57658 Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Rules and Regulations

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Part 888

[Docket No. FR–4589–N–02]

Fair Market Rents for Fiscal Year 2001

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of Final Fiscal Year (FY)

2001 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 to establish payment

standards for the Housing Choice

Voucher program; to determine initial

contract rents in new commitments for

Section 8 project-based assistance (e.g.,

the project-based voucher program); to

determine whether comparability

applies to adjustment of contract rents

during the term of an existing HAP

contract in the Section 8 new

construction, substantial rehabilitation

and moderate rehabilitation programs;

and as a limit on renewal rents for

certain Section 8 projects. The FMRs

also apply to any other programs

requiring their use. Today’s notice

establishes final FY 2001 FMRs for all

areas. These FMRs reflect the estimated

40th percentile rent levels trended to

April 1, 2001.

EFFECTIVE DATE: The FMRs published in

this notice are effective on October 1,

2000.

FOR FURTHER INFORMATION CONTACT:

Gerald Benoit, 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 Lynn A. Rodgers, Economic and

Market Analysis Division, Office of

Economic Affairs, telephone (202) 708–

0590, Extension 5735 (e-mail:

Lynn_A._Rodgers @hud.gov). Hearing-or

speech-impaired persons may use the

Telecommunications Devices for the

Deaf (TTY) by contacting the Federal

Information Relay Service at 1–800–

877–8339. (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 safe

and habitable housing. Housing

assistance payments are limited by

FMRs established by HUD for different

areas. In the voucher program, the FMR

is used to determine the ‘‘payment

standard’’ (the maximum monthly

subsidy) for assisted families (see 24

CFR Section 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, 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

FMRs are 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.

Bedroom Size Adjustments

FMRs have been calculated separately

for each bedroom size category. For

areas whose FMRs are based on the

State minimums, the rents for each

bedroom size are the higher of the rent

for the area or the Statewide average of

nonmetropolitan counties for that

bedroom size.

For all other FMR areas, the FMRs,

including determination of the intervals

between the FMRs for bedroom size

category, are generally based on data for

the specific area. Although intervals are

generally based on data for the specific

area, exceptions have been made for

some areas with local bedroom size rent

intervals below an acceptable range. For

those areas the intervals used were the

minimum bedroom intervals

(determined after excluding outliers)

from the distribution of bedroom

intervals for all metropolitan areas.

Higher intervals continue to be used

for three-bedroom and larger size units

than would result from using the actual

market relationships. This is done to

assist the largest, most difficult to house

families in finding program-eligible

units. The FMRs for unit sizes larger

than 4 bedroom are calculated by

adding 15 percent to the 4 bedroom

FMR for each extra bedroom. For

example, the FMR for a 5 bedroom unit

is 1.15 times the 4 bedroom FMR, and

the FMR for a 6 bedroom unit is 1.30

times the 4 bedroom FMR. FMRs for

single-room-occupancy (SRO) units are

0.75 times the 0 bedroom FMR.

Public Comments

In response to the April 28, 2000

proposed FMRs, HUD received public

comments covering 33 FMR areas.

Rental housing survey information was

provided for 22 of those FMR areas. All

of the survey information submitted was

evaluated. Based on that review, HUD

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has revised the proposed FMRs for 16

areas. The information submitted for the

other FMR areas was not considered

sufficient to provide a basis for revising

the FMRs. HUD has increased the

proposed FMRs for the following areas.

Bennington County, VT

Brown County, SD

Caledonia County, VT

Clay County, SD

Codington County, SD

Davidson County, SD

Essex County, VT

Franklin County, VT

Grand Isle County, VT

Hughes County, SD

Reno, NV, MSA (Manufactured Home

Space FMRs only)

Rutland County, VT

San Jose, CA PMSA

Vallejo-Fairfield-Napa, CA PMSA

(Manufactured Home Space FMRs

only)

Windham County, VT

Windsor County, VT

RDD Surveys

This notice makes effective the FMRs

for 5 areas proposed with reductions

based on RDD surveys conducted from

January through April, 2000.

Of these five areas, comments were

received from:

Lake Charles, LA MSA

Providence-Fall River-Warwick, RI—

MA MSA

Springfield, MA MSA

None of the comments received

pertaining to these three FMR areas

contained sufficient rental housing

survey information to provide a basis for

revising the FMRs.

No comments were received from the

other two areas with proposed

decreases:

Brownsville-Harlingen-San Benito, TX

MSA

Utica-Rome, NY MSA

Based on RDDs conducted by HUD in

summer, 2000, FMRs for the following

areas are being increased more than the

normal inflation based increase:

Athens County, OH

Burlington, VT MSA

Burnet County, TX

Goldsboro, NC MSA

Jonesboro, AR MSA

Montcalm County, MI

Oakland, CA PMSA

Oklahoma City, OK MSA

Portland, ME MSA

Stamford-Norwalk, CT PMSA

Ventura, CA PMSA

Summer, 2000 RDDs were conducted

for the following areas with no change

in the FMRs indicated:

Boulder-Longmont, CO PMSA

Harrison County, OH

Los Angeles-Long Beach, CA PMSA

Rocky Mount, NC MSA

Santa Barbara-Santa Maria-Lompoc, CA

MSA

A summer, 2000 RDD indicates a

decrease of approximately 16 percent in

the FMR for the Dutchess County, NY

PMSA. This reduction will be proposed

for the FY 2002 FMRs.

American Housing Survey

There were no applicable AHS

surveys to include in the FY 2001

FMRs.

Calculation Errors

San Diego, CA and Orange County,

CA FMRs have been increased by 2

percent and 1.1 percent, respectively,

due to corrections of calculation errors

in the proposed FMRs.

FMR Area Definition Changes

There were no changes in OMB

metropolitan area definitions affecting

the FY 2001 FMRs.

Three areas requested changes to their

FMR areas: the Public Housing Agency

(PHA) for Santa Barbara, CA requested

a north/south split in the county, and

the Fairfax County, VA and Rockland

County, NY PHAs requested that they be

removed from their respective FMR

areas and made separate FMR areas.

HUD does not support splitting FMR

areas for these areas. FMR areas are

intended to correspond to housing

market areas, which HUD defines based

on the Office of Management and

Budget’s metropolitan area definitions.

While many FMR areas have large

differentials of market rent between the

highest and lowest cost parts of an FMR

area, current rules for the Section 8

Voucher Program provide that a PHA

may establish a separate payment

standard for a designated part of an

FMR area up to 110 percent of the

published standard amounts that exceed

this limit. In specified circumstances,

with sufficient justification, HUD

headquarters may even approve a

voucher payment standard amount that

exceeds 120 percent of the published

FMR—the maximum subsidy limit in

the old Section 8 certificate program.

These exceptions are sufficient to

account for market rent differentials.

Manufactured Home Space Surveys

FMRs for the rental of manufactured

home spaces in the Housing Choice

Voucher program are 40 percent of the

applicable Section 8 existing housing

program FMR for a two-bedroom unit.

HUD accepts public comments

requesting modifications of these FMRs

where the 40 percent FMRs are thought

to be inadequate. In order to be accepted

as a basis for revising the FMRs,

comments must contain statistically

valid survey data that show the 40th

percentile space rent (including the cost

of utilities) for the entire FMR area.

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 other 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 local rents are thought to

be significantly different than the FMR

proposed by HUD. In addition, HUD has

developed a simplified 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 Housing Agencies in Preparing

Fair Market Rent Comments.’’ Smaller

PHAs should obtain ‘‘Rental Housing

Surveys; A Guide to Assist Smaller

Housing Agencies in Preparing Fair

Market Rent Comments.’’ These guides

are also available on the Internet at

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

fmr.html.

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

57660 Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Rules and Regulations

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 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.

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 13132, 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.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic

Assistance program number is 14.156, LowerIncome Housing Assistance Program (Section

8).

Dated: September 15, 2000.

Andrew Cuomo,

Secretary.

Accordingly, the Fair Market Rent

Schedules,which will not be codified in

24 CFR Part 888, are amended as

follows:

Fair Market Rents for the Housing Choice

Voucher 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.

2. Bedroom Size Adjustments

Schedule B shows the FMRs for 0-

bedroom through 4-bedroom units. The

FMRs for unit sizes larger than 4

bedrooms are calculated by adding 15

percent to the 4-bedroom FMR for each

extra bedroom. For example, the FMR

for a 5-bedroom unit is 1.15 times the

4-bedroom FMR, and the FMR for a 6-

bedroom unit is 1.30 times the 4

bedroom FMR. FMRs for single-roomoccupancy (SRO) units are 0.75 times

the 0 bedroom FMR.

3. FMRs for Manufactured Home

Spaces

FMRs for manufactured home spaces

in the Housing Choice Voucher program

are 40 percent of the two-bedroom

Housing Choice Voucher program

FMRs, with the exception of the areas

listed in Schedule D whose

manufactured home space FMRs have

been modified on the basis of public

comments. Once approved, the revised

manufactured home space FMRs

establish new base-year estimates that

are updated annually using the same

data used to estimate the Housing

Choice Voucher program FMRs. The

FMR area definitions used for the rental

of manufactured home spaces are the

same as the area definitions used for the

other FMRs.

4. 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

Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Rules and Regulations 57661

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.

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[FR Doc. 00–24333 Filed 9–22–00; 8:45 am]

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