Acquisition, Relocation and Displacement Requirements For Grant Administrators

1
Acquisition, Relocation and Displacement
RequirementsFor Grant Administrators
2
Acquisition and Relocation - overview

• Whenever Federal funding, such as CDBG, is used
  in a project involving the acquisition,
  rehabilitation or demolition of real property, a
  Federal law known as the Uniform Relocation
  Assistance and Real Property Acquisition Policies
  Act (URA) may apply.

3
Overview - continued

• The purpose of the URA is to provide uniform,
  fair and equitable treatment for persons whose
  real property is acquired or who are displaced as
  a result of a CDBG-funded program or activity.

4
URA Statutory and Regulatory Requirements

• Establishes minimum standards for federally
  funded programs and projects that require
  acquisition, rehabilitation or demolition of real
  property and displace persons from their homes,
  businesses or farms
• URA provisions apply government-wide and impact
  programs administered by 18 Federal agencies,
  including HUD
• Government-wide regulations implementing URA are
  at 49 CFR Part 24

5
URA Statutory and Regulatory Requirements -
continued

• URA Final Rule published January 4, 2005 made
  significant changes
• Expanded business advisory services and
  relocation payments
• Adopted HUD income limits for determining
  low-income persons
• Revised replacement housing payments
• Prohibits asking persons to waive their
  payments
• Revised DSS standards in line with local codes

6
URA/HUD Regulatory Requirements

• Regulations implementing the URA requirements
  with respect to the state CDBG program are at 24
  CFR 570.606
• Clarifies the responsibilities of the State and
  of the local CDBG recipient
• Provides that local recipient may provide
  optional relocation assistance if the state
  permits it and there is a written policy
• Requires that there be an appeals procedure in
  place
• The state must ensure compliance and require
  local recipients to certify they will comply with
  all requirements

7
Section 104(d) Statutory Requirements

• Section 104(d) of the Housing and Community
  Development Act of 1974
• Applies to demolition of any housing or
  conversion of low-income housing to non-housing
  purposes or increased rents (over the FMR)
• Provides relocation assistance to low-income
  tenants (non-low-income persons are protected by
  the URA)
• Requires one-for-one replacement of low-income
  housing

8
Section 104(d) Regulatory Requirements

• Regulations at 24 CFR Part 42 require
• Residential anti-displacement and relocation
  assistance plan
• Relocation assistance for displaced low-income
  tenants
• One-for-one replacement of low-income units
  (when replacement is not required, submission to
  HUD)
• Public disclosure before committing funds to
  demolition/conversion

9
URA Acquisition RequirementsVoluntary vs.
Involuntary

• What makes a transaction voluntary?
• For agencies with eminent domain authority
• If no specific site is needed and any of several
  properties could be acquired for project purposes
• The property is not part of an intended, planned
  or designated project area where other properties
  will be acquired within specific time limits, and

10
Voluntary Transactionscontinued

• The agency informs the owner in writing of the
  propertys market value and
• The agency also informs the owner in writing that
  the property will not be acquired through
  condemnation, if negotiations do not reach an
  amicable agreement
• Displaced tenants are provided relocation
  assistance

11
Voluntary vs. Involuntary Acquisitioncontinued

• For agencies without eminent domain authority,
  acquisition is voluntary if
• The agency notifies the owner in writing of the
  propertys market value
• The agency notifies the owner prior to making an
  offer, that it will not acquire property if an
  amicable settlement cannot be reached
• If tenants are displaced, the tenants are
  provided relocation assistance (owners are not)

12
Eminent Domain

• The governments ability to take property for
  public use with compensation to the property
  owner
• In fiscal years 2006, 2007 and 2008 the
  Appropriations Acts have prohibited the use of
  CDBG or other federal funding in conjunction with
  the use of eminent domain for certain economic
  development projects

13
Involuntary Acquisition Required Steps

• Notify owner of the agencys intentions to
  acquire the property and their protections under
  the URA
• Appraise the property and invite the owner to
  accompany the appraiser
• Review the appraisal
• Establish just compensation for the property
• Provide owner with written offer and summary
  statement for property to be acquired

14
Required Stepscontinued

• Negotiate with owner for purchase of the property
• If negotiations are successful, complete the sale
  and reimburse property owner for related
  incidental expenses
• If negotiations are unsuccessful, consider an
  administrative settlement to complete the sale
• If negotiations are still unsuccessful, the
  agency may acquire the property through use of
  eminent domain

15
Cost Considerations of URA and Section 104(d)

• What is cost impact of the proposed project?
• Acquisition, rehabilitation and/or demolition is
  hard cost for property
• Cost of residential displacement
• Cost of non-residential displacement
• Availability of one-for-one replacement housing
  resources in the community
• Needs to be considered upfront when planning the
  project

16
What are the Costs of Displacement?

• Uniform Relocation Act (URA)
• Moving costs
• Relocation advisory services
• Replacement housing payments (residents)
• 42 months for tenants
• Price differential and expenses for owner
• Reestablishment costs (non-residential)
• Court costs (if using eminent domain)

17
Costs of Displacement - continued

• Section 104(d)
• Relocation advisory services
• Moving costs and security deposits
• Replacement housing payments for 60 months

18
Relocation

• Owners or tenants of homes or businesses who are
  displaced as a result of a federally-funded
  activity may be entitled to relocation payments
  as prescribed under the URA and the regulations
  at 49 CFR Part 24 and 24 CFR 570.606

19
Relocation - continued

• In some instances, a property may be acquired,
  but the occupant is not considered to be
  displaced and is therefore not eligible for
  relocation payments. These include the following
  circumstances
• Voluntary acquisition (owner-occupants only)
• Date of occupancy begins after acquisition
• Temporary displacement/occupant retains occupancy
  rights
• Occupancy is unlawful

20
Who is Displaced, Who is Not Displaced?

• Under URA, a displaced person is one who is
  required to move as a direct result of federally
  funded acquisition, demolition or rehabilitation
• Under CDBG regulations, a tenant can also be
  economically displaced and eligible for
  relocation assistance under the URA

21
Who is Displaced, Who is Not Displaced?

• Persons who are not displaced under URA
• Those who move temporarily and can return
• Unlawful occupants
• Those evicted for cause (unrelated to project)
• Owner-occupants subject to voluntary acquisition

22
Who is Displaced, Who is Not Displaced -
continued

• Under Section 104(d) a low-income tenant is
  considered displaced due to demolition or
  conversion of a low-income unit
• Qualified displaced tenants may select relocation
  assistance payments based on either the URA or
  Section 104(d)

23
Who is Displaced, Who is Not Displaced -
continued

• Those who are not displaced under 104(d)
• Those evicted for cause
• Those who received a move in notice before
  occupancy

24
Relocation Steps

• Minimum displacement policy
• Determine resource needs
• On-site survey of occupants
• Relocation notices
• General information notice
• Move in notice (HUD recommended)
• Notice of eligibility (with HUD Brochure)
• Notice of non-displacement (may require temporary
  relocation notice
• 90-day notice
• 30-day notice to move

25
Relocation Steps - continued

• Relocation Notices
• 49 CFR 24.203 (a)
• Rights under the process
• Conditions of eligibility
• Relocation payments
• Provide HUD Information Brochures
• owners
• tenants
• businesses

26
Relocation Steps - continued

• Notice of Nondisplacement
• 90-Day Notice
• After Notification of Relocation Eligibility
• 49 CFR 24.203 (c)
• 30-Day Notice
• Temporary relocation
• 30 days prior to move deadline

27
Relocation Steps - continued

• Notice of Intent To Acquire (49 CFR 24.203 (d))
• Establishes eligibility for relocation assistance
• Comparable replacement dwelling
• At least one must be made available
• Choice of three is preferable

28
Relocation Steps continuedResidential
Relocation

• Determine resource needs
• On-site survey of residents
• Issue notices
• Provide relocation advisory services
• 49 CFR 24.205 (c)
• Provide comparable housing referrals in writing
• Referrals must be available

29
Relocation Steps continuedResidential
Relocation

• Determine replacement housing payment
• Determine moving cost estimates
• Provide transportation to inspect replacement
  housing options
• Inspect all replacement units (must occupy within
  one year)

30
Relocation Steps continuedResidential
Relocation

• Determine actual moving cost payment
• Actual, reasonable and necessary moving expenses,
  or
• Fixed payment schedule, or
• Combination of both (e.g. actual cost for move of
  a piano, fixed payment for balance of move)
• Determine actual replacement housing payment
• Relocation claims must be filed within 18 months
  (by owners and tenants)

31
Relocation Steps continuedBusiness Relocation

• Relocation Planning Is the business moving or
  going out of business?
• On-site survey of occupants
• Issue notices
• Provide relocation advisory services
• Determine business moving and related expenses
• 49 CFR 24.303 or provide fixed payment 49
  CFR 24.305

32
Relocation Steps continuedBusiness Relocation

• Determine reestablishment payments for small
  businesses 49 CFR 24.304
• Assist business to file claim
• Determine final relocation/reestablishment
  payments

33
Relocation Payments

• Aliens not lawfully present in the U.S. are not
  eligible for URA relocation payments 49 CFR 208
  unless they can demonstrate an exceptional and
  unusual hardship to a spouse, parent or child who
  is a citizen or lawfully present
• There is no similar provision related to Section
  104(d)

34
Relocation Payments continued

• URA Relocation payments are not considered income
  49 CFR 209 but may affect the rent or
  eligibility for a person who seeks Section 8 or
  public housing assistance after a cash payment is
  made
• Local government recipient may not request or
  suggest that the displacee waive rights under the
  URA

35
URA Replacement Housing Payments (owners)

• 180-day homeowner-occupants
• Owned at least 180 days prior to initiation of
  negotiations
• Purchase a replacement unit within one year
• Maximum not more than 22,500 replacement
  housing payment
• Must be exceeded if necessary under Last Resort
  Housing
• Payment is difference between acquired and the
  lesser of replacement dwelling (or comparable)
  plus expenses
• 49 CFR 24.401

36
URA Replacement Housing Payments - continued

• 90-day occupants 49 CFR 24.402
• All occupants gt 90 days (owners or tenants)
• Owners 90-179 days are treated like tenants
• Purchase or rent a replacement unit in one year
• Maximum 5,250 replacement housing payment
  (must be exceeded under Last Resort Housing)
• Payment is difference between base monthly rental
  of the displacement dwelling and the lesser of
  replacement dwelling or comparable rental
• Can be used for downpayment assistance
• Must occupy dwelling within one year

37
Replacement Housing Assistance Payment (tenants)

• Maximum not more than 5,250 in rental
  assistance
• Must be exceeded if necessary under Last Resort
  Housing
• Difference between base monthly rental unit rent
  and the lesser of replacement unit rent or
  comparable (plus utilities)

38
Replacement Housing Assistance Payment (tenants)
- continued

• Is the displaced person low-income?
• X 42 months
• Can be used for downpayment on any form of
  homeownership

39
URA Replacement Housing Assistance Paymentlt
90-day occupant (owner or tenant)

• Difference between base monthly rental and the
  lesser of replacement unit rent or comparable
  (plus utilities) x 42 months
• Is the person low-income?
• X 42 if not low-income
• Same calculation for downpayment/purchase
  assistance

40
Relocation Assistance Payment 90-day occupant

• Downpayment Assistance
• Up to 5,250
• Must be used for purchase of a replacement
  dwelling

40
41
Section 104(d) Replacement HousingPayment
(low-income tenants)

• Use the Part 5 definition of income to calculate
  Total Tenant Payment (TTP)
• 60 months x TTP and the difference between rent
  and utilities at the replacement unit (may
  provide a voucher, in lieu of cash payment, if
  available

42
Section 104(d) Replacement HousingPayment
(low-income tenants)

• Same calculation determines downpayment
  assistance, but can only be used for purchase of
  an interest in Cooperative Housing or a Mutual
  Housing Association
• Displaced tenant can choose to accept assistance
  calculated under URA instead

43
Resources

• HUD Real Estate Acquisition and Relocation
  website http//www.hud.gov/relocation
• Federal Highway Administration
• www.fhwa.dot.gov
• International Right of Way Association
• www.irwaonline.org
• Section 104 (d) of Housing and Community
  Development Act