U.S. Department of Housing and Urban Development

PUBLIC AND INDIAN HOUSING

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Special Attention of:

Notice PIH 95-28 (HA)

Field Office Public Housing

Division Issued: May 12, 1995

Directors, Field Office Expires: May 31, 1996

Modernization
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Coordinators, Public Housing Cross References:

Agencies

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Subject: Final Regulation with New Requirements for Demolition

and Disposition of Property of Public Housing

Agencies

1\. This transmits

This Notice transmits the final regulation, Public Housing

Program; Demolition or Disposition of Public Housing

Projects which was published in the Federal Register on

January 18, 1995, and was effective on February 17, 1995.

2\. Explanation of Material Transmitted

The final Demolition and Disposition regulation incorporates

the changes to Section 18 of the United States Housing Act

of 1937 brought about from three statutes: (a) the Housing

and Community Development Act of 1987, (b) the National

Affordable Housing Act of 1990, and (c) the Housing and

Community Development Act of 1992. Since the January 18,

1995, Federal Register publication is not a reprint of the

entire regulation, until the final regulation is codified,

public housing agencies (PHAs) will have to supplement 24

CFR Part 970 in the Code of Federal Regulations (CFR) with

the January 18, 1995, Federal Register final regulation.

3\. Highlights of Changes in the Final Regulation

Listed below are the most significant changes contained in

the Final Regulation:

a\. Applicability (Section 970.2)

o Section 970.2(a)(3) clarifies that where a

homeownership plan includes demolition as a

component, the demolition is subject to the

requirements of 24 CFR Part 970.

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OCI: Distribution: W-3-1, W-2(H), R-6, R-7, 138-2

Previous Editions Are Obsolete HUD 21B(3-80)

GPO 871 902

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o Section 970.2(a)(6) states that easements, rights-of-way and

transfers of utility systems incident to the normal

operation of the PHA are actions not covered by the

regulation. Previously this clarification was contained in

Demolition, Disposition and Conversion Handbook, 7486.1,

which was recently cancelled.

b\. Definitions (Section 970.3)

o The definition of Chief Executive Officer of a unit of

general local government is added to this section. Examples

of a Chief Executive Officer include the elected mayor of a

municipality, and the elected county executive of a county.

This definition relates to the requirement in Section

970.11(c) of the regulation regarding approval of the

replacement housing plan by the unit of general local

government.

c\. Relocation (Section 970.5)

o This section which greatly expands the description of

relocation issues was developed by the Office of Community

Planning and Development. It incorporates into the

regulation information on the specific requirements for the

PHA in cases where the relocation is covered by the Uniform

Relocation Act (URA), as well as in situations where the

residents are not \"displaced\" and are not covered by the

URA.

o Section 970.5(k) states that the initiation of negotiations

for the purpose of providing appropriate notices is when the

Assistant Secretary approves the PHA\'s application.

o Section 970.5(h) requires a new certification from the PHA

that it will comply with the URA and the implementing

regulations and handbook.

d\. Offer to Sell Property to Resident Organization Section 970.13

o This provision is required by Section 412 of the National

Affordable Housing Act of 1990, as modified by the Housing

and Community Development Act of 1992.

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o In a development where there is no resident organization,

the PHA is now required to make a reasonable effort during a

45-day period to inform residents of the development of the

opportunity to organize to purchase the property proposed

for demolition or disposition. The previous guidance found

in the October 6, 1992 Federal Register Notice detailed a

process for communicating with the residents which included

posting notices, sending letters to each resident by

certified mail and convening a resident meeting. Note that

these requirements have been changed.

o The new provision in the regulation greatly simplifies the

previous process found in the Federal Register Notice. It

also reduces the total number of days required to complete

the process.

e\. Replacement Housing Plan (Section 970.11)

o PHAs 1 that are proposing to demolish or dispose of 200 or

more dwelling units in a single development, may use 5-year

Section 8 certificates (tenant or project-based 2).

o Allows all PHAs that are proposing to demolish or dispose of

200 or more dwelling units in a single development to use

5-year tenant-based Section 8 certificates without requiring

the conditions for use of tenant-based assistance found in

970.11(b).

o Limits the amount of replacement housing that can be 5-year

tenant-based Section 8 certificates to not more than 50

percent of the replacement housing.

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1 HOPE VI grantees that proposed demolition are not limited by this

200 unit threshold. It has been determined by General Counsel that HOPE
VI

grantees may use 5-year Section 8 certificates irrespective of the
number

of dwelling units proposed for demolition or disposition.

2 If a PHA elects to use 5-year Section 8 certificates, it must

comply with the 15 percent limitation on the number of units in the PHAs

Section 8 inventory that are project based, in accordance with the
Section

8 regulation.

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oOver a 5-year period, allows a PHA to demolish up to 5-units

or 5 percent of the total dwelling units in the PHA\'s

inventory, whichever is the lesser, without replacement

housing, but only if the vacant space is used for the

service needs of the residents. This is the first and only

time there has been an exception to the one-for-one

replacement housing requirement since 1987. In such a case,

the PHA must submit an application without a replacement

housing plan component.

oAllows for use of housing financed with low-income housing

tax credits as replacement housing under other Federal

Assistance having a 15-year term.

oAllows replacement housing to be built or acquired outside

of the jurisdiction of the PHA if several conditions are

met.

oAllows the chief executive officer (e.g., the mayor) of the

locality where the demolition or disposition is taking place

to approve the replacement housing plan. In the past, the

Department required a resolution from the City Council of

the local government to approve the replacement housing

plan.

f.Site and Neighborhood Standards (Section 970.11)

oIn the past, all PHAs submitting applications were required

to comply with the site and neighborhood standards

assessment requirement at the time of the demolition or

disposition application.

oUnder the final regulation, a PHA that does not have a site

selected for the replacement housing and proposes to use

either public housing development or Section 8 as

replacement housing the regulation provides that the PHA

will be allowed to defer site and neighborhood assessment

until required under the appropriate program. In this case

the PHA, must provide with the application a certification

that it will comply with site and neighborhood standards

once the site is known.

oUnder the final regulation, a PHA that proposes either to

build back on site or has selected a site, must have a site

and neighborhood standards assessment performed by the

Department at the time of the demolition or disposition

application.

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oUnder the final regulation, for the first time a PHA may

build replacement housing outside its jurisdiction, as long

as it develops agreements that the PHA receiving the

replacement housing will require that the PHA receiving the

replacement housing use the waiting list of the PHA that is

doing the demolition or disposition.

g.Three New Certifications

oThe regulation requires three new certifications:

(1)Section 970.4(c) a certification that the PHA agrees to

comply with Part 50 (environmental requirements), if

the site of replacement housing is not known;

(2)Section 970.5(h) a certification that the PHA will

comply with the URA; and

(3)Section 970.11(h) a certification that the PHA will

comply with site and neighborhood standards in the

future, if the site of the replacement housing is not

known.

4.Prohibition Against Constructive Demolition Section 970.12

oThe final regulation maintains the prohibition against

constructive demolition. The provision is unchanged by the

final rule.

5.Processing of Demolition\\Disposition Applications

a.The majority of the demolition/disposition/eminent domain

requests from PHA will be reviewed by four recently established

Processing Centers. The review process is basically the same,

however, the use of the Processing Centers will eliminate the

need for complete review of the demolition or disposition

application by the field office and headquarters.

b.The newly established Processing Centers are:

New York, which will handle all applications from New England,

New York/New Jersey and the Midwest, the areas covered by former

Regions 1, 2 and 5.

Atlanta, which will handle all applications from

Southeast/Caribbean and Mid-Atlantic that include the areas

covered by former Regions 3 and 4.

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Kansas City, which will handle all applications from Great Plains

and Southwest that include areas covered by former Regions 6 and

7\.

San Francisco, which will handle all applications from

Pacific/Hawaii, Rocky Mountain and Northwest/Alaska that include

areas covered by former Regions 8, 9, and 10.

There are also two alternate review sites for times when the

workload gets too heavy in the primary Processing Centers.

c.Review of demolition requests of HOPE VI developments will, as

previously announced, be handled by the Office of Distressed and

Troubled Housing Recovery in Headquarters.

d.For Section 18 applications, PHAs will be asked to submit their

applications simultaneously to the Processing Centers and the

local HUD Field Office. The local Office will have the

responsibility of performing the environmental reviews, as well

as for performing a site and neighborhood standards assessment of

any sites that are identified for replacement housing. Since

most PHAs do not have a site for replacement housing identified

at this early stage of the demolition request, we expect this

will be a limited workload.

e.The Processing Centers have a responsibility to keep the local

offices and Ainars Rodins, the control point, informed of their

contacts with PHAs to ensure consistency in the review process.

Ainars Rodins, formerly of the New York Regional Office, will be

the control point for the Processing Centers. He may be reached

at 212-264-8000 extension 3103.

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Assistant Secretary for

Public and Indian Housing

Attachment