89 FR 173 pgs. 72766-72769 - Adoption of 2020 Core Based Statistical Area Standards
Type: PRORULEVolume: 89Number: 173Pages: 72766 - 72769
Pages: 72766, 72767, 72768, 72769Docket number: [Docket No. FR-6464-P-01]
FR document: [FR Doc. 2024-19807 Filed 9-5-24; 8:45 am]
Agency: Housing and Urban Development Department
Official PDF Version: PDF Version
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 5
[Docket No. FR-6464-P-01]
RIN 2501-AE11
Adoption of 2020 Core Based Statistical Area Standards
AGENCY:
Office of the Secretary, U.S. Department of Housing and Urban Development (HUD).
ACTION:
Proposed rule.
SUMMARY:
This proposed rule would adopt the 2020 Core Based Statistical Area (CBSA) standards as determined by the Office of Management and Budget (OMB). The Metropolitan Areas Protection and Standardization Act of 2021 (MAPS Act) requires agencies that propagate OMB's CBSA Standards for non-statistical use to seek public comment before determining that the propagation supports the purposes of the agency's programs and is in the public interest. This proposed rule describes HUD's use of CBSAs, how CBSA standards support relevant programs, and how HUD believes the adoption of updated standards ensures accuracy of data and program administration.
DATES:
Comments are due by: November 5, 2024.
ADDRESSES:
There are two methods for submitting public comments. All submissions must refer to the above docket number and title.
1. Electronic Submission of Comments. Comments may be submitted 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 make comments immediately available to the public. Comments submitted electronically through www.regulations.gov can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that website to submit comments electronically.
2. 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.
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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 rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All comments and communications properly 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 advance appointment to review the public comments must be scheduled by calling the Regulations Division at (202) 708-3055 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as from individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed rule may be found at www.regulations.gov .
FOR FURTHER INFORMATION CONTACT:
Kurt Usowski, Deputy Assistant Secretary for Economic Affairs, Office of Policy Development and Research, Department of Housing and Urban Development, 451 7th St. SW, Washington, DC 20410, telephone number 202-402-5899 (this is not a toll-free number) or via email to Kurt.G.Usowski@hud.gov. HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
SUPPLEMENTARY INFORMATION:
I. Background: Core Based Statistical Areas
In its role as coordinator of the Federal statistical system, OMB establishes and maintains the CBSA program. CBSAs are geographic areas containing a large population nucleus, or urban area, and adjacent communities that have a high degree of integration with that nucleus measured by commuting ties. There are two types of CBSAs, the Metropolitan Statistical Area (MSA) and the Micropolitan Statistical Area. The classifications provide a nationally consistent set of delineations for collecting, tabulating, and publishing Federal statistics for geographic areas. OMB maintains CBSAs solely for statistical purposes. Every decade, OMB reviews and updates the Standards for Delineating CBSAs (CBSA standards), which describe the data sources and methods OMB uses to determine which geographic areas are to be designated CBSAs, prior to their application to new decennial census data. OMB updated CBSA standards on July 16, 2021 (86 FR 37770), prior to applying them to 2020 Census data.
The Metropolitan Areas Protection and Standardization Act of 2021, or the MAPS Act, (31 U.S.C. 6102, et seq. ) prohibits agencies from automatically propagating OMB's standards for non-statistical use by any domestic assistance program unless the agency determines that the propagation: (1) supports the purpose of the program; and (2) is in the public interest. (31 U.S.C. 6309(a)(2)(A)) Propagation of the standards for non-statistical use by domestic assistance programs must be done through a notice and comment rulemaking. (31 U.S.C. 6309(a)(2)(B))
HUD's Office of Community Planning and Development (CPD), Office of Housing-Federal Housing Administration (FHA), and Office of Public and Indian Housing (PIH) use CBSAs to administer their programs listed in Table 1. The Office of Policy Development and Research (PD&R) also uses CBSA definitions to calculate Fair Market Rents, Area Median Family Income Estimates and Income Limits. This proposed rule describes, for each of its affected programs, how HUD uses CBSA definitions, how the use of new CBSA standards support the purposes of the programs, and that the adoption of the new CBSAs in the operations of these programs is in the public interest. HUD welcomes comments on all aspects of this proposed rule.
Use | HUD Office |
---|---|
Community Development Block Grant Program | CPD. |
Community Development Block Grant Disaster Recovery Program | CPD. |
Housing Opportunities for Persons with AIDS Program | CPD. |
HOME Investment Partnerships (HOME) Program | CPD. |
Housing Trust Fund (HTF) Program | CPD. |
Continuum of Care | CPD. |
Emergency Solutions Grant (ESG) | CPD. |
FHA's Title II Program (loan limits) | Housing. |
Choice Neighborhoods Initiative | PIH. |
Difficult Development Area and Qualified Census Tract Designations | PD&R. |
Fair Market Rents, Area Median Family Income, and Income Limits | PD&R. |
II. Use of CBSAs in HUD Programs
A. Fair Market Rents, Area Median Family Income, and Income Limits
[top] HUD uses CBSAs to calculate Fair Market Rents (FMRs), HUD's Area Median Family Income (HAMFI) estimates, and Income Limits (ILs). FMRs, HAMFI, and ILs are addressed together because they incorporate MSA definitions in substantially identical ways and the presence of interacting calculations in the determination of these "program parameters." That is, FMRs, HAMFI estimates, and ILs share the same geography in any given fiscal year. FMRs are an estimate of the amount of money that would cover gross rents (rent and utility expenses) on 40 percent of the rental housing units in an area. FMRs are used in several HUD programs, including determining the maximum amount a Housing Choice Voucher will cover. ILs, which are derived from HAMFIs (and in some cases, FMRs) set eligibility income levels for HUD programs as well as various other federal programs and maximum rent levels for housing supported by the Low-Income Housing Credit. From the inception of FMRs, HUD has generally considered MSAs to be good proxies for housing markets as they have been historically based on home-to-work commuting interactions as the principal means of identifying component geography to be combined.
Currently, for computations of FMR estimates HUD uses the MSAs to define which areas are in HUD Metro FMR Areas or defines the FMR area as coterminous with the MSA as appropriate for the housing market. FMRs are estimated separately for each county or county equivalent not in a MSA, including those in Micropolitan CBSAs. HUD also uses MSA-level data in the calculation of FMRs in HMFAs. See HUD's notice announcing fiscal year (FY) 2024 FMRs for details on the use of MSA-level data at: https://www.huduser.gov/portal/datasets/fmr/fmr2024/FMR_FY24_FinalNotice_2023.pdf (88 FR 60223). HAMFIs and ILs are estimated for the same areas as FMRs. Details on the relationship between ILs and FMRs is available in the FY 2024 Income Limits Methodology description at: https://www.huduser.gov/portal/datasets/il//il24/IncomeLimitsMethodology-FY24.pdf.
B. Difficult Development Area and Qualified Census Tract Designations
HUD designates Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs) for purposes of the Low-Income Housing Credit (LIHTC) program. DDAs and QCTs derive from FMRs and ILs, but HUD also uses CBSA definitions in counting the metropolitan population and nonmetropolitan population for the DDAs, where designated populations are restricted to 20 percent of the respective totals, and the full population of metropolitan CBSAs for QCTs where the total population of designated tracts in a metropolitan area or nonmetropolitan part of a state cannot exceed 20 percent of total population of the respective areas. (26 U.S.C. 42(d)(5)(B))
C. Additional PIH Use of CBSAs
PIH's Choice Neighborhoods Initiative program uses CBSA definitions as part of its grant application process. In awarding Planning grants and Implementation grants, MSAs are used to determine points earned for the "leverage" rating factor. Points are different for applications targeting a neighborhood in an MSA with a population greater than 500,000 versus 500,000 or less. CBSAs are also a factor used to determine whether an applicant qualifies for an exception to the hard unit one-for-one replacement requirement. If grantees want to locate replacement housing outside their target neighborhood, they cannot locate it in areas of minority concentration, which is defined using CBSA delineations.
D. Additional CPD Use of CBSAs
CPD's Community Development Block Grant (CDBG) program uses OMB's definition of "Principal Cities" of Metropolitan CBSAs to determine which jurisdictions are eligible for metropolitan city status, as defined at 24 CFR 570.3. Metropolitan cities are participating units of general local government that are either principal cities, by OMB's definition, or any other city in a metropolitan area with a population of 50,000 or more. Other entitlement jurisdictions include "urban counties" which are defined and may be determined eligible by one of two ways as set forth in the Housing and Community Development Act of 1974, as amended ("HCDA") ( see 42 U.S.C. 5302(a)(6)). Either the population of the urban county exceeds 200,000 after deducting the population contained in any metropolitan city (cities), or part(s) of a metropolitan city (cities), within the county, or the urban county meets the low- and moderate-income preponderance test, in that it has a total combined population of at least 100,000 (but fewer than 200,000) in its unincorporated areas and included units of general local government, and those areas (combined) include the majority of low- and moderate-income persons in the county. The CDBG entitlement formula uses as its denominator for five of the six variables the aggregated data for all metropolitan areas (see 42 U.S.C. 5306). CDBG-eligible low- and moderate-income areas and households are determined relative to HUD's ILs.
CPD's CDBG-Disaster Recovery funds provides relief to rebuild disaster-stricken areas and crucial seed money to start the long-term recovery process. Funding is awarded to "metropolitan areas" and "metropolitan cities", among other recipients. Those geographic areas are defined in the HCDA as being established by OMB, referring to CBSAs. (42 U.S.C. 5302(a))
Additionally, CPD's Housing Opportunities for Persons With AIDS (HOPWA) program awards funding to States and "metropolitan statistical areas" to address the housing needs of low-income people living with HIV/AIDS and their families. The statute for the program defines "metropolitan statistical areas" as metropolitan statistical areas established by OMB and specifies that this includes the District of Columbia (HOPWA, section 853(5) of the AIDS Housing Opportunity Act, 42 U.S.C. 12902(5)).
Finally, CDP's HOME, Continuum of Care, and ESG programs offer grants to grantees in geographic areas based on the CDBG definitions that are themselves based on CBSAs. These programs do not otherwise use CBSAs in their grant allocation formulas. The HTF program uses formula factors whose definitions are based upon CBSA-level data.
E. Office of Housing's Use of CBSAs
The Office of Housing uses CBSAs to establish the Title II loan and mortgage limits. Loan limits are based on the county-level median home price of the highest price county within the area, with "area" defined as the "metropolitan statistical area as established by the Office of Management and Budget", referring to OMB's CBSA program. (National Housing Act 203(b)(2) (12 U.S.C. 1709(b)(2))
III. Adoption of New CBSAs Standards Would Support Program Purposes and be in the Public Interest
[top] The new CBSA standards support FMRs, HAMFIs, and ILs. Because the new CBSAs become the standards for Federal statistical entities and private sector firms releasing data used in FMR calculations, adopting the new standards in these calculations serves to promote the accuracy of FMRs and makes their calculation more efficient. Whether a particular county is a non-metropolitan FMR area or one-county HMFA makes only a slight difference in the estimated value of the FMR but may make it more accurate. HMFA designation means HUD applies adjustments to the county-level data derived from the containing MSA rather than the non-metropolitan part of the state. Similar adjustments apply to ILs. Using new CBSA definitions improves the accuracy of HUD's affected calculations. The accuracy of these program parameters is in the public interest as it most appropriately will direct resources governed by these parameters to recipients in the most appropriate amounts.
The new CBSA standards support HUD's designation of DDAs and QTCs as well as PIH, CPD, and Housing's programs because they more accurately reflect the current housing markets, which have changed significantly since the 2010 census. Furthermore, adopting the new standards will not be disruptive to the programs as program participants are expecting HUD to regularly update the metropolitan area standards and definitions to reflect current market conditions as HUD has done historically.
IV. This Proposed Rule
For the reasons stated above, this proposed rule would affirmatively adopt new OMB CBSA Standards for purposes of estimating Fair Market Rents, Area Median Family Incomes, and Income Limits, and for other administrative purposes in PIH, CPD, and Housing programs. This includes any future revisions to the CBSA delineations under these standards.
HUD proposes to add a new subpart M to part 5 that will cross reference all affected programs and adopt the updated CBSA standards for such programs.
V. Findings and Certifications
Regulatory Review (Executive Orders 12866, 13563, and 14094)
This proposed rule would adopt updated standards for CBSA delineations that HUD programs use for program administrative purposes. It is statistical and administrative in nature with the purpose of maintaining past administrative practices. This rule was not subject to OMB review. This proposed rule is not a "significant regulatory action" as defined in section 3(f) of Executive Order 12866 and is not an economically significant regulatory action.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This proposed rule does not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of UMRA.
Environmental Review
This proposed rule establishes discretionary review of loan limits, fair market rent schedules, income limits and exclusions with regard to eligibility for or calculation of HUD housing assistance or rental assistance, and similar rate and cost determinations and related external administrative or fiscal requirements or procedures which do not constitute a development decision that affects the physical condition of specific project areas or building sites. Accordingly, under 24 CFR 50.19(c)(6), this proposed rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This proposed rule would adopt updated definitions of CBSA geographic areas that affected HUD programs use for various administrative purposes. The proposed adoption would be statistical and administrative in nature and consistent with longstanding HUD policy and practice. Therefore, the proposed action does not have a significant economic impact on a substantial number of small entities.
Executive Order 13132, Federalism
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either: (i) imposes substantial direct compliance costs on State and local governments and is not required by statute, or (ii) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.
List of Subjects in 24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime, Government contracts, Grant programs-housing and community development, Individuals with disabilities, Intergovernmental relations, Loan programs-housing and community development, Low and moderate income housing, Mortgage insurance, Penalties, Pets, Public housing, Rent subsidies, Reporting and recordkeeping requirements, Social Security, Unemployment compensation, Wages.
Accordingly, for the reasons stated in the preamble, HUD proposes to amend 24 CFR part 5 as follows:
PART 5-GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
1. The authority for part 5 continues to read as follows:
Authority:
12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f, 1437n, 3535(d); 42 U.S.C. 2000bb et seq.; 34 U.S.C. 12471 et seq.; Sec. 327, Pub. L. 109-115, 119 Stat. 2396; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517.
2. Add subpart M to read as follows:
Subpart M-Core Based Statistical Areas
§?5.3001 Automatic propagation of OMB's Core Based Statistical Area Standards.
When using Core Based Statistical Areas (CBSAs), HUD shall use the 2020 CBSA standards adopted by the Office of Management and Budget on July 16, 2021, through publication in the Federal Register as well as any subsequent updates to the CBSA delineations based on these standards made by the Office of Management and Budget. Purposes and programs that use the CBSA standards include, but are not limited to:
(a) The Community Development Block Grant Program (24 CFR part 570);
(b) The Community Development Block Grant Disaster Recovery funds (applicable appropriations and Federal Register notices);
(c) The Housing Opportunities for Persons with AIDS Program (24 CFR part 574);
(d) The HOME Investment Partnerships Program (24 CFR part 92);
(e) The Continuum of Care Program (24 CFR part 578);
(f) The Emergency Solutions Grants Program (24 CFR part 576);
(e) The FHA Title II Program (National Housing Act of 1934 Title II);
(f) The Choice Neighborhoods Initiative Program (42 U.S.C. 1437v, as applied by the applicable annual appropriations act(s); 24 CFR 905.602(d);
(g) The Housing Trust Fund Program (24 CFR part 93); and
(h) The calculation of: Fair Market Rents (24 CFR part 888); Area Median Family Income (this part); Income Limits (this part); Difficult Development Areas; and Qualified Census Tracts.
Todd Richardson,
General Deputy Assistant Secretary, Policy Development and Research.
[FR Doc. 2024-19807 Filed 9-5-24; 8:45 am]
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