50724 Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations

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:

alanlfox@hud.gov). Hearing- or

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

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 betweenCensus 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 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
Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations 50725

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

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 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 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.

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
50726 Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations

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).

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.

The Catalog of Federal Domestic

Assistance program number is 14.156, LowerIncome 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: September 16, 1997.

Andrew M. Cuomo,

Secretary.

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

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 twobedroom Section 8 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 base-year 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.
Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations 50727

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.

[FR Doc. 97–25506 Filed 9–25–97; 8:45 am]

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[FR Doc. 97–25506 Filed 9–25–97; 8:45 am]

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