38398 Federal Register / Vol. 72, No. 133 / Thursday, July 12, 2007 / Notices 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5152–N–01] 

Proposed Fair Market Rents for Fiscal 

Year 2008 for the Housing Choice 

Voucher Program and Moderate 

Rehabilitation Single Room Occupancy 

Program 

AGENCY: Office of the Assistant 

Secretary for Policy Development and 

Research, HUD. 

ACTION: Notice of Proposed Fiscal Year 

(FY) 2008 Fair Market Rents (FMRs). 

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 FY2008. The proposed 

numbers amend FMR schedules 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 FY2008 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 FY2006 FMR areas. 

The changes OMB made to the 

metropolitan area definitions in 

December 2006 are also incorporated. 

This means that there are two new onecounty Metropolitan Statistical Areas 

(MSAs), and a few areas where MSA 

name changes add or delete a primary 

city name. 

Proposed FY2008 FMRs are based on 

2000 Census data updated with more 

current survey data. For the first time, 

HUD is using data from the Census 

Bureau’s American Community Survey 

(ACS). HUD is largely replacing the 

accumulated 2001-through-2005 FMR 

update factors from various sources 

with data from ACS’s first full 

implementation year, 2005. HUD uses 

ACS data in different ways according to 

how many 2-bedroom standard quality 

and recent mover sample cases are 

available in the FMR area or in its CoreBased Statistical Area (CBSA), as 

described in detail later in this notice. 

Random digit dialing (RDD) surveys 

performed between 2001 and 2005 may 

also be used under certain conditions. 

Revised 2005 FMRs based on 2000 

Census and 2005 ACS data have been 

updated with Consumer Price Index 

(CPI) data through the end of 2006 and 

then trended to April 2008, the midpoint of FY2008. Proposed FY2008 

FMRs are the first to be able to take 

advantage of the full-implementation 

ACS, a major new Census survey that is 

being conducted annually and that will 

replace the Decennial Census ‘‘longform’’ sample survey that is the source 

of the Decennial Census rent 

information. The ACS will permit more 

accurate FMR estimates each year than 

were possible using the Decennial 

Census trending techniques of previous 

FMR estimates. 

DATES: Comment Due Date: August 13, 

2007. 

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 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 submitted at least 

2 weeks in advance of the public 

comment deadline to ensure timely 

receipt by HUD. 

Electronic Submission of Comments. 

Since July 2004, HUD has been able to 

receive comments electronically. 

Interested persons may now submit 

comments electronically through the 

Federal eRulemaking Portal at http:// 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically, because doing 

so allows the commenter maximum 

time to prepare and submit a comment, 

ensures timely receipt by HUD, and 

enables HUD to make comments 

immediately available for viewing by 

other commenters and interested 

members of the public. Commenters 

should follow instructions provided on 

that 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 

a listing of all FMRs, please call the 

HUD USER information line at (800) 

245–2691 or access the information at 

the following link on the HUD Web site: 

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 FY2008 FMR 

documentation system at http:// 

www.huduser.org/datasets/fmr/fmrs/ 

index.asp?data=fmr08. 

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 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 TTY 

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 

areas. In the Housing Choice Voucher 


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Federal Register / Vol. 72, No. 133 / Thursday, July 12, 2007 / Notices 38399 

1As shown in the table, HMFA is an acronym for 

HUD Metro FMR Area, which is a MSA sub-area, 

or the remaining portions of a MSA after sub-areas 

have been determined. 

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 (nonluxury) 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 Web site at 

http://www.hudclips.org. Federal 

Register notices also are available 

electronically from the U.S. Government 

Printing Office Web site, http:// 

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

Complete documentation of the 

methodology and data used to compute 

each area’s Proposed FY2008 FMRs is 

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

datasets/fmr/fmrs/ 

index.asp?data=fmr08. 

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. For 

FY2008, no new areas have become 

eligible for 50th percentile rents. Areas 

that qualified for 50th percentile FMRs 

and were at this FMR for 3 years were 

reviewed in FY2006. The 14 areas that 

were allowed to continue to use the 

50th percentile rents will be reviewed 

again in FY2009, to measure their 

continued progress towards 

deconcentration. These areas are listed 

in the table 1 below: 

Albuquerque, NM MSA Austin-Round Rock, TX MSA. 

Chicago-Naperville-Joliet, IL HMFA Denver-Aurora, CO MSA. 

Fort Worth-Arlington, TX HMFA Grand Rapids-Wyoming, MI HMFA. 

Houston-Baytown-Sugar Land, TX HMFA Kansas City, MO–KS HMFA. 

Las Vegas-Paradise, NV MSA Orange County, CA HMFA. 

Phoenix-Mesa-Scottsdale, AZ MSA Richmond, VA HMFA. 

Virginia Beach-Norfolk-Newport News, VA–NC MSA Washington-Arlington-Alexandria, DC–VA–MD HMFA. 

Ten areas that became 50th percentile 

FMR areas in FY2006, along with the 

above 14 areas allowed to continue, will 

be evaluated for the first time in 

FY2009. These 10 new areas are: 

Baltimore-Towson, MD MSA Hartford-West–Hartford-East–Hartford, CT HMFA. 

Honolulu, HI MSA Milwaukee-Waukesha-West Allis, WI MSA. 

New Haven-Meriden, CT HMFA Providence-Fall River, RI–MA HMFA. 

Riverside-San Bernardino-Ontario, CA MSA Sarasota-Bradenton-Venice, FL MSA. 

Tacoma, WA HMFA Tucson, AZ MSA. 

Four newly eligible 50th percentile 

areas in FY2007 will be evaluated in 

FY2010. These four areas are: 

Dallas, TX HMFA Fort Lauderdale, FL HMFA. 

San Diego-Carlsbad-San Marcos, CA MSA West Palm Beach-Boca Raton, FL HMFA. 

III. FMR Methodology 

The FY2008 FMRs are based on 

current OMB metropolitan area 

definitions that were first used in the 

FY2006 FMRs. The changes OMB made 

to the Metropolitan Area Definitions in 

December 2006 are incorporated. This 

means there are two new one-county 

MSAs, and a few areas where MSA 

name changes add or delete a primary 

city name. These definitions have the 

advantages that they are based on more 

current (2000 Census) data, use a more 

relevant commuting interchange 

standard, and generally provide a better 

measure of current housing market 

relationships. HUD had three objectives 

in defining FMR areas for FY2006: (1) 

To incorporate new OMB metropolitan 

area definitions so the FMR estimation 

system can employ new data released 

according to those definitions; (2) to 

better reflect current housing markets; 

and (3) to minimize the number of large 

changes in FMRs due to use of the new 

OMB definitions. These objectives 

continue to apply to the proposed 

FY2008 FMRs, and area definitions 

were developed to achieve these 

objectives as follows: 

• FMR Census Base Rents and 

Median Family Incomes were calculated 

for each of the new OMB metropolitan 

areas using 2000 Census data. 

• Subparts of any of the new areas 

that had separate FMRs under the old 

OMB definitions, and that had a 

sufficiently large 2000 Census count of 

recent mover renter households in 

standard quality units, were identified, 

and 2000 Census Base Rents and 


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2The results of certain special case RDDs 

performed in ACS–1, ACS–2, and ACS–4 areas that, 

for example, adjusted bedroom rent ratios derived 

from the 2000 Census, may still be used on a caseby-case basis as noted in the FY2008 FMR 

Documentation System; see http:// 

www.huduser.org/datasets/fmr/fmrs/ 

index.asp?data-fmr08. 

Median Family Incomes for these 

subparts were calculated. Only the 

subparts within the new OMB 

metropolitan area were included in 

these calculations (e.g., counties that 

had been excluded from the new OMB 

metropolitan areas were not included). 

• Metropolitan subparts of new areas 

that had previously had separate FMRs 

were assigned their own FMRs if their 

2000 Census Base Rents differed by 

more than 5 percent from the new OMB 

area 2000 Census Base Rent, or if their 

2000 Census Median Family Income 

differed by more than 5 percent from the 

new OMB area 2000 Census Median 

Family Income. 

• Former metropolitan counties 

removed from metropolitan areas get 

their own FMRs. 

At HUD’s request, the Census Bureau 

prepared a special publicly releasable 

census file that permits almost exact 

replication of HUD’s 2000 Base Rent 

calculations, except for areas with few 

rental units. This data set is located on 

HUD’s HUD USER Web site at http:// 

www.huduser.org/datasets/fmr/ 

CensusRentData/. 

A. Data Sources—2000 Census and 

2005 American Community Survey 

Proposed FY2008 FMRs are based on 

2000 Census data updated with more 

current survey data. For the first time, 

HUD is using data from the Census 

Bureau’s ACS; the ACS data are from 

2005, the full survey’s first 

implementation year. While the Census 

Bureau intends for the ACS to replace 

the decennial census sample ‘‘long 

form’’ for collecting detailed socioeconomic data, the ACS has several 

important distinctions from the 

decennial long form. These include: 

• The ACS is conducted on a 

continuous ‘‘rolling’’ basis throughout 

the year. As a result, survey responses 

do not correspond to a particular date, 

whereas the long form responses are as 

of the census date of April 1. This has 

implications for the as-of date assumed 

for ACS-based rents. The ‘‘as of’’ date 

for ACS-based rents is set at June 30, 

2005. 

• The ACS has about one-fifth the 

sample size of the decennial long form, 

which surveyed approximately one out 

of every six households. This means 

that an adequate sample size for oneyear ACS data will be available only for 

very large population geographic areas, 

and that data for smaller areas will be 

accumulated over 3 or 5 years to form 

the basis of decennial long form 

equivalent estimates. 

In the proposed FY2008 FMRs, HUD 

is largely replacing the accumulated 

2001-through-2005 FMR update factors 

from various sources with 2005 ACS 

data (RDDs performed between 2001 

and 2005 will be used under certain 

conditions described below). HUD uses 

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 the 

CBSA. FMR areas are classified into four 

ACS data availability categories: 

ACS–1. FMR Areas that have at least 

200 sample cases of two-bedroom 

standard quality rents. ACS–1 areas may 

be entire MSAs, sub-areas that are 

assigned the CBSA base rents, other subareas, or large nonmetropolitan 

counties. 

ACS–2. FMR Areas that are sub-areas 

of CBSAs where the sub-area is not 

assigned the CBSA base rent, and the 

sub-area does not have at least 200 

sample cases of two-bedroom standard 

quality rents, but the CBSA containing 

the sub-area does have at least 200 

sample cases of two-bedroom standard 

quality rents. 

ACS–3. FMR Areas that are MSAs or 

nonmetropolitan counties that have 

fewer than 200 sample cases of twobedroom standard quality rents, or subareas of CBSAs that have fewer than 200 

sample cases of two-bedroom standard 

quality rents. 

ACS–4. FMR Areas that have at least 

200 sample cases of two-bedroom recent 

mover rents. ACS–4 areas may be entire 

MSAs, sub-areas that are assigned CBSA 

rents, other sub-areas, or large 

nonmetropolitan counties. By 

definition, these areas are a subset of 

ACS–1 areas. 

In ACS–1 FMR areas, the 2000 

Census-to-2005 ACS update factor is the 

ratio of the 2005 ACS two-bedroom 

standard quality rent to the 2000 Census 

two-bedroom standard quality rent for 

the FMR Area. 

In ACS–2 FMR areas, the 2000 

Census-to-2005 ACS update factor is 

either (1) the ratio of the 2005 ACS twobedroom standard quality rent to the 

2000 Census two-bedroom standard 

quality rent for the CBSA containing the 

FMR Area, or (2) the ratio of the 2005 

ACS two-bedroom standard quality rent 

to the 2000 Census two-bedroom 

standard quality rent for the entire state 

(or population-weighted average of 

states) containing the FMR area, 

whichever brings its 2005 updated rent 

closer to the value of its CBSA 2005 

updated rent. 

In ACS–3 FMR areas, the 2000 

Census-to-2005 ACS update factor is the 

ratio of the 2005 ACS two-bedroom 

standard quality rent to the 2000 Census 

two-bedroom standard quality rent for 

the parts of the state not in ACS–1 or 

ACS–2 FMR areas, or the populationweighted average factor across such 

parts of the states containing each multistate FMR area. In cases where there are 

fewer than 200 sample cases of 2005 

ACS two-bedroom standard quality 

rents in the parts of the state not in 

ACS–1 or ACS–2 areas, HUD uses the 

ratio of the 2005 ACS two-bedroom 

standard quality rent to the 2000 Census 

two-bedroom standard quality rent for 

the entire state containing the FMR area 

as the update factor. 

In ACS–4 FMR areas, the local 2005 

ACS recent mover rent becomes a new 

base rent for 2005, if the updated 2000 

Census base rent is outside its 90 

percent confidence interval and the 

recent mover rent is greater than the 

local standard quality rent. This means 

that the ACS is used to replace the 

updated 2000 base rent with a 2005 

local ACS base rent. 

B. Data Sources—Legacy RDDs 

The Department regularly obtains 

additional rent survey data to update 

the FMRs in the form of RDD telephone 

rent surveys meeting the Department’s 

statistical criteria for updating FMRs. 

HUD conducted numerous RDD surveys 

between 2001 and 2005, and also 

accepted a number of non-HUD RDD 

surveys to update FMRs during this 

time period. Since these RDDs were 

performed according to the FMR area 

geography in place at the time, they may 

not provide usable coverage of FY2008 

FMR areas. RDD surveys performed 

between 2001 and 2005 are used to 

update or replace 2000 Census base 

rents in ACS–2 and ACS–3 FMR areas 

under the following conditions (in 

ACS–1 and ACS–4 FMR areas the ACS 

results are deemed superior to legacy 

RDD results and legacy RDDs are not 

evaluated 2): 

• The RDD was the most recent RDD 

performed for the area. 

• The RDD is ‘‘Accepted,’’ meaning 

the updated 2000 Census base rent for 

the RDD area (prorated to the RDD 

month) is outside the 95 percent 

confidence interval of the RDD. 

• If the Accepted RDD area covers at 

least 75 percent of the population of the 

FMR area, and the FMR area’s 

population in the Accepted RDD area is 

at least 75 percent of the Accepted RDD 

area, the new base rent is the Accepted 

RDD result. If these conditions do not 

hold, the RDD is not used. 


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Federal Register / Vol. 72, No. 133 / Thursday, July 12, 2007 / Notices 38401 

FMR area base rents affected by 

Legacy RDDs from 2001 to 2005 are 

updated to 2005 using the prorated 2000 

Census to 2005 ACS update factor (from 

the RDD month to June 2005) for the 

area. 

C. FMR Updates from 2005 to 2006 

Local CPI data is used to move rents 

from June 2005 to the end of 2006 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 is used for 

FMR areas in Class B and C size 

metropolitan areas and nonmetropolitan 

areas without local CPI update factors. 

D. FMR Updates from 2006 to 2008 

The national 1990 to 2000 average 

annual rent increase trend of 1.03 is 

applied for 1.25 years. 

E. Additional Rent Surveys and Other 

Data 

Post-2005 RDDs are evaluated against 

the 2005 ACS-based rent trended to the 

RDD month by the appropriate 

proportion (root) of the 2005-to-2008 

update factors. For example, if the RDD 

was conducted in August 2006, then the 

appropriate root (14/18) of the 2005-to2006 CPI-based update is used to update 

the 2005 ACS rent. If the RDD was 

conducted in February 2007, then the 

entire CPI update factor is applied to the 

2005 rent, and the appropriate root (2/ 

15) of the December 2006-to-April 2008 

update is applied. If the updated 2005 

rent is outside the 95 percent 

confidence interval of the RDD, then the 

RDD is ‘‘Accepted.’’ Accepted RDD 

results are trended to April 2008 using 

the remainder of the 2005-to-2008 

update factors. 

The FMR bonuses related to the 

impact of Hurricane Katrina for Baton 

Rouge, Louisiana, and New Orleans, 

first applied on March 6, 2006, are 

proposed to continue to be applied in 

the FY2008 FMRs. The 2005 ACS was 

conducted largely before the impact of 

Hurricane Katrina or before its effects on 

the rental market could be detected in 

the survey. Because the ACS indicates 

that the 2000-to-2005 FMR update 

factors for these areas should be lower 

than for other data sources used in 

FY2007 and earlier FMRs, HUD is 

adjusting the bonus percentages to 15 

percent in Baton Rouge and 35 percent 

in New Orleans, as subsequent research 

shows that the tight rental market 

conditions in both areas indicate that 

FMRs should not be reduced. 

The area-specific data and 

computations used to calculate 

proposed FY2008 FMRs and FMR area 

definitions can be found at http:// 

www.huduser.org/datasets/fmr/fmrs/ 

index.asp?data=fmr08. 

F. Large Bedroom Rents 

FMR estimates are calculated for twobedroom 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 

that permits derivations of rent ratios is 

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

datasets/fmr/CensusRentData/ 

index.html. 

The rents for three-bedroom and 

larger units continue to reflect HUD’s 

policy to set higher rents for these units 

than would result from using normal 

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 threebedroom 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 fourbedroom FMR for each extra bedroom. 

For example, the FMR for a fivebedroom unit is 1.15 times the fourbedroom FMR, and the FMR for a sixbedroom unit is 1.30 times the fourbedroom FMR. FMRs for single-room 

occupancy units are 0.75 times the zerobedroom (efficiency) FMR. 

A further adjustment was made using 

2000 Census data in establishing rent 

ratios for areas with local bedroom-size 

intervals above or below what are 

considered to be reasonable ranges or 

where sample sizes are inadequate to 

accurately measure bedroom rent 

differentials. HUD’s 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 

ranges used were: efficiency units are 

constrained to fall between 0.65 and 

0.83 of the two-bedroom FMR; onebedroom units must be between 0.76 

and 0.90 of the two-bedroom unit; threebedroom units must be between 1.10 

and 1.34 of the two-bedroom unit; and 

four-bedroom units must be between 

1.14 and 1.63 of the two-bedroom unit. 

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). 

For low-population, nonmetropolitan 

counties with small census recentmover rent samples, census-defined 

county group data were used in 

determining 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 new 

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 FY2007 were 

updated to FY2008 using the same data 

used to estimate the Housing Choice 

Voucher program FMRs if the respective 

FMR area’s definition had remained the 

same. If the result of this computation 

was higher than 40 percent of the rebenchmarked 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 exceptions to their 

manufactured housing space rental 

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 


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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. 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. 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 be done by the PHA itself, 

rather than by professional survey 

organizations, at a cost of $5,000 or less. 

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 HUD’s Web site, in Microsoft 

Word format, at the following address: 

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 should preferably be 

randomly drawn from a complete list of 

rental units for the FMR area. If this is 

not feasible, the selected sample must 

be drawn to be statistically 

representative of the entire rental 

housing stock of the FMR area. Surveys 

must include units at all rent levels and 

be representative by structure type 

(including single-family, duplex, and 

other small rental properties), age of 

housing unit, and geographic location. 

The 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 of FMR areas cover only 

one- and two-bedroom units. 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 

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: June 27, 2007. 

Darlene F. Williams, 

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. The proposed 

FY2008 FMRs reflect a change in 

metropolitan area definitions. HUD is 

using the metropolitan CBSAs, which 

are made up of one or more counties, as 

defined by the 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 FY2008 

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 sub-areas 

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 Metropolitan Statistical Areas or 

MSAs) may be modified to allow for 

sub-area 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 

FY2005 FMRs. Collectively, they 

include 1999 definition MSAs/PMSAs, 

metropolitan 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.) Sub-areas of 

MSAs are assigned their own FMRs 

when the sub-area 2000 Census Base 

Rent differs by at least 5 percent from 

the MSA 2000 Census Base Rent (i.e., by 

at most 95 percent or at least 105 

percent), or when the 2000 Census 

Median Family Income for the sub-area 

differs by at least 5 percent from the 

MSA 2000 Census Median Family 

Income. MSA sub-areas, and the 

remaining portions of MSAs after subareas have been determined, are referred 

to as HUD Metro FMR Areas (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 zerobedroom 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 


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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 

rents for manufactured home spaces 

FMRs are listed alphabetically in 

Schedule D. 

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. 

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[FR Doc. 07–3388 Filed 7–11–07; 8:45 am] 

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