Section 8 Housing Assistance Payments Program-Annual Adjustment Factors, Fiscal Year 2019, 66726-66729 [2018-28097]
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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices
regularly scheduled air carrier
operations. Further, DHS will notify the
news media of this determination. In
addition, as a result of this
determination, 49 U.S.C. 44907(d)(l)(B)
requires that each United States and
foreign air carrier (and their agents)
providing transportation between the
United States and MNL will provide
written notice of DHS’s determination to
each passenger buying a ticket for
transportation between the United
States and MNL.
Dated: December 18, 2018.
Kirstien M. Nielsen,
Secretary of Homeland Security.
[FR Doc. 2018–27983 Filed 12–26–18; 8:45 am]
BILLING CODE 9110–14–P
DEPARTMENT OF HOMELAND
SECURITY
Transportation Security Administration
New Agency Information Collection
Activity Under OMB Review: Law
Enforcement Officers (LEOs) Flying
Armed
Transportation Security
Administration, DHS.
ACTION: 30-Day notice.
AGENCY:
This notice announces that
the Transportation Security
Administration (TSA) has forwarded the
new Information Collection Request
(ICR) abstracted below to the Office of
Management and Budget (OMB) for
review and approval under the
Paperwork Reduction Act (PRA). The
ICR describes the nature of the
information collection and its expected
burden. The collection involves
gathering information from Federal,
State, local, and tribal armed law
enforcement officers (LEOs) who require
specialized screening at the TSA
checkpoint.
DATES: Send your comments by January
28, 2019. A comment to OMB is most
effective if OMB receives it within 30
days of publication.
ADDRESSES: Interested persons are
invited to submit written comments on
the proposed information collection to
the Office of Information and Regulatory
Affairs, OMB. Comments should be
addressed to Desk Officer, Department
of Homeland Security/TSA, and sent via
electronic mail to dhsdeskofficer@
omb.eop.gov.
FOR FURTHER INFORMATION CONTACT:
Christina A. Walsh, TSA PRA Officer,
Information Technology (IT), TSA–11,
Transportation Security Administration,
601 South 12th Street, Arlington, VA
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SUMMARY:
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20598–6011; telephone (571) 227–2062;
email TSAPRA@tsa.dhs.gov.
SUPPLEMENTARY INFORMATION: TSA
published a Federal Register notice,
with a 60-day comment period soliciting
comments, of the following collection of
information on July 27, 2018, 83 FR
35675.
Comments Invited
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.), an agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid OMB control
number. The ICR documentation will be
available at https://www.reginfo.gov
upon its submission to OMB. Therefore,
in preparation for OMB review and
approval of the following information
collection, TSA is soliciting comments
to—
(1) Evaluate whether the proposed
information requirement 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;
(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 using
appropriate automated, electronic,
mechanical, or other technological
collection techniques or other forms of
information technology.
Consistent with the requirements of
Executive Order (E.O.) 13771, Reducing
Regulation and Controlling Regulatory
Costs, and E.O. 13777, Enforcing the
Regulatory Reform Agenda, TSA is also
requesting comments on the extent to
which this request for information could
be modified to reduce the burden on
respondents.
Information Collection Requirement
Title: Law Enforcement Officers
(LEOs) Flying Armed.
Type of Request: New collection.
OMB Control Number: 1652–XXXX.
Form(s): TSA Form 413A, Checkpoint
Sign-In Log.
Affected Public: Federal, state, local,
and tribal armed LEOs.
Abstract: Under 49 CFR 1540.111(b),
LEOs may carry a firearm or other
weapons while in the performance of
law enforcement duties at the airport. In
addition, LEOs may fly armed if they
meet the requirements of 49 CFR
1544.219. TSA has established a
specialized screening process for
Federal, State, local, and tribal LEOs
when they are flying armed. To
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document completion of TSA’s
specialized screening process, LEOs
who traverse a TSA checkpoint must
complete TSA Form 413A, Checkpoint
Sign-in Log. This process confirms,
documents, and memorializes that LEOs
have met the requirements of 49 CFR
1544.219, presented themselves at the
airport for specialized screening with
authenticated credentials, and are flying
armed to conduct or in furtherance of
official law enforcement duties.
Number of Respondents: 68,000.
Estimated Annual Burden Hours: An
estimated 1,133 hours annually.
Dated: December 18, 2018.
Christina A. Walsh,
TSA Paperwork Reduction Act Officer,
Information Technology.
[FR Doc. 2018–27942 Filed 12–26–18; 8:45 am]
BILLING CODE 9110–05–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–6134–N–01]
Section 8 Housing Assistance
Payments Program-Annual Adjustment
Factors, Fiscal Year 2019
Office of the Assistant
Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Fiscal Year (FY) 2019
Annual Adjustment Factors (AAFs).
AGENCY:
The United States Housing
Act of 1937 requires that certain
assistance contracts signed by owners
participating in the Department’s
Section 8 housing assistance payment
programs provide annual adjustments to
monthly rentals for units covered by the
contracts. This notice announces FY
2019 AAFs for adjustment of contract
rents on the anniversary of those
assistance contracts. The factors are
based on a formula using residential
rent and utility cost changes from the
most recent annual Bureau of Labor
Statistics Consumer Price Index (CPI)
survey. Beginning with the FY 2014
AAFs and continuing with these FY
2019 AAFs, the Puerto Rico CPI is used
in place of the South Region CPI for all
areas in Puerto Rico. These factors are
applied at the anniversary of Housing
Assistance Payment (HAP) contracts for
which rents are to be adjusted using the
AAF for those calendar months
commencing after the effective date of
this notice. AAFs are distinct from, and
do not apply to the same properties as,
Operating Cost Adjustment Factors
(OCAFs). OCAFs are annual factors used
to adjust rents for project-based rental
assistance contracts issued under
SUMMARY:
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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices
Section 8 of the United States Housing
Act of 1937 and renewed under section
515 or section 524 of the Multifamily
Assisted Housing Reform and
Affordability Act of 1997 (MAHRA). A
separate Federal Register Notice, to be
published following the finalization of
the FY 2019 federal appropriations, will
be used in the calculation of the
calendar year (CY) 2019 Housing Choice
Voucher (HCV) renewal funding for
public housing agencies (PHAs).
DATES:
December 27, 2018.
FOR FURTHER INFORMATION CONTACT:
Contact Becky Primeaux, Director,
Management and Operations Division,
Office of Housing Voucher Programs,
Office of Public and Indian Housing,
202–708–1380, for questions relating to
the Project-Based Certificate and
Moderate Rehabilitation programs (not
the Single Room Occupancy program);
Norman A. Suchar, Director, Office of
Special Needs Assistance Programs,
Office of Community Planning and
Development, 202–402–5015, for
questions regarding the Single Room
Occupancy (SRO) Moderate
Rehabilitation program; Katherine
Nzive, Director, OAMPO Program
Administration Office, Office of
Multifamily Housing, 202–402–3440, for
questions relating to all other Section 8
programs; and Marie Lihn, Economist,
Economic and Market Analysis
Division, Office of Policy Development
and Research, 202–402–5866, for
technical information regarding the
development of the schedules for
specific areas or the methods used for
calculating the AAFs. The mailing
address for these individuals is:
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 AAFs will be available
electronically from the HUD data
information page at https://
www.huduser.gov/portal/datasets/
aaf.html.
SUPPLEMENTARY INFORMATION:
II. Adjustment Procedures
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I. Applying AAFs to Various Section 8
Programs
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. There are two categories
of Section 8 programs that use the
AAFs:
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Category 1: The Section 8 New
Construction, Substantial
Rehabilitation, and Moderate
Rehabilitation programs;
Category 2: The Section 8 Loan
Management (LM) and Property
Disposition (PD) programs.
Each Section 8 program category uses
the AAFs differently. The specific
application of the 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. 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 established in
accordance with the statutory provision
in the Multifamily Assisted Housing
Reform and Affordability Act of 1997
(MAHRA), as amended, under which
the HAP is renewed. After renewal,
annual rent adjustments will be
provided in accordance with MAHRA.
Budget-based Rents. 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
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.
Housing Choice Voucher Program.
AAFs are not used to adjust rents in the
Tenant-Based or the Project-Based
Voucher programs.
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 two program categories:
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Category 1: Section 8 New Construction,
Substantial Rehabilitation, and
Moderate Rehabilitation Programs
In the Section 8 New Construction
and Substantial Rehabilitation
programs, the published AAF factor is
applied to the pre-adjustment contract
rent. In the Section 8 Moderate
Rehabilitation program (both the regular
program and the single room occupancy
program) the published AAF is applied
to the pre-adjustment base rent.
For Category 1 programs, the Table 1
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 AAF, the comparable rent
level (plus any initial difference) will be
the new contract rent. However, the preadjustment contract rent will not be
decreased by application of
comparability.
In all other cases (i.e., unless the
contract rent is reduced by
comparability):
• Table 1 AAF is used for a unit
occupied by a new family since the last
annual contract anniversary.
• Table 2 AAF is used for a unit
occupied by the same family as at the
time of the last annual contract
anniversary.
Category 2: Section 8 Loan Management
Program (24 CFR part 886, subpart A)
and Property Disposition Program (24
CFR part 886, subpart C)
Category 2 programs are not currently
subject to comparability. Comparability
will again apply if HUD establishes
regulations for conducting
comparability studies under 42 U.S.C.
1437f(c)(2)(C).
The applicable AAF is determined as
follows:
• Table 1 AAF is used for a unit
occupied by a new family since the last
annual contract anniversary.
• Table 2 AAF is used for a unit
occupied by the same family as at the
time of the last annual contract
anniversary.
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 AAF
is reduced by 0.01:
In Section 8 programs, for a unit
occupied by the same family at the time
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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices
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 . . .’’ (see 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:
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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 in
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 AAF Tables,
Table 1 and Table 2. The difference
between Table 1 and Table 2 is that each
AAF in Table 2 is 0.01 less than the
corresponding AAF in Table 1. Where
an AAF in Table 1 would otherwise be
less than 1.0, it is set at 1.0, as required
by statute; the corresponding AAF in
Table 2 will also be set at 1.0, as
required by statute.
IV. How to Find the AAF
AAF Table 1 and Table 2 are posted
on the HUD User website at https://
www.huduser.gov/portal/datasets/
aaf.html. There are two columns in each
AAF table. The first column is used to
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adjust contract rent for rental units
where the highest cost utility is
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 AAF is selected as
follows:
• Determine whether Table 1 or Table
2 is applicable. In Table 1 or Table 2,
locate the 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 AAF from the column for
‘‘Highest Cost Utility Included.’’ If
highest cost utility is not included,
select the AAF from the column for
‘‘Highest Cost Utility Excluded.’’
V. Methodology
AAFs are rent inflation factors. Two
types of rent inflation factors are
calculated for 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
reflect 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.’’
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 data from the Consumer
Expenditure Survey (CEX) on the
percentage of renters who pay for heat
(a proxy for the percentage of renters
who pay shelter rent) and also American
Community Survey (ACS) data on the
ratio of utilities to rents. For Puerto
1 CPI indexes CUUSA103SEHA and
CUSR0000SAH2 respectively.
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Rico, the Puerto Rico Community
Survey (PRCS) is used to determine the
ratio of utilities to rents, resulting in
different AAFs for some metropolitan
areas in Puerto Rico.2
Survey Data Used to Produce AAFs
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
2016 to 2017. 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 2017 CEX survey data
produced for HUD. The utility-to-rent
ratio used to produce AAFs comes from
2016 ACS median rent and utility costs.
Geographic Areas
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)
where more than 75 percent of the
population of the CBSA is covered by
the CPI city-survey. The AAF that is
based on that CPI survey is applied to
the whole CBSA and to any HUDdefined metropolitan area, called the
‘‘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. All
non-metropolitan counties use regional
CPI factors, except for those that are in
CPI cities, but have been dropped from
metropolitan area by OMB definitions
(Lenawee County, MI; Ashtabula
County, OH; Henderson County, TX;
King George County, VA; Island County,
WA). 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 and each
HMFA is listed alphabetically within its
respective CBSA. Each AAF applies to
a specific geographic area and to units
of all bedroom sizes. AAFs are
provided:
• For separate metropolitan areas,
including HMFAs and counties that are
currently designated as nonmetropolitan, but are part of the
metropolitan area defined in the local
CPI survey.
• For the four Census Regions (to be
used for those metropolitan and non2 The formulas used to produce these factors can
be found in the Annual Adjustment Factors
overview and in the FMR documentation at
www.HUDUSER.gov.
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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices
metropolitan areas that are not covered
by a CPI city-survey).
AAFs use the same OMB metropolitan
area definitions, as revised by HUD, that
are used for the FY 2019 FMRs.
Area Definitions
To make certain that they are using
the correct AAFs, users should refer to
the Area Definitions Table section at
https://www.huduser.gov/portal/
datasets/aaf.html. The Area Definitions
Table lists CPI areas in alphabetical
order by state, and the associated
Census region is shown next to each
state name. Areas whose AAFs are
determined by local CPI surveys are
listed first. All metropolitan areas with
local CPI surveys have separate 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 separately listed in
the Area Definitions Table at https://
www.huduser.gov/portal/datasets/
aaf.html.
Puerto Rico uses its own AAFs
calculated from the Puerto Rico CPI as
adjusted by the PRCS, the Virgin Islands
uses the South Region AAFs and the
Pacific Islands uses the West Region
AAFs. All areas in Hawaii use the AAFs
listed next to ‘‘Hawaii’’ in the Tables
which are based on the CPI survey for
the Honolulu metropolitan area.
Dated: December 20, 2018.
Todd M. Richardson,
General Deputy Assistant Secretary for Office
of Policy Development and Research.
[FR Doc. 2018–28097 Filed 12–26–18; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–7006–N–15]
60-Day Notice of Proposed Information
Collection: Comment Request: Agency
Information Collection Activities:
Public Housing Annual Contributions
Contract for Capital and Operating
Grant Funds
Office of the Assistant
Secretary for Public and Indian
Housing, HUD.
ACTION: Notice.
khammond on DSK30JT082PROD with NOTICES
AGENCY:
HUD is seeking approval from
the Office of Management and Budget
(OMB) for the information and
collection described below. The public
housing program provides Operating
SUMMARY:
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Funds and Capital Funds to low rent
projects owned and operated by public
housing agencies (PHAs), subject to the
terms and conditions contained in the
Annual Contributions Contract (ACC)
grant agreement. These program
requirements govern how projects are
funded and operated by PHAs. HUD has
made changes and updates to its grant
agreement, the Annual Contributions
Contract (ACC) (the ‘‘New ACC’’), based
on current applicable statutes and
regulations. This notice is to provide
PHAs with notice of the changes and the
opportunity to comment on such
changes. In accordance with the
Paperwork Reduction Act, HUD is
requesting comment from all interested
parties on the proposed collection of
information. The purpose of this notice
is to allow for 60 days of public
comment.
DATES: Comments Due Date: February
25, 2019.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposal. All comments must refer
to the proposal by name and OMB
Control Number. There are two methods
for submitting public comments.
1. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street SW, Room 10276,
Washington, DC 20410–0500.
2. Electronic Submission of
Comments. Interested persons may also
submit comments electronically through
the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly
encourages commenters to submit
comments electronically. Electronic
submission of comments allows the
commenter maximum time to prepare
and submit a comment, ensures timely
receipt by HUD, and enables HUD to
make them immediately available to the
public. Comments submitted
electronically through the
www.regulations.gov website can be
viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
Note: To receive consideration as public
comments, comments must be submitted
through one of the methods specified above.
Again, all submissions must refer to the
docket number and title of the notice.
No Facsimiled Comments. Facsimiled
(faxed) comments are not acceptable.
Public Inspection of Public
Comments. Copies of all comments
submitted are available for inspection
and downloading at
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66729
www.regulations.gov. In addition, all
properly submitted comments and
communications submitted to HUD will
be available for public inspection and
copying between 8 a.m. and 5 p.m.,
weekdays, at the above address. Due to
security measures at the HUD
Headquarters building, an advance
appointment to review the public
comments must be scheduled by calling
the Regulations Division at 202–708–
3055 (this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
via TTY by calling the Federal Relay
Service at 800–877–8339 (this is a tollfree number).
FOR FURTHER INFORMATION CONTACT:
Arlette Mussington, Office of Policy,
Programs and Legislative Initiatives,
PIH, Department of Housing and Urban
Development, 451 7th Street SW, Room
3178, Washington, DC 20410; telephone
202–402–4109, (this is not a toll-free
number). Persons with hearing or
speech impairments may access this
number via TTY by calling the Federal
Information Relay Service at (800) 877–
8339. Copies of available documents
submitted to OMB may be obtained
from Ms. Mussington.
SUPPLEMENTARY INFORMATION: This
notice informs the public that the
Department is re-submitting the
proposed information collection to OMB
for review, under the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35, as amended). HUD is
seeking approval from OMB for the
information collection described in
Section A.
A. Overview of Information Collection
Title of Information Collection: Public
Housing Annual Contributions Contract
for Capital and Operating Grant Funds.1
OMB Approval Number: 2577–0075.
Type of Request: Revision of a
currently approved collection.
Form Number: HUD–52840A; HUD–
53012A; HUD–53012 B.
Description of the need for the
information and proposed use: The ACC
establishes the basic terms and
conditions for the PHA’s public housing
programs and requires the PHA to
manage and operate its public housing
properties in accordance with the
United States Housing Act of 1937 (42
U.S.C. 1437 et seq.) (1937 Act) and all
applicable HUD requirements. The ACC
governs the award and use of two
distinct public housing grant funds. The
Capital Fund Program (CFP) provides
financial assistance in the form of grants
1 The previous title was ‘‘Public Housing Annual
Contribution Contract and Inventory Removal
Application’’.
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27DEN1
Agencies
[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Notices]
[Pages 66726-66729]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28097]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6134-N-01]
Section 8 Housing Assistance Payments Program-Annual Adjustment
Factors, Fiscal Year 2019
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Fiscal Year (FY) 2019 Annual Adjustment Factors
(AAFs).
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SUMMARY: The United States Housing Act of 1937 requires that certain
assistance contracts signed by owners participating in the Department's
Section 8 housing assistance payment programs provide annual
adjustments to monthly rentals for units covered by the contracts. This
notice announces FY 2019 AAFs for adjustment of contract rents on the
anniversary of those assistance contracts. The factors are based on a
formula using residential rent and utility cost changes from the most
recent annual Bureau of Labor Statistics Consumer Price Index (CPI)
survey. Beginning with the FY 2014 AAFs and continuing with these FY
2019 AAFs, the Puerto Rico CPI is used in place of the South Region CPI
for all areas in Puerto Rico. These factors are applied at the
anniversary of Housing Assistance Payment (HAP) contracts for which
rents are to be adjusted using the AAF for those calendar months
commencing after the effective date of this notice. AAFs are distinct
from, and do not apply to the same properties as, Operating Cost
Adjustment Factors (OCAFs). OCAFs are annual factors used to adjust
rents for project-based rental assistance contracts issued under
[[Page 66727]]
Section 8 of the United States Housing Act of 1937 and renewed under
section 515 or section 524 of the Multifamily Assisted Housing Reform
and Affordability Act of 1997 (MAHRA). A separate Federal Register
Notice, to be published following the finalization of the FY 2019
federal appropriations, will be used in the calculation of the calendar
year (CY) 2019 Housing Choice Voucher (HCV) renewal funding for public
housing agencies (PHAs).
DATES: December 27, 2018.
FOR FURTHER INFORMATION CONTACT: Contact Becky Primeaux, Director,
Management and Operations Division, Office of Housing Voucher Programs,
Office of Public and Indian Housing, 202-708-1380, for questions
relating to the Project-Based Certificate and Moderate Rehabilitation
programs (not the Single Room Occupancy program); Norman A. Suchar,
Director, Office of Special Needs Assistance Programs, Office of
Community Planning and Development, 202-402-5015, for questions
regarding the Single Room Occupancy (SRO) Moderate Rehabilitation
program; Katherine Nzive, Director, OAMPO Program Administration
Office, Office of Multifamily Housing, 202-402-3440, for questions
relating to all other Section 8 programs; and Marie Lihn, Economist,
Economic and Market Analysis Division, Office of Policy Development and
Research, 202-402-5866, for technical information regarding the
development of the schedules for specific areas or the methods used for
calculating the AAFs. The mailing address for these individuals is:
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 AAFs will be available
electronically from the HUD data information page at https://www.huduser.gov/portal/datasets/aaf.html.
I. Applying AAFs to Various Section 8 Programs
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. There are two categories of Section 8 programs that use the
AAFs:
Category 1: The Section 8 New Construction, Substantial
Rehabilitation, and Moderate Rehabilitation programs;
Category 2: The Section 8 Loan Management (LM) and Property
Disposition (PD) programs.
Each Section 8 program category uses the AAFs differently. The
specific application of the 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. 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 established in
accordance with the statutory provision in the Multifamily Assisted
Housing Reform and Affordability Act of 1997 (MAHRA), as amended, under
which the HAP is renewed. After renewal, annual rent adjustments will
be provided in accordance with MAHRA.
Budget-based Rents. 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 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.
Housing Choice Voucher Program. AAFs are not used to adjust rents
in the Tenant-Based or the Project-Based Voucher programs.
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 two 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 AAF factor is applied to the pre-adjustment
contract rent. In the Section 8 Moderate Rehabilitation program (both
the regular program and the single room occupancy program) the
published AAF is applied to the pre-adjustment base rent.
For Category 1 programs, the Table 1 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 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):
Table 1 AAF is used for a unit occupied by a new family
since the last annual contract anniversary.
Table 2 AAF is used for a unit occupied by the same family
as at the time of the last annual contract anniversary.
Category 2: Section 8 Loan Management Program (24 CFR part 886, subpart
A) and Property Disposition Program (24 CFR part 886, subpart C)
Category 2 programs are not currently subject to comparability.
Comparability will again apply if HUD establishes regulations for
conducting comparability studies under 42 U.S.C. 1437f(c)(2)(C).
The applicable AAF is determined as follows:
Table 1 AAF is used for a unit occupied by a new family
since the last annual contract anniversary.
Table 2 AAF is used for a unit occupied by the same family
as at the time of the last annual contract anniversary.
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 AAF is reduced by 0.01:
In Section 8 programs, for a unit occupied by the same family at
the time
[[Page 66728]]
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 . . .'' (see 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 in 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 AAF Tables, Table
1 and Table 2. The difference between Table 1 and Table 2 is that each
AAF in Table 2 is 0.01 less than the corresponding AAF in Table 1.
Where an AAF in Table 1 would otherwise be less than 1.0, it is set at
1.0, as required by statute; the corresponding AAF in Table 2 will also
be set at 1.0, as required by statute.
IV. How to Find the AAF
AAF Table 1 and Table 2 are posted on the HUD User website at
https://www.huduser.gov/portal/datasets/aaf.html. There are two columns
in each AAF table. The first column is used to adjust contract rent for
rental units where the highest cost utility is 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 AAF is selected as follows:
Determine whether Table 1 or Table 2 is applicable. In
Table 1 or Table 2, locate the 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 AAF from
the column for ``Highest Cost Utility Included.'' If highest cost
utility is not included, select the AAF from the column for ``Highest
Cost Utility Excluded.''
V. Methodology
AAFs are rent inflation factors. Two types of rent inflation
factors are calculated for 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 reflect 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.''
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 data from the Consumer
Expenditure Survey (CEX) on the percentage of renters who pay for heat
(a proxy for the percentage of renters who pay shelter rent) and also
American Community Survey (ACS) data on the ratio of utilities to
rents. For Puerto Rico, the Puerto Rico Community Survey (PRCS) is used
to determine the ratio of utilities to rents, resulting in different
AAFs for some metropolitan areas in Puerto Rico.\2\
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\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 www.HUDUSER.gov.
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Survey Data Used to Produce AAFs
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 2016 to
2017. 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 2017 CEX survey data produced for HUD. The utility-to-
rent ratio used to produce AAFs comes from 2016 ACS median rent and
utility costs.
Geographic Areas
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) where more
than 75 percent of the population of the CBSA is covered by the CPI
city-survey. The AAF that is based on that CPI survey is applied to the
whole CBSA and to any HUD-defined metropolitan area, called the ``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.
All non-metropolitan counties use regional CPI factors, except for
those that are in CPI cities, but have been dropped from metropolitan
area by OMB definitions (Lenawee County, MI; Ashtabula County, OH;
Henderson County, TX; King George County, VA; Island County, WA). 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 and each HMFA is listed
alphabetically within its respective CBSA. Each AAF applies to a
specific geographic area and to units of all bedroom sizes. 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 (to be used for those
metropolitan and non-
[[Page 66729]]
metropolitan areas that are not covered by a CPI city-survey).
AAFs use the same OMB metropolitan area definitions, as revised by
HUD, that are used for the FY 2019 FMRs.
Area Definitions
To make certain that they are using the correct AAFs, users should
refer to the Area Definitions Table section at https://www.huduser.gov/portal/datasets/aaf.html. The Area Definitions Table lists CPI areas in
alphabetical order by state, and the associated Census region is shown
next to each state name. Areas whose AAFs are determined by local CPI
surveys are listed first. All metropolitan areas with local CPI surveys
have separate 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 separately listed in the Area Definitions Table at
https://www.huduser.gov/portal/datasets/aaf.html.
Puerto Rico uses its own AAFs calculated from the Puerto Rico CPI
as adjusted by the PRCS, the Virgin Islands uses the South Region AAFs
and the Pacific Islands uses the West Region AAFs. All areas in Hawaii
use the AAFs listed next to ``Hawaii'' in the Tables which are based on
the CPI survey for the Honolulu metropolitan area.
Dated: December 20, 2018.
Todd M. Richardson,
General Deputy Assistant Secretary for Office of Policy Development and
Research.
[FR Doc. 2018-28097 Filed 12-26-18; 8:45 am]
BILLING CODE 4210-67-P