24 C.F.R. § 888.204

Revision to the automatic annual adjustment factors

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If the application of the Annual Adjustment Factors results in rents that are substantially lower than rents charged for comparable units not receiving assistance under the U.S. Housing Act of 1937, in the area for which the factor was published or a portion thereof, and it is shown to HUD that the costs of operating comparable rental housing have increased at a substantially greater rate than the Adjustment Factors, the HUD Field Office will consider establishing separate or revised Automatic Annual Adjustment Factors for that particular area. Any request for revision of the factors must be accompanied by an identification of the area, its boundaries and evidence that the area constitutes the largest contiguous area in which substantially the same rent levels prevail. The HUD Field Office will publish appropriate notice of the establishment of any such revised Automatic Annual Adjustment Factors. These factors will remain in effect until superseded by the subsequent publication of Automatic Annual Adjustment Factors pursuant to § 888.202.

[44 FR 21769, Apr. 12, 1979]

Notes of Decisions

Cited in 7 cases, 1988–2003 · leading case: Cisneros v. Alpine Ridge Grp., 508 U.S. 10 (1993).

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Cisneros v. Alpine Ridge Grp., 508 U.S. 10 (1993). “The court quoted 24 CFR §888.204 (1987), which states that the agency “'will consider establishing separate or revised Automatic Annual Adjustment Factors for [a] particular area'” if project owners can demonstrate that application of the formula would result in Section 8 rents…”

Cuyahoga Metro. Hous. Auth. v. United States, 57 Fed. Cl. 751 (Fed. Cl. 2003). “(citing 24 C.F.R. § 888.204 (1987)). In short, Rainier View acknowledged that adjustments were limited by comparable rents, but held that comparability determinations had to be considered in creating the AAAFs, not applied as a separate cap.”

Nat'l Leased Hous. Ass'n, & 189 Named v. United States, 105 F.3d 1423 (Fed. Cir. 1997). “In Alpine Ridge, the Court considered the Rainier View court’s view that 24 C.F.R. § 888.204 , which states that the agency “will consider establishing separate or revised [AAAFs] for [a] particular area,” barred adjustments to contract rents independent of the published factors.”

Nat'l Leased Hous. Ass'n v. United States, 22 Cl. Ct. 649 (Ct. Cl. 1991). “For the same general reasons, 24 C.F.R. § 888.204 (1988) does not demand a different result.”

Park Vill. Apts. v. United States, 25 Cl. Ct. 729 (Ct. Cl. 1992). “Defendant contends that 24 C.F.R. § 888.204 permitted plaintiff, based on its comparability findings, to secure a higher contract rent by presenting its evidence of higher operating costs to HUD and having HUD modify the applicable AAAFs accordingly.”

Carmichaels Arbors Assocs. v. United States Ex Rel. Dep't of Hous. & Urban Dev., 789 F. Supp. 683 (W.D. Pa. 1992). “Although this interpretation certainly finds some support in section 8(c)(2)(A), it does not adequately account for the overall limitation provision.”

Rainier View Assocs. v. United States, 848 F.2d 988 (9th Cir. 1988). “24 C.F.R. § 888.204 (1987) provides that “[i]f the application of the Annual Adjustment Factors results in rents that are substantially lower than rents charged for comparable units not receiving assistance .”

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