HUD Issues Amended Demolition/Disposition Notice

HUD posted Notice PIH 2018-04, explaining the requirements public housing agencies (PHAs) must follow when applying for HUD approval to demolish and/or dispose of public housing property under Section 18 of the Housing Act of 1937. This Notice replaces Notice PIH 2012-07, written as a result of persistent efforts by advocates. The 2012 Notice purposely served as a reminder to residents, the public, and PHAs, of PHAs’ obligations regarding resident involvement and the role of the PHA Plan under demolition/disposition and PHA Plan regulations. The 2018 Notice significantly downplays the role of resident consultation, the PHA Plan, and other resident-oriented features. Notice PIH 2018-04 follows HUD’s recent decision not to implement resident-oriented protections proposed in improvements to the demolition/disposition regulations (see Memo, 10/20/14, 1/8). An extended summary and analysis of Notice PIH 2018-04 is at:  

Throughout 2010, the Housing Justice Network (comprised of legal services attorneys and other advocates, including NLIHC) worked on a draft letter to HUD outlining features of the demolition/disposition regulations that needed to be amended in order to address the many problems public housing residents had encountered over the years. At a meeting with HUD Secretary Shaun Donovan and Assistant Secretary for Public and Indian Housing (PIH) Sandra Henriquez on November 16, 2010, the NLIHC Board of Directors raised the issue of public housing demolition and disposition. In response, PIH officials had a series of meetings and calls with HJN advocates.

One outcome of these meetings was Notice PIH 2012-7, which NLIHC and HJN considered to be helpful because it emphasized the requirements for genuine resident consultation and clearly stated that demolition/disposition applications must be complete in order for resident involvement to be meaningful.

A second outcome was publication of long-awaited proposed improvements to the demolition/disposition regulations on October 16, 2014 (see Memo, 10/20/14). PIH stated that the purpose of the proposed rule was to increase oversight of the demolition and disposition of public housing by requiring PHAs to submit more detailed justifications. The rule would also clarify and provide more detail related to existing requirements like resident consultation and relocation, as well as fair housing and civil rights compliance. Unfortunately, HUD recently decided not to finalize the improved demolition/disposition regulations that could have provided residents greater protections (see Memo, 1/8). 

Role of Resident Consultation Significantly Downplayed by the New Notice

The 2018 Notice only contains five and a half lines regarding resident consultation, compared to a full page in the 2012 Notice. The 2018 Notice no longer reminds the reader that the PHA Plan regulations require a public hearing, a comment period, consultation with the Resident Advisory Board (RAB), and reasonable outreach to encourage broad public participation in the public hearing. The demolition/disposition regulations also require applications to undergo a separate resident participation process that is in addition to the PHA Plan process. Both Notices indicate that applications are subject to consultation with residents in a project a PHA proposes to demolish or sell, resident organizations of affected developments, PHA-wide resident organizations, and the RAB.

The 2018 Notice no longer includes text:

  • Stating that PHAs should provide a copy of the application to residents and resident groups, post the application on its website, and/or make application materials available for review at the PHA’s central office.
  • Stating that PHAs should a) inform residents and resident groups of their right to submit written comments about the application, b) inform residents that the PHA will respond to their comments in writing, and then c) submit their comments and the PHA’s written responses to HUD as part of the application. The 2012 Notice also stated that PHAs should consult residents and resident groups regarding the relocation plan, if one was needed.
  • Stating that residents and members of the public may submit comments about a proposed application directly to HUD’s Special Applications Center (SAC), which decides whether to approve applications for demolition and/or disposition.
  • Explaining resident consultation regarding disposition of public housing that would be followed by the development of new public housing. The 2012 Notice required the PHA to inform residents of the number and affordability of public housing units and other affordable units to be developed, the number of bedrooms per unit, the screening and application requirements for the new units, the ownership structure of the units, any opportunity to return, or other occupancy preferences for displaced residents. 

The 2018 Notice does have an enhanced section on accessible resident consultation, stating that priority must be given to meeting locations on the site of the public housing development, even if doing so requires multiple meetings with smaller groups of residents.

Role of the PHA Plan Significantly Downplayed by the New Notice

The 2018 Notice only contains three lines, while the 2012 Notice had a three-paragraph section on the first page, stressing the importance of the PHA Plan. The 2012 Notice:

  • Required a description of public housing that a PHA has applied or will apply for demolition or disposition approval, along with a timetable.
  • Elaborated on Moving to Work Demonstration (MTW) agencies’ responsibilities.
  • Stated three times that HUD would not process or approve an application without evidence that the PHA had complied with all PHA Plan requirements.

Other Important Resident-Oriented Provisions Deleted from the New Notice

The 2018 Notice no longer clearly states that PHAs are prohibited from relocating residents or demolishing or disposing units before receiving HUD approval. The 2012 Notice was written in response to residents and advocates informing HUD of residents being relocated before an application was approved, and of PHAs demolishing properties before receiving HUD approval, even though the regulations prohibit such actions. In addition, the 2018 Notice no longer clearly declares that PHAs cannot point to high vacancy rates as a sole justification for judging a public housing development to be “obsolete,” nor does it state that HUD will review allegations that there are inconsistencies with a PHA’s certifications of obsolescence.  

The Process for Substantially Incomplete Applications Significantly Diluted

In response to advocates’ complaints about incomplete applications presented for public comment or even sent to HUD, the 2012 Notice stated, “Prior to submitting an application, PHAs ensure the application is complete with all information and documentation. . . . The SAC will not process an application found to be incomplete or deficient on a substantial item. . . .” The 2018 Notice simply notes “SAC only reviews complete SAC applications.”

According to the 2012 Notice, HUD terminated its review if an application was substantially incomplete or deficient. In addition, HUD “rejected” such an application and rendered the application “inactive.” After an application was rejected, HUD would not allow a PHA to submit missing items or correct deficiencies. A PHA could, however, submit a new application for the same demolition or disposition. Under the 2018 Notice, if an application is substantially incomplete or deficient, HUD will merely return the application and inform the PHA of the deficiencies. The value of the formal rejection and “stop work” process of the 2012 Notice was to serve as a disincentive to PHAs providing residents and HUD with incomplete applications for review and comment. The 2018 Notice does, however, remind PHAs that they must consult with residents and resident groups before re-submitting an application.

Both Notices reflect the regulations indicating that HUD may disapprove an application if it is clearly inconsistent with the PHA Plan and/or any information or data available to, or requested by, HUD, or if the application was not developed in consultation with residents or resident groups.

A New Provision Pertaining to Rental Assistance Demonstration

The 2018 Notice introduces a new provision allowing a PHA to propose disposition using comprehensive rehabilitation or replacement of public housing through the Rental Assistance Demonstration (RAD). This provision requires a PHA to convert at least 75% of a development’s units to either Project-Based Vouchers (PBVs) or Project-Based Rental Assistance (PBRA), and to replace the units proposed for disposition (up to 25% of the units in the development) with PBVs. The RAD and PBV units must be in a newly constructed or substantially rehabilitated property that does not use 9% Low Income Housing Tax Credits.

A preliminary analysis by the National Housing Law Project (NHLP) indicates that because the initial contract rents for RAD-converting public housing units are based on the public housing contract rent, having up to 25% of the units at the property with a higher PBV market rent would likely provide the PHA/owner more money. NHLP is concerned that RAD residents could be treated differently (different leases, house rules, grievance procedures, rents, etc.) than the non-RAD PBV residents. It would be very important for advocates to secure an upfront commitment from the PHA/owner (perhaps in the ground lease, if applicable) that all residents at these properties will be subject to the same leases, house rules, rents, etc.

Tenant Protection Vouchers

The 2018 Notice adds a new section describing how PHAs must apply to HUD to obtain Tenant Protection Vouchers (TPVs). HUD does not automatically award TPVs to a PHA when SAC approves a demolition and/or disposition application. A PHA must apply to a different office within PIH separately for TPVs following a PIH funding Notice for the voucher program. The current voucher funding Notice is PIH 2017-10 (see Memo, 7/3/17). PIH Notice 2017-10 states that the maximum number of TPVs will be based on the number of public housing units occupied at the time the demolition/disposition application is approved.

The Civil Rights Section is Significantly Augmented

The 2018 Notice greatly expands upon civil rights requirements, going beyond a single paragraph in the 2012 Notice to a full page. Information about affirmatively furthering fair housing is addressed in this section, instructing PHAs that they must assess how demolition and/or disposition impacts fair housing choice and access to opportunity. The 2018 Notice reminds PHAs that demolition and/or disposition “should generally improve fair housing opportunities, such as offering residents greater housing choice through Housing Choice Vouchers in a geographic mobility program or placing low income housing units in areas of higher opportunity.”

NLIHC’s extended summary and analysis of Notice PIH 2018-04 is at: