Notice2021-16148
Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs Fiscal Year 2022
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 6, 2021
Issuing agencies
Housing and Urban Development Department
Abstract
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 2022 FMRs and enumerates the procedures for Public Housing Agencies (PHAs) and other interested parties to request reevaluations of their FMRs as required by HOTMA.
Full Text
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<title>Federal Register, Volume 86 Issue 149 (Friday, August 6, 2021)</title>
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[Federal Register Volume 86, Number 149 (Friday, August 6, 2021)]
[Notices]
[Pages 43260-43266]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-16148]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR 6277-N-01]
Fair Market Rents for the Housing Choice Voucher Program,
Moderate Rehabilitation Single Room Occupancy Program, and Other
Programs Fiscal Year 2022
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, Housing and Urban Development (HUD).
ACTION: Notice of Fiscal Year (FY) 2022 Fair Market Rents (FMRs).
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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
[[Page 43261]]
methods used to calculate the FY 2022 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: September 30, 2021.
Effective Date: October 1, 2021 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 2022 FMRs through the
Regulations Division, Office of General Counsel, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10276, Washington,
DC 20410-0001. Communications must refer to the above docket number and
title and should contain the information specified in the ``Request for
Comments/Request for Reevaluation'' section. There are two methods for
submitting public comments:
1. Electronic Submission of Comments. Interested persons may submit
comments or reevaluation requests electronically through the Federal
eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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
all comments or reevaluation requests received by mail available to the
public at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
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 <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>.
Questions related to 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 <a href="https://www.hud.gov/program_offices/public_indian_housing/about/css">https://www.hud.gov/program_offices/public_indian_housing/about/css</a>. Questions
on how to conduct FMR surveys may be addressed to the mailbox for the
Program Parameters and Research Division at <a href="/cdn-cgi/l/email-protection#d6a6a6a4b296bea3b2f8b1b9a0"><span class="__cf_email__" data-cfemail="7404040610341c01105a131b02">[email protected]</span></a>.
For any additional questions, you can contact Adam Bibler, Program
Parameters and Research Division, Office of Policy Development and
Research, telephone number 202-402-6057. Persons with a hearing- or
speech-impairment may contact the Federal Relay Service at 800-877-8339
(TTY). (Other than the ``800'' TTY number, the above-listed telephone
numbers are not toll free.)
Electronic Data Availability. This Federal Register notice will be
available electronically from the HUD User page at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>. Federal Register notices also
are available electronically from <a href="https://www.federalregister.gov/">https://www.federalregister.gov/</a> the
U.S. Government Printing Office website. Complete documentation of the
methods and data used to compute each area's FY 2022 FMRs is available
at <a href="https://www.huduser.gov/portal/datasets/fmr.html#2022_query">https://www.huduser.gov/portal/datasets/fmr.html#2022_query</a>. FY 2022
FMRs are available in a variety of electronic formats at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>, including in PDF and
Microsoft Excel. Small Area FMRs for all metropolitan FMR areas are
available in Microsoft Excel format at: <a href="https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html">https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html</a>. For informational purposes, HUD also
publishes 50th percentile rents for all FMR areas at <a href="https://www.huduser.gov/portal/datasets/50per.html">https://www.huduser.gov/portal/datasets/50per.html</a>.
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.
HUD's FMR calculations represent HUD's best effort to estimate the 40th
percentile gross rent \1\ paid by recent movers into standard quality
units in each FMR area. In addition, all rents subsidized under the HCV
program must meet reasonable rent standards.
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\1\ HUD also calculates and posts 50th percentile rent estimates
for the purposes of Success Rate Payment Standards as defined at 24
CFR 982.503(e) (estimates available at: <a href="https://www.huduser.gov/portal/datasets/50per.html">https://www.huduser.gov/portal/datasets/50per.html</a>).
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The FY 2022 FMRs incorporate revisions to metropolitan area
definitions released by the Office of Management and Budget in
September 2018 (see section III).\2\ PHAs and other users of FMRs
should ensure that they look up the FY 2022 FMRs using the county,
county equivalent, or town in the case of New England states, as the
relationship between these areas and their respective metropolitan
areas has changed in some instances.
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\2\ See OMB Bulletin 18-04.
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[[Page 43262]]
II. Procedures for the Development of FMRs
Section 8(c)(1) of the USHA, 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 become effective. Consistent with the statute, HUD is issuing
this notice to notify the public that FY 2022 FMRs are available at
<a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a> and will become
effective on October 1, 2021. This notice also provides procedures for
FMR reevaluation requests.
III. FMR Methodology
This section provides a brief overview of how HUD computes the FY
2022 FMRs. HUD is making no changes to the estimation methodology for
FMRs as used by HUD for the FY 2021 FMRs. For complete information on
how HUD derives each area's FMRs, see the online documentation at
<a href="https://www.huduser.gov/portal/datasets/fmr.html#2022_query">https://www.huduser.gov/portal/datasets/fmr.html#2022_query</a>.
The FY 2022 FMRs are based on the updated metropolitan area
definitions published by the Office of Management and Budget (OMB) on
September 14, 2018 and incorporated by the Census Bureau into the 2019
American Community Survey (ACS) data. Following the methodology first
established in FY 2016 to incorporate such revisions, HUD treats
counties that OMB removed from metropolitan areas as nonmetropolitan
counties. HUD treats counties that OMB added to metropolitan areas as
metropolitan county subareas. They receive rents based on their own
data if the local data is statistically reliable (with an error that is
less than one-half of the estimate) or receive the metropolitan rent if
their subarea estimate does not exist or is statistically unreliable.
HUD treats new multi-county metropolitan areas as individual county
metropolitan subareas using county-based gross rent estimates (if
statistically reliable); otherwise, HUD uses a metropolitan, area-wide
gross rent estimate. The goal of this policy is to minimize year-to-
year changes in FMR values that are solely due to area definition
revisions.
In FY 2022, HUD is making the following additional area definition
changes:
HUD is adding Oliver County, ND to the Bismarck, ND Metropolitan
Statistical Area. Since FY 2016, Oliver County has comprised the Oliver
County, ND HUD Metro FMR Area (HMFA), a separate area from the
Bismarck, ND HUD Metro FMR Area. However, in each year from FY 2017
through FY 2021, Oliver County did not have reliable gross rent data
from the 5-year ACS, and HUD used the data for the Bismarck, ND MSA in
its FMR calculation.
HUD is adding Maunabo Municipio, PR to the San Juan-Guaynabo, PR
HUD Metro FMR Area. Since FY 2006, Maunabo has been part of the
Barranquitas-Aibonito, PR HUD Metro FMR Area. However, Maunabo is not
contiguous with the other municipios that comprise the Barranquitas-
Aibonito, PR HUD Metro FMR Area. HUD FMR areas generally consist of
contiguous counties or county equivalents.
HUD is adding Utuado Municipio to the Aguadilla-Isabela, PR HUD
Metro FMR Area. Prior to FY 2016, no FMR area in Puerto Rico consisted
of a single municipio. Unlike Counties in the United States, HUD groups
non-metropolitan Puerto Rico Municipios to form the ``Puerto Rico HUD
Nonmetro Area'' because Municipios are often smaller than counties in
the United States. Similarly, HUD is adding Quebradillas Municipio to
the Arecibo, PR HUD Metro FMR Area, which is retitled as Arecibo, PR
MSA. Following these two changes, there are no single municipio FMR
areas remaining in Puerto Rico.
A. Base Year Rents
For FY 2022 FMRs, HUD uses the U.S. Census Bureau's 5-year ACS data
collected between 2015 and 2019 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 2022 FMRs. HUD pairs a ``margin of
error'' test \3\ with an additional requirement based on the number of
survey observations supporting the estimate to improve the statistical
reliability of the ACS data used in the FMR calculations. The Census
Bureau does not provide HUD with an exact count of the number of
observations supporting the ACS estimate; rather, the Census Bureau
provides HUD with categories of the number of survey responses
underlying the estimate, including whether the estimate is based on
more than 100 observations. Using these categories, HUD requires that,
in addition to the ``margin of error'' test, ACS rent estimates must be
based on at least 100 observations to be used as base rents.
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\3\ 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 \4\ (provided that there is data available
for at least two of these years),\5\ 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.
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\4\ For FY 2022, the three years of ACS data in question are
2017, 2018 and 2019. HUD adjusts the 2017 and 2018 data to be
denominated in 2019 dollars using the growth in Consumer Price Index
(CPI)-based gross rents measured between 2017, 2018, and 2019.
\5\ 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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B. 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
2015-2019 standard quality two-bedroom gross rent and the 1-year 2019
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, HUD is, in
effect, replacing the base rent with the recent-mover rent for that
area.
The calculation of the recent-mover factor for FY 2022 continues to
use statistical reliability requirements that are similar to those for
base rents. That is, for a recent-mover gross rent estimate
[[Page 43263]]
to be considered statistically reliable, the estimate must have a
margin of error ratio that is less than 50 percent, and the estimate
must be based on 100 or more observations.
When an FMR area does not have statistically reliable two-bedroom
recent-mover data, the ``all-bedroom'' 1-year recent-mover ACS data for
the FMR area is tested for statistical reliability.\6\ HUD will use an
``all-bedroom'' recent-mover factor from the FMR area, if statistically
reliable, before substituting a two-bedroom recent-mover factor from
the next larger geography. Incorporating ``all-bedroom'' rents into the
recent-mover factor calculation when statistically reliable two-bedroom
data are not available preserves the use of local information to the
greatest extent possible.
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\6\ ``All-bedroom'' refers to estimates aggregated together
regardless of the number of bedrooms in the dwelling unit.
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However, where statistically reliable ``all-bedroom'' data are not
available, HUD will continue to base FMR areas' recent-mover factors on
larger geographic areas. HUD tests data from differently sized
geographic areas in the following order (from small to large), and
bases the recent-mover factor on the first statistically reliable
recent-mover rent estimate in the geographic hierarchy listed below.
<bullet> For metropolitan areas that are sub-areas of larger
metropolitan areas, the order is the FMR area, metropolitan area,
aggregated metropolitan parts of the state, and state.
<bullet> For metropolitan areas that are not divided, the order is
the FMR area, aggregated metropolitan parts of the state, and state.
<bullet> In non-metropolitan areas, the order is the FMR area,
aggregated non-metropolitan parts of the state, and state.
Applying the recent-mover factor to the standard quality base rent
produces an ``as of'' 2019 recent mover two-bedroom gross rent for the
FMR area.
C. 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 2019 using the
growth in national ACS data for the FY 2022 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.
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\7\ The ACS is not conducted in the Pacific Islands (Guam,
Northern Mariana Islands and American Samoa) or the U.S. 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 2022 FMRs.
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HUD does not use ACS data to establish the base rent or recent-
mover factor where the FY 2021 FMRs are based on locally collected
survey data which are more recent than the 2019 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 2022 FMRs is from 2019, larger areas with valid one-year recent
mover data may not use other survey data collected before June 30, 2019
for the FY 2022 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 2022 FMRs,
there are 18 areas that are based on local ad hoc surveys:
<bullet> HUD uses survey data from 2017 to calculate the FMRs for
Hood River County, OR; Wasco County, OR; Hawaii County, HI; and the
Jonesboro, AR HMFA.
<bullet> HUD uses survey data from 2018 to calculate the FMRs for
Coos County, OR; Curry County, OR; and Douglas County, OR.
<bullet> HUD uses survey data from 2019 to calculate the FMRs for
Kauai County, HI; Eugene-Springfield, OR MSA; Portland, ME HUD Metro
FMR Area; Santa Maria-Santa Barbara, CA MSA; Worcester, MA HUD Metro
FMR Area; and Guam.
<bullet> HUD uses survey data from 2020 to calculate the FMRs for
Santa Cruz-Watsonville, CA MSA; Houston-The Woodlands-Sugar Land, TX
HUD Metro FMR Area, Knox County, ME; Lincoln County, ME; and Waldo
County, ME.
D. CPI Gross Rent Adjustment Factors
HUD updates the ACS-based ``as of'' 2019 rent through 2020 using
the annual change in gross rents measured through the Consumer Price
Index (CPI) from 2019 to 2020 (CPI update factor). HUD uses local CPI
data for FMR areas within Class A metropolitan areas covered by local
CPI data. HUD uses CPI data aggregated at the Census region level for
all Class B and C size metropolitan areas and non-metropolitan areas.
Additionally, HUD uses CPI data collected locally in Puerto Rico as the
basis for CPI adjustments from 2019 to 2020 for all Puerto Rico FMR
areas.
E. Trend Factor Forecasts
Following the application of the appropriate CPI update factor, HUD
trends the gross rent estimate from 2020 to FY 2022 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 is holding the type of model selected (NIM, LIM, or PTS) constant
for 5 years and will reassess the model selections during the
calculation of the FY 2025 FMRs. More details on the trend factor
forecasts are available in the June 5, 2019 Federal Register notice (84
FR 26141) and are available at <a href="https://www.federalregister.gov/documents/2019/06/05/2019-11763/proposed-changes-to-the-methodology-used-for-estimating-fair-market-rents">https://www.federalregister.gov/documents/2019/06/05/2019-11763/proposed-changes-to-the-methodology-used-for-estimating-fair-market-rents</a>.
E. Bedroom Rent Adjustments
HUD updates the bedroom ratios used in the calculation of FMRs
annually. The bedroom ratios used in the calculation of FY 2022 FMRs
are calculated from three five-year ACS data series (2013-2017, 2014-
2018, and 2015-2019). 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.
In the calculation of FY 2022 FMR estimates, HUD sets the bedroom
[[Page 43264]]
interval ranges as follows: Efficiency FMRs are constrained to fall
between 0.66 and 0.86 of the two-bedroom FMR; one-bedroom FMRs must be
between 0.76 and 0.88 of the two-bedroom FMR; three-bedroom FMRs (prior
to the adjustments described below) must be between 1.14 and 1.31 of
the two-bedroom FMR; and four-bedroom FMRs (again, prior to adjustment)
must be between 1.26 and 1.59 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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F. Minimum FMRs
All FMRs are subject to a state or national minimum. 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 2022 FMR Documentation
System, available at <a href="https://www.huduser.gov/portal/datasets/fmr.html#2022_query">https://www.huduser.gov/portal/datasets/fmr.html#2022_query</a>. 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 minimum rent. For FY 2022, the
national minimum rent is $757. The applicable minimum rent for a
particular area is the lower of the state or national minimum. Each
area's two-bedroom FMR must be no less than the applicable minimum
rent.
G. Limit on FMR Decreases
Within the Small Area FMR final rule published on November 16,
2016, HUD amended 24 CFR 888.113 to include a limit on the amount that
FMRs may annually decrease. The current year's FMRs resulting from the
application of the bedroom ratios, as discussed in section (E) above,
may be no less than 90 percent of the prior year's FMRs for units with
the same number of bedrooms. Accordingly, if the current year's FMRs
are less than 90 percent of the prior year's FMRs as calculated by the
above methodology, HUD sets the current year's FMRs equal to 90 percent
of the prior year's FMRs. For areas where use of Small Area FMRs in the
administration of their voucher programs is required, the FY 2022 Small
Area FMRs may be no less than 90 percent of the FY 2021 Small Area
FMRs. For all other metropolitan areas, the FY 2022 Small Area FMRs may
be no less than 90 percent of the greater of the FY 2021 metropolitan
area wide FMRs or the applicable FY 2021 Small Area FMR.
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
2022 FMR Documentation System (available at: <a href="https://www.huduser.gov/portal/datasets/fmr.html#2022_query">https://www.huduser.gov/portal/datasets/fmr.html#2022_query</a>).
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 are 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.\10\
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\10\ For example, for FY 2022 Small Area FMRs, HUD averages the
gross rents from 2017, 2018, and 2019 5-Year ACS estimates. The 2017
and 2018 gross rent estimates would be adjusted to 2019 dollars
using the metropolitan area's gross rent CPI adjustment factors.
---------------------------------------------------------------------------
For ZCTAs without usable gross rent data by bedroom size, 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 SAFMR rather
than a county proxy, where the weight is the length of the shared
boundary between the ZCTA and its neighbor. In small areas where the
neighboring ZCTA median gross rents are not statistically reliable, HUD
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
[[Page 43265]]
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 2022 Small Area FMRs, HUD has updated the rent ratios to use an
average of the rent ratios calculated from the 2013-2017, 2014-2018,
and 2015-2019 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. Request for Public Comments and FMR Reevaluations
HUD accepts public comments on the methods HUD uses to calculate FY
2022 FMRs and requests for reevaluation of FMRs for specific areas
prior to the effective date 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 2022 FMRs, as provided for under section 8(c)(1)(B)
of USHA, must follow the following procedures:
1. Prior to the effective date of this notice, PHAs or other
parties must submit reevaluation requests through <a href="https://www.regulations.gov/">https://www.regulations.gov/</a> or directly to HUD as described above. The area's
PHA or, in multi-jurisdictional areas, PHA(s) representing at least
half of the voucher tenants in the FMR area, must agree that the
reevaluation is necessary.
2. The requestor(s) must supply HUD with data more recent than the
2019 ACS data used in the calculation of the FY 2022 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) provide the best data. The data delivered
must be sufficient for HUD to calculate a 40th and 50th percentile two-
bedroom gross rent.\11\ Should this type of data not be available,
requestors may gather this information using the survey guidance
available at <a href="https://www.huduser.gov/portal/datasets/fmr/NoteRevisedAreaSurveyProcedures.pdf">https://www.huduser.gov/portal/datasets/fmr/NoteRevisedAreaSurveyProcedures.pdf</a> and <a href="https://www.huduser.gov/portal/datasets/fmr/PrinciplesforPHA-ConductedAreaRentSurveys.pdf">https://www.huduser.gov/portal/datasets/fmr/PrinciplesforPHA-ConductedAreaRentSurveys.pdf</a>.
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\11\ 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).
---------------------------------------------------------------------------
3. Areas where valid reevaluation requests are submitted must
continue to use FY 2021 FMRs whether the FY 2022 FMRs are lower or
higher than the FY 2021 FMRs. Following the comment period, HUD will
post a list, at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>, of
the areas requesting reevaluations and where FY 2021 FMRs remain in
effect.
4. PHAs or other parties must supply data for reevaluations to HUD
no later than Friday January 7, 2022. 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 in order 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 7, 2022 to reevaluate
the FMRs and following the reevaluation, will post revised FMRs in
April of 2022 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. On Monday
January 10, 2022, HUD will post at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a> a listing of the areas that requested FMR
reevaluations but did not deliver data and making the FY 2022 FMRs
effective in these areas. HUD will incorporate any data supporting a
change in FMRs supplied after January 7, 2022 into FY 2023 FMRs.
Questions on how to conduct FMR surveys may be addressed to the Program
Parameters and Research Division at <a href="/cdn-cgi/l/email-protection#a5d5d5d7c1e5cdd0c18bc2cad3"><span class="__cf_email__" data-cfemail="f383838197b39b8697dd949c85">[email protected]</span></a>.
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: <a href="https://www.huduser.gov/portal/datasets/fmr.html#survey_info">https://www.huduser.gov/portal/datasets/fmr.html#survey_info</a>. 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
[[Page 43266]]
requirements, but in no case will fewer than 100 eligible cases be
considered.
Calculating Small Area FMRs Using Rent Distributions
HUD has developed guidance on how to provide data-supported
comments on Small Area FMRs using HUD's special tabulations of the
distribution of gross rents by unit bedroom count for ZIP Code
Tabulation Areas. This guidance is available at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a> in the FY 2022 FMR section
under the ``Documents'' tab and should be used by interested parties in
commenting on whether or not the level of Small Area FMRs are too high
or too low (i.e., Small Area FMRs that are larger than the gross rent
necessary to make 40 percent of the units accessible for an individual
zip code or that are smaller than the gross rent necessary to make 40
percent of the units accessible for a given zip code). HUD will post
revised Small Area FMRs after confirming commenters' calculations.
VI. Environmental Impact
This Notice involves the establishment of FMR schedules, which do
not constitute a development decision affecting the physical condition
of specific project areas or building sites. Accordingly, under 24 CFR
50.19(c)(6), this Notice is categorically excluded from environmental
review under the National Environmental Policy Act of 1969 (42 U.S.C.
4321).
Accordingly, the Fair Market Rent Schedules, which will not be
codified in 24 CFR part 888, are available at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>.
Todd Richardson,
General 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 <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>.
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. 2021-16148 Filed 8-5-21; 8:45 am]
BILLING CODE 4210-67-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.