Exception Payment Standard to Offset Increase in Utility Costs in the Housing Choice Voucher Program

Currently, increased energy costs in some parts of the country have had an adverse impact on the ability of applicants and participants in the Housing Choice Voucher program to either lease a unit while paying no more than 40 percent of their income for rent, or, once having leased a unit, to continue to pay both rent and the higher utility costs. Therefore, HUD is temporarily approving higher exception payment standard amounts for certain PHAs that have adopted a new utility allowance schedule after October 1, 2000 of between 110% and 120% of the Fair Market Rents (FMRs) without requiring the Public Housing Agency (PHA) to seek HUD approval, in order to mitigate the adverse impact of increased energy costs. HUD will calculate these exception payment standards using new rental data (reflected in proposed FMRs for FY 2002 published at 66 FR 23770 (May 9, 2001)) with the result that in areas where energy costs have increased substantially the exception payment standard amount will be between 110% and 120% of current FMRs. These exception payment standards are published in the Federal Register as appendix A immediately following this rule. HUD is also permitting these exception payment standard amounts to be used at interim reexaminations of families until September 30, 2001. The provisions of this interim rule apply only for the balance of the federal fiscal year ending September 30, 2001. The proposed fair market rents for FY 2002 published at 66 FR 23770 (May 9, 2001) reflect the increased cost of utilities.