Circular No. A-45
October 20, 1993
Office of the Director
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Rental and Construction of Government
7. Procedures for Determining Rents and Other Charges
8. Construction of Federally-Owned Housing
9. Agency Regulations
Appendix: Isolation Adjustment Computation
PURPOSE. This circular sets forth policies and administrative
guidance to be used by executive agencies in establishing and administering
rental rates and other charges for Government rental quarters and
related facilities located within the fifty States, the District
of Columbia, and the territories and possessions of the United States.
It also sets forth policies and administrative guidance to be used
by executive agencies respecting construction of Federally-owned
housing (exclusive of military barracks) for civilian and military
personnel, as well as for employees of Government contractors, whether
provided on a rental basis or free of charge, both in the United
States and overseas. This circular does not deal with determinations
of whether construction of housing is appropriate, for which please
see Office of Management and Budget (OMB) Circular No. A-11, Preparation
and Submission of Budget Estimates, section 12.5(n).
2. BACKGROUND. The policies and procedures of this circular
have been revised pursuant to section 9 of the 1984 version of the
circular. Portions of OMB Circular No. A-18, Policies on Construction
of Family Housing (rescinded August 26, 1992), have been incorporated
into section 8 of this circular.
3. RESCISSION. This rescinds OMB Circular No. A-45, dated
March 28, 1984, as amended, and incorporates portions of rescinded
OMB Circular No. A-18, Policies on Construction of Family Housing,
October 18, 1957.
4. AUTHORITY. This circular is issued by virtue of the authority
vested in the President
by 5 U.S.C. section 5911(f), and delegated to the Director of the
Office of Management and Budget by section 9 of Executive Order
11609 of July 22, 1971; by 31 U.S.C. section llll; and by section
2(d) of Executive Order 8248 of September 8, 1939, and section 1
of Executive Order 11541 of July 1, 1970.
on private housing market. It is the policy of the Federal Government
to rely on the private housing market to provide housing for its
civilian employees. If there is no requirement of service or protection
or if there is no lack of available housing, as discussed in OMB
Circular No. A-11, Preparation and Submission of Budget Estimates,
subsection 12.5(n)(2) and (3), agencies must not acquire additional
of rents. Agencies of the Federal Government must adhere to the
following in determining rental rates for Government rental quarters:
value to employee. Rental rates and charges for Government quarters
and related facilities will be based upon their "reasonable value
. . . to the employee . . . in the circumstances under which the
quarters and facilities are provided, occupied or made available."
5 U.S.C. section 5911. As intended by the Congress, reasonable
value to the employee or other occupant is determined by the rule
of equivalence; namely, that charges for rent and related facilities
should be set at levels equal to those prevailing for comparable
private housing located in the same area, when practicable; and
inducements prohibited. Federal employees whose pay and allowances
are fixed by statute or regulation may not receive additional
pay and allowances for any service or duty unless specifically
authorized by law. 5 U.S.C. section 5536. Consequently, rents
and other charges may not be set so as to provide a housing subsidy,
serve as an inducement in the recruitment or retention of employees,
or encourage occupancy of existing Government housing.
consistency. When properly determined in accordance with the provisions
of this circular, rental rates will be fair as between the Government
and the employee (or other authorized occupant) and as between
employees of different agencies living in the same installation
in similar housing, or employees living in Government quarters
at different installations. Rents should not be set so as to serve
as an inducement to recruit or retain employees. Moreover, rents
should reflect a consistent local pattern for all Federal quarters
in a given location.
responsibilities. Employees have a responsibility to inform themselves
of all the conditions that prevail in and near the quarters and
duty stations to which they might be assigned before accepting transfer
to or employment at such duty stations.
As defined in Pub. L. 88-459, 78 Stat. 557 (1964), the term "agency"
means (1) each executive department of the Government; (2) each
agency or independent establishment in the Executive Branch of the
Government; (3) each corporation owned or controlled by the Government,
except the Tennessee Valley Authority; and (4) the General Accounting
b. Air conditioning.
The process of cooling air either through evaporation of water (evaporative
cooling) or refrigeration (mechanical or absorption), and the distribution
of such air.
c. Base rental
rate. The base rental rate is the rental value of the quarters,
established in accordance with the provisions of this circular,
before applying any administrative adjustments or charges for related
housing. Comparable housing is housing in the private sector that
is generally equivalent in size to the rental quarters, with the
same number of bedrooms, and with generally equivalent amenities
and related facilities. Such housing is housing available on a landlord-tenant
basis, with rental rates reflecting the fair market value of the
accommodations. This is distinguished from-housing rented on an
"employer-employee" basis or between friends and relatives, for
which other considerations may have influenced the rental rates.
In addition, other Government rental housing (Federal, State, or
local) and housing provided by churches or religious societies are
excluded from this definition of comparable housing.
"Construction" includes conversions of structures for dwelling purposes.
community. An established community is ordinarily the nearest population
center (Metropolitan Statistical Area or an incorporated or unincorporated
city or town) having a year-round population of 1,500 or more (5,000
or more in Alaska), provided that it has minimum essential medical
facilities (i.e., at least one physician and one dentist) available
to all occupants of Government quarters on a nonemergency basis
and a private rental market with housing available to the general
public. Population determinations will be based-upon the most recently
published decennial census of the United States.
g. Net area.
For purposes of construction of quarters, the net area of a dwelling
is the space inside exterior or party walls, excluding only attic,
garage, and basement (or service and storage space in lieu of basement).
value. Reasonable value for rental quarters is to be measured by
the test of equivalence, i.e., what the employee would pay for comparable
housing in the open market. Rental rates, including charges for
related facilities when appropriate, will be based upon prevailing
rates for comparable private housing located in the same general
area, after taking into account those factors that reduce or increase
the value of the housing to the tenant.
facilities. Related facilities are equipment, supplies and services
made available in connection with the occupancy of quarters including,
but not limited to, household furniture and equipment, garage space,
utilities, subsistence, and trash and laundry services.
quarters. Except as specifically excluded herein or by statute,
the term "rental quarters," includes all furnished and unfurnished
quarters supplied under specific Government authority to Government
employees, contractors, contractor employees, and all other persons
to whom housing is provided as an incidental service in support
of Government programs. It includes, but is not limited to, Government
-owned or -leased dwellings, apartments, bunkhouses, dormitories,
trailer pads, cabins, guard stations and lookouts, mobile homes,
house trailers, and housekeeping as well as nonhousekeeping units.
The term excludes tents, containers, housing which due to extreme
deterioration is unsuitable for occupancy except in exigent circumstances,
and "public quarters" designated for occupancy by members of the
uniformed services with loss of allowances, but it includes quarters
occupied by such personnel on a rental basis under 37 U.S.C. section
403(e), 42 U.S.C. subsection 1594a(f) and 1594b, and other authorities.
k. Room. A
room is a living space such as a living room, bedroom, kitchen,
finished attic or basement, or other suitable living space. A half
room is a small space used for living purposes, such as a dinette,
breakfast nook, dressing room, or reception room. No count is made
of bathrooms, strip or pullman kitchens, halls or foyers, alcoves,
pantries, laundries, storage or utility rooms, or unfinished attics
7. PROCEDURES FOR DETERMINING RENTS AND OTHER CHARGES.
for quarters. The determination of reasonable value of Government
rental quarters will be based upon an impartial study of comparable
private rental housing. There are two methods that may be employed
to determine the base rental rate. The first, an appraisal, involves
direct comparison with individual private rental housing units.
The second, the regional survey, creates a series of economic models
based upon a survey of comparable private rental housing throughout
the region. While both methods are accurate, agencies are encouraged
to utilize the survey method, whenever possible, due to the costs
and administrative burdens associated with conducting individual
appraisals. Both methods are subject to the conditions and limitations
set forth below.
and suburban locations. If Government quarters are located in
or within five miles of an established community, in an urban
or suburban location, the base rental rate may be determined by
either a staff or contract appraiser, applying recognized real
estate valuation principles.
the administrative adjustments provided in subsection 7c will
be made for isolation, site amenities, space devoted to official
use, or excessive heating or cooling costs when an appraisal
is made in an urban or suburban location. These factors, if
appropriate, will already have been considered by the appraiser
in the appraisal process. Adjustments, suitably documented,
may be made by agencies when an appraiser has not considered
or incorrectly calculated the effect of these factors.
areas. When the appraisal method is used to determine the reasonable
value of quarters that are not located in, or within five miles
of, an established community, it will be subject to the-following
limitation: To ensure a uniform approach to valuation when conducting
an appraisal in such areas, the staff or contract appraiser
will be limited to comparing the Government rental quarters
with housing in the nearest established community. (If the nearest
established community does not contain sufficient comparables
or is unduly affected by severe economic conditions, the appraiser
may select comparable rental units from the next closest established
community that does have sufficient comparables or does not
have a severely deflated or inflated housing market.) Such comparison
will be limited to adjustments for the physical differences
in the housing. The appraiser in such circumstances will not
make adjustments for location (isolation) or for the absence
of site amenities. These adjustments, if applicable, will be
made administratively in the same manner as authorized for regional
surveys in subsections 7c(1) and 7c(2).
surveys. Regional surveys may be used in all locations where Government
quarters are located. If the regional survey method is used, the
base rental rates will be set by means of a series of economic
models that utilize typical rental rates for comparable private
rental housing in the established communities nearest to the sites
in which the Government quarters are located. (If the nearest
established community does not contain sufficient comparables
or is unduly affected by severe economic conditions, the survey
may utilize comparable rental units from the next closest established
community that does have sufficient comparables or does not have
a severely deflated or inflated housing market. The actual analysis
of rental data for the establishment of base rental rates may
be accomplished using appropriate statistical techniques, such
as step-wise multiple regression.
duplication and inconsistent rates, all agencies with quarters
in a given location should coordinate their survey plans and
conduct a single survey applicable to all. The area selected
for survey should be large enough to permit an adequate sampling
of comparable rental properties in several established communities
and may encompass one or more States. Ideally, the survey would
establish the rental rates for a large number of Government
quarters and thereby reduce the cost per unit surveyed. The
methods of analysis must be capable of recognizing both the
physical characteristics and the differences in economic conditions,
and reflecting such differences in the base rental rates. Private
rental housing samples reflecting extremely high or low rental
rates should be excluded from the data base subjected to final
analysis. Appropriate adjustments may be made to the base rental
rates established for quarters in accordance with the provisions
of subsection 7c.
- Agency review.
Regardless of the method used, results of surveys and appraisals
will be reviewed by the agency prior to implementation to assure
that they are fair and reasonable, and that they were developed
in accordance with the provisions of this circular. In those communities
where the rental rates are extremely high or low, the rental housing
market should be reviewed periodically between surveys to determine
whether changes in the private rental housing market warrant revision
of the base rental rates for the quarters located near those communities.
for related facilities and costs.
It is Government policy to minimize energy consumption. Consumption
has been found to decrease when occupants of Government rental
quarters are required to pay for the actual cost of utilities
used (such as electricity, oil, natural gas, propane, coal, telephone,
cable television, water and sewer). Utilities should be furnished
by a private company and billed directly to the occupant, wherever
furnished utilities are provided, they should be metered or
measured, where practicable. The rate for utilities furnished
by the Government will be the same as the residential rate for
these utilities in the nearest established community (when the
appraisal method is used) or survey area (when the survey method
is used) used in determining the base rental rate. The consumed
amount of Government furnished utilities that are individually
metered or measured will be determined by actual readings.
furnished utilities are not individually metered or measured,
consumption will be determined on the basis of an analysis of
the average amounts of utilities used in comparable private
rental housing in the nearest established community (when the
appraisal method is used) or survey area (when the survey method
is used). (Such estimates are usually available from local utility
companies.) Alternatively, consumption may be determined using
engineering tables (such as design heat loss tables from the
American Society of Heating and Refrigeration Engineers) and
meteorological records. Normally, utility charges will be clearly
shown and separated from rent charges. Utility charges may be
combined, however, in one charge for nonhousekeeping rooms.
Where it is impractical to shut off heat and electricity to
unused rooms and the employee is otherwise entitled to the reduction
in section 7c(5) for quarters of excessive size, a proportionate
reduction in the utility charges based on the area of the unused
quarters may be made.
If there is an inadequate market of comparably furnished housing
for purposes of comparison with furnished Government quarters,
the rents on otherwise comparable unfurnished private units may
be used as the base and adjusted by a reasonable charge for furnishings.
This adjustment should be based on actual replacement costs allocated
over the useful life of the furnishings.
- Other services.
Charges for other services provided by the Government including,
but not limited to, laundry, trash and garbage removal, lawn care
and snow removal will be based upon prevailing rates for such
services in the nearest established community (when the appraisal
method is used) or survey area (when the survey method is used).
to obtain base rental rate. Where the rental charge for comparable
housing includes the values of utilities, furnishings, or other
services, downward adjustments to obtain the base rental rate
will be based on the prevailing rates for such utilities, furnishings,
and other services in the nearest established community (when
the appraisal method is used) or the survey area (when the survey
method is used). The value of furnishings and other services may
be based upon national average costs where such data are available.
heating or cooling costs. A deduction from the rental rate is
permissible if quarters require an unreasonable additional expense
to the employee for heating or cooling because of poor design,
the lack of all-weather construction, or other related factors.
The amount of the deduction will be determined as follows: If
the rental quarters in question require expenses to the occupant
in excess of 25 percent for the heating or cooling season over
the average of heating or cooling for comparable housing in the
same area and climate zone as determined by a suitable survey
or appraisal, the head of agency may determine that the excessive
costs (i.e., those in excess of 25 percent over the average) may
be deducted from the annual rental rates.
adjustments. Additional adjustments in the form of deductions from,
the base rental rate are appropriate in the specific situations
described below. The total amount deducted for all reasons must
not be excessive, resulting in a rental rate to the occupant that
is less than the reasonable value of the quarters, since this would
constitute a supplementation of salary in contravention of law.
The rental rate, after all adjustments, must not be less than 50
percent of the base rental rate, unless an adjustment for isolation
has been made. In such instances, the rental rate may be set at
not less than 40 percent of the base rental rate.
locations. In some cases, the Government supplies quarters in
locations where minimal community services are available but only
at some distance from the quarters. In addition, travel conditions
or mode of transportation may serve further to isolate some employees
from minimal community services. In such situations, the agency
shall grant a reasonable adjustment to ameliorate the direct economic
effects of the isolation, utilizing the procedure described below
and in the appendix.
established community will be used as the community for calculating
the deduction, even though that community may not serve as the
location of the comparable private rental housing used in establishing
the base rental rates. The mileage used in computing the adjustment
will be the shortest route usually traveled from the rental
quarters to the center of the nearest established community.
If that route is closed seasonally, a weighted average adjustment
will be used for the entire year, based upon the number of months
each route would ordinarily be used.
is designed to recognize different categories of highways and
modes of transportation. Because of the range of possible travel
conditions and modes of transportation, point values have been
assigned to each category of transportation. These point values
represent differences in time, cost, or both, associated with
each mile of each category of transportation from the quarters
to the nearest established community.
values are multiplied by the number of one-way miles from the
quarters to the nearest established community, to produce one-way
points. When travel from the quarters to the nearest established
community involves more than one category of transportation,
the one-way miles are distributed accordingly. When the category
of travel is category 4 or 5 on the Isolation Adjustment Computation
form in the appendix, 29 and 27 points are added, respectively,
to the product of columns A and B. The one-way points in each
category are then added to produce total one-way points, which
must exceed 30, or there is no adjustment. Finally, the total
adjusted points for all modes of transport are multiplied by
an Isolation Adjustment Factor (based on the automobile mileage
allowance determined by the General Services Administration)
to produce the monthly dollar adjustment.
- Site Amenities.
Living conditions at the locations of some Government housing
are not always the same as those found in or immediately adjacent
to the survey or appraisal communities. In such communities, the
amenities listed below are generally present and their contributory
value included in the base rent. The lack of availability of any
of these items at the quarters location represents a generally
less desirable condition that should be reflected as a negative
percentage adjustment to the base rental rate, as shown below.
Reliability and adequacy of water supply. The system should
provide potable water (free of significant discoloration or
odor) at adequate pressure at usual outlets. (No more than
a -3 percent adjustment can be made for this category.)
Reliability and adequacy of electric service. Service must
equal or exceed a 100-ampere power system capable of providing
24-hour service under normal conditions. (Occasional temporary
outages are considered normal.) If an adequate backup generator
is available, the amenity will be rated as present regardless
of the reliability of the primary power source. (No more
than a -3 percent adjustment can be made for this category.)
Reliability and adequacy of fuel for heating, cooling and
cooking. There should be sufficient fuel storage capacity
to meet prevailing weather conditions and cooking needs.
Where electricity is used to heat, cool, or cook, this adjustment
is to be made only when the deduction in (b), above, applies.
(No more than a -3 percent adjustment can be made for this
Reliability and adequacy of Police protection. Law enforcement
personnel, including Government employees with law enforcement
authority, should be available on a 24-hour basis. Availability
is defined as the ability to respond to emergencies as quickly
as any officer in the nearest established community. Part-time
officers are not necessarily unable to meet this test of
availability. Gaps in availability due to temporary illness
or injury, use of annual leave, temporary duties, training,
or other short absences, do not render law enforcement personnel
"unavailable" at the Government quarters. (No more than
a -3 percent adjustment can be made for this category.)
Fire insurance availability or reliability and adequacy
of fire protection. Fire insurance should be available with
the premium charge based upon a rating equal to the rating
available to comparable housing located in or adjacent to
the nearest established community, or, in the alternative,
adequate equipment, adequate water (or fire retardant chemical)
supply, and trained personnel should be available on a 24-hour
basis to meet foreseeable emergencies. If either element
is present, i.e., adequate insurance or an adequate fire
fighting capability, no adjustment may be made. (No more
than a -3 percent adjustment can be made for this category.)
Reliability and adequacy of sanitation service. An adequately
functioning sewage disposal system and a solid waste disposal
system, whether community or individually provided, should
be available. Individual sewage disposal systems (septic,
cesspool, or other) will be considered adequate even though
they may require periodic maintenance, as long as they are
usable during periods of occupancy. (No more than a -3 percent
adjustment can be made for this category.)
Reliability and adequacy of telephone service. Twenty-four-hour
accessibility to commercial telephone facilities should
be available. A deduction of 3 percent is authorized if
telephone service is unavailable both within the employee's
quarters and within 100 yards of the quarters. A deduction
of 2 percent is authorized if there is no telephone service
within the employee's quarters, but telephone service (either
private or party line) is available within 100 yards of
the quarters. A deduction of 1 percent is authorized if
telephone service is available in the employee's quarters,
but is not private line service and/or is not accessible
on a 24 hour per day basis.
Noise and odors. There should be an absence of significant,
frequent disturbing noises or offensive odors. (No more
than a -3 percent adjustment can be made for this category.)
Miscellaneous improvements. One or more of the following
improvements should be present: paved roads, sidewalks,
or street lights. (No more than a -1 percent adjustment
can be made for this category.)
on privacy or living space. Administrative adjustments in the
base rental rate are allowed if the living space or privacy of
the occupant is restricted. In each such case, the agency will
make a special determination of the specific conditions making
certain that the conditions have not already been reflected in
establishing the base rental rate.
Loss of privacy. If occupants are subject to loss of privacy
during nonduty hours by virtue of repeated public visits (i.e.,
occurring several times daily) or inhibited from enjoying
the full range of activities normally associated with rental
occupancies (such as where restrictions are imposed on activities
in quarters in or near national cemeteries or where quarters
are within view of prison inmates), a deduction not to exceed
10 percent of the base rental rate is allowable. Proportional
deductions will be made in situations of less frequency or
seriousness in their impact upon privacy or usage or to reflect
Space devoted to official use. When the agency determines
that the use of a portion of the quarters is required for
official business (i.e., office, storage, etc.), loss of
living space should be reflected by an adjustment to the
base rental rate, based on the square footage occupied.
and temporary use of quarters for other than temporary duty assignments
and uniformed service members on permanent change of station.
Transient quarters. Charges for quarters occupied on a transient
basis, that is, normally for 90 days or less, will be assessed
at rates equivalent to private transient housing of comparable
type and quality. These rates may be set on a nightly or weekly
basis, or both. If comparable private transient housing does
not exist in the area, the rental may be established by determining
the reasonable monthly rental rate for the quarters through
application of the other provisions of this circular, and
adding to the monthly rate an additional charge of at least
20 percent to cover necessary additional administrative and
service charges. The total will be divided by 30 days for
the nightly rate or 4-1/3 weeks for the weekly rate.
Temporary quarters. This adjustment will apply when an employee
occupies quarters for the convenience of the Government
on a temporary basis (normally more than 60 days) and does
not receive per diem. Under these circumstances, if the
employee maintains two households, the agency is authorized
to adjust the rental rate on the quarters unit so that the
combined rent or rent and mortgage payment paid during the
period of occupancy is not excessively burdensome. The adjustment
may not exceed 20 percent of the base rental rate of the
quarters unit, unless the agency determines that the circumstances
fully justify a greater deduction.
of excessive or inadequate size or quality. If there is a lack
of housing of appropriate size or quality, an employee may be
provided Government quarters of a size or quality either excessive
or inadequate to that which the prudent employee would have selected
in the private community. In these exceptional circumstances,
the base rental rate will be reduced by up to 10 percent in direct
proportion to the degree of the excess or deficiency. This reduction
will not continue beyond one month after the availability of either
appropriate Government rental quarters or private rental housing,
except when the agency determines that the reassignment of quarters
will not benefit the Government.
in administrative adjustments. For specific quarter rental rates,
agencies should implement new administrative adjustments to reflect
changes in any of the factors contained in subsection 7c as soon
as possible after learning of those changes, normally within 30
and annual adjustments; newly acquired quarters. Charges for rental
quarters and related facilities shall be adjusted periodically in
accordance with the following:
based on surveys or appraisal. Base rental rates established for
rental quarters shall be affirmed or adjusted by a survey or appraisal
of the private rental market, as follows:
At least every fifth year or when the base rental rate for
the quarters has been increased by 40 percent through application
of the rent series of the U.S. City Average Revised Consumer
Price Index for Urban Wage Earners and Clerical Workers, Rent
Series, whichever occurs first, or
Any year when changes in the private rental market in the
nearby established community indicate a need to adjust base
rental rates on the basis of a survey or appraisal of the
based on changes in the CPI. Annual adjustments in the base rental
rate shall be made by applying the percent change in the CPI Rent
Series from the month and year that the last regional survey or
reappraisal of the private rental market was conducted. The new
rates shall be effective at the beginning of the first pay period
that starts on or after March 1 of each year. Though effective
in March, the adjustment shall be based on the preceding September
CPI data to provide the required lead time.
- Annual adjustments
for isolation. The Isolation Adjustment Factor (currently 1.9)
will be recomputed each year to reflect the Government mileage
allowance for automobiles published by the General Services Administration
as of the last day of September each year. The new isolation adjustment
factor will be used to compute the monthly isolation adjustment
applicable to rents being charged starting with the first full
pay period in March of each year. This is done to coincide with
the implementation of rental rates adjusted by the CPI Rent Series
each year, as required in section 7d(2) of this circular.
- Annual adjustments
of utilities, furnishings, and services. To ensure that rates
for Government furnished utilities, furnishings, and services
keep pace with current costs, they shall be adjusted annually.
Where appraisals are used, the rate will be the average residential
rate for the utility, furnishings, and services in the nearest
established community as of the last day of September. Where surveys
are used, utility costs will be adjusted by amounts coinciding
with the changes in the appropriate components of the September
Consumer Price Index for Urban Wage Earners and Clerical Workers:
Nonfood Expenditure Categories, Seasonally Adjusted, U.S. City
Average. The adjusted value of furnishings and other services
may be based upon local or national average costs. The new changes
will be effective at the beginning of the first pay period that
starts on or after March 1 of each year.
year adjustment. The cycle year (and survey or appraisal month
within the cycle year) occurs at different times for different
employee quarters within an agency. Therefore, since annual CPI
adjustments effective in March are based on the preceding September
CPI data, cycle year adjustments for any particular quarters or
facility shall be made as follows:
When the private rental market survey or appraisal is made
during the months of September through February, no CPI adjustment
will be made on March 1 of the following year, but will be
deferred until the start of the first pay period that begins
after March 1 of the following year. Rental adjustments based
on the survey or appraisal will be put into effect in the
usual manner. Example: If the survey month is October 1989,
no CPI adjustment will be made in March 1990, but will be
deferred until March 1991. Such CPI adjustments will be based
on the changes in the CPI from the actual date of the survey
through September 1990.
When the private rental market survey or appraisal is made
during the months of March through August, no CPI adjustments
will be made in March of that year, but will be deferred
until the start of the first pay period that begins after
March 1 of the following year. Rental adjustments based
on the survey will be put into effect in the usual manner.
Example: If the survey month is April 1989, no CPI adjustment
will be made in March 1989, but will be deferred until March
1, 1990. Such CPI adjustment will be based on the changes
in the CPI from the actual date of the survey through September
acquired service. Rates for newl acquired quarters shall
be the same as those prevailing for similar Government rental
quarters in the area. If there are no established rates, an
initial survey or appraisal to establish valid and realistic
comparability with private rental housing shall be made upon
acceptance of newly acquired quarters, and the corresponding
rental rates shall be made effective upon occupancy. The initial
CPI adjustment in rental rates shall be made as follows:
When the initial survey or appraisal of the private rental
market is made during the months of March through August,
the initial CPI adjustment will be made at the start of
the first pay period that begins after March 1 of the following
When the initial survey or appraisal of the private rental
market is made during the months of September through February,
the initial CPI adjustment will be made in accordance with
the procedure set forth in subparagraph (5) (a), above.
adjustments. If new appraisals, surveys or CPI adjustments
result in increases in rental rates of 25 percent or more
above the current rental rate, such increases may be imposed
incrementally over a period not to exceed one year, on the
condition that they be applied in equal increments on at least
a quarterly basis.
Qualifications and extensions. The principle of comparability
with private rental practice may be modified under the conditions
Extension of comparability. For lack of available
alternative quarters, employees must sometimes occupy space
for use as quarters that is generally unsuitable for that
purpose. Such space may be unsuitable, for example, because
it was originally built for seasonal occupancy only, or
because it was not originally built for use as quarters.
In other instances, quarters may be suitable only for particular
types of occupancy, such as rooming houses, bunkhouses,
bachelor quarters, residence hotel-type structures, barracks-type
structures, or guard stations and lookouts.
all such cases, if no comparable rental data can be obtained
or professional appraisals are not made, rental rates will
be determined by the square footage occupied, at a rate
equivalent to one-half the base rental rate per square foot
charged for the nearest adequate rental quarters of the
same or any other Federal agency. This rate will apply only
to the shelter rental, with additions thereto for all other
related facilities at rates comparable to those in the area.
Rental and other charges will be based upon desired capacity
and, when so determined, will remain in effect for each
occupant without regard to fluctuations in the number of
occupants from time to time either above or below designed
buildings where space is assigned for occupancy of several
persons or families, common-use space in the building will
be distributed to all occupants in proportion to the space
assigned for the sole occupancy of each, to detremine the
number of square feet chargeable to each. Common-use space
includes, for example, washrooms, stairs, hallways, and
storage, lobby, and lounge areas.
Quarters for uniformed service personnel. Rental
rates and other charges incident to the occupancy of quarters
on a rental basis by members of the uniformed services will
be established in accordance with the provisions of this
quarters that have been designated inadequate public quarters
or substandard pursuant to law and regulations of the Surgeon
General of the Public Health Service and the Secretaries
of Defense and Transportation require special treatment
in one respect. The total of the rental rate, plus charges
for furniture and utilities (except telephone), will be
adjusted, if required, so as not to exceed 75 percent of
the member's basic allowance for quarters. The rental rate,
as used in the preceding sentence, is the rate obtained
after the additions or deductions required or authorized
elsewhere in this circular have been applied to the base
rental rate, including that requirement contained in subsection
7c, that the rental rate, after adjustments, will not be
less than 50 percent of the base rental rate.
Instances of hardship. In certain hardship cases
where continued occupancy of public quarters by former uniformed
service members and dependents or by dependents of deceased
service members is permitted, an amount equivalent to the
member's full basic allowance for quarters and other housing
allowances (i.e., Variable Housing Allowance, etc.) may
be charged for such periods of time as may be properly allowed
in each particular case. Occupancy of quarters in such instances
will normally not exceed 60 days.
former Federal employees (or other occupants) and dependents,
or dependents of deceased Federal employees (or other occupants),
may continue to occupy Government rental quarters for a
period normally not to exceed 60 days. Such occupants will
continue to pay the established rental rate for those quarters.
Alternative requirements. The provisions of this
circular will not apply in the following instances:
When employees attend training programs at Federal or private
facilities and the cost of housing is factored into the
program cost to the agency or through other means, the valuation
rules of this circular need not be applied, so long as the
per diem rate (or actual per diem expense rates) paid the
employee is set to reflect the fact that the housing is
provided at no cost to the employee. In other than training
situations when employees are receiving per diem (or actual
per diem expense rates) and occupying Government housing,
the per diem paid the employees is set to reflect the fact
that the housing is provided at no cost to the employee.
When employees are receiving a remote worksite commuting
allowance, in accordance with 5 U.S.C. 5942, and housing
is provided at no cost to the employees, the allowance paid
will consist of factors other than the housing cost portion
of the allowance.
Exceptions. Efforts have been made in the preparation
of this circular to allow for unusual circumstances that
may exist with respect to rental quarters. Exceptions to
the requirements included in this circular will be permitted,
therefore, only upon written request and in those very unusual
circumstances when it is demonstrated to the Office of Management
and Budget that the application of the provisions of this
circular will not result in a rental rate equivalent to
the reasonable value of the quarters to the occupant. If
an exception is granted by the Director of the Office of
Management and Budget, the agency concerned will be notified
8. CONSTRUCTION OF FEDERALLY-FUNDED HOUSING. Unless
otherwise provided by law (e.g., 10 U.S.C. 2826), the following
provides guidance to agencies on determining housing construction
needs and construction standards:
Determination of number of families to be housed and
pattern of housing required. The agency should determine
the number of families to be housed under the particular
circumstances and the probable pattern of family size and
composition by a statistical study of families and numbers
of dependents within the service or agency adjusted for
agency experience, changes in staffing patterns, and national
trends in family size. Most frequently, the agency will
be adding a limited number of houses at a station where
some housing already exists. Under these circumstances,
the agency should first make certain that existing housing
(owned, leased, or otherwise available to the agency) is
properly assigned. After ascertaining that there is a proper
utilization of existing housing, the agency should determine
what further construction, if any, is required to establish
a proper pattern of housing at the station. The determination
must discount temporary and unusual peak numbers of employees
at the station, but not necessarily recurring requirements
for seasonal employees who must be housed. Three general
situations with basically different housing requirements
are likely to occur:
station. Where only one to five Government houses are
to be supplied at a station, it is likely that no stable
family pattern can be predicted on a statistical basis.
The most reasonable method of meeting the housing requirement
under these circumstances is to supply three three-bedroom
houses, one two-bedroom house, and one four-bedroom house.
station. Where five to 25 Government houses are to be
supplied, the group is probably still too small to expect
a stable family pattern, but the group is too large to
permit building all houses the same size. Under these
circumstances, the agency should seek to develop a flexible
housing supply, if possible. However, in view of family
size trends, it would be best to construct mostly three-bedroom
houses, with a smaller number of two-bedroom houses, and
a few four-bedroom houses.
station. Where more than 25 Government houses are to be
supplied, it is reasonable to expect that a fairly stable
family pattern exists. Under these circumstances, the
agency should determine what this pattern is, as described
above, and, utilizing Table 1, below, plan to provide
the appropriate number and distribution of rooms. At military
installations the probable number of personnel entitled
to family housing quarters by grade, rank, and position
will determine the family housing requirements. In the
table of net floor areas given below, Table 1, the normal
construction limits will govern the maximum areas of houses
to be constructed, except that agencies may construct
up to the statutory or maximum limitation for housing
for commanding officers and in unusual circumstances.
The numbers of rooms will be governed by Table 1, below,
showing the relation between number of bedrooms and net
square footage areas. OMB will consider exceptions under
special circumstances only when fully justified.
NUMBER OF ROOMS
Persons Rooms to Baths Baths
in household be provided Bedrooms One-story Two-story
2-3 4 2 1 1 or l&1/2
4 5, 5&1/2 or 6 3 1 or 1&1/2 2 or 2&1/2
5 5&1/2, 6 or 7 3 or 4 l&1/2 or 2 2 or 2&1/2
6 7 4 2 2 or 2&1/2
b. Types of
family dwellings to be constructed. Family dwellings similar in
type to acceptable dwellings normally built in the local area will
be constructed whenever practicable, with full advantage being taken
of the economy of construction and maintenance of multiple-family
dwellings-apartment, row, or duplex. The construction of single-family
dwellings may receive special consideration in locations where remoteness
of the station from other community facilities makes it undesirable
from the standpoint of safety, employee morale, recruitment and
retention of personnel, and satisfactory living conditions under
adverse circumstances to house employees in multiple-family dwellings.
rental levels and their effect on construction. The type of dwellings
to be constructed will also be governed by the amount of rent that
the occupants can afford to pay (public quarters excepted) as determined
in accordance with this circular. Hence, care must be taken to ensure
that dwellings would rent at rates within the reach of employees
to be housed. In cases where there are large numbers of high salaried
personnel who would normally rent larger houses than are usually
provided on the station and where the ability to hold such employees
in Government service may be dependent upon the housing available,
agencies may construct a limited number of larger houses upon securing
specific advance approval from OMB.
of the number of rooms to be provided in family housing. The number
of rooms to be provided must be based on the size and normal composition
of families to be housed. Consideration should be given to the trends
in family size. It is permissible to provide larger houses for civilian
directors or military commanders of large stations, for military
officers of general or flag rank, chiefs of Foreign Service missions,
Foreign Service officers with the rank of career minister, and to
a limited extent, for higher salaried personnel who can afford to
and will pay commercially comparable rents for superior quarters.
Table 2, below, indicates the number of rooms and bedrooms that
should normally be planned for families of varying sizes. Again,
OMB will consider justified exceptions depending upon the remoteness
of the small or medium station and the extent to which the family
is isolated from normal community facilities.
MAXIMUM AND MINIMUM NET FLOOR AREA PER DWELLING UNIT
4 or more
1 Bedroom 1/ 2 Bedrooms 3 Bedrooms Bedrooms
Minimum 2/ 550 sq. ft. 750 3/ 960 3/ 1,190 3/
Normal 4/ 730 1,000 1,415 1,670
Maximum 810 1,250 5/ 1,670 5/ 2,100 6/
1/ For multi-family or apartment construction only.
No one-bedroom houses should be built.
2/ Any construction proposed to provide less square footage
than these minimums must be specifically approved by OMB.
3/ Applies to flats or multi-family construction. Not
recommended for single or duplex houses.
4/ Budget estimates will not be considered for construction
beyond these normal limits unless accompanied by a specific
determination of the agency that up to the specified maximums
5/ Applies to single-family houses without basements for higher
salaried personnel only.
6/ Applies to single-family houses without basements for higher
salaried personnel only. Larger areas may be considered by
OMB on special justification for heads of large stations,
flag officers, or in unusual circumstances only.
e. Net area of houses. The net areas shown below in Table 2 may be increased
10 percent (a) if outside the continental United States, (b) for
commanding officers or civilian heads of large installations, or
(c) under conditions of extreme isolation where the family may be
confined to the home for long periods due to weather conditions
or lack of community facilities within reasonable distance. The
minimum floor areas below represent the limit below which it is
not deemed advisable to go when building permanent housing; such
minimum areas should be used only for multiple-family dwellings.
areas represent the limit above which Federal funds need not be
invested to provide housing reasonably commensurate with income
for all but the highest income groups.
cannot always determine the grades of the occupants, there is a
normal range of grades for the personnel who are required or permitted
to occupy Government housing on the station. The minimum size for
the number of bedrooms needed should be provided for those in the
lowest grades in order that the housing may not be more expensive
than the occupants could be expected to rent if they were securing
their own quarters commercially. Larger quarters may be provided
for progressively higher grades up to the maximums for personnel
at and above general schedule grade 14 and ranks equivalent to the
military rank of colonel.
features. Special features may be provided to meet special work
or isolation conditions. These include: extra rooms with outside
doors for the employee whose home is also his or her work headquarters;
special access to bath or shower rooms without going through the
house where the employee's work is particularly dirty and shower
facilities are not provided in work buildings; fireplaces in remote
areas where wood is readily available and the fireplaces would serve
a practical purpose; extra storage space and facilities where distances
to market are such as to necessitate purchasing food and other supplies
in quantity; and some space for recreation purposes where families
may be confined to the house for long periods of time during bad
may be installed in living quarters only in locations where during
the six warmest months of the year the dry bulb temperature is 80
F or higher for over 650 hours or the wet bulb temperature is 67
F or higher for over 800 hours.
otherwise permitted by the standards described above, should employ
evaporative cooling when engineering studies indicate it is feasible
and more economical than refrigeration systems to install and operate.
It is suggested
that Departments and agencies initiate a priority system for installing
air conditioning in existing personnel living quarters to ensure
that the air conditioning of quarters in the warmest areas under
these criteria is completed first.
standards. Agencies should consult the Uniform Building Code or
the codes developed by the Council of American Building Officials
for guidance in planning construction of permanent family housing
that is liveable, durable, safe, sanitary, and not impose an unreasonable
and uneconomical burden upon the Government.
with design standards. Agencies shall plan new construction of family
housing in accordance with this circular and nationally recognized
design standards, such as those set forth in the Uniform Building
Code or the codes developed by the Council of American Building
Officials. Budget requests and apportionment requests for this purpose
shall be based upon compliance with the approved design standards
and the provisions of this circular. The squarefoot construction
cost should not exceed that generally recognized as prevailing in
the area for non-Federal dwellings of similar size and type of occupancy.
Exceptions may be made by those agencies constructing housing outside
the continental United States where climatic conditions or local
building codes and restrictions prevent compliance. Any other exceptions
should be plainly set forth in the budget or apportionment request.
and apportionment requests. Consult OMB Circular No. A-11, Preparation
and Submission of Budget Estimates, subsection 12.5(n), for guidance
respecting budget and apportionment requests.
9. AGENCY REGULATIONS. The following guidelines must also
be observed in establishing charges for rental quarters and related
facilities and in developing agency regulations and procedures implementing
of interest. To avoid potential conflicts of interest, agencies
will not assign employee occupants of quarters or their subordinates
to perform appraisals or serve as members of regional survey teams
used to recommend rents and other charges.
local patterns; Interagency Committees. Where several different
Federal agencies provide rental quarters in the same area, those
agencies will take necessary steps to ensure a consistent local
pattern in rents and utility rates. In particular, such agencies
are urged to establish interagency committees to coordinate and
oversee the establishment of consistent and uniform rental rates.
records regarding recommendations and adjustments. A full record
of the findings and recommendations of the appraiser or survey team,
as well as documentation to justify administrative adjustments,
will be kept by the agency concerned.
central records and supervision. Sufficient information will be
maintained centrally by the agency to allow agency management to
be informed of, and to monitor, the status of administration of
the requirements of this circular.
procedures for. Agencies will provide a procedure for dealing with
requests for reconsideration of rental determinations and other
f. Leave status,
charges during. Employees on leave will continue to be charged for
quarters and related facilities, unless the quarters are vacated
and made available for reassignment.
relationship. To aid all agency administrative officials and employees
in understanding how the circular is to be applied, agencies will
make clear that they assume the customary responsibilities of the
landlord and that those who occupy rental quarters assume the customary
responsibilities of tenants.
occupancy. Agency regulations will specify the conditions under
which the agency head, or his or her designee, will require occupancy
of Government rental quarters, in accordance with the limitations
cited in 5 U.S.C. section 5911(e), which provides that employee
or member occupancy of rental quarters may not be required unless
the agency head determines that necessary service cannot be rendered,
or that property of the Government cannot adequately be protected.
i. Safe and
sanitary quarters. Agency heads will ensure that Government rental
quarters are safe and sanitary. Although adjustments to the basic
rental rate are permitted for such circumstances as excessive heating
and cooling costs, poor condition, and lack of potable water, such
conditions should not be permitted to continue any longer than absolutely
housing officers. Each Federal agency that provides rental quarters
shall appoint a principal housing officer with responsibility to
supervise the agency's implementation of the policies of this circular.
10. INQUIRIES. For information concerning this circular,
contact the Office of Management and Budget, Office of Federal Procurement
Policy, 725 17th Street, NW, Washington, DC 20503, telephone (202)395-6803.
Leon E. Panetta
adjustment for isolation, as described in section 7c(1), is computed,
Determine the one-way distance in miles (from the quarters to
the nearest established community) for each affected category
of transportation listed in Figure 1. Enter mileages) in the appropriate
block(s) under Column B.
Multiply mileage figures entered in Column B by point values listed
in Column A for each affected category of transportation to produce
one-way points for each category. Add 29 points to the category
4 subtotal and 27 points to the category 5 subtotal to reflect
relative differences in cost or time by use of these modes of
Add all categories of one-way points in Column C to produce total
one-way points. (The total must exceed 30 points or there is no
adjustment for isolation.)
Column A Column B Column C
Category Point One-way One-way
of Travel Value Miles Points
(1) Paved road or rail 1.0 X _____ =
(2) Unpaved but improved road 1.5 X _____ =
(3) Unimproved road 2.0 X _____ =
(4) Water, snowmobile, pack 2.5 X _____=_____ + 29 = ____
animal, foot or other
special purpose conveyance
(5) Air 4.0 X _____=_____ + 27 = ____
Calculate the Isolation Adjustment Factor (IAF) using the following
formula: Multiply 2 (to reflect round-trip points) by 4 (to reflect
number of trips per month) and then multiply by $x.xx (GSA's current
automobile mileage allowance). For example, the GSA mileage allowance,
as of the date of this circular, is $0.25 per mile, resulting
in a IAF of 2.0 (rounded to the nearest tenth).
ADJUSTMENT FACTOR = 2.0
Multiply total adjusted points by the Isolation Adjustment Factor
to produce the monthly adjustment for isolation (rounded to the
nearest whole dollar).
ADJUSTMENT = _____
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