1 Acquisition, Relocation and Displacement Requirements For 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.

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. 3

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 −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 Requirements: Voluntary 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

Voluntary Transactions continued The agency informs the owner in writing of the property’s 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 Acquisition continued For agencies without eminent domain authority, acquisition is voluntary if: The agency notifies the owner in writing of the property’s 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 government’s 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 agency’s 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

Required Steps continued 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

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

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)

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 (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 (c) 30-Day Notice  Temporary relocation  30 days prior to move deadline

27 Relocation Steps - continued Notice of Intent To Acquire (49 CFR (d)) −Establishes eligibility for relocation assistance Comparable replacement dwelling −At least one must be made available −Choice of three is preferable

28 Relocation Steps – continued Residential Relocation Determine resource needs On-site survey of residents Issue notices Provide relocation advisory services −49 CFR (c) −Provide comparable housing referrals in writing −Referrals must be available

29 Relocation Steps – continued Residential 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 – continued Residential 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 – continued Business 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 ] or provide fixed payment [49 CFR ]

Relocation Steps – continued Business Relocation −Determine reestablishment payments for small businesses [49 CFR ] −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)

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

36 URA Replacement Housing Payments - continued 90-day occupants 49 CFR −All occupants > 90 days (owners or tenants) −Owners 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 Payment < 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

41 Section 104(d) Replacement Housing Payment (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

Section 104(d) Replacement Housing Payment (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 Federal Highway Administration International Right of Way Association − Section 104 (d) of Housing and Community Development Act