35650 Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Parts 5, 207, 266, 880, 881, 882,

883, 884, 886, 891, 965, and 983

[Docket No. FR–4280–P–01]

RIN 2501–AC45

Uniform Physical Condition Standards

and Physical Inspection Requirements

for Certain HUD Housing

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

establish for housing assisted under

certain HUD programs uniform physical

condition standards. These standards

are intended to ensure that such

housing is decent, safe, sanitary and in

good repair. HUD’s Section 8 housing,

Public Housing, HUD-insured

multifamily housing, and other HUD

assisted housing (collectively, HUD

housing) currently must meet certain

standards and must undergo an annual

physical inspection to determine that

the housing qualifies as decent, safe,

sanitary and in good repair. The

description or components of what

constitutes acceptable physical housing

quality and the physical inspection

procedures by which the standards are

determined to be met, however, vary

from HUD program to HUD program. To

the extent possible, HUD believes that

housing assisted under its programs

should be subject to uniform physical

standards, regardless of the source of the

subsidy or assistance. Additionally, to

the extent feasible, HUD believes that

the physical inspection procedures by

which the standards will be assessed

should be uniform in the covered

programs. Therefore, this rule proposes

that certain HUD housing, as defined in

this rule, must meet uniform physical

condition standards to ensure that the

HUD housing is decent, safe, sanitary

and in good repair. This rule also

generally describes new physical

inspection procedures that will allow

HUD to determine conformity with such

standards. This rule would not change

the requirement for annual physical

inspections currently found in the

covered HUD programs. Additionally,

this rule would not affect the existing

requirements in each covered HUD

program regarding which entity is

responsible for conducting the physical

inspection of the program.

DATES: Comments must be submitted on

or before July 30, 1998.

ADDRESSES: Interested persons are

invited to submit comments regarding

this proposed rule to the Regulations

Division, Office of General Counsel,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410.

Communications should refer to the

above docket number and title.

Facsimile (FAX) comments are not

acceptable. A copy of each

communication submitted will be

available for public inspection and

copying between 7:30 a.m. and 5:30

p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: For

further information, contact the Real

Estate Assessment Center, Attention:

William Thorson, Department of

Housing and Urban Development, 4900

L’Enfant Plaza East, SW, Room 8204,

Washington, DC 20410; telephone (202)

755–0102. Persons with hearing and

speech impairments may contact the

Center via TTY by calling the Federal

Information Relay Service at (800) 877–

8399.

SUPPLEMENTARY INFORMATION:

I. Background—Statutory Directive To

Provide Decent, Safe, and Sanitary

Housing

‘‘The Declaration of Policy’’ in section

2 of the United States Housing Act of

1937 (42 U.S.C. 1437) (1937 Act)

provides in relevant part as follows:

It is the policy of the United States to

promote the general welfare of the Nation by

employing its funds and credit, as provided

in this Act, to assist the several States and

their political subdivisions to remedy the

unsafe and unsanitary housing conditions

and the acute shortage of decent, safe, and

sanitary dwellings for families of lower

income * * *. (Emphasis added)

More recently, in the CranstonGonzalez National Affordable Housing

Act (Pub. L. 101–625, approved

November 28, 1990; 42 U.S.C. 12701 et

seq.), the Congress reaffirmed the

nation’s housing policy. Section 102 of

this statute (42 U.S.C. 12702) states in

relevant part as follows:

The objective of national housing policy

shall be to reaffirm the long-established

national commitment to decent, safe, and

sanitary housing for every American by

strengthening a nationwide partnership of

public and private institutions.

The housing standard set by the

Congress as the standard for all

American families is one of decent, safe,

and sanitary housing. As the statutes

cited above reflect, this is also the

standard by which HUD housing should

be evaluated.

II. Current Requirements Governing

Physical Condition and Property

Maintenance Standards for HUD

Housing

The majority of HUD programs

currently contain requirements

governing the physical condition and

maintenance of the housing. In

discussing the various housing that is

proposed to be covered by this rule

(Section 8 project-based housing, Public

Housing, HUD-insured multifamily

housing, and other HUD-assisted

housing) the term ‘‘HUD housing’’ is

used for purposes of brevity.

Current Standards Applicable to

Section 8 Housing

HUD’s Section 8 project-based

assistance is provided under the Section

8 New Construction, Substantial

Rehabilitation, Loan Management SetAside, Property Disposition, Moderate

Rehabilitation (including the Section 8

Moderate Rehabilitation Single Room

Occupancy (SRO) program for homeless

individuals), and project-based

Certificate programs. The statutory

physical condition standard for all

Section 8 housing is ‘‘decent, safe, and

sanitary.’’ Specifically, section 2 of the

1937 Act, as noted above, declares the

statutory policy to provide assistance for

low-income individuals in ‘‘decent,

safe, and sanitary’’ dwellings in the

Section 8 (and Public Housing) program.

Additionally, section 3(b)(1) of the 1937

Act defines the term ‘‘low-income

housing,’’ which term includes Public

Housing and housing receiving Section

8 assistance, as ‘‘decent, safe, and

sanitary dwellings assisted under this

Act.’’

The various forms of Section 8

Housing Assistance Payments (HAP)

Contracts covering all of these Section 8

programs contain broad references to

the quality or the physical condition of

the housing that must be maintained,

language that is similar to the 1937 Act

language. While there is some minor

variation in language, these contracts

generally require owners to maintain

project units and related premises in

decent, safe, and sanitary condition.

The program regulations for each of

the Section 8 programs provide the

substantive physical condition

standards for each program, but they

differ somewhat from one another. For

the Section 8 New Construction and

Substantial Rehabilitation programs, the

regulations provide that housing is

decent, safe, and sanitary if it is

maintained in a condition substantially

the same as at the time of acceptance

(see 24 CFR 880.201 and 881.201).

Section 8 New Construction projects
Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules 35651

1The minimum property standards pertain to

HUD requirements for site design, building design,

materials, and construction of projects. An owner

has the obligation to maintain a project constructed

in accordance with the minimum property

standards in a condition ‘‘substantially the same as

at the time of [its] acceptance’’ (24 CFR 880.201).

2The HUD minimum design standards contain

the basic HUD requirements for the rehabilitation

of projects. An owner has the obligation to maintain

a project rehabilitated in accordance with the

minimum design standards in a condition

‘‘substantially the same as at the time of [its]

acceptance’’ (§ 881.201).

also must comply with HUD minimum

property standards; 1 applicable State

and local laws, codes, ordinances, and

regulations; HUD requirements

pertaining to noise abatement and

control; and HUD requirements

pursuant to section 209 of the Housing

and Community Development Act of

1974 for ‘‘projects for the elderly or

handicapped’’ (24 CFR 880.207).

Section 8 Substantial Rehabilitation

projects must comply with HUD

minimum design standards for

rehabilitation for residential

properties; 2 applicable State and local

laws, codes, ordinances, and

regulations; HUD noise abatement and

control requirements; and HUD section

209 requirements (24 CFR 881.207). The

requirements in §§ 880.207 and 881.207

generally relate to design, construction,

and rehabilitation standards, rather than

to physical maintenance requirements.

This proposed rule only addresses

physical condition after completion of

construction and/or rehabilitation. This

rule does not propose to revise the

design, construction, and rehabilitation

standards currently found in HUD

regulations.

Additionally, this rule does not

propose to revise the housing quality

standards (HQS) applicable to the

Section 8 Certificates and Vouchers

program. As discussed later in this

preamble, HQS will remain applicable

to the Section 8 Certificates and

Vouchers Program.

Current Standards Applicable to Public

Housing

HUD Public Housing is also subject to

a standard of decent, safe, and sanitary.

Section 3(b)(1) of the 1937 Act provides

in relevant part as follows:

The term low-income housing means

decent, safe, and sanitary dwellings assisted

under this Act. The term ‘‘public housing’’

means low-income housing, and all

necessary appurtenances thereto, assisted

under this Act other than under section 8.

Section 14 of the 1937 Act, which

addresses Public Housing

modernization, also emphasizes a

decent, safe, and sanitary housing

standard. Section 14(j)(2) provides, in

relevant part, that ‘‘the Secretary shall

issue rules and regulations establishing

standards which provide for decent,

safe, and sanitary living conditions in

low-rent public housing projects

* * *.’’ In addition to the references to

the decent, safe, and sanitary standard,

other sections of the 1937 Act refer to

the ‘‘obligation’’ of a public housing

agency (PHA) to inspect and maintain

the Public Housing units in the PHA’s

projects. For example, in connection

with the Public Housing Management

Assessment Program (PHMAP),

established by section 6(j) of the 1937

Act, section 6(j)(1)(G) requires the PHA

to inspect the units to ascertain

‘‘maintenance or modernization needs.’’

The current regulatory provisions

addressing the physical condition of

Public Housing projects are found in

several sections of HUD’s regulations in

Title IX of 24 CFR: §§ 901.30 (of the

PHMAP regulations), 941.203 (of the

Public Housing Development

regulations), 965.704 (of the PHAOwned or Leased Projects regulations),

and 968.315 (of the Comprehensive

Improvement Program Regulations). In

the current Public Housing

Development regulations, § 941.203

(Design and construction standards)

provides that Public Housing projects

must comply with a national building

code; applicable State and local laws,

codes, ordinances, and regulations; and

other Federal requirements, including

fire safety requirements and HUD

minimum property standards. (HUD’s

minimum property standards are found

in 24 CFR part 200, subpart S, and

remain applicable to Public Housing as

design and construction standards.)

As noted earlier in this preamble,

Public Housing is not only currently

subject to a standard of ‘‘decent, safe,

and sanitary’’ housing, there is also a

statutory obligation on the PHA to

inspect Public Housing units (see

section 6(j) of the 1937 Act). This

requirement is found in the current

Public Housing Management

Assessment Program (PHMAP)

regulations (see 24 CFR 901.30). Section

901.30, captioned ‘‘Indicator #5, Annual

Inspection of Units and Systems,’’

provides in relevant part that: ‘‘All

occupied units are required to be

inspected.’’ This proposed rule would

not change the current requirement that

PHAs inspect all of their units annually

to determine maintenance and

modernization needs. However, through

a separate rulemaking, HUD is

proposing new assessment regulations

for Public Housing under which PHAs

would be required to maintain their

units in accordance with the same

decent, safe, and sanitary standard

proposed in part 5, subpart G of this

rule.

Current Standards Applicable to

Insured Multifamily Housing

Generally, in HUD-insured

multifamily housing, the mortgagors are

subject, by contract, to maintain the

mortgaged premises, accommodations,

and the grounds appurtenant thereto, in

good repair and condition. Additionally,

HUD’s standard mortgage form requires

the mortgagor to keep the premises in

good repair. Although existing FHA

regulations and supplementary

materials (such as handbooks) do not

provide exact details on what is meant

by ‘‘good repair,’’ the ‘‘good repair’’

standard is very similar if not identical

to the ‘‘decent, safe, and sanitary’’

standard. For example, HUD Handbook

4350.1 REV–1, Multifamily Asset

Management and Project Servicing,

provides that in determining the level of

management review HUD should

perform on site, it should review the

mortgagee’s annual physical inspection

‘‘to determine if the condition of the

property is consistent with the

provision of ‘‘decent, safe, and sanitary

housing’’ (emphasis added). For HUDowned projects, section 203 of the

Housing and Community Development

Amendments of 1978 (12 U.S.C. 1701–

z–11) provides that HUD shall manage

or dispose of HUD-owned projects and

projects covered by a HUD-held

mortgage in a manner that will, in the

least costly fashion among reasonable

available alternatives, address the goal

of maintaining existing housing stock in

a ‘‘decent, safe, and sanitary condition,’’

among other things.

Summary of Current Applicable

Standards

While Section II of the preamble does

not address all the various HUD

programs that contain housing physical

condition standards and physical

inspection requirements, the section

provides examples of the similarities

and differences in housing standards

and inspection requirements to which

certain HUD subsidized, assisted, and/

or insured housing is currently subject

under various HUD programs. These

standards are found throughout HUD

regulations, and are also supplemented

by HUD handbooks, contracts,

agreements, and other documents.

Although several sets of housing

standards apply to HUD housing, HUD

finds it warranted, by the proper

administration of its duties, to apply a

uniform set of physical condition

standards to the housing related to

HUD’s Section 8 (project-based

assistance only), Public Housing,
35652 Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules

Section 202/811 Supportive Housing,

and multifamily mortgage insurance

programs. (As described below, HUD’s

Section 8 Certificate and Voucher

Programs will continue to be subject to

the existing housing quality standards

(HQS) set forth in HUD’s regulations in

24 CFR part 982.) However, in adopting

uniform physical condition standards

for HUD housing, this proposed rule

would not alter the statutory standard

for maintaining HUD housing. Instead,

this proposed rule, by using the

statutory terminology, clearly

acknowledges that the physical

condition of the housing that is to be

met is one of ‘‘decent, safe, and

sanitary.’’

III. Proposed Uniform Physical

Condition Standards

Through this rule, HUD proposes

uniform physical condition standards

that will serve to determine whether

certain HUD housing is decent, safe,

sanitary and in good repair. HUD also

proposes that these standards be

evaluated through uniform physical

inspection procedures. These proposed

standards and inspection process are

intended to achieve three significant

objectives:

(1) Consistency in physical condition

standards for HUD housing;

(2) Standardization of the inspection

to be undertaken to determine

compliance with the standards; and

(3) Implementation of an

electronically-based inspection system

to evaluate, rate and rank the physical

condition of HUD housing objectively.

HUD Programs Covered by the New

Standards

The proposed new physical condition

standards will apply to housing assisted

by HUD under the following programs

(Section V of this preamble discusses

the specific regulatory parts and

sections that are proposed to be

amended). In this rule, the various types

of HUD housing that are proposed to be

subject to the new physical condition

standards, as set forth in paragraphs (1)

through (3) below, are collectively

referred to as ‘‘HUD housing.’’

1. Section 8 Project-Based and Other

Assisted Housing

—Section 8 Project-Based Assistance,

including the Section 8 New

Construction, Substantial

Rehabilitation, Loan Management SetAside, Property Disposition, Moderate

Rehabilitation (including the Single

Room Occupancy program for

homeless individuals), and projectbased Certificate programs;

—Section 202 Program of Supportive

Housing for the Elderly;

—Section 811 Program of Supportive

Housing for Persons with Disabilities;

and

—Section 202 Loan Program for Projects

for the Elderly and Handicapped

(including 202/8 projects and 202/162

projects).

While this proposed rule covers

Section 8 project-based assistance, as

described above, this proposed rule

would not cover Section 8 tenant-based

assistance (i.e., housing assisted by

HUD’s Section 8 Certificate and

Vouchers Rental Assistance Program;

see 24 CFR part 982). The housing

quality standards (HQS) were originally

established by the Secretary for the

purpose of Section 8 tenant-based

housing assistance. Unlike Section 8

project-based assistance, HUD is

continuously reviewing and approving

new units into the Section 8 tenantbased assistance programs, and HUD

has found that HQS is appropriate for

this purpose. As discussed earlier in

this rule, HUD believes that all of its

programs should be subject to the same

uniform physical inspection

requirements. HUD also believes that it

would be appropriate to require the

Section 8 Certificate and Voucher

(tenant-based assistance) programs to be

subject to the uniform standards.

However, HUD is not proposing at this

time to apply the new uniform

standards to such housing, but instead

will consider doing so at a later date.

2. FHA Multifamily Housing

The proposed standards also will

apply to multifamily housing with

mortgages insured or held by HUD, or

housing that is receiving assistance from

HUD, under the following authorities:

—Section 207 of the National Housing

Act (NHA) (12 U.S.C. 1701 et seq.)

(Rental Housing Insurance);

—Section 213 of the NHA (Cooperative

Housing Insurance);

—Section 220 of the NHA

(Rehabilitation and Neighborhood

Conservation Housing Insurance);

—Section 221(d) (3) and (5) of the NHA

(Housing for Moderate Income and

Displaced Families);

—Section 221(d)(4) of the NHA

(Housing for Moderate Income and

Displaced Families);

—Section 231 of the NHA (Housing for

Elderly Persons);

—Section 232 of the NHA (Mortgage

Insurance for Nursing Homes,

Intermediate Care Facilities, Board

and Care Homes);

—Section 234(d) of the NHA (Rental)

(Mortgage Insurance for

Condominiums);

—Section 236 of the NHA (Rental and

Cooperative Housing for Lower

Income Families);

—Section 241 of the NHA

(Supplemental Loans for Multifamily

Projects); and

—Section 542(c) of the Housing and

Community Development Act of 1992

(12 U.S.C. 1707 note) (Housing

Finance Agency Risk Sharing

Program).

The proposed standards would not

apply to housing insured under HUD’s

single family mortgage insurance

programs. Section 5.701(b)(1) of this

proposed rule lists those sections of the

National Housing Act that specifically

give the Secretary authority to insure

mortgages. Sections of the NHA that

give the Secretary authority to insure

mortgages ‘‘pursuant to’’ another section

of the NHA are not listed in the

coverage of § 5.701 of this proposed

rule, because HUD ultimately has

insured the mortgages under one of the

listed statutory sections.

3. Public Housing

—Housing receiving assistance under

sections 5, 9 or 14 of the U.S. Housing

Act of 1937.

Through a separate rulemaking, HUD

is proposing new assessment regulations

for Public Housing under which PHAs

would be required to maintain their

units in accordance with the same

decent, safe, and sanitary standard

proposed in part 5, subpart G of this

rule. Under the HUD 2020 Management

Reform Plan, published in the Federal

Register on August 12, 1997 (62 FR

43204), HUD is seeking new tools to

strengthen its abilities to ensure the

soundness and physical condition of

Public Housing. Consistent with HUD’s

responsibilities under the new Real

Estate Assessment Center, HUD intends

to conduct independent inspections of a

statistically valid number of Public

Housing units for each PHA, in order to

confirm compliance with the new

uniform physical condition standards.

Although HUD encourages PHAs to

use its inspection software during the

course of their own annual inspections

in order to promote uniformity in

inspections, HUD is not proposing at

this time to require PHAs to use HUD’s

inspection software for two reasons.

First, PHAs may have existing software

for operations (e.g., work order systems)

that may be incompatible with the HUD

software. It would be unreasonable and

uneconomical to require PHAs to

change their existing systems. Second,

PHAs may, as a part of their operating

procedures, combine other inspections

(e.g., housekeeping, preventative
Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules 35653

maintenance) with their annual unit

inspections. HUD believes that its role,

consistent with section 2 of the U.S.

Housing Act of 1937 (42 U.S.C. 1437),

is to prescribe broad standards, giving

PHAs maximum latitude as to how best

to meet those standards consistent with

existing statutes, regulations, and their

own operating procedures and practices.

HUD has no objection, however, if the

PHA determines that use of the HUD

software for its own purposes is in its

best interests.

Standards for Determining Housing

That Is Decent, Safe, Sanitary and in

Good Repair

The uniform standards in this

proposed rule would set parameters

under which the HUD housing must be

maintained and will be evaluated. These

standards are designed to analyze, score,

and rank the overall and general

physical condition of a project. This

evaluation would not focus on a single

element, but would take into

consideration significant observable

deficiencies and score compliance taken

as a whole. A single critical element

with a major defect (for example, an

inoperable heating system), however,

could have a significant impact on a

project’s overall evaluation. The

proposed standards emphasize health

and safety considerations as essential to

housing that is decent, safe, sanitary and

in good repair.

The physical condition standards are

intentionally broad and are defined with

terms such as in ‘‘proper operating

condition,’’ ‘‘adequately functional,’’

and ‘‘free of health and safety hazards.’’

Given the differences in construction

and design of HUD housing, and the

different types of electrical and utility

systems that an inspector will

encounter, the rule cannot define or

describe proper operating condition for

every type of system. For example, an

inspection of whether an electrical

heating system is operating properly

might be different from an inspection of

whether an oil-based heating system is

operating properly. This would not

mean, however, that these two systems

should be subject to a different physical

condition standard. The standard—

proper operating condition—is the same

for both types of systems and is the

same for all heating systems.

The uniform physical condition

standards in this proposed rule do not

include design or configuration

requirements for housing (e.g., these

standards do not require that every unit

have a kitchen). The regulations for the

individual housing programs will

continue to contain any such design or

configuration requirements. The

uniform physical condition standards in

this proposed rule are structured so that

regardless of the configuration of a

particular project or unit (for example,

a shared kitchen versus private

kitchens), the project or unit would be

inspected under the uniform standards.

Similarly, the proposed standards do

not address occupancy requirements of

a dwelling unit, that is, the number of

residents per unit. The proposed

standards are solely concerned with the

physical condition of the housing and

the operational state of its various

elements, to the extent relevant.

The proposed new standards address

six major areas of the HUD housing:

(1) Site;

(2) Building exterior;

(3) Building systems;

(4) Dwelling units;

(5) Common areas; and

(6) Health and safety.

Under this proposed rule, the major

areas of the HUD housing and their

related elements are to be maintained in

a manner that is decent, safe, sanitary

and in good repair. Intrinsic to all these

areas are health and safety

considerations. However, there are other

broad health and safety concerns that

HUD will evaluate at any time they are

observed. Since HUD places such a high

priority on health and safety concerns,

this proposed rule identifies them

separately.

1. Site. The site components, such as

fencing and retaining walls, grounds,

lighting, mailboxes/project signs,

parking lots/driveways, play areas and

equipment, refuse disposal, roads, storm

drainage and walkways must be free of

health and safety hazards and be in

good repair. The site must not be subject

to material adverse conditions, such as

abandoned vehicles, dangerous walks or

steps, poor drainage, septic tank backups, sewer hazards, excess

accumulations of trash, vermin or

rodent infestation or fire hazards.

2. Building Exterior. Each building on

the site must be structurally sound,

secure, habitable, and in good repair.

Each building’s doors, fire escapes,

foundations, lighting, roofs, walls, and

windows, where applicable, must be

free of health and safety hazards,

operable, and in good repair.

3. Building Systems. Each building’s

domestic water, electrical system,

elevators, emergency power, fire

protection, HVAC, and sanitary system

must be free of health and safety

hazards, functionally adequate,

operable, and in good repair.

4. Dwelling Units. Each dwelling unit

within a building must be structurally

sound, habitable, and in good repair. All

areas and aspects of the dwelling unit

must be free of health and safety

hazards. The unit’s bathroom, call-foraid, ceiling, doors, electrical systems,

floors, hot water heater, HVAC, kitchen,

lighting, outlets/switches, patio/porch/

balcony, smoke detectors, stairs, walls,

and windows (where applicable) must

be free of health and safety hazards,

functionally adequate, operable, and in

good repair. Where applicable, the

dwelling unit must have hot and cold

running water, including an adequate

source of potable water (note for

example that single room occupancy

units may not contain water facilities).

If the dwelling unit includes its own

sanitary facility, it must be in proper

operating condition, usable in privacy,

and adequate for personal hygiene and

the disposal of human waste. The

dwelling unit must include at least one

battery-operated or hard-wired smoke

detector, in proper working condition,

on each level of the unit. Properties that

are subject to the specific requirements

of the Fire Administration

Authorization Act must also comply

with those requirements.

5. Common Areas. The common areas

must be structurally sound, secure, and

functionally adequate for the purposes

intended. The basement/garage/carport,

restrooms, closets, utility, mechanical,

community rooms, day care, halls/

corridors, stairs, kitchens, laundry

rooms, office, porch, patio, balcony, and

trash collection areas, if applicable,

must be free of health and safety

hazards, operable, and in good repair.

All common area ceilings, doors, floors,

HVAC, lighting, outlets/switches, smoke

detectors, stairs, walls, and windows, to

the extent applicable, must be free of

health and safety hazards, operable, and

in good repair. These standards for

common areas would apply, to a varying

extent, to all HUD housing, but will be

particularly relevant to congregate

housing, independent group homes/

residences, and single room occupancy

units, in which the individual dwelling

units (sleeping areas) do not contain

kitchen and/or bathroom facilities.

6. Health and Safety Considerations.

All areas and components of the

housing must be free of health and

safety hazards. As discussed in the

preceding section, the five other major

inspectable areas contain health and

safety considerations that will be

evaluated in the applicable areas. In

addition, there are broad health and

safety concerns by which HUD will

evaluate the housing. These areas

include, but are not limited to, air

quality, electrical hazards, elevators,

emergency/fire exits, flammable

materials, garbage and debris, handrail

hazards, infestation, and lead-based
35654 Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules

paint. For example, the buildings must

have fire exits that are not blocked and

are accessible to all residents, and have

hand rails that are undamaged and have

no other observable deficiencies. The

housing must have no evidence of

infestation by rats, mice, or other

vermin, or of garbage and debris. The

housing must have no evidence of

electrical hazards, natural hazards, or

fire hazards. The dwelling units and

common areas must have proper

ventilation and be free of mold, odor, or

other observable deficiencies. The

housing must comply with all

requirements related to the evaluation

and reduction of lead-based paint

hazards and have available proper

certifications of such.

With regard to the evaluation and

reduction of lead-based paint hazards,

HUD is developing consolidated final

regulations to implement sections 1012

and 1013 of the Residential Lead-Based

Paint Hazard Reduction Act of 1992,

which is Title X of the Housing and

Community Development Act of 1992

(42 U.S.C 4851 et seq.). These final

regulations will be based upon a

proposed rule published on June 7, 1996

(61 FR 29170), and will be codified in

24 CFR part 35.

No Preemption of State and Local

Building and Maintenance Codes. The

new uniform physical condition

standards in this rule would not

supersede or preempt State and local

building and maintenance codes with

which HUD housing must comply. HUD

housing must continue to adhere to

these codes.

IV. Proposed Uniform Physical

Inspection Requirements

Frequency of Inspection

To make a determination of whether

the owner is providing HUD housing

that is decent, safe, sanitary and in good

repair, this rule proposes to continue

the practice currently found in HUD

programs of requiring a physical

inspection of each HUD housing

structure (except that Public Housing

shall be inspected as described below).

This proposed rule would require such

inspections annually, unless HUD

provides notice to the contrary. HUD

housing is currently subject to an

annual inspection requirement;

therefore, an annual inspection would

impose no new requirement.

The New Inspection Protocol

Along with the uniform physical

condition standards proposed in this

rule, HUD intends to implement a new

computer-driven physical inspection

protocol. The inspection would not

have to be performed by an engineer or

architect, but may be performed by a

person who is generally familiar with

real estate of the type to be inspected.

Any eligible individual who is trained

and certified under HUD auspices to use

the new HUD computer program may

conduct the inspection. The inspector

will complete the inspection using a

hand-held computer that uses the HUD

software. The new HUD computer

program would guide the inspector

through the inspection, prompting the

necessary observations to be made

regarding the condition of the property.

The computer program is based on

substantially objective observations,

which will tend to eliminate the

uncertainty of subjective interpretation

of the physical condition standards. The

results of the inspection will be

electronically transferred to HUD and

will be processed and scored by

electronic means and recorded in a

Central Integrated Data Repository.

Determining Whether HUD Housing

Meets the New Physical Condition

Standards

The determination of whether the

HUD housing meets the standard of

decent, safe, sanitary and in good repair

would be based on a review of

observable deficiencies of the health

and safety conditions, the site, the

building, the dwelling units, and the

common areas of such housing. The

computer program will generate a score

for these major areas and their

respective elements. The scores will

allow HUD to rank the housing

according to physical condition as

determined by the computer-based

inspection.

Inherent in such a scoring system is

the weighting of factors that make up

the physical condition standards. For

instance, health and safety hazards are

of utmost importance to HUD; therefore,

these factors, as well as other key

components of the building (i.e., roof,

walls, heating) might be more heavily

weighted in the scoring. Other factors

that are less crucial to health and safety,

although still related to housing that is

decent, safe, sanitary and in good repair,

might receive a lower weight. For

example, a faulty roof would generally

be weighed more heavily than a faulty

sidewalk, because it could generally

have a greater impact on the residents’

health and safety. The evaluation

system will create a composite score for

HUD housing by calculating the

component scores on a weighted

average basis.

V. Regulatory Amendments

New Subpart for Physical Condition

Standards and Inspection Requirements

This rule proposes to create a new

subpart G in 24 CFR part 5. The

regulations in part 5 represent HUD’s

general program requirements, as well

as requirements that cut across one or

more HUD programs. This new subpart

G would consist of three sections.

Section 5.701 would provide the lists of

the types of HUD housing to which the

uniform physical condition standards

and inspection requirements would

apply. This section also would describe

the unique applicability of the proposed

requirements to the Public Housing

program, as described above.

Section 5.703 would contain the

physical condition standards for HUD

housing that is decent, safe, sanitary and

in good repair. These are the standards

to which HUD housing must be

maintained. Section 5.705 would simply

provide that any entity responsible for

conducting a physical inspection of

HUD housing must inspect such

housing annually (unless HUD provides

notice to the contrary), in accordance

with HUD-prescribed physical

inspection procedures. This rule would

not affect the existing requirements

under each covered HUD program

regarding which entity is responsible for

conducting the physical inspection.

HUD intends to provide more details

with respect to the implementation of

its physical inspection system through

notices and other guidance materials.

Conforming Amendments in Program

Regulations

In accordance with the proposed

physical condition standards and

inspection requirements, this rule also

proposes to make several conforming

amendments to HUD’s program

regulations.

1. 24 CFR part 207; Multifamily

Housing Mortgage Insurance. This rule

proposes to add a new § 207.260, which

will provide that for FHA-insured

multifamily properties, the mortgagor

must maintain the insured project in

accordance with the physical condition

standards in the new subpart G of part

5. This section would also require the

mortgagee to inspect the project in

accordance with the requirements in

subpart G of part 5. As described above,

the requirements for the mortgagor to

maintain the property in a condition

that is decent, safe, sanitary and in good

repair (and for the mortgagee to inspect

the property) are not new. This rule

provides a clear set of physical

condition standards and inspection

requirements to help ensure that these
Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules 35655

properties are maintained in accordance

with such obligations.

2. 24 CFR part 266; Housing Finance

Agency (HFA) Risk-Sharing. This rule

proposes to add a new § 266.507 to

provide that the mortgagor must

maintain the project in accordance with

the new physical condition standards in

subpart G of part 5. This new section

would apply the new standards to all

projects insured previously or in the

future. This rule also proposes to

remove § 266.505(b)(6) regarding the

maintenance requirements of the

Regulatory Agreement between the HFA

and the mortgagor, since the

maintenance requirements would be in

the new § 266.507. This rule would also

amend § 266.510(a) to require HFAs to

perform their inspections in accordance

with the inspection requirements in

subpart G of part 5.

3. 24 CFR part 880; Section 8 New

Construction. This rule proposes to

amend § 880.201 to revise the definition

of the term ‘‘Decent, safe, and sanitary.’’

This rule would provide that decent,

safe, and sanitary housing is housing

that meets the requirements of subpart

G of part 5. This rule also proposes to

remove paragraph (a) of § 880.207

regarding HUD’s minimum property

standards, since compliance with the

new subpart G of part 5 would replace

the continuing requirement to comply

with these standards.

4. 24 CFR part 881; Section 8

Substantial Rehabilitation. This rule

proposes to amend § 881.201 to revise

the definition of the term ‘‘Decent, safe,

and sanitary.’’ This rule would provide

that decent, safe, and sanitary housing

is housing that meets the requirements

of subpart G of part 5. This rule also

proposes to remove paragraph (a) of

§ 881.207 regarding HUD’s minimum

design standards, since compliance with

the new subpart G of part 5 would

replace the continuing requirement to

comply with these standards.

5. 24 CFR part 882; Section 8 (ProjectBased) Moderate Rehabilitation

(including the Single Room Occupancy

program for homeless individuals). HUD

recently amended its regulations in part

882 to remove the regulatory provisions

on certificates. These provisions are

now in part 982. (Please see the Section

8 Certificate and Voucher Programs

Conforming Rule, published in the

Federal Register on April 30, 1998, 63

FR 23826.) The only regulatory

provisions remaining in part 882 are for

two Section 8 project-based programs—

Moderate Rehabilitation and Single

Room Occupancy for homeless

individuals.

This rule proposes to amend part 882

further to recognize the new uniform

physical condition standards. This rule

would amend § 882.102 to revise the

definition of the term ‘‘Decent, safe, and

sanitary.’’ This rule would provide that

decent, safe, and sanitary housing is

housing that meets the requirements of

subpart G of part 5. This rule would also

remove the definition of ‘‘Housing

Quality Standards’’ from § 882.102,

since those standards would be replaced

by the new uniform physical condition

standards in this proposed rule.

This rule would then amend

§ 882.404 by replacing the Housing

Quality Standards with references to the

new physical condition standards in

subpart G of part 5. This rule would

retain, however, the lead-based paint

requirements that are otherwise

embedded in the Housing Quality

Standards. This rule would not affect

the applicability of HUD’s lead-based

paint requirements (although please see

the reference above to the separate

regulations that are under development

for lead-based paint). Similarly, this rule

would also amend § 882.803(b) for the

SRO program by replacing references to

the Housing Quality Standards with

references to § 882.404.

6. 24 CFR part 883; Section 8 State

Housing Agencies. This rule proposes to

amend § 883.302 to add a definition of

the term ‘‘Decent, safe, and sanitary.’’

This rule would provide that decent,

safe, and sanitary housing is housing

that meets the requirements of subpart

G of part 5. This rule also proposes to

remove the definition of ‘‘MPS

(Minimum Property Standards)’’ in

§ 883.302, and paragraphs (a)(1) and

(b)(1) of § 883.310 regarding HUD’s

minimum property and design

standards, since compliance with the

new subpart G of part 5 would replace

the continuing requirement to comply

with these standards.

7. 24 CFR part 884; Section 8 New

Construction Set-Aside for Rural Rental

Housing. This rule proposes to amend

§ 884.102 to revise the definition of the

term ‘‘Decent, safe, and sanitary.’’ This

rule would provide that decent, safe,

and sanitary housing is housing that

meets the requirements of subpart G of

part 5. This rule also proposes to

remove the definition of ‘‘Minimum

property standards’’ in § 884.102, and

paragraph (b)(1) of § 884.110 regarding

HUD’s minimum property standards,

since compliance with the new subpart

G of part 5 would replace the continuing

requirement to comply with those

standards.

8. 24 CFR part 886; Section 8 Special

Allocations (Loan Management SetAside (LMSA) and Property Disposition

(PD)). This rule proposes to amend

§§ 886.102 (LMSA) and 886.302 (PD) to

revise the definition of the term

‘‘Decent, safe, and sanitary.’’ This rule

would provide that decent, safe, and

sanitary housing is housing that meets

the requirements of subpart G of part 5.

This rule also would amend §§ 886.113

(LMSA) and 886.307 (PD) by replacing

the Housing Quality Standards with

references to the new physical condition

standards in subpart G of part 5. This

rule would retain, however, the specific

occupancy requirements (i.e., the

number of tenants per dwelling unit);

such requirements are not addressed by

the new uniform physical condition

standards. This rule also would retain

the lead-based paint requirements that

are otherwise embedded in the Housing

Quality Standards. This rule would not

affect the applicability of HUD’s leadbased paint requirements (although

please see the reference above to the

separate regulations that are under

development for lead-based paint).

9. 24 CFR part 891; Supportive

Housing for the Elderly and Persons

with Disabilities. This rule would add a

new § 891.180 to provide that housing

assisted under these supportive housing

programs must be maintained and

inspected in accordance with the

proposed physical condition standards

and inspection requirements in subpart

G of part 5.

10. 24 CFR part 965; PHA-Owned or

Leased Projects—General Provisions.

This rule proposes to add a new subpart

F (consisting of § 965.601) to part 965.

Section 965.601 would require that

housing that is owned or leased by a

PHA must be maintained in accordance

with the new uniform physical

condition standards. Section 965.601

would also provide that for each PHA,

HUD intends to perform independent

inspections to confirm that Public

Housing is being maintained in

accordance with the new uniform

physical condition standards using the

proposed new inspection system, based

upon a statistically valid sample of

Public Housing units for each PHA.

11. 24 CFR part 983; Section 8 ProjectBased Certificate Program. This rule

proposes to amend § 983.5 by replacing

the Housing Quality Standards with

references to the new physical condition

standards in subpart G of part 5. This

rule would retain, however, the specific

occupancy requirements, since these

requirements are not addressed by the

new uniform physical condition

standards. This rule also would retain

the lead-based paint requirements that

are otherwise embedded in the Housing

Quality Standards. This rule would not

affect the applicability of HUD’s leadbased paint requirements (although

please see the reference above to the
35656 Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules

separate regulations that are under

development for lead-based paint).

VI. Justification for 30-Day Comment

Period

In general, it is HUD’s policy that

notices of proposed rulemaking are to

afford the public not less than 60 days

for submission of comments, in

accordance with its regulations on

rulemaking in 24 CFR part 10. However,

HUD has determined that there is good

cause to reduce the public comment

period for this proposed rule to 30 days.

As discussed in more detail earlier in

this preamble, the announcement,

through this rule, of HUD’s proposal to

establish a uniform set of physical

condition standards and to establish a

uniform inspection protocol has been

developed with the participation of

HUD’s program participants, industry

leaders, and experts in the real estate

inspection industries. As also discussed

in the preamble, in adopting uniform

physical condition standards for HUD

housing, this proposed rule would not

alter the statutory standard for the

maintenance of HUD housing, nor the

existing requirement to conduct

property inspection. HUD anticipates

that making these standards uniform

and consistent will ease the

administrative burden for participants

in the covered HUD programs, and

therefore there is a benefit to making

this standard effective at the earliest

date possible. Given these reasons, HUD

has determined that the 30-day

comment period for this proposed rule

should provide sufficient notice and

opportunity for interested entities to

comment. In order to provide the fullest

and most expedient access to the

provisions of this proposed rule, HUD

will make it available on the HUD Home

Page on the World Wide Web at http:/

/www.hud.gov, on the date of

publication in the Federal Register.

HUD will also directly notify entities

that have expressed a significant interest

to HUD by sending such entities a copy

of this proposed rule.

VII. Findings and Certifications

Executive Order 12866

The Office of Management and Budget

(OMB) reviewed this proposed rule

under Executive Order 12866,

Regulatory Planning and Review, issued

by the President on September 30, 1993.

OMB determined that this proposed rule

is a ‘‘significant regulatory action,’’ as

defined in section 3(f) of the Order

(although not economically significant,

as provided in section 3(f)(1) of the

Order). Any changes made in this

proposed rule subsequent to its

submission to OMB are identified in the

docket file, which is available for public

inspection between 7:30 a.m. and 5:30

p.m. weekdays in the Office of the Rules

Docket Clerk, Office of General Counsel,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC.

Environmental Impact

A Finding of No Significant Impact

with respect to the environment was

made in accordance with HUD

regulations in 24 CFR part 50 that

implement section 102(2)(C) of the

National Environmental Policy Act of

1969 (42 U.S.C. 4223). The Finding is

available for public inspection between

7:30 a.m. and 5:30 p.m. weekdays in the

Office of the Rules Docket Clerk, Office

of General Counsel, Room 10276,

Department of Housing and Urban

Development, 451 Seventh Street, SW,

Washington, DC.

Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)), has reviewed this proposed rule

before publication and by approving it

certifies that this proposed rule is not

anticipated to have a significant

economic impact on a substantial

number of small entities. All HUD

housing is currently subject to physical

condition standards and a physical

inspection requirement. As discussed in

the preamble to this proposed rule,

there are statutory directives to maintain

HUD housing in a condition that is

decent, safe, and sanitary. Accordingly,

this proposed rule does not alter that

requirement, nor does the proposed rule

shift responsibility with respect to who

conducts the physical inspection of the

property. The entities and individuals

currently responsible for the inspection

of HUD subsidized properties would

remain responsible. The proposed rule,

however, provides for uniform physical

inspection standards for the majority of

HUD programs. These standards would

not be significantly different from those

standards to which HUD housing is

currently subject. The existing

applicable standards are similar but

there are some variations from HUD

program to program. HUD anticipates

that making these standards uniform

and consistent for the HUD programs

covered by this rule will ease the

administrative burden for participants

in the covered HUD programs, including

and particularly small entities. As with

the implementation of any new or

modified program requirement, HUD

intends to provide guidance to the

covered entities, particularly small

entities, to assist them in understanding

the changes being made.

Notwithstanding HUD’s

determination that this proposed rule

would not have a significant economic

impact on small entities, HUD

specifically invites comments regarding

alternatives to this proposed rule that

would meet HUD’s objectives as

described in this preamble.

Executive Order 12612, Federalism

The General Counsel, as the

Designated Official under section 6(a) of

Executive Order 12612, Federalism, has

determined that the policies contained

in this proposed rule would not have

substantial direct effects on States or

their political subdivisions, on the

relationship between the Federal

Government and the States, or on the

distribution of power and

responsibilities among the various

levels of government. This proposed

rule would provide a uniform set of

physical condition standards and

physical inspection requirements for

HUD housing, which would make

HUD’s requirements clearer and more

objective. As a result, the proposed rule

is not subject to review under the Order.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (Pub. L. 104–4;

approved March 22, 1995) (UMRA)

establishes requirements for Federal

agencies to assess the effects of their

regulatory actions on State, local, and

tribal governments, and the private

sector. This proposed rule would not

impose any Federal mandates on any

State, local, or tribal governments, or on

the private sector, within the meaning of

the UMRA.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic

Assistance numbers for the programs

that would be affected by this proposed

rule are:

14.126—Mortgage Insurance—

Cooperative Projects (Section 213)

14.129—Mortgage Insurance—Nursing

Homes, Intermediate Care Facilities,

Board and Care Homes and Assisted

Living Facilities (Section 232)

14.134—Mortgage Insurance—Rental

Housing (Section 207)

14.135—Mortgage Insurance—Rental

and Cooperative Housing for

Moderate Income Families and

Elderly, Market Rate Interest (Sections

221(d) (3) and (4))

14.138—Mortgage Insurance—Rental

Housing for Elderly (Section 231)

14.139—Mortgage Insurance—Rental

Housing in Urban Areas (Section 220

Multifamily)
Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules 35657

14.157—Supportive Housing for the

Elderly (Section 202)

14.181—Supportive Housing for Persons

with Disabilities (Section 811)

14.188—Housing Finance Agency (HFA)

Risk Sharing Pilot Program (Section

542(c))

14.856—Lower Income Housing

Assistance Program—Section 8

Moderate Rehabilitation

List of Subjects

24 CFR Part 5

Administrative practice and

procedure, Aged, Claims, Drug abuse,

Drug traffic control, Grant programs—

housing and community development,

Grant programs—Indians, Individuals

with disabilities, Loan programs—

housing and community development,

Low- and moderate-income housing,

Mortgage insurance, Pets, Public

housing, Rent subsidies, Reporting and

recordkeeping requirements.

24 CFR Part 207

Manufactured homes, Mortgage

insurance, Reporting and recordkeeping

requirements, Solar energy.

24 CFR Part 266

Aged, Fair housing,

Intergovernmental relations, Mortgage

insurance, Low and moderate income

housing, Reporting and recordkeeping

requirements.

24 CFR Part 880

Grant programs—housing and

community development, Rent

subsidies, Reporting and recordkeeping

requirements.

24 CFR Part 881

Grant programs—housing and

community development, Rent

subsidies, Reporting and recordkeeping

requirements.

24 CFR Part 882

Grant programs—housing and

community development, Homeless,

Lead poisoning, Manufactured homes,

Rent subsidies, Reporting and

recordkeeping requirements.

24 CFR Part 883

Grant programs—housing and

community development, Rent

subsidies, Reporting and recordkeeping

requirements.

24 CFR Part 884

Grant programs—housing and

community development, Rent

subsidies, Reporting and recordkeeping

requirements, Rural areas.

24 CFR Part 886

Grant programs—housing and

community development, Lead

poisoning, Rent subsidies, Reporting

and recordkeeping requirements.

24 CFR Part 891

Aged, Capital advance programs, Civil

rights, Grant programs—housing and

community development, Individuals

with disabilities, Loan programs—

housing and community development,

Low-and moderate-income housing,

Mental health programs, Rent subsidies,

Reporting and recordkeeping

requirements.

24 CFR Part 965

Energy conservation, Government

procurement, Grant programs—housing

and community development, Lead

poisoning, Loan programs—housing and

community development, Public

housing, Reporting and recordkeeping

requirements, Utilities.

24 CFR Part 983

Grant programs—housing and

community development, Rent

subsidies, Reporting and recordkeeping

requirements.

Accordingly, for the reasons stated in

the preamble, title 24 of the CFR is

proposed to be amended as follows:

PART 5—GENERAL HUD PROGRAM

REQUIREMENTS; WAIVERS

1. The authority citation for 24 CFR

part 5 continues to read as follows:

Authority: 42 U.S.C. 3535(d), unless

otherwise noted.

2. A new subpart G is added to part

5 to read as follows:

Subpart G—Physical Condition Standards

and Inspection Requirements

Sec.

5.701 Applicability.

5.703 Physical condition standards for HUD

housing that is decent, safe, sanitary and

in good repair (DSS/GR).

5.705 Uniform physical inspection

requirements.

Subpart G—Physical Condition

Standards and Inspection

Requirements

§ 5.701 Applicability.

(a) This subpart applies to housing

assisted by HUD under the following

programs:

(1) All Section 8 project-based

assistance. ‘‘Project-based assistance’’

means Section 8 assistance that is

attached to the structure (see

§ 982.1(b)(1) regarding the distinction

between ‘‘project-based’’ and ‘‘tenantbased’’ assistance);

(2) Section 202 Program of Supportive

Housing for the Elderly;

(3) Section 811 Program of Supportive

Housing for Persons with Disabilities;

(4) Section 202 loan program for

projects for the elderly and handicapped

(including 202/8 projects and 202/162

projects).

(b) This subpart also applies to

housing with mortgages insured or held

by HUD, or housing that is receiving

assistance from HUD, under the

following authorities:

(1) Section 207 of the National

Housing Act (NHA) (12 U.S.C. 1701 et

seq.) (Rental Housing Insurance);

(2) Section 213 of the NHA

(Cooperative Housing Insurance);

(3) Section 220 of the NHA

(Rehabilitation and Neighborhood

Conservation Housing Insurance);

(4) Section 221(d)(3) and (5) of the

NHA (Housing for Moderate Income and

Displaced Families);

(5) Section 221(d)(4) of the NHA

(Housing for Moderate Income and

Displaced Families);

(6) Section 231 of the NHA (Housing

for Elderly Persons);

(7) Section 232 of the NHA (Mortgage

Insurance for Nursing Homes,

Intermediate Care Facilities, Board and

Care Homes);

(8) Section 234(d) of the NHA (Rental)

(Mortgage Insurance for

Condominiums);

(9) Section 236 of the NHA (Rental

and Cooperative Housing for Lower

Income Families);

(10) Section 241 of the NHA

(Supplemental Loans for Multifamily

Projects); and

(11) Section 542(c) of the Housing and

Community Development Act of 1992

(12 U.S.C. 1707 note) (Housing Finance

Agency Risk Sharing Program).

(c) This subpart also applies to Public

Housing (housing receiving assistance

under sections 5, 9, or 14 of the U.S.

Housing Act of 1937).

(d) For purposes of this subpart, the

term ‘‘HUD housing’’ means the types of

housing listed in paragraphs (a), (b), and

(c) of this section.

§ 5.703 Physical condition standards for

HUD housing that is decent, safe, sanitary

and in good repair (DSS/GR).

HUD housing must be decent, safe,

sanitary and in good repair. Owners of

housing described in § 5.701(a),

mortgagors of housing described in

§ 5.701(b), and PHAs and other entities

approved by HUD owning housing

described in § 5.701(c) must maintain

such housing in a manner that meets the

physical condition standards set forth in

this section in order to be considered

decent, safe, sanitary and in good repair.
35658 Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules

These standards address the major areas

of the HUD housing: the site; the

building exterior; the building systems;

the dwelling units; the common areas;

and health and safety considerations.

(a) Site. The site components, such as

fencing and retaining walls, grounds,

lighting, mailboxes/project signs,

parking lots/driveways, play areas and

equipment, refuse disposal, roads, storm

drainage and walkways must be free of

health and safety hazards and be in

good repair. The site must not be subject

to material adverse conditions, such as

abandoned vehicles, dangerous walks or

steps, poor drainage, septic tank backups, sewer hazards, excess

accumulations of trash, vermin or

rodent infestation or fire hazards.

(b) Building exterior. Each building on

the site must be structurally sound,

secure, habitable, and in good repair.

Each building’s doors, fire escapes,

foundations, lighting, roofs, walls, and

windows, where applicable, must be

free of health and safety hazards,

operable, and in good repair.

(c) Building systems. Each building’s

domestic water, electrical system,

elevators, emergency power, fire

protection, HVAC, and sanitary system

must be free of health and safety

hazards, functionally adequate,

operable, and in good repair.

(d) Dwelling units. (1) Each dwelling

unit within a building must be

structurally sound, habitable, and in

good repair. All areas and aspects of the

dwelling unit (for example, the unit’s

bathroom, call-for-aid, ceiling, doors,

electrical systems, floors, hot water

heater, HVAC (where individual units

are provided), kitchen, lighting, outlets/

switches, patio/porch/balcony, smoke

detectors, stairs, walls, and windows)

must be free of health and safety

hazards, functionally adequate,

operable, and in good repair.

(2) Where applicable, the dwelling

unit must have hot and cold running

water, including an adequate source of

potable water (note for example that

single room occupancy units may not

contain water facilities).

(3) If the dwelling unit includes its

own sanitary facility, it must be in

proper operating condition, usable in

privacy, and adequate for personal

hygiene and the disposal of human

waste.

(4) The dwelling unit must include at

least one battery-operated or hard-wired

smoke detector, in proper working

condition, on each level of the unit.

(e) Common areas. The common areas

must be structurally sound, secure, and

functionally adequate for the purposes

intended. The basement/garage/carport,

restrooms, closets, utility, mechanical,

community rooms, day care, halls/

corridors, stairs, kitchens, laundry

rooms, office, porch, patio, balcony, and

trash collection areas, if applicable,

must be free of health and safety

hazards, operable, and in good repair.

All common area ceilings, doors, floors,

HVAC, lighting, outlets/switches, smoke

detectors, stairs, walls, and windows, to

the extent applicable, must be free of

health and safety hazards, operable, and

in good repair. These standards for

common areas would apply, to a varying

extent, to all HUD housing, but will be

particularly relevant to congregate

housing, independent group homes/

residences, and single room occupancy

units, in which the individual dwelling

units (sleeping areas) do not contain

kitchen and/or bathroom facilities.

(f) Health and safety concerns. All

areas and components of the housing

must be free of health and safety

hazards. These areas include, but are

not limited to, air quality, electrical

hazards, elevators, emergency/fire exits,

flammable materials, garbage and

debris, handrail hazards, infestation,

and lead-based paint. For example, the

buildings must have fire exits that are

not blocked and are accessible to all

residents, and have hand rails that are

undamaged and have no other

observable deficiencies. The housing

must have no evidence of infestation by

rats, mice, or other vermin, or of garbage

and debris. The housing must have no

evidence of electrical hazards, natural

hazards, or fire hazards. The dwelling

units and common areas must have

proper ventilation and be free of mold,

odor, or other observable deficiencies.

The housing must comply with all

requirements related to the evaluation

and reduction of lead-based paint

hazards and have available proper

certifications of such (see 24 CFR part

35).

(g) Compliance with State and local

codes. The physical condition standards

in this section do not supersede or

preempt State and local codes building

and maintenance with which HUD

housing must comply. HUD housing

must continue to adhere to these codes.

§ 5.705 Uniform physical inspection

requirements.

Any entity responsible for conducting

a physical inspection of HUD housing,

to determine compliance with this

subpart, must inspect such HUD

housing annually (unless otherwise

specifically notified by HUD), in

accordance with HUD-prescribed

physical inspection procedures. For

Public Housing, PHAs have the option

to inspect Public Housing units using

the procedures prescribed in accordance

with this section.

PART 207—MULTIFAMILY HOUSING

MORTGAGE INSURANCE

3. The authority citation for 24 CFR

part 207 continues to read as follows:

Authority: 12 U.S.C. 1701z–11(e), 1713,

and 1715b; 42 U.S.C. 3535(d).

4. A new § 207.260 is added,

immediately after § 207.259a, to read as

follows:

§ 207.260 Maintenance and inspection of

property.

As long as the mortgage is insured or

held by the Commissioner, the

mortgagor must maintain the insured

project in accordance with the physical

condition requirements in 24 CFR part

5, subpart G; and the mortgagee must

inspect the project in accordance with

the physical inspection requirements in

24 CFR part 5, subpart G.

PART 266—HOUSING FINANCE

AGENCY RISK-SHARING PROGRAM

FOR INSURED AFFORDABLE

MULTIFAMILY PROJECT LOANS

5. The authority citation for 24 CFR

part 266 continues to read as follows:

Authority: 12 U.S.C. 1707; 42 U.S.C.

3535(d).

§ 266.505 [Amended]

6. Section 266.505 is amended by

removing and reserving paragraph

(b)(6).

7. A new § 266.507 is added, to read

as follows:

§ 266.507 Maintenance requirements.

The mortgagor must maintain the

project in accordance with the physical

condition standards in 24 CFR part 5,

subpart G.

8. In § 266.510, paragraph (a) is

revised to read as follows:

§ 266.510 HFA responsibilities.

(a) Inspections. The HFA must

perform inspections in accordance with

the physical inspection procedures in

24 CFR part 5, subpart G.

* * * * *

PART 880—SECTION 8 HOUSING

ASSISTANCE PAYMENTS PROGRAM

FOR NEW CONSTRUCTION

9. The authority citation for 24 CFR

part 880 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f,

3535(d), 12701, and 13611–13619.

10. Section 880.201 is amended by

revising the definition of ‘‘Decent, safe

and sanitary’’, to read as follows:
Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules 35659

§ 880.201 Definitions.

* * * * *

Decent, safe, and sanitary. Housing is

decent, safe, and sanitary if it meets the

physical condition requirements in 24

CFR part 5, subpart G.

* * * * *

§ 880.207 [Amended]

11. Section 880.207 is amended by

removing and reserving paragraph (a).

PART 881—SECTION 8 HOUSING

ASSISTANCE PAYMENTS PROGRAM

FOR SUBSTANTIAL REHABILITATION

12. The authority citation for 24 CFR

part 881 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f,

3535(d), 12701, and 13611–13619.

13. Section 881.201 is amended by

revising the definition of ‘‘Decent, safe

and sanitary’’, to read as follows:

§ 881.201 Definitions.

* * * * *

Decent, safe, and sanitary. Housing is

decent, safe, and sanitary if it meets the

physical condition requirements in 24

CFR part 5, subpart G.

* * * * *

§ 881.207 [Amended]

14. Section 881.207 is amended by

removing and reserving paragraph (a).

PART 882—SECTION 8 MODERATE

REHABILITATION PROGRAMS

15. The authority citation for 24 CFR

part 882 continues to read as follows:

Authority: 42 U.S.C. 1437f and 3535(d).

16. Section 882.102 is amended in

paragraph (b) by revising the definition

of ‘‘Decent, safe, and sanitary’’; and by

removing the definition of ‘‘Housing

quality standards (HQS)’’; to read as

follows:

§ 882.102 Definitions.

* * * * *

(b) * * *

Decent, safe, and sanitary. Housing is

decent, safe, and sanitary if it meets the

physical condition standards in 24 CFR

part 5, subpart G.

* * * * *

17. Section 882.404 is amended by

revising the heading; by revising

paragraph (a); by removing and

reserving paragraph (b); by revising

paragraph (c); and by removing

paragraph (d); to read as follows:

§ 882.404 Physical condition standards;

physical inspection requirements.

(a) Compliance with physical

condition standards. Housing in this

program must be maintained and

inspected in accordance with the

requirements in 24 CFR part 5, subpart

G.

* * * * *

(c) Compliance with lead-based paint

requirements. Housing used in the

Section 8 moderate rehabilitation

program must comply with the leadbased paint requirements in 24 CFR

982.401(j). For purposes of the SRO

program, however, see § 882.803(b).

18. Section 882.803 is amended by

revising paragraph (b), to read as

follows:

§ 882.803 Project eligibility and other

requirements.

* * * * *

(b) Physical condition standards.

Section 882.404 applies to this program,

except that the lead-based paint

requirements in 24 CFR 982.401(j) do

not apply to this program, since these

SRO units will not house children.

* * * * *

PART 883—SECTION 8 HOUSING

ASSISTANCE PAYMENTS

PROGRAM—STATE HOUSING

AGENCIES

19. The authority citation for 24 CFR

part 883 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f,

3535(d), and 13611–13619.

20. Section 883.302 is amended by

adding a definition of ‘‘Decent, safe, and

sanitary’’, in alphabetical order; and by

removing the definition of ‘‘MPS

(Minimum Property Standards’’; to read

as follows:

§ 883.302 Definitions.

* * * * *

Decent, safe, and sanitary. Housing is

decent, safe, and sanitary if it meets the

physical condition requirements in 24

CFR part 5, subpart G.

* * * * *

§ 883.310 [Amended]

21. Section 883.310 is amended by

removing and reserving paragraphs

(a)(1) and (b)(1).

PART 884—SECTION 8 HOUSING

ASSISTANCE PAYMENTS PROGRAM,

NEW CONSTRUCTION SET-ASIDE FOR

SECTION 515 RURAL RENTAL

HOUSING PROJECTS

22. The authority citation for 24 CFR

part 884 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f,

3535(d), and 13611–13619.

23. Section 884.102 is amended by

revising the definition of ‘‘Decent, safe,

and sanitary’’; and by removing the

definition of ‘‘Minimum property

standards’’; to read as follows:

§ 884.102 Definitions.

* * * * *

Decent, safe, and sanitary. Housing is

decent, safe, and sanitary if it meets the

physical condition requirements in 24

CFR part 5, subpart G.

* * * * *

§ 884.110 [Amended]

24. Section 884.110 is amended in

paragraph (b) by removing ‘‘(1)

Minimum Property Standards,’’ and the

designations ‘‘(2)’’, ‘‘(3)’’, ‘‘(4)’’, and

‘‘(5)’’.

PART 886—SECTION 8 HOUSING

ASSISTANCE PAYMENTS

PROGRAM—SPECIAL ALLOCATIONS

25. The authority citation for 24 CFR

part 886 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f,

3535(d), and 13611–13619.

26. Section 886.102 is amended by

revising the definition of ‘‘Decent, Safe

and Sanitary’’, to read as follows:

§ 886.102 Definitions.

* * * * *

Decent, Safe, and Sanitary. Housing is

decent, safe, and sanitary if it meets the

physical condition requirements in 24

CFR part 5, subpart G.

* * * * *

27. Section 886.113 is amended by

revising the heading; by removing the

introductory text; by revising

paragraphs (a) and (b); by removing and

reserving paragraphs (c) through (h);

and by removing paragraphs (j) through

(n); to read as follows:

§ 886.113 Physical condition standards;

physical inspection requirements.

(a) General. Housing used in this

program must be maintained and

inspected in accordance with the

requirements in 24 CFR part 5, subpart

G.

(b) Space and security. In addition to

the standards in 24 CFR part 5, subpart

G, the dwelling unit must have a living

room, a kitchen area, and a bathroom.

The dwelling unit must have at least

one bedroom or living/sleeping room for

each two persons.

* * * * *

28. Section 886.302 is amended by

revising the definition of ‘‘Decent, safe,

and sanitary’’, to read as follows:

§ 886.302 Definitions.

* * * * *

Decent, safe, and sanitary. Housing is

decent, safe, and sanitary if it meets the
35660 Federal Register / Vol. 63, No. 125 /Tuesday, June 30, 1998 / Proposed Rules

physical condition requirements in 24

CFR part 5, subpart G.

* * * * *

29. Section 886.307 is amended by

revising the heading; by removing the

introductory text; by revising

paragraphs (a) and (b); by removing and

reserving paragraphs (c) through (h);

and by removing paragraphs (j) through

(p); to read as follows:

§ 886.307 Physical condition standards;

physical inspection requirements.

(a) General. Housing assisted under

this part must be maintained and

inspected in accordance with the

requirements in 24 CFR part 5, subpart

G.

(b) Space and security. In addition to

the standards in 24 CFR part 5, subpart

G, the dwelling unit must have a living

room, a kitchen area, and a bathroom.

The dwelling unit must have at least

one bedroom or living/sleeping room for

each two persons.

* * * * *

PART 891—SUPPORTIVE HOUSING

FOR THE ELDERLY AND PERSONS

WITH DISABILITIES

30. The authority citation for 24 CFR

part 891 continues to read as follows:

Authority: 12 U.S.C. 1701q; 42 U.S.C.

1437f, 3535(d) and 8013.

31. In subpart A of part 891, a new

§ 891.180 is added, to read as follows:

§ 891.180 Physical condition standards;

physical inspection requirements.

Housing assisted under this part must

be maintained and inspected in

accordance with the requirements in 24

CFR part 5, subpart G.

PART 965—PHA-OWNED OR LEASED

PROJECTS—GENERAL PROVISIONS

32. The authority citation for 24 CFR

part 965 continues to read as follows:

Authority: 2 U.S.C. 1437, 1437a, 1437d,

1437g, and 3535(d). Subpart H is also issued

under 42 U.S.C. 4821–4846.

33. In part 965, a new subpart F,

consisting of § 965.601, is added, to read

as follows:

Subpart F—Physical Condition

Standards and Physical Inspection

Requirements

§ 965.601 Physical condition standards;

physical inspection requirements.

Housing owned or leased by a PHA,

and public housing owned by another

entity approved by HUD, must be

maintained in accordance with the

physical condition standards in 24 CFR

part 5, subpart G. For each PHA, HUD

will perform an independent physical

inspection of a statistically valid sample

of such housing based upon the

physical condition standards in 24 CFR

part 5, subpart G.

PART 983—SECTION 8 PROJECTBASED CERTIFICATE PROGRAM

34. The authority citation for 24 CFR

part 983 continues to read as follows:

Authority: 42 U.S.C. 1437f and 3535(d).

35. Section 983.5 is revised to read as

follows:

§ 983.5 Physical condition standards;

physical inspection requirements.

(a) General. Housing used in this

program must be maintained and

inspected in accordance with the

requirements in 24 CFR part 5, subpart

G.

(b) Space and security. In addition to

the standards in 24 CFR part 5, subpart

G, the dwelling unit must have a living

room, a kitchen area, and a bathroom.

The dwelling unit must have at least

one bedroom or living/sleeping room for

each two persons.

(c) Lead-based paint. 24 CFR

982.401(j) applies to assistance under

this part.

Dated: June 5, 1998.

Andrew Cuomo,

Secretary.

[FR Doc. 98–17271 Filed 6–29–98; 8:45 am]

BILLING CODE 4210–32–P