02-1411. Requirement of HUD Approval Before a Grantee May Undertake CDBG-Assisted Demolition of HUD-Owned Housing Units

AGENCY:

Office of the Assistant Secretary for Community Planning and Development, HUD.

ACTION:

Proposed rule.

SUMMARY:

The Department of Housing and Urban Development (HUD) proposes to amend the Community Development Block Grant (CDBG) Entitlement program regulations by requiring grantees to obtain HUD's approval to demolish HUD-owned housing units. The proposed amendment will ensure that HUD receives notification of a grantee's intent to use CDBG funds to demolish HUD-owned housing units. In addition, the application of this rule will aid in preserving the supply of affordable housing that is available to low- and moderate-income persons.

DATES:

Comments Due Date: March 25, 2002.

ADDRESSES:

Interested persons are invited to submit comments regarding this proposed rule to the Rules Docket Clerk, Office of General Counsel, Room 10276, U.S. Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. Comments should refer to the above docket number and title. A copy of each comment submitted will be available for public inspection and copying during weekdays between 7:30 a.m. and 5:30 p.m. at the above address. Comments submitted by facsimile (FAX) will not be accepted.

FOR FURTHER INFORMATION CONTACT:

Sue Miller, Director, Entitlement Communities Division, Office of Block Grant Assistance, Room 7282, U.S. Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410; telephone [phone] (this is not a toll-free number). Hearing-or speech-impaired individuals may access the telephone number listed in this section by calling the toll-free Federal Information Relay Service at [phone].

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

Title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301-5320) establishes the statutory framework for the CDBG program. HUD's regulations implementing the CDBG program are codified at 24 CFR part 570 (entitled “Community Development Block Grants”).

II. This Proposed Rule

This rule proposes to change § 570.201(d), Clearance activities, which currently allows the demolition of HUD-assisted housing units only if HUD has approved the demolition. The proposed change will require that grantees also obtain the approval of HUD before proceeding with CDBG-assisted demolition of HUD-owned housing units.

HUD believes that the proposed revision will aid in achieving three primary objectives: (1) Ensure that grantees notify HUD of their plans to demolish HUD-owned housing units; (2) prevent grantees from demolishing, without reasonable cause, HUD-owned housing units; and, (3) ensure that grantees preserve the supply of affordable housing available to low- and moderate-income persons.

III. Background Information Concerning the Proposed Rule

As discussed above, the proposed rule would revise the CDBG Entitlement program (24 CFR part 570) regulations at § 570.201(d), Clearance activities, to prohibit grantees from using CDBG funds for the demolition of HUD-owned housing units without prior approval from HUD. The current regulation at § 570.201(d) requires that a grantee obtain HUD's approval to demolish HUD-assisted housing units. Although the CDBG regulations do not contain a definition of the term “HUD-assisted housing units”, the term has been considered to include various forms of subsidized housing such as section 8 or public housing. It has not been HUD policy to interpret the regulation as including HUD-owned properties. Thus, a regulatory change to § 570.201(d) is required to ensure that CDBG-assisted demolition of HUD-owned housing units can only be carried out with the prior approval of HUD.

IV. Findings and Certifications

Environmental Impact

A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4223). The Finding of No Significant Impact is available for public inspection weekdays between the hours of 7:30 a.m. and 5:30 p.m. in the Office of the Rules Docket Clerk, Office of General Counsel, Room 10276, Department of Housing and Urban Development, 451 Seventh Street, NW., Washington, DC 20410.

Impact on Small Entities

The Secretary, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this rule before publication and by approving it certifies that this rule does not have a significant economic impact on a substantial number of small entities. There are no anti-competitive discriminatory aspects of the rule with regard to small entities and there are not any unusual procedures that need to be complied with by small entities. Although HUD has determined that this proposed rule does not have a significant economic impact on a substantial number of small entities, HUD invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.

Executive Order 13132, Federalism

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute, or the rule preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This proposed rule does not have Federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive Order.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and on the private sector. This proposed rule does not impose a Federal mandate on any State, local, or tribal governments, or on the private sector, within the meaning of the Unfunded Mandates Reform Act of 1995.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance (CFDA) program number is 14.218.

List of Subjects in 24 CFR Part 570

• Administrative practice and procedure
• American Samoa,

Accordingly, for the reasons stated above, HUD proposes to amend 24 CFR part 570 to read as follows:

PART 570—COMMUNITY DEVELOPMENT BLOCK GRANTS

1. The authority citation for part 570 continues to read as follows:

Authority: 42 U.S.C. 3535(d) and 5301-5320.

2. Section 570.201 is amended by revising paragraph (d) to read as follows:

§ 570.201

Basic eligible activities.

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(d) Clearance activities. Clearance, demolition, and removal of buildings and improvements, including movement of structures to other sites. Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.

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Dated: November 26, 2001.

Roy A. Bernardi,

Assistant Secretary for Community Planning and Development.