[Federal Register Volume 74, Number 148 (Tuesday, August 4, 2009)]
[Notices]
[Pages 38716-38828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18507]



[[Page 38715]]

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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 2010; 
Notice

Federal Register / Vol. 74, No. 148 / Tuesday, August 4, 2009 / 
Notices

[[Page 38716]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5328-N-01]


Proposed Fair Market Rents for the Housing Choice Voucher Program 
and Moderate Rehabilitation Single Room Occupancy Program Fiscal Year 
2010

AGENCY: Office of the Assistant Secretary for Policy Development and 
Research, HUD.

ACTION: Notice of Proposed Fiscal Year (FY) 2010 Fair Market Rents 
(FMRs) and request for comments on FMR methodology.

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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 2010 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 2010 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 2008 are incorporated. Three Micropolitan areas that became 
Metropolitan Statistical Areas (MSA) are included here as HUD 
Metropolitan Statistical Areas without modification.\1\ Proposed FY 
2010 FMRs are based on 2000 Census data updated with more current 
survey data. For FY 2010, FY 2009 FMRs are updated using 2007 American 
Community Survey (ACS) data 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).
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    \1\ These areas are: Cape Girardeau-Jackson, MO-IL MSA 
(comprised of Alexander County, IL; Bollinger County, MO; and Cape 
Girardeau County, MO), Manhattan, KS MSA (comprised of Geary County, 
Pottawatomie County, and Riley County, KS), Mankato-North Mankato, 
MN MSA (comprised of Blue Earth County and Nicollet County, MN).
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    HUD is considering reforms and several changes to the methodology 
for calculating FMRs that are not reflected in these proposed FMRs. HUD 
will publish a separate Federal Register notice describing and 
depicting examples of the effects of a number of reforms and 
improvements to the methodology for estimating Fair Market Rents and 
requesting public comment. In this notice, HUD is seeking public 
comments suggesting items for consideration in the subsequent notice.

DATES: Comment Due Date: September 2, 2009.

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 the 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 results in 
delayed delivery. To ensure timely receipt of comments, HUD recommends 
that any comments submitted by mail be sent 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 the 
instructions provided on that Web 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 for 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 at 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 2010 FMR 
documentation system at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr10.
    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 number 202-708-
0590. Persons with hearing or speech impairments may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at 800-877-8339. (Other than the HUD USER information line and TDD 
numbers, telephone numbers are not toll free.)

SUPPLEMENTARY INFORMATION:

I. Background

    Section 8 of the USHA (42 U.S.C. 1437f) authorizes housing 
assistance to aid lower-income families in renting safe and decent 
housing. Housing assistance payments are limited by FMRs established by 
HUD for different 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 assisted 
family (see 24 CFR 982.503). In general, the FMR for an area is the

[[Page 38717]]

amount that would be needed to pay the gross rent (shelter rent plus 
utilities) of privately-owned, decent, and safe rental housing of a 
modest (non-luxury) nature with suitable amenities. In addition, all 
rents subsidized under the Housing Choice Voucher program must meet 
reasonable rent standards. The interim rule published on October 2, 
2000 (65 FR 58870), established 50th-percentile FMRs for certain areas.
    Electronic Data Availability: This Federal Register notice is 
available electronically from the HUD User page at http://www.huduser.org/datasets/fmr.html. Federal Register notices also are 
available electronically at 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 2010 FMRs 
is available at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr10.

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. Minimally qualified areas are reviewed each year, 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 3 years or 
have lost 50th-percentile status for failure to deconcentrate within 
the last 3 years. Twelve FMR areas, listed below, were reviewed for 
proposed FY 2010 FMRs.

Current or Potential FMR Areas Reviewed for Eligibility as FY 2010 50th-
                          Percentile FMR Areas
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Baltimore-Towson, MD MSA
Bergen-Passaic, NJ HMFA \2\
Dallas, TX HMFA
Fort Lauderdale, FL HMFA
Grand Rapids-Wyoming, MI HMFA
New Haven-Meriden, CT HMFA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
Providence-Fall River, RI-MA HMFA
Sacramento--Arden-Arcade--Roseville, CA HMFA
San Diego-Carlsbad-San Marcos, CA MSA
Washington-Arlington-Alexandria, DC-VA-MD HMFA
West Palm Beach-Boca Raton, FL HMFA
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\2\ 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.

    Six of the 12 areas eligible for review become or remain 50th 
percentile areas: The Baltimore-Towson, MD MSA; the Fort Lauderdale, FL 
HMFA; the Grand Rapids-Wyoming, MI HMFA; the New Haven-Meriden, CT 
HMFA; and the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA; and the 
West Palm Beach-Boca Raton, FL HMFA. Grand Rapids did not meet the 
concentration-of-tenants criterion in FY 2009, but now meets it and is 
designated a 50th- percentile area for FY 2010. Fort Lauderdale, FL 
HMFA; and the West Palm Beach-Boca Raton, FL HMFA continue to meet the 
criteria for 50th percentile status and have made progress in the 
deconcentration of tenants, so they will remain 50th percentile areas 
for another 3 years.
    The Baltimore-Towson, MD MSA; the New Haven-Meriden, CT HMFA; and 
the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA have large PHAs 
operating within their jurisdiction under HUD's Moving to Work (MTW) 
program. MTW reporting requirements differ from non-MTW agencies and 
have limited HUD's ability to evaluate some metropolitan areas' 
eligibility for 50th percentile FMRs. Reporting by the MTW agencies in 
these three metropolitan areas has improved such that HUD is now able 
to assess the criteria for eligibility for 50th percentile FMRs and 
determine that they now qualify. Under current program rules, these six 
areas will not have their 50th percentile FMR status reevaluated until 
FY 2013.
    Six of the 12 areas eligible for review fail to qualify for the 
50th-percentile FMR program for FY 2010. Of these six areas, one area, 
San Diego-Carlsbad-San Marcos, CA MSA, no longer qualifies 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 area with the 
largest number of program participants (the concentration-of-tenants 
test). Three areas with FY 2009 40th-percentile FMRs that were 
evaluated for FY 2010 50th-percentile FMRs also fail the concentration-
of-tenants test: The Providence-Fall River, RI-MA HMFA; the Bergen-
Passaic, NJ HMFA; and the Sacramento--Arden-Arcade--Roseville, CA HMFA. 
These areas will be reviewed next year; if this concentration changes, 
they may be made 50th-percentile areas for the FY 2011 FMRs.
    Voucher tenants in the Dallas, TX HMFA have not materially 
deconcentrated over its 3-year eligibility period for a 50th percentile 
FMR. Deconcentration of tenants is the primary objective of the 50th-
percentile program, and failure to make progress on the deconcentration 
of tenants over a 3-year period disqualifies an otherwise eligible area 
for 3 years. This area is not currently eligible for reevaluation until 
the FY 2013 FMRs. HUD solicits public comments on this aspect of the 
50th percentile regulation.
    The Washington-Arlington-Alexandria, DC-VA-MD HMFA still does not 
meet the minimum reporting criteria of 85 percent of resident records 
after an extensive search for useable data on assisted tenants. The 
District of Columbia Housing Authority is encouraged to submit to HUD 
by the end of the comment period any additional tenant data available 
in order to improve the reporting rate for the metropolitan area in 
which they operate. The Washington-Arlington-Alexandria, DC-VA-MD HMFA 
will be re-evaluated for 50th percentile FMR status in time for 
publication of the final FY 2010 FMRs based on all additional data 
submitted or refinements of analysis of data already at HUD based on 
comments from the PHAs. Please contact Lynn Rodgers at 
<a href="/cdn-cgi/l/email-protection#8fe3f6e1e1a1eea1fde0ebe8eafdfccfe7faeba1e8e0f9"><span class="__cf_email__" data-cfemail="f79b8e9999d996d985989390928584b79f8293d9909881">[email protected]</span></a> for specific data requirements.
    Ten current 50th-percentile FMR areas were not evaluated this year 
because they have not completed 3 years of program participation since 
their last review. These 10 areas, listed below, continue in FY 2010 as 
50th-percentile FMR areas. They will be up for review again in 
computation of the FY 2012 FMRs:

[[Page 38718]]



 FY 2009 50th-Percentile FMR Areas Not Slated for Eligibility Evaluation
           and Continuing With 50th-Percentile FMRs in FY 2010
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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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    In total, 16 areas will be 50th-percentile areas for FY 2010, the 
10 areas listed above and the six that passed review this year: 
Baltimore, Fort Lauderdale, Grand Rapids, New Haven, Philadelphia, and 
West Palm Beach.

III. FMR Methodology

    This section provides a brief overview of how the FY 2010 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=fmr10.
    The FY 2010 FMRs are based on current OMB metropolitan area 
definitions and standards that were first used in the FY 2006 FMRs. OMB 
changes to the metropolitan area definitions through November 2008 are 
incorporated. As of November 2008, three micropolitan areas were 
redefined as metropolitan areas: Cape Girardeau-Jackson, MO-IL MSA; 
Manhattan KS MSA; and Mankato-North Mankato, MN MSA.

A. Data Sources--2000 Census, the American Community Survey, and the 
Consumer Price Index

    As in all post-FY 2006 FMR publications, FY 2010 FMRs start with 
base rents generated using Census 2000 long-form survey data. They are 
updated with American Community Survey (ACS) data and Bureau of Labor 
Statistics Consumer Price Index (CPI) data. FY 2010 FMRs are FY 2009 
FMRs updated by replacing the CPI data used for FY 2009 FMRs with ACS 
2007 survey data and updated CPI data. Specifically, the FY 2009 rent 
(as of date: April 2009) is deflated to June 2006 by dividing it by 18 
months of CPI data representing June 2006 through December 2007 
inflation, and the usual 15-month trend factor. This June 2006 rent is 
the best and most recent rent estimate available using only ACS survey 
data and eliminating all other update data. It is this rent that will 
be updated with additional ACS data and new CPI data.
    In order to preserve additional information gathered by HUD through 
random digit dialing (RDD) surveys, areas surveyed after June 2007 are 
updated separately, the details of which can be found at the Web site 
listed above.

B. Updates from 2006 to 2007--2007 ACS

    ACS survey data continues to be applied to areas based on the type 
of area (CBSA, metropolitan subarea, or nonmetropolitan county), the 
amount of survey data available, and the reliability of the survey 
estimates. Both 1- and 3-year ACS 2007 data are used to update June 
2006 rents. All areas are updated with the change from 2006 to 2007 in 
State or metropolitan one-year standard-quality median rents. In a 
methodological update from previous years' estimates intended to 
minimize fluctuations in rents due to survey error, these rent changes 
are tested for statistical significance \3\
[GRAPHIC] [TIFF OMITTED] TN04AU09.109

before being applied to 2006 rents. Any State or metropolitan level 
change that is not statistically significant is not applied; that is, 
the updated 2007 rent is the same as the 2006 rent. Metropolitan level 
rent changes are used for CBSA areas and subareas that have more than 
200 standard quality cases in 2006 and 2007. All other areas are 
updated with State-level rent changes. For subareas, State and CBSA 
change factors continue to be selected based on which factor brings the 
subarea rent closer to the CBSA-wide rent. Subareas that have 200 or 
more local standard-quality survey observations are updated with their 
local area update factor.
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    \3\ The change is considered statistically significant if Z > 
1.645 where [see equation above] and EST<INF>1</INF> = ACS 2007 
Estimate, EST<INF>2</INF> = ACS 2006 Estimate, SE<INF>1</INF> = 
Standard Error of Estimate 1, and SE<INF>2</INF> = Standard Error of 
Estimate 2.
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    After all areas have been updated with a standard-quality median 
rent change, local areas with estimates that reflect more than 200 one-
year recent-mover cases are evaluated further. If the updated rent is 
outside the confidence interval of the ACS recent-mover estimate, the 
updated rent is replaced with the ACS recent-mover rent estimate. In 
areas without 200 or more one-year ACS recent-mover observations, but 
with 200 or more 3-year ACS recent mover observations, the 3-year 
estimate \4\ is used if it is statistically different from the updated 
2007 rent based on the standard-quality median rent change. This 
process creates a June 2007 rent.
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    \4\ The recent-mover estimate from the 3-year data includes all 
those who moved in the most recent 24-month period. That means that 
no 2005 survey data are included in this 3-year recent-mover 
classification, and the likelihood of having a valid (with 200 or 
more cases) 3-year recent-mover rent is lower for these estimates.
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C. Updates from 2007 to 2008

    ACS 2007 data updates the June 2006 rents used in the FY 2009 FMRs 
forward by 12 months to June 2007. Six months of 2007 and 12 months of 
2008 CPI rent and utilities price index data are used to update the 
June 2007 rents to the end of 2008. 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 2008 to 2010

    The national 1990 to 2000 average annual rent increase trend of 
1.03 is applied to end-of-2008 rents for 15 months, to derive the 
proposed FY 2010 FMRs.
    The area-specific data and computations used to calculate proposed 
FY 2010 FMRs and FMR area definitions can be found at http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr10.

E. Bedroom Rent Adjustments

    FMR estimates are calculated for two-bedroom units. This generally 
is 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

[[Page 38719]]

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 range requirements used 
were: efficiency FMRs to fall between 0.65 and 0.83 of the two-bedroom 
FMR; one-bedroom FMRs must be between 0.76 and 0.90 of the two-bedroom 
FMR; three-bedroom FMRs must be between 1.10 and 1.34 of the two-
bedroom FMR; and four-bedroom FMRs must be between 1.14 and 1.63 of the 
two-bedroom FMR. 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 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 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 2010 using the same data used to estimate the 
Housing Choice Voucher program FMRs, if the respective FMR area's 
definition remained the same. 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. Areas with definitional changes 
that previously had manufactured housing space rental exception 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 to $50,000. 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.
    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: 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, 
preferably, should 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

[[Page 38720]]

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: July 28, 2009.
Raphael W. Bostic,
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 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 2010 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.
BILLING CODE 4210-67-P

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[FR Doc. E9-18507 Filed 8-3-09; 8:45 am]
BILLING CODE 4210-67-C


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