DE MINIMIS DEMOLITION

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.  HUD’s implementing regulations at 24 CFR 970.27 state the requirements a PHA must meet to engage in a de minimis demolition without the need to submit an application.

 

Step-by-Step Requirements

1

Determine the PHA has the authority to demolish the proposed units (not more than the lesser of 5 dwelling units or 5 percent of the total public housing dwelling units and limited by the 5-year period, see 24 CFR 970.27(b) for how to count the units)

2

Determine that the units meet one of the criteria for demolition outlined in 24 CFR 970.27(c) (the units are “beyond repair” or the space occupied by the units will be used for meeting the service or other needs of the residents such as use of space to construct a laundry facility, community center, child care facility, office space for a general provider or for use as open space or garden)

3

Ensure an Environmental Review is done under 24 CFR part 58 or 50

3

If the demolition involves an alteration of existing housing facilities, follow the requirements of 24 CFR 8.23

4

Include the demolition in the PHA Plan (or significant amendment); follow the PHA plan requirements at 24 CFR part 903 (e.g., including resident consultation and public meeting) and provide a certification as described in 970.7(a)(1).

5

Consult local government officials and provide evidence in accordance with 24 CFR 970.7(a)(14)

6

Secure a Board Resolution approving the de minimis demolition after all resident and local government consultation has been completed.

7

Assure the demolition will not jeopardize any agreements that that PHA has entered into regarding its public housing units (e.g., Energy Performance Contracting; Capital Fund Financing Program; Operating Fund Financing Program or Rental Assistance Demonstration (RAD) Commitment to Enter into a Housing Assistance Payment Contract (CHAP), Financing Plan or RAD Conversion Commitment (RCC)) or assure that it satisfies the terms and conditions of such agreement before proposing the demolition action.

8

Assure the demolition in consistent with all applicable civil rights requirements, including the PHA’s duty to affirmatively further fair housing as demonstrated by compliance under 24 CFR part 903 and its annual certification.

9

Consult with the resident advisory board (RAB), resident groups, and any residents who will be displaced, including consultation on where the residents will be relocated (e.g., other public housing units or units in the private market with a voucher)

10

Prior to commencing the demolition, submit the applicable information to HUD via the “Inventory Removals Module” of IMS/PIC.  Select “De Minimis Demolition” from the drop-down menu. 

SAC PROCESSING 

If the PHA’s submission meets all applicable requirements including submission of all information, HUD (through the SAC) will accept the PHA’s submission and certifications unless HUD has independent information that requirements for de minimis demolition have not been met.  The PHA may commence the demolition action after receiving a written acceptance from HUD.

REQUIREMENTS REGARDING RESIDENT TRANFER/RELOCATION AFTER the PHA RECEIVES HUD ACCEPTANCE OF THE DE MINIMIS DEMOLITION

Prior to commencing the demolition, if the units are occupied, the PHA must assure that all residents living in the units are provided with housing assistance in accordance with applicable federal laws and requirements.  Because Section 18(g), which excepts Section 18 demolitions and dispositions from the Uniform Relocation and Real Property Acquisition Act of 1970 (URA), also applies to de minimis demolitions under Section 18(f).  If CDBG or HOME funds are involved in a covered activity, relocated residents may be eligible for assistance under Section 104(d) of the Housing and Community Development Act of 1974.  If a PHA is planning on relocating residents with a Section 8 tenant-based voucher, the PHA should confirm that its Section 8 Administrative Plan (24 CFR part 982) provides a priority preference for residents who are displaced by a de minimis demolition.  The PHA’s Admissions and Continued Occupancy Policy (ACOP) (24 CFR part 966) and the PHA’s policy regarding mandatory/involuntary transfers (see PIH Occupancy Guide) are also useful resources.

PHA REQUIREMENTS AFTER THE DEMOLITION

After completing a de minimis demolition under Section 18(f) and 24 CFR 970.27, the PHA must comply with the record-keeping and PIC reporting requirements outlined in the HUD acceptance letter.  This includes requesting that the units be put into Removed From Inventory (RMI) status in PIC after the actual demolition.

FREQUENTLY ASKED QUESTIONS

  1. QUESTION. If HUD approval for de minimis demolitions is not required, why does the PHA need to make a submission to HUD about its proposed de minimis demolition prior to commencing the demolition?
    ANSWER.  24 CFR 970.7(b)(13) requires that PHAs submit information related to environmental review requirements prior to commencing a de minimis demolition.  In addition, 24 CFR 970.27 requires PHAs to submit the information required by §§ 970.7(a)(1), (2), (12), (13), and (14) for record-keeping and inventory management purposes.  These requirements are to assure that public housing unit counts in IMS/PIC are correct, which assures that HUD is not providing Operating and/or Capital Funds on a public housing unit that has been demolished.  In addition, HUD needs the PHA’s certification on file (prior to commencement) that the demolition meets the requirements of Section 18 of the 1937 Act.
     
  2. QUESTION. What does “beyond repair” mean?
    ANSWER. HUD defers to each PHA’s discretion to determine if a unit is beyond repair.  The PHA should use the demolition criteria at 24 CFR 970.15 as a guide. HUD will accept a certification from the PHA that the units proposed for de minimis demolition meet one of two threshold criteria (units are beyond repair or will be used for resident needs) unless HUD has information that is contrary to that certification. 
     
  3. QUESTION. My PHA partially demolished a public housing unit that was damaged by fire, to the extent necessary to eliminate an exigent hazard and maintain their public housing unit in a safe condition (as permitted by Sections 4 and 13 of the Annual Contributions Contract-ACC).  My PHA has determined the unit is beyond repair and would now like to fully demolish this unit using the de minimis exception to demolition requirements.   If my PHA otherwise qualifies to demolish units under this de minimis exception (e.g., unit count), can it submit a de minimis demolition certification for this unit, certifying that it has met all applicable criteria?
    ANSWER.  Yes.  Provided it meets all other applicable criteria, the PHA may fully demolish this unit using the de minimis exception to demolition requirements.
     
  4. QUESTION.  My PHA demolished no units in 2012.  My PHA demolished 50 units on January 1, 2013 under 24 CFR 970.15.  My PHA demolished 50 more units on January 1, 2014 under 24 CFR 970.15.  My PHA demolished no units in 2015.  My PHA demolished 50 more units on January 1, 2016 under 24 CFR 970.15.  Is my PHA prohibited from demolishing units under the de minimis exception in 2017?  In other words, does the 24 CFR 970.15 demolition of 150 units (between January 1, 2013 and January 1, 2016) count against the maximum number of units my PHA can demolish under the de mimimis exception (i.e., the lesser of 5 units or 5 percent of public housing inventory in any 5 years)?
    ANSWER.  No.  The PHA is still eligible to demolish units under the de minimis exception in 2017 because it did not demolish any units through the de minimis exception within a 5-year period (i.e., five years counting backward from the date of the proposed de minimis demolition).  De minimis demolitions under 24 CFR 970.27 operate outside of the 24 CFR 970.15 demolition approval process.  Only demolitions done under de minimis exception count against the maximum number of units a PHA can demolish under 24 CFR 970.27.
     
  5. QUESTION. What is an example of how a PHA could demolish units under the de minimis exception in order to use the space occupied by the unit(s) for meeting the service or other needs of the residents?
    ANSWER.  A PHA could use the land as a playground, parking or a community garden.  A PHA could also develop the land with a community building or with new public housing units, provided the HA submits and HUD approves a development proposal under 24 CFR 905.604 or 24 CFR 905.606 (which would be done through a separate and subsequent process from the SAC application).  If the units are within a building that will not be wholly demolished, the former units could be used for various non-dwelling services, such as administrative offices, elevator/laundry/trash space, or utility/boiler upgrades. 
     
  6. QUESTION. After the demolition, my PHA wants to sell the vacant land at public bid and use the proceeds for eligible purposes under Section 18 of the 1937 Act.  Is this allowable? 
    ANSWER. The PHA must certify to HUD that the unit is beyond repair or the demolition will allow the space to meet the service or other needs of public housing residents.  In this case, the PHA would not be using the unit to meet the service or other needs of public housing residents, so it would need to certify to HUD that the unit is “beyond repair”.  Assuming the unit meets the “beyond repair” criteria, after demolition, the PHA could submit a disposition application for the (then) vacant land.
     
  7. QUESTION. Are units demolished under de minimis demolition eligible for tenant protection vouchers (TPVs)?
    ANSWER.  Yes. PIH Notice 2016-04 specifically states that PHAs may be eligible to receive TPVs if residents are displaced due to demolition of their units under the de minimis demolition exception.  However, all other applicable provisions of PIH Notice 2016-04 apply.  Specifically, PHAs will only be eligible to receive TPVs for these units if they units are occupied on the day they submit their TPV application to HUD (which can’t occur until after the PHA receives written HUD acceptance of the demolition action).  In addition, if a PHA plans to develop new public housing units back on site (in accordance with 24 CFR part 905), it will only be eligible to receive Relocation TPVs, not Replacement TPVs (see PIH Notice 2017-10).
     
  8. QUESTION. Are units that PHAs demolish through de minimis eligible for Demolition and Disposition Transitional Funding (DDTF)? 
    ANSWER.  Yes, provided the units and PHAs meet the eligibility requirements of 24 CFR 905.400(j).
     
  9. QUESTION. Are units eligible for an asset repositioning fee (ARF) under 24 CFR 990.190?
    ANSWER. Yes.  In accordance with PIH Notice 2011-18, units “approved” by HUD for demolition (including units accepted by HUD for de minimis demolition) are eligible for an ARF provided they constitute an entire building in a project. Individual units within a multi-unit building are not eligible for ARF (see PIH Notice 2011-18).
     
  10. QUESTION. What funds can be used to pay for demolitions undertaken under this de minimis exception? 
    ANSWER. PHAs can use public housing Capital Funds (in accordance with 24 CFR 905.200(b)(9)) or any other eligible and available federal or non-federal funds to pay for the demolition.   
     
  11. QUESTION. 24 CFR 970.27 states that PHAs must comply with the requirements of 24 CFR 8.23 if applicable.  24 CFR 8.23 governs the alterations of existing housing facilities.  Can you provide an example of how this could be applicable to demolitions undertaken under this de minimis exception
    ANSWER. 24 CFR 8.23 requires that PHAs undertake alterations to public housing units, to the maximum extent feasible, in a way that allows units to be readily accessible to and usable by individuals with handicaps. 24 CFR 8.23 generally requires at least five percent of the dwelling units in a project to be readily accessible to and usable by individuals with mobility impairments.  If a PHA proposes to demolish accessible units under this part, it may be required, pursuant to 24 CFR 8.23, to undertake alterations of other units at the project in order to make those units accessible.
     
  12. QUESTION.  Can you give some examples of how the 5-year period works? 
    ANSWER.  See below; also see 24 CFR 970.27(b).
    EXAMPLE #1.  A PHA that owns 1,000 housing units wishes to demolish units under this de minimis provision on July 1, 2004, and previously demolished two units under this provision on September 1, 2000, and two more units on July 1, 2001, the PHA would be able to demolish one additional unit for a total of five in the preceding 5 years.

    EXAMPLE #2.  A PHA that owns 60 housing units as of July 1, 2004, had demolished two units on September 1, 2000, and one unit on July 1, 2001, that PHA would not be able to demolish any further units under this de minimis provision until after September 1, 2005, because it would have already demolished 5 percent of its total.