[Federal Register: February 28, 2005 (Volume 70, Number 38)]
[Notices]
[Page 9777-9838]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe05-149]
[[Page 9777]]
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Part V
Department of Housing and Urban Development
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Fair Market Rents for the Housing Choice Voucher Program and Moderate
Rehabilitation Single Room Occupancy Program; Fiscal Year 2005; Notice
[[Page 9778]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4937-N-03]
Fair Market Rents for the Housing Choice Voucher Program and
Moderate Rehabilitation Single Room Occupancy Program; Fiscal Year 2005
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Revised Final Fiscal Year (FY) 2005 Fair Market Rents
(FMRs).
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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.
The primary uses of FMRs are 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. Today's notice
revises the final FY2005 FMRs that were published on October 1, 2004,
for a limited number of areas.
EFFECTIVE DATE: The FMRs published in this notice are effective
February 28, 2005.
FOR FURTHER INFORMATION CONTACT: For technical information on the
methodology used to develop fair market rents or a listing of all fair
market rents, please call the HUD USER information line at 800-245-2691
or access the information 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, a table of 40th percentile
recent mover rents for the 39 areas with 50th percentile FMRs will be
provided on the same website noted above. Any 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 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 TDD 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 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 (non-
luxury) 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 news page: 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.
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.) Final FY2005 FMRs were published on
October 1, 2004 (69 FR 59003), consistent with section 8(c)(1) of the
USHA.
III. Final FY2005 FMRs, Published on October 1, 2004
HUD's final FY2005 FMRs were set at the 40th and 50th percentile
and trended forward to April 2005 in accordance with HUD regulations.
In setting the final FY2005 FMRs, HUD took into consideration a large
number of comments objecting to the magnitude of changes caused by use
of new data and new Office of Management and Budget (OMB) metropolitan
area definitions and by insufficient time to evaluate and respond to
the proposed changes. While HUD is required by statute to use the most
recent available data in setting FMRs, HUD is not obligated to use the
new OMB definitions. In the final FMR publication, the 2004 FMR area
definitions were used to eliminate FMR differences resulting from
geography changes. The FY2005 FMR schedules contained in the October 1,
2004, FMR notice are based on the 2000 Census and, when available, more
current data, but were calculated for the same geographical areas used
in preparing the FY2004 FMRs.
By September 7, 2004, HUD had received 370 public comments on the
proposed FY2005 FMRs. Most of these comments opposed implementation of
the proposed FMRs. The primary reason given was that the proposed
FY2005 FMRs were significantly different from the FY2004 FMRs, and that
additional time was needed to examine the proposed FMRs. Many
commenters asked HUD to delay issuing FY2005 FMRs. HUD was obligated by
statute to issue revised FMRs based on the most current available data
by October 1, 2004, and did so, but allowed additional public comments
to be submitted until November 2004.
IV. Revised Final FY2005 FMRs
The revised final FY2005 FMRs continue to be based on the same
geographic areas as were used in the FY2004 FMRs. The only changes
between the final FY2005 FMRs published on October 1, 2004, and the
FMRs in this publication resulted from additional information submitted
with public comments or resulting from HUD Random Digit Dialing (RDD)
surveys. A total of 283 public comments submitted in the second public
comment period that closed in November 2004 were reviewed. Most of the
comments received lacked the data needed to support FMR changes. The
comments received are discussed in more detail later in this notice.
[[Page 9779]]
V. FMR Methodology
A. Data Sources
The data sources used are explained in detail in the October 1,
2004, Federal Register FMR publication. Data from the 2000 Census were
used to revise FMRs for most areas, which served to correct estimation
errors that have accumulated since the 1990 Census data were used to
revise FMRs. A number of the larger metropolitan areas also had
American Housing Survey or RDD surveys conducted after the 2000 Census
that were used in calculating FMRs. At HUD's request, the Census Bureau
prepared a special extract of Census data that is a very close
approximation of the unsuppressed data used in calculating FMRs that
can be used to almost exactly replicate HUD's FMR calculations. This
data set is located on HUD's HUDUSER Web site at: http://www.huduser.org/datasets/fmr/CensusRentData/index.html
.
B. Large Bedroom Rents
A number of concerns about FMR reductions for large bedroom FMRs
were noted in public comments. The changes made were the result of
changes in rent relationship patterns shown by the 2000 Census.
Relative to two-bedroom FMRs, a large number of efficiency and one-
bedroom rents increased while many three-bedroom and large unit FMRs
decreased. A majority of three-plus bedroom FMRs increased in FY2005,
but there were an unusual number of decreases that were related to the
Census rebenchmarking process that occurs every 10 years.
FMR estimates are calculated for two-bedroom units. This 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.
For the past several years, bedroom ratios have been based on 1990
Census data. The FY2005 FMRs were the first to make use of 2000 Census
data to more correctly reflect market rent differentials between units
with differing numbers of bedrooms. The 2000 Census data were analyzed
in essentially the same way as the 1990 Census data to determine the
bedroom ratio outliers. The one major difference in this analysis was
that HUD had unrestricted access to the 2000 Census data, which
permitted it to more precisely calculate bedroom ratios. The analysis
showed significant changes in bedroom ratios over the decade and
permitted more accurate estimates of bedroom rent interval differences.
Median efficiency rents increased 9 percent relative to the two-bedroom
ratios. One-bedroom rents also increased relative to two-bedroom rents.
Median four-bedroom rents, however, fell 9 percent over the decade
relative to two-bedroom rents and median three-bedroom rent ratios also
decreased. These changes were at least partly associated with the
relatively large number of new, higher rent one- and two-bedroom units
built during the 1990's.
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 three-
bedroom 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 four-bedroom FMR
for 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 units
are 0.75 times the zero-bedroom (efficiency) FMR.
A further adjustment is made 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. 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 in New York City 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 final ranges used were: efficiency units are constrained to fall
between 0.65 and 0.83 of the two-bedroom FMR, one-bedroom units must be
between 0.76 and 0.89 of the two-bedroom unit, three-bedroom 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
(e.g., efficiency rents were not allowed to be higher than one-bedroom
rents and four-bedroom rents were set at a minimum of 3 percent higher
than three-bedroom rents).
For low-population, non-metropolitan counties with small Census
recent-mover 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 have less
than 33 two-bedroom Census sample observations.
C. FMR Updates to 2000 Census
After 2000 Census FMR estimates were established for each FMR area
and bedroom size, they were updated from the estimated Census date of
April 1, 2000, to April 1, 2005 (the midpoint of FY2005). Update
factors for the 2000 through end of 2003 period were based either on
the area-specific CPI survey data that were available for the largest
metropolitan areas or on HUD regional RDD survey data.
For areas with local CPI surveys, CPI annual data on rents and
utilities were used to update the Census rent estimates. Three-quarters
of the 2000 CPI change factor was used to bring the FMR estimates
forward from April to December of 2000. Annual CPI survey data could
then be used for calendar years 2001, 2002, and 2003. Trending to cover
the period from January 1, 2004 to April 1, 2005, was then needed. An
annual trending factor of 3 percent, based on the average annual
increase in the median Census gross rent between 1990 and 2000, was
used to update estimates from the end of 2003 (i.e., the last date for
which CPI data were available) until the midpoint of the fiscal year in
which the estimates were used. The 15-month trending factor was 3.75
percent (3 percent times 15/12).
For areas without local CPI surveys, the same process was used
except that regional RDD survey data were substituted for CPI data.
Regional RDD surveys were done for 20 areas--the metropolitan and
nonmetropolitan part of each of the 10 HUD regions. Areas covered by
CPI metropolitan surveys were excluded from the RDD metropolitan
regional surveys.
[[Page 9780]]
D. Additional RDD Surveys and Other Data
RDDs covering 23 additional areas were conducted by HUD in the
September-November 2004 period and completed in time for use in this
publication. Supplemental surveys were conducted for the portions of
the three metropolitan areas where RDDs were conducted in August 2004
and implemented in the October 1, 2004, FMR publication to cover
portions of these metropolitan areas not covered in the initial
surveys. The first column of the following table identifies the RDD
survey area. The second column shows the final FY2005 FMR as published
on October 1, 2004. The third column shows the October 2004 or November
2004 RDD results, trended to the middle of FY2005. A change in FMR
estimates is shown only if the RDD result shows a statistically
significant difference from the FMR estimate published on October 1,
2004. The fourth column shows whether or not the RDD results were
statistically different enough to justify replacing the Census or other
survey estimates with the RDD results. The survey results were as
follows:
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FY2005 FMR
Area definition without Sept.- FY2005 FMR RDD result
Nov. RDD with RDD
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Albany-Schenectady-Troy, NY................... 679 679 No Change.
Albuquerque, NM............................... 699 699 No Change.
Atlanta, GA................................... 928 834 Decrease.
Bergen-Passaic, NJ............................ 1132 1132 No Change.
Boston, MA.................................... 1266 1266 No Change.
Cincinnati, OH-KY-IN.......................... 706 652 Decrease.
Columbus, OH.................................. 675 640 Decrease.
Dayton-Springfield, OH........................ 595 595 No Change.
Denver, CO.................................... 973 888 Decrease.
Detroit, MI................................... 805 805 No Change.
Honolulu, HI.................................. 955 1087 Increase.
Houston, TX................................... 801 733 Decrease.
Kauai County, HI.............................. 831 1061 Increase.
Louisville, KY-IN............................. 597 553 Decrease.
Maui County, HI............................... 899 1149 Increase.
McAllen-Edinburg-Mission, TX.................. 480 593 Increase.
Nashville, TN................................. 697 654 Decrease.
Newark, NJ.................................... 1020 1020 No Change.
New York, NY.................................. 1018 1075 Increase.
Omaha, NE..................................... 650 650 No Change.
Philadelphia, PA.............................. 962 914 Decrease.
Salt Lake City, UT............................ 747 682 Decrease.
Springfield, MA............................... 732 772 Increase.
Tulsa, OK..................................... 640 640 No Change.
Tuscon, AZ.................................... 712 673 Decrease.
Washington, DC................................ 1187 1187 No Change.
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HUD is directed by statute to use the most recent data available in
its FMR publications. These RDD survey results are being implemented in
the revised final FY2005 FMR publication consistent with that
requirement.
The new and old OMB geographic definitions of the Boston, Detroit,
and Washington D.C. metropolitan areas contained measurable
differences, although the bulk of the old definitions were still
contained in the new definitions. The surveys conducted in August 2004
were based on the new definitions. When the decision to revert to the
old definitions was made, revised FMR estimates were made by
multiplying the new definition FMR estimate by the 2000 Census 40th
percentile new-to-old definition rent ratio (e.g., if the median rent
for the old definition was 3 percent higher than the rent using the new
definition, the survey result was adjusted by increasing it by 3
percent). Rent relationships among different parts of metropolitan
areas tend to be very stable in the short-term and medium-term, so this
approach should normally be reliable. In response to concerns, however,
HUD conducted full surveys of the old definition area parts not
included in the initial surveys. The results of the original and
supplemental samples were then merged using 2000 Census sampling
weights. Counties or county parts were added or deleted to provide an
aggregate sample based on the old OMB definition. Because two surveys
were used to cover different parts of the old metropolitan area
definition, the combined survey coverage had larger samples and more
statistically reliable estimates than normally sought. None of the
resulting estimates resulted in a change in the FMR estimates because
they were not sufficiently different. To the extent there were
differences, the revised estimates for Boston, Detroit, and Washington
were somewhat lower than the FMR estimates published on October 1,
2004, but not by enough to trigger changes.
HUD also reviewed surveys and data supplied by housing authorities
as part of the public comment process. The results are shown on the
following table:
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Two-bedroom FY2005 FMRs
--------------------------------
Area definition 10/1/2004 Revised final Revised FMR change
final FMRs FMRs
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Cheyenne, WY.................... 536 592 RDD Increase.
Cleveland County, NC............ 523 578 RDD Increase.
Columbia, MD.................... 988 1242 Census-Based Increase.
[[Page 9781]]
Dover, DE....................... 616 663 RDD Increase.
Drew County, AR................. 413 506 Survey Based Increase.
Fargo, ND....................... 523 551 RDD Increase.
Hawaii County, HI............... 691 818 RDD Increase.
Maui County, HI................. 899 1149 RDD Increase.*
McDowell County, NC............. 490 541 RDD Increase.
Polk County, NC................. 504 557 RDD Increase.
Rutherford County, NC........... 492 544 RDD Increase.
San Jose, CA.................... 1313 1313** 3+ Bedroom Survey Increase.
Stevens Co., MN................. 488 488** 1 & 4 Bedroom FMR Increases.
Sussex County, DE............... 572 617 RDD Increase.
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* The survey conducted by local authorities showed an increase, but the HUD RDD survey had a larger sample, was
more statistically reliable, and showed a larger increase.
** The FMR changes for these areas related to specific bedroom sizes and do not affect the two-bedroom FMR.
The results of locally funded RDD surveys for Cheyenne, WY, Fargo,
ND, and Hawaii County, HI, justified FMR increases. Columbia, MD
submitted extensive data, but these data were not statistically
reflective of the overall rental inventory. An increase in Columbia's
FMRs was justified, however, based on an analysis of area-specific
Census data that was not available when FY2005 FMRs were initially
determined. HUD accepted the RDD results for Hawaii County, HI, but had
concerns about the survey results presented for Maui County. HUD's own
survey of Maui had a much larger sample and produced a higher FMR
result that is contained in this publication. At the request of Polk
County, NC, a 2001 multi-county RDD was re-evaluated using 2000 Census
bedroom relationships, which resulted in FMR increases for most bedroom
sizes. Santa Clara County, CA, submitted data on three- and four-
bedroom rents that supported increases for their FMRs, and Stevens
County, MN, submitted data on one- and four-bedroom rentals that
supported increases.
VI. Public Comments
An additional 283 comments were received during the September 7th
through mid-November 2004 period. Nearly all comments can be summarized
into six categories:
1. Over one-fourth of these comments, most originated before
October 1, 2004, expressed concern about the use of the new OMB
geographic definitions. These were addressed in the October 1, 2004,
FMR publication, which published FMRs using the FY2004 FMR definitions.
2. A number of requests were made to permit continued use of the
FY2004 FMRs when they were higher than the FY2005 FMRs. HUD did not
honor this request, because it is inconsistent with the statutory
requirement to use the most current available data in calculating FMRs.
In addition, the proposed policy would unfairly hurt the majority of
FMR areas with FY2005 increases, since it would eventually change the
pro-rating of funding to disproportionately favor areas that data show
should receive lower FMRs.
3. Numerous complaints were received about three-plus bedroom FMR
reductions. As noted in the FMR Methodology section of this notice, the
majority of large unit FMRs had increases as a result of using 2000
Census data and any decreases are based on local market data from the
2000 Census that HUD has made publicly available.
4. A number of requests were made to conduct RDD surveys in areas
with FY2005 FMR decreases. HUD has conducted surveys in the largest of
these areas, but funding for this purpose is limited.
5. Complaints were received that HUD's current exception rent
policy makes it very difficult to obtain exception rent approvals for
submarkets that 2000 Census and other data show have much higher rents
than the FMR area-wide rents, and that this is adversely affecting
program viability and de-concentration objectives. HUD will consider
these comments, but the exception rent policy is not within the scope
of this notice.
6. Complaints were made about FMR reductions and inconsistencies
due to eliminating state non-metropolitan FMR minimums. Prior to
FY2005, HUD set minimum state nonmetro FMRs based on state-wide
nonmetro 40th percentile rents. One complaint was that the unusually
low FMRs in some counties reflect housing quality issues that are not
addressed by the current policy. The other and sometimes related
complaint was from areas where there were sufficient census data to
calculate FMRs, and where lower cost, adjacent counties were assigned
higher county group FMRs. HUD will review this policy but no change is
being made at this time.
Form letters were received from Atlanta, Georgia, requesting that
additional excise or liquor taxes be used to increase funding for
programs for the poor. Tax and funding issues are not determined in a
FMR Federal Register notice, and no response is provided. Another form
letter campaign from Connecticut complained about low FMRs for 2-
bedroom, 3-bedroom and 4-bedroom units throughout the state. No data in
support of higher FMRs for these bedroom sizes was provided and no
changes were made.
Some requests were received that were at odds with the requirement
that HUD must use the most current data available in setting FMRs.
Commenters from Vermont asked HUD to use the 2000 RDDs conducted in
place of the 2000 Census data. Since both sets of data are from 2000,
the Census data must be used because it is based on a greater number of
observations, making it more statistically reliable.
Numerous comments were received from Puerto Rico, where RDD surveys
were delayed at the request of the local housing agency to give it
additional time to review the survey instrument and consider
alternatives. The request for higher FMRs was a common theme. Some
comments requested RDD surveys for all of Puerto Rico, but others
argued that RDD survey results would not be valid because of incomplete
telephone coverage and unusual housing quality issues. A suggestion was
received that Puerto Rico's FMRs be set using construction costs, but
this approach appears inconsistent with statutory and regulatory
provisions. One comment
[[Page 9782]]
argued that Puerto Rico's housing markets are unlike those of the
United States, because most renters live in single-family homes. This,
however, is also true for most rental markets in the United States.
Until surveys are completed, Puerto Rico will be permitted to continue
to use its FY2004 FMRs.
The Council of Large Public Housing Authorities (CLPHA) commented
that the HUD method of calculating FMRs is overcomplicated and
requested that large PHAs be allowed to set their own FMRs, which would
require a statutory change. It also requested that more reliable data
sources, such as the American Community Survey (ACS), be used to set
FMRs. HUD agrees that the ACS is of enormous potential value in
improving FMR estimates, because it will eventually provide decennial-
census-quality data on an annual basis. HUD plans to start using ACS
data in producing FY2006 FMRs, but full ACS sample data will not be
available until near the start of FY2007.
CLPHA also complained about HUD's use of new OMB definitions in
conducting RDD surveys, and that use of these definitions had damaging
results for many PHAs. The comments received correctly note that HUD
completed 24 RDD surveys prior to the final FY2005 FMR publication,
that 11 of the surveys resulted in FMR decreases, and that the new
Office of Management and Budget metropolitan area definitions had been
used in defining survey areas. No concerns were raised about RDD-based
FMR increases, although the same estimation procedures were used. The
comments failed to note that surveys for five of the 11 areas covered
100 percent of the respective final FY2005 FMR areas (Baltimore,
Detroit, Orange County, San Francisco, and Seattle), that another four
surveys covered 97-99 percent of the renters in the final FY2005 FMR
areas (Chicago, Fort Worth, Kansas City, and San Jose), and that
eliminating the few cases not within the old FMR area definition did
not measurably change the published FMR estimate. Only three of the
initial 24 survey areas had significant metropolitan area definition
differences (Boston, Detroit, and Washington). As previously noted,
additional surveys were conducted for the three metropolitan areas
where there was a more than 3 percent difference between the old and
new metropolitan area definitions. In each instance, the supplemental
surveys resulted in larger than usual samples and provided estimates
that were slightly lower than those published on October 1, 2004, but
still within the statistical confidence intervals of the published
estimates.
CLPHA also expressed concerns with sample bias associated with
telephone surveys due to increased use of cell phones. Call screening
is also of concern to HUD. Changes in phone utilization may bias
outcomes, but what research is available suggests that the bias is
still very small for most surveys. It is also unclear if the bias has
the effect of increasing or decreasing FMRs. HUD is sensitive to this
concern. In large metropolitan areas where extensive data are available
on large apartment complex rents, HUD compares the results of the RDD
and apartment complex surveys. Research indicates that typical
apartment complex rents differ both in amounts and rent changes from
the overall rental market, but they nonetheless provide a means of
confirming whether there were any recent, significant changes in rent
levels. The difficulty HUD faces is that, until ACS data become fully
available, RDD surveys offer the only currently available, cost-
feasible, and validated means of obtaining statistically reliable rent
estimates for most areas.
VII. 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.
One comment was received, for Adams County, CO, but the survey
included was not valid since it only covered a small portion of the
manufactured home spaces in the metropolitan area of Denver, CO. All
approved exceptions to these rents that were in effect in FY2004 were
updated to 2005 using the same data used to estimate the Housing Choice
Voucher program FMRs. 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.
VIII. 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
$20,000-$30,000. 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.
PHAs in nonmetropolitan areas may, in certain circumstances, do
surveys of groups of counties; all county-group surveys have to 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 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 if 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.
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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.
Accordingly, the FMR Schedules, which will not be codified in 24
CFR part 888, are amended as follows:
Dated: February 8, 2005.
Dennis C. Shea,
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.
HUD uses the OMB Metropolitan Statistical Area (MSA) and Primary
Metropolitan Statistical Area (PMSA) definitions, but the current
definitions from the June 6, 2003 publication have not yet been
incorporated. Use of these new geographical definitions will be
considered for use in future FMR publications. Schedule B FMRs are
issued for the same metropolitan area definitions used by HUD in FY
2004 with the exceptions discussed in paragraph (b). The OMB-defined
metropolitan areas closely correspond to housing market area
definitions.
b. Exceptions to OMB Definitions--The exceptions are counties
deleted from several large metropolitan areas whose old 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 Counties Assigned County-Based FMRs
Chicago, IL--DeKalb County, Grundy County, and Kendall County, IL
Cincinnati-Hamilton, OH-KY-IN--Brown County, OH; Gallatin County, Grant
County, and Pendleton County, KY; and Ohio County, IN
Dallas, TX--Henderson County, TX
Flagstaff, AZ-UT--Kane County, UT
New Orleans, LA--St. James Parish, LA
Washington, DC-MD-VA-WV--Berkeley County and Jefferson County, WV; and
Clarke County, Culpeper County, King George County, and Warren County,
VA
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 Falls, 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-room-occupancy (SRO) units are 0.75 times the 0-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 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.
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. 05-3814 Filed 2-25-05; 8:45 am]
BILLING CODE 4210-62-C