Adoption of 2020 Core Based Statistical Area Standards

<RULE> DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT <CFR>24 CFR Part 5</CFR> <DEPDOC>[Docket No. FR-6464-F-02]</DEPDOC> <RIN>RIN 2501-AE11</RIN> <SUBJECT>Adoption of 2020 Core Based Statistical Area Standards</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Secretary, U.S. Department of Housing and Urban Development (HUD). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This rule adopts the 2020 Core Based Statistical Area (CBSA) standards as determined by the Office of Management and Budget's July 16, 2021, <E T="04">Federal Register</E> notice for all HUD use of CBSAs. HUD uses CBSAs throughout its programs and is updating the standards to ensure accuracy of data and program administration. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Effective January 6, 2025. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Kurt Usowski, Deputy Assistant Secretary for Economic Affairs, Office of Policy Development and Research (PD&R), 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 <E T="03">Kurt.G.Usowski@hud.gov.</E> 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 <E T="03">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> In its role as coordinator of the Federal statistical system, the Office of Management and Budget (OMB) establishes and maintains the CBSA program. CBSAs are geographic areas containing a large population center, or urban area, and adjacent communities that have a high degree of integration with that population center measured by commuting ties. 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, <E T="03">et seq.</E> ) prohibits agencies from automatically propagating OMB's CBSA 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 CBSA 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)). <HD SOURCE="HD1">II. The Proposed Rule</HD> On September 6, 2024, HUD published a proposed rule for public comment (89 FR 72766) to add new subpart M to 24 CFR part 5 adopting the 2020 CBSA standards as determined by OMB in 86 FR 37770 (July 16, 2021). The proposed rule described how HUD programs use CBSAs, as outlined in Table 1. The proposed rule also described how adoption of the new CBSA standards support the purpose of these programs and is in the public interest. <GPOTABLE COLS="2" OPTS="L2,nj,i1" CDEF="s200,r100"> <TTITLE>Table 1—HUD Uses of CBSAs</TTITLE> <CHED H="1">Use</CHED> <CHED H="1">HUD office</CHED> <ROW> <ENT I="01">Community Development Block Grant Program</ENT> <ENT>Community Planning and Development (CPD).</ENT> </ROW> <ROW> <ENT I="01">Community Development Block Grant Disaster Recovery Program</ENT> <ENT>CPD.</ENT> </ROW> <ROW> <ENT I="01">Housing Opportunities for Persons with AIDS Program</ENT> <ENT>CPD.</ENT> </ROW> <ROW> <ENT I="01">HOME Investment Partnerships (HOME) Program</ENT> <ENT>CPD.</ENT> </ROW> <ROW> <ENT I="01">Housing Trust Fund (HTF) Program</ENT> <ENT>CPD.</ENT> </ROW> <ROW> <ENT I="01">Continuum of Care</ENT> <ENT>CPD.</ENT> </ROW> <ROW> <ENT I="01">Emergency Solutions Grant (ESG)</ENT> <ENT>CPD.</ENT> </ROW> <ROW> <ENT I="01">FHA's Title II Program (loan limits)</ENT> <ENT>Housing.</ENT> </ROW> <ROW> <ENT I="01">Choice Neighborhoods Initiative</ENT> <ENT>Public and Indian Housing (PIH).</ENT> </ROW> <ROW> <ENT I="01">Difficult Development Area (DDA) and Qualified Census Tract (QCT) Designations</ENT> <ENT>PD&R.</ENT> </ROW> <ROW> <ENT I="01">Fair Market Rents (FMRs), HUD Area Median Family Incomes (HAMFIs), and Income Limits</ENT> <ENT>PD&R.</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">III. This Final Rule</HD> After considering comments received from the public, HUD adopts this final rule without changes from the proposed rule. HUD has determined that adoption of the 2020 CBSA standards, as determined by OMB in 86 FR 37770 (July 16, 2021), supports the purpose of HUD's programs and is in the public interest. The updated CBSA standards, and updated CBSA delineations based on the 2020 CBSA standards, will make calculation of Fair Market Rents, Area Median Family Income, and Income Limits more accurate. 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 QCTs 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 delineations to reflect current market conditions as HUD has done historically. <HD SOURCE="HD1">IV. Public Comments</HD> HUD received three relevant comments in response to the proposed rule. Two comments were from interested individuals and one was from a real estate association. Commenters were generally supportive of the proposed rule. This section includes a summary of the issues raised by commenters. <HD SOURCE="HD2">Policy Suggestions</HD> One commenter urged HUD to minimize disruptions for program participants. To do so, the commenter suggested that HUD adopt a “hold harmless” policy that keeps income limits constant rather than allowing them to decline. Specifically, the commenter noted that the exception should not merge a high-income county with an MSA that has a lower HAMFI but instead allow the high-income county to become its own HUD Metropolitan Fair Market Rent Area (HMFA). It would also hold harmless any county detached from an MSA, meaning that when a relatively lower-income county is detached from an MSA with a higher HAMFI, income limits in the detached county should be kept at the same level as they were when part of the MSA, rather than allowed to decline. The commenter noted that downward changes are difficult for program participants to predict and stated that this exception would avoid disruptive changes. The commenter recommended that this exception be available for all income limits, including Section 8 limits. Additionally, the commenter asked that HUD allow reasonable “grandfathering” for uses of CBSAs beyond FMR/HAMFI/Income Limits such that any area, property or individual currently receiving assistance, or in the process of applying for assistance, should be grandfathered in for a reasonable period of time, rather than lose eligibility instantly due to the change in geographic definitions. <E T="03">HUD Response:</E> This rule allows HUD to use CBSA delineations based on OMB's latest standards for CBSA delineation in its program administration. It does not otherwise set policy for HUD program eligibility such as generally defining the methods by which HUD sets program eligibility income limits derived from the HAMFI or determining program eligibility in cases where income limits decline due to geographic change caused by adopting new CBSA delineations or for other reasons. HUD's FMR, Income Limit and HAMFI policies allow for various exceptions to the CBSA delineations HUD uses in the estimation processes for these program operating parameters. This rule allows HUD to include the latest CBSA delineations in the computation process for FMRs, Income Limits, and HAMFIs, but does not otherwise affect that process or the rules of program administration. <HD SOURCE="HD2">ZIP Codes</HD> One commenter suggested that HUD use a zip-codes based system rather than a county-based system because zip codes are a more concise and accurate measure of populations and will help ensure taxes are going to the intended beneficiaries of these programs. The commenter also noted that there has been a change in commuting habits since 2020 and a decline in urban populations in 2020-2021 which is not reflected in the 2020 census data. One commenter reflected that FMRs are poor indicators of the housing market and noted the move away from the regional standard to a zip code standard. The commenter asked whether the zip code standard will allow for more resources for enforcement and rent control to be directed towards lower-income areas. The commenter also asked whether tying large areas around a metropolitan area to the metropolitan area would turn the smaller areas into large areas again. <E T="03">HUD Response:</E> OMB determines the geographic units (counties and county equivalents) that form the basis of CBSAs in the process of setting the standards for CBSA delineation. HUD interprets its statutes and regulations referencing “metropolitan areas” as referring to the metropolitan CBSAs delineated by OMB. Thus, i ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 20k characters. 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