Demolition and/or disposition of public housing property

The United States Department of Housing and Urban Development (HUD) has issued guidance regarding demolition and/or disposition of public housing.  A public housing authority must apply to HUD to demolish or dispose of public housing property.

For disposition of public housing property, the application must be based on at least one of three reasons: 1) The conditions in the area surrounding the project adversely affect the health or safety of residents or the feasible operation of the project, which can be supported by either conditions that present serious obstacles ion maintaining the under as healthy and safe housing an why the housing authority cannot cure or mitigate those conditions in a cost-effective manner or lack of demand for the units; 2) disposition allows for the development of other properties that will be more efficiently or effectively operated as low-income housing; 3) disposition is in the best interest of the residents and the housing authority, which can include unit obsolescence, very small (50 or fewer units) housing authority, comprehensive rehabilitation or replacement through rental assistance demonstration, improved efficiency or effectiveness through on-site development of low-income housing or scattered site units that are no longer sustainable.

For non-dwelling and vacant land, the housing authority must certify that the property exceeds the needs of the project or disposition of the property is incidental to, or does not interfere with, continued operation of the project.

Disposition at below fair market value requires a finding of commensurate public benefit, which HUD determines on a case-by-case basis.  Generally, the disposed property is developed for affordable housing serving low-income families.

For demolition of public housing, HUD reviews demolition requests in accordance with the following criteria: 1) substantial physical issues of the building or units; 2) the location of the units causes obsolescence, including physical deterioration of the neighborhood, change in neighborhood from residential to industrial or commercial, or environmental conditions of the cite jeopardize residential use; 3) other factors that impact the marketability, usefulness or management of the units that seriously impedes operation of residential use.

In any 5 year period, a housing authority can demolish the lesser of 5 units or 5% of the total public housing units without HUD approval.

As part of HUD’s approval of an application for disposition or demolition, a housing authority may be eligible for tenant protection vouchers.  The housing authority must apply to HUD separately for tenant protection vouchers.

Other requirements for disposition or demolition include that the housing authority should not re-rent units while HUD is consideration an application unless it is necessary for community needs or other reasons consistent with the public housing authority plan, and that the housing authority certifies compliance with applicable civil rights requirements.

If residents are relocated because of demolition and/or disposition, the housing authority must follow the requirements in 24 CFR 970.21 instead of the Uniform Relocation Act.  However, if CDBG or HOME funds are used in subsequent acquisition, rehabilitation or demolition, the project may be subject to the Uniform Relocation Act, including relocation assistance and one-for-one unit replacement.  (PIH Notice 2018-04, March 22, 2018.)