1. 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Family Housing (rescinded August 26, 1992), have been incorporated into section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A-45, dated March 28, 1984, as amended, and incorporates portions of rescinded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,
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.
a. Reliance 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 rental quarters.
b. Determination of rents. Agencies of the Federal Government must
adhere to the following in determining rental rates for Government rental
Reasonable 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
Subsidies, 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.
Fairness, 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.
c. Employee 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.
a. Agency. 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 Office.
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
d. Comparable 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.
e. Construction. "Construction" includes conversions of structures for
f. Established 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
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).
h. Reasonable 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
i. Related 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.
j. Rental 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 and basements.
7. PROCEDURES FOR DETERMINING RENTS AND OTHER
a. 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
(a) Urban 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.
None of 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.
(b) Rural 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
Regional 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.
To avoid 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.
b. Charges for related facilities and costs.
Utilities. 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 possible.
When Government 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.
When Government 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.
Furnishings. 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
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).
Adjustments 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
Excessive 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.
c. Administrative 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.
Isolated 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.
The nearest 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.
The adjustment 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.
The point 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.
(a) 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.)
(b) 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.)
(c) 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 category.)
(d) 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
(e) 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.)
(f) 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.)
(g) 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.
(h) 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.)
(i) 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.)
Impositions 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.
(a) 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 seasonal variations.
(b) 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.
Transient and temporary use of quarters for other than temporary duty
assignments and uniformed service members on permanent change of station.
(a) 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.
(b) 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.
Quarters 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
Changes 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 days.
d. Cyclical and annual adjustments; newly acquired quarters. Charges for
rental quarters and related facilities shall be adjusted periodically in
accordance with the following:
Adjustments 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:
(a) 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
(b) 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 rental market.
Adjustments 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.
Periodic/cycle 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:
(a) 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.
(b) 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
Newly 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:
(a) 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 year.
(b) 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.
Incremental 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.
e. Qualifications and extensions. The principle of
comparability with private rental practice may be modified under the conditions
(1) 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.
In 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
In 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.
(2) 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 circular.
Those 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.
(3) 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.
Similarly, 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.
(4) Alternative requirements. The provisions of this
circular will not apply in the following instances:
(a) 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.
(b) 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.
(5) 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 in
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:
a. 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:
Small 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.
Medium 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.
Large 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 Baths Baths
in household to 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.
c. Prospective 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.
d. Determination 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 are
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.
Maximum floor 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.
Although agencies 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.
f. Special 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 weather
Air conditioning 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.
Air conditioning 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.
g. Design 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.
h. Compliance 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.
i. Budget 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
a. Conflicts 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.
b. Consistent 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.
c. Agency 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.
d. Agency 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
e. Reconsideration, procedures for. Agencies will provide a procedure
for dealing with requests for reconsideration of rental determinations and
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.
g. Landlord-tenant 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.
h. Required 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 necessary.
j. Agency 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
Leon E. Panetta Director
Isolation Adjustment Computation
The monthly adjustment for isolation, as described in section 7c(1), is
computed, as follows:
Step 1. 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.
Step 2. 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 travel.
Step 3. 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 = ____
TOTAL ONE-WAY POINTS
Step 4. 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
ISOLATION ADJUSTMENT FACTOR = 2.0
Step 5. Multiply total adjusted points by the Isolation Adjustment
Factor to produce the monthly adjustment for isolation (rounded to the nearest