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Community Development Demolition Projects Guidelines

Explore best practices for using CDBG funds in demolition projects. Learn about federal regulations, acquisition methods, tenant relocation, prevailing wage considerations, liens, and property disposition. Get insights on project planning and compliance with URA and 104(d) requirements. Helpful resources and project planning hints included. Make informed decisions for successful demolition projects.

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Community Development Demolition Projects Guidelines

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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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