80 FR 36832 - HUD Administrative Fee Formula-Solicitation of Comment

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 80, Issue 123 (June 26, 2015)

Page Range		36832-36837
FR Document		2015-15765

Housing Choice Voucher program administrative fees are currently calculated based on the number of vouchers under lease and a percentage of the 1993 or 1994 local Fair Market Rent. In 2010, HUD contracted Abt Associates to conduct the Housing Choice Voucher Program Administrative Fee Study to measure the actual costs of operating high- performing and efficient Housing Choice Voucher programs and to develop an updated administrative fee formula. The results of the study were released on April 8, 2015. In this notice, HUD seeks public comment on the variables identified by the study as impacting administrative fee costs (including specific questions raised in this preamble), how HUD might use these study findings to develop a new administrative fee formula, and any other issues that may arise with the development and implementation of a new administrative fee formula.

Federal Register, Volume 80 Issue 123 (Friday, June 26, 2015)

[Federal Register Volume 80, Number 123 (Friday, June 26, 2015)]
[Notices]
[Pages 36832-36837]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-15765]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5874-N-01]

HUD Administrative Fee Formula--Solicitation of Comment

AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.

ACTION: Notice; Solicitation of comment.

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SUMMARY: Housing Choice Voucher program administrative fees are
currently calculated based on the number of vouchers under lease and a
percentage of the 1993 or 1994 local Fair Market Rent. In 2010, HUD
contracted Abt Associates to conduct the Housing Choice Voucher Program
Administrative Fee Study to measure the actual costs of operating high-
performing and efficient Housing Choice Voucher programs and to develop
an updated administrative fee formula. The results of the study were
released on April 8, 2015. In this notice, HUD seeks public comment on
the variables identified by the study as impacting administrative fee
costs (including specific questions raised in this preamble), how HUD
might use these study findings to develop a new administrative fee
formula, and any other issues that may arise with the development and
implementation of a new administrative fee formula.

DATES: Comment Due Date: July 27, 2015.

ADDRESSES: Interested persons are invited to submit comments regarding
this notice to the Regulations Division, Office of General Counsel,
Department of Housing and Urban Development, 451 7th Street SW., Room
10276, Washington, DC 20410-0500. Communications must refer to the
above docket number and title. There are two methods for submitting
public comments. All submissions must refer to the above docket number
and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to

[[Page 36833]]

make them immediately available to the public. Comments submitted
electronically through the www.regulations.gov Web site can be viewed
by other commenters and interested members of the public. Commenters
should follow the instructions provided on that site to submit comments
electronically.

Note: To receive consideration as public comments, comments 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. Facsimile (fax) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an appointment to review the public comments must be
scheduled in advance by calling the Regulations Division at 202-708-
3055 (this is not a toll-free number). Individuals with speech or
hearing impairments may access this number via TTY by calling the
Federal Relay Service at 1-800-877-8339 (this is a toll-free number).
Copies of all comments submitted are available for inspection and
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Todd Richardson, Associate Deputy
Assistant Secretary for Policy Development, Office of Policy
Development and Research, Department of Housing and Urban Development,
451 7th Street SW., Room 8106, Washington, DC 20410; telephone number
202-402-5706 (this is not a toll-free number). Persons with hearing or
speech impairments may access this number by calling the Federal Relay
Service at 800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

Current Housing Choice Voucher Administrative Fee

HUD provides funding to over 2,300 public housing agencies (PHAs)
to administer more than 2.1 million Housing Choice Vouchers (HCV)
nationwide, using a formula that was established by statute in 1998 to
apply from 1999 forward, and which currently uses a calculation based
primarily on the formulation of Fair Market Rents (FMR) from Fiscal
Years 1993 or 1994. Section 8(q)(1)(B) of the United States Housing Act
of 1937 (1937 Act), which was established in its current form in Title
V, Section 547 of the Quality Housing and Work Responsibility Act,
Public Law 105-276 (approved October 21, 1998) provides how the
administrative fee from 1999 and thereafter is calculated.
Additionally, the 1937 Act, in section 8(q)(1)(C), provides HUD with
broad authority to establish the administrative fee for years
subsequent to 1999 based on changes in wage data or other objectively
measurable data that reflect the costs of administering the program, as
determined by the Secretary.
The Fiscal Year 1999 calculation is provided in section 8(q)(1)(B)
of the 1937 Act, 42 U.S.C. 1437f(q)(1)(B), and provides that the
monthly fee for which a dwelling unit is covered by an assistance
contract shall be, for a PHA with 600 or fewer units, 7.65 percent of
the base amount. For a PHA with more than 600 units, the fee is 7.65
percent of the base amount for the first 600 units, and 7.0 percent of
the base amount for additional units above 600. The base amount is
calculated as the higher of the Fiscal Year 1993 FMR for a 2 bedroom
existing dwelling unit in the market area, or the amount that is the
lesser of the Fiscal Year 1994 FMR for the same type of unit or 103.5
percent of the 1993 FMR for the same type of unit. This amount is
adjusted for wage inflation from 1993 or 1994 to the current year.
For years after 1999, section 8(q)(1)(C) of the 1937 Act, 42 U.S.C.
1437f(q)(1)(C), provides that HUD shall publish a notice setting the
administrative fee for each geographic area in the Federal Register.
The fee is to be based on changes in wage data or other objectively
verifiable data that reflect the cost of administering the program, as
determined by HUD.\1\
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\1\ It is important to note that the Consolidated and Further
Continuing Appropriations Act of 2015 (Pub. L. 113-235) provides
that administrative fees for the calendar year 2015 funding cycle
will be calculated as provided for by section 8(q) of the 1937 Act
and related appropriation act provisions (notably section 202 of
Pub. L. 104-204), as in effect immediately before the enactment of
the Quality Housing and Work Responsibility Act of 1998 (QHWRA)
(Pub. L. 105-276). Similar language has appeared in HUD's
appropriations acts since 1999. Although current and recent
appropriations act language requires administrative fees to be
calculated based on section 8(q) of the 1937 Act and related
appropriation act provisions as in effect immediately before the
enactment of QHWRA, the relevant statutory language (except for the
percentages in the base amount) is the same as the current section
8(q) provisions of the 1937 Act.
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Despite having the statutory authority in 42 U.S.C. 1437f(q)(1)(C)
to update the administrative fee in fiscal years subsequent to 1999
based on changes in wage data or other objectively measurable data that
reflect the costs of administering the program, HUD has not yet updated
the administrative fee formula.

Housing Choice Voucher (HCV) Program Administrative Fee Study

HUD initiated, and Congress funded, the HCV Program Administrative
Fee Study to determine how much it costs to effectively and efficiently
administer the Housing Choice Voucher program and how PHA, housing
market, and HCV program characteristics affect those administrative
costs.\2\ The study measured time use over an 8 week period at 60 PHAs
across the country. For 56 of the 60 PHAs, time measurement was
conducted on a rolling basis commencing in January 2013 and ending in
April 2014. Four of the 60 PHAs served as pretest sites and were
measured in 2012. The study was completed and published on April 8
2015.\3\ The study represents the most rigorous and thorough
examination of the cost of administering a high-performing and
efficient HCV program and provides the basis for calculating a fee
formula based on actual PHA experience across a wide range of PHAs. The
HCV Program Administrative Fee Study, which relied on a rigorous
methodology, a range of PHA sizes and locations, and input from a large
group of expert and industry technical reviewers over the life of the
study, has attempted to correct those shortfalls.
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\2\ The study excluded PHAs participating in the Moving to Work
demonstration because the fees for these agencies are presently
calculated in accordance with their agreements.
\3\ The study can be found at: http://www.huduser.org/portal/hcvfeestudy.html.
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The study (1) identified a diverse sample of 60 PHAs administering
high performing and efficient HCV programs; (2) tested different direct
time measurement methods; (3) collected detailed direct time
measurement data using Random Moment Sampling via smartphones; and (4)
captured all costs incurred by the HCV program (labor, non-labor,
direct, indirect, overhead costs) over an 18 month period. Time data
was collected from each PHA over an 8 week period, with just a few PHAs
included in each 8 week window throughout the 18 month period.
Additionally, a large and active expert and industry technical
review group of representatives from the major affordable housing
industry groups, executive directors and HCV program directors from
high performing PHAs, affordable housing industry technical assistance
providers, housing researchers, and industrial engineers reviewed the
study design and results at

[[Page 36834]]

separate stages in the study and provided invaluable feedback.
In addition to documenting the total cost needed to run the HCV
program effectively, the study recommends a new formula for allocation
of funds. It also recommends that the proposed new formula have some
flexibility to be adjusted for unanticipated cost, program changes, and
supplementary fees as programmatic design or goals change over time.

II. Findings of HCV Program Administrative Fee Study

The recently published HCV Program Administrative Fee Study
explores the actual cost to administer the HCV program effectively and
efficiently and finds that there are variables with better theoretical
and statistical connection to administering the program than the 1993
FMRs.

Formula Variables

The study analyzed over 50 variables and found the following
variables to be the most relevant cost drivers:
(a) Wage index. The study tested the theory that areas with higher
wages would have higher per unit administrative costs, and confirmed
that this is the primary driver of cost differences between PHAs.
(b) PHA size. The study tested the theory that smaller PHAs
experience higher costs than larger PHAs, and found this theory to be a
very strong driver of cost differences and that the impact was greater
for PHAs administering approximately 500 or less units. The proposed
formula applies a stepped down approach to implementing this factor by
gradually reducing the weight of this factor in the formula amount the
larger the PHA. While PHAs administering 250 units or less receive the
full amount of the PHA size factor, PHAs administering between 251 and
750 units are gradually reduced to zero for this factor. The
researchers found that this gradual reduction is a more accurate
measure of explaining variance between PHAs rather than a strict cut
off of 500 units, as used in the study.
(c) Health Insurance Cost Index. The study tested the theory that
health insurance costs vary from state to state and are an important
component of agency costs. The study found that health insurance costs
explain some of the variance between PHAs but that the relationship
between health insurance costs and administrative costs is not very
strong. Nonetheless such costs are included in the proposed formula due
to the strong encouragement of the technical experts advising the
research team based on the strong theoretical relationship to HCV
administrative costs and the fact that it captures aspects of PHA costs
not addressed by other variables. The health insurance cost index
offers a way of capturing regional variation that is known to exist in
local benefits costs, which are an important component of PHA labor
costs.
(d) Percent households with earned income. The study tested the
theory that the more households an agency had to manage that have wage
earnings, the higher the agency's costs. The agency's costs are higher
because wage earners are more likely to have changes in income over the
course of a year, and therefore require more interim recertifications.
The time to verify income is greater for these households than to
verify the income for fixed income households. The study confirmed that
this is a highly significant factor explaining variance between PHAs in
cost.
(e) New admission rate. The study tested the theory that PHAs with
a higher rate of new admissions have higher costs due to additional
time associated with intake and lease-up work. The study found that the
time for intake and lease-up is more costly than ongoing occupancy on a
per household basis. However, new admission rates did not have a high
statistical significance in the study's cost driver model, likely due
to the study occurring during a time of relatively low new admission
rates. Refraining from issuing vouchers was often used to avoid funding
shortfalls resulting from the 2013 sequestration, a period of time
which was included in this study. New admission rate is included as a
factor in the proposed formula due to the findings in the study on time
spent per activity related to new admissions and the strong
encouragement of the technical experts advising the research team.
(f) Small area rent ratio.\4\ The study tested the theory that the
time needed to assist tenants with successful leasing in zip codes with
higher median rents than the overall market area (county or
metropolitan area) adds to administrative costs. The findings support
this theory, showing that among the 60 PHAs, the minutes spent per
voucher household on expanding housing opportunities was a significant
cost driver. Although information on minutes spent on expanding housing
opportunities is not available for every PHA (it is only available for
the 60 PHAs in the study), the study is able to use the location of
where tenants lease units to assess if PHA tenants successfully lease
units in more expensive neighborhoods within a metropolitan area.
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\4\ For PHAs in Metropolitan counties, the small area rent ratio
is calculated as the median gross rent for the zip codes where
voucher holders live, weighted by the share of voucher holders in
each zip code, divided by the median gross rent for the Metropolitan
area; for PHAs in non-Metropolitan counties, the small area rent
ratio is calculated as the unadjusted two-bedroom FMR for the non-
Metropolitan counties where the PHA operates, divided by the
published FMR.
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(g) Distance from main office greater than 60 miles. The study
tested the theory that an agency serving a very large service area,
such as a PHA serving an entire state or a very large county, will need
to either travel long distances or set up satellite offices to
administer the program, which increases administrative costs. The
researchers found this to be particularly true for PHAs with very large
service areas as measured by the percent of leased units more than 60
miles from the PHA headquarters, leading to its inclusion in the
proposed formula.

Inflation Factor

Since the proposed formula predicts the per-unit costs for
administering the program from July 1, 2013, through June 30, 2014, the
formula must be adjusted to reflect changes in the cost of goods and
services over time. That is, the formula needs a factor to account for
inflation. The HCV Program Administrative Fee Study recommends a
blended inflation rate that distinguishes between (i) change in wage
rates over time; (ii) change in health insurance costs over time; and
(iii) change in non-labor costs over time.

Base Fee Formula Calculation

The published Draft Final Report for the HCV Program Administrative
Fee Study establishes a recommended formula. In the process of updating
the study data, HUD identified a more accurate method for calculating
new admission rate than the method used in the study. In the published
Draft Final Report for the HCV Program Administrative Fee Study, new
admission rate was captured using an extract of PIH Information Center
(PIC) data showing all ``New Admissions'' during a 12 month period. The
extract used, however, undercounted new admissions because any interim
recertification within the 12 months on a new admission overwrote the
new admission code. HUD has corrected this. This has resulted in
updated

[[Page 36835]]

coefficients from those reported in the Draft Final Report for the HCV
Program Administrative Fee Study.

Table 1--Updated Base Fee Formula Calculation
------------------------------------------------------------------------
Variable Applies to Calculation
------------------------------------------------------------------------
Intercept \5\................. All PHAs......... -$110.56
Wage index.................... All PHAs......... + $49.21 x wage index
Health insurance cost index... All PHAs......... + $27.99 x health
insurance index cost
Program size 1................ PHAs with less + $16.07
than or equal to
250 units.
Program size 2................ PHAs with 251 to + $16.07 x [1 -
750 units. (units - 250)/500]
Program size 3................ PHAs with more + $0
than 750 units.
Percent of households with All PHAs......... + $0.93 x % of
earned income. households with
earned income
New admissions rate........... All PHAs......... + $0.24 x % of
households that are
new admissions
Small area rent ratio......... All PHAs......... + $60.83 x small area
rent ratio
Percent of households more All PHAs......... + $1.01 x % of
than 60 miles from PHA HQ. households living
more than 60 miles
from PHA HQ
Fee........................... Per Unit Month = $
Leased (UML).
------------------------------------------------------------------------

The formula calculates for an individual PHA an amount of the
administrative fee for each factor. The total of all factors is used to
determine the UML fee for each PHA. For example, an agency with a wage
rate that is 80 percent of the national rate would receive, on the wage
rate factor, 0.80 times $49.21 equals $39.37 per unit month [0.80 *
$49.21 = $39.37]. Each factor would be calculated in this same way. All
of the resulting costs are summed to equal the per unit month cost for
the specific PHA to run the program.
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\5\ The intercept for the model is -110.56, which means that
each PHA starts out with approximately a negative $110.56 fee per
UML. (This does not make a lot of intuitive sense but is part of the
regression model. It means that if all the other variables were
zero, the predicted cost per UML would be -$110.56. However, that
would not happen in practice, because several of the variables could
never be zero.)
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The study was based on 60 high performing PHAs. The study found
that across the 60 PHAs, the average administrative cost per voucher,
for calendar year 2013, ranged from $42.06 per UML to $108.87 per UML.
A straight application of the proposed formula for the more than 2,300
PHAs would result in predicted fees that fall below the lowest observed
cost of $42 per UML for 2 percent of PHAs overall, half of which are
located in the U.S. Territories of Puerto Rico, Guam, U.S. Virgin
Islands, and the Northern Mariana Islands. All of the other PHAs in the
study had costs that exceeded $42 and the formula is designed to
capture those actual costs. Because $42 per UML is the lowest cost the
study observed under which a PHA with very low cost drivers could
operate a high-performing and efficient program, the study recommends
that the formula establish a floor of $42 per UML. However, the 80 PHAs
in the U.S. Territories may have costs that the fee formula is not
capturing as reflected in their current funding levels. As such, and to
minimize the funding disruption, a floor of $54 per UML was proposed
for the U.S. Territories.
The proposed formula would change the method by which PHAs are
reimbursed for the administrative costs associated with tenant
portability. The study found that PHAs with higher percentages of units
that are port-ins (received from another jurisdiction under portability
regulations) had higher average costs, supporting the theory that there
is additional time associated with processing port-ins and working with
issuing PHAs. Currently, as noted in the study, ``PHAs receive 100
percent of the administrative fee for vouchers that remain within their
jurisdiction, bill the issuing PHAs for 80 percent of the issuing PHA's
fee for port-in vouchers, and are billed by receiving PHAs for 80
percent of their fees for port-out vouchers.'' This process means that
PHAs currently receive less than 100 percent of another agency's fee
rate. The proposed formula eliminates the billing of administrative
fees. Instead, as noted in the recommendations, PHAs would ``receive
100 percent of their own fee for vouchers that do not port and for
port-in vouchers administered on behalf of other PHAs. PHAs [would]
also receive a fee equivalent to 20 percent of their own fee for port-
out vouchers that are administered by other PHAs.''
The proposed formula accurately predicted 63 percent of the
variance in agency costs among the 60 PHAs studied. Given the
complexity of the HCV program and the heterogeneity of the United
States, this is an extremely high predictive value. Nonetheless, the
study notes that there are costs that may not be accounted for in the
proposed formula. An example is the up-front time to establish a
Veterans Affairs Supportive Housing (VASH) voucher program, continuing
costs to administer a homeownership voucher program, and the up-front
time to utilize project-based vouchers. Moreover, the study emphasizes
that program rules may change which could impact costs. For example,
PHAs may adopt streamlining activities which result in fewer
inspections, and may result in lower administrative costs.
For more details on the HCV Program Administrative Fee Study's
proposed formula, please review the study which is available at http://www.huduser.org/portal/hcvfeestudy.html. HUD will also post at that Web
page comments on the study from independent peer reviewers in the
disciplines of economics and industrial engineering by June 30, 2015.

III. Solicitation of Comments on Proposed New Housing Choice Voucher
Formula

Through this notice, HUD solicits comments on the variables
identified by the study as impacting administrative fee costs, as well
as how HUD may use these study findings to develop a new administrative
fee formula. While all comments are welcome, HUD specifically seeks
comments in the following areas:
A. Seven Formula Factors \6\
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\6\ The values for the seven formula factors are all limited in
the proposed formula to the range of values observed in the 60 study
PHAs.
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As noted above, additional analysis after issuance of the report
resulted in some changes to the importance of each variable in the
proposed formula. The variables do not change and their

[[Page 36836]]

relative importance only changes a small amount based on these new
data.
(1) Wages
The data source for this variable is the Bureau of Labor Statistics
Quarterly Census on Employment and Wages (QCEW), average annual wages
for local government employees. For non-state PHAs located in
metropolitan counties, the proposed formula would use the ratio of the
average annual wage for local government employees for all metropolitan
counties in the PHA's state divided by the national average in the most
recent 4 quarters for which data are available times $49.21 per unit
month. For non-state PHAs located in non-metropolitan counties, the
proposed formula would use the ratio of the average annual wage for
local government employees for all non-metropolitan counties in the
PHA's state divided by the national average in the most recent 4
quarters for which data are available times $49.21 per unit month. For
state PHAs, the proposed formula would use the ratio of the average
annual wage for local government employees for the PHA's state divided
by the national average in the most recent 4 quarters for which data
are available times $49.21. This variable is both theoretically and
statistically very strong and, based on current statutory language, is
a required variable.
Specific questions for comment:
(i) Is the average metropolitan or non-metropolitan wage rate a
reasonable proxy for non-state PHAs?
(ii) Is using the state average wage reasonable for a state PHA?
(2) PHA Size
The study recommends that PHAs with 250 or fewer average units
under lease in the most recent 4 quarters receive a factor of $16.07
per unit month. For PHAs with more than 250 units but fewer than 750
units, the factor is calculated as $16.07 x [1 - (units - 250)/500].
For PHAs with 750 or more units, the factor is zero. The unit count
would include port-ins and subtract out port-outs. This variable is
both theoretically and statistically very strong and, based on current
statutory language, is a recommended variable.
From a policy perspective, multiple small PHAs working in close
proximity to one another is clearly inefficient. If those PHAs merged,
this study shows their administrative costs would likely go down. On
the other hand, as the ``60 miles'' variable shows, there is a cost to
PHAs with very large service areas. As such, remote small PHAs may be
no less inefficient than larger PHAs with huge service areas.
Specific questions for comment:
(i) As an incentive to have small PHAs in close proximity to one
another merge, should the increase in funding for smaller PHAs only be
applied to remote smaller PHAs?
(ii) Should the formula consider additional size categories?
(3) Health Insurance Cost Index
The study recommends using the ratio of the annual average health
insurance costs to private employers from the U.S. Department of Health
and Human Services Medical Expenditure Panel Survey in the state of the
PHA main office divided by the national average in the most recent 3
years for which data are available times $27.99.
This variable is theoretically strong but not statistically very
strong.
Specific questions for comment:
(i) Is this a good measure of the health insurance costs facing
PHAs?
(ii) Are health insurance costs a good proxy for the benefits costs
facing PHAs?
(iii) Should this variable, given its weak statistical
significance, be included as part of the formula?
(4) Percent Households With Earned Income
The study recommends using an average of the count of number of
households served during each of the most recent 12 quarters with
income from wages as reported to HUD on Form 50058 \7\ divided by total
number of vouchers under lease reported to HUD on Form 50058 in the
same time period times $0.93. This variable is both theoretically and
statistically very strong. Several members of the industry group noted
that elderly and disabled, with their many receipts for health care
expenses, did not appear to be accounted for in the formula. The study
finds that PHAs spend more time on annual and interim recertifications
for family households (a large share of which have earned income) than
for elderly and disabled households and also that the percentage of
households with wages was a significant cost driver explaining the
variance on PHA costs.
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\7\ See http://portal.hud.gov/hudportal/documents/huddoc?id=50058.pdf.
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Specific question for comment: Are there exceptional costs for non-
wage earners that should be considered for the formula?
(5) New Admission Rate
The study recommends using the average of the count of households
admitted to the program during each of the most recent 12 quarters as
reported to HUD on Form 50058 divided by the total number of vouchers
under lease during the same time period as reported to HUD on Form
50058 times $0.24.
This variable is theoretically strong but not statistically very
strong. It was included based on a weak statistical relationship and
the strong views of the expert panel.
Specific question for comment: To smooth out year-to-year
fluctuations in admissions rates, HUD is proposing to use three-years
of admission data to calculate this variable. Is that a long enough
period or should HUD consider 5 years?
(6) Small Area Rent Ratio
The study recommends using the most recent 4 quarter average of the
sum of program unit ratios in Metropolitan areas and program unit
ratios outside of Metropolitan areas divided by total number of program
units for which a ratio is calculated during the same time period times
$60.83. For program units in Metropolitan areas, the ratio for each
program unit is the most recent median gross rent of the zip code of
the program unit based on the program unit address reported on HUD form
50058 divided by Metropolitan average median gross rent for the
Metropolitan or HUD FMR area during the same time period. For program
units outside of Metropolitan areas, the ratio is the sum of the count
of program units during each of the prior three calendar years under
lease in each county based on tenant addresses reported to HUD on Form
50058 times the most recent unadjusted 2-bedroom FMR of the county as
determined by HUD divided by the published 2-bedroom FMR of the county.
This variable is a proxy measure of agency's cost in successfully
assisting tenants with leasing units in neighborhoods that are assumed
to have higher quality assets such as lower crime and higher performing
schools. The research supports that effort to lease in higher costs
areas is more burdensome on PHAs.
Specific question for comment: While this may serve as a motivator
for PHAs with a low-rent service area to merge with a PHA with a higher
cost service area, it is a disincentive for the PHAs within a higher
cost service area to merge. How could this factor be used to
incentivize both parties to merge?
(7) Distance From Main Office Greater Than 60 Miles
The study recommends using the average of the count of households
served by the program during each of

[[Page 36837]]

the most recent 4 quarters determined by HUD to be 60 miles or more
from the PHA headquarters address using tenant address data as reported
to HUD on Form 50058 divided by the total number of vouchers under
lease during the same time period as reported to HUD on Form 50058
times $1.01.
This variable is both theoretically and statistically very strong
and is reflected in the statutory language as a recommended variable.
Specific issues for comment: The research is clear that PHAs that
serve voucher holders over a very large area have higher costs. The
researchers have used as a proxy for this the average distance from the
main office of over 60 miles. HUD recognizes that this could be
problematic if an agency primarily serves households in a relatively
small geography, but that small geography is more than 60 miles from
its ``main'' office. HUD is exploring different ways to implement this
finding such that it does not have this problem. HUD encourages comment
on approaches to implementing the research finding most effectively
without providing more funding than is appropriate.
B. Inflation Factor
The study also recommends a blended inflation factor. HUD is
seeking comment on the data to be used for each inflation factor as
well as how to weight the different inflation factors.
Specific issues for comment: HUD is soliciting comment on the value
of using the following three data sources:
(i) The change between the average over the most recent 4 quarters
and 2013 in the Consumer Price Index for all Urban Consumers in the
U.S. as published by the Bureau of Labor Statistics;
(ii) The change between the average over the most recent 4 quarters
and 2013 in the Bureau of Labor Statistics QCEW data on local
government employees for the U.S.; and
(iii) The change between the average over the most recent 4
quarters and 2013 in health insurance costs from the U.S. Department of
Health and Human Services Medical Expenditure Panel Survey for the U.S.
C. Fee Floor
The fee floor is projected at $42 per unit month. Can PHAs operate
for less than this fee floor amount per month? If so, what would the
proposed amount be and what are the supporting data that might be
available?
D. Fee Floor for U.S. Territories
The fee floor for U.S. Territories is projected at $54 per unit
month. What data that might be available for U.S. Territories that
might support a lower or higher rate?
E. Maximum Funding
Among the 60 study sites, the highest calculated per unit month
rate was $108.87. Should HUD set a maximum funding amount per unit
month? If so, what should the maximum funding amount per unit month be?
F. Adjusting Fees for Future Program Changes
Where, in the future, there are reductions in cost associated with
program changes such as less frequent reexaminations or inspections,
how should HUD account for those reductions in the administrative fee
formula? Should HUD review and revise the fee on a set schedule? How
much advance notice do PHAs need?
G. Reducing Funding Disruptions
How might HUD reduce funding disruptions for the small number of
PHAs likely to have a decrease in funding under the proposed formula
relative to recent year funding levels? The research shows that even if
Congress funded the proposed formula at 100 percent, there would still
be a small number of PHAs (8 percent) with a funding reduction relative
to their 2013 and 2014 funding levels.
H. Additional Cost Factors for Consideration
While the study team had no additional recommendations on the
formula other than what has been described above, the team did note
that they expected HUD to consider modifications to the formula or
supplemental fees to support PHAs in addressing program priorities,
strategic goals, and policy objectives at both the local and the
national level. (See section 7.7 of the draft final report.) The
findings from the study suggested four specific areas for further
analysis and consideration:
(1) Special voucher programs;
(2) serving homeless households;
(3) performance incentives; and
(4) expanding housing opportunities.
HUD also requests feedback on inclusion of a factor for enforcement
actions, specifically an incentive for PHAs to investigate potential
fraud or errors and how such a formula factor might be constructed with
the data currently reported by PHAs to HUD.
HUD is specifically seeking comment on whether additional
compensation should be provided to address any or all of these areas.
In addition, what other areas should be considered for additional
compensation? What would be the appropriate amount of compensation for
these areas or any other areas, and what data would support the
proposed amounts? What form should the compensation take--should it be
built into the fee formula as a cost driver or should it be provided
outside of the administrative fee formula as a separate supplemental
fee?

Dated: June 22, 2015.
Katherine M. O'Regan,
Assistant Secretary for Policy Development and Research.
[FR Doc. 2015-15765 Filed 6-25-15; 8:45 am]
BILLING CODE 4210-67-P

36832 Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices

requirements that will become effective IV. Other New Provisions DEPARTMENT OF HOUSING AND
July 6, 2015. URBAN DEVELOPMENT
1. Under-Occupied Units at Time of In addition to the waivers above, the
Conversion. Provisions affected: 24 CFR following change to the RAD program [Docket No. FR–5874–N–01]
983.259 and 24 CFR 880.605. has been implemented:
HUD Administrative Fee Formula—
Alternative requirements: Families Initial Contract Rent Setting for Solicitation of Comment
occupying, at the time of conversion of Conversions of Assistance from Rent
assistance, a unit that is larger than is Supp/RAP. The 2015 Appropriations AGENCY: Office of the Assistant
appropriate, may remain in the unit Act permitted HUD to convert Rent Secretary for Policy Development and
until an appropriate-sized unit becomes Supp and RAP properties to PBRA. To Research, HUD.
available in the covered project. For ACTION: Notice; Solicitation of comment.
implement this authority, HUD must
conversions of assistance under the
establish how to set the contract rents SUMMARY: Housing Choice Voucher
Second Component, this alternative
requirement will only apply to families for these conversions. Rents will be set program administrative fees are
who are elderly or disabled. on the post-rehabilitation market rents, currently calculated based on the
2. Assistance for Families when Total as determined by a rent comparability number of vouchers under lease and a
Tenant Payment (TTP) Exceeds Gross study, not to exceed 110 percent of the percentage of the 1993 or 1994 local Fair
Rent. Provisions affected: Section fair market rent. Market Rent. In 2010, HUD contracted
8(o)(13)(H) of the 1937 Act and 24 CFR Abt Associates to conduct the Housing
V. Revised Program Notice Availability
983.301 and 983.53(d); sections 8–5 C Choice Voucher Program Administrative
and 8–6 A.1 of Housing Handbook The Revised Program Notice (PIH Fee Study to measure the actual costs of
4350.3, REV–1. Alternative 2012–32, REV–2) can be found on operating high-performing and efficient
requirements: PHAs and owners must RAD’s Web site, www.hud.gov/RAD. Housing Choice Voucher programs and
continue to treat certain families in to develop an updated administrative
public housing that has converted VI. Environmental Review fee formula. The results of the study
assistance as assisted and charge 30 were released on April 8, 2015. In this
percent of adjusted gross income in rent. A Finding of No Significant Impact
notice, HUD seeks public comment on
The families covered by this alternative with respect to the environment was
the variables identified by the study as
requirement must have incomes high made in connection with HUD notice impacting administrative fee costs
enough for their TTP to exceed the PIH 2012–32 issued on March 8, 2012, (including specific questions raised in
contract rent yet still remain eligible for and in accordance with HUD this preamble), how HUD might use
assistance or otherwise be unable to regulations in 24 CFR part 50 that these study findings to develop a new
afford market rate housing in their implement section 102(2)(C) of the administrative fee formula, and any
community. National Environmental Policy Act of other issues that may arise with the
3. Choice-Mobility Cap for Public 1969 (42 U.S.C. 4332(2)(C)). The development and implementation of a
Housing Conversions to PBV. Provisions Finding remains applicable to the new administrative fee formula.
affected: Section 8(o)(13)(E) of the 1937 Revised Program Notice and is available DATES: Comment Due Date: July 27,
Act and 24 CFR 983.261(c). Alternative for public inspection during regular 2015.
requirements: PHAs may, for projects business hours in the Regulations
that have converted assistance from ADDRESSES: Interested persons are
Division, Office of General Counsel;
public housing to PBV, provide one of invited to submit comments regarding
Department of Housing and Urban
every four turnover vouchers to this notice to the Regulations Division,
Development; 451 7th Street SW., Room Office of General Counsel, Department
households on their regular HCV 10276; Washington, DC 20410– 0500.
waiting list instead of for Choice- of Housing and Urban Development,
Due to security measures at the HUD 451 7th Street SW., Room 10276,
Mobility vouchers.
4. Rent Supp/RAP Contracts After Headquarters building, please schedule Washington, DC 20410–0500.
Section 236 Prepayment. Provision an appointment to review the Finding Communications must refer to the above
affected: 24 CFR 236.725. Alternative by calling the Regulations Division at docket number and title. There are two
requirement: The original RAP or Rent 202–402–3055 (this is not a toll-free methods for submitting public
Supp contract may remain in place for number). Individuals with speech or comments. All submissions must refer
60 days after repayment of a section 236 hearing impairments may access this to the above docket number and title.
mortgage until the PBV HAP contract is number via TTY by calling the Federal 1. Submission of Comments by Mail.
executed. Relay Service at 800–877–8339. Comments may be submitted by mail to
5 Uniform Physical Condition Dated: June 19, 2015. the Regulations Division, Office of
Standards (UPCS) Inspections. General Counsel, Department of
Lourdes Castro Ramı́rez,
Provision affected: 24 CFR part 5, Housing and Urban Development, 451
subpart G. Alternative requirement: All Principal Deputy Assistant Secretary for 7th Street SW., Room 10276,
units converting assistance to PBRA Public and Indian Housing. Washington, DC 20410–0500.
must meet the Uniform Physical Edward L. Golding, 2. Electronic Submission of
Condition Standards no later than the Principal Deputy Assistant Secretary for Comments. Interested persons may
date of completion of initial repairs as Housing. submit comments electronically through
indicated in the RAD conversion Approved on: June 3, 2015. the Federal eRulemaking Portal at
tkelley on DSK3SPTVN1PROD with NOTICES

commitment. Nani A. Coloretti, www.regulations.gov. HUD strongly
6. Floating Units. Provision affected: encourages commenters to submit
Deputy Secretary.
24 CFR 983.203(c). Alternative comments electronically. Electronic
requirement: For certain projects [FR Doc. 2015–15764 Filed 6–25–15; 8:45 am] submission of comments allows the
(Choice, Mixed Finance, and HOPE VI), BILLING CODE 4210–67–P commenter maximum time to prepare
HUD is allowing PBV assistance to float and submit a comment, ensures timely
among unassisted units. receipt by HUD, and enables HUD to

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Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices 36837

the most recent 4 quarters determined data that might be available for U.S. additional compensation? What would
by HUD to be 60 miles or more from the Territories that might support a lower or be the appropriate amount of
PHA headquarters address using tenant higher rate? compensation for these areas or any
address data as reported to HUD on other areas, and what data would
E. Maximum Funding
Form 50058 divided by the total number support the proposed amounts? What
of vouchers under lease during the same Among the 60 study sites, the highest form should the compensation take—
time period as reported to HUD on Form calculated per unit month rate was should it be built into the fee formula
50058 times $1.01. $108.87. Should HUD set a maximum as a cost driver or should it be provided
This variable is both theoretically and funding amount per unit month? If so, outside of the administrative fee
statistically very strong and is reflected what should the maximum funding formula as a separate supplemental fee?
in the statutory language as a amount per unit month be? Dated: June 22, 2015.
recommended variable. F. Adjusting Fees for Future Program Katherine M. O’Regan,
Specific issues for comment: The
Changes Assistant Secretary for Policy Development
research is clear that PHAs that serve
Where, in the future, there are and Research.
voucher holders over a very large area
reductions in cost associated with [FR Doc. 2015–15765 Filed 6–25–15; 8:45 am]
have higher costs. The researchers have
used as a proxy for this the average program changes such as less frequent BILLING CODE 4210–67–P

distance from the main office of over 60 reexaminations or inspections, how
miles. HUD recognizes that this could should HUD account for those
be problematic if an agency primarily reductions in the administrative fee DEPARTMENT OF HOUSING AND
serves households in a relatively small formula? Should HUD review and revise URBAN DEVELOPMENT
geography, but that small geography is the fee on a set schedule? How much [Docket No. FR–5828–N–26]
more than 60 miles from its ‘‘main’’ advance notice do PHAs need?
office. HUD is exploring different ways Federal Property Suitable as Facilities
G. Reducing Funding Disruptions
to implement this finding such that it To Assist the Homeless
does not have this problem. HUD How might HUD reduce funding
disruptions for the small number of AGENCY: Office of the Assistant
encourages comment on approaches to Secretary for Community Planning and
implementing the research finding most PHAs likely to have a decrease in
funding under the proposed formula Development, HUD.
effectively without providing more
relative to recent year funding levels? ACTION: Notice.
funding than is appropriate.
The research shows that even if SUMMARY: This Notice identifies
B. Inflation Factor Congress funded the proposed formula unutilized, underutilized, excess, and
The study also recommends a blended at 100 percent, there would still be a surplus Federal property reviewed by
inflation factor. HUD is seeking small number of PHAs (8 percent) with HUD for suitability for use to assist the
comment on the data to be used for each a funding reduction relative to their homeless.
inflation factor as well as how to weight 2013 and 2014 funding levels.
FOR FURTHER INFORMATION CONTACT:
the different inflation factors. H. Additional Cost Factors for Juanita Perry, Department of Housing
Specific issues for comment: HUD is Consideration and Urban Development, 451 Seventh
soliciting comment on the value of
While the study team had no Street SW., Room 7266, Washington, DC
using the following three data sources:
additional recommendations on the 20410; telephone (202) 402–3970; TTY
(i) The change between the average
formula other than what has been number for the hearing- and speech-
over the most recent 4 quarters and 2013
described above, the team did note that impaired (202) 708–2565 (these
in the Consumer Price Index for all
they expected HUD to consider telephone numbers are not toll-free), or
Urban Consumers in the U.S. as
modifications to the formula or call the toll-free Title V information line
published by the Bureau of Labor
supplemental fees to support PHAs in at 800–927–7588.
Statistics;
(ii) The change between the average addressing program priorities, strategic SUPPLEMENTARY INFORMATION: In
over the most recent 4 quarters and 2013 goals, and policy objectives at both the accordance with 24 CFR part 581 and
in the Bureau of Labor Statistics QCEW local and the national level. (See section section 501 of the Stewart B. McKinney
data on local government employees for 7.7 of the draft final report.) The Homeless Assistance Act (42 U.S.C.
the U.S.; and findings from the study suggested four 11411), as amended, HUD is publishing
(iii) The change between the average specific areas for further analysis and this Notice to identify Federal buildings
over the most recent 4 quarters and 2013 consideration: and other real property that HUD has
in health insurance costs from the U.S. (1) Special voucher programs; reviewed for suitability for use to assist
Department of Health and Human (2) serving homeless households; the homeless. The properties were
Services Medical Expenditure Panel (3) performance incentives; and reviewed using information provided to
Survey for the U.S. (4) expanding housing opportunities. HUD by Federal landholding agencies
HUD also requests feedback on regarding unutilized and underutilized
C. Fee Floor inclusion of a factor for enforcement buildings and real property controlled
The fee floor is projected at $42 per actions, specifically an incentive for by such agencies or by GSA regarding
unit month. Can PHAs operate for less PHAs to investigate potential fraud or its inventory of excess or surplus
than this fee floor amount per month? errors and how such a formula factor Federal property. This Notice is also
tkelley on DSK3SPTVN1PROD with NOTICES

If so, what would the proposed amount might be constructed with the data published in order to comply with the
be and what are the supporting data that currently reported by PHAs to HUD. December 12, 1988 Court Order in
might be available? HUD is specifically seeking comment National Coalition for the Homeless v.
on whether additional compensation Veterans Administration, No. 88–2503–
D. Fee Floor for U.S. Territories should be provided to address any or all OG (D.D.C.).
The fee floor for U.S. Territories is of these areas. In addition, what other Properties reviewed are listed in this
projected at $54 per unit month. What areas should be considered for Notice according to the following

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Document Created: 2015-12-15 14:15:23
Document Modified: 2015-12-15 14:15:23

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice; Solicitation of comment.
Contact		Todd Richardson, Associate Deputy Assistant Secretary for Policy Development, Office of Policy Development and Research, Department of Housing and Urban Development, 451 7th Street SW., Room 8106, Washington, DC 20410; telephone number 202-402-5706 (this is not a toll-free number). Persons with hearing or speech impairments may access this number by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number).
FR Citation		80 FR 36832