The demolition and disposition of public housing is authorized under Section 18 of the Housing Act of 1937 (the Act), as amended. The implementing regulation, 24 CFR part 970, was published in the Federal Register on October 24, 2006 and took effect on November 24, 2006. Minor corrections to the regulation were published in the Federal Register on January 23, 2008. HUD reviews demolition and disposition applications in accordance with the guidance in PIH Notice 2018-04.
To evidence obsolescence for demolition of a project, PHAs must show that the necessary modification and/or rehabilitation to a project is not cost-effective. HUD generally considers modifications not to be cost-effective if costs exceed 62.5% of TDC for elevator structures and 57.14% for other types of structures. PHAs should use the HUD TDC information associated with the year the rehabilitation cost estimate was generated. For instance, if a rehabilitation cost estimated was generated in November 2012, but the PHA did not submit the application until January 2013, the PHA should use HUDâ€™s 2012 TDC information. More information about HUDâ€™s TDC calculations, including procedures HUD uses for establishing TDC limits and procedures for the annual posting of TDC limits on HUD's webpages, can be found in PIH Notice 2011-38. See also HUD's TDC Limits Workbook and TDC costs limits from 2019, 2018, 2017, 2016, 2015 2014, 2013, 2012, and 2011.
An Excel Version of the Total Development Cost (TDC) Addendum (HUD-52860-B) is available here.
In accordance with Section 18(f) of the U.S. Housing Act of 1937 (1937 Act), in any 5-year period PHA may demolish not more than the lesser of 5 dwelling units or 5 percent of the total public housing dwelling units owned by the PHA, but only if the space occupied by the demolished unit is used for meeting the service or other needs of public housing residents or the demolished unit was beyond repair. Read more...
The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA) does not apply to Section 18 actions. However, Section 18 of the Act and 24 CFR Part 970 contain similar, but distinct, requirements for the relocation of residents. 104(d) of the Housing and Community Development Act of 1974 applicable, the notice requirements at 24 CFR 970.21(e) apply. Such notice must also explain to the tenant the assistance available under section 104(d) (which includes offering the choice of assistance calculated at section 104(d) or URA levels). See Appendix 33 of HUD Handbook 1378.
PHAs may realize proceeds when they sell, transfer, ground lease or otherwise dispose of public housing property. PHAs retain flexibility to determine the use of proceeds, provided the use is consistent with the 1937 Act which requires that proceeds be used for the provision of low-income housing or to benefit the residents of the public housing agency; or leveraging amounts for securing commercial enterprises, onsite in public housing projects of the PHA appropriate to serve the needs of the residents. A PHAâ€™s use of proceeds is subject to HUD (SAC) approval pursuant to 24 CFR part 970.19.
PHAs are authorized to blend RAD and Section 18 as part of a public housing conversion