[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR972.124]



[Page 555-557]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 972_CONVERSION OF PUBLIC HOUSING TO TENANT-BASED ASSISTANCE--Table 

of Contents

 

      Subpart A_Required Conversion of Public Housing Developments

 

Sec.  972.124  Standards for identifying public housing developments 

subject to required conversion.



    The development, or portions thereof, must be converted if it is a 

general occupancy development of 250 or more



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dwelling units and it meets the following criteria:

    (a) The development is on the same or contiguous sites. This refers 

to the actual number and location of units, irrespective of HUD 

development project numbers.

    (b) The development has a vacancy rate of at least a specified 

percent for dwelling units not in funded, on-schedule modernization, for 

each of the last three years, and the vacancy rate has not significantly 

decreased in those three years. (1) For a conversion analysis performed 

on or before March 16, 2009, the specified vacancy rate is 15 percent. 

For a conversion analysis performed after that date, the specified 

vacancy rate is 12 percent.

    (2) For the determination of vacancy rates, the PHA must use the 

data it relied upon for the PHA's latest Public Housing Assessment 

System (PHAS) certification, as reported on the Form HUD-51234 (report 

on Occupancy). Units in the following categories must not be included in 

this calculation:

    (i) Vacant units in an approved demolition or disposition program;

    (ii) Vacant units in which resident property has been abandoned, but 

only if state law requires the property to be left in the unit for some 

period of time, and only for the period of time stated in the law;

    (iii) Vacant units that have sustained casualty damage, but only 

until the insurance claim is adjusted;

    (iv) Units that are occupied by employees of the PHA and units that 

are used for resident services; and

    (v) Units that HUD determines, in its sole discretion, are 

intentionally vacant and do not indicate continued distress.

    (c) The development either is distressed housing for which the PHA 

cannot assure the long-term viability as public housing, or more 

expensive for the PHA to operate as public housing than providing 

tenant-based assistance. (1) The development is distressed housing for 

which the PHA cannot assure the long-term viability as public housing 

through reasonable revitalization, density reduction, or achievement of 

a broader range of household income. (See Sec.  972.127)

    (i) Properties meeting the standards set forth in paragraphs (a) and 

(b) of this section will be assumed to be ``distressed,'' unless HUD 

determines that the reasons a property meets such standards are 

temporary in duration and are unlikely to recur.

    (ii) A development satisfies the long-term viability test only if it 

is probable that, after reasonable investment, for at least 20 years (or 

at least 30 years for rehabilitation equivalent to new construction) the 

development can sustain structural/system soundness and full occupancy; 

will not be excessively densely configured relative to other similar 

rental (typically family) housing in the community; can achieve a 

broader range of family income; and has no other site impairments that 

clearly should disqualify the site from continuation as public housing.

    (2) The development is more expensive for the PHA to operate as 

public housing than to provide tenant-based assistance if it has an 

estimated cost, during the remaining useful life of the project, of 

continued operation and modernization of the development as public 

housing in excess of the cost of providing tenant-based assistance under 

section 8 of the United States Housing Act of 1937 for all families in 

occupancy, based on appropriate indicators of cost (such as the 

percentage of total development cost required for modernization).

    (i) For purposes of this determination, the costs used for public 

housing must be those necessary to produce a revitalized development as 

described in paragraph (c)(1) of this section.

    (ii) These costs, including estimated operating costs, modernization 

costs, and accrual needs must be used to develop a per unit monthly cost 

of continuing the development as public housing.

    (iii) That per unit monthly cost of public housing must be compared 

to the per unit monthly Section 8 cost.

    (iv) The cost methodology necessary to conduct the cost comparisons 

for required conversions has not yet been finalized. PHAs are not 

required to undertake conversions under this subpart until six months 

after the effective date of the cost methodology, which



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will be announced in the Federal Register. Once effective, the cost 

methodology will be codified as an appendix to this part.