the CPI 

covering all products and services could 

be used (to prevent double counting of 

the rent and utility data and/or to 

provide the leading impact of other 

price changes). 

HUD envisions several ways recent 

CPI data could be used to develop a 

trend factor. The Bureau of Labor 

Statistics (BLS) advocates calculating 

annual changes by showing the change 

from April of one year to April of the 

following year to eliminate seasonality 

issues. HUD would then apply this 

newly created index to the end of the 

FMR estimate, which is the previous 

year, to the midpoint of the next fiscal 

year, or 15 months. Under this 

approach, the FMR estimation process 

would include a double counting of CPI 

data. CPI data on an area basis (for most 

metropolitan areas) is used to bring the 

ACS-updated FMR to the end of the 

previous year, or 2009 in the case of the 

FY 2011 FMRs. The trend factor would 

be developed using April 2010 CPI data 

(nationally) over April 2009, but all of 

2009 CPI data is already included in the 

FMR. Is this a concern? Should HUD 

calculate an index showing the change 

from December of the previous year to 

April of the current year (to use the 

most current data available without 

double counting any data already used), 

and apply it to the CPI-updated FMR?. 

Even though this second construct 

would not cover an entire 12 months, 

HUD would likely use the change as an 

annual change carrying the FMR 

forward to April of the next year. 

Timeframe Considerations. As noted 

earlier, current practices and legislative 

constraints drive the publication and 

application of FMRs. HUD is required to 

publish FMRs in the Federal Register, 

both for comment, and in final form to 

be effective October 1st, the start of the 

fiscal year. FMRs shall be based on the 

most recent available data trended for 

the year to which they apply, which 

HUD interprets as the midpoint of the 

fiscal year or April. Given these 

constraints, April CPI data, available by 

mid-May, is the most recent that could 

possibly be used for FMR estimation. 

This data is not available by CPI area, 

except for the three largest metropolitan 

areas, New York City, Los Angeles, and 

Chicago. The remaining 24 large 

metropolitan areas have data collected 

bimonthly or semiannually. April CPI 

data could be incorporated into the FMR 

estimation process with the publication 

of a Federal Register notice of proposed 

FMRs likely in early July, providing six 

weeks to prepare the FMR and review 

them for publication; however, this is a 

shorter time period than normal and 

assumes no delays. Recently, HUD has 

published proposed FMRs as late as late 

as August, but many commenters have 

rightly complained that the limited time 

was not sufficient for them to provide 

analysis of the new FMRs, so a July 

publication date, becomes the earliest 

possible for incorporation of 

contemporaneous CPI data while also 

providing the most time possible for 

comments. 

Historically, HUD published proposed 

FMRs for comment in April or May; 

however, HUD could only incorporate 

CPI data through February (only two 

additional months of data) to publish by 

early May, assuming the availability of 

other data sources such as the ACS. 

HUD could update the final FMR 

calculations to include more recent CPI 

data relative to what was available for 

the proposed FMRs. Following such a 

procedure could potentially render the 

proposed FMR publication and public 

comment meaningless however, as 

virtually all FMRs could be expected to 

change between the proposed and final 

FMRs when new CPI data are 

introduced. 

Reduce Constraints Through 

Legislative Changes. As an alternative to 

making changes to the way a trend 

factor is calculated and applied, or in 

addition to, HUD could seek legislative 

changes that reduce the time period 

over which a trend factor is applied, or 

eliminate the need for a trend factor 

altogether. One possible avenue is to 

eliminate the requirement that HUD 

publish proposed FMRs for public 

comment. If HUD did not have to 

publish proposed FMRs in the Federal 

Register for comment, then more 

current data could be used in the final 

FMR estimation process. As currently 

proposed for HUD’s FY 2012 budget, 

FMRs shall no longer be published in 

proposed form for comment. The 

proposed legislation establishes a 

separate procedure that allows 

interested parties to comment on FMRs 

and request reevaluation of FMRs in 


Emcdonald on DSK2BSOYB1PROD with NOTICES
12988 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 

their jurisdiction. FMRs would only be 

required to be published annually with 

an effective date no earlier than 30 days 

after publication. The FMRs would be 

published on the internet with notice of 

the publication in the Federal Register. 

These proposed changes eliminate the 

October 1 deadline for making FMRs 

effective. Interested parties would be 

provided an opportunity to comment on 

FMRs, and all comments will be 

addressed by subsequent Federal 

Register notices, including any 

proposed material changes in 

methodology. 

The annual CPI data currently used in 

the FMR estimation process could allow 

publication of FMRs in April, effective 

in May or June. Similarly, half-yearly 

CPI data that is available for all the areas 

in the annual CPI data is released in 

mid-August. This data could be used to 

calculate local and regional factors 

which would update FMRs to June of 

the current year, providing an 

additional six months of update than 

the current process. The FMRs would 

then be trended to the midpoint of the 

fiscal year; the trend factor would be 

applied for a nine-month period instead 

of the current 15-month period for the 

trend factor. If HUD set FMRs at a level 

equal to the beginning of the fiscal year 

(October) instead of the mid-point of the 

fiscal year (April), only a three-month 

trend factor would be applied. Lastly, 

HUD could set the FMR equal to the 

date of the latest available data, thereby 

eliminating the required use of a trend 

factor; this would also require a Federal 

Register notice seeking comments on 

this change. 

IV. Possible Effects on FMRs of 

Alternative Trend Factors 

Currently HUD uses a constant trend 

factor that will be too low in markets 

where rents are increasing and too high 

for sluggish markets. This trend factor is 

based on historical data at the national 

level and does not attempt to reflect 

current market conditions. HUD 

developed the current trend factor 

methodology to minimize the impact on 

annual changes in FMRs. This notice 

outlines the consideration of using the 

trend factor to continue the annual 

adjustment of the FMR in markets with 

different movements in rents. Formerly, 

HUD conducted about 50 area-wide 

surveys to provide the most current data 

and improve the estimation of FMRs 

annually. Due to several factors, the 

expense of these surveys has limited 

this number conducted to at most 5 per 

year. Other data must be evaluated to 

improve the estimation of FMRs on an 

annual basis. Therefore, HUD is 

evaluating the calculation and timing of 

the application of the trend factor. 

Comments concerning the departure to 

a trend factor that is adjusted annually, 

based on the most current market data 

available and how to do so is what is 

being addressed in this notice. 

Below are some alternatives to the 

current national trend factor that have 

been reviewed by HUD: 

1. Use the most recent year’s data 

from the overall CPI to calculate a trend 

factor; 

2. Use the most recent year’s data 

from CPI-rent and utilities to calculate 

a trend factor; 

3. Use proprietary data covering rental 

markets (like REIS Reports, Inc.) to 

calculate a trend factor; 

4. Assuming the legislative changes as 

proposed in the FY 2012 HUD budget, 

(and assuming that HUD trends to the 

midpoint of the fiscal year), and using 

CPI rent and utility data through the 

first half of the year to calculate the 

trend factor (by region and local area), 

apply the trend factor for nine months 

to April. These FMRs could be effective 

between October and December; 

5. Assuming the legislative changes as 

proposed in the FY 2012 HUD budget 

(and assuming that HUD trends only to 

the beginning of the fiscal year), and 

using CPI rent and utility data through 

the first half of the year to calculate the 

trend factor (by region and local area), 

apply the trend factor for three months 

to the start of the fiscal year. These 

FMRs could be effective between 

October and December; and 

6. Assuming the legislative changes as 

proposed in the FY 2012 HUD budget 

and HUD eliminates trending for the 

FMRS, the half-yearly CPI rent and 

utility data would provide the most 

recent update to the FMRs. There would 

be no trending and FMRs would 

effectively represent mid-year rent for 

the year they are published. But they 

would be published (effective) at the 

end of the year, between October and 

December. 

Except for the third alternative (use of 

proprietary data), all of the alternatives 

HUD has examined rely on some use of 

CPI data to develop a new trend factor. 

The third alternative would rely on the 

use of private sector rent surveys that 

generally focus on rents in large 

apartment complexes; in turn, these 

large apartment complexes typically 

comprise 20 percent or less of most 

rental markets. HUD investigated data 

provided by REIS and similar sources as 

a means of updating FMRs, but have 

found these sources to be surprisingly 

uncorrelated with broader measures of 

rent over time such as the decennial 

census, and the American Housing 

Survey; therefore, HUD does not want to 

incorporate this type of information 

because it will not improve the FMR 

estimation process. In addition, the 

geographic limitations of these data 

sources further limit its use in the FMR 

estimation process. Nonmetropolitan 

areas and smaller metropolitan areas 

typically have no coverage in these data 

sources. Finally, these proprietary data 

have disclosure restrictions that may 

prevent HUD from fully documenting 

individual FMR calculations. HUD is 

required to provide as much 

transparency as possible in the FMR 

estimation process, especially after a 

2004 study by the Government 

Accountability Office, and HUD does 

not want to reduce its efforts by using 

a data source that cannot be divulged. 

The remaining suggestions focus on 

using the CPI, because the CPI measures 

rent and utility changes, and provides 

current data, at least on a national and 

regional basis. Local data, published for 

27 consolidated metropolitan areas (and 

used for almost 100 FMR areas), is only 

available on a monthly basis for the 

three largest metropolitan areas (New 

York, NY, Los Angeles, CA, and 

Chicago, IL). Half-yearly CPI data for 

rent and utilities is all that is available 

for 13 of the remaining 24 local areas, 

but this information is not published 

until mid-August, too late to start the 

proposed/final publication of FMRs in 

the Federal Register under current 

regulations. The remaining 11 areas 

have CPI data on rent and utilities 

available every odd (four areas) or every 

even month (7 areas). This would 

provide inconsistent time periods for 

incorporating additional CPI data into 

the trend calculation. Aside from the 

three large metropolitan areas (New 

York, NY; Los Angeles, CA; and 

Chicago, IL), the lowest level of 

geographic area aggregation for monthly 

data, are the four census regions 

(Northeast, Midwest, South and West). 

Monthly CPI data would have to be 

used to capture the recent trend in rent 

and utilities not already captured in the 

FMR estimation process (which uses 

CPI data as of the previous year-end). 

Capturing current CPI data, however, is 

limited by the time required to process, 

review and publish proposed FMRs for 

comment and to publish final FMRs by 

October 1. The review and publication 

process for both the proposed and final 

FMRs averages six weeks, though it has 

taken as little as four weeks. The 

minimum comment period is 30 days, 

though on an ongoing basis, 60 days 

provides more time for interested 

parties to analyze the proposed FMRs. 

The latest CPI month that could be used 

for a trend factor, would be April, which 

would be available in mid-May. Under 


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Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 12989 

current statute and regulations, the 

proposed FMRs would be produced (2 

weeks) and reviewed and published (4 

weeks) in early July. A 30-day comment 

period (with an additional 1 week to be 

added to the end of the comment period 

to cover all filings that are not posted by 

the due date) would provide for analysis 

of comments (1 week), and 1 week to 

spare for publishing October 1. This 

timeline should not represent the 

normal process, because it does not 

provide HUD or commenters the time 

necessary to review comments and 

FMRs. With a trend factor that changes 

every year, it is important to provide 

additional time for all to have a chance 

to review proposed FMRs. Using the 

March CPI instead would increase the 

time for commenters to review their 

FMRs, though HUD’s review of 

comments will be the same. HUD 

specifically requests comments as to 

whether or not an additional 3 or 4 

months of CPI is believed to 

significantly improve the quality of the 

FMRs, or if, without legislative relief 

from publishing proposed FMRs, HUD 

should use a trend factor that mimics 

the average annual CPI data already 

used. This would eliminate a constant 

trend factor, and would extend the rent 

and utility changes from the most recent 

year an additional 15 months. 

An additional concern regarding the 

monthly data is that, except at a 

national level, the monthly data are not 

seasonally adjusted. This means that 

basing trend factors on monthly CPI 

statistics would depend critically on 

which months are chosen as the base 

and final months. HUD analyzed 

applying a new trend factor using the 

six months of regional CPI data 

available in the summer 2009 (through 

June 2009) and the national average 

FMR was 1.6 percent higher than the 

national average FMR for the previous 

year. However, using only the first five 

months of CPI data (through May 2009), 

the national average FMR was 2.2 

percent higher. There can be 

considerable monthly fluctuations in 

the rent and utility data of the CPI, even 

on a regional basis. This leads to 

another question: Should a national 

factor be used instead of a regional trend 

factor so that seasonally adjusted data 

can be used? 

Under the current regulations and 

legislative constraints, CPI data are 

released in the interim period between 

publication of proposed and final FMRs; 

should these be incorporated? How 

would this best be achieved? Would this 

render the public comment process 

meaningless, as nearly all rents would 

change between proposed and final, and 

locations that would benefit from the 

new data would lobby for the update 

while those made worse off would push 

for the status quo? 

The last three suggested alternatives 

assume the legislative changes that 

eliminate the requirement that FMRs be 

published for effect on October 1st, but 

there are three different assumptions 

about the date of the FMR, October, (3 

months trending), April (9 months 

trending) and June (of that year and no 

trending). Is the accuracy of the FMRs 

best served by using the most current 

data and reducing or eliminating the 

trend factor? 

V. Request for Public Comments 

HUD seeks public comments on the 

trend factor that is used in the FMR 

estimation process. Comments on the 

trend factor must include sufficient 

information in support of one of the 

alternatives listed by HUD, or a new 

proposal. The following issues should 

be addressed: 

1. Should HUD continue to use a 

constant trend factor or should the trend 

factor be updated annually to attempt to 

capture market changes? 

2. The constant trend factor that HUD 

has used in the past cannot be 

replicated for 2000 to 2010 based on 

available 2010 Census data. If a constant 

trend factor is appropriate, what data 

and time period should be used for a 

constant trend factor? 

3. Is a national trend factor 

appropriate, or should HUD limit itself 

to use of more local options such as 

regional factors? 

4. Should HUD allow changes 

between the proposed and final FMRs 

resulting from updated trend factors? 

5. Is using the more current data for 

estimating the FMRs more important 

than providing for public comment 

before establishing final FMRs for 

effect? 

6. Is the seasonality of rent and utility 

prices important in considering what 

month to collect data for trending? If so, 

how should HUD select the month to 

use or to compare it with? 

7. Is double counting of CPI data a 

concern? 

8. Is it more important to base a trend 

on the most recent data possible, or on 

the most specific geography? 

9. Is it better to use rent and utility 

CPI data in developing a trend factor or 

should other prices be included? 

10. Should HUD pursue legislative 

and regulatory changes to reduce or 

eliminate the need for trending? 

11. Is there a data source or 

aggregation of sources of data provided 

on a more current basis than the CPI 

that could be used in the FMR 

estimation process? 

Dated: March 2, 2011. 

Raphael W. Bostic, 

Assistant Secretary for Policy Development 

and Research. 

[FR Doc. 2011–5263 Filed 3–8–11; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

[FWS–R9–R–2011–N030; 93261–1263–000– 

5C] 

RIN 1018–AX35 

Draft Fish and Wildlife Service Friends 

Policy 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Notice of reopening of comment 

period. 

SUMMARY: We are reopening the 

comment period on our draft Fish and 

Wildlife Service Friends Policy, which 

we made available for public comment 

via a Federal Register notice published 

on October 18, 2010. 

DATES: Submit comments on or before 

April 8, 2011. 

ADDRESSES: You may submit comments 

on the draft policy by mail to: Kevin 

Kilcullen, Division of Visitors Services 

and Communication, U.S. Fish and 

Wildlife Service, 4401 N. Fairfax Drive, 

Room 635, Arlington, VA 22203; by 

FAX to (703) 358–2517; or by e-mail to 

refugesystempolicycomments@fws.gov. 

FOR FURTHER INFORMATION CONTACT: 

Kevin Kilcullen, (703) 358–2382. 

SUPPLEMENTARY INFORMATION: In a 

Federal Register notice dated October 

18, 2010 (75 FR 63851), we announced 

availability for public review and 

comment of a draft policy for Fish and 

Wildlife Service employees working 

with Refuge Friends groups. Established 

in 1996 to encourage and organize 

community involvement in National 

Wildlife Refuge System activities, the 

National Friends Program works to 

expand the effectiveness of communitybased, nonprofit Friends organizations 

to build visibility and support for the 

Fish and Wildlife Service’s conservation 

programs. Given the rapid growth and 

size of the program (currently about 230 

organizations and an estimated 60,000 

members), we have identified the need 

to issue national policy guidance on a 

number of issues affecting our 

relationship with Friends organizations. 

Those needs include administrative 

procedures, guidance on addressing 

financial and administrative 

information, a sample Friends 


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