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Acquisition, Relocation and

DisplacementFor Local Officials

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Acquisition and Relocation overview

• Whenever Federal funds, such as CDBG, are used in a project involving the acquisition, rehabilitation or demolition of real property, a Federal law known as the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) may apply

Overview - continued

• The purpose of the URA is to provide uniform, fair and equitable treatment for persons whose real property is acquired or for persons displaced as a result of a CDBG-funded project or activity

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URA: Statutory Requirements

• Establishes minimum standards for federally funded programs and projects that require acquisition, rehabilitation or demolition of real property and displace persons from their homes, businesses or farms

Statutory Requirementscontinued

• Applies government-wide and impacts programs administered by 18 Federal agencies, including HUD

• Government-wide regulations implementing URA are at 49 CFR Part 24

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URA: Regulatory Requirements

• URA Final Rule published January 4, 2005 made significant changes:– Expanded business advisory services and

relocation payments– Adopted HUD income limits for determining low-

income persons– Revised replacement housing payments– Prohibits asking persons to “waive” their

payments– Revised DSS standards in line with local codes

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URA Regulatory Requirements continued

• URA implementing regulations with respect to the state CDBG program are at 24 CFR 570.606:– Clarifies the responsibilities of the State and of

the local CDBG recipient– Local recipient may provide “optional relocation

assistance” if the state permits it and there is a written policy

– Requires an appeals procedure in place– The state must ensure compliance; local

recipients must certify they will comply with all requirements

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Section 104 (d) Statutory Requirements

• Section 104(d) of the Housing and Community Development Act of 1974– Applies to demolition of any housing or

conversion of low-income housing to another purpose

– Provides relocation assistance to low-income tenants (non-low-income persons are protected by URA)

– Requires one-for-one replacement of any low-income housing demolished or converted

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Section 104(d)Regulatory Requirements

• Regulations implementing Section 104(d) at 24 CFR Part 42 require:– Residential Anti-displacement and Relocation

Assistance Plan– Relocation assistance for displaced low-income

tenants– One-for-one replacement of low-income units (or

submission to HUD when replacement is not required)

– Public disclosure before committing funds to demolition or conversion

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URA Acquisition Requirements:Voluntary vs. Involuntary

What makes a transaction “voluntary”?

For agencies with eminent domain authority:

• If no specific site is needed and any of several properties could be acquired for project purposes

• The property is not part of an intended, planned or designated project area where other properties will be acquired within specific time limits; and

Voluntary vs. Involuntary Acquisition - continued

• The agency informs the owner in writing of the property’s market value; and

• The agency also informs the owner in writing that the property will not be acquired through condemnation, if negotiations do not reach an amicable agreement

• If tenants are displaced, the tenants are provided relocation assistance (owners are not)

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Voluntary vs. Involuntary Acquisitioncontinued

For agencies without eminent domain authority, acquisition is voluntary if:

• The agency notifies the owner in writing of the property’s market value; and

• The agency notifies the owner prior to making an offer, that it will not acquire property if an amicable settlement cannot be reached

• If tenants are displaced, the tenants are provided relocation assistance (owners are not)

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Eminent Domain

• The government’s ability to take property for public use with payment of just compensation to the property owner

• In fiscal years 2006, 2007 and 2008 the Appropriations bills have prohibited the use of CDBG or other Federal funding in conjunction with the use of eminent domain for certain economic development projects.

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Involuntary Acquisition: Required Steps

• Notify owner of the agency’s intentions to acquire the property and their protections under the URA

• Appraise the property and invite the owner to accompany the appraiser

• Review the appraisal• Establish just compensation for the property• Provide owner with written offer and

summary statement for property to be acquired

Involuntary Acquisition: Required Steps - continued

• Negotiate with owner for purchase of the property

• If negotiations are successful, complete the sale and reimburse property owner for related incidental expenses

• If negotiations are unsuccessful, consider an administrative settlement to complete the sale

• If negotiations are still unsuccessful, the agency should acquire the property through use of eminent domain

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Cost Considerations of URA and Section 104(d)

• What is cost impact of the proposed project?• Acquisition, rehabilitation and/or demolition

is hard cost for property• Cost of residential displacement• Cost of non-residential displacement• Availability of one-for-one replacement

housing resources in the community• Needs to be considered upfront when

planning the project

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What are the Costs of Displacement?

• Uniform Relocation Act (URA)

– Relocation advisory services– Moving costs– Replacement housing payments (residents)

42 months for tenants Price differential and expenses for owner Reestablishment costs (non-residential) Court costs (if using eminent domain)

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Costs of Displacement continued

• Section 104(d)

– Relocation advisory services

– Moving costs and security deposits

– Replacement housing payments for 60 months

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Resources

• HUD Real Estate Acquisition and Relocation website http://www.hud.gov/relocation

http://www.hud.gov/relocation• Federal Highway Administration

www.fhwa.dot.govhttp://www.hud.gov/relocation

• International Right of Way Associationwww.irwaonline.org