[Federal Register Volume 86, Number 52 (Friday, March 19, 2021)]
[Notices]
[Pages 14953-14955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05782]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6224-N-02]
Fair Market Rents for the Housing Choice Voucher Program,
Moderate Rehabilitation Single Room Occupancy Program, and Other
Programs
Fiscal Year 2021; Revised
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice of Revised Fiscal Year (FY) 2021 Fair Market Rents
(FMRs) and Discussion of Comments on FY 2021 FMRs.
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SUMMARY: This notice updates the FY 2021 FMRs for four areas based on
new survey data: Houston-The Woodlands-Sugar Land, TX HUD Metro FMR
Area (HMFA), Knox County, ME, Lincoln County, ME, and Waldo County, ME.
Further, HUD responds to comments received on the FY 2021 FMRs.
DATES: The revised FY 2021 FMRs for these four areas are effective on
April 1, 2021.
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) or access the information on the HUD USER
website: https://www.huduser.gov/portal/datasets/fmr.html. Individuals
with speech or hearing impairments may access this number through TTY
by calling the Federal Relay Service at 800-877-8339 (toll-free
number). The FY 2021 EXCEL files have been updated to include these
revised FMRs and this data is included in our query system by FMR area.
For informational purposes, the 50th percentile rents for all FMR areas
are updated and published at https://www.huduser.gov/portal/datasets/50per.html.
SUPPLEMENTARY INFORMATION: On August 14, 2020 HUD published the FY 2021
FMRs, requesting comments on the FY 2021 FMRs, and outlining procedures
for requesting a reevaluation of an area's FY 2021 FMRs (85 FR 49666).
This notice revises FY 2021 FMRs for four areas based on data provided
to HUD. In addition to providing revised FY 2021 FMRs, this notice also
provides responses to the public comments HUD received on the notice
referenced above.
I. Revised FY 2021 FMRs
The FMRs appearing in the following table supersede the use of the
FY 2020 FMRs for the four areas that provided statistically valid data.
The updated FY 2021 FMRs are based on surveys conducted by the area
public housing agencies (PHAs) and reflect the estimated 40th
percentile rent levels trended to April 1, 2021.
Stamford-Norwalk, CT, CT HMFA and Transylvania County, NC also
provided survey data and have continued to use FY 2020 FMRs while
survey data was evaluated. However, the survey data provided by these
areas could not be used to revise their FY 2021 FMRs. Effective April
1, 2021, the FMRs for these two areas are the FY 2021 FMRs as
originally calculated.
The FMRs for the affected area are revised as follows:
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FMR by number of bedrooms in unit
2021 Fair Market Rent Area -------------------------------------------------------------------------------
0 BR 1 BR 2 BR 3 BR 4 BR
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Houston-The Woodlands-Sugar $908 $983 $1,176 $1,576 $2,010
Land, TX HUD Metro FMR Area....
Knox County, ME................. 771 815 967 1,329 1,365
Lincoln County, ME.............. 797 802 1,021 1,270 1,642
Waldo County, ME................ 836 841 1,001 1,251 1,712
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The FY 2021 FMRs are amended and are available on the HUD USER
website: https://www.huduser.gov/portal/datasets/fmr.html. The FY 2021
Small Area FMRs (SAFMRs) for metropolitan areas with revised FMRs have
also been updated commensurate with the metropolitan area revisions and
may be found at https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html.
II. Public Comments on FY 2021 FMRs
A total of 13 comments were received and posted on regulations.gov,
https://www.regulations.gov/document?D=HUD-2020-0055-0001. Of the 13
comments received, 11 were reevaluation requests for nine FMR areas.
HUD granted requests for reevaluation for the nine FMR areas. Three
areas elected to conduct a joint survey of the combined three-county
area. See: https://www.huduser.gov/portal/datasets/fmr/fmr2021/FY-2021-Reevaluation-areas.pdf.
Public housing agencies in the nine areas where HUD agreed to
reevaluate the FY 2021 FMRs continued to use FY 2020 FMRs during the
reevaluation period as mandated by the Housing Opportunities Through
Modernization Act. Six of these nine areas have continued to use FY
2020 FMRs since January 11, 2020 because they either provided valid
survey data or requested additional time to collect survey results
because of mail delays attributed to the COVID-19 pandemic. FY 2021
FMRs became effective on January 11, 2021 for the three areas where
local survey data was not submitted by the January 8, 2021 cut-off
date. HUD published a list of the three FMR areas not providing data at
the following link: https://www.huduser.gov/portal/datasets/fmr/fmr2021/FY-2021-FMR-Areas-without-Reevaluation-Data.pdf. This notice
[[Page 14954]]
provides the reevaluated FY 2021 FMRs for the four areas requesting
reevaluation that provided valid survey data and requires the use the
FY 2021 FMRs as originally published for two areas that requested
reevaluation but were unable to provide valid survey data.
General Comments
Most of the comments not related to specific areas requesting a
reevaluation discussed inaccuracies of the FMRs and a need for more
current and local data. These comments and their responses are
discussed in greater detail below.
Comment: Several commenters suggested that HUD should provide
additional funding to PHAs who undertake local area surveys. One
comment noted that the cost for address-based mail surveys is in the
$5,000 to $10,000 range.
HUD Response: HUD reminds PHAs that paying for local area rent
surveys is an eligible expense to be paid from on-going administrative
fees or their administrative fee reserve account. The estimate of
$5,000 to $10,000 per survey is too low, based on the 2012 survey study
of small metropolitan areas and is much higher based on recent
experiences of these small metropolitan areas and rural counties. The
estimate was never appropriate for rental markets in large and complex
metropolitan FMR areas. In general, the cost of the survey increases
with the size of the FMR area, the size of the rental market and the
availability and cost of good rental market lists.
Comment: HUD's reliance on setting FMRs at the 40th percentile is
flawed because this only works if there is a normal distribution of
rental units. Sub-standard housing should be removed from the
distribution when calculating a 40th percentile rent.
HUD Response: The purpose of using a percentile instead of an
average is to account for abnormal distributions. HUD removes responses
from the American Community Survey (ACS) when the respondent reports
the unit does not have a complete kitchen or complete plumbing to
address sub-standard units. In addition, HUD determines a ``public
housing cut-off rent'' to eliminate the bottom end of the distribution
of rental units from the ACS before the 40th percentile rent is
calculated as a proxy to remove units with low rents that are likely in
non-market transactions (e.g., rented from relatives), subsidized (ACS
does not ask whether households receive rental subsidies), or are
otherwise inadequate in some manner not measured by the ACS. HUD uses a
consistent method to calculate this distribution cut off for each HUD
region. HUD continues to explore alternatives for removing assisted
units from the ACS responses before the 40th percentile rent is
calculated for the purpose of calculating FMRs.
Comment: HUD needs to conduct its own analysis or research to
address market anomalies and account for erratic fluctuations in FMRs
between years and by bedroom size.
HUD Response: HUD did conduct research into different methods of
calculating the trend factor and implemented metropolitan and regional
forecasting into the calculation of the trend factor beginning with the
FY 2020 FMRs.
To correct erratic fluctuations in FMRs year over year, HUD has
implemented steps to attenuate the fluctuations found in the annually
updated survey data. HUD has made methodology changes that call for
averaging bedroom ratios over three years of data and averaging base
rents over the same period when the data is limited. The statutory
directive to use the most recent data available compels HUD to update
the data behind each area's FMR calculation when new data is released.
Consequently, FMRs will change from year to year in accordance with
changes in the underlying survey data. HUD emphasizes that the primary
data source for FMRs is a survey (ACS) and while surveyors do their
best to select unbiased random samples of the population, sampling
error persists within survey statistics.
In addition, HUD has awarded three research grants, and each will
evaluate potential methodology changes for the calculation of FMRs in
areas with rapidly rising rents. The proposed methodology changes
resulting from these three studies will be presented in a Federal
Register Notice of material change in methodology that will be
published for comment in early- to mid-2022.
HUD reminds agencies that payment standard regulations allow for a
payment standard that is between 90 percent and 110 percent of the FMR.
Therefore, PHAs may in many cases adopt payment standards that have
``smoother'' changes over time than the FMRs.
Comment: Along with inadequate administrative fees, inadequate FMRs
result in voucher underutilization nationwide. HUD's methodology for
setting FMRs also often results in a reduction of choice and in many
places relegates voucher holders to the poorest areas.
HUD Response: HUD's methodology for calculating FMRs has been
revised to improve choice in metropolitan areas through the use of
Small Area FMRs and in all FMR areas by the use of local or regional
trend factors as opposed to one national trend factor
Comment: HUD should create new administrative mechanisms to cope
with inaccurate FMRs, specifically the current flexibilities should be
expanded.
HUD Response: HUD does have procedures that provide flexibility in
the voucher program that allow PHAs to keep payment standards constant
when FMRs decline. For areas where rents increase more rapidly than
what is captured by the most recent data available to HUD in
calculating FMRs, the department provides a mechanism for more recent
data collected in a survey to be supplied to HUD. Additionally, HUD has
eased the exception payment standard regulations in metropolitan areas
to allow for the use of up to 110 percent of the Small Area FMR as an
exception payment standard with no approval needed from HUD. The only
requirement is for PHAs to notify HUD of their use of Small Area FMRs
in this manner. New administrative procedures would have to be
developed by the programs other than the Housing Choice Voucher program
to allow for use of payment standards to provide additional
flexibility. Each program required to use FMRs without similar
flexibility to payment standards would have to amend its regulations to
allow for flexible application of FMRs if statute permits.
Comment: HUD should continue to refine its methodology for
calculating FMRs. A high priority should be placed on improving the
data that is used to derive more accurate FMRs. HUD should explore
``scraping'' local rent data and use more timely data when calculating
FMRs
HUD Response: HUD is looking at incorporating scraped rental data
and other more recent data in its current studies of improving FMR
calculations in areas of rapidly rising rents.
Comment: HUD should use the 2017 American Community Survey data to
compare the gross rent by FMR area to the FY 2017 FMRs to determine
accuracy of FMRs and report back to the industry.
HUD Response: HUD undertook an analysis such as this and reported
the results in a recent report to Congress. Please see the section
labeled ``Accuracy of FMRs'' in HUD's report ``Proposals To Update the
Fair Market Rent Formula'', page 3, available at https://
www.huduser.gov/portal/sites/default/
[[Page 14955]]
files/pdf/Proposals-To-Update-the-Fair-Market-Rent-Formula.pdf. Between
2009 and 2016 for areas with sufficiently large ACS recent mover rental
unit samples, the ACS-measured 40th percentile gross rents were within
90 to 110 percent of the published FMRs in 83.4 to 94.3 percent of
cases. These results do not adjust for more recent improvements in the
FMR estimation method.
III. Environmental Impact
This Notice involves a statutorily required establishment of fair
market rent schedules 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. 2021-05782 Filed 3-18-21; 8:45 am]
BILLING CODE 4210-67-P