Part 970 Public Housing Program Demolition Or Disposition of Public Housing Projects
PART 970—PUBLIC HOUSING PROGRAM—DEMOLITION OR DISPOSITION OF PUBLIC HOUSING PROJECTS
Subpart A—Demolitions and Dispositions Under Section 18 of the U.S. Housing Act of 1937
Sec.
970.1 Purpose.
970.3 Applicability.
970.5 Definitions.
970.7 General requirements for HUD review and approval of a PHA demolition/ or disposition application.
970.9 Resident participation—consultation and opportunity to purchase.
970.11 Procedures for the offer of sale to established eligible organizationsan Established Eligible Organization.
970.12Civil rights and equal opportunity review.
970.13 Environmental review requirements.
970.14Section 3 compliance.
970.15 Specific criteria for HUD approval of a demolition requestsapplication.
970.17 Specific criteria and conditions for HUD approval of a disposition requestsapplication.
970.19 Disposition of property; use Requirements for the disposition of a project.
970.20Use and treatment of proceeds.
970.21 Relocation of residents.
970.23 Costs of demolition and relocation of displaced tenants. residents.
970.25 Required and permitted actions prior to approval.
970.27 De minimis exception to demolition requirements. application requirement.
970.29 Criteria for HUD disapproval of a demolition or disposition applications. application.
970.31 Replacement units. 970.33 Effect on Operating Fund Program and Capital Fund Program.
970.33Demolitions due to emergency, disaster, or accidental loss.
970.35 Removal of all projects in the PHA’s public housing inventory.
970.37Reports and records.
Subpart B—Real Property Transactions: Retention of Projects by Public Housing Agencies
970.39Definitions.
970.41Applicability.
970.43Removal of a project from public housing without a transfer to a third party.
970.45Specific criteria for HUD approval of requests under this subpart.
Authority: 42 U.S.C. 1437p and 3535(d).
Source: 71 FR 62362, Oct. 24, 2006, unless otherwise noted.
Subpart A—Demolitions and Dispositions Under Section 18 of the U.S. Housing Act of 1937
§ 970.1 Purpose.
This part states requirements for HUD approval of a public housing agency’s applicationapplications for demolition or disposition (in whole or in part) of public housing developmentsprojects assisted under Title I of the U.S. Housing Act of 1937 (Act1937 Act). This subpart states the requirements applicable to demolitions and dispositions of public housing projects as provided under section 18 of the 1937 Act. Subpart B of this part states the requirements applicable to real property transactions and retention of projects by public housing agencies (PHAs). The regulations in 24 CFR part 85 are not applicable to this subpart, and are addressed in subpart B of this part.
§ 970.3 Applicability.
(a)This partsubpart applies to public housing developments that are owned by public housing agencies (PHAs) andprojects that are subject to an annual contributions contracts (ACCs) under the Act.contract (ACC) under the 1937 Act and which are proposed for demolition, disposition, or both, through an application under section 18 of the 1937 Act, and includes projects owned by PHAs;
(b)This partsubpart does not apply to the following:
(1)Public housing projects that PHAs apply to retain under subpart B of this part;
(2)(1) PHA-owned sectionSection 8 housing, or housing leased under former sections 10(c) or 23 of the 1937 Act;
(3)(2) Demolition or disposition before the date of full availability (DOFA) of property acquired incidentincidental to the development of a public housing project (however, this exception shall not apply to dwelling units under ACC);
(4)(3) The conveyance of public housingprojects for the purpose of providing homeownership opportunities for lowerlow-income families under sections 21 and 32 of the 1937 Act (42 U.S.C. 1437s and 42 U.S.C. 1437z-–4, respectively), the homeownership program under former section 5(h) of the 1937 Act (42 U.S.C. 1437c(h)), or other predecessor homeownership programs;
(4)The leasing of dwelling or non-dwelling space incidental to the normal operation of the project for public housing purposes, as permitted by the ACC;
(5)An agreement with a third party (e.g., leases or license, solar roof top lease, telecommunications lease, garden or park space) provided such agreement:
(i)Benefits the PHA and its residents;
(ii)Is consistent with the PHA’s Plan(as determined by HUD);
(iii)Is consistent with the PHA’s ACCwith HUD; and
(iv)Is approved in writing by HUD;
(6)(5) MakingThe adaptation or utilization ofportions of projects (including availablecommon areas and unoccupied dwellingunits in public housing projects to provide HUD-approved economic self-sufficiency services and activities to promote employment of public housing residents) for authorized non-dwellingpurposes related to public housing,including resident amenities, activitiesand services, and public housingadministration;
(7)The leasing of a project (but notindividual dwelling units) for thepurpose of enabling a prospectiveowner-entity to show site control in anapplication for funding for theredevelopment of the project, such aslow-income housing tax credits(LIHTC), provided such lease is for oneyear or less and is approved by HUD inwriting;
(8)(6) The reconfiguration of the interiorspace of buildings (e.g., moving orremoving interior walls to change thedesign, sizes, or number of units) for anauthorized use related to the normaloperation of public housing, without“demolition,” as defined in § 970.5. (This includes the conversionreconfiguration ofbedroom size, occupancy type, orchanging the status of unit fromdwelling to non-dwelling. in accordancewith all applicable HUD requirementsand approvals. Changes in the numberof units or number of bedrooms will bereflected in the PIH Information Center(PIC) or any future substitute systemrequired by HUD);
(9)(7) Easements, rights-of-way, andtransfers of utility systems incidentrelated to thenormal operation of the developmentproject forpublic housing purposes, as permittedby the ACC, provided such easements,rights-of-way, and transfers of utilitysystems are approved by HUD inwriting;
(10)(8) A whole or partial taking by apublic or quasi-public entity (takingagency) authorized to take real propertyby its use of police power or exercise ofits power of eminent domain under statelaw. A taking does not qualify for theexception under this paragraph unless:
(i)The taking agency has beenauthorized to acquire real property byuse of its police power or power ofeminent domain under its state law;
(ii)The taking agency has taken atleast the first step in formal proceedingsunder its state law; and
(iii)If the taking is for a federallyassisted project, the Uniform RelocationActAssistance and Real PropertyAcquisition Policies Act of 1970 (URA)(42 U.S.C. 4601 et seq.) applies to anyresulting displacement of residents andit is the responsibility of the takingagency to comply with applicable URArequirements.;
(9)Demolition after conveyance of apublic housing project to a non-PHAentity in accordance with an approvedhomeownership program under Title IIIof the Cranston-Gonzalez National Affordable Housing Act (HOPE I) (42U.S.C. 1437aaa note);
(10)Units or land leased for non-dwelling purposes for one year or less;
(11)A public housingReal property (vacant land andimprovements) that is conveyed by a PHAowned or hasbeen acquired by, or donated to, a PHAwith public housing or other funds andthen conveyed, sold, or otherwisetransferred to an owner-entity prior toDOFA to enable an owner-entity todevelop the property using the mixed-financedevelopment method at 24 CFR905.604;
(12)Disposition of public housingpropertyvacant land (butnot units) comprising a project fordevelopment pursuant to the mixed-financedevelopment method at 24 CFRpart 941, subpart F905.604 are exempt from this regulation,but not Section 18 of the 1937 Act, andprovided that the PHA:
(i)Submits an application, in the formprescribed by HUD, that evidences toHUD’s satisfaction that it has compliedwith the requirements of section 18 ofthe 1937 Act; and
(ii)Receives HUD approval of thatapplication before commencing thedisposition of the project;
(13)Demolition under the de minimisexception in § 970.27, except that theenvironmental review provisions apply,including the provisions at§§ 970.7(a)(15) and (b)(13) of this part.c)(18) and 970.13, providedthat the PHA notifies HUD in the formprescribed and submits the documentsand information outlined in § 970.27(e)and, except in cases of imminent threatsto health or safety, HUD acknowledgesthe action in writing prior to thecommencement of the demolition;
(14)Demolition (but not disposition)of severely distressed units as part of arevitalization plan under section 24 ofthe 1937 Act (42 U.S.C. 1437v) (HOPEVI and Choice Neighborhoods)approved after October 21, 1998;
(15)Demolition (but not disposition)of public housing developmentsprojects removed from a PHA’sinventory under section 33 of the 1937Act,(42 U.S.C. 1437z-5.–5);
[71 FR 62362, Oct. 24, 2006, as amended at 73 FR 3868, Jan. 23, 2008]
(16)Demolition of projects due to adisaster, sudden accidental or casualtyloss, as permitted by the ACC and§ 970.33, provided the PHA submits thedocuments and information outlined in§ 970.33;
(17)Dispositions of projects of a deminimis nature that are necessary tocorrect and/or clarify legal descriptionsto deed or ownership documents,provided such de minimis dispositionsare approved by HUD; and
(18)Consolidation of occupancywithin or among buildings of a project,or among projects, or with other low-incomehousing for the purposes ofimproving living conditions of, orproviding more efficient services toresidents, provided such consolidationof occupancy is done in accordancewith applicable federal laws andrequirements, which may include thePHA’s written policies on admissionsand continued occupancy, the PHA’ssection 8 Administrative Plan (24 CFRpart 982), and PHA Plan requirements(24 CFR part 903), and further providedthe PHA notifies HUD in writing inadvance of such occupancyconsolidation.
(c)The exclusion of activities in § 970.3(b) from applicability of thissubpart does not impair theapplicability of other requirements thatapply independently of section 18 of the1937 Act, including the requirements ofsection 104(d) of the Housing andCommunity Development Act of 1974(42 U.S.C. 5304(d)).
§ 970.5 Definitions.
1937 Act, is defined in 24 CFR 5.100.
ACC, or annual contributionscontract, is defined in 24 CFR 5.403.
Act means the United States Housing Act of 1937, 42 U.S.C. 1437 et seq.
Accessible, or accessibility, meansaccessible to persons with disabilities asdefined further in HUD’s regulations at24 CFR 8.3.
Appropriate government officialsmean the Chief Executive Officer orofficers of a unit of general localgovernment.
Assistant Secretary means theAssistant Secretary for Public andIndian Housing at HUD.
Chief Executive Officer of a unit ofgeneral local government means theelected official or the legally designatedofficial, who has the primaryresponsibility for the conduct of thatentity’s governmental affairs and whohas the authority to contractually bindthe jurisdiction. Examples of the chiefexecutive officer of a unit of generallocal government are: theThe elected mayorof a municipality; the elected countyexecutive of a county; the chairperson ofa county commission or board in acounty that has no elected countyexecutive; and the official designatedpursuant to law by the governing bodyof a unit of general local government.
Commensurate public benefit meansbenefits to the residents of the PHA, thecommunity, and/or the federalgovernment, as approved by HUD.General public improvements or publicinfrastructure such as streets andbridges, do not qualify as commensuratepublic benefits. HUD will generallyconsider the following to becommensurate public benefits:
(1)Rental dwelling units (in a numberapproved by HUD) to house low-incomefamilies (as defined herein) for a periodrequired by HUD of not less than 30years from the date such units areavailable for occupancy, and for whichall lease-compliant public housingresidents (as defined herein) who aredisplaced from a public housing project(as defined herein) due to a demolitionand/or disposition under this part areprovided with an opportunity to returnto size-appropriate public housing unitsthat are rebuilt on the site;
(2)Homeownership dwelling units (ina number approved by HUD) affordableto low-income families;
(3)Non-dwelling structures orfacilities to serve low-income families,as approved by HUD; and
(4)Other or additional benefits asapproved by HUD (which may include,in part, planning and carrying outsection 3 activities under section 3 ofthe Housing and Urban DevelopmentAct of 1968 (12 U.S.C. 1701u) (section3 or section 3 activities) related to theseproposed benefits)).
Comparable housing means housingthat meets housing quality standards(HQS) (or such successor standard thatHUD may adopt) and is appropriate insize for the household. For residentswith a disability, comparable housingmust include the accessibility featuresneeded by the resident and must belocated in the most integrated settingappropriate for the resident with adisability (i.e., the setting that enablesthe resident to interact with nondisabledpersons to the fullest extentpossible and have access to community-basedservices). Comparable housingmust be located in an area that isgenerally not less desirable than thelocation of the displaced resident’scurrent public housing unit. Indetermining comparable housing, a PHAshall also consider the following criteria(in aggregate): Neighborhood safety;quality of local schools; accessibility ofamenities (e.g., transportation,employment); and exposure to adverseenvironmental conditions. Relocationassociated with demolition anddisposition plans must be consistentwith the PHA’s obligation toaffirmatively further fair housing (42U.S.C. 3608(e)(5))).
(1)Comparable housing for displacedresidents is generally other subsidizedhousing and may include:
(i)Tenant-based assistance undersection 8 of the 1937 Act;
(ii)Project-based assistance undersection 8 of the 1937 Act; or
(iii)Occupancy in a unit operated orassisted by a PHA at a rental rate paidby the resident that is comparable to therental rate applicable to the publichousing unit from which the resident isdisplaced. Comparable housing for aresident household which is not eligiblefor public or assisted housing or in caseswhere no other comparable subsidizedhousing is available may be provided byoffering referrals to non-subsidizedhousing currently available on theprivate market, and may includeanother level of housing assistance, asadopted by the PHA and approved byHUD, in order to mitigate the costs ofdisplacement.
(2)[Reserved]
Demolition means the removal byrazing or other means, in whole or inpart, of one or more permanentbuildings of a public housing developmentproject such as to renderthe building(s) uninhabitable as definedby the applicable building occupancycode. A demolition involves any:
(1)The lifting and relocation of abuilding from its existing site to anothersite not covered by the same DOT; or
(2)The removal of 50 percent or moreof a building’s partition walls inaddition to four or more of thefollowing:
(i)(1) Envelope removal (roof, windows,exterior walls);
(ii)(2) Kitchen removal;
(iii)(3) Bathroom removal;
(iv)(4) Electrical system removal (unitservice panels and distribution circuits);or
(v)(5) Plumbing system removal (e.g.,either the hot water heater ordistribution piping in the unit, or both).
Declaration of Trust (DOT) means alegal instrument that grants HUD aninterest in a project. It provides publicnotice that the project must be operatedin accordance with all public housingfederal requirements, including therequirement not to convey or otherwiseencumber the property unless expresslyauthorized by federal law and/or HUD.
Displaced resident means a “resident” as defined in this section that isrelocated permanently from the projectas a direct result of a demolition and/or disposition action under this part.The term “displaced resident” means aresident displaced from a project underthis part and includes, but is not limitedto:
(1)An eligible public housingresident (including any currentmembers of the resident household) thatlives in a project at the time thedisplacement is approved, subject to anACC under the 1937 Act; and
(2)An over-income or other residentwho is otherwise ineligible foroccupancy in public housing or othersubsidized housing who, at the time thedisplacement is approved, resides in aproject subject to an ACC under the Actbut occupies a unit under PHA policiesfor continued occupancy or otherspecial rent exceptions.
Disposition means the conveyance or other transfer by the PHA, by sale or other transaction, of any interest in the real estate of a public housing development, subject to the exceptions stated in §970.3.sale or othertransfer (e.g. ground lease) of a projectthat will cause HUD to terminate theACC with respect to the project andrelease the DOT recorded against theproject, provided that such sale ortransfer is to a legal entity that isindependent from the PHA under theapplicable state law.
DOFA, or date of full availability,means the last day of the month inwhich substantially all (95 percent ormore) of the units in a housing developmentproject areavailable for occupancy.
Emergency means any occasion orinstance for which, in the determinationof the President or HUD, federalassistance is needed to supplement stateand local efforts and capabilities to savelives and to protect property and publichealth and safety, or to lessen or avertthe threat of a catastrophe in any part ofthe United States.
Established Eligible Organizationmeans any resident council or anyresident management corporation asthose terms are defined in 24 CFR part964, or to a nonprofit organizationacting on behalf of the residents.
Fair Market Value (FMV) means theestimated market value of a project, asdetermined by an independentappraiser contracted but not employedby the PHA and completed within 6months of the date an application issubmitted to HUD, unless a longer timeis approved by HUD.
Firm financial commitment means acommitment that obligates a creditablesource, lender, or equity provider, to thelending or equity investment of aspecific sum of funds to be made on orbefore a specific date(s) and maycontain contingencies or conditions thatmust be satisfied by the borrower (orentity receiving equity investments) before the closing of the transaction.The condition of a firm commitmentmust be that it is enforceable by theborrower (or entity receiving the equityinvestment) upon the satisfaction of allcontingencies or conditions.
Housing Quality Standards (HQS) hasthe same meaning as 24 CFR part 982.
Housing Construction Cost (HCC) hasthe same meaning as in 24 CFR part 905.
Lease-compliant displaced residentmeans a displaced resident (includinghousehold members whose namesappear on the public housing lease) whohas not engaged in serious or repeatedviolations of material terms of the leasethat result, or could result, in goodcause to evict, and terminate theresident’s assistance.
Low-income families has the samemeaning as found in section 3 of the1937 Act (e.g., families with incomesthat do not exceed 80 percent of areamedian income (AMI)).
Low-income housing has the samemeaning as section 3 of the 1937 Act(e.g., decent, safe, and sanitarydwellings assisted under the 1937 Act)and which may include public housingunits and units assisted by funds fromsection 8 of the 1937 Act (e.g., tenant-basedor project-based voucher unitsunder section 8 of the 1937 Act, andhomeownership units developed undersections 32, 24, or 9 of the 1937 Act.)
Major disaster means any naturalcatastrophe (including any hurricane,tornado, storm, high water, wind-drivenwater, tidal wave, tsunami, earthquake,volcanic eruption, landslide, mudslide,snowstorm, or drought), or, regardless ofcause, any fire, flood, or explosion, inany part of the United States, which:
(1)In the determination of thePresident causes damage of sufficientseverity and magnitude to warrant majordisaster assistance under this 1937 Actto supplement the efforts and availableresources of states, local governments,and disaster relief organizations; or
(2)Causes severe danger, hardship, orsuffering, as determined by HUD.
PHA or Public Housing Agency isdefined at 24 CFR 5.100.
PHA Plan—Means the PHA’s initial, annual, and 5-year submissions means the plan the PHA isrequired to prepare and/or submit toHUD under section 5(A) of the U.S. Housing Act of1937, 42 U.S.C. 1437c-1.1937 Act(42 U.S.C. 1437c–1) and 24 CFR part903, and which plan must be consistentwith the jurisdiction’s ConsolidatedPlan under 24 CFR part 91 (the PHAPlan is generally the annual plan unlessthe PHA is a Moving to Work (MTW)agency in which case it means theAnnual MTW Plan).
Project means discrete property,including all necessary appurtenances(e.g., playgrounds, as well as equipmentand personal property that has beenacquired with HUD funds and used inthe operation, maintenance, orimprovement of the project) and otherreal property developed, acquired, orassisted with funds under the 1937 Act.A project may comprise vacant landand/or dwelling or non-dwellingstructures. A project will generally havean identification number in the PIHInformation Center (PIC), but may alsoinclude housing, including mixedfinance public housing units, and otherreal property that has been acquired orotherwise developed with fundsprovided under the 1937 Act, butwithout prior HUD approval. A projectmay be owned by a PHA or, in wholeor in part, by another owner entitypursuant to 24 CFR 905.604. A projectis governed by an ACC. For purposes ofthis part, the term project includes anyhousing or other real property,regardless of whether the propertycomprises all or a portion of property ona given site and/or within a projectnumber, and includes units developedpursuant to the mixed finance methodat 24 CFR 905.604. The term projectmeans the same as the worddevelopment used in other HUDsystems and guidance.