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Using CDBG for Demolition Projects

Using CDBG for Demolition Projects. November 8, 2012. Presenter. Betsy Giffin Section Supervisor, Training & Technical Assistance Office of Community Development 77 South High Street Columbus, Ohio 43215 614. 466.8216 F 614.752.4575 Betsy.Giffin@development.ohio.gov.

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Using CDBG for Demolition Projects

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  1. Using CDBG for Demolition Projects November 8, 2012

  2. Presenter Betsy Giffin Section Supervisor, Training & Technical AssistanceOffice of Community Development 77 South High StreetColumbus, Ohio43215614.466.8216 F 614.752.4575 Betsy.Giffin@development.ohio.gov

  3. 2012 Community Development Demolition Projects • 21 Grantees • $775,800 CDBG & Other Funds • $13,900 Average Cost

  4. Issues to be Aware of • Federal Acquisition (URA) • Section 104(d) of the Community Development Act (1:1 Replacement) • Tenants & Relocation • Federal or State Prevailing Wage • Liens • Change in Use or Property Disposition

  5. Do You Plan to Acquire Property? • If yes … • Uniform Relocation Act (URA) applies • 49 CFR Part 24 is the government-wide regulation that implements the URA.

  6. For Demolition, if Governments Acquire Property They Usually Use One of Two Methods Voluntary • Property is dilapidated and blighting the neighborhood • Property owner not willing or unable to make repairs • You have a willing seller • Selling price is fair and reasonable

  7. For Demolition, if Governments Acquire Property They Usually Use One of Two Methods Involuntary • Property is dilapidated and blighting the neighborhood • Property owner not willing or unable to make repairs • Specific property needed for another purpose • Property owner is not willing to sell

  8. How to Resource – HUD Handbook 1378On-line • http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/library/relocation/policyandguidance/handbook1378

  9. Useful Chapters and Appendices • Chapter 2 • General Relocation/Tenant Assistance Requirements • Chapter 5 • Real Property Acquisition • Chapter 7 • Section 104(d) Relocation Requirements

  10. Project Planning Hints • Involuntary acquisition will take much longer time than voluntary acquisition and will cost more because of additional requirements like appraisals

  11. Section 104(d) aka Barney-Frank Amendment • Each Grantee has an Anti-Displacement Plan and Certification • Replacement of Occupiable Housing • Extra Relocation Assistance for LMI • 24 CFR 570.488(c)

  12. A Housing Unit Demolished Must be Replaced if: • Occupied, regardless of its condition and rents at or below FMR • Currently vacant but occupied within the past 3 months regardless of its condition • Vacant for more than 3 months and suitable for rehabilitation

  13. Housing Does Not Need to Be Replaced if • Property that has a value of less than $10,000, • Has been vacant for at least 3 months, • and has been documented to be dilapidated will be considered not suitable for rehabilitation.

  14. Tenants and Relocation • Tenants required to leave a property because of sale or intent to sell are eligible for relocation services and cost.

  15. Federal Prevailing Wage • What do you plan to do with the property after unit is demolished?

  16. Does Federal Prevailing Wage Apply? • Demolition with no construction on-site contemplated – NO (regardless of # units or cost) • Demolition done under separate contract by grantee before transfer to developer – NO (regardless of # units or cost) • Demolition contracted for by the same entity (developer, grantee contractor, etc.) doing subsequent construction and will be carried out while contracting entity controls site - YES

  17. Does State Prevailing Wage Apply? • If demolishing 5, 6, or 7 units - YES

  18. Liens • Liens are required to be placed on real property which is acquired and/or improved in whole or in part using CDBG funds in excess of $25,000. • Demolition is considered an improvement.

  19. Change in Use or Property Disposition for Property Acquired an/or Improved > $25,000 Recipient may not change the use or planned use of property (including the beneficiaries of such use) unless • affected citizens are given reasonable notice of, and opportunity to comment on, any proposed change, and either:

  20. Change in Use or Property Disposition for Property Acquired an/or Improved > $25,000 • The new use of such property qualifies as meeting one of the national objectives and is not a building for the general conduct of government; • or the following requirements are met:

  21. Change in Use or Property Disposition for Property Acquired an/or Improved > $25,000 • All parties agree to a new use which does not qualify as meeting a national objective • The CDBG program is reimbursed the current fair market value of the property.

  22. For Any Speaker!

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