Source: http://thefederalregister.com/2009/12/04/E9-28984.html
Timestamp: 2019-08-21 19:11:19
Document Index: 31339037

Matched Legal Cases: ['art 93', '§ 93', '§ 93', '§ 93', '§ 93', '§ 93', '§ 93', 'ART 93', '§ 93', '§ 93', '§ 93', '§ 93', '§ 93', '§ 93', '§ 93', '§ 93']

Federal Register | Housing Trust Fund; Allocation Formula
[Docket No. FR-5246-P-01]
RIN 2506-AC23
SUMMARY: The Housing and Economic Recovery Act of 2008 establishes a Housing Trust Fund to be administered by HUD. The purpose of the fund is to provide grants to States to increase and preserve the supply of rental housing for extremely low- and very low-income families, including homeless families, and to increase homeownership for extremely low- and very low-income families. The Housing and Economic Recovery Act of 2008 charges HUD to establish through regulation the formula for the distribution of the Housing Trust Fund to States. The statute specifies that only certain factors are to be part of the formula, and assigns priority to certain factors. This proposed rule submits, for public comment, the proposed formula for allocating funds from the Housing Trust Fund.
DATES: Comment due date:February 2, 2010.
ADDRESSES: 1.Submission of Comments by Mail.Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500.
FOR FURTHER INFORMATION CONTACT: Marcia Sigal, Office of Community Planning and Development, Department of Housing and Urban Development, 451 7th Street, SW., Room 7158, Washington, DC 20410; telephone number 202-708-2684 (this is not a toll-free number). 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.
The Housing and Economic Recovery Act of 2008, (Pub. L. 110-289, enacted July 30, 2008) (HERA) was major housing legislation enacted to reform and improve the regulation of Fannie Mae and Freddie Mac (the government-sponsored enterprises or GSEs), strengthen neighborhoods hardest hit by the foreclosure crisis, enhance mortgage protection and disclosures, and maintain the availability of affordable home loans. Section 1131 of HERA amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501et seq.) (Act) to add a new section 1337, entitled “Affordable Housing Allocation” and a new section 1338, entitled “Housing Trust Fund.”
Subpart A of new part 93 would set forth the general provisions applicable to the Housing Trust Fund (HTF) program. This subpart includes a definition section (§ 93.52) that establishes the definitions applicable to the HTF program. In keeping with the scope of this rulemaking, the definitions that would be established by the proposed rule pertain to the allocation formula, including the statutory definitions of “extremely low-income renter household,” “shortage of standard rental units both affordable and available to extremely low-income renter households,” and “shortage of standard rental units both affordable and available to very low-income renter households,” found in section 1338(f) of the Act. The list of defined terms will be expanded, as necessary, by HUD's forthcoming rule establishing the HTF programmatic requirements.
The proposed rule utilizes the statutory definitions of the terms “extremely low-income renter household” and “very low-income renter household.” Specifically, the proposed rule would define an extremely low-income renter household as a household whose income does not exceed 30 percent of the area median income (AMI). A very low-income renter household would be defined as a household whose income does not exceed 50 percent of AMI. Consistent with departmental practice for other of its programs, the proposed definitions of extremely low-income and very low-income renter households would provide for adjustment for family size as determined by the Secretary of HUD. The adjustments are standard factors that HUD applies to AMI before determining the extremely low-income and very low-income threshold. The adjustments for other family sizes are as follows: One person, 70 percent of AMI; two persons, 80 percent of AMI; three persons, 90 percent of AMI; four persons, base AMI; five persons, 108 percent of AMI; six persons, 116 percent of AMI; seven persons, 124 percent of AMI; and eight persons, 132 percent of AMI. The method is documented in the “FY 2008 HUD Income Limits” briefing materials available athttp://www.huduser.org/datasets/il/il08/index.html.
The proposed rule uses the “30 percent of 30 percent” terminology for consistency with the statutory language and conformity to housing industry practice to approximate the annual gross rent affordable to extremely low-income renter households; however, HUD notes that “30 percent of 30 percent” of the AMI equals nine percent of the AMI. In addition, the annual gross rent affordable to extremely low-income households is adjusted for the number of bedrooms. This is done to take into consideration that the number of bedrooms needed for a unit will vary with family size. This method will be documented and made available on thehttp://www.huduser.orgWeb site.
The statutory formula factors are incorporated in proposed § 93.70. Section 1338(c)(3)(C) of the Act requires the formula to give priority emphasis and consideration to the first factor in section 1338(c)(3)(B)(i). The proposed rule reflects this priority consideration by weighting this factor higher than the other factors in the formula (see proposed § 93.70(b)(2)). Section 1338(c)(10)(A) of the Act requires that no more than 10 percent of the funds may be spent on homeownership activities, Section 1338(c)(10)(D) states that no more than 10 percent may be spent on administration, and Section 1338(c)(10)(A) states that a minimum of 75 percent of the funds for rental activities must be for the benefit only of extremely low-income families or families with incomes at or below the poverty line. Therefore, HUD proposes to ensure that the two factors in section 1338(c)(3)(B)(i) that address extremely low-income renters, the first and third factors, receive a combined weight of 75 percent, with priority emphasis on the first factor.
Data for calculating the HTF program formula allocations must come from readily available standardized data sources. The U.S. Census, the American Community Survey, and the RSMeans cost survey, are the most readily available sources for the data necessary to calculate the formula allocations. However, the data available for insular areas (Guam, the Northern Mariana Islands, the United States Virgin Islands, and America Samoa) in the surveys differ from the data available from those sources for the 50 States, the Commonwealth of Puerto Rico, and the District of Columbia. To accommodate the differences in data, the proposed rule would establish a separate formula allocation process for the insular areas. The portion of the annual appropriation available for formula allocations for insular areas will be determined by establishing the ratio of renter households in the insular areas to the total number of renter households in the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and the insular areas. This is an appropriate way to establish the amount to be allocated to the insular areas, as these data (onrenter households) are readily available from the U.S. Census Bureau for all of the jurisdictions in the potential pool of grantees for this program; and the primary focus of the HTF is to produce or preserve housing to serve renter households. Note that because of the limited data available for insular areas, HUD's other formula programs similar to the HTF program also treat insular areas in a different way than other program grantees. For example, the HOME and Community Development Block Grants programs set aside specific percentage or dollar amounts for the insular areas. Proposed § 93.60(b) describes this allocation process.
As noted above, section 1338(c)(3)(B)(v) of the Act requires that the formula contain a multiplication factor reflecting the relative cost of construction in the State. The construction cost factor would be implemented at § 93.70(c)(5). HUD will use RSMeans construction cost data in making this calculation. The factor will be constructed by calculating a population weighted average of the construction costs in sampled metropolitan areas of each State as a proportion of the national average of such State averages. For example, if a State's weighted average RSMeans location adjustment factor is 0.818 and the national average of the State averages is 0.939, that State's base calculation, based on its share of housing need, would be multiplied times a ratio of 0.818/0.939. That is, the base calculation would be multiplied times 0.871. In contrast, a State with an average location adjustment factor of 1.145 would have its grant multiplied times a ratio of 1.145/0.939, thus its base calculation would be multiplied times 1.220.
Section 1338(c)(4)(C) of the Act establishes minimum allocations for the 50 States and the District of Columbia and provides that if the formula would allocate less than $3,000,000 to any of the 50 States or the District of Columbia in a fiscal year, the allocation for such State or the District of Columbia shall be $3,000,000, and the portion of State calculated allocations above $3,000,000 would be pro rata adjusted to match the amount available to be allocated. The minimum allocation established by the Act is found in proposed § 93.70(d).
III. Findings and Certifications Executive Order 12866, Regulatory Planning and Review
The Economic Analysis prepared for this rule also is available for public inspection and on HUD's Web site athttp://www.hud.gov.A summary of the findings contained in the Economic Analysis follows.
The proposed allocation formula is intended to target funds primarily to States with a shortage of rental housing affordable to extremely low-income households. Specifically, this program provides funding to add supply to market places where there is strong evidence of inadequate supply. This program represents a strong complement to the demand side program, the Housing Choice Voucher program, which provides a tenant based subsidy for primarily extremely low-income households to afford existing privately owned rental housing. The primary benefits of the HTF program are expected to be similar to the Housing Choice Voucher program. An evaluation of the impact of receiving a housing voucher versus not receiving a housing voucher has shown that the primary benefit of housing assistance programs is to reduce homelessness and housing cost burdens. Thus, the primary benefit of the HTF program will be to reduce the number of homeless families and individuals, as well as reducing the number of families paying a disproportionate share of their income for housing in relatively tight housing markets.
The Regulatory Flexibility Act (5 U.S.C. 601et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.
Administrative practice and procedure, Grant programs—housing and community development, Low and moderate income housing, Manufactured homes, Rent subsidies, Reporting and recordkeeping requirements.
PART 93—HOUSING TRUST FUND Sec. Subpart A—General Provisions 93.50 Purpose. 93.52 Definitions. Subpart B—Allocation Formula 93.55 Formula allocation. 93.60 Allocations for the insular areas. 93.70 Allocations for the 50 States, the Commonwealth of Puerto Rico and the District of Columbia. 93.75 Federal Register notice of formula allocations. Authority:
12 U.S.C. 4567; 42 U.S.C. 3535(d).
§ 93.50 Purpose.
§ 93.52 Definitions.
Actmeans the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (12 U.S.C. 4501et seq).
Extremely low-income renter householdsmeans a household whose income is not in excess of 30 percent of the area median income, with adjustments for smaller and larger families, as determined by the Secretary.
Householdmeans one or more persons occupying a housing unit.
Insular areasmeans Guam, the Northern Mariana Islands, the United States Virgin Islands, and American Samoa.
Poverty lineis defined in section 673 of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902).
Secretarymeans the Secretary of Housing and Urban Development.
Shortage of standard rental units both affordable and available to extremely low-income renter households(1) Means for any State or other geographical area the gap between:
Shortage of standard rental units both affordable and available to very low-income renter households(1) Means for any State or other geographical area the gap between:
Statemeans any State of the United States, the Commonwealth of Puerto Rico, the District of Columbia, and the insular areas.
Very low-income renter householdsmeans a household whose income is in excess of 30 percent but not greater than 50 percent of the AMI, with adjustments for smaller and larger families, as determined by the Secretary.
§ 93.55 Formula allocation.
§ 93.60 Allocations for the insular areas.
The allocation amount for each insular area is determined by multiplying the funds available times the ratio of renter households in each insular area to the total number of renter households in the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and the insular areas. This allocation is not subject to adjustment pursuant to § 93.70(d).
§ 93.70 Allocations for the 50 States, the Commonwealth of Puerto Rico, and the District of Columbia.
(a)Amounts available for allocations.The amount of funds that is available for allocation by the formula to the 50 States, the Commonwealth of Puerto Rico, and the District of Columbia is determined using the most current data available from the U.S. Census Bureau that is available for the same year for all these geographic areas. The amount is equal to the balance of funds remaining after determining formula allocations for the insular areas under § 93.60. For purposes of subsections (b) and (c) of this section, the term “State” means any of the 50 United States, the Commonwealth of Puerto Rico, and the District of Columbia.
(b)Allocations.(1) Allocations to the States are determined using the four needs factors described in paragraphs (c)(1) through (c)(4) of this section, multiplying each factor by the amount available under paragraph (a) of this section by its priority weight, and summing the four factors for each State.
(c)Formula factors—(1)Need factor one.The ratio of the shortage of standard rental units both affordable and available to extremely low-income renter households in the State to the aggregate shortage of standard rental units both affordable and available to extremely low-income renter households in all the States.
(2)Need factor two.The ratio of the shortage of standard rental units both affordable and available to very low-income renter households in the State to the aggregate shortage of standard rental units both affordable and available to very low-income renter households in all the States.
(3)Need factor three.The ratio of:
(4)Need factor four.The ratio of very low-income renter households in the State paying more than 50 percent of income on rent relative to the aggregate number of very low-income renter households paying more than 50 percent of income on rent in all the States.
(5)Construction cost factor.The resulting sum calculated from the factors described in paragraphs (c)(1) through (c)(4) of this section shall be multiplied by the relative cost of construction in the State. For purposes of calculating this factor, the term “cost of construction”:
(d)Minimum allocations.If the formula amount determined for a fiscal year is less than $3,000,000 to any of the 50 States or the District of Columbia, then the allocation to that State or the District of Columbia is increased to the $3,000,000, and allocations to States, the Commonwealth of Puerto Rico, and the District of Columbia above $3,000,000 are adjusted by an equal amount on a pro rata basis.
§ 93.75 Federal Register notice of formula allocations.
Not later than 60 days after the date that HUD determines the formula amounts under this subpart, HUD will publish a notice in theFederal Registerannouncing the availability of the allocations to States.
Dated: November 4, 2009. Mercedes M. Márquez, Assistant Secretary for Community Planning and Development.