Section 8 Housing Assistance Payments Program-Contract Rent Annual Adjustment Factors (AAFs), Fiscal Year 2011, 14421-14424 [2011-6065]

Download as PDF Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Notices proposed collection of information to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. This Notice also lists the following information: Title of Proposal: Federal Housing Administration (FHA): Home Energy Retrofit Loan Pilot Program. Description of Information Collection: Lender reporting requirements under the Retrofit Pilot Program. OMB Control Number: 2502–0596. Agency Form Numbers: None. Members of Affected Public: FHAapproved lenders. Estimation of the total numbers of hours needed to prepare the information collection including number of respondents, frequency of responses, and hours of response: An estimation of the total number of hours needed to prepare the information collection is 320, number of respondents is 20 frequency response is annually, and the estimated number of hours per response is 16. Authority: The Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, as amended. Dated: March 09, 2011. Colette Pollard, Departmental Reports Management Officer, Office of the Chief Information Officer. [FR Doc. 2011–6064 Filed 3–15–11; 8:45 am] BILLING CODE 4210–72–P DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT [Docket No. FR–5489–N–01] jlentini on DSKJ8SOYB1PROD with NOTICES Section 8 Housing Assistance Payments Program—Contract Rent Annual Adjustment Factors (AAFs), Fiscal Year 2011 Office of the Assistant Secretary for Policy Development and Research, HUD. ACTION: Notice. AGENCY: The United States Housing Act of 1937 requires that assistance SUMMARY: VerDate Mar<15>2010 16:56 Mar 15, 2011 Jkt 223001 contracts signed by owners participating in the Department’s Section 8 housing assistance payment programs provide annual adjustment to monthly rentals for units covered by the contract. This Notice announces revised Contract Rent AAFs for adjustment of contract rents on assistance contract anniversaries. The factors are based on a formula using residential rent and utility cost changes from the most current annual Bureau of Labor Statistics Consumer Price Index (CPI) survey. These factors are applied at Housing Assistance Payment (HAP) contract anniversaries for those calendar months commencing after the effective date of this Notice. HUD will publish ‘‘Renewal Funding AAFs,’’ in a separate Notice, to be used exclusively for renewal funding of tenant-based rental assistance, if so required in the fiscal year (FY) 2011 HUD Budget. DATES: Effective Date: March 16, 2011. FOR FURTHER INFORMATION CONTACT: Contact Danielle Bastarache, Director, Housing Voucher Management, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, 202–708–1380, for questions relating to the Project-Based Certificate and Moderate Rehabilitation programs (non Single Room Occupancy); Ann Oliva, Director, Office of Special Needs Assistance Programs, Office of Community Planning and Development, 202–708–4300, for questions regarding the Single Room Occupancy (SRO) Moderate Rehabilitation program; Willie Spearmon, Director, Office of Housing Assistance and Grant Administration, Office of Housing, 202–708–3000, for questions relating to all other Section 8 programs; and Marie L. Lihn, Economist, Economic and Market Analysis Division, Office of Policy Development and Research, 202–708– 0590, for technical information regarding the development of the schedules for specific areas or the methods used for calculating the AAFs. Mailing address for the above persons: Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. Hearing- or speech-impaired persons may contact the Federal Information Relay Service at 800–877–8339 (TTY). (Other than the ‘‘800’’ TTY number, the above-listed telephone numbers are not toll free.) Tables showing Contract Rent AAFs will be available electronically from the HUD data information page at http:// www.huduser.org/portal/datasets/ aaf.html/FY2011_CR_tables.pdf. SUPPLEMENTARY INFORMATION: PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 14421 I. Applying Contract Rent AAFs to Various Section 8 Programs Contract Rent AAFs established by this Notice are used to adjust contract rents for units assisted in certain Section 8 housing assistance payment programs during the initial (i.e., prerenewal) term of the HAP contract and for all units in the Project-Based Certificate program. There are three categories of Section 8 programs that use the Contract Rent AAFs: Category 1—The Section 8 New Construction and Substantial Rehabilitation programs and the Section 8 Moderate Rehabilitation program. Category 2—The Section 8 Loan Management (LM) and Property Disposition (PD) programs. Category 3—The Section 8 ProjectBased Certificate (PBC) program. Each Section 8 program category uses the Contract Rent AAFs differently. The specific application of the Contract Rent AAFs is determined by the law, the HAP contract, and appropriate program regulations or requirements. AAFs are not used in the following cases: Renewal Rents. With the exception of the Project-Based Certificate program, Contract Rent AAFs are not used to determine renewal rents after expiration of the original Section 8 HAP contract (either for projects where the Section 8 HAP contract is renewed under a restructuring plan adopted under 24 CFR part 401; or renewed without restructuring under 24 CFR part 402). In general, renewal rents are based on the applicable State-by-State operating cost adjustment factor (OCAF) published by HUD; the OCAF is applied to the previous year’s contract rent minus debt service. Budget-Based Rents. Contract Rent AAFs are not used for budget-based rent adjustments. For projects receiving Section 8 subsidies under the LM program (24 CFR part 886, subpart A) and for projects receiving Section 8 subsidies under the PD program (24 CFR part 886, subpart C), contract rents are adjusted, at HUD’s option, either by applying the Contract Rent AAFs or by budget-based adjustments in accordance with 24 CFR 886.112(b) and 24 CFR 886.312(b). Budget-based adjustments are used for most Section 8/202 projects. Certificate Program. In the past, Contract Rent AAFs were used to adjust the contract rent (including manufactured home space rentals) in both the tenant-based and project-based certificate programs. The tenant-based certificate program has been terminated and all tenancies in the tenant-based certificate program have been converted E:\FR\FM\16MRN1.SGM 16MRN1 14422 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Notices to the Housing Choice Voucher Program, which does not use Contract Rent AAFs to adjust rents. All tenancies remaining in the project-based certificate program continue to use Contract Rent AAFs to adjust contract rent for outstanding HAP contracts. Voucher Program. Contract Rent AAFs are not used to adjust rents in the Tenant-Based or the Project-Based Voucher programs. Moderate Rehabilitation Program. Under the Section 8 Moderate Rehabilitation program (both the regular program and the single room occupancy program), the public housing agency (PHA) applies the Contract Rent AAF to the base rent component of the contract rent, not the full contract rent. jlentini on DSKJ8SOYB1PROD with NOTICES II. Adjustment Procedures This section of the Notice provides a broad description of procedures for adjusting the contract rent. Technical details and requirements are described in HUD notices H 2002–10 (Section 8 New Construction and Substantial Rehabilitation, Loan Management, and Property Disposition) and PIH 97–57 (Moderate Rehabilitation and ProjectBased Certificates). Because of statutory and structural distinctions among the various Section 8 programs, there are separate rent adjustment procedures for the three program categories: Category 1: Section 8 New Construction, Substantial Rehabilitation, and Moderate Rehabilitation Programs In the Section 8 New Construction and Substantial Rehabilitation programs, the published Contract Rent AAF factor is applied to the preadjustment contract rent. In the Section 8 Moderate Rehabilitation program, the published Contract Rent AAF is applied to the pre-adjustment base rent. For Category 1 programs, the Table 1 Contract Rent AAF factor is applied before determining comparability (rent reasonableness). Comparability applies if the pre-adjustment gross rent (preadjustment contract rent plus any allowance for tenant-paid utilities) is above the published Fair Market Rent (FMR). If the comparable rent level (plus any initial difference) is lower than the contract rent as adjusted by application of the Table 1 Contract Rent AAF, the comparable rent level (plus any initial difference) will be the new contract rent. However, the pre-adjustment contract rent will not be decreased by application of comparability. In all other cases (i.e., unless the contract rent is reduced by comparability): VerDate Mar<15>2010 16:56 Mar 15, 2011 Jkt 223001 • The Table 1 Contract Rent AAF is used for a unit occupied by a new family since the last annual contract anniversary. • The Table 2 Contract Rent AAF is used for a unit occupied by the same family as at the time of the last annual contract anniversary. Category 2: The Loan Management Program (24 CFR Part 886, Subpart A) and Property Disposition Program (24 CFR Part 886, Subpart C) At this time Category 2 programs are not subject to comparability. (Comparability will again apply if HUD establishes regulations for conducting comparability studies under 42 U.S.C. 1437f(c)(2)(C).). Rents are adjusted by applying the full amount of the applicable AAF under this Notice. The applicable Contract Rent AAF is determined as follows: • The Table 1 Contract Rent AAF is used for a unit occupied by a new family since the last annual contract anniversary. • The Table 2 Contract Rent AAF is used for a unit occupied by the same family as at the time of the last annual contract anniversary. Category 3: Section 8 Project-Based Certificate Program The following procedures are used to adjust contract rent for outstanding HAP contracts in the Section 8 PBC program: • The Table 2 Contract Rent AAF is always used. The Table 1 Contract Rent AAF is not used. • The Table 2 Contract Rent AAF is always applied before determining comparability (rent reasonableness). • Comparability always applies. If the comparable rent level is lower than the rent to owner (contract rent) as adjusted by application of the Table 2 Contract Rent AAF, the comparable rent level will be the new rent to owner. • The new rent to owner will not be reduced below the contract rent on the effective date of the HAP contract. III. When To Use Reduced AAFs (From AAF Table 2) In accordance with Section 8(c)(2)(A) of the United States Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)), the Contract Rent AAF is reduced by 0.01: • For all tenancies assisted in the Section 8 Project-Based Certificate program. • In other Section 8 programs, for a unit occupied by the same family at the time of the last annual rent adjustment (and where the rent is not reduced by application of comparability (rent reasonableness)). The law provides that: PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 Except for assistance under the certificate program, 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. In the case of assistance under the certificate program, 0.01 shall be subtracted from the amount of the annual adjustment factor (except that the factor shall not be reduced to less than 1.0), and the adjusted rent shall not exceed the rent for a comparable unassisted unit of similar quality, type and age in the market area. 42 U.S.C. 1437f(c)(2)(A). Legislative history for this statutory provision states that ‘‘the rationale [for lower AAFs for non-turnover units is] that operating costs are less if tenant turnover is less * * *.’’ Department of Veteran Affairs and Housing and Urban Development, and Independent Agencies Appropriations for 1995, Hearings Before a Subcommittee of the Committee on Appropriations 103d Cong., 2d Sess. 591 (1994). The Congressional Record also states the following: Because the cost to owners of turnoverrelated vacancies, maintenance, and marketing are lower for long-term stable tenants, these tenants are typically charged less than recent movers in the unassisted market. Since HUD pays the full amount of any rent increases for assisted tenants section 8 projects and under the Certificate program, HUD should expect to benefit from this ‘‘tenure discount.’’ Turnover is lower in assisted properties than in the unassisted market, so the effect of the current inconsistency with market-based rent increases is exacerbated. (140 Cong. Rec. 8659, 8693 (1994)). To implement the law, HUD publishes two separate Contract Rent AAF Tables, Tables 1 and 2. The difference between Table 1 and Table 2 is that each Contract Rent AAF in Table 2 is 0.01 less than the corresponding Contract Rent AAF in Table 1. Where a Contract Rent AAF in Table 1 would otherwise be less than 1.0, it is set at 1.0, as required by statute; the corresponding Contract Rent AAF in Table 2 will also be set at 1.0, as required by statute. IV. How To Find the AAF Tables 1 and 2 that show Contract Rent AAFs are posted on the HUD User Web site at http://www.huduser.org/ portal/datasets/aaf.html/ FY2011_CR_tables.pdf. There are two columns in each table. The first column is used to adjust contract rent for rental units where the highest cost utility is E:\FR\FM\16MRN1.SGM 16MRN1 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Notices included in the contract rent, i.e., where the owner pays for the highest cost utility. The second column is used where the highest cost utility is not included in the contract rent, i.e., where the tenant pays for the highest cost utility. The applicable Contract Rent AAF is selected as follows: • Determine whether Table 1 or Table 2 is applicable. In Table 1 or Table 2, locate the Contract Rent AAF for the geographic area where the contract unit is located. • Determine whether the highest cost utility is or is not included in contract rent for the contract unit. • If highest cost utility is included, select the Contract Rent AAF from the column for ‘‘highest cost included.’’ If highest cost utility is not included, select the Contract Rent AAF from the column for ‘‘utility excluded.’’ jlentini on DSKJ8SOYB1PROD with NOTICES V. Methodology Contract Rent AAFs are rent inflation factors. Two types of rent inflation factors are calculated for Contract Rent AAFs: gross rent factors and shelter rent factors. The gross rent factor accounts for inflation in the cost of both the rent of the residence and the utilities used by the unit; the shelter rent factor accounts for the inflation in the rent of the residence, but does not include any change in the cost of utilities. The gross rent inflation factor is designated as ‘‘Highest Cost Utility Included’’ and the shelter rent inflation factor is designated as ‘‘Highest Cost Utility Excluded’’. Contract Rent AAFs are calculated using CPI data on ‘‘rent of primary residence’’ and ‘‘fuels and utilities’’.1 The CPI inflation index for rent of primary residence measures the inflation of all surveyed units regardless of whether utilities are included in the rent of the unit or not. In other words, it measures the inflation of the ‘‘contract rent’’ which includes units with all utilities included in the rent, units with some utilities included in the rent and units with no utilities included in the rent. In producing a gross rent inflation factor and a shelter rent inflation factor, HUD decomposes the contract rent CPI inflation factor into parts to represent the gross rent change and the shelter rent change. This is done by applying the percentage of renters who pay for heat (a proxy for the percentage renters who pay shelter rent) from the Consumer Expenditure Survey (CEX) and American Community Survey 1 CPI indexes CUUSA103SEHA and CUSR0000SAH2 respectively. VerDate Mar<15>2010 16:56 Mar 15, 2011 Jkt 223001 (ACS) data on the ratio of utilities to rents.2 Survey Data Used to Produce Contract Rent AAFs In this publication, the rent and fuel and utilities inflation factors for large metropolitan areas and Census regions are based on changes in the rent of primary residence and fuels and utilities CPI indices from 2008 to 2009. The CEX data used to decompose the contract rent inflation factor into gross rent and shelter rent inflation factors come from a special tabulation of 2008 CEX survey data produced for HUD for the purpose of computing Contract Rent AAFs. The utility-to-rent ratio used to produce Contract Rent AAFs comes from 2008 ACS median rent and utility costs. Geographic Areas Contract Rent AAFs are produced for all Class A CPI cities (CPI cities with a population of 1.5 million or more) and for the four Census Regions. They are applied to core-based statistical areas (CBSAs), as defined by the Office of Management and Budget (OMB), according to how much of the CBSA is covered by the CPI city-survey. If more than 75 percent of the CBSA is covered by the CPI city-survey, the Contract Rent AAF that is based on that CPI survey is applied to the whole CBSA and to any HUD-defined metropolitan area, called ‘‘HUD Metro FMR Area’’ (HMFA), within that CBSA. If the CBSA is not covered by a CPI city-survey, the CBSA uses the relevant regional CPI factor. Almost all non-metropolitan counties use regional CPI factors.3 For areas assigned the Census Region CPI factor, both metropolitan and non-metropolitan areas receive the same factor. Each metropolitan area that uses a local CPI update factor is listed alphabetically in the tables, by State and each HMFA is listed alphabetically within its respective CBSA. Each Contract Rent AAF applies to a specified geographic area and to units of all bedroom sizes. Contract Rent AAFs are provided: • For separate metropolitan areas, including HMFAs and counties that are 2 The formulas used to produce these factors can be found in the Annual Adjustment Factors overview and in the FMR documentation at http://www.HUDUSER.org. 3 There are four non-metropolitan counties that continue to use CPI city updates: Ashtabula County, OH, Henderson County, TX, Island County, WA, and Lenawee County, MI. BLS has not updated the geography underlying its survey for new OMB metropolitan area definitions and these counties, are no longer in metropolitan areas, but they are included as parts of CPI surveys because they meet the 75 percent standard HUD imposes on survey coverage. These four counties are treated the same as metropolitan areas using CPI city data. PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 14423 currently designated as nonmetropolitan, but are part of the metropolitan area defined in the local CPI survey. • For the four Census Regions for those metropolitan and nonmetropolitan areas that are not covered by a CPI city-survey. The Contract Rent AAFs shown at http://www.huduser.org/portal/ datasets/aaf.html/ FY2011_CR_tables.pdf use the same OMB metropolitan area definitions, as revised by HUD, that are used in the FY 2011 FMRs. Area Definitions To make certain that they are using the correct Contract Rent AAFs, users should refer to the Area Definitions Table section at http:// www.huduser.org/portal/datasets/ aaf.html/FY2011_AreaDef.pdf. For units located in metropolitan areas with a local CPI survey, Contract Rent AAF areas are listed separately. For units located in areas without a local CPI survey, the metropolitan or nonmetropolitan counties receive the regional CPI for that Census Region. The Area Definitions Table at http:// www.huduser.org/portal/datasets/ aaf.html/FY2011_AreaDef.pdf lists areas in alphabetical order by State. The associated CPI region is shown next to each State name. Areas whose Contract Rent AAFs are determined by local CPI surveys are listed first. All metropolitan areas with local CPI surveys have separate Contract Rent AAF schedules and are shown with their corresponding county definitions or as metropolitan counties. In the six New England States, the listings are for counties or parts of counties as defined by towns or cities. The remaining counties use the CPI for the Census Region and are not specifically listed in the Area Definitions Table at http:// www.huduser.org/portal/datasets/ aaf.html/FY2011_AreaDef.pdf. Puerto Rico and the Virgin Islands use the South Region Contract Rent AAFs. All areas in Hawaii use the Contract Rent 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 West Region Contract Rent AAFs. Accordingly, HUD publishes these Annual Adjustment Factors for the Section 8 Housing Assistance Payments programs as set forth in the Contract Rent AAF Tables posted at http:// www.huduser.org/portal/datasets/ aaf.html/FY2011_CR_tables.pdf. E:\FR\FM\16MRN1.SGM 16MRN1 14424 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Notices Dated: March 7, 2011. Raphael W. Bostic, Assistant Secretary for Policy Development and Research. ACTION: Notice of receipt of permit applications; request for comment. BILLING CODE 4210–67–P DEPARTMENT OF THE INTERIOR Office of the Assistant Secretary— Water and Science; Environmental Assessment for the Proposed Restoration of a Portion of Lower Hobble Creek Central Utah Project Completion Act Completion Office, Interior. ACTION: Notice of intent. AGENCY: Pursuant to Section 102(2)(c) of the National Environmental Policy Act of 1969, as amended, the Department of the Interior, the Central Utah Water Conservancy District, and the Utah Reclamation Mitigation and Conservation Commission, as joint leads, are initiating an Environmental Assessment of the impacts associated with the proposed restoration of the eastern portion of Lower Hobble Creek, near Springville, Utah. This restoration effort is intended to facilitate the recovery of the June Sucker (Chasmistes liorus), a Federally listed endangered species, through improvement of spawning habitat and maintenance of stream flow. It is anticipated that the resultant effort would include the possible restoration of approximately 2 miles of stream channel, potential modification or removal of several existing barriers to fish passage, and enhancement of the existing water supply. DATES: Date and location for public scoping will be announced locally. FOR FURTHER INFORMATION CONTACT: Contact Mr. Lee Baxter at (801) 379– 1174, or by e-mail at lbaxter@usbr.gov. SUMMARY: Reed R. Murray, Program Director, Central Utah Project Completion Act, Department of the Interior. [FR Doc. 2011–6090 Filed 3–15–11; 8:45 am] DEPARTMENT OF THE INTERIOR jlentini on DSKJ8SOYB1PROD with NOTICES Fish and Wildlife Service [FWS–R8–ES–2011–N051;80221–1113– 0000–F5] Endangered Species Recovery Permit Applications Fish and Wildlife Service, VerDate Mar<15>2010 16:56 Mar 15, 2011 Jkt 223001 Permit No. TE–33863A FOR FURTHER INFORMATION CONTACT: Daniel Marquez, Fish and Wildlife Biologist; see ADDRESSES (telephone: 760–431–9440; fax: 760–431–9624). SUPPLEMENTARY INFORMATION: The following applicants have applied for scientific research permits to conduct certain activities with endangered species under section 10(a)(1)(A) of the Act (16 U.S.C. 1531 et seq.). We seek review and comment from local, State, and Federal agencies and the public on the following permit requests. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Permit No. TE–815214 BILLING CODE 4310–MN–P Interior. We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species. With some exceptions, the Endangered Species Act (Act) prohibits activities with endangered and threatened species unless a Federal permit allows such activity. The Act also requires that we invite public comment before issuing these permits. DATES: Comments on these permit applications must be received on or before April 15, 2011. ADDRESSES: Written data or comments should be submitted to the U.S. Fish and Wildlife Service, Endangered Species Program Manager, Region 8, 2800 Cottage Way, Room W–2606, Sacramento, CA 95825 (telephone: 916– 414–6464; fax: 916–414–6486). Please refer to the respective permit number for each application when submitting comments. SUMMARY: [FR Doc. 2011–6065 Filed 3–15–11; 8:45 am] AGENCY: Counties, California, for the purpose of enhancing their survival. Applicant: Oceano Dunes State Vehicular Recreation Area, Arroyo Grande, California. The applicant requests an amendment to an existing permit (February 13, 2008, 73 FR 8344) to take (set up and use remote sensing cameras to document and identify predation) the California least tern (Sterna antillarumbrowni) in conjunction with population monitoring and predator management activities in San Luis Obispo and Santa Barbara PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 Applicant: Deborah K. Blackburn, Austin, Texas. The applicant requests apermitto take (harass by survey) the southwestern willow flycatcher (Empidonaxtrailliiextimus) in conjunction with surveys and population monitoring activities throughout the range of the species in California and Nevada for the purpose of enhancing its survival. Permit No. TE–064431 Applicant: Aztec Engineering Group Inc., Phoenix, Arizona. The applicant requests an amendment to an existing permit (February 10, 2011, 76 FR 7577) to take (harass by survey and monitor nests) the southwestern willow flycatcher (Empidonaxtrailliiextimus), and take (harass by survey) the Yuma clapper rail (Ralluslongirostrisyumanensis) in conjunction with surveys and population monitoring activities throughout the range of each species in California and Nevada for the purpose of enhancing their survival. Permit No. TE–027422 Applicant: Brian T. Pittman, Petaluma, California. The applicant requests an amendment to an existing permit (June 20, 2000, 65 FR 38297) to take (harass by survey, capture, handle, measure, and release) the arroyo toad (Anaxyruscalifornicus), and take (harass by survey, capture, handle, mark, collect biological samples, collect voucher specimens) the California tiger salamander (Ambystomacaliforniense) in conjunction with surveys, genetic study,and population monitoring activities throughout the range of each species in California for the purpose of enhancing their survival. Permit No. TE–213726 Applicant: Joelle J. Fournier, San Diego, California. The applicant requests an amendment to an existing permit (May 3, 2010, 75 FR 23287) to take (harass by survey, trap, capture, band adults, erect fence, use cameras, handle, transport sick and injured chicks and adults, and collect and transport abandoned eggs) the California least tern (Sterna antillarumbrowni) in conjunction with surveys, population monitoring and rehabilitation activities at Camp Pendleton Marine Base, Naval Amphibious Base Coronado, Naval Air E:\FR\FM\16MRN1.SGM 16MRN1

Agencies

[Federal Register Volume 76, Number 51 (Wednesday, March 16, 2011)]
[Notices]
[Pages 14421-14424]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6065]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5489-N-01]


Section 8 Housing Assistance Payments Program--Contract Rent 
Annual Adjustment Factors (AAFs), Fiscal Year 2011

AGENCY: Office of the Assistant Secretary for Policy Development and 
Research, HUD.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The United States Housing Act of 1937 requires that assistance 
contracts signed by owners participating in the Department's Section 8 
housing assistance payment programs provide annual adjustment to 
monthly rentals for units covered by the contract. This Notice 
announces revised Contract Rent AAFs for adjustment of contract rents 
on assistance contract anniversaries. The factors are based on a 
formula using residential rent and utility cost changes from the most 
current annual Bureau of Labor Statistics Consumer Price Index (CPI) 
survey. These factors are applied at Housing Assistance Payment (HAP) 
contract anniversaries for those calendar months commencing after the 
effective date of this Notice. HUD will publish ``Renewal Funding 
AAFs,'' in a separate Notice, to be used exclusively for renewal 
funding of tenant-based rental assistance, if so required in the fiscal 
year (FY) 2011 HUD Budget.

DATES: Effective Date: March 16, 2011.

FOR FURTHER INFORMATION CONTACT: Contact Danielle Bastarache, Director, 
Housing Voucher Management, Office of Public Housing and Voucher 
Programs, Office of Public and Indian Housing, 202-708-1380, for 
questions relating to the Project-Based Certificate and Moderate 
Rehabilitation programs (non Single Room Occupancy); Ann Oliva, 
Director, Office of Special Needs Assistance Programs, Office of 
Community Planning and Development, 202-708-4300, for questions 
regarding the Single Room Occupancy (SRO) Moderate Rehabilitation 
program; Willie Spearmon, Director, Office of Housing Assistance and 
Grant Administration, Office of Housing, 202-708-3000, for questions 
relating to all other Section 8 programs; and Marie L. Lihn, Economist, 
Economic and Market Analysis Division, Office of Policy Development and 
Research, 202-708-0590, for technical information regarding the 
development of the schedules for specific areas or the methods used for 
calculating the AAFs. Mailing address for the above persons: Department 
of Housing and Urban Development, 451 7th Street, SW., Washington, DC 
20410. Hearing- or speech-impaired persons may contact the Federal 
Information Relay Service at 800-877-8339 (TTY). (Other than the 
``800'' TTY number, the above-listed telephone numbers are not toll 
free.)

SUPPLEMENTARY INFORMATION: Tables showing Contract Rent AAFs will be 
available electronically from the HUD data information page at http://www.huduser.org/portal/datasets/aaf.html/FY2011_CR_tables.pdf.

I. Applying Contract Rent AAFs to Various Section 8 Programs

    Contract Rent AAFs established by this Notice are used to adjust 
contract rents for units assisted in certain Section 8 housing 
assistance payment programs during the initial (i.e., pre-renewal) term 
of the HAP contract and for all units in the Project-Based Certificate 
program. There are three categories of Section 8 programs that use the 
Contract Rent AAFs:
    Category 1--The Section 8 New Construction and Substantial 
Rehabilitation programs and the Section 8 Moderate Rehabilitation 
program.
    Category 2--The Section 8 Loan Management (LM) and Property 
Disposition (PD) programs.
    Category 3--The Section 8 Project-Based Certificate (PBC) program.
    Each Section 8 program category uses the Contract Rent AAFs 
differently. The specific application of the Contract Rent AAFs is 
determined by the law, the HAP contract, and appropriate program 
regulations or requirements.
    AAFs are not used in the following cases:
    Renewal Rents. With the exception of the Project-Based Certificate 
program, Contract Rent AAFs are not used to determine renewal rents 
after expiration of the original Section 8 HAP contract (either for 
projects where the Section 8 HAP contract is renewed under a 
restructuring plan adopted under 24 CFR part 401; or renewed without 
restructuring under 24 CFR part 402). In general, renewal rents are 
based on the applicable State-by-State operating cost adjustment factor 
(OCAF) published by HUD; the OCAF is applied to the previous year's 
contract rent minus debt service.
    Budget-Based Rents. Contract Rent AAFs are not used for budget-
based rent adjustments. For projects receiving Section 8 subsidies 
under the LM program (24 CFR part 886, subpart A) and for projects 
receiving Section 8 subsidies under the PD program (24 CFR part 886, 
subpart C), contract rents are adjusted, at HUD's option, either by 
applying the Contract Rent AAFs or by budget-based adjustments in 
accordance with 24 CFR 886.112(b) and 24 CFR 886.312(b). Budget-based 
adjustments are used for most Section 8/202 projects.
    Certificate Program. In the past, Contract Rent AAFs were used to 
adjust the contract rent (including manufactured home space rentals) in 
both the tenant-based and project-based certificate programs. The 
tenant-based certificate program has been terminated and all tenancies 
in the tenant-based certificate program have been converted

[[Page 14422]]

to the Housing Choice Voucher Program, which does not use Contract Rent 
AAFs to adjust rents. All tenancies remaining in the project-based 
certificate program continue to use Contract Rent AAFs to adjust 
contract rent for outstanding HAP contracts.
    Voucher Program. Contract Rent AAFs are not used to adjust rents in 
the Tenant-Based or the Project-Based Voucher programs.
    Moderate Rehabilitation Program. Under the Section 8 Moderate 
Rehabilitation program (both the regular program and the single room 
occupancy program), the public housing agency (PHA) applies the 
Contract Rent AAF to the base rent component of the contract rent, not 
the full contract rent.

II. Adjustment Procedures

    This section of the Notice provides a broad description of 
procedures for adjusting the contract rent. Technical details and 
requirements are described in HUD notices H 2002-10 (Section 8 New 
Construction and Substantial Rehabilitation, Loan Management, and 
Property Disposition) and PIH 97-57 (Moderate Rehabilitation and 
Project-Based Certificates).
    Because of statutory and structural distinctions among the various 
Section 8 programs, there are separate rent adjustment procedures for 
the three program categories:

Category 1: Section 8 New Construction, Substantial Rehabilitation, and 
Moderate Rehabilitation Programs

    In the Section 8 New Construction and Substantial Rehabilitation 
programs, the published Contract Rent AAF factor is applied to the pre-
adjustment contract rent. In the Section 8 Moderate Rehabilitation 
program, the published Contract Rent AAF is applied to the pre-
adjustment base rent.
    For Category 1 programs, the Table 1 Contract Rent AAF factor is 
applied before determining comparability (rent reasonableness). 
Comparability applies if the pre-adjustment gross rent (pre-adjustment 
contract rent plus any allowance for tenant-paid utilities) is above 
the published Fair Market Rent (FMR).
    If the comparable rent level (plus any initial difference) is lower 
than the contract rent as adjusted by application of the Table 1 
Contract Rent AAF, the comparable rent level (plus any initial 
difference) will be the new contract rent. However, the pre-adjustment 
contract rent will not be decreased by application of comparability.
    In all other cases (i.e., unless the contract rent is reduced by 
comparability):
     The Table 1 Contract Rent AAF is used for a unit occupied 
by a new family since the last annual contract anniversary.
     The Table 2 Contract Rent AAF is used for a unit occupied 
by the same family as at the time of the last annual contract 
anniversary.

Category 2: The Loan Management Program (24 CFR Part 886, Subpart A) 
and Property Disposition Program (24 CFR Part 886, Subpart C)

    At this time Category 2 programs are not subject to comparability. 
(Comparability will again apply if HUD establishes regulations for 
conducting comparability studies under 42 U.S.C. 1437f(c)(2)(C).). 
Rents are adjusted by applying the full amount of the applicable AAF 
under this Notice.
    The applicable Contract Rent AAF is determined as follows:
     The Table 1 Contract Rent AAF is used for a unit occupied 
by a new family since the last annual contract anniversary.
     The Table 2 Contract Rent AAF is used for a unit occupied 
by the same family as at the time of the last annual contract 
anniversary.

Category 3: Section 8 Project-Based Certificate Program

    The following procedures are used to adjust contract rent for 
outstanding HAP contracts in the Section 8 PBC program:
     The Table 2 Contract Rent AAF is always used. The Table 1 
Contract Rent AAF is not used.
     The Table 2 Contract Rent AAF is always applied before 
determining comparability (rent reasonableness).
     Comparability always applies. If the comparable rent level 
is lower than the rent to owner (contract rent) as adjusted by 
application of the Table 2 Contract Rent AAF, the comparable rent level 
will be the new rent to owner.
     The new rent to owner will not be reduced below the 
contract rent on the effective date of the HAP contract.

III. When To Use Reduced AAFs (From AAF Table 2)

    In accordance with Section 8(c)(2)(A) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f(c)(2)(A)), the Contract Rent AAF is 
reduced by 0.01:
     For all tenancies assisted in the Section 8 Project-Based 
Certificate program.
     In other Section 8 programs, for a unit occupied by the 
same family at the time of the last annual rent adjustment (and where 
the rent is not reduced by application of comparability (rent 
reasonableness)).

The law provides that:

    Except for assistance under the certificate program, 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. In the case of 
assistance under the certificate program, 0.01 shall be subtracted 
from the amount of the annual adjustment factor (except that the 
factor shall not be reduced to less than 1.0), and the adjusted rent 
shall not exceed the rent for a comparable unassisted unit of 
similar quality, type and age in the market area. 42 U.S.C. 
1437f(c)(2)(A).

Legislative history for this statutory provision states that ``the 
rationale [for lower AAFs for non-turnover units is] that operating 
costs are less if tenant turnover is less * * *.'' Department of 
Veteran Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations for 1995, Hearings Before a Subcommittee of the 
Committee on Appropriations 103d Cong., 2d Sess. 591 (1994). The 
Congressional Record also states the following:

    Because the cost to owners of turnover-related vacancies, 
maintenance, and marketing are lower for long-term stable tenants, 
these tenants are typically charged less than recent movers in the 
unassisted market. Since HUD pays the full amount of any rent 
increases for assisted tenants section 8 projects and under the 
Certificate program, HUD should expect to benefit from this ``tenure 
discount.'' Turnover is lower in assisted properties than in the 
unassisted market, so the effect of the current inconsistency with 
market-based rent increases is exacerbated. (140 Cong. Rec. 8659, 
8693 (1994)).

    To implement the law, HUD publishes two separate Contract Rent AAF 
Tables, Tables 1 and 2. The difference between Table 1 and Table 2 is 
that each Contract Rent AAF in Table 2 is 0.01 less than the 
corresponding Contract Rent AAF in Table 1. Where a Contract Rent AAF 
in Table 1 would otherwise be less than 1.0, it is set at 1.0, as 
required by statute; the corresponding Contract Rent AAF in Table 2 
will also be set at 1.0, as required by statute.

IV. How To Find the AAF

    Tables 1 and 2 that show Contract Rent AAFs are posted on the HUD 
User Web site at http://www.huduser.org/portal/datasets/aaf.html/FY2011_CR_tables.pdf. There are two columns in each table. The first 
column is used to adjust contract rent for rental units where the 
highest cost utility is

[[Page 14423]]

included in the contract rent, i.e., where the owner pays for the 
highest cost utility. The second column is used where the highest cost 
utility is not included in the contract rent, i.e., where the tenant 
pays for the highest cost utility.
    The applicable Contract Rent AAF is selected as follows:
     Determine whether Table 1 or Table 2 is applicable. In 
Table 1 or Table 2, locate the Contract Rent AAF for the geographic 
area where the contract unit is located.
     Determine whether the highest cost utility is or is not 
included in contract rent for the contract unit.
     If highest cost utility is included, select the Contract 
Rent AAF from the column for ``highest cost included.'' If highest cost 
utility is not included, select the Contract Rent AAF from the column 
for ``utility excluded.''

V. Methodology

    Contract Rent AAFs are rent inflation factors. Two types of rent 
inflation factors are calculated for Contract Rent AAFs: gross rent 
factors and shelter rent factors. The gross rent factor accounts for 
inflation in the cost of both the rent of the residence and the 
utilities used by the unit; the shelter rent factor accounts for the 
inflation in the rent of the residence, but does not include any change 
in the cost of utilities. The gross rent inflation factor is designated 
as ``Highest Cost Utility Included'' and the shelter rent inflation 
factor is designated as ``Highest Cost Utility Excluded''.
    Contract Rent AAFs are calculated using CPI data on ``rent of 
primary residence'' and ``fuels and utilities''.\1\ The CPI inflation 
index for rent of primary residence measures the inflation of all 
surveyed units regardless of whether utilities are included in the rent 
of the unit or not. In other words, it measures the inflation of the 
``contract rent'' which includes units with all utilities included in 
the rent, units with some utilities included in the rent and units with 
no utilities included in the rent. In producing a gross rent inflation 
factor and a shelter rent inflation factor, HUD decomposes the contract 
rent CPI inflation factor into parts to represent the gross rent change 
and the shelter rent change. This is done by applying the percentage of 
renters who pay for heat (a proxy for the percentage renters who pay 
shelter rent) from the Consumer Expenditure Survey (CEX) and American 
Community Survey (ACS) data on the ratio of utilities to rents.\2\
---------------------------------------------------------------------------

    \1\ CPI indexes CUUSA103SEHA and CUSR0000SAH2 respectively.
    \2\ The formulas used to produce these factors can be found in 
the Annual Adjustment Factors overview and in the FMR documentation 
at http://www.HUDUSER.org.
---------------------------------------------------------------------------

Survey Data Used to Produce Contract Rent AAFs

    In this publication, the rent and fuel and utilities inflation 
factors for large metropolitan areas and Census regions are based on 
changes in the rent of primary residence and fuels and utilities CPI 
indices from 2008 to 2009. The CEX data used to decompose the contract 
rent inflation factor into gross rent and shelter rent inflation 
factors come from a special tabulation of 2008 CEX survey data produced 
for HUD for the purpose of computing Contract Rent AAFs. The utility-
to-rent ratio used to produce Contract Rent AAFs comes from 2008 ACS 
median rent and utility costs.

Geographic Areas

    Contract Rent AAFs are produced for all Class A CPI cities (CPI 
cities with a population of 1.5 million or more) and for the four 
Census Regions. They are applied to core-based statistical areas 
(CBSAs), as defined by the Office of Management and Budget (OMB), 
according to how much of the CBSA is covered by the CPI city-survey. If 
more than 75 percent of the CBSA is covered by the CPI city-survey, the 
Contract Rent AAF that is based on that CPI survey is applied to the 
whole CBSA and to any HUD-defined metropolitan area, called ``HUD Metro 
FMR Area'' (HMFA), within that CBSA. If the CBSA is not covered by a 
CPI city-survey, the CBSA uses the relevant regional CPI factor. Almost 
all non-metropolitan counties use regional CPI factors.\3\ For areas 
assigned the Census Region CPI factor, both metropolitan and non-
metropolitan areas receive the same factor.
---------------------------------------------------------------------------

    \3\ There are four non-metropolitan counties that continue to 
use CPI city updates: Ashtabula County, OH, Henderson County, TX, 
Island County, WA, and Lenawee County, MI. BLS has not updated the 
geography underlying its survey for new OMB metropolitan area 
definitions and these counties, are no longer in metropolitan areas, 
but they are included as parts of CPI surveys because they meet the 
75 percent standard HUD imposes on survey coverage. These four 
counties are treated the same as metropolitan areas using CPI city 
data.
---------------------------------------------------------------------------

    Each metropolitan area that uses a local CPI update factor is 
listed alphabetically in the tables, by State and each HMFA is listed 
alphabetically within its respective CBSA. Each Contract Rent AAF 
applies to a specified geographic area and to units of all bedroom 
sizes. Contract Rent AAFs are provided:
     For separate metropolitan areas, including HMFAs and 
counties that are currently designated as non-metropolitan, but are 
part of the metropolitan area defined in the local CPI survey.
     For the four Census Regions for those metropolitan and 
non-metropolitan areas that are not covered by a CPI city-survey.
    The Contract Rent AAFs shown at http://www.huduser.org/portal/datasets/aaf.html/FY2011_CR_tables.pdf use the same OMB metropolitan 
area definitions, as revised by HUD, that are used in the FY 2011 FMRs.

Area Definitions

    To make certain that they are using the correct Contract Rent AAFs, 
users should refer to the Area Definitions Table section at http://www.huduser.org/portal/datasets/aaf.html/FY2011_AreaDef.pdf. For units 
located in metropolitan areas with a local CPI survey, Contract Rent 
AAF areas are listed separately. For units located in areas without a 
local CPI survey, the metropolitan or nonmetropolitan counties receive 
the regional CPI for that Census Region.
    The Area Definitions Table at http://www.huduser.org/portal/datasets/aaf.html/FY2011_AreaDef.pdf lists areas in alphabetical order 
by State. The associated CPI region is shown next to each State name. 
Areas whose Contract Rent AAFs are determined by local CPI surveys are 
listed first. All metropolitan areas with local CPI surveys have 
separate Contract Rent AAF schedules and are shown with their 
corresponding county definitions or as metropolitan counties. In the 
six New England States, the listings are for counties or parts of 
counties as defined by towns or cities. The remaining counties use the 
CPI for the Census Region and are not specifically listed in the Area 
Definitions Table at http://www.huduser.org/portal/datasets/aaf.html/FY2011_AreaDef.pdf.
    Puerto Rico and the Virgin Islands use the South Region Contract 
Rent AAFs. All areas in Hawaii use the Contract Rent 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 West Region 
Contract Rent AAFs.
    Accordingly, HUD publishes these Annual Adjustment Factors for the 
Section 8 Housing Assistance Payments programs as set forth in the 
Contract Rent AAF Tables posted at http://www.huduser.org/portal/datasets/aaf.html/FY2011_CR_tables.pdf.


[[Page 14424]]


    Dated: March 7, 2011.
Raphael W. Bostic,
Assistant Secretary for Policy Development and Research.
[FR Doc. 2011-6065 Filed 3-15-11; 8:45 am]
BILLING CODE 4210-67-P