12594 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Office of the Secretary

24 CFR Part 888

[Docket No. N–95–3875; FR–3807–N–01]

Section 8 Housing Assistance

Payments Program—Contract Rent

Annual Adjustment Factors

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of revised contract rent

annual adjustment factors.

SUMMARY: The United States Housing

Act of 1937 requires that the assistance

contracts signed by owners participating

in the Department’s Section 8 Housing

Assistance Payments programs provide

for annual or more frequent adjustment

in the maximum monthly rentals for

units covered by the contract to reflect

changes based on fair market rents

prevailing in a particular market area, or

on a reasonable formula. This notice

announces revised Annual Adjustment

Factors (AAFs), which are based on a

formula using data on residential rent

and utilities cost changes from the

Bureau of Labor Statistics Consumer

Price Index (CPI) and the HUD Random

Digit Dialing (RDD) rent change surveys.

EFFECTIVE DATE: March 7, 1995.

FOR FURTHER INFORMATION CONTACT:

Gerald J. Benoit, Rental Assistance

Division, Office of Public and Indian

Housing [(202) 708–0477 (TDD) or (202)

708–0850 (voice)], for questions relating

to the Section 8 Voucher, Certificate,

and Moderate Rehabilitation programs;

Barbara Hunter, Program Planning

Division, Office of Multifamily Housing

Management [(202) 708–3944 (TDD) or

(202) 708–4594 (voice)], for questions

relating to all other Section 8 programs;

for technical information regarding the

development of the schedules for

specific areas or the method used for

calculating the AAFs, Michael R. Allard,

Economic and Market Analysis

Division, Office of Policy Development

and Research [(202) 708–0577 (TDD) or

(202) 708–0770 (voice)]. Mailing address

for above persons: Department of

Housing and Urban Development, 451

Seventh Street SW, Washington, DC

20410. (The above-listed telephone

numbers are not toll-free.)

SUPPLEMENTARY INFORMATION: The

Department of Housing and Urban

Development Appropriations Act, 1995

(Pub. L. 103–327, approved September

28, 1994) provides that, ‘‘For any unit

occupied by the same family at the time

of the last annual rental adjustment,

where the assistance contract provides

for the adjustment of the maximum

monthly rent by applying an annual

adjustment factor and where the rent for

a unit is otherwise eligible for an

adjustment based on the full amount of

the factor, 0.01 shall be subtracted from

the amount of the factor, except that the

factor shall not be reduced to less than

1.0′′. Schedule C, tables 1 and 2 contain

separate AAFs for a unit occupied by

the same family at the last annual

adjustment (Table 2), and for a unit

occupied by a new family since the last

annual adjustment since (Table 1).

The revised AAFs are applicable for

adjusting Contract Rents for contract

anniversaries falling on or after

November 8, 1994, the anniversary date

for publication of a new annual

adjustment factor.

Applicability of AAFs to Various

Section 8 Programs

In general, AAFs established by this

Notice are used to adjust Contract Rents

for Section 8 Housing Assistance

Payments Program units. However, the

specific application of the AAFs should

be determined by reference to the HAP

Contract and to appropriate program

regulations or requirements.

AAFs are not used for the Section 8

Voucher program. Contract Rents for

many projects receiving Section 8

subsidies under the Loan Management

provisions of 24 CFR part 886, subpart

A, and for projects receiving Section 8

subsidies under the Property

Disposition provisions of 24 CFR part

886, subpart C, are adjusted, at HUD’s

option, either by applying the AAFs or

by adjusting rents in accordance with 24

CFR 207.19(e).

Under the Section 8 Moderate

Rehabilitation program, the public

housing agency (PHA) applies the AAF

to the base rent, not the Contract Rent.

AAF Tables

The AAFs for FY 1995 are contained

in Schedule C, tables 1 and 2 of this

notice.

AAF Areas

With several exceptions discussed

below, the AAFs shown in Schedule C

use the Office of Management and

Budget’s (OMB) most current definitions

of metropolitan areas. HUD uses the

OMB Metropolitan Statistical Area

(MSA) and Primary Metropolitan

Statistical Area (PMSA) definitions for

AAF areas because they closely

correspond to housing market area

definitions.

The exceptions are for six large

metropolitan areas, where HUD

considers the area covered by the OMB

definitions to be larger than appropriate

for use as a housing market area

definition. HUD therefore modified the

definitions for these areas by deleting

some of the counties that OMB had

added to its revised definitions. The

following counties are deleted from the

HUD definitions of AAF areas:

Metropolitan Area Deleted Counties

Atlanta, GA—Carroll, Pickens, and

Walton Counties.

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.

New Orleans, LA—St. James Parish.

Washington, DC—Berkeley and

Jefferson Counties in West Virginia;

and Clarke, Culpeper, King George

and Warren counties in Virginia.

Separate AAFs are listed in this

publication for the above counties. They

and the metropolitan area of which they

are a part are identified with an asterisk

(*) next to the area name. The asterisk

denotes that there is a difference

between the OMB metropolitan area and

the HUD AAF area definitions for these

areas.

Based on an evaluation of information

submitted by local officials, HUD has

determined that Spalding County is part

of the Atlanta housing market area.

Program units in Spalding County,

therefore, will use the Atlanta, GA

AAFs.

Each AAF applies to a specified

geographical area and to units of all

bedroom sizes. AAFs are provided for

the metropolitan parts (exclusive of CPI

areas) and the nonmetropolitan parts of

the ten HUD regions, which, under

HUD’s reorganization plan have been

renamed and are referred to as follows:

Region I (Boston) is now New England

Region II (New York) is now New York/

New Jersey

Region III (Philadelphia) is now the

Mid-Atlantic

Region IV (Atlanta) is now the Southeast

Region V (Chicago) is now the Midwest

Region VI (Fort Worth) is now the

Southwest

Region VII (Kansas City) is now the

Great Plains

Region VIII (Denver) is now Rocky

Mountain

Region IX (San Francisco) is now

Pacific/Hawaii

Region X (Seattle) is now Northwest/

Alaska

AAFs, developed from local CPI

surveys, also are provided for 103

separate metropolitan AAF areas.

Program participants should refer to

the area definitions section at the end of
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12595

Schedule C to make certain that they are

using the correct AAFs. Units located in

metropolitan areas with a local CPI

survey must use the corresponding

AAFs listed separately for those

metropolitan areas. Units that are

located in areas without a local CPI

survey must use the appropriate HUD

regional Metropolitan or

Nonmetropolitan AAFs.

The AAF area definitions shown in

Schedule C are listed in alphabetical

order by State. The associated HUD

region is shown next to each State

name. Areas whose AAFs are

determined by local CPI surveys are

listed first. All CPI defined areas have

separate AAF schedules and are shown

with their corresponding county

definitions or as metropolitan counties.

Listed after the CPI defined areas (in

those states that have such areas) are the

metropolitan and nonmetropolitan

counties of each State. In the six New

England States, the listings are for

counties or parts of counties as defined

by towns or cities.

Puerto Rico and the Virgin Islands use

the Southeast AAFs. All areas in Hawaii

use the AAFs identified in the table as

STATE: Hawaii, which are based on the

CPI survey for the Honolulu

metropolitan area. The Pacific Islands

use the Pacific/Hawaii Nonmetropolitan

AAFs. The Anchorage metropolitan area

uses the AAFs based on the local CPI

survey. All other areas in Alaska use the

Northwest/Alaska Nonmetropolitan

AAFs. Reflecting a decrease in the local

CPI survey, the AAFs for the San Diego,

CA MSA are shown as 1.00.

Section 8 Certificate Program AAFs for

Manufactured Home Spaces

The AAFs in this publication

identified as ‘‘Highest Cost Utility

Excluded’’ are to be used for updating

manufactured home space contract

rents. The applicable AAF is

determined by reference to the

geographic listings contained in

Schedule C, as described in the

preceding section.

Retroactivity

Retroactivity is permitted to avoid any

detriment to owners because of HUD’s

delay in the annual publication of the

factors, as required by 24 CFR 888.202.

Owners of Section 8 units (other than

units assisted under the Section 8

Certificate, Moderate Rehabilitation,

regular and SRO, Project-based

Assistance Certificates, and FmHA

programs) who have HAP Contracts

with anniversary dates falling on

November 8, 1994 through March 7,

1995 may request that the AAFs be

applied retroactively to the anniversary

date of their HAP Contracts.

The AAFs are not applied

retroactively for units assisted under the

Section 8 Certificate, Moderate

Rehabilitation (both regular and SRO),

Project-based Assistance Certificates,

and the FmHA programs. The annual

adjustments for these units are

determined as of any anniversary date

using the AAFs most recently published

in the Federal Register (see 24 CFR

882.108(a)(1)(i) and 884.109(b)(2)).

RDD Factors

HUD uses the RDD regional surveys

for calculating AAFs. The RDD survey

method is based on a sampling

procedure that uses computers to select

a statistically random sample of rental

housing, dial and keep track of the

telephone calls and process the

responses. RDD surveys are conducted

to determine the rent change factors for

the metropolitan parts (exclusive of CPI

areas) and nonmetropolitan parts of the

10 HUD regions, a total of 20 surveys.

AAF Formula

The formula for calculating the AAFs

for each area is as follows:

For areas with CPI surveys: (1)

Changes in the shelter rent and utilities

components were calculated based on

the most recent CPI annual average

change data; (2) the shelter rent factor

was calculated by eliminating the effect

of heating costs that are included in the

rent of some of the units included in the

CPI surveys; and (3) the gross rent

factors were calculated by weighing the

rent and utility components with the

1990 Census corresponding

components.

For areas using RDD surveys: (1) The

change in gross rent was calculated

using the most recent RDD survey

median gross rent for the respective

metropolitan or nonmetropolitan parts

of the HUD region; and (2) the change

in shelter rent was calculated by

subtracting median value of utilities

costs from the median gross rent. The

median cost of utilities was determined

from the units in the RDD sample

reporting that all utilities were paid by

the tenant.

Other Matters

An environmental assessment is

unnecessary, since revising Annual

Adjustment Factors is categorically

excluded from the Department’s

National Environmental Policy Act

procedures under 24 CFR 50.200(l).

The General Counsel, as the

Designated Official under section 6(a) of

Executive Order 12612, Federalism, has

determined that the policies contained

in this Notice do not have federalism

implications and, thus, are not subject

to review under the Order. The Notice

merely announces the adjustment

factors to be used to adjust contract

rents in the Section 8 Housing

Assistance Payment programs, as

required by the United States Housing

Act of 1937.

The General Counsel, as the

Designated Official under Executive

Order 12606, The Family, has also

determined that this Notice does not

have potential significant impact on

family formation, maintenance, and

general well-being and, thus, is not

subject to review under the Order. The

Notice merely announces the

adjustment factors to be used to adjust

contract rents in the Section 8 Housing

Assistance Payment programs, as

required by the United States Housing

Act of 1937.

The Catalog of Federal Domestic

Assistance program number for Lower

Income Housing Assistance programs

(Section 8) is 14.156.

Accordingly, the Department

publishes these Contract Rent Annual

Adjustment Factors for the Section 8

Housing Assistance Payments Program

as set forth in the following tables:

Dated: February 7, 1995.

Henry Cisneros,

Secretary

BILLING CODE 4210–32–P
12596 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12597
12598 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12599
12600 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12601
12602 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12603
12604 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12605
12606 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12607
12608 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12609
12610 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12611
12612 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12613
12614 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12615
12616 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12617
12618 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12619
12620 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12621
12622 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12623
12624 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12625
12626 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations
Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations 12627
12628 Federal Register / Vol. 60, No. 44 / Tuesday, March 7, 1995 / Rules and Regulations

[FR Doc. 95–5457 Filed 3–6–95; 8:45 am]

BILLING CODE 4210–32–C