Grant Administration: Section 10.3 Residential Relocation under URAResidential occupants who will be displaced are entitled to receive a range of benefits under the URA. These include: (1) advisory services; (2) offer of a comparable replacement unit; (3) replacement housing payments; and (4) moving expenses. The following sections highlight each of these requirements.
Advisory Services for Displaced Households
The grantee should work with the household that will be displaced throughout the process to ensure the household is provided appropriate and required advisory services.
- Grantees must provide counseling and appropriate referrals to social service agencies, when appropriate.
- Grantees must offer or pay for transportation (e.g., taxi, rental car) to inspect comparable units or the actual unit selected by the displaced person.
- When a displacee is a minority, every effort should be made to ensure that referrals are made to comparables located outside of areas of minority concentration, if feasible.
- The grantee must provide current and continuing information on the availability, purchase price or rental cost and location of “comparable replacement dwellings.” (See the section below for more information on comparable replacement dwellings.)
Comparable Replacement Dwelling Units
The grantee must make referrals to the replacement housing units (comparables) for displaced residential households. It is also recommended that the grantee inspect the comparables to determine if they are in decent, safe and sanitary condition (including ensuring they are lead safe) prior to making referrals.
The regulations stipulate that no person is to be displaced unless at least one, and preferably three, comparable dwellings are made available to the potential displacee. Grantees should document if three comparable dwellings are not identified and provide justification. Grantees should identify comparable unites that meet the following conditions:
- A comparable replacement dwelling means a dwelling which meets local relevant housing codes and standards for occupancy;
- The replacement unit must be functionally equivalent to the displacement dwelling. The term “functionally equivalent” means that it performs the same function, and provides the same utility. While a comparable replacement dwelling need not possess every feature of the displacement dwelling, the principal features must be present. In determining whether a replacement dwelling is functionally equivalent to the displacement dwelling, the grantee may consider reasonable trade-offs for specific features when the replacement unit is equal to or better than the displacement dwelling;
- Adequate in size to accommodate the occupants;
- If the displaced household were over-crowded, the comparable must be large enough to accommodate them;
- In an area not subject to unreasonable adverse environmental conditions;
- In a location generally not less desirable than the location of the displaced person’s dwelling with respect to public utilities and commercial and public facilities, and reasonably accessible to the person’s place of employment;
- On a site that is typical in size for residential development with normal site improvements, including customary landscaping;
- Currently available to the displaced person on the private market (unless they are displaced from subsidized housing as described below); and
- Within the financial means of the displaced person. A replacement dwelling is considered to be within the person’s financial means if a grantee pays the appropriate replacement housing payment.
For a person receiving government housing assistance before displacement, a comparable dwelling unit that has similar government housing assistance must be offered. (For example, a comparable unit for a tenant who had a Housing Choice Voucher prior to displacement must be offered another unit where the Voucher could be used or is accepted.) When the government housing assistance program has requirements relating to the size of the replacement dwelling, the rules for that program apply.
Grantees may use Attachment 10-12: Section 8 Existing Housing Program Inspection Checklist to determine whether a comparable unit is decent, safe and sanitary. Since replacement housing units must meet all local codes and housing standards, an inspector must be familiar with these requirements to ensure that displaced persons move to standard housing. Attachment 10-13: HUD Form 40061 should be used to identify the most representative comparable replacement dwelling units for purposes of computing a replacement housing payment.
The grantee must then provide the potentially displaced household with a Notice of Eligibility for relocation assistance ( Attachment 10-5: Notice of Eligibility contains a sample of that notice). The notice must identify the cost and location of the comparable replacement dwelling(s).
Replacement Housing Payments
In some instances, a comparable replacement dwelling may not be available within the monetary limits for owners or tenants. This is the purpose of the Replacement Housing Payment (RHP).
Relocation payments are not considered “income” for purposes of the IRS or the Social Security Administration. 49 CFR 24.401 & 49 CFR 24.402 & 49 CFR 24.404(a)
The regulations do not allow a grantee to encourage or ask a displaced person to waive their relocation assistance; however, a fully informed person may choose not to apply for financial benefits and must acknowledge that decision in writing by clearly describing the assistance for which he/she will not apply. Grantees are encouraged to contact CDFA if this situation is likely to occur. 49 CFR 24.209 & 49 CFR 24.207(f)
Replacement Housing Assistance for 90-Day Homeowners
Only homeowner-occupants who were in residency for 90 days prior to an offer to purchase their home (Initiation of Negotiations – “ION”) USING INVOLUNTARY ACQUISITION are eligible for a replacement housing payment as “displaced persons”. If homeowners were in occupancy for less than 90 days prior to the ION, they are protected by the URA as “displaced persons” but the calculation is made using the same method used for tenants.
NOTE: If an owner occupies a property acquired using voluntary acquisition requirements, they are NOT eligible for relocation benefits.
For involuntary acquisitions, the ION is defined as the delivery of the written offer of just compensation by the grantee to the owner.
The RHP made to a 90-day homeowner is the sum of:
- The lesser of: the cost of the comparable or the cost of the actual replacement unit. 42 U.S.C. 4623(a)(1) & 42 U.S.C. 4624(b)
- Additional mortgage financing cost; and
- Reasonable expenses incidental to purchase the replacement dwelling.
To calculate the replacement housing payment for a 90-day homeowner, grantees should use the HUD claim form in
Attachment 10-14: Claim for Replacement Housing for 90-day Homeowner. If an owner elects to become a renter, the RHP can be no more than the amount would otherwise have received as an owner. The maximum payment is $31,000.
The displaced homeowner must purchase and occupy the replacement unit in order to qualify for an RHP as a displaced owner-occupant of 90 days.
Replacement Housing Payments for Displaced Tenants
The amount of the replacement housing payment paid to a displaced tenant does not vary depending upon whether the household was in occupancy more or less than 90 days prior to the date of execution of the agreement.
The replacement housing payment is intended to provide affordable housing for a 42-month period. Although the URA regulations establish a $7,200 limitation on rental assistance payments, it also requires that persons receive the calculated payment under: replacement “Housing of Last Resort.” Therefore, low and moderate-income households are entitled to the full 42 months of assistance even though the amount may exceed $7,200. See Section 10.6: Relocation Requirements under Section 104(d) to determine if applicable. 42 U.S.C. 4624(a)
For all tenants, the replacement housing payment makes up (for a 42-month period) the difference between:
- Housing cost, defined as the lesser of rent and estimated utility costs at the replacement dwelling or comparable unit; and
- Tenant obligation, defined as the lesser of:
– Thirty percent of the tenant’s average monthly gross household income (applicable only if the household is classified as low income—within 80% Area Median Income-using HUD’s income limits), or
– The monthly rent and estimated average utility costs of the displacement dwelling.
URA cash rental assistance must be provided in at least 3 installments, unless benefit is $500 or less or the tenant wishes to purchase a home. If $500 or less, 2 installments are permitted. If the displaced tenant wishes to purchase a home, the payment must be provided in a single lump sum so that the funds can be used for a down payment, including incidental expenses.
The amount of cash rental assistance to be provided is based on a one-time calculation. The URA RHP payment is not adjusted to reflect subsequent changes in a person’s income, rent/utility costs, or household size. See Attachment 10-15: Claim for Rental Assistance or Downpayment Assistance for the claim form that must be used to calculate rental assistance or down payment assistance.
Housing of Last Resort
When undertaking relocation activities, grantees must be sure to provide a comparable replacement dwelling in a timely manner. If the grantee cannot identify comparable replacement housing, they must seek other means of assisting displacees under the “Last Resort Replacement Housing” provisions of the regulations. This situation can occur in communities where there is a limited supply of available comparable units. Grantees should contact CDFA to confer on how to proceed. 49 CFR 24.404
The Last Resort sections of the URA require grantees to take alternate measures to assist displaced persons to be able to afford to move to a decent, safe and sanitary comparable unit. Such alternatives include rehabilitation of, and/or additions to, an existing replacement dwelling; a replacement housing payment in excess of regulatory limits; construction of new units; relocation of a replacement dwelling; and removal of barriers to the disabled in a replacement dwelling. Handbook 1378, Chapter 3, Paragraph 3-6
Early Movers: Relocation Prior to Notice of Eligibility
Some displaced persons will not wait for the grantee to locate comparable units and offer replacement housing assistance. These households may search for their own units and relocate themselves.
The implication of the early move will depend on when it occurs. If the move occurs after a General Information Notice (GIN) was sent to the household but before the Initiation of Negotiations, the household may have jeopardized their eligibility or payment amount for relocation assistance.
However, after the Initiation of Negotiations, (the date that triggers eligibility for relocation assistance) relocation eligibility can be triggered for all occupants. So, it is vital that the grantee immediately send the Notice of Eligibility or Non-displacement. If these notices are not sent in a timely or complete manner and the household moves out, HUD may require that the replacement housing be based on the actual unit they have chosen (if that exceeds a possible comparable), if that unit qualifies as decent, safe and sanitary. The budgetary consequences can be substantial.
Relocation into a Substandard Unit
If an individual locates or moves into a replacement unit that is not decent, safe and sanitary and that move occurred because the grantee was not timely in the delivery of the required URA notices, the grantee may try to upgrade the unit to the decent, safe and sanitary standard. Alternately, the grantee can offer the household the opportunity to move to a decent, safe and sanitary unit and the grantee must pay for that move.
In the event the grantee was timely in the delivery of the Notice of Eligibility but the household moved anyway to a substandard unit, the grantee must inform the displacee that if they remain in a substandard unit, they will be eligible only for moving expenses and not for replacement housing payments. The grantee must also inform the displacee that if he or she moves into standard housing within a year from the date he or she moved from the displacement dwelling and files a claim within 18 months of the date of displacement, he or she will be eligible for a replacement housing payment. A sample letter is provided as Attachment 10-16: Sample Letter to Relocatee in a Substandard Unit of this chapter.
Payment for Residential Moving and Incidental Expenses
Displaced homeowners and tenants may choose to receive payment for moving and related expenses either by:
- Commercial mover selected through competitive bids obtained by the grantee paid directly to the mover or reimbursed to the household; OR
- Reimbursement of actual expenses for a self-move, OR
- Receipt of a fixed payment based upon a schedule established by the Department of Transportation, Federal Highway Administration (FHWA), for the current payment level established for New Hampshire, which is available on the FHWA website.
The updated regulations at 49 CFR 24.301(b) clarified that grantees cannot allow residential self-moves based on the lower of two bids. 49 CFR 24.301(b) & (g)(1-7)
If reimbursement of actual expenses for a self-move is chosen, the grantee must determine that the expenses are reasonable and necessary and include only eligible expenses, which are:
- Transportation of the displaced person and personal property. (This may include reimbursement at the current mileage rate for personally owned vehicles that need to be moved.) Transportation costs for a distance beyond 50 miles are not eligible, unless the Agency determines that relocation beyond 50 miles is justified.
- Packing, crating, uncrating and unpacking of the personal property.
- Storage of the personal property for a period not to exceed 12 months, unless the Agency determines that a longer period is necessary.
- Disconnecting, dismantling, removing, reassembling, and reinstalling relocated household appliances, and other personal property.
- Insurance for the replacement value of the property in connection with the move and necessary storage.
- The replacement value of property lost, stolen, or damaged in the process of moving (not through the fault or negligence of the displaced person, his or her agent, or employee) where insurance covering such loss, theft or damage is not reasonably available. 49 CFR 24.301(h)
- Credit checks.
- Utility hook-ups, including reinstallation of telephone and cable service.
- Other costs as determined by the agency to be reasonable and necessary.
The following are ineligible expenses:
- Refundable security and utility deposits; or
- Interest on a loan to cover moving expenses; or
- Personal injury; or
- Any legal fee or other cost for preparing a claim for a relocation payment or for representing the claimant before the Agency; or
- The cost of moving any structure or other real property improvement in which the displaced person reserved ownership; or
- Costs for storage of personal property on real property owned or leased by the displaced person before the initiation of negotiations.
If the displaced homeowner/tenant chooses a fixed payment based upon a schedule established by the Department of Transportation, Federal Highway Administration (FHWA), the following applies:
- A person displaced from a dwelling or a seasonal residence may, at his or her discretion, choose to receive a fixed moving expense payment as an alternative to a payment for actual reasonable moving and related expenses. Attachment 10-17: Fixed Residential Moving Cost
The payment reflects the number of rooms in the displacement dwelling and whether the displaced person owns and must move the furniture. If a room or an outbuilding contains an unusually large amount of personal property (e.g., a crowded basement), the Agency may increase the payment accordingly (i.e., count it as two rooms). A current schedule is accessible on HUD’s website.
The fixed payment does not require that the grantee document costs, receipts, or payments by the displaced person, nor does the displace person need to account for the use of the fixed payment.
Whether the displaced household choose reimbursement of actual costs or fixed payment based on the FHWA schedule, grantees should use Residential Claim for Moving and Related Expenses (HUD Form 40054) to calculate and document such payments. See Attachment 10-18: Residential Claim for Moving and Related Expenses (HUD Form 40054) for this form.
Occupant of Dwelling with Congregate Sleeping Space (Dormitory): The moving expense for a person displaced from a permanent residence with congregate sleeping space ordinarily occupied by three or more unrelated persons is $100.
Homeless Persons: A displaced “homeless” person (e.g., the occupant of an emergency shelter) is not considered to have been displaced from a permanent residence and, therefore, is not entitled to a fixed moving expense payment. (Such a person may, however, be eligible for a payment for actual moving expenses.)
In addition to the moving expenses, the updated regulations at 49 CFR 24.401(e)(4) added professional home inspection to the list of eligible incidental expenses for displaced owner-occupants only. This will only apply when a property is involuntarily acquired, and owner occupied for a period of at least 90 days. 49 CFR 24.401(e)(4)
The URA also allows grantees to pay for non-refundable security deposits but clarifies that refundable security and utility deposits are ineligible. 49 CFR 24.301(h)(12)