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 (NEW) PIH Notice 2021-07.
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 2019, but the PHA did not submit the application until January 2020, the PHA should use HUD’s 2019 TDC information. More information about HUD’s TDC calculations, including procedures HUD uses for establishing TDC limits can be found at 24 CFR 905.314. Annual postings of TDC limits can be found on HUD's webpages at 2020, 2019, 2018, 2017, 2016 and 2015.
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 PHA’s use of proceeds is subject to HUD (SAC) approval pursuant to 24 CFR part 970.19.
- (NEW) Proceeds Training Video
- PIH Notice 2020-23 (Use of Proceeds under Section 18 Disposition or Section 22 Voluntary Conversion)
- (NEW) Options for 50-and-Under
- (NEW) Options for Scattered-Site Units
- (NEW) Repositioning Public Housing: Section 18 Demolition & Disposition (YouTube) | (PDF)
- (NEW) Determining Physical Obsolescence under Section 18 (Youtube) | (PDF)
- In accordance with PIH Notice 2018-04, demolitions and disposition must comply with 24 CFR 970.13 and have environmental clearance, which means final approval from a HUD Approving Official or the Responsible Entity of an environmental review (ER) conducted under 24 CFR part 50 or 58. See Notice PIH 2016-22. PHAs are responsible for providing the Responsible Entity or local Office of Public Housing (Field Office) with a full description of the activities in connection with the demolition and/or disposition (including relocation, known future use of the site, use of disposition proceeds) to comply with aggregation requirements. The site re-use is not limited to future actions by the PHA, but includes any future known reuse.
- ERs must be conducted within the past 5 years and must contemplate the same project description and scope, including the same future use proposed in the SAC application. ERs generally remain valid for 5 years.
- The ER must be completed PRIOR to the submission of the SAC application in IMS/PIC. The only exception to this is that if the RE makes a finding of no significant impact (FONSI), the PHA may submit the SAC application during the public comment for the FONSI notice. (In this instance, the PHA will submit the Request for Release of Funds/Environmental Certification (RROF/C), form HUD-7015.15 to the HUD Local office of Public Housing, through HEROS, but the Field Office will not approve the PHA to use Grant Funds, form HUD-7015.16 until the public comment period has ended).
- After SAC approval, an ER remains open to re-evaluation per 24 CFR Part 58 (58.47) by the Responsible Entity (RE) before and during the undertaking of a project (as the term project is defined in 24 CFR part 58). Re-evaluation of an existing ER must be performed by the RE. Depending on the updated project description, project scope, and environmental conditions, the RE may determine that the past ER is not valid and that a new ER is required. It is up to the RE to make that determination.
- If a PHA is delayed in its implementation of a SAC approval, note a re-evaluation of the ER may be required. If an ER was conducted that is more than 5 years old and contemplates the same project description and scope, including the same proposed future use, the PHA must contact the RE to request a re-evaluation, which most likely will result in a new review since ERs are generally valid for 5 years. It is up to the RE to make that determination as to whether a new review is required; and if so, the RE may choose to use the past ER to guide completion of the new ER.
- If a PHA’s plans change, and the PHA is contemplating a different future use of a property approved for demolition or disposition, the PHA must submit an amendment request to the SAC (prior to the actual demolition or disposition. If an ER was conducted that is less than 5 years old, but contemplates a different project description and scope, including a different proposed future use, the PHA must contact the RE to request a re-evaluation which most likely will result in a new review. It is up to the RE to make the determination as to whether a new review is required; and if so, the RE may choose to use the past ER to guide completion of the new ER. Depending on the updated project description, project scope, and environmental conditions, the RE will most likely determine that the past ER is not valid and that a new ER is required. Pursuant to PIH Notice 2021-07, the PHA must request that SAC amend the application/approval to reflect the different future use for the property. SAC will not approve the amendment request until the local HUD Office of Public Housing confirms to the SAC that the RE has confirmed that it has complied with 24 CFR Part 58, most likely by completing a new ER for the proposed project.