Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs; Fiscal Year 2024, 60223-60231 [2023-18402]
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Federal Register / Vol. 88, No. 168 / Thursday, August 31, 2023 / Notices
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–7065–N–02]
60-Day Notice of Proposed Information
Collection: Build America Buy America
Waiver Form, OMB Control No.: 2511–
0002
Office of the Chief Financial
Officer, HUD.
ACTION: Notice.
AGENCY:
HUD is seeking approval from
the Office of Management and Budget
(OMB) for the information collection
described below. In accordance with the
Paperwork Reduction Act, HUD is
requesting comment from all interested
parties on the proposed collection of
information. The purpose of this notice
is to allow for 60 days of public
comment.
DATES: Comments Due Date: October 30,
2023.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposal. Written comments and
recommendations for the proposed
information collection can be sent
within 60 days of publication of this
SUMMARY:
Number of
respondents
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from Ms. Guido.
SUPPLEMENTARY INFORMATION: This
notice informs the public that HUD is
seeking approval from OMB for the
information collection described in
Section A.
notice to www.reginfo.gov/public/do/
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hud.gov.
FOR FURTHER INFORMATION CONTACT:
Colette Pollard, Reports Management
Officer, REE, Department of Housing
and Urban Development, 451 7th Street
SW, Washington, DC 20410; email;
Colette.Pollard@hud.gov or telephone
202–402–0306. This is not a toll-free
number.
HUD welcomes and is prepared to
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Title of Information Collection: Build
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OMB Approval Number: 2511–0002.
Type of Request: New Collection.
Description of the need for the
information and proposed use: The
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Development (HUD) requests a 6-month
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Responses
per annum
Annual
burden hours
Hourly
cost per
response
Annual
cost
HUD—27054e ...............................................
5,000.00
1.00
5,000.00
1.00
5,000.00
$0.00
$0.00
Total .......................................................
........................
........................
........................
........................
5,000.00
0.00
0.00
B. Solicitation of Public Comment
C. Authority
This notice is soliciting comments
from members of the public and affected
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information described in Section A on
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the use of appropriate automated
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electronic submission of responses.
HUD encourages interested parties to
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questions.
Section 3507 of the Paperwork
Reduction Act of 1995, 44 U.S.C.
Chapter 35
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Daniel Ballard,
Acting Deputy Chief Financial Officer.
[FR Doc. 2023–18778 Filed 8–30–23; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–6401–N–02]
Fair Market Rents for the Housing
Choice Voucher Program, Moderate
Rehabilitation Single Room Occupancy
Program, and Other Programs; Fiscal
Year 2024
Office of the Assistant
Secretary for Policy Development and
Research, U.S. Department of Housing
and Urban Development (HUD).
ACTION: Notice of fiscal year (FY) 2024
Fair Market Rents (FMRs).
AGENCY:
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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 year. This notice describes the
methods used to calculate the FY 2024
FMRs and enumerates the procedures
for Public Housing Agencies (PHAs) and
other interested parties to request
reevaluations of their FMRs as required
by HOTMA.
DATES:
Comment Due Date: October 2, 2023.
Effective Date of Revised FMRs:
October 1, 2024, 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 2024 FMRs. Communications
must refer to the above docket number
and title and should contain the
information specified in the ‘‘Request
for Public Comments and FMR
SUMMARY:
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Federal Register / Vol. 88, No. 168 / Thursday, August 31, 2023 / Notices
Reevaluations’’ section. There are two
methods for submitting public
comments:
1. 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.
2. Submission of Comments by Mail.
Members of the public may submit
comments or requests for reevaluation
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 comments or reevaluation
requests received by mail available to
the public at https://
www.regulations.gov.
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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. HUD does not
accept facsimile (FAX) comments or
requests for FMR reevaluation.
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 at https://
www.huduser.gov/portal/datasets/
fmr.html.
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Questions related to the use of FMRs
or voucher payment standards should
be directed to the respective local HUD
program staff or the Office of Public and
Indian Housing Customer Service
Center at https://www.hud.gov/
program_offices/public_indian_
housing/about/css. Questions on how to
conduct FMR surveys may be addressed
to the electronic mailbox for the
Program Parameters and Research
Division at pprd@hud.gov.
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 2024 FMRs is available at
https://www.huduser.gov/portal/
datasets/fmr.html#2024_query. FY 2024
FMRs are available in a variety of
electronic formats at https://
www.huduser.gov/portal/datasets/
fmr.html, including in PDF and
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/. For informational
purposes, HUD also publishes 50th
percentile rents for all FMR areas at
https://www.huduser.gov/portal/
datasets/50per.html.
SUPPLEMENTARY INFORMATION:
I. Background
Section 8 of the USHA (42 U.S.C.
1437f) authorizes housing assistance to
aid lower-income families in renting
safe and decent housing. Housing
assistance payments are limited by
FMRs established by HUD for different
geographic areas. In the Housing Choice
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
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Housing units. In general, the FMR for
an area is the amount that a tenant
would need 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. The FMR is also
used to determine the Performance
Based Contract Administration Fee in
Multifamily Housing. 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.
On June 23, 2023, HUD published a
notice of Proposed Changes to the
Methodology Used for Calculating Fair
Market Rents.2 For FY 2024 FMRs, HUD
is implementing the proposed changes
described in that notice. The first affects
how HUD determines the ‘‘recent mover
adjustment factor’’ to meet its regulatory
objective of setting the FMR from the
distribution of rental units occupied by
recent movers. The second change
affects how HUD inflates the recent
mover rent to the most recent full
calendar year using a Gross Rent
Inflation Adjustment Factor. The
methodology used in each of these steps
is described in more detail in the
following section.
II. Procedures for the Development of
FMRs
Section 8(c)(1) of the USHA,3 as
amended by HOTMA (Pub. L. 114–201,
enacted 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).
2 88 FR 41118.
3 42 U.S.C. 1437f.
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become effective. Consistent with the
statute, HUD is issuing this notice to
notify the public that FY 2024 FMRs are
available at https://www.huduser.gov/
portal/datasets/fmr.html and will
become effective on October 1, 2023.
This notice also provides procedures for
FMR reevaluation requests.
III. FMR Methodology
This section provides a brief overview
of how HUD computes the FY 2024
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#2024_query.
A. Geographic Area Definitions
The FY 2024 FMRs are based on the
updated metropolitan area definitions
published by the Office of Management
and Budget (OMB) on September 14,
2018 and first incorporated by the
Census Bureau into the 2019 American
Community Survey (ACS) data, and the
corresponding FY 2022 FMRs. On July
21, 2023, OMB published Bulletin No.
23–01 which contains revisions to
metropolitan area definitions. However,
the Census Bureau has not yet
incorporated these revisions into the
data available to HUD, and therefore
HUD is not using these new definitions
for FY 2024.
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B. Base Year Rents
For FY 2024 FMRs, HUD uses the U.S.
Census Bureau’s 5-year ACS data
collected between 2017 and 2021 as the
‘‘base rents’’ for the FMR calculations.
These data are the most current ACS
data available at the time that HUD
calculates the FY 2024 FMRs. HUD
pairs a ‘‘margin of error’’ test 4 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 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
meeting the ‘‘margin of error’’ test, ACS
rent estimates must be based on at least
100 observations to be used as base
rents.
4 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 5 (provided that
there is data available for at least two of
these years),6 or if such data are not
available, using the two-bedroom rent
data within the next largest geographic
area. For a metropolitan subarea, the
next largest area is its containing
metropolitan area. For a nonmetropolitan area, the next largest area
is the State non-metropolitan portion.
C. Recent-Mover Factors
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 2017–2021
standard quality two-bedroom gross rent
and the 1-year 2021 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,
HUD sets the recent-mover factor to 1.
When the recent-mover factor is greater
than one and calculated for the same
geographic area as the base rent, HUD is,
in effect, replacing the base rent with
the recent-mover rent for that area.
Newly for FY 2024, HUD is modifying
the definition of ‘‘recent mover’’ used in
determining the 2021 recent mover
gross rent as described above. To make
its recent mover adjustment as reflective
of current market conditions as possible,
HUD first considers the rents of
households who moved into their unit
only in the current ACS year. For ACS
2021, this means that the maximum
length of time for a household to have
lived in its current unit and still be
considered a recent mover under this
definition would be 11 months. This
differs from HUD’s prior practice of
considering rents from householders
who moved into their unit in either the
current year or prior year.
However, restricting the ACS universe
to recent movers limits the sample size
5 For FY 2024, the three years of ACS data in
question are 2018, 2019 and 2020. HUD adjusts the
2018 and 2019 data to be denominated in 2020
dollars using the growth in Consumer Price Index
(CPI)-based gross rents measured between 2018 and
2020.
6 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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supporting the resulting estimates,
potentially harming the statistical
reliability of those estimates. HUD
applies the same two statistical
reliability checks to each ACS recent
mover estimate as it does for the base
rent estimate. First, the estimate must be
supported by at least 100 sample cases
from the ACS. Second, the estimate
must have a margin of error that is
smaller than half the estimate itself.
These criteria also apply for the new,
single-year definition of recent movers.
For areas without an ACS estimate
meeting these criteria, HUD next checks
the estimate tabulated from two-year
recent movers, following its prior
methodology.
D. Other Rent Survey Data
HUD calculates base rents for the
insular areas using data collected during
the 2010 decennial census of American
Samoa, the Northern Mariana Islands,
and the Virgin Islands beginning with
the FY 2016 FMRs.7 HUD updates the
2010 base year data to 2021 using the
growth in national ACS data for the FY
2024 FMRs. Note that while the 2010
decennial census also included Guam,
HUD uses the result of a more recent
rent survey in calculating the FMRs for
Guam, as discussed in the following
paragraph. HUD is working with the
Census Bureau to provide special
tabulations of the 2020 Island Area
Census and hopes to include these data
in FY 2025 FMRs.
HUD does not use ACS data to
establish the base rent or recent-mover
factor in cases where it has locally
collected survey data which are more
recent than the 2021 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 oneyear data. Since the ACS one-year data
used for the FY 2024 FMRs is from
2021, larger areas with valid one-year
recent mover data may not use other
survey data collected before June 30,
2021 for the FY 2024 FMRs. 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. For FY 2024 FMRs, the
following are Metropolitan Statistical
Areas (MSAs), HUD Metro FMR Areas,
or non-metropolitan counties that have
FMRs based on local ad hoc surveys:
7 The ACS is not conducted in the Pacific Islands
(Guam, Northern Mariana Islands 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. HUD
uses the results gathered by this long form survey
for the FY 2024 FMRs.
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• HUD uses survey data from 2019 to
calculate the FMRs for Kauai County,
HI; and Guam.
• HUD uses survey data from 2021 to
calculate the FMRs for Abilene, TX
MSA; Asheville, NC HUD Metro FMR
Area; Boston-Cambridge-Quincy, MANH HUD Metro FMR Area; BremertonSilverdale, WA MSA; Iron County, UT;
Knox County, ME; Lincoln County, ME;
New York, NY HUD Metro FMR Area;
Portland, ME HUD Metro FMR Area;
Portland-Vancouver-Hillsboro, OR-WA
MSA; San Diego-Carlsbad, CA MSA;
Santa Maria-Santa Barbara, CA MSA;
Transylvania County, NC; and Waldo
County, ME.
• HUD uses survey data from 2022 to
calculate the FMRs for Grand RapidsWyoming, MI HUD Metro FMR Area;
Hawaii County, HI; Hood River County,
OR; Salinas, CA MSA; Seattle-Bellevue,
WA HUD Metro FMR Area; and Wasco
County, OR.
• HUD uses survey data from 2023 to
calculate the FMRs for San Benito
County, CA HUD Metro FMR Area; and
Santa Cruz-Watsonville, CA MSA.
E. Gross Rent Inflation Adjustment
Factors
The ACS recent mover rent estimates
as described above produce a rent value
that is ‘‘as of’’ 2021. In the past, HUD
has updated the latest ACS-based rent
estimates with one year of gross rent
inflation measured with the 23 local or
4 regional CPI components rent of
primary residence and household fuels
and utilities depending on the location
of the FMR area. For FY 2023, HUD
augmented the CPI methodology by
including available private data sources
along with CPI data in calculating a
weighted average gross rent inflation
factor that was used to update the ACSbased ‘‘as of’’ 2020 rent through 2021.
HUD applied a weight of 60 percent to
the average of the change in private data
sources and 40 percent to the annual
change in CPI gross rents. In places
without sufficient private rent data
sources, the actual inflation adjustment
process solely used regional CPI data.
For FY 2024, HUD is continuing to
augment CPI rent inflation data with
private sources of rent data to create a
gross rent inflation adjustment factor.
Recent research has indicated that there
is a substantial lag in the overall CPI
rent of primary residence index’s ability
to capture changes in recent mover
rents, and that private rent measure are
often better at capturing such changes
quickly. The private measures of rent
used by HUD are the RealPage average
effective rent per unit, Moody’s
Analytics REIS average market rent,
CoStar Group average effective rent,
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CoreLogic, Inc. single-family combined
3-bedroom median rent, ApartmentList
Rent Estimate, and Zillow Observed
Rent Index.
In calculating a measure of inflation
from these data, HUD first takes the
annual average of each statistic, then its
year-to-year change. HUD then takes the
mean of changes from all available
sources for each area. Next, HUD takes
an average of this private-sector measure
of rent inflation with rent inflation as
captured by the CPI for the area, where
the private-sector measure is weighted
at approximately 55.8 percent and the
CPI rent inflation measure is weighted
at approximately 44.2 percent. HUD has
determined these weights by comparing
the national average of the private rent
changes and changes in CPI rent of
primary residence to changes in the
national average of recent mover rents
from the ACS from 2017 through 2021.
HUD weights the private data averages
and overall CPI rent of primary
residence in such a way as to minimize
the root mean squared error between the
resulting average and the ACS recent
mover rents. For future FMRs, HUD will
update the weights by adding the most
recent years of ACS recent mover rents,
private rent data, and CPI rent of
primary residence to the analysis.
HUD uses a local measure of private
rent inflation for markets that are
covered by at least three of the six
available sources of private rent data.
HUD combines this local measure of
rent inflation with either the local
metropolitan area CPI rent of primary
residence for the 23 areas where such
data exist, or the regional CPI rent in
areas without a local index.
Unlike in FY 2023, for areas without
at least three of the six private rent data
sources available, HUD uses a regional
average of private rent inflation factors
alongside the regional CPI rent of
primary residence using the nationally
derived weights described above. HUD
constructs the regional average by taking
the rental unit weighted average of the
change in rents of each area in a region
that does have private rent data
coverage. This ensures that smaller
areas which are not covered by the
private sources directly still have
current rental market conditions taken
into account in the calculation of the
rent inflation factor for such areas.
Finally, HUD averages the result of
this step with the year-to-year change in
the CPI housing fuels and utilities index
for the area in order to make the
resulting inflation measure reflective of
gross rents. The results of this step are
gross rent estimates that are ‘‘as of’’
2022.
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F. Trend Factor Forecasts
Following the application of the
appropriate gross rent inflation factor,
HUD trends the gross rent estimate from
2022 to FY 2024 using a trend factor
which is based on local or regional
forecasts of CPI gross rent data. HUD
derived a trend factor for each Class A
CPI area and Class B/C CPI region using
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
chose the actual model used for each
CPI area’s trend factor based on which
model generates the lowest Root Mean
Square Error (RMSE) statistic and
applied the trend factors to the
corresponding FMR areas. HUD
established the type of model for each
forecast (NIM, LIM, or PTS) for the FY
2020 FMRs and is keeping it constant
for 5 years. HUD will reassess the model
selections during the calculation of the
FY 2025 FMRs. More details on the
trend factor forecasts are available in the
June 5, 2019, Federal Register notice (84
FR 26141) and are available at https://
www.federalregister.gov/documents/
2019/06/05/2019-11763/proposedchanges-to-the-methodology-used-forestimating-fair-market-rents.
G. Bedroom Rent Adjustments
HUD updates the bedroom ratios used
in the calculation of FMRs annually.
The bedroom ratios HUD uses in the
calculation of FY 2024 FMRs are
calculated from three, five-year ACS
data series (2015–2019, 2016–2020, and
2017–2021). 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, HUD uses
the bedroom ratios for the area’s larger
parent geography.
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 for individual 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.
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In the calculation of FY 2024 FMR
estimates, HUD sets the bedroom
interval ranges as follows: efficiency
FMRs are constrained to fall between
0.68 and 0.87 of the two-bedroom FMR;
one-bedroom FMRs must be between
0.76 and 0.89 of the two-bedroom FMR;
three-bedroom FMRs (prior to the
adjustments described below) must be
between 1.12 and 1.30 of the twobedroom FMR; and four-bedroom FMRs
(again, prior to adjustment) must be
between 1.24 and 1.58 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.
HUD also further adjusts the rents for
three-bedroom and larger units to reflect
HUD’s policy to set higher rents for
these units.8 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).9
H. Minimum FMRs
All FMRs are subject to a minimum
rent based on State or national nonmetropolitan area median rent. HUD
calculates a population-weighted
median two-bedroom FMR across all
non-metropolitan counties or countyequivalents 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
2024 FMR Documentation System,
available at https://www.huduser.gov/
portal/datasets/fmr.html#2024_query.
HUD also calculates the population
weighted median FMR rent across all
non-metropolitan areas of the country,
which, for the purposes of FMRs, is the
national non-metropolitan rent. For FY
2024, the national non-metropolitan
rent is $905. The applicable minimum
rent for a particular area is the lower of
the State or national non-metropolitan
median. Each area’s two-bedroom FMR
must be no less than the applicable
minimum rent.
I. Limit on FMR Decreases
Within the Small Area FMR final rule
published on November 16, 2016,10
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 2024 Small
Area FMRs may be no less than 90
percent of the FY 2023 Small Area
FMRs. For all other metropolitan areas,
the FY 2024 Small Area FMRs may be
no less than 90 percent of the greater of
the FY 2023 metropolitan area wide
FMRs or the applicable FY 2023 Small
Area FMR.
PHAs operating in areas where the
calculated FMR is lower than the
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2017–18
Average Private Change ...........................................
ACS National Recent Mover Change ........................
CPI RPR ....................................................................
Weighted Avg of CPI RPR and Private Change .......
Squared Error ............................................................
Minimum Possible RMSE ..........................................
8 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
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3.34%
5.24%
3.62%
3.46%
3E–04
3.01%
2018–19
Frm 00060
Fmt 4703
3.62%
4.06%
3.71%
3.66%
2E–05
Sfmt 4703
J. Methodology Appendix
To derive the weights used for the
private shelter rent inflation factors and
the CPI rent of primary residence, HUD
compared the national average private
rent inflation rates and CPI rent of
primary residence inflation rates to the
national average increase in ACS recent
mover rents. While private rent data and
ACS recent mover rents measure rent
inflation for recent movers, the CPI rent
of primary residence measures rent
inflation across all rental units, and
while ACS recent mover rents and CPI
rent of primary residence originate from
representative samples, private rent data
inflation is derived from large samples
of rents that are not constructed to be
fully representative of the rental stock.
To temper any potential bias arising
from the non-representativeness of the
private data sources, HUD constructs a
weighted average of private rent data
and CPI rent of primary residence that
minimizes the root mean squared error
between the weighted average changes
in private rent data and CPI rent of
primary residence compared to the
changes in national average ACS recent
mover rents for the years 2017 through
2021. Since 2020 ACS recent mover rent
data are not available, HUD interpolates
a value for 2020 by assuming the rate of
increase was constant from 2019 to
2021. The resulting weights are
approximately 55.8 percent private rent
data and 44.2 percent CPI rent of
primary residence.
2019–20
FMRs can exceed the interval ranges but the
unadjusted FMRs cannot.
9 As established in the interim rules
implementing the provisions of the Quality Housing
PO 00000
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
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 2024 FMR
Documentation System (available at:
https://www.huduser.gov/portal/
datasets/fmr.html#2024_query).
2020–21
1.11%
7.34%
3.12%
2.00%
3E–03
7.59%
7.34%
2.25%
5.23%
4E–04
Weights
Private—0.558388.
CPI RPR—0.441612.
and Work Responsibility Act of 1998 (Title V of the
FY 1999 HUD Appropriations Act; Pub. L. 105–276)
in 24 CFR 982.604.
10 81 FR 80567.
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HUD will use these values of the
weights for the FY 2024 FMRs and will
perform the same analysis including
new data for purposes of setting weights
each year, e.g., for FY2025 FMRs, 2022
ACS recent mover rents, 2022 private
rent data and 2022 CPI rent of primary
residence would be included in the
analysis to set the weights. Thus, the
weights for private rent data and CPI
rent of primary residence in the gross
rent inflation adjustment factors will
vary based on such reanalysis in future
versions of FMRs.
IV. Small Area FMRs
HUD lists Small Area FMRs for all
metropolitan areas in the Small Area
FMR Schedule. Metropolitan PHAs
operating in areas where the use of
Small Area FMRs is not mandated
should contact their local HUD field
office to request approval for using
Small Area FMRs in the operation of
their Housing Choice Voucher program.
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 are 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
calculates 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 are used because the twobedroom gross rent data are not
statistically reliable, HUD converts the
one-bedroom or three-bedroom 40th
percentile gross rent 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 count, HUD calculates
Small Area FMRs using the rent ratio
method. To calculate Small Area FMRs
11 For example, for FY 2024 Small Area FMRs,
HUD averages the gross rents from 2019, 2020, and
2021 5-Year ACS estimates. The 2019 and 2020
gross rent estimates would be adjusted to 2021
dollars using the metropolitan area’s gross rent CPI
adjustment factors.
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using a rent ratio, HUD divides the
median gross rent across all bedrooms
for the ZCTA by the similar median
gross rent for the metropolitan area of
the ZCTA. If a ZCTA does not have
reliable rent data at the all-bedroom
level, HUD will then check to see if the
ZCTA borders other ZCTAs that
themselves have reliable rent data. If at
least half of a ZCTA’s ‘‘neighbors’’ have
such data, HUD will use the weighted
average of those estimates as the basis
for the Small Area FMR 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 substitutes 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
FMR for the metropolitan area
containing the small area to generate the
current year two-bedroom FMR 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
2024 Small Area FMRs, HUD has
updated the rent ratios to use an average
of the rent ratios calculated from the
2015–2019, 2016–2020, and 2017–2021
5-year ACS estimates.
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.
V. Response to Comments on Proposed
Changes to FMR Calculation
On June 23, 2023, HUD published a
notice of Proposed Changes to the
Methodology Used for Calculating Fair
Market Rents.12 In response to this
notice HUD received 25 public
comments. The following sections
respond to these comments.
a. Public Comments Supporting the
Proposed Changes to the Methodology
Used for Calculating FMRs
The majority of commenters
supported both of HUD’s proposed
changes to the FY 2024 FMR calculation
methodology, specifically: (1) retaining
and expanding the use of rent inflation
factors calculated by private sector data
sources and (2) changing the ‘‘recent
mover’’ definition from a maximum of
12 88
PO 00000
FR 41118.
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23 months to 11 months. Commenters
stated that these changes are likely to
produce FMRs that are more accurate
because the private data sources are
updated more recently than the CPI and
because rents for tenants who have
moved within the past year are more
reflective of current rental prices.
Several commenters also mentioned the
importance of capturing the high rate of
inflation.
There were no commenters opposed
to the ‘‘recent mover’’ redefinition,
although one commenter expressed
concern that it could increase volatility.
There were also no commenters
expressly opposed to the expanded use
of private data, although some
commenters expressed concerns about
insufficient transparency into the
companies’ methodologies and into
HUD’s selection criteria.
Several commenters applauded HUD
for the methodological changes
implemented in FY 2023, noting that
FMRs were significantly more reflective
of real market conditions last year than
in the past.
HUD Response: Partially in response
to the supportive comments, HUD is
retaining and expanding the use of
private rent inflation data in its FMR
calculation. HUD consistently strives for
transparency in its FMR calculation by
maintaining an online lookup tool that
shows the component factors of each
area’s FMR calculation. HUD is
committed to further research on the
various methodologies used by private
companies and making this research
publicly available.
b. Public Comments Recommending
Additional Changes or Alterations to the
Proposed Changes to the Methodology
Used for Calculating FMRs
i. Suggestions To Further Expand Usage
of Private or Alternative Data Sources
While most commenters expressed
support for the expanded use of private
data as proposed for FY 2024, several
commenters recommended that HUD
expand its use even further in FY 2025.
One commenter recommended that
HUD replace the use of 5-year ACS data
with private data since this accounts for
80% of FMR areas. Another
recommended that HUD augment the
gross rent CPI data used in the Trend
Factor calculation with private data,
(which they had also recommended in
their public comment submitted for FY
2023). Another commenter
recommended additional private or
alternative data sources for HUD to
consider including in FY 2025
calculations. Another commenter
expressed concern that HUD has
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provided insufficient justification for its
three private data sources standard.
Another requested further clarification
from HUD on HUD’s selection criteria
for private data sources.
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ii. Request for More Transparency in
Private Data
Multiple commenters expressed
concern that there is insufficient
transparency into the methodologies
used by the private companies in
calculating rental rates.
iii. Request That FMR Calculation Be
More Localized
Two commenters requested that local
data sources, specifically the University
of Southern California Lusk Center for
Real Estate, University of California Los
Angeles Lewis Center for Regional
Policy Studies, and the New York City
Housing and Vacancy Survey
(NYCHVS), be added to the private data
as alternative sources. Another
commenter requested that local PHAs be
allowed to set their own FMRs in order
to properly account for hyperlocal
conditions, while another suggested that
FMRs instead be set ‘‘within the state
based on local conditions.’’ A
commenter recommended that HUD
consider basing its inflation adjustment
on smaller geographic areas for rental
markets with many submarkets, such as
Los Angeles.
HUD Response: The private rental
data available to HUD do not represent
the entirety of the rental market. The
data sources are in some cases based on
online rental listings or consist of
surveys of large multifamily properties.
Research has shown that despite these
limitations, the changes in rent reported
by these sources are similar to the
change in rent from the overall rental
market. Therefore, HUD is comfortable
using these sources as a source of the
shelter rent inflation rate for markets
where such data are available. However,
they cannot be used to establish the base
rent for each area, as they do not
provide a 40th percentile rent statistic,
and if they did, such a statistic would
not be drawn from a representative
sample of the entire rental market as is
the case with gross rent estimates from
the ACS.
HUD is aware that, given the
limitations in the CPI rent of primary
residence as a measure of recent mover
rents, there are concerns in continuing
to rely on that series in the trend factor.
However, given the complexities of
forecasting, HUD has not arrived an
alternative methodology. Moreover,
until very recently, both the overall CPI
rent of primary residence and the CPI
new tenant repeat rent index showed
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similar rates of inflation, suggesting that
convergence in the future is a
reasonable assumption.
As previously stated, HUD
consistently strives for transparency in
its FMR calculation by maintaining an
online lookup tool that shows the
component factors of each area’s FMR
calculation. HUD is committed to
further research on the various
methodologies used by private
companies and making this research
publicly available. In some cases, the
proprietary nature of the data and
methodologies used by various
companies limit the ability of HUD to
provide transparency.
With respect to alternative data
sources, interested parties may submit
any survey or comprehensive rental
market study that provides a 40th
percentile rent estimate for recent
movers that is more current than the
year of the ACS for consideration to
HUD. In the case of the New York
Housing and Vacancy Survey however,
the most recent data are from 2017.
c. Public Comments That Address
Alternative FMR Calculations and the
Determination of FMR Amounts
i. Comments Concerning the FMR
Amounts
Multiple commenters indicated that
FMR values have historically been too
low, and continue to be too low, causing
individuals and families to be unable to
find housing. On the other hand, some
commenters indicated that high FMR
values have negatively affected tenant
ability to afford units when flat rents are
set to 80% of FMRs.
ii. Comments Suggesting Alternative
FMR Calculation Methodologies
Multiple commenters suggested
alternative methodologies for HUD to
use in calculating FMRs that differ
significantly from current methods. One
commenter encouraged the use of a
‘‘Fair and Reasonable’’ approach in the
setting of FMR amounts, rather than the
method currently used to set FMR rates.
One commenter lamented that Public
Housing Authorities have had difficulty
serving tenants amidst rising rental
prices and recommended that PHAs be
allowed to determine the rental rates for
their own jurisdiction based on a ‘‘rent
reasonableness’’ standard, their budget,
and their total number of assigned
vouchers. Another commenter
recommended that HUD factor vacancy
rates into its FMR calculations, although
they did not expand on how it should
be factored in. A commenter
recommended that HUD fundamentally
change the FMR calculation from an
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60229
estimate of current rents in the area to
instead be based on ‘‘what the near-term
rent needs to be to attract the private
capital necessary to create the type of
housing that is desired’’ in
neighborhoods that ‘‘lack affordable
housing units but face strong demand
from local residents.’’ One commenter
recommended that HUD adopt an
Island-Wide FMR specifically for Puerto
Rico to increase administrative
efficiency. Another commenter
recommended that HUD reconsider its
use of 40th percentile rent limits; if
voucher holders are unable to secure
rental housing at this rate, the
commenter suggested that PHAs have
the discretion to incorporate the use of
50th percentile rent levels instead.
HUD Response: In setting the overall
level of the FMR, HUD must balance the
interests of ensuring that families have
an adequate choice of decent and safe
housing while seeking to maximize the
number of families who can receive
assistance. HUD’s current regulations
set the FMR at the 40th percentile rent,
a statistic which is below the average
rent in each area, to achieve this
balance. With respect to the Voucher
program, there are numerous ways in
which the payment standard can exceed
the FMR, including exception payment
standards and success rate payment
standards.
With respect to flat rents, there are
numerous options for PHAs in
circumstances where the FMR is too
high for an appropriate flat rent, such as
the use of Small Area FMRs or
conducting a rent comparability study.
HUD periodically conducts research
on potential improvements to the
voucher program. For example, several
PHAs who participate in the Moving to
Work demonstration have conducted
their own rental market studies and
determined their own payment
standards rather than rely on the FMR.
The Department is committed to
continuing to evaluate this and other
research and determine the best
approach to determining rental subsidy
rates.
It is not clear that setting higher FMRs
would increase housing supply, as the
largest barrier to the creation of new
affordable housing in many areas is land
use restrictions. Instead, setting FMRs
higher based on a desire to attract new
capital would likely lead to undue
subsidy capture by current landlords.
HUD is committed to working with
stakeholders in Puerto Rico regarding
what the appropriate level of geography
is for determining Fair Market Rent
areas. To date, HUD has received little
feedback on this issue.
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d. Public Comments Regarding
Suggestions for the Methodology Used
for Calculating FMRs After FY 2024
One commenter recommended that
for areas that use SAFMRs, HUD replace
the three private data sources standard
with either a minimum population or
rental unit count, as these areas may
have the requisite population/unit
density.
One commenter recommended that
rather than using a minimum of three
private data sources, HUD use only data
from the two private providers—
CoreLogic and Zillow—that have an
established relationship with the CPI
according to the BLS/Fed study.
Another commenter recommended that
HUD continue to follow up on the BLS/
Fed study with a longitudinal study to
observe the accuracy of FMR calculation
methods with private sector data.
One commenter who supported both
of HUD’s proposals recommended that
HUD increase transparency by
producing a new annual report detailing
national FMR statistics in the aggregate
(i.e., percent of areas where FMRs did
not pass statistical reliability checks).
One commenter tentatively supports
the use of private data, but requests that
the sources be required to release their
coverage areas and methodology for
public comment; this commenter also
tentatively supports the redefinition of
‘‘recent mover’’ but is concerned that it
may increase volatility and suggests that
HUD incorporate additional safeguards
in general against year-over-year
volatility.
HUD Response: With respect to the
use of only CoreLogic and Zillow, note
that the BLS/Fed study did not examine
the other data sources available to HUD.
HUD has replicated the correlations
among the additional sources and the
CPI NTRR as was done in the study and
feels that the results justify including
the additional sources. Additionally, the
BLS/Fed study considered only national
changes in rent. At the local level, rent
data are more volatile and including
additional data sources reduces some of
this volatility. HUD does intend to
continue tracking the relationship
among private sources of rent data and
the CPI NTRR subject to the latter’s
availability.
With respect to transparency, HUD
would be willing to provide aggregate
statistics on the various adjustment
categories that FMR areas are subject to;
however, with many such adjustments it
is not clear which would be most salient
for users. Interested parties are invited
to comment on this in response to this
notice.
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On the issue of geographic coverage,
HUD only uses private sources in cases
where the geographic coverage closely
matches HUD’s FMR area definitions.
HUD agrees that volatility is a concern
in setting FMRs and making
methodology changes. At the same time,
rental markets themselves may be
genuinely volatile and therefore FMRs
may exhibit some degree of volatility by
virtue of being accurately calculated.
VI. Request for Public Comments and
FMR Reevaluations
HUD accepts public comments on the
methods HUD uses to calculate FY 2024
FMRs and requests for reevaluation of
FMRs for specific areas for 30 days after
the publication of this notice. HUD
lacks the 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.
FMR Reevaluations
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.’’
PHAs or other parties interested in
requesting HUD’s reevaluation of their
area’s FY 2024 FMRs, as provided for
under section 8(c)(1)(B) of USHA, must
follow the following procedures:
1. By the end of the 30-day comment
period, PHAs or other parties must
submit reevaluation requests through
https://www.regulations.gov/ or directly
to HUD as described in the Addresses
section 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. The requestor(s) must supply HUD
with data more recent than the 2021
ACS data used in the calculation of the
FY 2024 FMRs. HUD requires data on
gross rents paid in the FMR area for
occupied standard quality rental
housing units. Occupied recent mover
units (defined as those who moved in
the past 24 months, although a shorter
definition may also be used at the
requestors discretion) provide the best
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data. The data delivered must be
sufficient for HUD to calculate a 40th
and 50th percentile two-bedroom gross
rent.13 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. Areas where valid reevaluation
requests are submitted may continue to
use FY 2023 FMRs, or may use the FY
2024 FMRs. Commenters should
indicate whether they wish to maintain
the FY 2023 or implement the FY 2024
FMR during the revaluation period as
part of their reevaluation request.
Following the comment period, HUD
will post a list, at https://
www.huduser.gov/portal/datasets/
fmr.html, of the areas requesting
reevaluations where FY 2023 FMRs
remain in effect.
4. PHAs or other parties must supply
data for reevaluations to HUD no later
than Friday January 5, 2024. All survey
responses of rental units gathered as
part of the survey efforts should be
delivered to HUD. In addition to the
survey data, HUD requires a current
utility schedule to evaluate the survey
responses. Finally, HUD encourages
PHAs to evaluate their survey data to
ensure the survey supports their
request. Should PHAs or their
contractors undertake this evaluation,
HUD requests that this analysis also be
submitted.
HUD will use the data delivered by
January 5, 2024 to reevaluate the FMRs
and following the reevaluation, will
post revised FMRs in April of 2024 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. By
January 12, 2024, HUD will post at
https://www.huduser.gov/portal/
datasets/fmr.html a listing of the areas
that requested FMR reevaluations and
continued effect of the FY2023 FMRs
but did not deliver data, making the FY
2024 FMRs effective in these areas. HUD
will incorporate any data supporting a
change in FMRs supplied after January
5, 2024 into FY 2025 FMRs. Questions
on how to conduct FMR surveys may be
addressed to the Program Parameters
and Research Division at pprd@hud.gov.
13 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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Federal Register / Vol. 88, No. 168 / Thursday, August 31, 2023 / Notices
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 units.
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 are
required to get 100 eligible survey
responses, which means they should
have at least 5,000 rental units. PHAs
may conduct surveys of groups of nonmetropolitan counties to increase the
number of rental units that are
surveyed, but HUD must approve all
county-grouped surveys in advance.
HUD cautions 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, HUD advises 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 re-evaluations to provide the
minimum number of survey cases
required to ensure that data submitted
for re-evaluation represent a statistically
valid sample.
A PHA or contractor that cannot
obtain the recommended number of
sample responses after reasonable
VerDate Sep<11>2014
18:04 Aug 30, 2023
Jkt 259001
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.
60231
d. Similarly, the schedule lists the
New England towns and cities included
in a non-metropolitan county
immediately following the county name.
[FR Doc. 2023–18402 Filed 8–30–23; 8:45 am]
BILLING CODE 4210–67–P
Calculating Small Area FMRs Using
Rent Distributions
Since FY 2016, HUD has provided
guidance and data 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. HUD has not
received any such requests since 2017
and is therefore discontinuing the
publication of these data.
VII. Environmental Impact
Solomon Greene,
Principal Deputy Assistant Secretary for
Policy Development and Research.
Fair Market Rents for the Housing
Choice Voucher Program
Schedule B—General Explanatory Notes
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 nonmetropolitan county within each state
and are available at https://
www.huduser.gov/portal/datasets/
fmr.html.
b. The schedule lists the constituent
counties (and New England towns and
cities) included in each metropolitan
FMR area 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. The schedule lists two nonmetropolitan counties alphabetically on
each line of the non-metropolitan
county listings.
Frm 00064
Fmt 4703
Sfmt 4703
Bureau of Land Management
[BLM_MT_FRN_MO# 4500172578]
Public Meeting for the Missouri Basin
Resource Advisory Council
Bureau of Land Management,
Interior.
ACTION: Notice of public meeting.
AGENCY:
In accordance with the
Federal Land Policy and Management
Act and the Federal Advisory
Committee Act of 1972, the U.S.
Department of the Interior, Bureau of
Land Management (BLM) Missouri
Basin Resource Advisory Council (RAC)
will meet as follows.
DATES: The Missouri Basin RAC will
meet on September 18, 2023, from 10
a.m. to 4 p.m. Mountain Time (MT) and
on September 19, 2023, from 8 a.m. to
1 p.m. MT.
ADDRESSES: The meetings will take
place at the BLM Miles City Field
Office, 111 Garryowen Road, Miles City,
MT 59301. To accommodate broader
participation, the meetings will provide
both in-person and virtual attendance
options. Individuals that prefer to
participate virtually must contact the
RAC coordinator by September 14 to
request a link.
FOR FURTHER INFORMATION CONTACT:
Mark Jacobsen, Missouri Basin RAC
Coordinator, BLM Eastern Montana/
Dakotas District Office, 111 Garryowen
Road, Miles City, MT 59301; telephone:
(406) 233–2831; email: mjacobse@
blm.gov.
Individuals in the United States who
are deaf, deafblind, hard of hearing, or
have a speech disability may dial 711
(TTY, TDD, or TeleBraille) to access
telecommunications relay services.
Individuals outside the United States
should use the relay services offered
within their country to make
international calls to the point-ofcontact in the United States.
SUPPLEMENTARY INFORMATION: The 15member council advises the Secretary of
the Interior, through the BLM, on a
variety of planning and management
issues associated with public land
management in central and eastern
Montana, and North and South Dakota.
At this meeting, agenda topics will
SUMMARY:
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.
PO 00000
DEPARTMENT OF THE INTERIOR
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]]>Agencies
[Federal Register Volume 88, Number 168 (Thursday, August 31, 2023)]
[Notices]
[Pages 60223-60231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18402]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6401-N-02]
Fair Market Rents for the Housing Choice Voucher Program,
Moderate Rehabilitation Single Room Occupancy Program, and Other
Programs; Fiscal Year 2024
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, U.S. Department of Housing and Urban Development (HUD).
ACTION: Notice of fiscal year (FY) 2024 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 year. This
notice describes the methods used to calculate the FY 2024 FMRs and
enumerates the procedures for Public Housing Agencies (PHAs) and other
interested parties to request reevaluations of their FMRs as required
by HOTMA.
DATES:
Comment Due Date: October 2, 2023.
Effective Date of Revised FMRs: October 1, 2024, 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 2024 FMRs.
Communications must refer to the above docket number and title and
should contain the information specified in the ``Request for Public
Comments and FMR
[[Page 60224]]
Reevaluations'' section. There are two methods for submitting public
comments:
1. 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.
2. Submission of Comments by Mail. Members of the public may submit
comments or requests for reevaluation 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
comments or reevaluation requests received by mail available to the
public at https://www.regulations.gov.
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. HUD does not accept
facsimile (FAX) comments or requests for FMR reevaluation.
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 at https://www.huduser.gov/portal/datasets/fmr.html.
Questions related to the use of FMRs or voucher payment standards
should be directed to the respective local HUD program staff or the
Office of Public and Indian Housing Customer Service Center at https://www.hud.gov/program_offices/public_indian_housing/about/css. Questions
on how to conduct FMR surveys may be addressed to the electronic
mailbox for the Program Parameters and Research Division at
[email protected].
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 2024 FMRs is available
at https://www.huduser.gov/portal/datasets/fmr.html#2024_query. FY 2024
FMRs are available in a variety of electronic formats at https://www.huduser.gov/portal/datasets/fmr.html, including in PDF and
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/. For informational purposes, HUD also
publishes 50th percentile rents for all FMR areas at https://www.huduser.gov/portal/datasets/50per.html.
SUPPLEMENTARY INFORMATION:
I. Background
Section 8 of the USHA (42 U.S.C. 1437f) authorizes housing
assistance to aid lower-income families in renting safe and decent
housing. Housing assistance payments are limited by FMRs established by
HUD for different geographic areas. In the Housing Choice 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 a tenant would need 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.
The FMR is also used to determine the Performance Based Contract
Administration Fee in Multifamily Housing. 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
On June 23, 2023, HUD published a notice of Proposed Changes to the
Methodology Used for Calculating Fair Market Rents.\2\ For FY 2024
FMRs, HUD is implementing the proposed changes described in that
notice. The first affects how HUD determines the ``recent mover
adjustment factor'' to meet its regulatory objective of setting the FMR
from the distribution of rental units occupied by recent movers. The
second change affects how HUD inflates the recent mover rent to the
most recent full calendar year using a Gross Rent Inflation Adjustment
Factor. The methodology used in each of these steps is described in
more detail in the following section.
---------------------------------------------------------------------------
\2\ 88 FR 41118.
---------------------------------------------------------------------------
II. Procedures for the Development of FMRs
Section 8(c)(1) of the USHA,\3\ as amended by HOTMA (Pub. L. 114-
201, enacted 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
[[Page 60225]]
become effective. Consistent with the statute, HUD is issuing this
notice to notify the public that FY 2024 FMRs are available at https://www.huduser.gov/portal/datasets/fmr.html and will become effective on
October 1, 2023. This notice also provides procedures for FMR
reevaluation requests.
---------------------------------------------------------------------------
\3\ 42 U.S.C. 1437f.
---------------------------------------------------------------------------
III. FMR Methodology
This section provides a brief overview of how HUD computes the FY
2024 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#2024_query.
A. Geographic Area Definitions
The FY 2024 FMRs are based on the updated metropolitan area
definitions published by the Office of Management and Budget (OMB) on
September 14, 2018 and first incorporated by the Census Bureau into the
2019 American Community Survey (ACS) data, and the corresponding FY
2022 FMRs. On July 21, 2023, OMB published Bulletin No. 23-01 which
contains revisions to metropolitan area definitions. However, the
Census Bureau has not yet incorporated these revisions into the data
available to HUD, and therefore HUD is not using these new definitions
for FY 2024.
B. Base Year Rents
For FY 2024 FMRs, HUD uses the U.S. Census Bureau's 5-year ACS data
collected between 2017 and 2021 as the ``base rents'' for the FMR
calculations. These data are the most current ACS data available at the
time that HUD calculates the FY 2024 FMRs. HUD pairs a ``margin of
error'' test \4\ 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 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
meeting the ``margin of error'' test, ACS rent estimates must be based
on at least 100 observations to be used as base rents.
---------------------------------------------------------------------------
\4\ 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.
---------------------------------------------------------------------------
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 \5\ (provided that there is data available
for at least two of these years),\6\ or if such data are not available,
using the two-bedroom rent data within the next largest geographic
area. For a metropolitan subarea, the next largest area is its
containing metropolitan area. For a non-metropolitan area, the next
largest area is the State non-metropolitan portion.
---------------------------------------------------------------------------
\5\ For FY 2024, the three years of ACS data in question are
2018, 2019 and 2020. HUD adjusts the 2018 and 2019 data to be
denominated in 2020 dollars using the growth in Consumer Price Index
(CPI)-based gross rents measured between 2018 and 2020.
\6\ 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.
---------------------------------------------------------------------------
C. Recent-Mover Factors
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
2017-2021 standard quality two-bedroom gross rent and the 1-year 2021
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, HUD sets the recent-mover factor
to 1. When the recent-mover factor is greater than one and calculated
for the same geographic area as the base rent, HUD is, in effect,
replacing the base rent with the recent-mover rent for that area.
Newly for FY 2024, HUD is modifying the definition of ``recent
mover'' used in determining the 2021 recent mover gross rent as
described above. To make its recent mover adjustment as reflective of
current market conditions as possible, HUD first considers the rents of
households who moved into their unit only in the current ACS year. For
ACS 2021, this means that the maximum length of time for a household to
have lived in its current unit and still be considered a recent mover
under this definition would be 11 months. This differs from HUD's prior
practice of considering rents from householders who moved into their
unit in either the current year or prior year.
However, restricting the ACS universe to recent movers limits the
sample size supporting the resulting estimates, potentially harming the
statistical reliability of those estimates. HUD applies the same two
statistical reliability checks to each ACS recent mover estimate as it
does for the base rent estimate. First, the estimate must be supported
by at least 100 sample cases from the ACS. Second, the estimate must
have a margin of error that is smaller than half the estimate itself.
These criteria also apply for the new, single-year definition of recent
movers. For areas without an ACS estimate meeting these criteria, HUD
next checks the estimate tabulated from two-year recent movers,
following its prior methodology.
D. Other Rent Survey Data
HUD calculates base rents for the insular areas using data
collected during the 2010 decennial census of American Samoa, the
Northern Mariana Islands, and the Virgin Islands beginning with the FY
2016 FMRs.\7\ HUD updates the 2010 base year data to 2021 using the
growth in national ACS data for the FY 2024 FMRs. Note that while the
2010 decennial census also included Guam, HUD uses the result of a more
recent rent survey in calculating the FMRs for Guam, as discussed in
the following paragraph. HUD is working with the Census Bureau to
provide special tabulations of the 2020 Island Area Census and hopes to
include these data in FY 2025 FMRs.
---------------------------------------------------------------------------
\7\ The ACS is not conducted in the Pacific Islands (Guam,
Northern Mariana Islands 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. HUD uses the
results gathered by this long form survey for the FY 2024 FMRs.
---------------------------------------------------------------------------
HUD does not use ACS data to establish the base rent or recent-
mover factor in cases where it has locally collected survey data which
are more recent than the 2021 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 2024 FMRs is from
2021, larger areas with valid one-year recent mover data may not use
other survey data collected before June 30, 2021 for the FY 2024 FMRs.
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. For FY 2024 FMRs, the following are
Metropolitan Statistical Areas (MSAs), HUD Metro FMR Areas, or non-
metropolitan counties that have FMRs based on local ad hoc surveys:
[[Page 60226]]
HUD uses survey data from 2019 to calculate the FMRs for
Kauai County, HI; and Guam.
HUD uses survey data from 2021 to calculate the FMRs for
Abilene, TX MSA; Asheville, NC HUD Metro FMR Area; Boston-Cambridge-
Quincy, MA-NH HUD Metro FMR Area; Bremerton-Silverdale, WA MSA; Iron
County, UT; Knox County, ME; Lincoln County, ME; New York, NY HUD Metro
FMR Area; Portland, ME HUD Metro FMR Area; Portland-Vancouver-
Hillsboro, OR-WA MSA; San Diego-Carlsbad, CA MSA; Santa Maria-Santa
Barbara, CA MSA; Transylvania County, NC; and Waldo County, ME.
HUD uses survey data from 2022 to calculate the FMRs for
Grand Rapids-Wyoming, MI HUD Metro FMR Area; Hawaii County, HI; Hood
River County, OR; Salinas, CA MSA; Seattle-Bellevue, WA HUD Metro FMR
Area; and Wasco County, OR.
HUD uses survey data from 2023 to calculate the FMRs for
San Benito County, CA HUD Metro FMR Area; and Santa Cruz-Watsonville,
CA MSA.
E. Gross Rent Inflation Adjustment Factors
The ACS recent mover rent estimates as described above produce a
rent value that is ``as of'' 2021. In the past, HUD has updated the
latest ACS-based rent estimates with one year of gross rent inflation
measured with the 23 local or 4 regional CPI components rent of primary
residence and household fuels and utilities depending on the location
of the FMR area. For FY 2023, HUD augmented the CPI methodology by
including available private data sources along with CPI data in
calculating a weighted average gross rent inflation factor that was
used to update the ACS-based ``as of'' 2020 rent through 2021. HUD
applied a weight of 60 percent to the average of the change in private
data sources and 40 percent to the annual change in CPI gross rents. In
places without sufficient private rent data sources, the actual
inflation adjustment process solely used regional CPI data.
For FY 2024, HUD is continuing to augment CPI rent inflation data
with private sources of rent data to create a gross rent inflation
adjustment factor. Recent research has indicated that there is a
substantial lag in the overall CPI rent of primary residence index's
ability to capture changes in recent mover rents, and that private rent
measure are often better at capturing such changes quickly. The private
measures of rent used by HUD are the RealPage average effective rent
per unit, Moody's Analytics REIS average market rent, CoStar Group
average effective rent, CoreLogic, Inc. single-family combined 3-
bedroom median rent, ApartmentList Rent Estimate, and Zillow Observed
Rent Index.
In calculating a measure of inflation from these data, HUD first
takes the annual average of each statistic, then its year-to-year
change. HUD then takes the mean of changes from all available sources
for each area. Next, HUD takes an average of this private-sector
measure of rent inflation with rent inflation as captured by the CPI
for the area, where the private-sector measure is weighted at
approximately 55.8 percent and the CPI rent inflation measure is
weighted at approximately 44.2 percent. HUD has determined these
weights by comparing the national average of the private rent changes
and changes in CPI rent of primary residence to changes in the national
average of recent mover rents from the ACS from 2017 through 2021. HUD
weights the private data averages and overall CPI rent of primary
residence in such a way as to minimize the root mean squared error
between the resulting average and the ACS recent mover rents. For
future FMRs, HUD will update the weights by adding the most recent
years of ACS recent mover rents, private rent data, and CPI rent of
primary residence to the analysis.
HUD uses a local measure of private rent inflation for markets that
are covered by at least three of the six available sources of private
rent data. HUD combines this local measure of rent inflation with
either the local metropolitan area CPI rent of primary residence for
the 23 areas where such data exist, or the regional CPI rent in areas
without a local index.
Unlike in FY 2023, for areas without at least three of the six
private rent data sources available, HUD uses a regional average of
private rent inflation factors alongside the regional CPI rent of
primary residence using the nationally derived weights described above.
HUD constructs the regional average by taking the rental unit weighted
average of the change in rents of each area in a region that does have
private rent data coverage. This ensures that smaller areas which are
not covered by the private sources directly still have current rental
market conditions taken into account in the calculation of the rent
inflation factor for such areas.
Finally, HUD averages the result of this step with the year-to-year
change in the CPI housing fuels and utilities index for the area in
order to make the resulting inflation measure reflective of gross
rents. The results of this step are gross rent estimates that are ``as
of'' 2022.
F. Trend Factor Forecasts
Following the application of the appropriate gross rent inflation
factor, HUD trends the gross rent estimate from 2022 to FY 2024 using a
trend factor which is based on local or regional forecasts of CPI gross
rent data. HUD derived a trend factor for each Class A CPI area and
Class B/C CPI region using 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 chose the actual model used for each CPI area's trend factor based
on which model generates the lowest Root Mean Square Error (RMSE)
statistic and applied the trend factors to the corresponding FMR areas.
HUD established the type of model for each forecast (NIM, LIM, or PTS)
for the FY 2020 FMRs and is keeping it constant for 5 years. HUD will
reassess the model selections during the calculation of the FY 2025
FMRs. More details on the trend factor forecasts are available in the
June 5, 2019, Federal Register notice (84 FR 26141) and are available
at https://www.federalregister.gov/documents/2019/06/05/2019-11763/proposed-changes-to-the-methodology-used-for-estimating-fair-market-rents.
G. Bedroom Rent Adjustments
HUD updates the bedroom ratios used in the calculation of FMRs
annually. The bedroom ratios HUD uses in the calculation of FY 2024
FMRs are calculated from three, five-year ACS data series (2015-2019,
2016-2020, and 2017-2021). 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, HUD uses
the bedroom ratios for the area's larger parent geography.
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 for individual 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.
[[Page 60227]]
In the calculation of FY 2024 FMR estimates, HUD sets the bedroom
interval ranges as follows: efficiency FMRs are constrained to fall
between 0.68 and 0.87 of the two-bedroom FMR; one-bedroom FMRs must be
between 0.76 and 0.89 of the two-bedroom FMR; three-bedroom FMRs (prior
to the adjustments described below) must be between 1.12 and 1.30 of
the two-bedroom FMR; and four-bedroom FMRs (again, prior to adjustment)
must be between 1.24 and 1.58 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.
HUD also further adjusts the rents for three-bedroom and larger
units to reflect HUD's policy to set higher rents for these units.\8\
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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\8\ 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).\9\
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\9\ 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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H. Minimum FMRs
All FMRs are subject to a minimum rent based on State or national
non-metropolitan area median rent. HUD calculates a population-weighted
median two-bedroom FMR across all non-metropolitan counties or county-
equivalents 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 2024 FMR Documentation System, available at https://www.huduser.gov/portal/datasets/fmr.html#2024_query. HUD also
calculates the population weighted median FMR rent across all non-
metropolitan areas of the country, which, for the purposes of FMRs, is
the national non-metropolitan rent. For FY 2024, the national non-
metropolitan rent is $905. The applicable minimum rent for a particular
area is the lower of the State or national non-metropolitan median.
Each area's two-bedroom FMR must be no less than the applicable minimum
rent.
I. Limit on FMR Decreases
Within the Small Area FMR final rule published on November 16,
2016,\10\ 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 2024 Small Area FMRs may be no less than 90 percent of
the FY 2023 Small Area FMRs. For all other metropolitan areas, the FY
2024 Small Area FMRs may be no less than 90 percent of the greater of
the FY 2023 metropolitan area wide FMRs or the applicable FY 2023 Small
Area FMR.
---------------------------------------------------------------------------
\10\ 81 FR 80567.
---------------------------------------------------------------------------
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 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
2024 FMR Documentation System (available at: https://www.huduser.gov/portal/datasets/fmr.html#2024_query).
J. Methodology Appendix
To derive the weights used for the private shelter rent inflation
factors and the CPI rent of primary residence, HUD compared the
national average private rent inflation rates and CPI rent of primary
residence inflation rates to the national average increase in ACS
recent mover rents. While private rent data and ACS recent mover rents
measure rent inflation for recent movers, the CPI rent of primary
residence measures rent inflation across all rental units, and while
ACS recent mover rents and CPI rent of primary residence originate from
representative samples, private rent data inflation is derived from
large samples of rents that are not constructed to be fully
representative of the rental stock. To temper any potential bias
arising from the non-representativeness of the private data sources,
HUD constructs a weighted average of private rent data and CPI rent of
primary residence that minimizes the root mean squared error between
the weighted average changes in private rent data and CPI rent of
primary residence compared to the changes in national average ACS
recent mover rents for the years 2017 through 2021. Since 2020 ACS
recent mover rent data are not available, HUD interpolates a value for
2020 by assuming the rate of increase was constant from 2019 to 2021.
The resulting weights are approximately 55.8 percent private rent data
and 44.2 percent CPI rent of primary residence.
--------------------------------------------------------------------------------------------------------------------------------------------------------
2017-18 2018-19 2019-20 2020-21 Weights
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Private Change....................... 3.34% 3.62% 1.11% 7.59% Private--0.558388.
ACS National Recent Mover Change............. 5.24% 4.06% 7.34% 7.34% CPI RPR--0.441612.
CPI RPR...................................... 3.62% 3.71% 3.12% 2.25%
Weighted Avg of CPI RPR and Private Change... 3.46% 3.66% 2.00% 5.23%
Squared Error................................ 3E-04 2E-05 3E-03 4E-04
Minimum Possible RMSE........................ 3.01%
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 60228]]
HUD will use these values of the weights for the FY 2024 FMRs and
will perform the same analysis including new data for purposes of
setting weights each year, e.g., for FY2025 FMRs, 2022 ACS recent mover
rents, 2022 private rent data and 2022 CPI rent of primary residence
would be included in the analysis to set the weights. Thus, the weights
for private rent data and CPI rent of primary residence in the gross
rent inflation adjustment factors will vary based on such reanalysis in
future versions of FMRs.
IV. Small Area FMRs
HUD lists Small Area FMRs for all metropolitan areas in the Small
Area FMR Schedule. Metropolitan PHAs operating in areas where the use
of Small Area FMRs is not mandated should contact their local HUD field
office to request approval for using Small Area FMRs in the operation
of their Housing Choice Voucher program.
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 are 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
calculates 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 are used because the two-
bedroom gross rent data are not statistically reliable, HUD converts
the one-bedroom or three-bedroom 40th percentile gross rent 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 2024 Small Area FMRs, HUD averages the
gross rents from 2019, 2020, and 2021 5-Year ACS estimates. The 2019
and 2020 gross rent estimates would be adjusted to 2021 dollars
using the metropolitan area's gross rent CPI adjustment factors.
---------------------------------------------------------------------------
For ZCTAs without usable gross rent data by bedroom count, HUD
calculates Small Area FMRs using the rent ratio method. To calculate
Small Area FMRs using a rent ratio, HUD divides the median gross rent
across all bedrooms for the ZCTA by the similar median gross rent for
the metropolitan area of the ZCTA. If a ZCTA does not have reliable
rent data at the all-bedroom level, HUD will then check to see if the
ZCTA borders other ZCTAs that themselves have reliable rent data. If at
least half of a ZCTA's ``neighbors'' have such data, HUD will use the
weighted average of those estimates as the basis for the Small Area FMR
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 substitutes 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 FMR for the metropolitan
area containing the small area to generate the current year two-bedroom
FMR 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 2024 Small Area FMRs, HUD has updated the rent ratios
to use an average of the rent ratios calculated from the 2015-2019,
2016-2020, and 2017-2021 5-year ACS estimates.
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.
V. Response to Comments on Proposed Changes to FMR Calculation
On June 23, 2023, HUD published a notice of Proposed Changes to the
Methodology Used for Calculating Fair Market Rents.\12\ In response to
this notice HUD received 25 public comments. The following sections
respond to these comments.
---------------------------------------------------------------------------
\12\ 88 FR 41118.
---------------------------------------------------------------------------
a. Public Comments Supporting the Proposed Changes to the Methodology
Used for Calculating FMRs
The majority of commenters supported both of HUD's proposed changes
to the FY 2024 FMR calculation methodology, specifically: (1) retaining
and expanding the use of rent inflation factors calculated by private
sector data sources and (2) changing the ``recent mover'' definition
from a maximum of 23 months to 11 months. Commenters stated that these
changes are likely to produce FMRs that are more accurate because the
private data sources are updated more recently than the CPI and because
rents for tenants who have moved within the past year are more
reflective of current rental prices. Several commenters also mentioned
the importance of capturing the high rate of inflation.
There were no commenters opposed to the ``recent mover''
redefinition, although one commenter expressed concern that it could
increase volatility. There were also no commenters expressly opposed to
the expanded use of private data, although some commenters expressed
concerns about insufficient transparency into the companies'
methodologies and into HUD's selection criteria.
Several commenters applauded HUD for the methodological changes
implemented in FY 2023, noting that FMRs were significantly more
reflective of real market conditions last year than in the past.
HUD Response: Partially in response to the supportive comments, HUD
is retaining and expanding the use of private rent inflation data in
its FMR calculation. HUD consistently strives for transparency in its
FMR calculation by maintaining an online lookup tool that shows the
component factors of each area's FMR calculation. HUD is committed to
further research on the various methodologies used by private companies
and making this research publicly available.
b. Public Comments Recommending Additional Changes or Alterations to
the Proposed Changes to the Methodology Used for Calculating FMRs
i. Suggestions To Further Expand Usage of Private or Alternative Data
Sources
While most commenters expressed support for the expanded use of
private data as proposed for FY 2024, several commenters recommended
that HUD expand its use even further in FY 2025. One commenter
recommended that HUD replace the use of 5-year ACS data with private
data since this accounts for 80% of FMR areas. Another recommended that
HUD augment the gross rent CPI data used in the Trend Factor
calculation with private data, (which they had also recommended in
their public comment submitted for FY 2023). Another commenter
recommended additional private or alternative data sources for HUD to
consider including in FY 2025 calculations. Another commenter expressed
concern that HUD has
[[Page 60229]]
provided insufficient justification for its three private data sources
standard. Another requested further clarification from HUD on HUD's
selection criteria for private data sources.
ii. Request for More Transparency in Private Data
Multiple commenters expressed concern that there is insufficient
transparency into the methodologies used by the private companies in
calculating rental rates.
iii. Request That FMR Calculation Be More Localized
Two commenters requested that local data sources, specifically the
University of Southern California Lusk Center for Real Estate,
University of California Los Angeles Lewis Center for Regional Policy
Studies, and the New York City Housing and Vacancy Survey (NYCHVS), be
added to the private data as alternative sources. Another commenter
requested that local PHAs be allowed to set their own FMRs in order to
properly account for hyperlocal conditions, while another suggested
that FMRs instead be set ``within the state based on local
conditions.'' A commenter recommended that HUD consider basing its
inflation adjustment on smaller geographic areas for rental markets
with many submarkets, such as Los Angeles.
HUD Response: The private rental data available to HUD do not
represent the entirety of the rental market. The data sources are in
some cases based on online rental listings or consist of surveys of
large multifamily properties. Research has shown that despite these
limitations, the changes in rent reported by these sources are similar
to the change in rent from the overall rental market. Therefore, HUD is
comfortable using these sources as a source of the shelter rent
inflation rate for markets where such data are available. However, they
cannot be used to establish the base rent for each area, as they do not
provide a 40th percentile rent statistic, and if they did, such a
statistic would not be drawn from a representative sample of the entire
rental market as is the case with gross rent estimates from the ACS.
HUD is aware that, given the limitations in the CPI rent of primary
residence as a measure of recent mover rents, there are concerns in
continuing to rely on that series in the trend factor. However, given
the complexities of forecasting, HUD has not arrived an alternative
methodology. Moreover, until very recently, both the overall CPI rent
of primary residence and the CPI new tenant repeat rent index showed
similar rates of inflation, suggesting that convergence in the future
is a reasonable assumption.
As previously stated, HUD consistently strives for transparency in
its FMR calculation by maintaining an online lookup tool that shows the
component factors of each area's FMR calculation. HUD is committed to
further research on the various methodologies used by private companies
and making this research publicly available. In some cases, the
proprietary nature of the data and methodologies used by various
companies limit the ability of HUD to provide transparency.
With respect to alternative data sources, interested parties may
submit any survey or comprehensive rental market study that provides a
40th percentile rent estimate for recent movers that is more current
than the year of the ACS for consideration to HUD. In the case of the
New York Housing and Vacancy Survey however, the most recent data are
from 2017.
c. Public Comments That Address Alternative FMR Calculations and the
Determination of FMR Amounts
i. Comments Concerning the FMR Amounts
Multiple commenters indicated that FMR values have historically
been too low, and continue to be too low, causing individuals and
families to be unable to find housing. On the other hand, some
commenters indicated that high FMR values have negatively affected
tenant ability to afford units when flat rents are set to 80% of FMRs.
ii. Comments Suggesting Alternative FMR Calculation Methodologies
Multiple commenters suggested alternative methodologies for HUD to
use in calculating FMRs that differ significantly from current methods.
One commenter encouraged the use of a ``Fair and Reasonable'' approach
in the setting of FMR amounts, rather than the method currently used to
set FMR rates. One commenter lamented that Public Housing Authorities
have had difficulty serving tenants amidst rising rental prices and
recommended that PHAs be allowed to determine the rental rates for
their own jurisdiction based on a ``rent reasonableness'' standard,
their budget, and their total number of assigned vouchers. Another
commenter recommended that HUD factor vacancy rates into its FMR
calculations, although they did not expand on how it should be factored
in. A commenter recommended that HUD fundamentally change the FMR
calculation from an estimate of current rents in the area to instead be
based on ``what the near-term rent needs to be to attract the private
capital necessary to create the type of housing that is desired'' in
neighborhoods that ``lack affordable housing units but face strong
demand from local residents.'' One commenter recommended that HUD adopt
an Island-Wide FMR specifically for Puerto Rico to increase
administrative efficiency. Another commenter recommended that HUD
reconsider its use of 40th percentile rent limits; if voucher holders
are unable to secure rental housing at this rate, the commenter
suggested that PHAs have the discretion to incorporate the use of 50th
percentile rent levels instead.
HUD Response: In setting the overall level of the FMR, HUD must
balance the interests of ensuring that families have an adequate choice
of decent and safe housing while seeking to maximize the number of
families who can receive assistance. HUD's current regulations set the
FMR at the 40th percentile rent, a statistic which is below the average
rent in each area, to achieve this balance. With respect to the Voucher
program, there are numerous ways in which the payment standard can
exceed the FMR, including exception payment standards and success rate
payment standards.
With respect to flat rents, there are numerous options for PHAs in
circumstances where the FMR is too high for an appropriate flat rent,
such as the use of Small Area FMRs or conducting a rent comparability
study.
HUD periodically conducts research on potential improvements to the
voucher program. For example, several PHAs who participate in the
Moving to Work demonstration have conducted their own rental market
studies and determined their own payment standards rather than rely on
the FMR. The Department is committed to continuing to evaluate this and
other research and determine the best approach to determining rental
subsidy rates.
It is not clear that setting higher FMRs would increase housing
supply, as the largest barrier to the creation of new affordable
housing in many areas is land use restrictions. Instead, setting FMRs
higher based on a desire to attract new capital would likely lead to
undue subsidy capture by current landlords.
HUD is committed to working with stakeholders in Puerto Rico
regarding what the appropriate level of geography is for determining
Fair Market Rent areas. To date, HUD has received little feedback on
this issue.
[[Page 60230]]
d. Public Comments Regarding Suggestions for the Methodology Used for
Calculating FMRs After FY 2024
One commenter recommended that for areas that use SAFMRs, HUD
replace the three private data sources standard with either a minimum
population or rental unit count, as these areas may have the requisite
population/unit density.
One commenter recommended that rather than using a minimum of three
private data sources, HUD use only data from the two private
providers--CoreLogic and Zillow--that have an established relationship
with the CPI according to the BLS/Fed study. Another commenter
recommended that HUD continue to follow up on the BLS/Fed study with a
longitudinal study to observe the accuracy of FMR calculation methods
with private sector data.
One commenter who supported both of HUD's proposals recommended
that HUD increase transparency by producing a new annual report
detailing national FMR statistics in the aggregate (i.e., percent of
areas where FMRs did not pass statistical reliability checks).
One commenter tentatively supports the use of private data, but
requests that the sources be required to release their coverage areas
and methodology for public comment; this commenter also tentatively
supports the redefinition of ``recent mover'' but is concerned that it
may increase volatility and suggests that HUD incorporate additional
safeguards in general against year-over-year volatility.
HUD Response: With respect to the use of only CoreLogic and Zillow,
note that the BLS/Fed study did not examine the other data sources
available to HUD. HUD has replicated the correlations among the
additional sources and the CPI NTRR as was done in the study and feels
that the results justify including the additional sources.
Additionally, the BLS/Fed study considered only national changes in
rent. At the local level, rent data are more volatile and including
additional data sources reduces some of this volatility. HUD does
intend to continue tracking the relationship among private sources of
rent data and the CPI NTRR subject to the latter's availability.
With respect to transparency, HUD would be willing to provide
aggregate statistics on the various adjustment categories that FMR
areas are subject to; however, with many such adjustments it is not
clear which would be most salient for users. Interested parties are
invited to comment on this in response to this notice.
On the issue of geographic coverage, HUD only uses private sources
in cases where the geographic coverage closely matches HUD's FMR area
definitions.
HUD agrees that volatility is a concern in setting FMRs and making
methodology changes. At the same time, rental markets themselves may be
genuinely volatile and therefore FMRs may exhibit some degree of
volatility by virtue of being accurately calculated.
VI. Request for Public Comments and FMR Reevaluations
HUD accepts public comments on the methods HUD uses to calculate FY
2024 FMRs and requests for reevaluation of FMRs for specific areas for
30 days after the publication of this notice. HUD lacks the 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.
FMR Reevaluations
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.''
PHAs or other parties interested in requesting HUD's reevaluation
of their area's FY 2024 FMRs, as provided for under section 8(c)(1)(B)
of USHA, must follow the following procedures:
1. By the end of the 30-day comment period, PHAs or other parties
must submit reevaluation requests through https://www.regulations.gov/
or directly to HUD as described in the Addresses section 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. The requestor(s) must supply HUD with data more recent than the
2021 ACS data used in the calculation of the FY 2024 FMRs. HUD requires
data on gross rents paid in the FMR area for occupied standard quality
rental housing units. Occupied recent mover units (defined as those who
moved in the past 24 months, although a shorter definition may also be
used at the requestors discretion) provide the best data. The data
delivered must be sufficient for HUD to calculate a 40th and 50th
percentile two-bedroom gross rent.\13\ 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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\13\ 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. Areas where valid reevaluation requests are submitted may
continue to use FY 2023 FMRs, or may use the FY 2024 FMRs. Commenters
should indicate whether they wish to maintain the FY 2023 or implement
the FY 2024 FMR during the revaluation period as part of their
reevaluation request. Following the comment period, HUD will post a
list, at https://www.huduser.gov/portal/datasets/fmr.html, of the areas
requesting reevaluations where FY 2023 FMRs remain in effect.
4. PHAs or other parties must supply data for reevaluations to HUD
no later than Friday January 5, 2024. All survey responses of rental
units gathered as part of the survey efforts should be delivered to
HUD. In addition to the survey data, HUD requires a current utility
schedule to evaluate the survey responses. Finally, HUD encourages PHAs
to evaluate their survey data to ensure the survey supports their
request. Should PHAs or their contractors undertake this evaluation,
HUD requests that this analysis also be submitted.
HUD will use the data delivered by January 5, 2024 to reevaluate
the FMRs and following the reevaluation, will post revised FMRs in
April of 2024 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. By January
12, 2024, HUD will post at https://www.huduser.gov/portal/datasets/fmr.html a listing of the areas that requested FMR reevaluations and
continued effect of the FY2023 FMRs but did not deliver data, making
the FY 2024 FMRs effective in these areas. HUD will incorporate any
data supporting a change in FMRs supplied after January 5, 2024 into FY
2025 FMRs. Questions on how to conduct FMR surveys may be addressed to
the Program Parameters and Research Division at [email protected].
[[Page 60231]]
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 units.
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 are required to get 100 eligible
survey responses, which means they should have at least 5,000 rental
units. PHAs may conduct surveys of groups of non-metropolitan counties
to increase the number of rental units that are surveyed, but HUD must
approve all county-grouped surveys in advance. HUD cautions 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, HUD advises 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 re-evaluations to provide the minimum number of survey cases
required to ensure that data submitted for re-evaluation 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.
Calculating Small Area FMRs Using Rent Distributions
Since FY 2016, HUD has provided guidance and data 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. HUD has not received any such requests
since 2017 and is therefore discontinuing the publication of these
data.
VII. 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.
Solomon Greene,
Principal Deputy Assistant Secretary for Policy Development and
Research.
Fair Market Rents for the Housing Choice Voucher Program
Schedule B--General Explanatory Notes
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 schedule lists the constituent counties (and New England
towns and cities) included in each metropolitan FMR area 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. The schedule lists two non-metropolitan counties alphabetically
on each line of the non-metropolitan county listings.
d. Similarly, the schedule lists the New England towns and cities
included in a non-metropolitan county immediately following the county
name.
[FR Doc. 2023-18402 Filed 8-30-23; 8:45 am]
BILLING CODE 4210-67-P
