Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs Fiscal Year 2021, 49666-49672 [2020-17717]
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Federal Register / Vol. 85, No. 158 / Friday, August 14, 2020 / Notices
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–6224–N–01]
Fair Market Rents for the Housing
Choice Voucher Program, Moderate
Rehabilitation Single Room Occupancy
Program, and Other Programs Fiscal
Year 2021
Office of the Assistant
Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Fiscal Year (FY) 2021
Fair Market Rents (FMRs).
AGENCY:
Section 8(c)(1) of the United
States Housing Act of 1937 (USHA), as
amended by the Housing Opportunities
Through Modernization Act of 2016
(HOTMA), requires the Secretary to
publish FMRs not less than annually,
adjusted to be effective on October 1 of
each federal fiscal year (FFY). This
notice describes the methods used to
calculate the FY 2021 FMRs and
enumerates the procedures for Public
Housing Agencies (PHAs) and other
interested parties to request
reevaluations of their FMRs as required
by HOTMA. The trend factors used in
the FY 2021 FMRs include updated
economic assumptions to reflect the
economic downturn caused by the
COVID–19 pandemic.
DATES:
Comment Due Date: September 30,
2020.
Applicable Date: October 1, 2020
unless HUD receives a valid request for
reevaluation of specific area FMRs as
described below.
ADDRESSES: HUD invites interested
persons to submit comments regarding
the FMRs and to request reevaluation of
the FY 2021 FMRs to the Regulations
Division, Office of General Counsel,
Department of Housing and Urban
Development, 451 Seventh Street SW,
Room 10276, Washington, DC 20410–
0001. Communications must refer to the
above docket number and title and
should contain the information
specified in the ‘‘Request for Comments/
Request for Reevaluation’’ section.
There are two methods for submitting
public comments.
1. Submission of Comments by Mail.
Comments or requests for reevaluation
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. Due to security measures at all
federal agencies, however, submission
of comments by standard mail often
results in delayed delivery. To ensure
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SUMMARY:
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timely receipt of comments or
reevaluation requests, HUD
recommends that comments or requests
submitted by standard mail be
submitted at least two weeks in advance
of the deadline. HUD will make all
comments or reevaluation requests
received by mail available to the public
at https://www.regulations.gov.
2. Electronic Submission of
Comments. Interested persons may
submit comments or reevaluation
requests electronically through the
Federal eRulemaking Portal at https://
www.regulations.gov. HUD strongly
encourages commenters to submit
comments or reevaluation requests
electronically. Electronic submission of
comments or reevaluation requests
allows the author maximum time to
prepare and submit a comment or
reevaluation request, ensures timely
receipt by HUD, and enables HUD to
make them immediately available to the
public. Comments or reevaluation
requests submitted electronically
through the https://www.regulations.gov
website can be viewed by other
submitters and interested members of
the public. Commenters or reevaluation
requestors should follow instructions
provided on that site to submit
comments or reevaluation requests
electronically.
Note: To receive consideration as
public comments or reevaluation
requests, comments or requests must be
submitted through one of the two
methods specified above. Again, all
submissions must refer to the docket
number and title of the notice.
No Facsimile Comments or
Reevaluation Requests. Facsimile (FAX)
comments or requests for FMR
reevaluation are not acceptable.
Public Inspection of Public Comments
and Reevaluation Requests. All properly
submitted comments and reevaluation
requests and communications regarding
this notice 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 and reevaluation requests
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
through TTY by calling the Federal
Relay Service at 800–877–8339 (toll-free
number). Copies of all comments and
reevaluation requests submitted are
available for inspection and
downloading at https://
www.regulations.gov.
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For
technical information on the
methodology used to develop FMRs or
a listing of all FMRs, please call the
HUD USER information line at 800–
245–2691 or access the information on
the HUD USER website https://
www.huduser.gov/portal/datasets/
fmr.html. FMRs are listed at the 40th
percentile in the Schedule of
Metropolitan and Non-Metropolitan
Area FMRs. For informational purposes,
50th percentile rents for all FMR areas
will be published at https://
www.huduser.gov/portal/datasets/
50per.html.
Questions related to use of FMRs or
voucher payment standards should be
directed to the respective local HUD
program staff. Questions on how to
conduct FMR surveys may be addressed
to Marie L. Lihn or Peter B. Kahn of the
Program Parameters and Research
Division, Office of Economic Affairs,
Office of Policy Development and
Research at HUD headquarters, 451 7th
Street SW, Room 8208, Washington, DC
20410; telephone number 202–402–2409
(this is not a toll-free number), or they
may be reached at pprd@hud.gov.
Persons with hearing or speech
impairments may access HUD numbers
through TTY by calling the Federal
Relay Service at 800–877–8339 (toll-free
number).
Electronic Data Availability. This
Federal Register notice will be available
electronically from the HUD User page
at https://www.huduser.gov/portal/
datasets/fmr.html. Federal Register
notices also are available electronically
from https://www.federalregister.gov/
the U.S. Government Printing Office
website. Complete documentation of the
methods and data used to compute each
area’s FY 2021 FMRs is available at
https://www.huduser.gov/portal/
datasets/fmr.html#2021_query. FY 2021
FMRs are available in a variety of
electronic formats at https://
www.huduser.gov/portal/datasets/
fmr.html. FMRs may be accessed in PDF
as well as in Microsoft Excel. Small
Area FMRs for all metropolitan FMR
areas are available in Microsoft Excel
format at: https://www.huduser.gov/
portal/datasets/fmr/smallarea/
index.html.
FOR FURTHER INFORMATION CONTACT:
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 Housing Choice
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Voucher (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.
HUD also uses the FMRs to determine
initial renewal rents for some expiring
project-based Section 8 contracts, initial
rents for housing assistance payment
contracts in the Moderate Rehabilitation
Single Room Occupancy program, rent
ceilings for rental units in both the
HOME Investment Partnerships program
and the Emergency Solution Grants
program, calculation of maximum
award amounts for Continuum of Care
recipients and the maximum amount of
rent a recipient may pay for property
leased with Continuum of Care funds,
and calculation of flat rents in Public
Housing units. 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 and is typically set at
the 40th percentile of the distribution of
gross rents. HUD’s FMR calculations
represent HUD’s best effort to estimate
the 40th percentile gross rent 1 paid by
recent movers into standard quality
units in each FMR area. In addition, all
rents subsidized under the HCV
program must meet reasonable rent
standards.
II. Procedures for the Development of
FMRs
Section 8(c)(1) of the USHA, as
amended by HOTMA (Pub. L. 114–201,
approved July 29, 2016), requires the
Secretary of HUD to publish FMRs not
less than annually. Section 8(c)(1)(A)
states that each FMR ‘‘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 . . .’’ Section
8(c)(1)(B) requires that HUD publish,
not less than annually, new FMRs on
the World Wide Web or in any other
manner specified by the Secretary, and
that HUD must also notify the public of
when it publishes FMRs by Federal
Register notice. After notification, the
FMRs ‘‘shall become effective no earlier
than 30 days after the date of such
publication,’’ and HUD must provide a
procedure for the public to comment
and request a reevaluation of the FMRs
in a jurisdiction before the FMRs
1 HUD also calculates and posts 50th percentile
rent estimates for the purposes of Success Rate
Payment Standards as defined at 24 CFR 982.503(e)
(estimates available at: https://www.huduser.gov/
portal/datasets/50per.html), which policy was not
changed by the Small Area FMR rule.
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become effective. Consistent with the
statute, HUD is issuing this notice to
notify the public that FY 2021 FMRs are
available at https://www.huduser.gov/
portal/datasets/fmr.html and will
become effective on October 1, 2020.
This notice also provides procedures for
FMR reevaluation requests.
III. FMR Methodology
This section provides a brief overview
of how HUD computes the FY 2021
FMRs. HUD is making no changes to the
estimation methodology for FMRs as
used by HUD for the FY 2020 FMRs. For
complete information on how HUD
derives each area’s FMRs, see the online
documentation at https://
www.huduser.gov/portal/datasets/
fmr.html#2021_query.
In conjunction with the use of 2018
American Community Survey (ACS)
data, HUD has implemented the
following geography change, the
designation of the two counties
comprising newly created Twin Falls,
ID MSA as metropolitan counties. These
two counties will be designated as Twin
Falls County, ID HUD Metro FMR Area
and Jerome County, ID HUD Metro FMR
Area. Although the FMRs for these
counties will be calculated separately,
the metropolitan area designation
impacts the FMR calculations since the
areas will use the Idaho metropolitan
state-based recent mover factor instead
of the Idaho state non-metropolitan
recent mover factor.
A. Base Year Rents
For FY 2021 FMRs, HUD uses the U.S.
Census Bureau’s 5-year ACS data
collected between 2014 and 2018 and
released in December 2019 as the base
rents for the FMR calculations. The ACS
data released at the end of 2019 is the
most current ACS data available at the
time the FY 2021 FMRs are calculated.
HUD pairs a ‘‘margin of error’’ test 2
with an additional requirement based
on the number of survey observations
supporting the estimate to improve the
statistical reliability of the ACS data
used in the FMR calculations. The
Census Bureau does not provide HUD
with an exact count of the number of
observations supporting the ACS
estimate; rather, the Census Bureau
provides HUD with categories of the
number of survey responses underlying
the estimate, including whether the
estimate is based on more than 100
observations. Using these categories,
HUD requires that, in addition to the
‘‘margin of error’’ test, ACS rent
2 HUD’s margin of error test requires that the
margin of error of the ACS estimate is less than half
the size of the estimate itself.
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estimates must be based on at least 100
observations to be used as base rents.
For areas in which the 5-year ACS
data for two-bedroom, standard quality
gross rents do not pass the statistical
reliability tests (i.e., have a margin of
error ratio greater than 50 percent or
fewer than 100 observations), HUD will
use an average of the base rents over the
three most recent years 3 (provided that
there is data available for at least two of
these years),4 or if such data is not
available, using the two-bedroom rent
data within the next largest geographic
area, which for a non-metropolitan area
would be the state non-metro area rent
data.
HUD has updated base rents each year
using annually updated 5-year data
made available since FY 2012. HUD also
updates base rents for Puerto Rico FMRs
using data collected between 2014 and
2018 through the Puerto Rico
Community Survey (PRCS); HUD first
updated the Puerto Rico base rents in
FY 2014 based on 2007–2011 PRCS data
collected through the ACS program.
HUD historically based FMRs on gross
rents for recent movers (those who have
moved into their current residence in
the last 24 months) measured directly.
However, due to the way Census
constructs the 5-year ACS data, HUD
developed a new method for calculating
recent-mover FMRs in FY 2012, which
HUD continues to use in FY 2021.
Under this method, HUD assigns all
areas a base rent, which is the twobedroom standard quality 5-year gross
rent estimate from the ACS; then,
because HUD’s regulations mandate that
FMRs must be published as recent
mover gross rents, HUD applies a
recent-mover factor to the base rents
assigned from the 5-year ACS data.5 The
calculation of the recent mover factor is
described below.
3 For FY 2021, the three years of ACS data in
question are 2016, 2017 and 2018. The 2016 data
are adjusted to be denominated in 2018 dollars
using the growth in Consumer Price Index (CPI)based gross rents measured between 2016 and 2018.
Similarly, the 2017 gross rent data is adjusted to
2018 denominated dollars using the growth in CPIbased gross rents measured between 2017 and 2018.
4 To be used in the three-year average calculation,
the 5-year estimates must be minimally statistically
qualified; that is, the margin of error of the
estimates must be less than half the size of the
estimate.
5 HUD’s regulations at 24 CFR 888.113(a)
incorporate recent-mover data into FMR
calculations because the gross rents of those who
most recently moved into their units likely depicts
the most current market conditions observable
through the ACS. Rents paid by renters renewing
existing leases may not reflect the most current
market conditions, in part because these renters
may have clauses within their leases that
predetermine the annual increases in rents paid
(i.e., rent escalator clauses).
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B. Recent-Mover Factor
Following the assignment of the
standard quality two-bedroom rent
described above, HUD applies a recentmover factor to these rents. HUD
calculates the recent-mover factor as the
change between the 5-year 2014–2018
standard quality two-bedroom gross rent
and the 1-year 2018 recent mover gross
rent for the recent mover factor area.
HUD does not allow recent-mover
factors to lower the standard quality
base rent; therefore, if the 5-year
standard quality rent is larger than the
comparable 1-year recent mover rent,
the recent-mover factor is set to 1 so the
base rent is updated and trended. When
the recent-mover factor is greater than
one, the base rent is effectively replaced
with the recent-mover rent for that area
and that is what is updated and trended.
For virtually all metropolitan areas, oneyear recent-mover data is the basis for
the updated and trended FMRs.
The calculation of the recent-mover
factor for FY 2021 continues to use
statistical reliability requirements that
are similar to those for base rents. That
is, for a recent-mover gross rent estimate
to be considered statistically reliable,
the estimate must have a margin of error
ratio that is less than 50 percent, and the
estimate must be based on 100 or more
observations.
When an FMR area does not have
statistically reliable two-bedroom
recent-mover data, the ‘‘all-bedroom’’ 1year recent-mover ACS data for the FMR
area is tested for statistical reliability.6
An ‘‘all-bedroom’’ recent-mover factor
from the FMR area will be used, if
statistically reliable, before substituting
a two-bedroom recent-mover factor from
the next larger geography. Incorporating
‘‘all-bedroom’’ rents into the recentmover factor calculation when
statistically reliable two-bedroom data is
not available preserves the use of local
information to the greatest extent
possible.
However, where statistically reliable
‘‘all-bedroom’’ data is not available,
HUD will continue to base FMR areas’
recent-mover factors on larger
geographic areas, following the same
procedures used historically: HUD tests
data from differently sized geographic
areas in the following order (from small
to large), and bases the recent-mover
factor on the first statistically reliable
recent-mover rent estimate in the
geographic hierarchy listed below.
• For metropolitan areas that are subareas of larger metropolitan areas, the
order is the FMR area, metropolitan
6 ‘‘All-bedroom’’ refers to estimates aggregated
together regardless of the number of bedrooms in
the dwelling unit.
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area, aggregated metropolitan parts of
the state, and state.
• For metropolitan areas that are not
divided, the order is the FMR area,
aggregated metropolitan parts of the
state, and state.
• In non-metropolitan areas, the order
is the FMR area, aggregated nonmetropolitan parts of the state, and
state.
The process for calculating each area’s
recent mover factor is detailed in the FY
2021 FMR documentation system
available at:
https://www.huduser.gov/portal/
datasets/fmr.html#2021_query.
Applying the recent-mover factor to the
standard quality base rent produces an
‘‘as of’’ 2018 recent mover two-bedroom
gross rent for the FMR area.
C. Other Rent Survey Data
HUD calculated base rents for the
insular areas using data collected during
the 2010 decennial census of American
Samoa, Guam, the Northern Mariana
Islands, and the Virgin Islands
beginning with the FY 2016 FMRs.7
This 2010 base year data is updated
through 2018 for the FY 2021 FMRs
using the growth in national ACS data.
HUD does not use ACS data to
establish the base rent or recent-mover
factor for 21 areas where the FY 2021
FMRs are based on locally collected
survey data which are more recent than
the 2018 ACS. For larger metropolitan
areas that have valid ACS one-year
recent-mover data, survey data may not
be any older than the mid-point of the
calendar year for the ACS one-year data.
Since the ACS one-year data used for
the FY 2021 FMRs is from 2018, larger
areas may not use survey data collected
before June 30, 2018 for the FY 2021
FMRs. Smaller areas without
statistically reliable 1-year ACS data
may continue to use local survey data
until the mid-point of the 5-year ACS
data is more recent than the local
survey. The following list enumerates
the areas with local areas surveys and
the year of the survey data:
• Survey data from 2017 is used to
adjust the FMRs for Hood River County,
OR; Wasco County, OR; Hawaii County,
HI; and Jonesboro, AR HMFA.
• Survey data from 2018 is used to
adjust the FMR for Portland-VancouverHillsboro, OR–WA; Burlington-South
Burlington, VT; Coos County, OR; Curry
County, OR; Oakland-Fremont, CA HUD
7 The ACS is not conducted in the Pacific Islands
(Guam, Northern Marianas and American Samoa) or
the US Virgin Islands. As part of the 2010 Decennial
Census, the Census Bureau conducted ‘‘long-form’’
sample surveys for these areas. The results gathered
by this long form survey have been incorporated
into the FY 2020 FMRs.
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Metro FMR Area; San Francisco, CA
HUD Metro FMR Area; San JoseSunnyvale-Santa Clara, CA HUD Metro
FMR Area; Boston-Cambridge-Quincy,
MA-NH HUD Metro FMR Area; Douglas
County, OR; and San Diego-Carlsbad,
CA MSA.
• Survey data from 2019 is used to
adjust the FMRs for Kauai County, HI;
Asheville, NC HUD Metro FMR Area;
Eugene-Springfield, OR MSA; Portland,
ME HUD Metro FMR Area; Santa MariaSanta Barbara, CA MSA; Worcester, MA
HUD Metro FMR Area; and Guam.
• Survey data from 2020 is used to
calculate the FMRs for Santa CruzWatsonville, CA MSA.
D. Updates From 2018 to 2019
HUD updates the ACS-based ‘‘as of’’
2018 rent through 2019 using the annual
change in gross rents measured through
the Consumer Price Index (CPI) from
2018 to 2019 (CPI update factor). As in
previous years, HUD uses local CPI data
coupled with Consumer Expenditure
Survey data for FMR areas within Class
A metropolitan areas covered by local
CPI data. In 2018, the Bureau of Labor
Statistics (BLS) changed the area
definitions of its Class A metropolitan
areas from the 1990 definition of
Consolidated Metropolitan Statistical
Areas (CMSA) to smaller Core-Based
Statistical Area (CBSA) MSAs. In
addition, BLS eliminated some areas
from this Class A collection: Pittsburgh,
PA MSA; Cleveland-Elyria, OH MSA;
Cincinnati, OH-KY-IN MSA; Kansas
City, MO-KS MSA; MilwaukeeWaukesha-West Allis, WI MSA; and
Portland-Vancouver-Hillsboro, OR-WA
MSA. HUD estimated these areas’ FMRs
using regional CPI beginning with the
FY 2020 FMRs and continues the use of
regional CPI factors in FY 2021. HUD
uses CPI data aggregated at the Census
region level for all Class B and C size
metropolitan areas and nonmetropolitan areas. Additionally, HUD
uses CPI data collected locally in Puerto
Rico as the basis for CPI adjustments
from 2018 to 2019 for all Puerto Rico
FMR areas.
E. Trend Factor Forecasts
Following the application of the
appropriate CPI update factor, HUD
trends the gross rent estimate from 2019
to FY 2021 using local and regional
forecasts of the CPI gross rent data.
Riverside-San Bernardino-Ontario, CA
MSA as a newly designated Class A city
(it was previously part of the Los
Angeles-Riverside-Orange County, CA
CMSA) has data for a CPI update factor,
but does not have enough data for a
trend factor forecast; therefore, until
there is sufficient history to create a
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credible local trend factor forecast its
trend factor is the regional (West) trend
factor. The actual model used for each
trend factor has been chosen based on
which model generates the lowest Root
Mean Square Error (RMSE) statistic. As
detailed in the June 5, 2019 Federal
Register notice (84 FR 26141), the trend
factors were selected from a series of
time series models based on national
inputs (National Input Model or NIM),
local inputs (Local Input Model or LIM)
and historical values of the predicted
series (Pure Time Series—PTS). HUD
will hold the type of model selected
(NIM, LIM, or PTS) constant for 5 years
and will reassess the model selections
during the calculation of the FY 2025
FMRs. For instances when HUD changes
the functional form of the model (NIM,
PTS, LIM) for a geographic area that is
different from the previous model
selection, HUD will ensure the change
is not due to overfitting the model or
outliers in the data. HUD will update
and run the gross rent forecast models
annually with updated actual data and
newly created input forecasts. For FY
2021, in the NIM models, HUD is using
economic projections that account for
the COVID–19 impacts on the
economy .8
E. Bedroom Rent Adjustments
HUD updates the bedroom ratios used
in the calculation of FMRs annually.
The bedroom ratios which HUD used in
the calculation of FY 2021 FMRs have
been updated using average data from
three five-year ACS data series (2012–
2016, 2013–2017, and 2014–2018). The
bedroom ratio methodology used in this
update is unchanged from previous
calculations using 2000 Census data.
HUD only uses estimates with a margin
of error ratio of less than 50 percent. If
an area does not have reliable estimates
in at least two of the previous three ACS
releases, bedroom ratios for the area’s
larger parent geography are used.
HUD uses two-bedroom units for its
primary calculation of FMR estimates.
This is generally the most common size
of rental unit and, therefore, the most
reliable to survey and analyze. After
estimating two-bedroom FMRs, HUD
calculates bedroom ratios for each FMR
area which relate the prices of smaller
and larger units to the cost of twobedroom units. To ensure an adequate
distributional fit in these bedroom ratio
calculations in particular FMR areas,
HUD establishes bedroom interval
ranges which set upper and lower limits
for bedroom ratios nationwide, based on
an analysis of the range of such intervals
8 Congressional Budget Office (CBO) economic
projections, May 2020.
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for all areas with large enough samples
to permit accurate bedroom ratio
determinations.
In the calculation of FY 2021 FMR
estimates, HUD set the bedroom interval
ranges as follows: Efficiency FMRs are
constrained to fall between 0.66 and
0.86 of the two-bedroom FMR; onebedroom FMRs must be between 0.76
and 0.88 of the two-bedroom FMR;
three-bedroom FMRs (prior to the
adjustments described below) must be
between 1.14 and 1.32 of the twobedroom FMR; and four-bedroom FMRs
(again, prior to adjustment) must be
between 1.26 and 1.61 of the twobedroom FMR. Given that these interval
ranges partially overlap across unit
bedroom counts, HUD further adjusts
bedroom ratios for a given FMR area, if
necessary, to ensure that higher
bedroom-count units have higher rents
than lower bedroom-count units within
that area. The bedroom ratios for Puerto
Rico follow these constraints.
HUD also further adjusts the rents for
three-bedroom and larger units to reflect
HUD’s policy to set higher rents for
these units.9 This adjustment is
intended to increase the likelihood that
the largest families, who have the most
difficulty in leasing units, will be
successful in finding eligible program
units. The adjustment adds 8.7 percent
to the unadjusted three-bedroom FMR
estimates and adds 7.7 percent to the
unadjusted four-bedroom FMR
estimates.
HUD derives FMRs for units with
more than four bedrooms by adding 15
percent to the four-bedroom FMR for
each extra bedroom. For example, the
FMR for a five-bedroom unit is 1.15
times the four-bedroom FMR, and the
FMR for a six-bedroom unit is 1.30
times the four-bedroom FMR. Similarly,
HUD derives FMRs for single-room
occupancy units by subtracting 25
percent from the zero-bedroom FMR
(i.e., they are set at 0.75 times the zerobedroom (efficiency) FMR).10
F. Limit on FMR Decreases
Within the Small Area FMR final rule
published on November 16, 2016, HUD
amended 24 CFR 888.113 to include a
limit on the amount that FMRs may
annually decrease. The current year’s
FMRs resulting from the application of
9 As mentioned above, HUD applies the interval
ranges for the three-bedroom and four-bedroom
FMR ratios prior to making these adjustments. In
other words, the adjusted three- and four-bedroom
FMRs can exceed the interval ranges, but the
unadjusted FMRs cannot.
10 As established in the interim rules
implementing the provisions of the Quality Housing
and Work Responsibility Act of 1998 (Title V of the
FY 1999 HUD Appropriations Act; Pub. L. 105–
276). In 24 CFR 982.604.
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the bedroom ratios, as discussed in
section (E) above, may be no less than
90 percent of the prior year’s FMRs for
units with the same number of
bedrooms. Accordingly, if the current
year’s FMRs are less than 90 percent of
the prior year’s FMRs as calculated by
the above methodology, HUD sets the
current year’s FMRs equal to 90 percent
of the prior year’s FMRs. For areas
where use of Small Area FMRs in the
administration of their voucher
programs is required, the FY 2021 Small
Area FMRs may be no less than 90
percent of the FY 2020 Small Area
FMRs. For all other metropolitan areas,
for which Small Area FMRs are
calculated so that they may be used for
other allowable purposes if desired (e.g.,
exception payment standards, public
housing flat rents), the FY 2021 Small
Area FMRs may be no less than 90
percent of the greater of the FY 2020
metropolitan area-wide FMRs or the
applicable FY 2020 Small Area FMR.
G. Other Limits on FMRs
All FMRs are subject to a state or
national minimum. HUD calculates a
population-weighted median twobedroom 40th percentile rent across all
non-metropolitan portions of each state,
which, for the purposes of FMRs, is the
state minimum rent. State-minimum
rents for each FMR area are available in
the FY 2021 FMR Documentation
System, available at https://
www.huduser.gov/portal/datasets/
fmr.html#2021_query. HUD also
calculates the population-weighted
median two-bedroom 40th percentile
rent across all non-metropolitan
portions of the country, which, for the
purposes of FMRs, is the national
minimum rent. For FY 2021, the
national minimum rent is $734. The
applicable minimum rent for a
particular area is the lower of the state
or national minimum. Each area’s twobedroom FMR must be no less than the
applicable minimum rent.
As in prior years, Small Area FMRs
are subject to a maximum limit. HUD
limits each two-bedroom Small Area
FMR to be no more than 150 percent of
the two-bedroom FMR for the
metropolitan area where the ZIP code is
located.
IV. Small Area FMRs
Small Area FMRs for all metropolitan
areas are listed in the Small Area FMR
Schedule. Other Metropolitan PHAs
operating in areas where the Small Area
FMR is not required to be used and
interested in using Small Area FMRs in
the operation of their Housing Choice
Voucher program should contact their
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local HUD field office to request
approval from HUD to do so.
HUD calculates Small Area FMRs
directly from the standard quality gross
rents provided to HUD by the Census
Bureau for ZIP Code Tabulation Areas
(ZCTAs), when such data is statistically
reliable. The ZCTA two-bedroom
equivalent 40th percentile gross rent is
analogous to the standard quality base
rents set for metropolitan areas and nonmetropolitan counties. For each ZCTA
with statistically reliable gross rent
estimates, using the expanded test of
statistical reliability first used in FY
2018 (i.e., estimates with margins of
error ratios below 50 percent and based
on at least 100 observations), HUD will
calculate a two-bedroom equivalent
40th percentile gross rent using the first
statistically reliable gross rent
distribution data from the following
data sets (in this order): Two-bedroom
gross rents, one-bedroom gross rents,
and three-bedroom gross rents. If either
the one-bedroom or three-bedroom gross
rent data is used because the twobedroom gross rent data is not
statistically reliable, the one-bedroom or
three-bedroom 40th percentile gross rent
will be converted to a two-bedroom
equivalent rent using the bedroom ratios
for the ZCTA’s parent metropolitan area.
To increase stability to these Small Area
FMR estimates, HUD averages the latest
three years of gross rent estimates.11
For ZCTAs without usable gross rent
data by bedroom size, HUD will
continue to calculate Small Area FMRs
using the rent ratio method similar to
that HUD has used in past Small Area
FMR calculations. To calculate Small
Area FMRs using a rent ratio, HUD
divides the median gross rent across all
bedrooms for the small area (a ZIP code)
by the similar median gross rent for the
metropolitan area of the ZIP code. If a
ZCTA does not have reliable rent data
at the all bedroom level, HUD will then
check to see if the ZCTA is bordered by
ZCTAs that themselves have reliable
rent data. If at least half of a ZCTA’s
‘‘neighbors’’ have such data, the
weighted average of those estimates will
be used as the basis for the SAFMR
rather than a county proxy, where the
weight is the length of the shared
boundary between the ZCTA and its
neighbor. In small areas where the
neighboring ZCTA median gross rents
are not statistically reliable, HUD
continues to substitute the median gross
rent for the county containing the ZIP
11 For example, for FY 2021 Small Area FMRs,
HUD averages the gross rents from 2016, 2017, and
2018 5-Year ACS estimates. The 2016 and 2017
gross rent estimates would be adjusted to 2018
dollars using the metropolitan area’s gross rent CPI
adjustment factors.
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code in the numerator of the rent ratio
calculation. HUD multiplies this rent
ratio by the current two-bedroom rent
for the metropolitan area containing the
small area to generate the current year
two-bedroom rent for the small area.
HUD continues to use a rolling
average of ACS data in calculating the
Small Area FMR rent ratios. HUD
believes coupling the most current data
with previous year’s data minimizes
excessive year-to-year variability in
Small Area FMR rent ratios due to
sampling variance. Therefore, for FY
2021 Small Area FMRs, HUD has
updated the rent ratios to use an average
of the rent ratios calculated from the
2012–2016, 2013–2017, and 2014–2018
5-year ACS estimates.
V. Request for Public Comments and
FMR Reevaluations
HUD will continue to accept public
comments on the methods HUD uses to
calculate FY 2021 FMRs, including
Small Area FMRs, and the FMR levels
for specific areas. Due to its current
funding levels, HUD does not have
sufficient resources to conduct local
surveys of rents to address comments
filed regarding the FMR levels for
specific areas. PHAs may continue to
fund such surveys independently, as
specified below, using ongoing
administrative fees or their
administrative fee reserve if they so
choose. HUD continually strives to
calculate FMRs that meet the statutory
requirement of using ‘‘the most recent
available data’’ while also serving as an
effective program parameter.
PHAs or other parties interested in
requesting HUD’s reevaluation of their
area’s FY 2021 FMRs, as provided for
under section 8(c)(1)(B) of USHA, must
follow the following procedures:
1. By the end of the comment period,
such reevaluation requests must be
submitted publicly through https://
www.regulations.gov/ or directly to
HUD as described above. The area’s
PHA or, in multi-jurisdictional areas,
PHA(s) representing at least half of the
voucher tenants in the FMR area, must
agree that the reevaluation is necessary.
2. For a re-evaluation to occur, the
requestor(s) must supply HUD with data
more recent than the 2018 ACS data
used in the calculation of the FY 2021
FMRs. HUD requires data on gross rents
paid in the FMR area for standard
quality rental housing units occupied by
recent movers. The data delivered must
be sufficient for HUD to calculate a 40th
and 50th percentile two-bedroom rent.12
12 Although there are no longer 50th percentile
FMRs, HUD must calculate 50th percentile rents for
the Success Rate Payment Standard under 24 CFR
982.503(e).
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Should this type of data not be
available, requestors may gather this
information using the survey guidance
available at https://www.huduser.gov/
portal/datasets/fmr/NoteRevisedArea
SurveyProcedures.pdf and https://
www.huduser.gov/portal/datasets/fmr/
PrinciplesforPHA-ConductedArea
RentSurveys.pdf.
3. On or about October 2, 2020 HUD
will post a list, at https://
www.huduser.gov/portal/datasets/
fmr.html, of the areas requesting
reevaluations and where FY 2020 FMRs
remain in effect. 42 U.S.C. 1437f(c)(1)(B)
includes the following: ‘‘The Secretary
shall establish a procedure for public
housing agencies and other interested
parties to comment on such fair market
rentals and to request, within a time
specified by the Secretary, reevaluation
of the fair market rentals in a
jurisdiction before such rentals become
effective.’’ Therefore, areas where valid
reevaluation requests are submitted
continue to use FY 2020 FMRs whether
the FY 2021 FMRs are lower or higher
than the FY 2020 FMRs.
4. Data for reevaluations must be
supplied to HUD no later than Friday
January 8, 2021. On Monday January 11,
2021, HUD will post at https://
www.huduser.gov/portal/datasets/
fmr.html a listing of the areas that
requested FMR reevaluations but did
not deliver data and making the FY
2021 FMRs effective in these areas. All
survey responses gathered as part of the
survey efforts should be delivered to
HUD. In addition to the survey data,
HUD requires a current utility schedule
in order to evaluate the survey
responses. Finally, HUD encourages
PHAs to evaluate their survey data to
ensure the survey provides the expected
results. Should PHAs or their
contractors undertake this evaluation,
HUD requests that this analysis also be
submitted.
5. HUD will use the data delivered by
January 8, 2021 to reevaluate the FMRs
and following the reevaluation, will
post revised FMRs with an
accompanying Federal Register notice
stating the revised FMRs are available,
which will include HUD’s responses to
comments filed during the comment
period for this notice.
6. Any data supporting a change in
FMRs supplied after January 8, 2021
will be incorporated into FY 2022
FMRs.
7. PHAs operating in areas where the
calculated FMR is lower than the
published FMR (i.e., those areas where
HUD has limited the decrease in the
annual change in the FMR to 10
percent) may request payment standards
below the basic range (24 CFR
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982.503(d)) and reference the
‘‘unfloored’’ rents (i.e., the unfinalized
FMRs calculated by HUD prior to
application of the 10-percent-decrease
limit) depicted in the FY 2021 FMR
Documentation System (available at:
https://www.huduser.gov/portal/
datasets/fmr.html#2021_query).
Questions on how to conduct FMR
surveys may be addressed to Marie L.
Lihn or Peter B. Kahn of the Program
Parameters and Research Division,
Office of Economic Affairs, Office of
Policy Development and Research at
HUD headquarters, 451 7th Street SW,
Room 8208, Washington, DC 20410;
telephone number 202–402–2409 (this
is not a toll-free number), or they may
be reached at pprd@hud.gov.
For small metropolitan areas without
one-year ACS data and nonmetropolitan counties, HUD has
developed a method using mail surveys
that is discussed on the FMR web page:
https://www.huduser.gov/portal/
datasets/fmr.html#survey_info. This
method allows for the collection of as
few as 100 one-bedroom, two-bedroom
and three-bedroom recent mover
(tenants that moved in last 24 months)
units.
While HUD has not developed a
specific method for mail surveys in
areas with 1-year ACS data or in areas
not covered by ACS data, HUD would
apply the standard established for
Random-Digit Dialing (RDD) telephone
rent surveys. HUD will evaluate these
survey results to determine whether
they would establish a new FMR
statistically different from the current
FMR, which means that the survey
confidence interval must not include
the FMR. The survey should collect
results based on 200 one-bedroom and
two-bedroom eligible recent mover units
to provide a small enough confidence
interval for significant results in large
market mail surveys. Areas with
statistically reliable 1-year ACS data are
not considered to be good candidates for
local surveys due to the size and
completeness of the ACS process.
Other survey methods are acceptable
in providing data to support
reevaluation requests if the survey
method can provide statistically
reliable, unbiased estimates of gross
rents paid of the entire FMR area. In
general, recommendations for FMR
changes and supporting data must
reflect the rent levels that exist within
the entire FMR area and should be
statistically reliable.
PHAs in non-metropolitan areas may
survey three-bedroom units, in addition
to one- and two-bedroom units and are
only required to get 100 eligible survey
responses. In certain circumstances,
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PHAs may conduct surveys of groups of
non-metropolitan counties. HUD must
approve all county-grouped surveys in
advance. PHAs are cautioned that the
resulting FMRs may not be identical for
the counties surveyed; each individual
FMR area will have a separate FMR
based on the relationship of rents in that
area to the combined rents in the cluster
of FMR areas. In addition, PHAs are
advised that in counties where FMRs
are based on the combined rents in the
cluster of FMR areas, HUD will not
revise their FMRs unless the grouped
survey results show a revised FMR
statistically different from the combined
rent level.
Survey samples should preferably be
randomly drawn from a complete list of
rental units for the FMR area. If this is
not feasible, the selected sample must
be drawn to be statistically
representative of the entire rental
housing stock of the FMR area. Surveys
must include units at all rent levels and
be representative by structure type
(including single-family, duplex, and
other small rental properties), age of
housing unit, and geographic location.
The current 5-year ACS data should be
used as a means of verifying if a sample
is representative of the FMR area’s
rental housing stock. Staff from HUD’s
Program Parameters and Research
Division will work with PHAs in areas
requesting reevaluations to provide the
minimum number of survey cases
required to ensure that data submitted
for reevaluation represent a statistically
valid sample.
A PHA or contractor that cannot
obtain the recommended number of
sample responses after reasonable
efforts should consult with HUD before
abandoning its survey; in such
situations, HUD may find it appropriate
to relax normal sample size
requirements, but in no case will fewer
than 100 eligible cases be considered.
HUD has developed guidance on how
to provide data-supported comments on
Small Area FMRs using HUD’s special
tabulations of the distribution of gross
rents by unit bedroom count for ZIP
Code Tabulation Areas. This guidance is
available at https://www.huduser.gov/
portal/datasets/fmr.html in the FY 2021
FMR section under the ‘‘Documents’’
tab and should be used by interested
parties in commenting on whether or
not the level of Small Area FMRs are too
high or too low (i.e., Small Area FMRs
that are larger than the gross rent
necessary to make 40 percent of the
units accessible for an individual zip
code or that are smaller than the gross
rent necessary to make 40 percent of the
units accessible for a given zip code).
HUD will post revised Small Area FMRs
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49671
after confirming commenters’
calculations.
As stated earlier in this notice, HUD
is required to use the most recent data
available when calculating FMRs.
Therefore, in order to reevaluate an
area’s FMR, HUD requires more current
rental market data than the 2018 ACS.
HUD encourages a PHA or other
interested party that believes the FMR
in their area is incorrect to file a
comment even if they do not have the
resources to provide market-wide rental
data. In these instances, HUD will use
the comments, should survey funding
be restored, when determining the areas
HUD will select for HUD-funded local
area rent surveys.
VI. Environmental Impact
This Notice involves the
establishment of FMR 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 available at https://
www.huduser.gov/portal/datasets/
fmr.html.
Dated: August 10, 2020.
Seth D. Appleton,
Assistant Secretary for Policy Development
and Research.
Fair Market Rents for the Housing
Choice Voucher Program Schedule B—
General Explanatory Notes
1. Geographic Coverage
a. Metropolitan Areas—Most FMRs
are market-wide rent estimates that are
intended to provide housing
opportunities throughout the geographic
area in which rental-housing units are
in direct competition. HUD uses the
metropolitan CBSAs, which are made
up of one or more counties, as defined
by OMB, with some modifications. HUD
is generally assigning separate FMRs to
the component counties of CBSA
Micropolitan Areas.
b. Modifications to OMB Definitions—
Following OMB guidance, the
estimation procedure for the FY 2021
FMRs incorporates the OMB definitions
of metropolitan areas based on the
CBSA standards as implemented with
2000 Census data and updated by the
2010 Census in February 28, 2013,
including incremental adjustments
through August 15, 2017. The
adjustments made to the 2000
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definitions to separate subparts of these
areas where FMRs or median incomes
would otherwise change significantly
are continued. In addition, to limit FMR
changes based solely on geography and
to provide FMRs at the smallest possible
area of geography, no counties were
added to existing metropolitan areas
beginning with changes to metropolitan
area definitions from the 2010 Census
and implemented in the FY 2016 FMRs.
All counties added to existing
metropolitan areas are treated as
separate counties for FMR calculations
and new metropolitan areas of more
than one county will have separate
FMRs for each county in that new MSA.
Rents from a county that is a sub-area
will not be used in the remaining
metropolitan sub-area rent
determination. All metropolitan areas
that have been subdivided by HUD will
use ACS data which conforms to HUD’s
area definition if statistically reliable
information exists. If statistically
reliable data for the HUD defined area
is not available, HUD uses information
from the average of the last three years.
If that is not available, then the FMR of
the larger encompassing geography is
used, which is the MSA for a
metropolitan county and the nonmetropolitan portion of a State for a
non-metropolitan county.
The specific counties and New
England towns and cities within each
state in MSAs and HMFAs were not
changed by the August 2017 OMB
metropolitan area definitions. These
areas are listed in Schedule B, available
online at https://www.huduser.gov/
portal/datasets/fmr.html.
2. Unit Bedroom Count Adjustments
The Metropolitan and NonMetropolitan Area FMR Schedule s is
available at https://www.huduser.gov/
portal/datasets/fmr.html and shows the
FMRs for zero-bedroom through fourbedroom units. The Small Area FMR
Schedule shows Small Area FMRs for
all metropolitan areas. FMRs for unit
sizes larger than four bedrooms may be
calculated by adding 15 percent to the
four-bedroom FMR for each extra
bedroom. For example, the FMR for a
five-bedroom unit is 1.15 times the fourbedroom FMR, and the FMR for a sixbedroom unit is 1.30 times the fourbedroom FMR. FMRs for single-roomoccupancy (SRO) units are 0.75 times
the zero-bedroom FMR.
3. Arrangement of FMR Areas and
Identification of Constituent Parts
a. The Metropolitan and NonMetropolitan FMR Area Schedule lists
FMRs alphabetically by state, by
metropolitan area and by non-
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metropolitan county within each state
and are available at https://
www.huduser.gov/portal/datasets/
fmr.html.
b. The constituent counties (and New
England towns and cities) included in
each metropolitan FMR area are listed
immediately following the listings of the
FMR dollar amounts. All constituent
parts of a metropolitan FMR area that
are in more than one state can be
identified by consulting the listings for
each applicable state.
c. Two non-metropolitan counties are
listed alphabetically on each line of the
non-metropolitan county listings.
d. The New England towns and cities
included in a non-metropolitan county
are listed immediately following the
county name.
[FR Doc. 2020–17717 Filed 8–13–20; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF THE INTERIOR
Geological Survey
[GX20LR000F60100; OMB Control Number
1028–0068/Renewal]
Agency Information Collection
Activities; Ferrous Metals Surveys
U.S. Geological Survey,
Interior.
ACTION: Notice of information collection;
request for comment.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the U.S. Geological Survey (USGS) are
proposing to renew an information
collection.
DATES: Interested persons are invited to
submit comments on or before October
13, 2020.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to U.S. Geological Survey,
Information Collections Officer, 12201
Sunrise Valley Drive MS 159, Reston,
VA 20192; or by email to gs-info_
collections@usgs.gov. Please reference
OMB Control Number 1028–0068 in the
subject line of your comments.
FOR FURTHER INFORMATION CONTACT: To
request additional information about
this ICR, contact Elizabeth S. Sangine by
email at escottsangine@usgs.gov, or by
telephone at 703–648–7720.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
SUMMARY:
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impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the USGS; (2)
will this information be processed and
used in a timely manner; (3) is the
estimate of burden accurate; (4) how
might the USGS enhance the quality,
utility, and clarity of the information to
be collected; and (5) how might the
USGS minimize the burden of this
collection on the respondents, including
through the use of information
technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
including your address, phone number,
email 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.
Abstract: Respondents to these forms
supply the USGS with domestic
production and consumption data for 13
ores, concentrates, metals, and
ferroalloys, some of which are
considered strategic and critical, to
assist in determining National Defense
Stockpile goals. These data and derived
information will be published as
chapters in Minerals Yearbooks,
monthly Mineral Industry Surveys,
annual Mineral Commodity Summaries,
and special publications, for use by
Government agencies, industry
education programs, and the general
public.
Title of Collection: Ferrous Metals
Surveys.
OMB Control Number: 1028–0068.
Form Number: Various (15 forms).
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public:
Business or Other-For-Profit
Institutions: U.S. nonfuel minerals
producers and consumers of ferrous and
related metals.
Total Estimated Number of Annual
Respondents: 954.
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[Federal Register Volume 85, Number 158 (Friday, August 14, 2020)]
[Notices]
[Pages 49666-49672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17717]
[[Page 49666]]
=======================================================================
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6224-N-01]
Fair Market Rents for the Housing Choice Voucher Program,
Moderate Rehabilitation Single Room Occupancy Program, and Other
Programs Fiscal Year 2021
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Fiscal Year (FY) 2021 Fair Market Rents (FMRs).
-----------------------------------------------------------------------
SUMMARY: Section 8(c)(1) of the United States Housing Act of 1937
(USHA), as amended by the Housing Opportunities Through Modernization
Act of 2016 (HOTMA), requires the Secretary to publish FMRs not less
than annually, adjusted to be effective on October 1 of each federal
fiscal year (FFY). This notice describes the methods used to calculate
the FY 2021 FMRs and enumerates the procedures for Public Housing
Agencies (PHAs) and other interested parties to request reevaluations
of their FMRs as required by HOTMA. The trend factors used in the FY
2021 FMRs include updated economic assumptions to reflect the economic
downturn caused by the COVID-19 pandemic.
DATES:
Comment Due Date: September 30, 2020.
Applicable Date: October 1, 2020 unless HUD receives a valid
request for reevaluation of specific area FMRs as described below.
ADDRESSES: HUD invites interested persons to submit comments regarding
the FMRs and to request reevaluation of the FY 2021 FMRs to the
Regulations Division, Office of General Counsel, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10276, Washington,
DC 20410-0001. Communications must refer to the above docket number and
title and should contain the information specified in the ``Request for
Comments/Request for Reevaluation'' section. There are two methods for
submitting public comments.
1. Submission of Comments by Mail. Comments or requests for
reevaluation 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. Due to
security measures at all federal agencies, however, submission of
comments by standard mail often results in delayed delivery. To ensure
timely receipt of comments or reevaluation requests, HUD recommends
that comments or requests submitted by standard mail be submitted at
least two weeks in advance of the deadline. HUD will make all comments
or reevaluation requests received by mail available to the public at
https://www.regulations.gov.
2. Electronic Submission of Comments. Interested persons may submit
comments or reevaluation requests electronically through the Federal
eRulemaking Portal at https://www.regulations.gov. HUD strongly
encourages commenters to submit comments or reevaluation requests
electronically. Electronic submission of comments or reevaluation
requests allows the author maximum time to prepare and submit a comment
or reevaluation request, ensures timely receipt by HUD, and enables HUD
to make them immediately available to the public. Comments or
reevaluation requests submitted electronically through the https://www.regulations.gov website can be viewed by other submitters and
interested members of the public. Commenters or reevaluation requestors
should follow instructions provided on that site to submit comments or
reevaluation requests electronically.
Note: To receive consideration as public comments or reevaluation
requests, comments or requests must be submitted through one of the two
methods specified above. Again, all submissions must refer to the
docket number and title of the notice.
No Facsimile Comments or Reevaluation Requests. Facsimile (FAX)
comments or requests for FMR reevaluation are not acceptable.
Public Inspection of Public Comments and Reevaluation Requests. All
properly submitted comments and reevaluation requests and
communications regarding this notice 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 and
reevaluation requests 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 through TTY
by calling the Federal Relay Service at 800-877-8339 (toll-free
number). Copies of all comments and reevaluation requests submitted are
available for inspection and downloading at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For technical information on the
methodology used to develop FMRs or a listing of all FMRs, please call
the HUD USER information line at 800-245-2691 or access the information
on the HUD USER website https://www.huduser.gov/portal/datasets/fmr.html. FMRs are listed at the 40th percentile in the Schedule of
Metropolitan and Non-Metropolitan Area FMRs. For informational
purposes, 50th percentile rents for all FMR areas will be published at
https://www.huduser.gov/portal/datasets/50per.html.
Questions related to use of FMRs or voucher payment standards
should be directed to the respective local HUD program staff. Questions
on how to conduct FMR surveys may be addressed to Marie L. Lihn or
Peter B. Kahn of the Program Parameters and Research Division, Office
of Economic Affairs, Office of Policy Development and Research at HUD
headquarters, 451 7th Street SW, Room 8208, Washington, DC 20410;
telephone number 202-402-2409 (this is not a toll-free number), or they
may be reached at [email protected]. Persons with hearing or speech
impairments may access HUD numbers through TTY by calling the Federal
Relay Service at 800-877-8339 (toll-free number).
Electronic Data Availability. This Federal Register notice will be
available electronically from the HUD User page at https://www.huduser.gov/portal/datasets/fmr.html. Federal Register notices also
are available electronically from https://www.federalregister.gov/ the
U.S. Government Printing Office website. Complete documentation of the
methods and data used to compute each area's FY 2021 FMRs is available
at https://www.huduser.gov/portal/datasets/fmr.html#2021_query. FY 2021
FMRs are available in a variety of electronic formats at https://www.huduser.gov/portal/datasets/fmr.html. FMRs may be accessed in PDF
as well as in Microsoft Excel. Small Area FMRs for all metropolitan FMR
areas are available in Microsoft Excel format at: https://www.huduser.gov/portal/datasets/fmr/smallarea/.
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 Housing Choice
[[Page 49667]]
Voucher (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. HUD also uses the
FMRs to determine initial renewal rents for some expiring project-based
Section 8 contracts, initial rents for housing assistance payment
contracts in the Moderate Rehabilitation Single Room Occupancy program,
rent ceilings for rental units in both the HOME Investment Partnerships
program and the Emergency Solution Grants program, calculation of
maximum award amounts for Continuum of Care recipients and the maximum
amount of rent a recipient may pay for property leased with Continuum
of Care funds, and calculation of flat rents in Public Housing units.
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 and is typically set at the 40th percentile of the
distribution of gross rents. HUD's FMR calculations represent HUD's
best effort to estimate the 40th percentile gross rent \1\ paid by
recent movers into standard quality units in each FMR area. In
addition, all rents subsidized under the HCV program must meet
reasonable rent standards.
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\1\ HUD also calculates and posts 50th percentile rent estimates
for the purposes of Success Rate Payment Standards as defined at 24
CFR 982.503(e) (estimates available at: https://www.huduser.gov/portal/datasets/50per.html), which policy was not changed by the
Small Area FMR rule.
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II. Procedures for the Development of FMRs
Section 8(c)(1) of the USHA, as amended by HOTMA (Pub. L. 114-201,
approved July 29, 2016), requires the Secretary of HUD to publish FMRs
not less than annually. Section 8(c)(1)(A) states that each FMR ``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 . . .'' Section
8(c)(1)(B) requires that HUD publish, not less than annually, new FMRs
on the World Wide Web or in any other manner specified by the
Secretary, and that HUD must also notify the public of when it
publishes FMRs by Federal Register notice. After notification, the FMRs
``shall become effective no earlier than 30 days after the date of such
publication,'' and HUD must provide a procedure for the public to
comment and request a reevaluation of the FMRs in a jurisdiction before
the FMRs become effective. Consistent with the statute, HUD is issuing
this notice to notify the public that FY 2021 FMRs are available at
https://www.huduser.gov/portal/datasets/fmr.html and will become
effective on October 1, 2020. This notice also provides procedures for
FMR reevaluation requests.
III. FMR Methodology
This section provides a brief overview of how HUD computes the FY
2021 FMRs. HUD is making no changes to the estimation methodology for
FMRs as used by HUD for the FY 2020 FMRs. For complete information on
how HUD derives each area's FMRs, see the online documentation at
https://www.huduser.gov/portal/datasets/fmr.html#2021_query.
In conjunction with the use of 2018 American Community Survey (ACS)
data, HUD has implemented the following geography change, the
designation of the two counties comprising newly created Twin Falls, ID
MSA as metropolitan counties. These two counties will be designated as
Twin Falls County, ID HUD Metro FMR Area and Jerome County, ID HUD
Metro FMR Area. Although the FMRs for these counties will be calculated
separately, the metropolitan area designation impacts the FMR
calculations since the areas will use the Idaho metropolitan state-
based recent mover factor instead of the Idaho state non-metropolitan
recent mover factor.
A. Base Year Rents
For FY 2021 FMRs, HUD uses the U.S. Census Bureau's 5-year ACS data
collected between 2014 and 2018 and released in December 2019 as the
base rents for the FMR calculations. The ACS data released at the end
of 2019 is the most current ACS data available at the time the FY 2021
FMRs are calculated. HUD pairs a ``margin of error'' test \2\ with an
additional requirement based on the number of survey observations
supporting the estimate to improve the statistical reliability of the
ACS data used in the FMR calculations. The Census Bureau does not
provide HUD with an exact count of the number of observations
supporting the ACS estimate; rather, the Census Bureau provides HUD
with categories of the number of survey responses underlying the
estimate, including whether the estimate is based on more than 100
observations. Using these categories, HUD requires that, in addition to
the ``margin of error'' test, ACS rent estimates must be based on at
least 100 observations to be used as base rents.
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\2\ HUD's margin of error test requires that the margin of error
of the ACS estimate is less than half the size of the estimate
itself.
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For areas in which the 5-year ACS data for two-bedroom, standard
quality gross rents do not pass the statistical reliability tests
(i.e., have a margin of error ratio greater than 50 percent or fewer
than 100 observations), HUD will use an average of the base rents over
the three most recent years \3\ (provided that there is data available
for at least two of these years),\4\ or if such data is not available,
using the two-bedroom rent data within the next largest geographic
area, which for a non-metropolitan area would be the state non-metro
area rent data.
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\3\ For FY 2021, the three years of ACS data in question are
2016, 2017 and 2018. The 2016 data are adjusted to be denominated in
2018 dollars using the growth in Consumer Price Index (CPI)-based
gross rents measured between 2016 and 2018. Similarly, the 2017
gross rent data is adjusted to 2018 denominated dollars using the
growth in CPI-based gross rents measured between 2017 and 2018.
\4\ To be used in the three-year average calculation, the 5-year
estimates must be minimally statistically qualified; that is, the
margin of error of the estimates must be less than half the size of
the estimate.
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HUD has updated base rents each year using annually updated 5-year
data made available since FY 2012. HUD also updates base rents for
Puerto Rico FMRs using data collected between 2014 and 2018 through the
Puerto Rico Community Survey (PRCS); HUD first updated the Puerto Rico
base rents in FY 2014 based on 2007-2011 PRCS data collected through
the ACS program.
HUD historically based FMRs on gross rents for recent movers (those
who have moved into their current residence in the last 24 months)
measured directly. However, due to the way Census constructs the 5-year
ACS data, HUD developed a new method for calculating recent-mover FMRs
in FY 2012, which HUD continues to use in FY 2021. Under this method,
HUD assigns all areas a base rent, which is the two-bedroom standard
quality 5-year gross rent estimate from the ACS; then, because HUD's
regulations mandate that FMRs must be published as recent mover gross
rents, HUD applies a recent-mover factor to the base rents assigned
from the 5-year ACS data.\5\ The calculation of the recent mover factor
is described below.
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\5\ HUD's regulations at 24 CFR 888.113(a) incorporate recent-
mover data into FMR calculations because the gross rents of those
who most recently moved into their units likely depicts the most
current market conditions observable through the ACS. Rents paid by
renters renewing existing leases may not reflect the most current
market conditions, in part because these renters may have clauses
within their leases that predetermine the annual increases in rents
paid (i.e., rent escalator clauses).
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[[Page 49668]]
B. Recent-Mover Factor
Following the assignment of the standard quality two-bedroom rent
described above, HUD applies a recent-mover factor to these rents. HUD
calculates the recent-mover factor as the change between the 5-year
2014-2018 standard quality two-bedroom gross rent and the 1-year 2018
recent mover gross rent for the recent mover factor area. HUD does not
allow recent-mover factors to lower the standard quality base rent;
therefore, if the 5-year standard quality rent is larger than the
comparable 1-year recent mover rent, the recent-mover factor is set to
1 so the base rent is updated and trended. When the recent-mover factor
is greater than one, the base rent is effectively replaced with the
recent-mover rent for that area and that is what is updated and
trended. For virtually all metropolitan areas, one-year recent-mover
data is the basis for the updated and trended FMRs.
The calculation of the recent-mover factor for FY 2021 continues to
use statistical reliability requirements that are similar to those for
base rents. That is, for a recent-mover gross rent estimate to be
considered statistically reliable, the estimate must have a margin of
error ratio that is less than 50 percent, and the estimate must be
based on 100 or more observations.
When an FMR area does not have statistically reliable two-bedroom
recent-mover data, the ``all-bedroom'' 1-year recent-mover ACS data for
the FMR area is tested for statistical reliability.\6\ An ``all-
bedroom'' recent-mover factor from the FMR area will be used, if
statistically reliable, before substituting a two-bedroom recent-mover
factor from the next larger geography. Incorporating ``all-bedroom''
rents into the recent-mover factor calculation when statistically
reliable two-bedroom data is not available preserves the use of local
information to the greatest extent possible.
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\6\ ``All-bedroom'' refers to estimates aggregated together
regardless of the number of bedrooms in the dwelling unit.
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However, where statistically reliable ``all-bedroom'' data is not
available, HUD will continue to base FMR areas' recent-mover factors on
larger geographic areas, following the same procedures used
historically: HUD tests data from differently sized geographic areas in
the following order (from small to large), and bases the recent-mover
factor on the first statistically reliable recent-mover rent estimate
in the geographic hierarchy listed below.
For metropolitan areas that are sub-areas of larger
metropolitan areas, the order is the FMR area, metropolitan area,
aggregated metropolitan parts of the state, and state.
For metropolitan areas that are not divided, the order is
the FMR area, aggregated metropolitan parts of the state, and state.
In non-metropolitan areas, the order is the FMR area,
aggregated non-metropolitan parts of the state, and state.
The process for calculating each area's recent mover factor is
detailed in the FY 2021 FMR documentation system available at:
https://www.huduser.gov/portal/datasets/fmr.html#2021_query. Applying
the recent-mover factor to the standard quality base rent produces an
``as of'' 2018 recent mover two-bedroom gross rent for the FMR area.
C. Other Rent Survey Data
HUD calculated base rents for the insular areas using data
collected during the 2010 decennial census of American Samoa, Guam, the
Northern Mariana Islands, and the Virgin Islands beginning with the FY
2016 FMRs.\7\ This 2010 base year data is updated through 2018 for the
FY 2021 FMRs using the growth in national ACS data.
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\7\ The ACS is not conducted in the Pacific Islands (Guam,
Northern Marianas and American Samoa) or the US Virgin Islands. As
part of the 2010 Decennial Census, the Census Bureau conducted
``long-form'' sample surveys for these areas. The results gathered
by this long form survey have been incorporated into the FY 2020
FMRs.
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HUD does not use ACS data to establish the base rent or recent-
mover factor for 21 areas where the FY 2021 FMRs are based on locally
collected survey data which are more recent than the 2018 ACS. For
larger metropolitan areas that have valid ACS one-year recent-mover
data, survey data may not be any older than the mid-point of the
calendar year for the ACS one-year data. Since the ACS one-year data
used for the FY 2021 FMRs is from 2018, larger areas may not use survey
data collected before June 30, 2018 for the FY 2021 FMRs. Smaller areas
without statistically reliable 1-year ACS data may continue to use
local survey data until the mid-point of the 5-year ACS data is more
recent than the local survey. The following list enumerates the areas
with local areas surveys and the year of the survey data:
Survey data from 2017 is used to adjust the FMRs for Hood
River County, OR; Wasco County, OR; Hawaii County, HI; and Jonesboro,
AR HMFA.
Survey data from 2018 is used to adjust the FMR for
Portland-Vancouver-Hillsboro, OR-WA; Burlington-South Burlington, VT;
Coos County, OR; Curry County, OR; Oakland-Fremont, CA HUD Metro FMR
Area; San Francisco, CA HUD Metro FMR Area; San Jose-Sunnyvale-Santa
Clara, CA HUD Metro FMR Area; Boston-Cambridge-Quincy, MA-NH HUD Metro
FMR Area; Douglas County, OR; and San Diego-Carlsbad, CA MSA.
Survey data from 2019 is used to adjust the FMRs for Kauai
County, HI; Asheville, NC HUD Metro FMR Area; Eugene-Springfield, OR
MSA; Portland, ME HUD Metro FMR Area; Santa Maria-Santa Barbara, CA
MSA; Worcester, MA HUD Metro FMR Area; and Guam.
Survey data from 2020 is used to calculate the FMRs for
Santa Cruz-Watsonville, CA MSA.
D. Updates From 2018 to 2019
HUD updates the ACS-based ``as of'' 2018 rent through 2019 using
the annual change in gross rents measured through the Consumer Price
Index (CPI) from 2018 to 2019 (CPI update factor). As in previous
years, HUD uses local CPI data coupled with Consumer Expenditure Survey
data for FMR areas within Class A metropolitan areas covered by local
CPI data. In 2018, the Bureau of Labor Statistics (BLS) changed the
area definitions of its Class A metropolitan areas from the 1990
definition of Consolidated Metropolitan Statistical Areas (CMSA) to
smaller Core-Based Statistical Area (CBSA) MSAs. In addition, BLS
eliminated some areas from this Class A collection: Pittsburgh, PA MSA;
Cleveland-Elyria, OH MSA; Cincinnati, OH-KY-IN MSA; Kansas City, MO-KS
MSA; Milwaukee-Waukesha-West Allis, WI MSA; and Portland-Vancouver-
Hillsboro, OR-WA MSA. HUD estimated these areas' FMRs using regional
CPI beginning with the FY 2020 FMRs and continues the use of regional
CPI factors in FY 2021. HUD uses CPI data aggregated at the Census
region level for all Class B and C size metropolitan areas and non-
metropolitan areas. Additionally, HUD uses CPI data collected locally
in Puerto Rico as the basis for CPI adjustments from 2018 to 2019 for
all Puerto Rico FMR areas.
E. Trend Factor Forecasts
Following the application of the appropriate CPI update factor, HUD
trends the gross rent estimate from 2019 to FY 2021 using local and
regional forecasts of the CPI gross rent data. Riverside-San
Bernardino-Ontario, CA MSA as a newly designated Class A city (it was
previously part of the Los Angeles-Riverside-Orange County, CA CMSA)
has data for a CPI update factor, but does not have enough data for a
trend factor forecast; therefore, until there is sufficient history to
create a
[[Page 49669]]
credible local trend factor forecast its trend factor is the regional
(West) trend factor. The actual model used for each trend factor has
been chosen based on which model generates the lowest Root Mean Square
Error (RMSE) statistic. As detailed in the June 5, 2019 Federal
Register notice (84 FR 26141), the trend factors were selected from a
series of time series models based on national inputs (National Input
Model or NIM), local inputs (Local Input Model or LIM) and historical
values of the predicted series (Pure Time Series--PTS). HUD will hold
the type of model selected (NIM, LIM, or PTS) constant for 5 years and
will reassess the model selections during the calculation of the FY
2025 FMRs. For instances when HUD changes the functional form of the
model (NIM, PTS, LIM) for a geographic area that is different from the
previous model selection, HUD will ensure the change is not due to
overfitting the model or outliers in the data. HUD will update and run
the gross rent forecast models annually with updated actual data and
newly created input forecasts. For FY 2021, in the NIM models, HUD is
using economic projections that account for the COVID-19 impacts on the
economy .\8\
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\8\ Congressional Budget Office (CBO) economic projections, May
2020.
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E. Bedroom Rent Adjustments
HUD updates the bedroom ratios used in the calculation of FMRs
annually. The bedroom ratios which HUD used in the calculation of FY
2021 FMRs have been updated using average data from three five-year ACS
data series (2012-2016, 2013-2017, and 2014-2018). The bedroom ratio
methodology used in this update is unchanged from previous calculations
using 2000 Census data. HUD only uses estimates with a margin of error
ratio of less than 50 percent. If an area does not have reliable
estimates in at least two of the previous three ACS releases, bedroom
ratios for the area's larger parent geography are used.
HUD uses two-bedroom units for its primary calculation of FMR
estimates. This is generally the most common size of rental unit and,
therefore, the most reliable to survey and analyze. After estimating
two-bedroom FMRs, HUD calculates bedroom ratios for each FMR area which
relate the prices of smaller and larger units to the cost of two-
bedroom units. To ensure an adequate distributional fit in these
bedroom ratio calculations in particular FMR areas, HUD establishes
bedroom interval ranges which set upper and lower limits for bedroom
ratios nationwide, based on an analysis of the range of such intervals
for all areas with large enough samples to permit accurate bedroom
ratio determinations.
In the calculation of FY 2021 FMR estimates, HUD set the bedroom
interval ranges as follows: Efficiency FMRs are constrained to fall
between 0.66 and 0.86 of the two-bedroom FMR; one-bedroom FMRs must be
between 0.76 and 0.88 of the two-bedroom FMR; three-bedroom FMRs (prior
to the adjustments described below) must be between 1.14 and 1.32 of
the two-bedroom FMR; and four-bedroom FMRs (again, prior to adjustment)
must be between 1.26 and 1.61 of the two-bedroom FMR. Given that these
interval ranges partially overlap across unit bedroom counts, HUD
further adjusts bedroom ratios for a given FMR area, if necessary, to
ensure that higher bedroom-count units have higher rents than lower
bedroom-count units within that area. The bedroom ratios for Puerto
Rico follow these constraints.
HUD also further adjusts the rents for three-bedroom and larger
units to reflect HUD's policy to set higher rents for these units.\9\
This adjustment is intended to increase the likelihood that the largest
families, who have the most difficulty in leasing units, will be
successful in finding eligible program units. The adjustment adds 8.7
percent to the unadjusted three-bedroom FMR estimates and adds 7.7
percent to the unadjusted four-bedroom FMR estimates.
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\9\ As mentioned above, HUD applies the interval ranges for the
three-bedroom and four-bedroom FMR ratios prior to making these
adjustments. In other words, the adjusted three- and four-bedroom
FMRs can exceed the interval ranges, but the unadjusted FMRs cannot.
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HUD derives FMRs for units with more than four bedrooms by adding
15 percent to the four-bedroom FMR for each extra bedroom. For example,
the FMR for a five-bedroom unit is 1.15 times the four-bedroom FMR, and
the FMR for a six-bedroom unit is 1.30 times the four-bedroom FMR.
Similarly, HUD derives FMRs for single-room occupancy units by
subtracting 25 percent from the zero-bedroom FMR (i.e., they are set at
0.75 times the zero-bedroom (efficiency) FMR).\10\
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\10\ As established in the interim rules implementing the
provisions of the Quality Housing and Work Responsibility Act of
1998 (Title V of the FY 1999 HUD Appropriations Act; Pub. L. 105-
276). In 24 CFR 982.604.
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F. Limit on FMR Decreases
Within the Small Area FMR final rule published on November 16,
2016, HUD amended 24 CFR 888.113 to include a limit on the amount that
FMRs may annually decrease. The current year's FMRs resulting from the
application of the bedroom ratios, as discussed in section (E) above,
may be no less than 90 percent of the prior year's FMRs for units with
the same number of bedrooms. Accordingly, if the current year's FMRs
are less than 90 percent of the prior year's FMRs as calculated by the
above methodology, HUD sets the current year's FMRs equal to 90 percent
of the prior year's FMRs. For areas where use of Small Area FMRs in the
administration of their voucher programs is required, the FY 2021 Small
Area FMRs may be no less than 90 percent of the FY 2020 Small Area
FMRs. For all other metropolitan areas, for which Small Area FMRs are
calculated so that they may be used for other allowable purposes if
desired (e.g., exception payment standards, public housing flat rents),
the FY 2021 Small Area FMRs may be no less than 90 percent of the
greater of the FY 2020 metropolitan area-wide FMRs or the applicable FY
2020 Small Area FMR.
G. Other Limits on FMRs
All FMRs are subject to a state or national minimum. HUD calculates
a population-weighted median two-bedroom 40th percentile rent across
all non-metropolitan portions of each state, which, for the purposes of
FMRs, is the state minimum rent. State-minimum rents for each FMR area
are available in the FY 2021 FMR Documentation System, available at
https://www.huduser.gov/portal/datasets/fmr.html#2021_query. HUD also
calculates the population-weighted median two-bedroom 40th percentile
rent across all non-metropolitan portions of the country, which, for
the purposes of FMRs, is the national minimum rent. For FY 2021, the
national minimum rent is $734. The applicable minimum rent for a
particular area is the lower of the state or national minimum. Each
area's two-bedroom FMR must be no less than the applicable minimum
rent.
As in prior years, Small Area FMRs are subject to a maximum limit.
HUD limits each two-bedroom Small Area FMR to be no more than 150
percent of the two-bedroom FMR for the metropolitan area where the ZIP
code is located.
IV. Small Area FMRs
Small Area FMRs for all metropolitan areas are listed in the Small
Area FMR Schedule. Other Metropolitan PHAs operating in areas where the
Small Area FMR is not required to be used and interested in using Small
Area FMRs in the operation of their Housing Choice Voucher program
should contact their
[[Page 49670]]
local HUD field office to request approval from HUD to do so.
HUD calculates Small Area FMRs directly from the standard quality
gross rents provided to HUD by the Census Bureau for ZIP Code
Tabulation Areas (ZCTAs), when such data is statistically reliable. The
ZCTA two-bedroom equivalent 40th percentile gross rent is analogous to
the standard quality base rents set for metropolitan areas and non-
metropolitan counties. For each ZCTA with statistically reliable gross
rent estimates, using the expanded test of statistical reliability
first used in FY 2018 (i.e., estimates with margins of error ratios
below 50 percent and based on at least 100 observations), HUD will
calculate a two-bedroom equivalent 40th percentile gross rent using the
first statistically reliable gross rent distribution data from the
following data sets (in this order): Two-bedroom gross rents, one-
bedroom gross rents, and three-bedroom gross rents. If either the one-
bedroom or three-bedroom gross rent data is used because the two-
bedroom gross rent data is not statistically reliable, the one-bedroom
or three-bedroom 40th percentile gross rent will be converted to a two-
bedroom equivalent rent using the bedroom ratios for the ZCTA's parent
metropolitan area. To increase stability to these Small Area FMR
estimates, HUD averages the latest three years of gross rent
estimates.\11\
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\11\ For example, for FY 2021 Small Area FMRs, HUD averages the
gross rents from 2016, 2017, and 2018 5-Year ACS estimates. The 2016
and 2017 gross rent estimates would be adjusted to 2018 dollars
using the metropolitan area's gross rent CPI adjustment factors.
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For ZCTAs without usable gross rent data by bedroom size, HUD will
continue to calculate Small Area FMRs using the rent ratio method
similar to that HUD has used in past Small Area FMR calculations. To
calculate Small Area FMRs using a rent ratio, HUD divides the median
gross rent across all bedrooms for the small area (a ZIP code) by the
similar median gross rent for the metropolitan area of the ZIP code. If
a ZCTA does not have reliable rent data at the all bedroom level, HUD
will then check to see if the ZCTA is bordered by ZCTAs that themselves
have reliable rent data. If at least half of a ZCTA's ``neighbors''
have such data, the weighted average of those estimates will be used as
the basis for the SAFMR rather than a county proxy, where the weight is
the length of the shared boundary between the ZCTA and its neighbor. In
small areas where the neighboring ZCTA median gross rents are not
statistically reliable, HUD continues to substitute the median gross
rent for the county containing the ZIP code in the numerator of the
rent ratio calculation. HUD multiplies this rent ratio by the current
two-bedroom rent for the metropolitan area containing the small area to
generate the current year two-bedroom rent for the small area.
HUD continues to use a rolling average of ACS data in calculating
the Small Area FMR rent ratios. HUD believes coupling the most current
data with previous year's data minimizes excessive year-to-year
variability in Small Area FMR rent ratios due to sampling variance.
Therefore, for FY 2021 Small Area FMRs, HUD has updated the rent ratios
to use an average of the rent ratios calculated from the 2012-2016,
2013-2017, and 2014-2018 5-year ACS estimates.
V. Request for Public Comments and FMR Reevaluations
HUD will continue to accept public comments on the methods HUD uses
to calculate FY 2021 FMRs, including Small Area FMRs, and the FMR
levels for specific areas. Due to its current funding levels, HUD does
not have sufficient resources to conduct local surveys of rents to
address comments filed regarding the FMR levels for specific areas.
PHAs may continue to fund such surveys independently, as specified
below, using ongoing administrative fees or their administrative fee
reserve if they so choose. HUD continually strives to calculate FMRs
that meet the statutory requirement of using ``the most recent
available data'' while also serving as an effective program parameter.
PHAs or other parties interested in requesting HUD's reevaluation
of their area's FY 2021 FMRs, as provided for under section 8(c)(1)(B)
of USHA, must follow the following procedures:
1. By the end of the comment period, such reevaluation requests
must be submitted publicly through https://www.regulations.gov/ or
directly to HUD as described above. The area's PHA or, in multi-
jurisdictional areas, PHA(s) representing at least half of the voucher
tenants in the FMR area, must agree that the reevaluation is necessary.
2. For a re-evaluation to occur, the requestor(s) must supply HUD
with data more recent than the 2018 ACS data used in the calculation of
the FY 2021 FMRs. HUD requires data on gross rents paid in the FMR area
for standard quality rental housing units occupied by recent movers.
The data delivered must be sufficient for HUD to calculate a 40th and
50th percentile two-bedroom rent.\12\ Should this type of data not be
available, requestors may gather this information using the survey
guidance available at https://www.huduser.gov/portal/datasets/fmr/NoteRevisedAreaSurveyProcedures.pdf and https://www.huduser.gov/portal/datasets/fmr/PrinciplesforPHA-ConductedAreaRentSurveys.pdf.
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\12\ Although there are no longer 50th percentile FMRs, HUD must
calculate 50th percentile rents for the Success Rate Payment
Standard under 24 CFR 982.503(e).
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3. On or about October 2, 2020 HUD will post a list, at https://www.huduser.gov/portal/datasets/fmr.html, of the areas requesting
reevaluations and where FY 2020 FMRs remain in effect. 42 U.S.C.
1437f(c)(1)(B) includes the following: ``The Secretary shall establish
a procedure for public housing agencies and other interested parties to
comment on such fair market rentals and to request, within a time
specified by the Secretary, reevaluation of the fair market rentals in
a jurisdiction before such rentals become effective.'' Therefore, areas
where valid reevaluation requests are submitted continue to use FY 2020
FMRs whether the FY 2021 FMRs are lower or higher than the FY 2020
FMRs.
4. Data for reevaluations must be supplied to HUD no later than
Friday January 8, 2021. On Monday January 11, 2021, HUD will post at
https://www.huduser.gov/portal/datasets/fmr.html a listing of the areas
that requested FMR reevaluations but did not deliver data and making
the FY 2021 FMRs effective in these areas. All survey responses
gathered as part of the survey efforts should be delivered to HUD. In
addition to the survey data, HUD requires a current utility schedule in
order to evaluate the survey responses. Finally, HUD encourages PHAs to
evaluate their survey data to ensure the survey provides the expected
results. Should PHAs or their contractors undertake this evaluation,
HUD requests that this analysis also be submitted.
5. HUD will use the data delivered by January 8, 2021 to reevaluate
the FMRs and following the reevaluation, will post revised FMRs with an
accompanying Federal Register notice stating the revised FMRs are
available, which will include HUD's responses to comments filed during
the comment period for this notice.
6. Any data supporting a change in FMRs supplied after January 8,
2021 will be incorporated into FY 2022 FMRs.
7. PHAs operating in areas where the calculated FMR is lower than
the published FMR (i.e., those areas where HUD has limited the decrease
in the annual change in the FMR to 10 percent) may request payment
standards below the basic range (24 CFR
[[Page 49671]]
982.503(d)) and reference the ``unfloored'' rents (i.e., the
unfinalized FMRs calculated by HUD prior to application of the 10-
percent-decrease limit) depicted in the FY 2021 FMR Documentation
System (available at: https://www.huduser.gov/portal/datasets/fmr.html#2021_query).
Questions on how to conduct FMR surveys may be addressed to Marie
L. Lihn or Peter B. Kahn of the Program Parameters and Research
Division, Office of Economic Affairs, Office of Policy Development and
Research at HUD headquarters, 451 7th Street SW, Room 8208, Washington,
DC 20410; telephone number 202-402-2409 (this is not a toll-free
number), or they may be reached at [email protected].
For small metropolitan areas without one-year ACS data and non-
metropolitan counties, HUD has developed a method using mail surveys
that is discussed on the FMR web page: https://www.huduser.gov/portal/datasets/fmr.html#survey_info. This method allows for the collection of
as few as 100 one-bedroom, two-bedroom and three-bedroom recent mover
(tenants that moved in last 24 months) units.
While HUD has not developed a specific method for mail surveys in
areas with 1-year ACS data or in areas not covered by ACS data, HUD
would apply the standard established for Random-Digit Dialing (RDD)
telephone rent surveys. HUD will evaluate these survey results to
determine whether they would establish a new FMR statistically
different from the current FMR, which means that the survey confidence
interval must not include the FMR. The survey should collect results
based on 200 one-bedroom and two-bedroom eligible recent mover units to
provide a small enough confidence interval for significant results in
large market mail surveys. Areas with statistically reliable 1-year ACS
data are not considered to be good candidates for local surveys due to
the size and completeness of the ACS process.
Other survey methods are acceptable in providing data to support
reevaluation requests if the survey method can provide statistically
reliable, unbiased estimates of gross rents paid of the entire FMR
area. In general, recommendations for FMR changes and supporting data
must reflect the rent levels that exist within the entire FMR area and
should be statistically reliable.
PHAs in non-metropolitan areas may survey three-bedroom units, in
addition to one- and two-bedroom units and are only required to get 100
eligible survey responses. In certain circumstances, PHAs may conduct
surveys of groups of non-metropolitan counties. HUD must approve all
county-grouped surveys in advance. PHAs are cautioned that the
resulting FMRs may not be identical for the counties surveyed; each
individual FMR area will have a separate FMR based on the relationship
of rents in that area to the combined rents in the cluster of FMR
areas. In addition, PHAs are advised that in counties where FMRs are
based on the combined rents in the cluster of FMR areas, HUD will not
revise their FMRs unless the grouped survey results show a revised FMR
statistically different from the combined rent level.
Survey samples should preferably be randomly drawn from a complete
list of rental units for the FMR area. If this is not feasible, the
selected sample must be drawn to be statistically representative of the
entire rental housing stock of the FMR area. Surveys must include units
at all rent levels and be representative by structure type (including
single-family, duplex, and other small rental properties), age of
housing unit, and geographic location. The current 5-year ACS data
should be used as a means of verifying if a sample is representative of
the FMR area's rental housing stock. Staff from HUD's Program
Parameters and Research Division will work with PHAs in areas
requesting reevaluations to provide the minimum number of survey cases
required to ensure that data submitted for reevaluation represent a
statistically valid sample.
A PHA or contractor that cannot obtain the recommended number of
sample responses after reasonable efforts should consult with HUD
before abandoning its survey; in such situations, HUD may find it
appropriate to relax normal sample size requirements, but in no case
will fewer than 100 eligible cases be considered.
HUD has developed guidance on how to provide data-supported
comments on Small Area FMRs using HUD's special tabulations of the
distribution of gross rents by unit bedroom count for ZIP Code
Tabulation Areas. This guidance is available at https://www.huduser.gov/portal/datasets/fmr.html in the FY 2021 FMR section
under the ``Documents'' tab and should be used by interested parties in
commenting on whether or not the level of Small Area FMRs are too high
or too low (i.e., Small Area FMRs that are larger than the gross rent
necessary to make 40 percent of the units accessible for an individual
zip code or that are smaller than the gross rent necessary to make 40
percent of the units accessible for a given zip code). HUD will post
revised Small Area FMRs after confirming commenters' calculations.
As stated earlier in this notice, HUD is required to use the most
recent data available when calculating FMRs. Therefore, in order to
reevaluate an area's FMR, HUD requires more current rental market data
than the 2018 ACS. HUD encourages a PHA or other interested party that
believes the FMR in their area is incorrect to file a comment even if
they do not have the resources to provide market-wide rental data. In
these instances, HUD will use the comments, should survey funding be
restored, when determining the areas HUD will select for HUD-funded
local area rent surveys.
VI. Environmental Impact
This Notice involves the establishment of FMR 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 available at https://www.huduser.gov/portal/datasets/fmr.html.
Dated: August 10, 2020.
Seth D. Appleton,
Assistant Secretary for Policy Development and Research.
Fair Market Rents for the Housing Choice Voucher Program Schedule B--
General Explanatory Notes
1. Geographic Coverage
a. Metropolitan Areas--Most FMRs are market-wide rent estimates
that are intended to provide housing opportunities throughout the
geographic area in which rental-housing units are in direct
competition. HUD uses the metropolitan CBSAs, which are made up of one
or more counties, as defined by OMB, with some modifications. HUD is
generally assigning separate FMRs to the component counties of CBSA
Micropolitan Areas.
b. Modifications to OMB Definitions--Following OMB guidance, the
estimation procedure for the FY 2021 FMRs incorporates the OMB
definitions of metropolitan areas based on the CBSA standards as
implemented with 2000 Census data and updated by the 2010 Census in
February 28, 2013, including incremental adjustments through August 15,
2017. The adjustments made to the 2000
[[Page 49672]]
definitions to separate subparts of these areas where FMRs or median
incomes would otherwise change significantly are continued. In
addition, to limit FMR changes based solely on geography and to provide
FMRs at the smallest possible area of geography, no counties were added
to existing metropolitan areas beginning with changes to metropolitan
area definitions from the 2010 Census and implemented in the FY 2016
FMRs. All counties added to existing metropolitan areas are treated as
separate counties for FMR calculations and new metropolitan areas of
more than one county will have separate FMRs for each county in that
new MSA. Rents from a county that is a sub-area will not be used in the
remaining metropolitan sub-area rent determination. All metropolitan
areas that have been subdivided by HUD will use ACS data which conforms
to HUD's area definition if statistically reliable information exists.
If statistically reliable data for the HUD defined area is not
available, HUD uses information from the average of the last three
years. If that is not available, then the FMR of the larger
encompassing geography is used, which is the MSA for a metropolitan
county and the non-metropolitan portion of a State for a non-
metropolitan county.
The specific counties and New England towns and cities within each
state in MSAs and HMFAs were not changed by the August 2017 OMB
metropolitan area definitions. These areas are listed in Schedule B,
available online at https://www.huduser.gov/portal/datasets/fmr.html.
2. Unit Bedroom Count Adjustments
The Metropolitan and Non-Metropolitan Area FMR Schedule s is
available at https://www.huduser.gov/portal/datasets/fmr.html and shows
the FMRs for zero-bedroom through four-bedroom units. The Small Area
FMR Schedule shows Small Area FMRs for all metropolitan areas. FMRs for
unit sizes larger than four bedrooms may be calculated by adding 15
percent to the four-bedroom FMR for each extra bedroom. For example,
the FMR for a five-bedroom unit is 1.15 times the four-bedroom FMR, and
the FMR for a six-bedroom unit is 1.30 times the four-bedroom FMR. FMRs
for single-room-occupancy (SRO) units are 0.75 times the zero-bedroom
FMR.
3. Arrangement of FMR Areas and Identification of Constituent Parts
a. The Metropolitan and Non-Metropolitan FMR Area Schedule lists
FMRs alphabetically by state, by metropolitan area and by non-
metropolitan county within each state and are available at https://www.huduser.gov/portal/datasets/fmr.html.
b. The constituent counties (and New England towns and cities)
included in each metropolitan FMR area are listed immediately following
the listings of the FMR dollar amounts. All constituent parts of a
metropolitan FMR area that are in more than one state can be identified
by consulting the listings for each applicable state.
c. Two non-metropolitan counties are listed alphabetically on each
line of the non-metropolitan county listings.
d. The New England towns and cities included in a non-metropolitan
county are listed immediately following the county name.
[FR Doc. 2020-17717 Filed 8-13-20; 8:45 am]
BILLING CODE 4210-67-P