Notice2022-05040
Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs Fiscal Year 2022; Revised
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
March 10, 2022
Issuing agencies
Housing and Urban Development Department
Abstract
This notice updates the FY 2022 FMRs for 12 areas based on new survey data. Further, HUD responds to comments received on the FY 2022 FMRs.
Full Text
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<title>Federal Register, Volume 87 Issue 47 (Thursday, March 10, 2022)</title>
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[Federal Register Volume 87, Number 47 (Thursday, March 10, 2022)]
[Notices]
[Pages 13744-13747]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-05040]
[[Page 13744]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6277-N-02]
Fair Market Rents for the Housing Choice Voucher Program,
Moderate Rehabilitation Single Room Occupancy Program, and Other
Programs Fiscal Year 2022; Revised
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Revised Fiscal Year (FY) 2022 Fair Market Rents
(FMRs) and Discussion of Comments on FY 2022 FMRs.
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SUMMARY: This notice updates the FY 2022 FMRs for 12 areas based on new
survey data. Further, HUD responds to comments received on the FY 2022
FMRs.
DATES: Applicable Date: The revised FY 2022 FMRs for these 12 areas are
applicable on April 11, 2022.
FOR FURTHER INFORMATION CONTACT: Questions related to use of FMRs or
voucher payment standards should be directed to the respective local
HUD program staff. 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 (toll-free), email the Program
Parameters and Research Division via <a href="/cdn-cgi/l/email-protection#8bfbfbf9efcbe3feefa5ece4fd"><span class="__cf_email__" data-cfemail="6515151701250d10014b020a13">[email protected]</span></a>, or access the
information on the HUD USER website: <a href="http://www.huduser.gov/portal/datasets/fmr.html">http://www.huduser.gov/portal/datasets/fmr.html</a>.
SUPPLEMENTARY INFORMATION: On August 6, 2021, HUD published the FY 2022
FMRs, requested comments on the FY 2022 FMRs, and outlined procedures
for requesting a reevaluation of an area's FY 2022 FMRs (86 FR 43260).
This notice revises FY 2022 FMRs for 12 areas based on data provided to
HUD. In addition to providing revised FY 2022 FMRs, this notice also
provides responses to the public comments HUD received on the notice
referenced above.
I. Revised FY 2022 FMRs
The FMRs appearing in the following table supersede the use of the
FY 2021 FMRs for the twelve areas that provided statistically valid
data. The updated FY 2022 FMRs are based on surveys conducted by the
area public housing agencies (PHAs) and reflect the estimated 40th
percentile rent levels trended to Fiscal Year 2022.
The FMRs for the affected areas are revised as follows:
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FMR by number of bedrooms in unit
2022 Fair market rent area -------------------------------------------------------------------------------
0 BR 1 BR 2 BR 3 BR 4 BR
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Abilene, TX MSA................. $688 $732 $945 $1,288 $1,598
Asheville, NC HUD Metro FMR Area 1,188 1,209 1,378 1,879 2,359
Boston-Cambridge-Quincy, MA-NH 1,803 1,986 2,399 2,966 3,253
HUD Metro FMR Area.............
Bremerton-Silverdale, WA MSA.... 1,174 1,368 1,765 2,435 2,909
Iron County, UT................. 615 757 926 1,268 1,585
New York, NY HUD Metro FMR Area. 2,018 2,054 2,340 2,952 3,173
Portland, ME HUD Metro FMR Area. 1,143 1,330 1,721 2,195 2,689
Portland-Vancouver-Hillsboro, OR- 1,416 1,512 1,735 2,451 2,903
WA MSA.........................
San Diego-Carlsbad, CA MSA...... 1,573 1,739 2,232 3,099 3,795
Santa Maria-Santa Barbara, CA 1,875 2,157 2,516 3,316 3,790
MSA............................
Seattle-Bellevue, WA HUD Metro 1,674 1,739 2,044 2,796 3,285
FMR Area.......................
Transylvania County, NC......... 706 711 935 1,156 1,364
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HUD has published these revised FMR values on the HUD USER website
at: <a href="http://www.huduser.gov/portal/datasets/fmr.html">http://www.huduser.gov/portal/datasets/fmr.html</a>. HUD has also
updated the FY 2022 Small Area FMRs (SAFMRs) for metropolitan areas
with revised FMRs, which may be found at <a href="https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html">https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html</a>. HUD has also updated the 50th
percentile rents for all FMR areas, which are published at <a href="http://www.huduser.gov/portal/datasets/50per.html">http://www.huduser.gov/portal/datasets/50per.html</a>.
II. Public Comments on FY 2021 FMRs
This summary of comments addresses the most significant concerns
raised by the commenters. Commenters are identified in the summary by
the last four numbers of the electronic rulemaking number used at
<a href="http://www.regulations.gov">www.regulations.gov</a>.
The public comment period for the August 6, 2021, notice closed on
September 30, 2021, and HUD received 99 distinct comments relating to
the notice. The comments were from housing authorities, community
development agencies, homeless shelters, healthcare providers, social
workers, counselors, and nonprofit social service providers.
Concerns Regarding the Accuracy of the Current FMR Methodology
Commenters noted concerns with the methodology used to calculate
the FMRs in light of rapid changes in housing costs. One commenter
stated that the current FMR calculations are inadequate for rural
counties because it is often difficult to gather valid data in rural
counties, and the use of contiguous county data may not accurately
reflect the rates present within the jurisdiction and suggested that
HUD should develop a methodology that would accurately reflect the FMRs
for rural areas. Another commenter noted that HUD's use of the 40th
percentile in calculating FMR rates limits the available housing to
individuals in the voucher plans.
Other commenters stated that the use of the 2019 American Community
Survey (ACS) data does not adequately represent a tightening rental
market, even if the survey was an accurate representation of the FMR in
previous years. Commenters stated that using current local data from
reliable sources would more accurately reflect the changes in the
rental market since 2019. One commenter suggested that HUD use
commercial data to calculate the FMRs, as the data may be more up-to-
date and accurately reflect the individual markets and would ensure
that the gross rent data used in the calculation is accurate to current
markets, which the commenter stated would prove more effective than
HUD's previous research into the trend factor. Another commenter
supported HUD's previously announced intent to explore alternative
methodologies for FMR calculation. One commenter supported their
jurisdiction's FMR value.
HUD Response: HUD's current regulations require it to set the FMR
at the 40th percentile rent paid by recent movers. Assessing the
accuracy of FMRs is difficult because at any given time the true 40th
percentile rent paid by recent
[[Page 13745]]
movers is unknown. Commercial sources of rent data do not provide an
estimate of the 40th percentile rent paid by recent movers, and what
data they do provide are often not based on the entirety of the rental
market, such as by building type or by geographic area. Survey-based
estimates of rent are subject to sampling and non-sampling error. For
the Voucher program, HUD's policy addresses these sources of
uncertainty by allowing the payment standard to be set from 90-110
percent of the FMR, as well as above 110 percent of the FMR through the
use of exception payment standards. HUD has provided for expedited
waivers of payment standard regulation per PIH Notice 2021-34. HUD
remains committed to continually assessing its FMR calculation
methodology to attempt to deal with its inherent challenges, through
both in-house research and working with external research partners.
Small Area FMR Determinations
A commenter stated that the Small Area Fair Market Rent (SAFMR)
calculations do not adequately represent the true market rent, citing
as an example a significant decrease in a county's SAFMR in one ZIP
Code despite being a high opportunity area. The commenter noted that
the 2-bedroom SAFMR for the ZIP Code in question was nearly $1000 below
surrounding ZIP Codes, while other ZIP Codes in their jurisdiction more
accurately reflect existing local commercial data on current market
prices. The commenter also noted that the decreased SAFMR for a one-
bedroom in this ZIP Code is $200 less than the fair market rent
established by a HUD validated rent comparability study of the same
area from 2019. The commenter stated that a decrease in the SAFMR would
defeat the intent of calculating fair market rents for specific ZIP
Codes.
A commenter opposed allowing certain jurisdictions to opt out or be
excluded from SAFMR mandates. Commenters noted that the use of excepted
payment standards, rather than calculating SAFMR for the areas, leaves
PHAs without the resources and flexibility to adjust to increasing
rents in the jurisdictions, reducing the availability of affordable
housing options to voucher holders. Commenters stated that voucher
holders are being pushed into low-rent areas in jurisdiction that have
received an exception payment standard, and that residents are not
receiving reasonable accommodations because reasonable accommodations
are based on the metro area's FMR, not the exceptionally high local
rental rates that justified the excepted payment standards, and
therefore do not provide any value.
HUD Response: Calculating SAFMRs poses the same challenges as
metropolitan-level FMRs, with the added difficulty of greater
uncertainty found in ZIP Code-level rent estimates due to their smaller
size. HUD will continue to carefully consider how any future changes to
its FMR calculation affect Small Area FMRs, as well as explore any
SAFMR-specific methodology changes.
HUD remains committed to evaluating the operation of the Housing
Choice Voucher program in areas that are required to set payment
standards based on Small Area FMRs.
Concerns Regarding the FMR Reevaluation Process
Commenters raised concerns about the current reevaluation process
for FMRs. Commenters noted that the reevaluation surveys require a
significant amount of time and funding and stated that HUD should
provide funding for PHAs who elect to provide local rent surveys. A
commenter suggested that address-based mail surveys could be conducted
at a lower cost than HUD anticipates, and that a yearly allocation of
$5,000 to each PHA would allow PHAs to conduct the necessary
reevaluation surveys.
One commenter noted that rural PHAs are often unable to meet the
regulatory requirements for reevaluation surveys. The commenter noted
that although small, nonmetro counties may conduct surveys with one or
more contiguous nonmetro county to obtain a sufficient number of
results, this methodology does not provide many options to rural
counties that face lower FMRs than neighboring counties. Furthermore,
this commenter noted that rural PHAs often do not have the necessary
capacity to conduct an in-house survey or the funds to hire outside
consultants. The commenter noted their previous request for
reevaluation in fiscal year 2021 cost the PHA over $27,000 and was
ultimately rejected by HUD as they only received 13 valid responses in
a county of 34,000 people. As a result, this commenter stated that FMRs
may continue to be inaccurate even if the PHA attempts to request
reevaluation if the jurisdiction's PHA is unable to conduct a valid
survey.
HUD Response: HUD is committed to working with PHAs who are
interested in conducting local rental market surveys, and has accepted
surveys and issued revised FMRs for small non-metropolitan counties
numerous times. Surveys and data collection are often inherently
expensive, and their costs are beyond HUD's control. In addition, HUD's
ability to provide funds to PHAs for local rental market surveys is
dependent on the availability of funds and their authorized uses
specified in annual appropriations statutes.
Requests for Additional Flexibilities in PHA Implementation
A commenter stated that HUD has additional authority under the
CARES Act to implement a ``hold harmless policy'' for FMRs in areas
that experienced significant FMR reductions. This waiver would be in
light of the additional challenges created by the COVID-19 pandemic and
would be limited to PHAs that experienced a significant FMR decrease
that could not be accounted for through the existing flexibilities in
payment standards. The commenter noted that the waiver would be aimed
at increasing depressed voucher utilization rates.
Another commenter suggested that increased flexibilities for
payment standards should be implemented through permanent statutory
changes. This would include allowing PHAs to utilize payment standards
between 80 and 120 percent of the FMR, with up to 130 percent available
as a reasonable accommodation for a person with a disability and would
ultimately reduce the burden of inaccurate FMRs for PHAs.
Another commenter requested authorization to increase their
jurisdiction's payment standards to 120 percent or greater for all
SAFMRs in their jurisdiction. The commenter also requested that all ZIP
Codes be grouped under one payment standard to reduce administrative
burdens on the PHA. The commenter stated that this flexibility would
provide additional access to safe housing in high opportunity areas for
voucher holders.
HUD Response: Declines in FMR are limited by regulation to 10
percent. Additionally, at the PHA's discretion, they may ``hold
harmless'' any in-place household from a payment standard reduction.
Requests for exception payment standards should be made to local HUD
Field Offices. PHAs operating under Small Area FMRs may group ZIP Codes
into one payment standard area as long as the combined payment standard
is within 90-110 percent of the Small Area FMR.
The Ability of PHAs To Respond to Rent Increases and FMR Changes
Through the Use of Payment Standards
Commenters noted that PHAs can adjust payment standards within
[[Page 13746]]
statutory limits to provide voucher holders access to units above the
FMRs, thus increasing voucher utilization. However, many commenters
stated that their jurisdictions were already using the statutory
maximum payment standard of 110 percent but continue to face challenges
in finding units for voucher holders, with PHAs continuing to
experience decreasing success rates. For example, one commenter noted
that available units in their jurisdiction are listed at 127 percent to
175 percent of the proposed FMR, beyond the statutory flexibilities
that PHAs have without HUD approval. Another commenter noted that a
lack of available units in their jurisdiction within the statutory
payment standard has caused some one-bedroom voucher holders to rent
single room units within the payment standards instead.
Commenters also noted that using payment standards to adjust for
insufficient FMRs is limited by its effect on individuals with fixed
incomes or the PHA's ability to provide reasonable accommodations. One
commenter noted that adjusting their jurisdiction's payment standards
in response to an FMR decrease would greatly increase the rent burden
for residents that depend on fixed Social Security or SSI Payments, as
cost of living increases in those programs are much lower than the rise
in rent. Other commenters noted that the use of excepted payment
standards for high-rent areas also limits the availability of
reasonable accommodations for individuals with disabilities, and
accommodations may actually lower the value of vouchers in some cases
if the FMR is insufficient for the area.
HUD Response: PHAs have a variety of options beyond setting payment
standards at 110 percent of the FMR. PHAs may pursue exception payment
standards above 110 percent of FMR, including through the expedited
waiver process described in PIH Notice 2021-34. PHAs may apply for
success rate payment standards, which allow for setting payment
standards using the 50th percentile estimates of rent. PHAs may, with
HUD approval, establish an exception payment standard of more than 120
percent of the published FMR if required as a reasonable accommodation
in accordance with 24 CFR part 8 for a family that includes a person
with a disability after approval from HUD. Finally, PHAs may adopt
Small Area FMRs (or use Small Area FMRs as the basis for exception
payment standards), which may allow for payment standards of up to 160
percent of the metropolitan FMR in high-rent ZIP Codes.
Market Factors Affecting the Supply of Units at FMR Levels
Commenters noted that the current housing market is competitive.
Commenters stated that the rental market for voucher holders is already
somewhat limited by the 40th percentile limitations on the program, and
a lack of available units for rent has driven rising rent prices.
Commenters noted that units are being converted to short term rentals,
affected by the impact of natural disasters, or utilized by new
residents or temporary college students. This lack of available units
can be further complicated by the needs of voucher holders, as a
commenter noted necessary features can drive rent prices above the
FMRs. Even when the vouchers are sufficient to meet rent, a commenter
stated that landlords may choose to rent the limited supply to
residents with the best credit and rental histories, further increasing
competition within the market.
Commenters also noted that increasing rents have limited voucher
holders' housing options due to insufficient FMR rates. When FMR rates
are below the current market rates, voucher holders face significant
difficulty in finding units within the allowed range. A commenter noted
that rent has increased in their jurisdiction by an average of 9.7
percent, while another noted that rent has been consistently rising in
the three years since the 2019 ACS survey. A commenter noted that
increases in rent prices are not being met by increased wages, while
another commenter noted that their jurisdictions have experienced rapid
job growth in the area, leading to increased demand and higher prices.
One commenter noted that the FMRs in their jurisdiction leave little to
no room for the utility allowance, limiting the available options
further.
Other commenters stated that the recent end of rent moratoriums
imposed by states in response to COVID-19 will result in rapidly
increasing rents. Commenters noted that the FMR methodology may not
fully capture these recent changes in rent prices, leaving voucher
holders with reduced options at the FMR level.
Commenters also noted that landlords are unwilling to accept
vouchers as the FMRs are below the rates they can receive on the open
market, which further reduces voucher holders' options and drives up
competition for the remaining units. Commenters noted that landlords'
costs of operation, including taxes, insurance, and repair prices, are
increasing, forcing landlords to prioritize the higher rates available
on the open market and reducing the number of single-family rental
units available to voucher holders. Another commenter stated that while
they would be interested in accepting voucher holders, the current
market rates in their jurisdiction are between 52 and 123 percent
higher than the FMR. Furthermore, a commenter stated that a decrease in
FMR for their jurisdiction could harm their existing efforts to address
landlord concerns, which could result in landlords leaving the program
before PHAs have the chance to resolve previously existing concerns.
HUD Response: As noted earlier, HUD is committed to continuously
evaluating its FMR calculation methodology, including considering the
implications for areas with rapidly rising rents. HUD recognizes the
interaction of the level of FMR on landlords' decisions to accept
Housing Choice Vouchers; at the same time, research shows that a
variety of factors influence landlord participation in the program.
HUD's setting the FMR at the 40th percentile of rents means that by
definition a large portion of rental units in any given area will not
be available to voucher holders, reflecting HUD's desire to provide a
modest unit for low-income families and maximize the number of families
served by HUD's limited funds.
Insufficient or Decreasing FMRs Impose Hardships
Commenters noted that FMRs that decrease or fail to keep up with
market rents would result in significant hardships for families and
individuals as the insufficient value would limit the available units
for voucher holders, would require great effort to find units even from
voucher holders who are able to find units, and would limit the ability
of voucher holders to enter new jurisdictions. Commenters noted that
voucher holders face competition from residents with better credit and
rental history, require accommodations, or face additional financial
pressure and burdens from market inflation and disasters, such as the
COVID-19 pandemic.
Commenters noted that PHAs are facing decreasing success rates with
vouchers at the current FMR rates and that additional decreases or gaps
between the FMR and market rates could further depress success rates,
leaving more voucher holders homeless. Commenters stated that landlords
are no longer accepting vouchers and are choosing not to renew voucher
holders' leases. One commenter also noted that additional COVID-19
response fundings allocated to PHAs may remain unused if PHAs continue
to face decreasing
[[Page 13747]]
success rates from below-market FMRs. One commenter further noted that
this has led to almost a 10 percent increase in rent burdened
households since 2019 and has led to PHAs being unable to realize their
full administrative fee potential.
Commenters also noted that limited availability of units or
insufficient FMRs can put a strain on homeless shelters and nonprofits,
as voucher holders may rely on these services when they face difficulty
using their vouchers. Some commenters also expressed concern that PHAs
have already raised payment standards to the statutory maximum but
remain unable to meet market rates due to the FMRs. Furthermore, many
commenters stated that decreasing FMRs will increase the burden on
voucher holders and PHAs and could lead to increased housing
instability or homelessness. One commenter noted that additional
vouchers issued under the CARES Act to homeless populations are facing
lower success rates due to a decrease in single-bedroom FMRs for their
jurisdiction, as the target population of the CARES Act vouchers
primarily needs one-bedroom units. As a result, many commenters called
for FMRs to increase this year.
HUD Response: As noted elsewhere, PHAs are not required to reduce
the payment standard for in-place tenants in response to declining
FMRs, and PHAs with declining voucher success rates have a variety of
options for setting higher payment standards. HUD acknowledges the many
hardships that low-income household face, as well as challenges faced
by PHAs and other partners in working with HUD to accomplish its
mission. Having an accurate FMR is often critical to helping address
these challenges, and as previously discussed, HUD is committed to its
ongoing evaluation of its FMR calculation. At the same time, the FMR
itself cannot solve all the problems associated with keeping low-income
families housed and preventing homelessness, particularly those arising
from a low supply of housing in general.
The Impact of COVID-19 and Other Disasters May Not Be Accurately
Reflected in the FMRs
Commenters noted that the COVID-19 pandemic has greatly affected
the housing market, leading to potentially inaccurate FMRs for Fiscal
Year 2022. Commenters stated that the pandemic has worsened an existing
housing crisis by increasing rents and decreasing affordable housing
supply, leading to rapidly increasing rental prices. One commenter
stated that recent data shows average rents have increased 9.4 percent
on average since March 2020, with anecdotal evidence pointing to more
drastic increases in recent months. Commenters also stated that the
nature and impact of the pandemic requires additional steps to keep
people in their homes, while PHAs need additional support and resources
to respond to additional burdens imposed by the pandemic. Some
commenters noted that the expiration of state rent moratoriums will
artificially affect the calculation of FMRs, as landlords will begin
raising rents after the moratoriums expire. This would result in
voucher holders facing difficulty in finding units within the FMRs
calculated prior to the end of the moratorium.
Other commenters noted that the COVID-19 pandemic has driven
population changes in certain areas, as higher-income new residents
purchase units that would otherwise be available as rental units. This
decrease in the supply of rental units has driven up rent prices, which
the FMR methodology may not be able to account for without updated
local data.
Commenters also noted that other disasters have contributed to
limited housing supply, such as floods and hurricanes. These disasters
can limit the housing supply through permanent or temporary damage to
units, ultimately driving prices up due to both increased demand from
displaced residents and decreased supply. For example, one commenter
noted that flooding in their jurisdiction affected over 700 homes,
increasing an existing deficit in affordable units.
HUD Response: The COVID-19 pandemic has caused widespread
volatility in the U.S. economy, including in many of the nation's
rental markets. Similarly, natural disasters often cause major
consequences to housing markets of the areas they affect. In
calculating FMRs, HUD is limited by the availability of data and its
requirement to calculate FMRs using the current methodology. HUD is
committed to evaluating the ongoing impacts of these disasters and
adjusting its policies as needed to meet its mission.
Requests for Reevaluations
Commenters submitted valid requests for reevaluation for 28 FMR
areas, as well as 10 requests that did not meet HUD requirements.
Commenters requesting or in support of a reevaluation for the FY 2022
FMRs stated that the proposed FMRs were not an accurate representation
of their area's rental market. Many commenters stated that they would
undertake a local rent survey as part of their request for
reevaluation. Other commenters stated that prior rent surveys are no
longer accurate predictors of rental prices in the market and that new
data would more accurately reflect the current market. One commenter
stated they did not have the resources to conduct a formal rent survey
in line with HUD's requirements and submitted other data points
instead. One commenter requested a reevaluation without any discussion
of the market conditions in their jurisdiction or a discussion of rent
survey data.
HUD Response: HUD published the list of areas requesting
reevaluation on October 20, 2021, and the list of areas without a
submission of rental market data on January 10, 2022. This notice
provides the revised FMRs for areas that submitted survey data and
concludes the FY 2022 FMR re-evaluation process.
III. Environmental Impact
This Notice involves establishment of a rate and does 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).
Todd M. Richardson,
General Deputy Assistant Secretary, Office of Policy Development and
Research.
[FR Doc. 2022-05040 Filed 3-9-22; 8:45 am]
BILLING CODE 4210-67-P
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