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103D CONGRESS

2D SESSION H. R. 5181

To amend section 18 of the United States Housing Act of 1937 to improve

the program providing for demolition and disposition of public housing.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 5, 1994

Mr. BAKER of Louisiana introduced the following bill; which was referred to

the Committee on Banking, Finance and Urban Affairs

A BILL

To amend section 18 of the United States Housing Act

of 1937 to improve the program providing for demolition

and disposition of public housing.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Public Housing Dis5 position Reform Act’’.

6 SEC. 2. DEMOLITION AND DISPOSITION OF PUBLIC HOUS7 ING.

8 Section 18 of the United States Housing Act of 1937

9 (42 U.S.C. 1437p) is amended to read as follows:
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1 ‘‘DEMOLITION AND DISPOSITION OF PUBLIC HOUSING

2 ‘‘SEC. 18. (a) CONDITION OF HOUSING.—The Sec3 retary may approve an application by a public housing

4 agency for permission to demolish or dispose of a public

5 housing project or a portion of a public housing project

6 only if the Secretary has determined that—

7 ‘‘(1) in the case of—

8 ‘‘(A) an application proposing demolition

9 of a public housing project or a portion of a

10 public housing project, the project or portion of

11 the project is obsolete as to physical condition,

12 location, or other factors, and it is more cost ef13 fective to replace the project or portion of the

14 project than to rehabilitate the project or por15 tion of the project; or

16 ‘‘(B) an application proposing the demoli17 tion of only a portion of a project, the demoli18 tion will help to assure the remaining useful life

19 of the remaining portion of the project;

20 ‘‘(2) in the case of an application proposing dis21 position of real property of a public housing agency

22 by sale or other transfer—

23 ‘‘(A)(i) the property’s retention is not in

24 the best interests of the tenants or the public

25 housing agency because—
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1 ‘‘(I) developmental changes in the

2 area surrounding the project adversely af3 fect the health or safety of the tenants or

4 the feasible operation of the project by the

5 public housing agency;

6 ‘‘(II) disposition will allow the acquisi7 tion, development, or rehabilitation of

8 other properties which will be more effi9 ciently or effectively operated as low-in10 come housing and which will (a) preserve

11 the total amount of low-income housing

12 stock available in the community, or (b)

13 create housing sufficient to address the

14 needs of the community as described in the

15 comprehensive housing affordability strat16 egy (under section 105 of the Cranston17 Gonzalez National Affordable Housing

18 Act), if such needs are less than the

19 amount needed to preserve the amount of

20 low-income housing stock; or

21 ‘‘(III) of other factors which the Sec22 retary determines are consistent with the

23 best interests of the tenants and public

24 housing agency and which are not incon-
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1 sistent with other provisions of this Act;

2 and

3 ‘‘(ii) for property other than dwelling

4 units, the property is excess to the needs of a

5 project or the disposition is incidental to, or

6 does not interfere with, continued operation of

7 a project; and

8 ‘‘(B) the net proceeds of the disposition

9 will be used—

10 ‘‘(i) for the payment of development

11 costs for the replacement housing;

12 ‘‘(ii) to the extent that any proceeds

13 remain after the application of proceeds in

14 accordance with clause (i), for the retire15 ment of outstanding obligations issued to

16 finance original development or moderniza17 tion of the project, which, in the case of

18 scattered-site housing of a public housing

19 agency, shall be in an amount that bears

20 the same ratio to the total of such costs

21 and obligations as the number of units dis22 posed of bears to the total number of units

23 of the project at the time of disposition;

24 and
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1 ‘‘(iii) to the extent that any proceeds

2 remain after the application of proceeds in

3 accordance with clauses (i) and (ii), the

4 provision of housing assistance for low-in5 come families through such measures as

6 modernization of low-income housing, or

7 the acquisition, development, or rehabilita8 tion of other properties to operate as low9 income housing; or

10 ‘‘(3) in the case of an application proposing

11 demolition or disposition of any portion of a public

12 housing project, assisted at any time under section

13 5(j)(2)—

14 ‘‘(A) such assistance has not been provided

15 for the portion of the project to be demolished

16 or disposed within the 10-year period ending

17 upon submission of the application; or

18 ‘‘(B) the property’s retention is not in the

19 best interest of the tenants or the public hous20 ing agency because of changes in the area sur21 rounding the project or other circumstances of

22 the project, as determined by the Secretary.

23 ‘‘(b) TENANT INVOLVEMENT AND REPLACEMENT

24 HOUSING.—The Secretary may approve an application or
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1 furnish assistance under this section or under this Act

2 only if the following requirements are met:

3 ‘‘(1) TENANT CONSULTATION AND EMPLOY4 MENT.—The application from the public housing

5 agency—

6 ‘‘(A) has been developed in consultation

7 with tenants and tenant councils, if any, who

8 will be affected by the demolition or disposition;

9 ‘‘(B) includes a plan to employ public

10 housing tenants in construction or rehabilita11 tion to the extent practicable, pursuant to sec12 tion 3 of the Housing and Urban Development

13 Act of 1968; and

14 ‘‘(C) contains a certification by appropriate

15 local government officials that the proposed ac16 tivity is consistent with the applicable com17 prehensive housing affordability strategy.

18 ‘‘(2) RELOCATION ASSISTANCE.—All tenants to

19 be relocated as a result of the demolition or disposi20 tion will be provided assistance by the public housing

21 agency and are relocated to other decent, safe, sani22 tary, and affordable housing, which is, to the maxi23 mum extent practicable, housing of their choice, in24 cluding housing assisted under section 8 of this Act.
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1 ‘‘(3) REPLACEMENT HOUSING.—Except as pro2 vided under subsections (c)(1) and (i), the public

3 housing agency has developed, and the Secretary has

4 approved, a plan that provides for additional decent,

5 safe, sanitary, and affordable dwelling units for each

6 public housing dwelling unit to be demolished or dis7 posed under such application. Such a plan—

8 ‘‘(A) shall provide for the provision of such

9 additional dwelling units through—

10 ‘‘(i) the acquisition or development of

11 additional public housing dwelling units;

12 ‘‘(ii) the use of 15-year project-based

13 assistance under section 8;

14 ‘‘(iii) in the case of an application

15 proposing demolition or disposition of 200

16 or more units, the use of tenant-based as17 sistance under section 8 having a term of

18 not less than 5 years;

19 ‘‘(iv) for not more than 10 percent of

20 the replacement units, units acquired or

21 otherwise provided for homeownership (in22 cluding cooperative and condominium in23 terests) by public housing tenants under

24 section 5(h), subtitle B or C of title IV of

25 the Cranston-Gonzalez National Affordable
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1 Housing Act, or other programs for home2 ownership that have program requirements

3 substantially equivalent to the require4 ments established under section 605 of the

5 Housing and Community Development Act

6 of 1987;

7 ‘‘(v) for not more than 10 percent of

8 the replacement units, affordable housing

9 homeownership units assisted under title II

10 of the Cranston-Gonzalez National Afford11 able Housing Act and sold to public hous12 ing tenants;

13 ‘‘(vi) rental units that are assisted

14 under—

15 ‘‘(I) title II of the Cranston-Gon16 zalez National Affordable Housing

17 Act (notwithstanding section

18 212(d)(2) of such Act), or

19 ‘‘(II) a State or local rental as20 sistance program that provides for

21 rental assistance that is comparable in

22 terms of eligibility and contribution to

23 rent to assistance under section 8;

24 except that, if such assistance is project25 based, the units shall be provided such as-
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1 sistance for a term of not less than 15

2 years and, if such assistance is tenant3 based, the units shall be provided such as4 sistance for a term of not less than 5

5 years;

6 ‘‘(vii) project-based assistance under

7 any other Federal program, which has a

8 term of not less than 15 years, including

9 housing assisted by a tax credit under sec10 tion 42 of the Internal Revenue Code;

11 ‘‘(viii) another method approved by

12 the Secretary; or

13 ‘‘(ix) any combination of such meth14 ods;

15 ‘‘(B) in the case of an application propos16 ing demolition or disposition of 200 or more

17 units, shall provide that—

18 ‘‘(i) not less than 50 percent of such

19 additional dwelling units shall be provided

20 through the acquisition or development of

21 additional dwelling units or through

22 project-based assistance; and

23 ‘‘(ii) not more than 50 percent of such

24 additional dwelling units shall be provided

25 through tenant-based assistance under sec-
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1 tion 8 having a term of not less than 5

2 years;

3 ‘‘(C) if providing for the use of tenant4 based assistance under section 8 or otherwise,

5 may be approved by the Secretary only if—

6 ‘‘(i) the Secretary finds that—

7 ‘‘(I) the supply of private rental

8 housing available to families who

9 would receive such assistance under

10 the plan is sufficient for the total

11 number of units that will be available

12 for tenant-based assistance under sec13 tion 8 or otherwise in the programs of

14 the public housing agency after imple15 mentation of the plan; and

16 ‘‘(II) on the basis of experience

17 with tenant-based assistance program

18 in the jurisdiction of the public hous19 ing agency, there is a reasonable ex20 pectation that the families who receive

21 such assistance will be housed in ac22 cordance with program requirements;

23 and

24 ‘‘(ii) the finding under clause (i) is

25 based on factors that the Secretary shall
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1 determine, which shall include the rental

2 vacancy rate in the market area, the avail3 ability of housing of appropriate quality,

4 size, and price in the market area, the suc5 cess rate of families receiving such assist6 ance from the public housing agency in

7 leasing a unit under tenant-based assist8 ance programs, and the overall administra9 tive ability of the agency in administering

10 such programs;

11 ‘‘(D) may provide that all or part of such

12 additional dwelling units may be located outside

13 the jurisdiction of the public housing agency (in

14 this subparagraph referred to as the ‘original

15 agency’) if—

16 ‘‘(i) the location is in the same hous17 ing market area as the original agency, as

18 determined by the Secretary; and

19 ‘‘(ii) the plan contains an agreement

20 between the original agency and the public

21 housing agency in the alternate location or

22 other public or private entity that will be

23 responsible for providing the additional

24 units in the alternate location that such al-
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1 ternate agency or entity will, with respect

2 to the dwelling units involved—

3 ‘‘(I) provide the dwelling units in

4 accordance with subparagraph (A);

5 ‘‘(II) complete the plan on sched6 ule in accordance with subparagraph

7 (E);

8 ‘‘(III) meet the requirements of

9 subparagraph (F) of this paragraph

10 and the maximum rent provisions of

11 subparagraph (G); and

12 ‘‘(IV) not impose a local resi13 dency preference on any resident of

14 the jurisdiction of the original agency

15 for purposes of admission to any such

16 units;

17 ‘‘(E) includes a schedule for completing

18 the plan within a period consistent with the

19 number of dwelling units subject to the pro20 posed demolition or disposition and replacement

21 plan, which—

22 ‘‘(i) shall not exceed 6 years, except

23 that the Secretary may extend the schedule

24 to not more than 10 years if the Secretary

25 determines that good cause exists to ex-
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1 tend the implementation of the replace2 ment plan under this subsection; and

3 ‘‘(ii) the demolition or disposition

4 under the plan can occur in phases nec5 essary to provide for relocation of tenants

6 under paragraph (2);

7 ‘‘(F) includes a method of ensuring that

8 the same number of individuals and families

9 will be provided housing;

10 ‘‘(G) provides for the payment of the relo11 cation expenses of each tenant to be displaced

12 and ensures that the rent paid by the tenant

13 following relocation will not exceed the amount

14 permitted under this Act;

15 ‘‘(H) prevents the taking of any action to

16 demolish or dispose of any unit until the tenant

17 of the unit is relocated to decent, safe, sanitary,

18 and affordable housing; and

19 ‘‘(I) permits the Secretary to intervene and

20 take any actions necessary to complete the plan

21 if the public housing agency fails, without good

22 cause, to carry out its obligations under the

23 plan.

24 ‘‘(c) LIMITATION ON DEMOLITION AND EXEMP25 TION.—
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1 ‘‘(1) MAXIMUM PERCENTAGE.—Notwithstand2 ing subsection (b)(3), in any 5-year period a public

3 housing agency may demolish not more than the

4 lesser of 5 dwelling units or 5 percent of the total

5 dwelling units owned and operated by the public

6 housing agency, without providing an additional

7 dwelling unit for each such public housing dwelling

8 unit to be demolished, but only if the space occupied

9 by the demolished unit is used for meeting the serv10 ice or other needs of public housing tenants or the

11 demolished unit was beyond repair.

12 ‘‘(2) SITE AND NEIGHBORHOOD STANDARDS

13 EXEMPTION.—Notwithstanding any other provision

14 of law, a replacement plan under subsection (b)(3)

15 may provide for demolition of public housing units

16 and replacement of such units on site or in the same

17 neighborhood if the number of replacement units

18 provided in the same neighborhood is significantly

19 fewer than the number of units demolished.

20 ‘‘(d) TREATMENT OF REPLACEMENT UNITS.—With

21 respect to any dwelling units developed, acquired, or leased

22 by a public housing agency pursuant to a replacement plan

23 under subsection (b)(3)—

24 ‘‘(1) assistance may be provided under section

25 9 for such units; and
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1 ‘‘(2) such units shall be available for occupancy,

2 operated and managed in the manner required for

3 public housing, and shall be subject to the other re4 quirements applicable to public housing dwelling

5 units.

6 ‘‘(e) APPROVAL OF APPLICATIONS.—

7 ‘‘(1) IN GENERAL.—The Secretary shall notify

8 a public housing agency submitting an application

9 under this section for demolition or disposition and

10 replacement of a public housing project or portion of

11 a project of the approval or disapproval of the appli12 cation not later than 60 days after receiving the ap13 plication. If the Secretary does not notify the public

14 housing agency as required under this paragraph or

15 paragraph (2), the application shall be considered to

16 have been approved.

17 ‘‘(2) DISAPPROVAL AND RESUBMISSION.—If the

18 Secretary disapproves an application, the Secretary

19 shall specify in the notice of disapproval the reasons

20 for the disapproval and the agency may resubmit the

21 application as amended or modified.

22 ‘‘(3) ANNUAL REPORT.—The Secretary shall

23 submit a report to the Congress annually describing

24 for the year the applications under this section ap25 proved and disapproved, the number, general condi-
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1 tion, and location of units demolished or disposed of,

2 and the number, general condition, location and

3 method of provision of units of replacement housing

4 provided pursuant to this section.

5 ‘‘(f) ACTION WITHOUT APPROVAL OF APPLICA6 TION.—

7 ‘‘(1) PROHIBITED ACTION.—A public housing

8 agency shall not take any action to demolish or dis9 pose of a public housing project or a portion of a

10 public housing project without obtaining the ap11 proval of the Secretary and satisfying the conditions

12 specified in subsections (a) and (b).

13 ‘‘(2) ALLOWABLE ACTIONS.—If public housing

14 dwelling units to be demolished or disposed of under

15 this section are not decent, safe, and sanitary or

16 public housing dwelling units to be rehabilitated

17 under section 14 or 24 or the HOPE VI urban revi18 talization demonstration program (pursuant to Pub19 lic Law 102–389 (106 Stat. 1579)) cannot be main20 tained cost-effectively in a decent, safe, and sanitary

21 condition, the public housing agency may relocate

22 tenants of such dwelling units into other dwelling

23 units or cease leasing such units before the approval

24 of an application under this section for demolition or
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1 disposition of such units or before implementing the

2 plan for modernization of such units.

3 ‘‘(g) ASSISTANCE FOR REPLACEMENT HOUSING.—

4 The Secretary may provide assistance under this sub5 section for—

6 ‘‘(1) providing replacement public housing units

7 pursuant to subsection (b)(3)(A) for units demol8 ished or disposed of pursuant to this section; and

9 ‘‘(2) providing assistance under section 8 for

10 replacement housing pursuant to subsection

11 (b)(3)(A) for units demolished or disposed of pursu12 ant to this section.

13 ‘‘(h) INAPPLICABILITY TO PUBLIC HOUSING HOME14 OWNERSHIP PROGRAM.—The provisions of this section

15 shall not apply to the disposition of a public housing

16 project in accordance with an approved homeownership

17 program under this Act.

18 ‘‘(i) EXCEPTIONS TO REPLACEMENT HOUSING RE19 QUIREMENT.—

20 ‘‘(1) WAIVER.—The Secretary shall waive the

21 applicability of the provisions of subsection (b)(3)

22 and (c)(1) with respect to an application under this

23 section by a public housing agency for the demolition

24 or disposition of public housing dwelling units if—
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1 ‘‘(A) the Secretary determines, based on

2 the number of families on the waiting list for

3 public housing dwelling units of the public

4 housing agency, vacancy rates, the comprehen5 sive housing affordability strategy (if applica6 ble), and other available information relating to

7 low-income housing needs within the jurisdic8 tion of the agency, that no need exists for addi9 tional low-income housing in the jurisdiction of

10 the agency; or

11 ‘‘(B)(i) the Secretary determines, based on

12 such factors as the vacancy rate for public

13 housing dwelling units of the agency, the num14 ber of families on the waiting list for public

15 housing dwelling units of the agency, the avail16 ability of funding under section 14, and the as17 sessment of the management performance of

18 the agency under section 6(j), that the need for

19 additional low-income housing in the community

20 can be met by the agency through the rehabili21 tation of vacant public housing dwelling units in

22 accordance with section 14; and

23 ‘‘(ii) the application under subsection (a)

24 includes a commitment by the public housing

25 agency to rehabilitate the requisite units within
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1 a period consistent with the extent of the pro2 posed demolition or disposition, which period

3 shall not exceed 6 years, except that the Sec4 retary may, upon a determination of good

5 cause, approve a commitment for rehabilitation

6 during a period not exceeding 10 years.

7 ‘‘(2) WAIVER AND ALTERNATIVE REPLACEMENT

8 HOUSING.—Notwithstanding any other provision of

9 this section, the Secretary shall waive the applicabil10 ity of the provisions of subsection (b)(3) with respect

11 to an application under this section by a public

12 housing agency for the demolition or disposition of

13 public housing dwelling units if—

14 ‘‘(A) the Secretary determines that the

15 agency cannot meet some or all of the require16 ments under subsection (b)(3) to provide re17 placement housing with project-based assistance

18 because of—

19 ‘‘(i) the high cost of acquiring real es20 tate for development or rehabilitation for

21 low-income housing in areas that are not

22 racially or economically impacted or are

23 not impacted by adverse environmental

24 conditions; or
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1 ‘‘(ii) other factors determined by the

2 Secretary; and

3 ‘‘(B) the agency applies for and the Sec4 retary approves the use of tenant-based assist5 ance under section 8 having a term of not less

6 than 5 years for any portion of the replacement

7 housing required under subsection (b)(3) that

8 the Secretary determines under subparagraph

9 (A) cannot be provided through project-based

10 assistance.

11 ‘‘(3) REQUEST FOR WAIVER.—To be eligible for

12 a waiver under paragraph (1) or (2), a public hous13 ing agency shall submit to the Secretary a request

14 for a waiver under this subsection that includes—

15 ‘‘(A) a comprehensive plan for demolition,

16 disposition, and replacement that describes ad17 ditional dwelling units to be made available by

18 the public housing agency;

19 ‘‘(B) an identification of the dwelling units

20 for which the waiver is requested; and

21 ‘‘(C) an assessment of the need for replac22 ing such dwelling units including the unit size,

23 age, general condition, and length of time such

24 units have been vacant, the condition of the

25 neighborhood in which the dwelling units are lo-
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1 cated, and the availability of dwelling units af2 fordable to low-income families within the juris3 diction in which the dwelling units are located,

4 during the implementation of the replacement

5 plan.

6 ‘‘(4) SUBMISSION TO SECRETARY.—A request

7 for a waiver under this subsection may be submitted

8 at any time. The request shall be submitted to the

9 Secretary by certified mail or any other equivalent

10 means that provides notification to the public hous11 ing agency making the request of the date of receipt

12 by the Secretary.

13 ‘‘(5) NOTICE OF DISPOSITION OF REQUEST.—

14 Except as provided in paragraph (6), the Secretary

15 shall notify a public housing agency requesting a

16 waiver under this section of the approval or dis17 approval of the request not later than 45 days after

18 receiving the request. If the Secretary does not no19 tify the public housing agency as required under this

20 paragraph or paragraph (6), the request for a waiver

21 shall be considered to have been approved.

22 ‘‘(6) REQUEST FOR ADDITIONAL INFORMA23 TION.—If the Secretary determines that more infor24 mation is needed to make the determinations re25 quired under paragraph (1) or (2) than has been
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1 provided by the public housing agency, the Secretary

2 shall notify the agency in writing not later than 30

3 days after receiving the request for the waiver that

4 additional information is necessary. Such notice

5 shall describe specifically the additional information

6 required for the determinations and establish a

7 deadline for the submission of the information by

8 the agency, which shall be determined based on the

9 difficulty of obtaining the information requested. If

10 the agency submits such additional information re11 quested before the deadline established in the notice

12 under this paragraph, the Secretary shall notify the

13 agency requesting the waiver that the request is ap14 proved or disapproved not later than 30 days after

15 the submission of such additional information.

16 ‘‘(7) STATEMENT OF REASONS FOR DENYING

17 OR APPROVING REQUEST.—The Secretary shall in18 clude, in each notice under paragraph (5) or (6) of

19 the denial or approval of a request for a waiver

20 under this subsection, the specific reasons for deny21 ing or approving the request. The denial of any re22 quest for a waiver for public housing dwelling units

23 shall not prejudice the consideration of any other
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1 subsequent request for such a waiver for any of such

2 dwelling units.’’.

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