1 Acquisition, Relocation and Displacement For Local Officials

2 Acquisition and Relocation overview Whenever Federal funds, such as CDBG, are 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 for persons displaced as a result of a CDBG- funded project or activity

4 URA: Statutory 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

Statutory Requirements continued Applies government-wide and impacts programs administered by 18 Federal agencies, including HUD Government-wide regulations implementing URA are at 49 CFR Part 24

6 URA: Regulatory Requirements 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

7 URA Regulatory Requirements continued URA implementing regulations with respect to the state CDBG program are at 24 CFR : –Clarifies the responsibilities of the State and of the local CDBG recipient –Local recipient may provide “optional relocation assistance” if the state permits it and there is a written policy –Requires an appeals procedure in place –The state must ensure compliance; local recipients must certify they will comply with all requirements

8 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 another purpose –Provides relocation assistance to low-income tenants (non-low-income persons are protected by URA) –Requires one-for-one replacement of any low- income housing demolished or converted

9 Section 104(d) Regulatory Requirements Regulations implementing Section 104(d) 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 (or submission to HUD when replacement is not required) –Public disclosure before committing funds to demolition or conversion

10 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 vs. Involuntary Acquisition - 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 If tenants are displaced, the tenants are provided relocation assistance (owners are not)

12 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; and 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)

13 Eminent Domain The government’s ability to take property for public use with payment of just compensation to the property owner In fiscal years 2006, 2007 and 2008 the Appropriations bills have prohibited the use of CDBG or other Federal funding in conjunction with the use of eminent domain for certain economic development projects.

14 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

Involuntary Acquisition: 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 should acquire the property through use of eminent domain

16 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

17 What are the Costs of Displacement? Uniform Relocation Act (URA) –Relocation advisory services –Moving costs –Replacement housing payments (residents)  42 months for tenants  Price differential and expenses for owner  Reestablishment costs (non-residential)  Court costs (if using eminent domain)

18 Costs of Displacement continued Section 104(d) –Relocation advisory services –Moving costs and security deposits –Replacement housing payments for 60 months

19 Resources HUD Real Estate Acquisition and Relocation website Federal Highway Administration International Right of Way Association