On October 16th, HUD issued a new proposed rule that would make significant changes to the approval process for the demolition and disposition of public housing properties. In addition to codifying a number of existing, informal demolition/disposition standards, the proposed rule strengthens HUD’s oversight of what has previously been a flexible funding stream for public housing authorities. As reported on Housing Plus, the proposed rule includes provisions to:
- Tightly regulate use of disposition proceeds and treat them similarly to federal funds;
- Require new HUD approvals for certain actions including rooftop and telecommunications leases and licenses on public housing property;
- Modify the justifications for disposition;
- Augment tenant consultation and relocation requirements; and
- Add a new alternative to disposition that would enable PHAs to remove public housing restrictions on a property for which the PHA retains ownership.
A Ballard Spahr Legal E-Alert more comprehensively details the changes proffered in the proposed rule. We have also prepared a line-by-line comparison of the current and proposed regulations. The comparison document is available here.
The proposed rule’s publication initiated a two-month comment period which concludes on Monday, December 15th. We urge public housing authorities and their developer and investment partners to comment on this rule, as it has the potential to significantly change the way that housing authorities may redevelop and dispose of public housing, directly or through their partners in the private sector. If you have questions, feel free to reach out to the Ballard Spahr team for assistance or counsel on these potential regulatory changes. Those ready to comment may do so via the Federal eRulemaking Portal.