Final Rule Requires Broadband Infrastructure for New Construction and Substantial Rehabilitation

HUD published a final rule requiring installation of broadband infrastructure at the time of new construction or substantial rehabilitation of multifamily housing that has more than four rental units funded or supported by HUD.

The rule applies to most HUD construction-related programs: public housing capital fund, project-based voucher, Section 8 project-based housing assistance payments (including Section 8 New Construction, Section 8 New Construction Set-aside for Section 515 Rural Rental Housing, Section 8 Substantial Rehabilitation, Loan Management Set-aside, and Property Disposition), Section 202 Supportive Housing for Elderly, Section 811 Supportive Housing for Persons with Disabilities, HOME Investment Partnerships, the national Housing Trust Fund, Continuum of Care, Housing Opportunities for Persons with AIDS, Choice Neighborhoods Initiative, and Community Development Block Grant. Although not stated in the final rule or in the preamble to it, HUD confirms via email that this new rule also applies to the Rental Assistance Demonstration (RAD), which converts public housing capital dollars to project-based vouchers or Section 8 project-based housing assistance payments. The rule does not apply to multifamily rental housing that only has a HUD-insured mortgage or that has a loan guaranteed under a HUD loan program.

Substantial rehabilitation is defined as:

  1. Significant work on the electrical system of the multifamily rental housing. “Significant work” means complete replacement of the electrical system or other work for which the pre-construction cost estimate is equal to or greater than 75% of the cost of replacing the entire electrical system. In the case of multiple buildings with more than four units, “entire system” refers to the electrical system of the building undergoing rehabilitation; or
  2. Rehabilitation of multifamily rental housing in which the pre-construction estimated cost of rehabilitation is equal to or greater than 75% of the total estimated cost of replacing the multifamily rental housing after rehabilitation. In the case of multiple buildings with more than four units, the replacement cost must be the replacement cost of the building undergoing rehabilitation.

Broadband infrastructure is not required if:

  1. The location makes installation infeasible.
  2. The cost of installation would result in an undue financial burden.
  3. The structure of the housing makes installation infeasible (for substantial rehabilitation only).

The final rule, published on December 20, 2016, is at: