Final Fair Market Rents for the Housing Choice Voucher Program for Small Area Fair Market Rent Demonstration Program Participants; Fiscal Year 2013, 69651-69658 [2012-28086]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 77, Number 224 (Tuesday, November 20, 2012)]
[Notices]
[Pages 69651-69658]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-28086]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5668-N-01]


Final Fair Market Rents for the Housing Choice Voucher Program 
for Small Area Fair Market Rent Demonstration Program Participants; 
Fiscal Year 2013

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

ACTION: Notice of Final Fiscal Year (FY) 2013 Fair Market Rents (FMRs) 
for selected Public Housing Authorities (PHAs) participating in the 
Small Area FMR Demonstration.

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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. 
This notice publishes the FMRs for the Housing Choice Voucher (HCV) 
Program for those PHAs selected to participate in the Small Area FMR 
Demonstration Program. Only those PHAs that have agreed to participate 
in the Demonstration are authorized to use these Small Area FMRs within 
their metropolitan operating areas.

DATES: Effective Date: The FMRs published in this notice are effective 
on October 1, 2012.

FOR FURTHER INFORMATION CONTACT: For general information regarding 
FMRs, please call the HUD USER information line at 800-245-2691 or 
access the information on the HUD USER Web site https://www.huduser.org/portal/datasets/fmr.html.
    Questions related to use of Small Area FMRs or voucher payment 
standards should be directed to the respective local HUD program staff. 
Technical questions concerning the methodology used to develop Small 
Area FMRs may be addressed to Geoffrey B. Newton or Peter B. Kahn, 
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 Relay Service at 800-877-
8339. (Other than the HUD USER information line and TDD numbers, 
telephone numbers are not toll-free.)
    Electronic Data Availability: This Federal Register notice is 
available electronically from the HUD User page at https://www.huduser.org/datasets/fmr.html. Federal Register notices also are 
available electronically from https://www.gpoaccess.gov/fr/, 
the U.S. Government Printing Office Web site. Complete documentation of 
the methodology and data used to compute each area's final FY 2013 FMRs 
is available at https://www.huduser.org/portal/datasets/fmr/fmrs/docsys.html&data=fmr13. Final FY 2013 FMRs are available in a variety 
of electronic formats at https://www.huduser.org/portal/datasets/fmr.html.

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 geographic areas. In the HCV 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 
HCV program must meet reasonable rent standards. Small Area FMRs 
(SAFMRs) are subject to all of the same rules and regulations that 
govern the use of all other FMRs.

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.

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III. Small Area Fair Market Rents

    Small Area FMRs represent a fundamentally different way of 
operating the voucher program in metropolitan areas; therefore, HUD is 
testing SAFMRs through a demonstration program to better understand the 
programmatic impacts of changing the way voucher payment standards are 
set. The purpose of the demonstration program is two-fold: (1) HUD 
needs to evaluate the demonstration project in terms of effectiveness 
in meeting the primary goal of improving tenants' housing choices in 
areas of opportunity while also assessing the impact on tenants in 
areas with SAFMRs below the metropolitan-wide FMR, and (2) HUD wants to 
understand and evaluate the administrative and budget impacts of 
converting and operating the tenant-based voucher program using SAFMRs.
    SAFMRs are calculated using a rent ratio determined by dividing the 
median gross rent across all bedrooms for the small area (a ZIP code) 
by the similar median gross rent for the metropolitan area covering the 
ZIP code. This rent ratio is multiplied by the current two- bedroom 
rent for the entire metropolitan area containing the small area to 
generate the current year two-bedroom SAFMR. In small areas where the 
median gross rent is not statistically reliable, HUD substitutes the 
median gross rent for the county containing the ZIP code in the 
numerator of the rent ratio calculation. The methodology used to 
determine the two-bedroom rent for the entire metropolitan area is 
identical to the methods used to calculate FY 2013 FMRs.
    For FY 2013 SAFMRs, HUD has implemented two changes to the rent 
ratio calculation methodology. First, HUD has updated the 2005-2009 5-
year ACS based ZIP code median gross rent data with 2006-2010 5-year 
ZIP Code Tabulation Area (ZCTA) median gross rent data. The use of the 
more current ACS data is consistent with the update process in the FMR 
methodology. However, the change from ZIP code to ZCTA was a change 
that the Bureau of the Census made for its aggregation process. The 
Census Bureau required the change to ZCTA data from ZIP code data 
because ZCTAs are a standard Census geography. Furthermore, The Census 
Bureau will not continue to support both ZIP code and ZCTA based 
tabulations due to concerns that ACS respondents' confidentiality could 
be compromised. Second, HUD expanded the criteria for determining the 
statistical reliability of the small area rent data in order to ensure 
that more SAFMRs are based on the data collected from the small area as 
opposed to using data from the parent county as a proxy. This change is 
consistent with the changes in the FMR methodology that eliminated the 
use of the statistical Z-test.\1\
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    \1\ HUD has provided numerous detailed accounts of the 
calculation methodology used for Small Area Fair Market Rents. 
Please see our Federal Register notice of April 20, 2011 (76 FR 
22125) for more information regarding the calculation methodology. 
Also, HUD's Final FY 2013 FMR documentation system available at 
(https://www.huduser.org/portal/datasets/fmr/fmrs/docsys.html&data=fmr13) contains detailed calculations for each ZIP 
code area in which Small Area FMR Demonstration participants 
operate.
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IV. Small Area FMR Demonstration Invitation Process

    HUD set out to create fair treatment and control groups of PHAs to 
objectively evaluate the impacts of SAFMRs. Eligible PHAs, as described 
below, were stratified into eight groups for local PHAs, with one 
additional group for state PHAs that met the criteria. HUD randomly 
selected which PHAs within each group would be offered the opportunity 
to participate and a monetary incentive to do so. No PHA was compelled 
to participate, and no PHA could participate unless randomly selected 
to receive the offer.
    HUD's Office of Policy Development and Research (PD&R) compiled 
statistics on PHAs, and in consultation with HUD's Public and Indian 
Housing (PIH) Office of Housing Voucher Programs, produced a list of 
PHAs eligible for random selection to participate in the Small Area FMR 
Demonstration. The set of eligible PHAs is defined as follows: (1) 
Metropolitan PHAs that have at least 500 voucher tenants, (2) have at 
least 10 voucher tenants living in ZIP codes where the SAFMR exceeds 
the metropolitan FMR by more than 10 percent; (3) have at least 10 
voucher tenants living in ZIP codes where the small area FMR is more 
than 10 percent below the metropolitan FMR; (4) have attained at least 
95 percent voucher family reporting in the PIH Information Center 
(PIC); (5) are not ``troubled'' as determined by SEMAP; (6) have the 
administrative capacity as determined by PIH's Office of Field 
Operations; and (7) not be involved in litigation that would seriously 
impede their ability to administer the vouchers.
    Participating PHAs (and alternates) were randomly selected from 
stratified sets of eligible PHAs. Selected PHAs were presented with the 
participation agreement, including an offer of supplemental 
administrative fees to cover the necessary expenses they will have to 
incur, and given the option to decline to participate. These fees are 
only to be used for administrative expenses related to the 
implementation of Small Area FMRs and in no way used for Housing 
Assistance Payments. If a PHA declined to participate, an offer was 
presented to the next alternate until the full slate of demonstration 
PHAs was established.

V. Small Area FMR Demonstration Participants

    Following the process of presenting invitations to eligible PHAs, 
the following have agreed to participate in the Demonstration: \2\
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    \2\ Additionally, all PHAs operating within the Dallas, TX HUD 
Metropolitan FMR Area will continue to manage their voucher programs 
using Small Area FMRs. These Small Area FMRs were released in a 
previous Federal Register Notice.

    1. The Chattanooga (TN) Housing Authority.
    2. The Housing Authority of the City of Laredo (TX).
    3. The Housing Authority of the City of Long Beach (CA).
    4. The Housing Authority of the County of Cook (IL).
    5. The Town of Mamaroneck (NY) Public Housing Agency.

    The ZIP Code-level Small Area FMRs for all known and anticipated 
metropolitan ZIP codes for these five PHAs are included in Schedule B 
of this Notice. Additional SAFMRs are available at in the Small Area 
FMR section of https://www.huduser.org/portal/datasets/fmr.html.

VI. Environmental Impact

    This Notice involves the establishment of Fair Market Rent 
schedules, which do not constitute a development decision affecting the 
physical condition of specific project areas or building sites. 
Accordingly, under 24 CFR 50.19(c)(6), this Notice is categorically 
excluded from environmental review under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321).
    Accordingly, the Fair Market Rent Schedules, which will not be 
codified in 24 CFR part 888, are proposed to be amended as shown in the 
Appendix to this notice:

    Dated: October 23, 2012.
Erika C. Poethig,
Acting Assistant Secretary for Policy Development and Research.
BILLING CODE 4210-67-P

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[FR Doc. 2012-28086 Filed 11-19-12; 8:45 am]
BILLING CODE 4210-67-C