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' - -- .J DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D. C. 20410 April 9, 1968 OFFICE OF THE ASSISTANT SECRETARY FOR RENEWAL AND HOUSING ASSISTANCE LOCAL PUBLIC AGENCY LETTER NO. 454 SUBJECT: (SUPERSEDES NO. 281~) Using the Urban Renewal Program to Provide Low Cost Public Housing Sites To encourage housing for low-income families, it is HUD policy to use the urban renewal program to provide sites for low-rent public housing, and to expedite the provision of such housing. (See LPA Letter No. 418 for a discussion of HUD policy pertaining to the designation of urban renewal projects for "priority consideration" if they contribute to the national goal of expanding the housing supply for low and moderate income fmnilies.) C Use of the urban renewal program to provide such sites is particularly advantageous in high-cost housing areas since it absorbs the Vhigh cost of acquisition of built-up land, site cle~rance and relocation. In addition, project property for low-rent public housing is made available at the special prices provided under Section 1O7(b) of the Housing Act of 1949, as amended. In areas with high per-unit costs, where public housing is necessary as a relocation resource to serve other urban renewal projects, the Department will give special consideration to Survey and Planning Applications for se~arate single-purpose public housing site p rojects, or other projects involving substantial amounts of public housing. ! These projects may acquire and clear sites, or acquire housing for rehabilitation by a Local Housing Authority (LEA) for low-rent public housing. Several techniques may be used separately, or in combination, to expedite the carrying out of such projects: ~. Hanclling of such sites or L,ousing as single-purpose urban renewal projects. 2. Acquisition of land under an Early Land Acquisition Loan. 3. Carrying out project execution activities with local funds during the planning stage. .I �.. 2 1. ~ 4. Priority staging of acquisition, site preparation work, and land disposal during the execution stage. 5. Arranging for site preparation work to be carried out by the IJIA. PUBLIC HOUSWG SITES PS SEPARATE URBAN RENEWAL PROJECTS An urban renewa.l pro~ ·c t for the exclusive use of low-rent public housing is particularly useful to meet the relocation housing needs of low-income families in other urban renewal projects. Such a singlepurpose project may be separat.ed in planning from another urban renewal project or may be in a separate location. i While such a project must meet basic urban renewal requirements, it may be planned and carried out much more rapidly, and simply, than . multiple - use projects. Jyoject area selectj.on--Aside from eligibility factors, planning considerations are limited to the suitability and the boundaries of the project area for housing uses. . prban renewal pla.u--The urban renewal plan and the report on planning proposa.ls will be very simple. The l snd use plan vi.11 .be limited to a single use , residential, and the controls and other elements of the plan and report will be correspondingly simplified. ~~nd Di spo~al--Since the real property will be connnitted to a single public use, land utilization and marketability studies and reports, evidence of mortgage fi nancing and certain other documentation will not be pertinent. Since the weal Housing Authority is committed, at an a.greed price, to purche.se the site from the LPA, before Part II of the Lo3ll and Grant Application is approvea., disposition activities related to the public housing project or site will be comparatively minor during the execution phase. They will consist primarily of appraisal and price determinations, in accordance with the provisions of Section 107(b), and preparation of disposition instruments. FinanciA,_~ plan~..rr'he noncash local grant-in~aid credit for the local public housing contribution, under Section 107(b) of the Housing Act of 1949, as amended by the Housing Act of 1964, may provide the loca.l share of net project cost of the urban renewal project. Therefore, no further commitments for financing the local share may be necessary. This does not, of course, preclude the funlishing by the locality of additional noncash grants- in- aid for pooling purposeso ') -- 1 �3 2. . ACQJlISITl ON OF Ll\Jfil UNDER EARLY LOJ-ID ACQUISITION LOAN If early land acquisition activities are pennitted by State or local law, the LPA mey apply for an Early Land Acquisition Loan to finance the acquisition of. land, property management, relocation of site occupants, and demolition and site clearance during the planning stage. When land is to be disposed of for low-rent public housing, a commitment by the LHA, . guaranteed by the Department of Housing E!Jld Urban Development (DJHUD) under an Annual Contribution Contract (Ace), to assume responsibility for any loss to the Federal Government if an urban renewal project is not carried out, will be accepted in lieu qf a commitment by the local governing bogy. Early land acquisition will expedite the completion of site preparation work, and delivery of the site for the public housing project after execution of the loan and grant contract. 3. CARRY nm C our EXECUTION ACTIVITIBS WITH LOCAL FUNDS DURrnG PLAlUUNG If it will contribute to the acceleration of the acquisition, preparation and• disposal of low-rent public housing sites, HUD may issue a "Letter of Consent" a:cthorizing the LPA to undertake these activities ·with locaJ. funds during the planning staee. t/ . A .,Letter of Consent 11 (as used for this and other purposes) is merely a determination that expenditures made by the LPA in carrying out the specified activities will not be excluded f'rom gross project cost solely be'cause they were incurred prior to the effective date of a contract for loan and grant, or the issuance of a project expenditures budget. However, for the costs to be eligible for inclusion in gross project cost, the .activities authorized by the Letter must be carried out in f'ull confonnance with all HUD policies and requirements applicable under an executed contra ct for loan and grD.nto The LPA should consult with the HUD Regional Office concerning the requirements to be met before a "Letter of Consent" mey be issued. 4. PRIORITY STAGING OF PROJECT EXECUTION ACTIVITIES The LPA mey give priority to the acquisition, preparation, and disposal of low-rent public housing sites in multi-purpose projects during the execution stage. While this will not permit as much acceleration as the carrying out of separate single- purpose public housing projects, the construction and colliJ )letion of ne.w public hoµsing frequently can be . carried out whil~ acquisition, relocation, ·rehabilitation, and site clearance ( �4 activ~ties are still underway in other .parts of the project. Frequently, activities can be expedited in both . single-purpose and multi-purpose projects. For example, the HUD Regional Office may authorize the LPA to contract for second land acquisition appraisals prior to the submission of Part I of the loan and grant applications if: 5. ' (1) the boundaries of the low-rent public housing site have been finuly established1 (2) the public housing use is consistent with the urbaii renewal plan being prepared for the project area, and (3) such action is necessary to assure completion of the appraisal vork before execution of the loan and grant contract. SITE CLEARANCE AND PREPARA.TION BY LOCAL HOUSlliG AlJrH0RITY i In some cases, considerable time mey be saved if the LHA carries out site clearance and preparation actiyj_ties. The lJIA may carry out site clearance and preparation activities under a ~ontract or other -written agreement (see Urban Renewal Manual, Section 30-2-1); or land in the low-rent public housing site may be disposed of with existing improvements, and responsibility for site clearance e.nd preparation activities included in the LHA's contract with Housing Assistance Administration. l In any case, the LPA is responsible for carrying out r elocation of site occupants and making r elocation peyments in accordance with the approved Relocation Program using its ovm staff or contracting \Tith the LHA or othe r s_gency. The LPA shall not disnose of in..iproved land in the low- rent public housing site before the buildings have be@n ·vacated . _______ 143.215.248.55.... Don Hummel Assistant Se cretary HUD-Wash., D. 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