II

103D CONGRESS

2D SESSION S. 2392

To amend section 18 of the United States Housing Act of 1937, and for

other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 16 (legislative day, AUGUST 11), 1994

Mr. BREAUX introduced the following bill; which was read twice and referred

to the Committee on Banking, Housing and Urban Affairs

A BILL

To amend section 18 of the United States Housing Act

of 1937, and for other purposes.

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

3 SECTION 1. DEMOLITION AND DISPOSITION OF PUBLIC

4 HOUSING.

5 Section 18 of the United States Housing Act of 1937

6 (42 U.S.C. 1437p) is amended to read as follows:

7 ‘‘SEC. 18. DEMOLITION AND DISPOSITION OF PUBLIC HOUS8 ING.

9 ‘‘(a) CONDITION OF HOUSING.—The Secretary may

10 approve an application by a public housing agency for per-
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1 mission to demolish or dispose of a public housing project

2 or a portion of a public housing project only if the Sec3 retary has determined that—

4 ‘‘(1) in the case of—

5 ‘‘(A) an application proposing demolition

6 of a public housing project or a portion of a

7 public housing project, the project or portion of

8 the project is obsolete as to physical condition,

9 location, or other factors, and it is more cost ef10 fective to replace the project or portion of the

11 project than to rehabilitate the project or por12 tion of the project; or

13 ‘‘(B) an application proposing the demoli14 tion of only a portion of a project, the demoli15 tion will help to assure the remaining useful life

16 of the remaining portion of the project;

17 ‘‘(2) in the case of an application proposing dis18 position of real property of a public housing agency

19 by sale or other transfer—

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

21 the best interests of the tenants or the public

22 housing agency because—

23 ‘‘(I) developmental changes in the

24 area surrounding the project adversely af25 fect the health or safety of the tenants or
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1 the feasible operation of the project by the

2 public housing agency;

3 ‘‘(II) disposition will allow the acquisi4 tion, development, or rehabilitation of

5 other properties which will be more effi6 ciently or effectively operated as low-in7 come housing and which will preserve the

8 total amount of low-income housing stock

9 available in the community or housing suf10 ficient to address the needs of the commu11 nity as described in the comprehensive

12 housing affordability strategy under sec13 tion 105 of the Cranston-Gonzalez Na14 tional Affordable Housing Act; or

15 ‘‘(III) because of other factors which

16 the Secretary determines are consistent

17 with the best interests of the tenants and

18 public housing agency and which are not

19 inconsistent with other provisions of this

20 Act; and

21 ‘‘(ii) for property other than dwelling

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

23 project or the disposition is incidental to, or

24 does not interfere with, continued operation of

25 a project; and
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1 ‘‘(B) the net proceeds of the disposition

2 will be used for—

3 ‘‘(i) the payment of development costs

4 for the replacement housing and for the re5 tirement of outstanding obligations issued

6 to finance original development or mod7 ernization of the project, which, in the case

8 of scattered-site housing of a public hous9 ing agency, shall be in an amount that

10 bears the same ratio to the total of such

11 costs and obligations as the number of

12 units disposed of bears to the total number

13 of units of the project at the time of dis14 position; and

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

16 remain after the application of proceeds in

17 accordance with clause (i), the provision of

18 housing assistance for low-income families

19 through such measures as modernization

20 of low-income housing, or the acquisition,

21 development, or rehabilitation of other

22 properties to operate as low-income hous23 ing; or

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

25 demolition or disposition of any portion of a public
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1 housing project, assisted at any time under section

2 5(j)(2)—

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

4 for the portion of the project to be demolished

5 or disposed of during the 10-year period ending

6 upon submission of the application; or

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

8 best interest of the tenants or the public hous9 ing agency because of changes in the area sur10 rounding the project or other circumstances of

11 the project, as determined by the Secretary.

12 ‘‘(b) TENANT INVOLVEMENT AND REPLACEMENT

13 HOUSING.—The Secretary may approve an application or

14 furnish assistance under this section or under any other

15 provision of this Act with respect to the demolition or dis16 position of public housing only if the following require17 ments are met:

18 ‘‘(1) TENANT CONSULTATION AND EMPLOY19 MENT.—The application submitted by the public

20 housing agency—

21 ‘‘(A) has been developed in consultation

22 with tenants and tenant councils, if any, who

23 will be affected by the demolition or disposition;

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

25 housing tenants in construction or rehabilita-
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1 tion, to the extent practicable, pursuant to sec2 tion 3 of the Housing and Urban Development

3 Act of 1968; and

4 ‘‘(C) contains a certification by appropriate

5 local government officials that the proposed ac6 tivity is consistent with the applicable com7 prehensive housing affordability strategy under

8 section 105 of the Cranston-Gonzalez National

9 Affordable Housing Act.

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

11 be relocated as a result of the demolition or disposi12 tion will be provided assistance by the public housing

13 agency and are relocated to other decent, safe, sani14 tary, and affordable housing, which is, to the maxi15 mum extent practicable, housing of their choice, in16 cluding housing assisted under section 8.

17 ‘‘(3) REPLACEMENT HOUSING.—The public

18 housing agency has developed a plan that provides

19 for additional decent, safe, sanitary, and affordable

20 dwelling units for each public housing dwelling unit

21 to be demolished or disposed of under such applica22 tion or provides additional dwelling units sufficient

23 to address the needs and demographic characteris24 tics of the number of applicants on the waiting list

25 of the agency equal to the number of units to be de-
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1 molished or disposed of or the needs of the commu2 nity, as described in the comprehensive housing af3 fordability strategy under section 105 of the Cran4 ston-Gonzalez National Affordable Housing Act,

5 which plan—

6 ‘‘(A) provides for the provision of such ad7 ditional dwelling units through—

8 ‘‘(i) the acquisition or development of

9 additional public housing dwelling units,

10 which may be units in housing owned (or

11 leased for a period to be determined by the

12 Secretary) by a partnership of a public

13 housing agency and other entity in which

14 the agency has a controlling interest;

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

16 assistance under section 8;

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

18 proposing demolition or disposition of 200

19 or more units, the use of tenant-based as20 sistance under section 8 having a term of

21 not less than 5 years;

22 ‘‘(iv) units acquired or otherwise pro23 vided for homeownership (including cooper24 ative and condominium interests) by public

25 housing residents under section 5(h), sub-
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1 title B or C of title IV of the Cranston2 Gonzalez National Affordable Housing Act,

3 or other programs for homeownership that

4 have program requirements substantially

5 equivalent to the requirements established

6 under section 605 of the Housing and

7 Community Development Act of 1987;

8 ‘‘(v) affordable housing homeowner9 ship units assisted under title II of the

10 Cranston-Gonzalez National Affordable

11 Housing Act and sold to public housing

12 residents;

13 ‘‘(vi) rental units that are—

14 ‘‘(I) assisted under title II of the

15 Cranston-Gonzalez National Afford16 able Housing Act (notwithstanding

17 section 212(d)(2) of such Act); or

18 ‘‘(II) assisted under a State or

19 local rental assistance program that

20 provides for rental assistance over a

21 term of not less than 15 years that is

22 comparable in terms of eligibility and

23 contribution to rent to assistance

24 under section 8, except that this
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1 subclause shall only apply in cases

2 provided under subparagraph (C);

3 ‘‘(vii) housing assisted by a tax credit

4 under section 42 of the Internal Revenue

5 Code of 1986;

6 ‘‘(viii) housing acquired from the Res7 olution Trust Corporation or the Federal

8 Deposit Insurance Corporation;

9 ‘‘(ix) housing acquired under section

10 203 of the Housing and Community Devel11 opment Amendments of 1978;

12 ‘‘(x) other methods of providing hous13 ing units approved by the Secretary; or

14 ‘‘(xi) any combination of such meth15 ods;

16 ‘‘(B) in the case of an application propos17 ing demolition or disposition of 200 or more

18 units, shall provide that—

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

20 additional dwelling units shall be provided

21 through the acquisition or development of

22 additional dwelling units or through

23 project-based assistance; and

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

25 additional dwelling units shall be provided
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1 through tenant-based assistance under sec2 tion 8 having a term of not less than 5

3 years;

4 ‘‘(C) if it provides for the use of tenant5 based assistance provided under section 8 or

6 otherwise, may be approved—

7 ‘‘(i) only after a finding by the Sec8 retary that replacement with project-based

9 assistance is not feasible, and the supply of

10 private rental housing actually available to

11 those who would receive such assistance

12 under the plan is sufficient for the total

13 number of families in the community as14 sisted with tenant-based assistance after

15 implementation of the plan and that such

16 supply is likely to remain available for the

17 full term of the assistance; and

18 ‘‘(ii) only if such finding is based on

19 objective information, which shall include

20 rates of participation by owners in the sec21 tion 8 program, size, conditions and rent

22 levels of available rental housing as com23 pared to section 8 standards, the supply of

24 vacant existing housing meeting the section

25 8 housing quality standards with rents at
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1 or below the fair market rental, the num2 ber of eligible families waiting for public

3 housing or housing assistance under sec4 tion 8, and the extent of discrimination

5 against the types of individuals or families

6 to be served by the assistance;

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

8 additional dwelling units may be located outside

9 the jurisdiction of the public housing agency (in

10 this subparagraph referred to as the ‘original

11 agency’) if—

12 ‘‘(i) the location is in the same hous13 ing market area as the original agency, as

14 determined by the Secretary; and

15 ‘‘(ii) the plan contains an agreement

16 between the original agency and the public

17 housing agency in the alternate location or

18 other public or private entity that will be

19 responsible for providing the additional

20 units in the alternate location that such al21 ternate agency or entity will, with respect

22 to the dwelling units involved—

23 ‘‘(I) provide the dwelling units in

24 accordance with subparagraph (A);
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1 ‘‘(II) complete the plan on sched2 ule in accordance with subparagraph

3 (F);

4 ‘‘(III) meet the requirements of

5 subparagraph (G) and the maximum

6 rent provisions of subparagraph (H);

7 ‘‘(IV) not impose a local resi8 dency preference on any resident of

9 the jurisdiction of the original agency

10 for purposes of admission to any such

11 units; and

12 ‘‘(V) allow that preference for ad13 mission to any such additional units

14 may be provided to residents of the

15 severely distressed public housing

16 dwelling units replaced under this

17 subparagraph pursuant to section 24;

18 ‘‘(E) includes a schedule for completing

19 the plan during a period consistent with the

20 size of the proposed demolition or disposition

21 and replacement 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 any other provision of this section, during any

3 5-year period a public housing agency may demolish

4 not more than the lesser of 5 dwelling units or 5

5 percent of the total dwelling units owned and oper6 ated by the public housing agency, without providing

7 an additional dwelling unit for each such public

8 housing dwelling unit to be demolished, but only if

9 the space occupied by the demolished unit is used

10 for meeting the service or other needs of public

11 housing residents.

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 fewer than the

19 number of units demolished and the balance of re20 placement units are provided elsewhere in the juris21 diction or pursuant to subsection (b)(3)(D).

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

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

24 by a public housing agency pursuant to a replacement plan

25 under subsection (b)(3)—
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1 ‘‘(1) assistance may be provided under section

2 9 for such units; and

3 ‘‘(2) such units shall be available for occupancy,

4 operated and managed in the manner required for

5 public housing, and shall be subject to the other re6 quirements applicable to public housing dwelling

7 units.

8 ‘‘(e) APPROVAL OF APPLICATIONS.—

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

10 a public housing agency submitting an application

11 under this section for demolition or disposition and

12 replacement of a public housing project or portion of

13 a project of the approval or disapproval of the appli14 cation not later than 60 days after receiving the ap15 plication. If the Secretary does not notify the public

16 housing agency as required under this paragraph or

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

18 have been approved.

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

20 Secretary disapproves an application, the Secretary

21 shall specify in the notice of disapproval the reasons

22 for the disapproval and the agency may resubmit the

23 application as amended or modified.

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

25 annually submit a report to the Congress describing
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1 for the year the applications under this section ap2 proved and disapproved, the number, general condi3 tion, and location of units demolished or disposed of,

4 and the number, general condition, location, and

5 method of provision of units of replacement housing

6 provided pursuant to this section.

7 ‘‘(f) ACTION BEFORE APPROVAL OF APPLICATION.—

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

9 agency shall not take any action to demolish or dis10 pose of a public housing project or a portion of a

11 public housing project without obtaining the ap12 proval of the Secretary and satisfying the conditions

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

14 ‘‘(2) ALLOWABLE RELOCATION.—A public

15 housing agency may relocate tenants of public hous16 ing into other dwelling units before the approval of

17 an application under this section for demolition or

18 disposition, or prior to implementing a plan for mod19 ernization under section 14 or 24, if units to be de20 molished or disposed of are not decent, safe, and

21 sanitary, or if the units to be rehabilitated cannot be

22 maintained cost-effectively in a decent, safe, and

23 sanitary condition.
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1 ‘‘(g) ASSISTANCE FOR REPLACEMENT HOUSING.—

2 The Secretary may provide assistance under this sub3 section for—

4 ‘‘(1) providing replacement public housing units

5 pursuant to subsection (b)(3)(A) for units demol6 ished or disposed of pursuant to this section; and

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

8 replacement housing pursuant to subsection

9 (b)(3)(A) for units demolished or disposed of pursu10 ant to this section.

11 ‘‘(h) INAPPLICABILITY TO PUBLIC HOUSING HOME12 OWNERSHIP PROGRAM.—The provisions of this section

13 shall not apply to the disposition of a public housing

14 project in accordance with an approved homeownership

15 program under title III.

16 ‘‘(i) EXCEPTION TO REPLACEMENT RULE.—

17 ‘‘(1) REQUIREMENTS FOR WAIVER.—The Sec18 retary shall waive the applicability of the provisions

19 of subsection (b)(3) with respect to any application

20 under this section by a public housing agency for the

21 demolition or disposition of public housing dwelling

22 units if—

23 ‘‘(A) the Secretary determines, based on

24 information provided by the public housing
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1 agency in the application and the request under

2 paragraph (2), that—

3 ‘‘(i) the requirements under sub4 section (b)(3) are preventing or interfering

5 with the development or acquisition of new

6 public housing dwelling units by the agen7 cy;

8 ‘‘(ii) the long-term goal of the agency

9 in requesting the waiver under this sub10 section is to increase the number of habit11 able public housing dwelling units of the

12 agency;

13 ‘‘(iii) maintaining and operating the

14 dwelling units to be demolished or disposed

15 of is not cost-effective; and

16 ‘‘(iv) sufficient financial assistance is

17 not, and will not be, available to the public

18 housing agency to rehabilitate or replace

19 all or some of the units;

20 ‘‘(B) the Secretary determines that replac21 ing the dwelling units to be demolished or dis22 posed of under the application is unnecessary

23 because other affordable housing is available in

24 the area in which the units are located, and in

25 making such determination the Secretary con-
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1 siders the assessment submitted by the public

2 housing agency under paragraph (2)(C); and

3 ‘‘(C) the public housing agency requests a

4 waiver under this subsection in accordance with

5 the requirements of paragraph (2).

6 ‘‘(2) REQUEST FOR WAIVER.—To be eligible for

7 a waiver under this subsection, a public housing

8 agency shall submit to the Secretary a request for

9 a waiver under this subsection that includes—

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

11 disposition, and replacement that describes ad12 ditional dwelling units to be made available by

13 the public housing agency;

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

15 for which the waiver is requested; and

16 ‘‘(C) an assessment of the need of replac17 ing such dwelling units including the unit size,

18 age, general condition, and length of time such

19 units have been vacant, the condition of the

20 neighborhood in which the dwelling units are lo21 cated, and the availability of dwelling units af22 fordable to low-income families within the juris23 diction in which the dwelling units are located,

24 during the implementation of the replacement

25 plan.
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1 ‘‘(3) SUBMISSION TO SECRETARY.—A request

2 for a waiver under this subsection may be submitted

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

4 Secretary by certified mail or any other equivalent

5 means that provides notification to the public hous6 ing agency making the request of the date of receipt

7 by the Secretary.

8 ‘‘(4) NOTICE OF DISPOSITION OF REQUEST.—

9 Except as provided in paragraph (5), the Secretary

10 shall notify a public housing agency requesting a

11 waiver under this section of the approval or dis12 approval of the request not later than 45 days after

13 receiving the request. If the Secretary does not no14 tify the public housing agency as required under this

15 paragraph or paragraph (5), the request for a waiver

16 shall be considered to have been approved.

17 ‘‘(5) REQUEST FOR ADDITIONAL INFORMA18 TION.—If the Secretary determines that more infor19 mation is needed to make the determinations under

20 paragraph (1) than has been provided by the public

21 housing agency, the Secretary shall notify the agen22 cy in writing not later 30 days after receiving the re23 quest for the waiver that additional information is

24 necessary. Such notice shall describe specifically the

25 additional information required for the determina-
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1 tions and establish a deadline for the submission of

2 the information by the agency, which shall be deter3 mined based on the difficulty of obtaining the infor4 mation requested. If the agency submits such addi5 tional information requested before the deadline es6 tablished in the notice under this paragraph, the

7 Secretary shall notify the agency requesting the

8 waiver that the request is approved or disapproved

9 not later than 30 days after the submission of such

10 additional information.

11 ‘‘(6) STATEMENT OF REASONS FOR DENYING

12 OR APPROVING REQUEST.—The Secretary shall in13 clude, in each notice under paragraph (4) or (5) of

14 the denial or approval of a request for a waiver

15 under this subsection, the specific reasons for deny16 ing or approving the request. The denial of any re17 quest for a waiver for public housing dwelling units

18 shall not prejudice the consideration of any other

19 subsequent request for such a waiver for any of such

20 dwelling units.’’.

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