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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. 45) (SUPERSEDES NO. 28)
SUBJECT: 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 families.)
Use of the urban renewal program to provide such sites is parti-
cularly advantageous in high-cost housing areas since it absorbs the
C high cost of acquisition of built-up land, site clearance and relocation.
In addition, project property for low-rent public housing is made avail-
able at the special prices provided under Section 107(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 Appli-
cations for separate single-purpose public housing site projects, 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 (LHA) for low-rent public
housing. Several techniques may be used separately, or in combination,
to expedite the carrying out of such projects:
Wi, Handling of such sites or Lousing 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.
hk. 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 LHA.
‘1. PUBLIC HOUSING SITES AS SEPARATE URBAN RENEWAL PROJECTS
An urban renewal project 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 single-
purpose project may be separated in planning from another urban renewal
project or may be in a separate location.
While such a project must meet basic urban renewal requirements,
it may be planned and carried out much more rapidly, end simply, than
multiple-use projects.
Project area selection~-Aside from eligibility factors, planning
considerations are limited to the suitability and the boundaries
of the project area for housing uses.
Urban renewal plan=--The urban renewal plan and the report on
planning proposals will be very simple. The land use plan will
be_ limited to a single use, residential, and the controls and
other elements of the plan and report will be correspondingly
simplified.
Land Disposal--Since the real property will be committed ‘to a
single public use, lend utilization and marketability studies
and reports, evidence of mortgage financing and certain other
documentation will_not be pertinent.
Since the Local Housing Authority is committed, at an agreed price,
to purchase the site from the LPA, before Part II of the Loan end
Grant Application is approved, 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), end preparation of disposition instruments.
Financing plan--The 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 local
' 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 furnishing by the locality of
additionel noncash grants-in-aid for pooling purposes.
2. ACQUISTTTON OF LAND UNDER EARLY LAND ACQUISITION LOAN
If early land acquisition activities are permitted by State or
local law, the LPA may apply for an Early Land Acquisition Loan to
finence 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,
@ commitment by the LHA,. guaranteed by the Department of Housing and
Urban Development (D/HUD) under an Annual Contribution Contract (ACC),
to assume responsibility for any loss to the Federal Government if an
urban renewal project is not carried out, will be accepted in lieu of
@ commitment by the local governing body.
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- CARRYING OUT EXECUTION ACTIVITIES WITH LOCAL FUNDS DURING PILANNING
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” acthorizing the LPA to undertake these
activities with local funds during the planning stage.
- :
A "Letter of Consent” (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 from gross project
cost solely because they were incurred prior to the effective date of
a contract for loan and grant, or the issuance of a project expendi-
tures 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 full conformance with all HUD policies and require=
ments applicable under an executed contract for loan and grant.
The LPA should consult with the HUD Regional Office concerning
the reguirements to be met before a "Letter of Consent" may be issued.
h. PRIORTTY STAGING OF PROJECT EXECUTION ACTIVITIES
The LPA may 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 completion of new public housing frequently can be. carried out
while acquisition, relocation, rehabilitation, and site clearance
activities are still underway in other parts of the project.
Frequently, activities can be expedited in both single~purpose
and multi-purpose projects. For exemple, 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:
(1) the boundaries of the low-rent public housing site
have been firmly established,
(2) the public housing use is consistent with the urben
renewal plan being prepared for the project area, and >
(3) such action is necessary to assure completion of the
eppraisal work before execution of the loan and grant
contract.
5.' SITE CLEARANCE AND PREPARATION BY LOCAL HOUSING AUTHORITY
In some cases, considerable time may be saved if the LHA carries
out site clearance and preparation activities. The LHA may carry out
site clearance and preparation activities under a contract 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 snd
preparation activities included in the LHA's contract with Housing
Assistance Administration.
In any case, the LPA is responsible for carrying out relocation
of site occupants and making relocation payments in accordance with
the approved Relocation Program using its own staff or contracting
with the LHA or other egency. The LPA shall not dispose of improved
land in the low-rent public housing site before the buildings have —
been vacated.
eS es
Don Hummel
Assistant Secretary
226783-P HUD-Wash., D. C.
WASHINGTON, D. C. 20410
April 9, 1968
OFFICE OF THE ASSISTANT SECRETARY
FOR RENEWAL AND HOUSING ASSISTANCE
LOCAL PUBLIC AGENCY LETTER NO. 45) (SUPERSEDES NO. 28)
SUBJECT: 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 families.)
Use of the urban renewal program to provide such sites is parti-
cularly advantageous in high-cost housing areas since it absorbs the
C high cost of acquisition of built-up land, site clearance and relocation.
In addition, project property for low-rent public housing is made avail-
able at the special prices provided under Section 107(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 Appli-
cations for separate single-purpose public housing site projects, 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 (LHA) for low-rent public
housing. Several techniques may be used separately, or in combination,
to expedite the carrying out of such projects:
Wi, Handling of such sites or Lousing 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.
hk. 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 LHA.
‘1. PUBLIC HOUSING SITES AS SEPARATE URBAN RENEWAL PROJECTS
An urban renewal project 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 single-
purpose project may be separated in planning from another urban renewal
project or may be in a separate location.
While such a project must meet basic urban renewal requirements,
it may be planned and carried out much more rapidly, end simply, than
multiple-use projects.
Project area selection~-Aside from eligibility factors, planning
considerations are limited to the suitability and the boundaries
of the project area for housing uses.
Urban renewal plan=--The urban renewal plan and the report on
planning proposals will be very simple. The land use plan will
be_ limited to a single use, residential, and the controls and
other elements of the plan and report will be correspondingly
simplified.
Land Disposal--Since the real property will be committed ‘to a
single public use, lend utilization and marketability studies
and reports, evidence of mortgage financing and certain other
documentation will_not be pertinent.
Since the Local Housing Authority is committed, at an agreed price,
to purchase the site from the LPA, before Part II of the Loan end
Grant Application is approved, 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), end preparation of disposition instruments.
Financing plan--The 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 local
' 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 furnishing by the locality of
additionel noncash grants-in-aid for pooling purposes.
2. ACQUISTTTON OF LAND UNDER EARLY LAND ACQUISITION LOAN
If early land acquisition activities are permitted by State or
local law, the LPA may apply for an Early Land Acquisition Loan to
finence 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,
@ commitment by the LHA,. guaranteed by the Department of Housing and
Urban Development (D/HUD) under an Annual Contribution Contract (ACC),
to assume responsibility for any loss to the Federal Government if an
urban renewal project is not carried out, will be accepted in lieu of
@ commitment by the local governing body.
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- CARRYING OUT EXECUTION ACTIVITIES WITH LOCAL FUNDS DURING PILANNING
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” acthorizing the LPA to undertake these
activities with local funds during the planning stage.
- :
A "Letter of Consent” (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 from gross project
cost solely because they were incurred prior to the effective date of
a contract for loan and grant, or the issuance of a project expendi-
tures 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 full conformance with all HUD policies and require=
ments applicable under an executed contract for loan and grant.
The LPA should consult with the HUD Regional Office concerning
the reguirements to be met before a "Letter of Consent" may be issued.
h. PRIORTTY STAGING OF PROJECT EXECUTION ACTIVITIES
The LPA may 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 completion of new public housing frequently can be. carried out
while acquisition, relocation, rehabilitation, and site clearance
activities are still underway in other parts of the project.
Frequently, activities can be expedited in both single~purpose
and multi-purpose projects. For exemple, 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:
(1) the boundaries of the low-rent public housing site
have been firmly established,
(2) the public housing use is consistent with the urben
renewal plan being prepared for the project area, and >
(3) such action is necessary to assure completion of the
eppraisal work before execution of the loan and grant
contract.
5.' SITE CLEARANCE AND PREPARATION BY LOCAL HOUSING AUTHORITY
In some cases, considerable time may be saved if the LHA carries
out site clearance and preparation activities. The LHA may carry out
site clearance and preparation activities under a contract 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 snd
preparation activities included in the LHA's contract with Housing
Assistance Administration.
In any case, the LPA is responsible for carrying out relocation
of site occupants and making relocation payments in accordance with
the approved Relocation Program using its own staff or contracting
with the LHA or other egency. The LPA shall not dispose of improved
land in the low-rent public housing site before the buildings have —
been vacated.
eS es
Don Hummel
Assistant Secretary
226783-P HUD-Wash., D. C.