DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 888

[Docket No. FR-4232-N-02]

Fair Market Rents for the Section 8

Housing Assistance Payments Program--Fiscal Year 1998

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of Final Fiscal Year (FY) 1998 Fair Market Rents (FMRs).

SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937 requires 

the Secretary to publish FMRs annually to be effective on October 1 of each 

year. FMRs are used for the Section 8 Rental Certificate Program 

(including space rentals by owners of manufactured homes under that 

program); the Moderate Rehabilitation Single Room Occupancy program; 

housing assisted under the Loan Management and Property Disposition 

programs; payment standards for the Rental Voucher program; and any other 

programs whose regulations specify their use.

 Today's notice provides final FY 1998 FMRs for all areas. It includes 

increased FMRs for 16 areas that submitted public comments and for 3 areas 

as a result of HUD-contracted Random Digit Dialing (RDD) surveys conducted 

through August, 1997. 

 Today's notice also makes effective FMR reductions for 20 areas that 

were proposed for reduction in the April 30, 1997 notice (62 FR 23552), 

based on the results of recent RDD and American Housing Surveys (AHSs). 

EFFECTIVE DATE: The FMRs published in this notice are effective on October 

1, 1997.

FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Director, Operations 

Division, Office of Rental Assistance, telephone (202) 708-0477. For 

technical information on the development of schedules for specific areas or 

the method used for the rent calculations, contact Alan Fox, Economic and 

Market Analysis Division, Office of Economic Affairs, telephone (202) 

708-9426, Extension 328 (e-mail: alan_fox@hud.gov). Hearing- or 
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speech-impaired persons may contact the Federal Information Relay Service 

at 1-800-877-8339 (TTY). (Other than the "800" TTY number, telephone 

numbers are not toll free.)

SUPPLEMENTARY INFORMATION: Section 8 of the United States Housing Act of 

1937 (the Act) (42 U.S.C. 1437f) authorizes housing assistance to aid lower 

income families in renting decent, safe, and sanitary housing. Assistance 

payments are limited by FMRs established by HUD for different areas. 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, safe, 

and sanitary rental housing of a modest (non-luxury) nature with suitable 

amenities.

Method Used to Develop FMRs

FMR Standard

FMRs are gross rent estimates; they include shelter rent and the cost 

of utilities, except telephone. HUD sets FMRs to assure that a sufficient 

supply of rental housing is available to program participants. To 

accomplish this objective, FMRs must be both high enough to permit a 

selection of units and neighborhoods and low enough to serve as many 

families as possible. The level at which FMRs are set is expressed as a 

percentile point within the rent distribution of standard quality rental 

housing units. The current definition used is the 40th percentile rent, 

the dollar amount below which 40 percent of standard quality rental housing 

units rent. The 40th percentile rent is drawn from the distribution of 

rents of units which are occupied by recent movers (renter households who 

moved into their unit within the past 15 months). Newly built units less 

than two years old are excluded, and adjustments have been made to correct 

for the below market rents of public housing units included in the data 

base.

Data Sources
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HUD used the most accurate and current data available to develop the 

FMR estimates. The sources of survey data used for the base-year estimates 

are:

(1) The 1990 Census, which provides statistically reliable rent data 

for all FMR areas;

(2) The Bureau of the Census' American Housing Surveys (AHSs), which 

are used to develop between-Census revisions for the largest metropolitan 

areas and which have accuracy comparable to the decennial Census; and

(3) Random Digit Dialing (RDD) telephone surveys of individual FMR 

areas, which are based on a sampling procedure that uses computers to 

select statistically random samples of rental housing.

The base-year FMRs are updated using trending factors based on 

Consumer Price Index (CPI) data for rents and utilities or HUD regional 

rent change factors developed from RDD surveys. Annual average CPI data 

are available individually for 99 metropolitan FMR areas. RDD regional 

rent change factors are developed annually for the metropolitan and 

nonmetropolitan parts of each of the 10 HUD regions. The RDD factors are 

used to update the base year estimates for all FMR areas that do not have 

their own local CPI survey.

State Minimum FMRs

In response to public concern that FMRs in rural areas were too low to 

operate the program successfully, HUD implemented a minimum FMR policy 

starting with the FY 1996 FMRs. FMRs are now established at the higher of 

the local 40th percentile rent level or the Statewide average of 

nonmetropolitan counties, subject to a ceiling rent cap. The State minimum 

also affects a small number of metropolitan areas whose rents would 

otherwise fall below the State minimum.

Public Comments

In response to the April 30, 1997 proposed FMRs, HUD received public 

comments covering 41 FMR areas. Rental housing survey information was 

provided for 26 of those FMR areas. All of the survey information 
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submitted was evaluated and, based on that review, the FMRs for 16 areas 

are being revised. The information submitted for the other FMR areas was 

not considered sufficient to provide a basis for revising the FMRs. An RDD 

survey sponsored by local Public Housing Agencies (PHAs) for the Los 

Angeles FMR area found results that were the same as what had been proposed 

based on the HUD RDD survey.

The 16 FMR areas with approved FMR revisions are as follows:

Orange County and Stockton-Lodi, CA

Lafayette, LA

Addison, Bennington, Chittenden, Lamoille, Orange, Rutland, Washington, 

Windham, and Windsor Counties, VT

Burlington, VT

Berkeley, Morgan, and Jefferson Counties, WV

PHAs and other interested parties should be aware that FMR comments 

received too late for adjusting the current year's final FMRs will be held 

for use in the following year. In such cases HUD will trend the survey 

results to the date of the FMR estimate. If the PHA is concerned that 

rents are changing rapidly, surveys should be timed to be received as close 

as possible to HUD's deadline for public comments.

AHS and RDD Surveys

 This notice makes effective the FMRs for 20 areas proposed with 

reductions based on recent RDD or AHS surveys. One of those areas, the 

Stockton-Lodi, CA MSA, submitted information that caused HUD to reduce the 

FMRs less than had been proposed. For the other areas, the lower proposed 

FMRs are, by this notice, being made final. FMR areas with reductions 

based on RDD surveys are: 

1996 RDD:

New Haven-Meriden, CT

Des Moines, IA

Pittsfield, MA

Worcester, MA-CT

1997 RDD:

Bakersfield, CA
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Los Angeles-Long Beach, CA 

Stockton-Lodi, CA

Daytona Beach, FL

Fort Myers-Cape Coral, FL

Lakeland-Winter Haven, FL

Melbourne-Titusville-Palm Bay, FL

Brockton, MA

Lawrence, MA-NH

St Cloud, MN

Salem, OR

Harrisburg-Lebanon-Carlisle, PA

Spokane, WA

Tacoma, WA

The areas with reductions based on AHS surveys are: 

Fort Lauderdale, FL

Miami, FL

HUD is increasing FMRs for the following 3 areas, based on RDDs that 

were completed after the date of the proposed FMR notice:

Detroit, MI 

Greensboro--Winston-Salem--High Point, NC

Phoenix, AZ

Technical Correction: Des Moines, IA

The final FMRs for the Des Moines, IA MSA have been revised slightly 

upward ($4 for 2-bedroom units) to correct an error that resulted from 

applying the wrong inflation factor to the June, 1996 RDD survey. The 

corrected FMRs are listed in Schedule B.

FMR Area Definition Changes

In the April 30, 1997 publication of the proposed FY 1998 FMRs, HUD 

announced that it had reevaluated the definition of the Atlanta FMR area 

and proposed to add back Carroll, Pickens, and Walton Counties, which 
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because of recent growth are now considered part of the housing market 

area. In addition, HUD announced that it was accepting the Office of 

Management and Budget's (OMB) expanded definition of the Jackson, TN 

metropolitan area as the revised FMR area. No comments were received 

concerning these proposed changes which, therefore, are being made 

effective with this publication.

Manufactured Home Space Surveys

 HUD received no public comments concerning the manufactured home space 

FMRs. 

 FMRs for the rental of manufactured home spaces are 30 percent of the 

applicable Section 8 existing housing program FMR for two-bedroom unit. 

HUD accepts public comments requesting modifications of these FMRs where 

the 30 percent FMRs are thought to be inadequate. In order to be accepted 

as a basis for revising the FMRs, such comments must contain statistically 

valid survey data that show the 40th percentile space rent (excluding the 

cost of utilities) for the entire FMR area. However, the sampling 

requirements for manufactured home space rent surveys are easier to meet 

than for regular FMR comments, and interested parties should contact HUD 

for suggestions. HUD uses the same FMR area definitions for manufactured 

home space rental as for the Section 8 existing housing FMRs shown in 

Schedule B. Manufactured home space FMR revisions are published as final 

FMRs in Schedule D. Once approved, the revised manufactured home space 

FMRs establish new base year estimates that are updated annually using the 

same data used to update the Section 8 existing housing program FMRs.

HUD Rental Housing Survey Guides

 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 $10,000-$12,000. 

Areas with 500 or more program units usually meet this criterion, and areas 

with fewer units may meet it if the actual two-bedroom FMR rent standard is 

significantly different than that proposed by HUD. In addition, HUD has 

developed a version of the RDD survey methodology for smaller, 

nonmetropolitan PHAs. This methodology is designed to be simple enough to
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be done by the PHA itself, rather than by professional survey 

organizations, at a cost of about $5,000.

 PHAs in nonmetropolitan areas may, in certain circumstances, do 

surveys of groups of counties. All grouped county surveys must be approved 

in advance by HUD. 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 its relationship to the combined rent of the group of 

FMR areas.

 PHAs that plan to use the RDD survey technique may obtain a copy of 

the appropriate survey guide by calling HUD USER on 1-800-245-2691. Larger 

PHAs should request "Random Digit Dialing Surveys; A Guide to Assist Larger 

Public Housing Agencies in Preparing Fair Market Rent Comments." Smaller 

PHAs should obtain "Rental Housing Surveys; A Guide to Assist Smaller 

Public Housing Agencies in Preparing Fair Market Rent Comments." These 

guides are also available on the Internet at http://www.huduser.org/ 

publications/ publicassist/ assisted/ rddlrge3.zip and .../rddsmall.exe, 

respectively.

 HUD prefers, but does not mandate, the use of RDD telephone surveys, 

or the more traditional method described in the small PHA survey guide. 

Other survey methodologies are acceptable as long as they provide 

statistically reliable, unbiased estimates of the 40th percentile gross 

rent. Survey samples should preferably be randomly drawn from a complete 

list of rental units for the FMR area. If this is not feasible, the 

selected sample must be drawn so as to be statistically representative of 

the entire rental housing stock of the FMR area. In particular, surveys 

must include units of 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 starting point and means of verification for determining 

whether the sample is representative of the FMR area's rental housing 

stock. All survey results must be fully documented.
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The cost of an RDD survey may vary, depending on the characteristics 

of the telephone system used in the FMR area. RDDs (and simplified 

telephone surveys) of some non-metropolitan areas have been unusually 

expensive because of telephone system characteristics. A PHA or PHA 

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 is prepared to relax normal sample size 

requirements.

FMRs for Federal Disaster Areas

 Under the authority granted in 24 CFR part 899, the Secretary of HUD 

finds good cause to waive and hereby waives the regulatory requirements 

that govern requests for geographic area exception rents for areas that are 

declared disaster areas by the Federal Emergency Management Agency (FEMA). 

HUD is prepared to grant disaster-related exceptions up to 10 percent above 

the applicable FMRs for those areas. HUD field offices are authorized to 

approve such exceptions for (1) single-county FMR areas and for individual 

county parts of multi-county FMR areas that qualify as disaster areas under 

the Robert T. Stafford Disaster Relief and Emergency Assistance Act; if 

(2) the PHA certifies that damage to the rental housing stock as a result 

of the disaster is so substantial that it has increased the prevailing rent 

levels in the affected area. Such exception rents must be requested in 

writing by the responsible PHAs. Exception rents approved by HUD during FY 

1998 will remain in effect until superseded by the publication of the final 

FY 2000 FMRs.

Other Matters

Environmental Impact. A Finding of No Significant Impact with respect 

to the environment as required by the National Environmental Policy Act (42 

U.S.C. 4321-4374) is unnecessary, since the Section 8 Rental Certificate 

Program is categorically excluded from the Department's National 

Environmental Policy Act procedures under 24 CFR 50.20(d).
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Regulatory Flexibility Act. The undersigned, in accordance with the 

Regulatory Flexibility Act (5 U.S.C. 605(b)), hereby certifies that this 

notice does not have a significant economic impact on a substantial number 

of small entities, because FMRs do not change the rent from that which 

would be charged if the unit were not in the Section 8 Program.

Federalism Impact. The General Counsel, as the Designated Official 

under section 6(a) of Executive Order No. 12611, Federalism, has determined 

that this notice will not involve the preemption of State law by Federal 

statute or regulation and does not have Federalism implications. The Fair 

Market Rent schedules do not have any substantial direct impact on States, 

on the relationship between the Federal government and the States, or on 

the distribution of power and responsibility among the various levels of 

government.
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 The Catalog of Federal Domestic Assistance program number is 14.156, 

Lower-Income Housing Assistance Program (Section 8).

 Accordingly, the Fair Market Rent Schedules, which will not be 

codified in 24 CFR Part 888, are amended as follows: 

Dated: 

 

Andrew M. Cuomo

Secretary
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Fair Market Rents for the Section 8 Housing Assistance Payments Program

Schedules B and D--General Explanatory Notes

1. Geographic Coverage

a. Metropolitan Areas- FMRs are housing market-wide rent estimates 

that are intended to provide housing opportunities throughout the 

geographic area in which rental housing units are in direct competition. 

The FMRs shown in Schedule B incorporate OMB's most current definitions of 

metropolitan areas, with the exceptions discussed in paragraph (b). HUD 

uses the OMB Metropolitan Statistical Area (MSA) and Primary Metropolitan 

Statistical Area (PMSA) definitions for FMR areas because they closely 

correspond to housing market area definitions. 

b. Exceptions to OMB Definitions- The exceptions are counties deleted 

from several large metropolitan areas whose revised OMB metropolitan area 

definitions were determined by HUD to be larger than the housing market 

areas. The FMRs for the following counties (shown by the metropolitan 

area) are calculated separately and are shown in Schedule B within their 

respective States under the "Metropolitan FMR Areas" listing:

Metropolitan Area and Counties Deleted

Chicago, IL 

DeKalb, Grundy and Kendall Counties

Cincinnati-Hamilton, OH-KY-IN 

Brown County, Ohio; Gallatin, Grant and Pendleton Counties in Kentucky; and 

Ohio County, Indiana

Dallas, TX 

Henderson County

Flagstaff, AZ-UT 

Kane County, UT
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New Orleans, LA 

St. James Parish

Washington, DC-MD-VA-WV 

Berkeley and Jefferson Counties in West Virginia; and Clarke, Culpeper, 

King George and Warren Counties in Virginia

c. Nonmetropolitan Area FMRs- FMRs also are established for 

nonmetropolitan counties and for county equivalents in the United States, 

for nonmetropolitan parts of counties in the New England states and for FMR 

areas in Puerto Rico, the Virgin Islands and the Pacific Islands.

d. Virginia Independent Cities- FMRs for the areas in Virginia shown 

in the table below were established by combining the Census data for the 

nonmetropolitan counties with the data for the independent cities that are 

located within the county borders. Because of space limitations, the FMR 

listing in Schedule B includes only the name of the nonmetropolitan County. 

The full definitions of these areas, including the independent cities, are 

as follows:

Virginia Nonmetropolitan County FMR Area and

 Independent Cities Included With County

County Cities

 Allegheny Clifton Forge and Covington

 Augusta Staunton and Waynesboro

 Carroll Galax

 Frederick Winchester

 Greensville Emporia

 Henry Martinsville

 Montgomery Radford

 Rockbridge Buena Vista and Lexington

 Rockingham Harrisonburg

 Southhampton Franklin

 Wise Norton

e. FMRs for Manufactured Home Spaces- FMRs for Section 8 manufactured 

home spaces are established at 30 percent of the two-bedroom Section 8 
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existing housing program FMRs, with the exception of the areas listed in 

Schedule D whose FMRs have been modified on the basis of public comments. 

Once approved, the revised manufactured home space FMRs establish new baseyear estimates that will be updated annually using the same data used to 

estimate the Section 8 existing housing FMRs. The FMR area definitions 

used for the rental of manufactured home spaces are the same as the area 

definitions used for the Section 8 existing FMRs.

2. 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 nonmetropolitan county listings.

 d. The New England towns and cities included in a nonmetropolitan 

part of a county are listed immediately following the county name.

 e. The FMRs are listed by dollar amount on the first line beginning 

with the FMR area name.