[Federal Register Volume 59, Number 84 (Tuesday, May 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10519]
[[Page Unknown]]
[Federal Register: May 3, 1994]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Assistant Secretary for Housing--Federal Housing
Commissioner
_______________________________________________________________________
24 CFR Part 880, et al.
Preferences for Elderly Families in Certain Section 8 Housing; and
Reservation of Units for Disabled Families; Interim Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
24 CFR Parts 880, 881, 883, 884, and 886
[Docket No. R-94-1719; FR-3465-I-01]
RIN 2502-AG05
Preference for Elderly Families in Certain Section 8 Housing; and
Reservation of Units for Disabled Families
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Interim rule.
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SUMMARY: This interim rule amends the Department's section 8
regulations for newly constructed and substantially rehabilitated
housing projects to provide for the system of occupancy preferences in
certain section 8 assisted housing authorized by subtitle D of title VI
of the Housing and Community Development Act of 1992. Subtitle D allow
owners of section 8 projects originally designed primarily for
occupancy by elderly families to provide preferences to elderly
families in selecting tenants for available units in those projects.
Owners that elect to provide preferences to elderly families as
authorized by subtitle D also must reserve no less than a statutorily
determined number of units for disabled families who are not elderly or
near-elderly families.
The Supplementary Information section of this document provides
further information on the specific amendments to be made to the
section 8 regulations in parts 880, 881, 883, 884 and 886, and explains
the Department's reasons for issuing this rule as an interim rule.
DATES: Effective date: June 2, 1994 through May 3, 1995.
Comments due date: July 5, 1994.
ADDRESSES: Interested persons are invited to submit comments regarding
this interim rule to the Rules Docket Clerk, room 10276, Office of
General Counsel, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410-0500. Comments should refer
to the above docket number and title. A copy of each comment submitted
will be available for public inspection and copying between 7:30 a.m.
and 5:30 p.m. weekdays at the above address. Facsimile (FAX) comments
are not acceptable.
FOR FURTHER INFORMATION CONTACT: Margaret Milner, Acting Director of
the Office of Elderly and Assisted Housing, Office of Housing,
Department of Housing and Urban Development, room 6130, or Albert
Sullivan, Director of the Office of Multifamily Management, room 6160,
451 Seventh Street, SW., Washington, DC 20410. Telephone number (202)
708-4542 (voice) for Ms. Milner: (202) 708-3730 for Mr. Sullivan; or
(202) 708-4594 (TDD). (These telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Background
Subtitle D (sections 651-661; codified at 42 U.S.C. 13611-13620) of
title VI of the Housing and Community Development Act of 1992 (Pub. L.
102-550, approved October 28, 1992) (hereafter, ``1992 HCD Act'') is
entitled ``Authority to Provide Preferences for Elderly Residents and
Units for Disabled Residents1 in Certain Section 8 Assisted
Housing,'' and allows an owner of a covered section 8 housing project
to elect to provide preferences to elderly families in selecting
tenants for available units in the project, subject to certain
statutory requirements. An owner who elects to provide preferences to
elderly families must also reserve a percentage of units, not to be
less than the percentage determined according to a formula set out in
the statute, for disabled families who are not elderly or near-
elderly.2
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\1\Definitions for ``elderly families'' and ``disabled
families'' are codified in section 3(b) of the U.S. Housing Act of
1937 (1937 Act). Section 3(b) was amended by section 621 of the 1992
HCD Act. Where the definition for ``elderly families'' has, since
1974, encompassed disabled families, the amended section 3(b) now
defines ``elderly families'' as families whose heads (or their
spouses) or sole members are persons at least 62 years old. Thus,
under the revised definition, a disabled person does not qualify as
an elderly family solely because of the person's disability.
Section 3(b) defines ``disabled families'' to mean families
whose heads (or their spouses) or sole members are persons with
disabilities. ``Person with disabilities'' is defined to mean a
person who: (1) has a disability as defined in section 223 of the
Social Security Act; (2) is determined pursuant to regulations
issued by the Secretary of HUD, to have a physical, mental or
emotional impairment which is expected to be of long-continued and
indefinite duration, substantially impedes his or her ability to
live independently, and is of such a nature that such ability could
be improved by more suitable housing conditions; or (3) has a
developmental disability as defined in section 102 of the
Developmental Disabilities Assistance and Bill of Rights Act.
The Department's regulations for the terms defined in section
3(b) of the 1937 Act for the assisted housing programs are published
at 24 CFR part 812. While the 1992 HCD Act amendments to section
3(b) of the 1937 Act require changes to 24 CFR part 812, this rule
does not amend 24 CFR part 812. The Department will modify 24 CFR
part 812 by separate rulemaking. Also, unless the context indicates
otherwise, reference to the terms elderly families, disabled
families, and near-elderly families in this preamble is reference to
these terms as defined in section 3(b) of the 1937 Act, as amended
by section 621 of the 1992 HCD Act.
\2\Under section 3(b) of the 1937 Act, as revised by section 621
of the 1992 HCD Act, the term ``near-elderly families'' is defined
as families whose heads (or their spouses) or sole members are
persons who are 50-61 years old.
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This interim rule adopts in regulation the system of preferences
for occupancy provided by subtitle D, and sets forth the standards for
determining whether a project is eligible to elect the preferences for
occupancy provided by subtitle D, and explains the effect of such
preferences on administration of project waiting lists.
II. Eligibility To Provide Preferences for Elderly Residents
Section 651 of the 1992 HCD Act provides in relevant part,
``[n]otwithstanding any other provision of law, an owner of a covered
section 8 housing project designed primarily for occupancy by elderly
families, may in selecting tenants for units in the project that become
available for occupancy, give preference to elderly families who have
applied for occupancy in the housing * * *.'' (Emphasis added.)
With regard to the phrase ``designed primarily for occupancy by
elderly families,'' the Department believes that in using the term
``primarily,'' the Congress intended to limit the applicability of
subtitle D to either the section 8 units in those covered projects in
which a majority of the section 8 units were designed for elderly
families (i.e., seniors3), or to the section 8 units in covered
projects where a distinct portion of the project (e.g., a tower or a
wing of a project, but not just a floor) exists in which the majority
of section 8 units were restricted to seniors only. Thus, section 651
may apply to the section 8 units in an entire project originally
designed primarily for occupancy by elderly families (``covered section
8 housing project''), or section 651 may apply to the section 8 units
in a portion of such project, but only where the section 8 units in
this project or portion of the project were designed primarily for
seniors. The preamble frequently uses the term ``covered section 8
units'' to recognize that there are partially assisted projects whose
section 8 units will be covered by this interim rule .
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\3\As used in this preamble, the term ``seniors'' refers to
families whose heads of household, their spouses or sole members are
62 years or older.
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It is important to note that the statutory system of preferences
provided by subtitle D is only available to projects which qualify as
``covered section 8 housing projects designed primarily for occupancy
by elderly families.'' The Department points out that many projects
which have section 8 assistance are not ``covered section 8 housing
projects designed primarily for occupancy by elderly families'' (as
defined in Section I.A. of the preamble, which follows), and may not
elect the subtitle D statutory system of preferences.
A. Covered Section 8 Housing Project: Section 659
Subtitle D and these regulations define ``covered section 8
housing'' to mean housing that:
(1) was constructed or substantially rehabilitated pursuant to
assistance provided under section 8(b)(2) of the United States Housing
Act of 1937 (1937 Act), as in effect before October 1, 1983;
(2) is assisted under a contract for assistance under such section;
and
(3) was originally designed primarily for occupancy by elderly
families.
1. Projects That are Newly Constructed or Substantially
Rehabilitated Pursuant to Assistance Provided Under Section 8(b)(2) of
the 1937 Act, as in Effect Before October 1, 1983.
The Department administers six section 8 programs that involve
newly constructed or substantially rehabilitated housing. However, the
system of preferences under subtitle D does not apply to all these
programs.
The programs to which subtitle D applies are:
(1) The section 8 New Construction Program, 24 CFR part 880;
(2) The Section 8 Substantial Rehabilitation Program, 24 CFR part
881;
(3) The State Housing Agencies program (insofar as it involves new
construction and substantial rehabilitation), 24 CFR part 883;
(4) The New Construction Set-Aside for Section 515 Rural Rental
Housing Projects Program, 24 CFR part 884; and
(5) The Section 8 Housing Assistance Program for the Disposition of
HUD-Owned Projects (insofar as it involves substantial rehabilitation),
24 CFR part 886.4
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\4\The ``Additional Assistance Program for Projects with HUD-
Insured and HUD-Held Mortgages'' (see 24 CFR part 886, subpart A)
involves only existing housing. However, the ``Section 8 Housing
Assistance Program for the Disposition of HUD-owned Projects'' (see
24 CFR part 886, subpart C) involves substantially rehabilitated
housing, in addition to existing housing. Accordingly, this rule
would amend subpart C of 24 CFR part 886, but only for projects
involving substantially rehabilitated housing.
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Other programs which may involve section 8 new construction or
substantial rehabilitation assistance, but which are not covered by the
preferences in subtitle D are identified in section 658 of the 1992 HCD
Act. Under section 658 of the 1992 HCD Act, an owner of a project (or
portion of a project) that was originally designed for occupancy by
elderly families, and assisted under the Section 221(d)(3) Below Market
Interest Rate (BMIR) program, the Section 236 Mortgage Insurance and
Interest Reduction Payment for Rental Projects program, or Section 202
Loans for Housing for the Elderly or Handicapped Program, may continue
to restrict occupancy in such projects (or portion of such projects) to
elderly families in accordance with the rules, standards and agreements
in effect when the housing project was developed. Accordingly, under
this interim rule, the subtitle D statutory system of preferences does
not apply to newly constructed or substantially rehabilitated section 8
projects with HUD insurance or assistance under any of these three
programs.5 The Department emphasizes that it is critical that a
project owner understand the type of assistance a project receives to
determine eligibility under subtitle D and these regulations.
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\5\Although in this regard, the Department is aware of no
Section 221(d)(3) BMIR projects or Section 236 projects with Section
8 new construction or substantial rehabilitation assistance. As
such, by its terms, ``covered section 8 housing'' does not seem to
encompass the Section 236 Mortgage Insurance and Interest Reduction
Payment for Rental Projects program or the Section 221(d)(3) BMIR
program.
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Project owners should note that the following types of projects or
assistance would NOT be covered by this interim rule:
--Section 202 housing projects,
--Section 221(d)(3) BMIR housing projects,
--Section 221(d)(4) retirement service centers (because such projects
have FHA mortgage insurance but no section 8 assistance),
--Section 236 housing projects,
--Housing projects with contracts for section 8 loan management set
aside (unless the projects also have contracts for section 8 assistance
involving new construction or substantial rehabilitation, in which case
the units could be covered),
--Housing projects with project-based section 8 rental certificates,
and
--Section 8 tenant-based assistance programs (rental vouchers and
certificates).
2. Assisted Under a Contract for Assistance Under Section 8(b)(2)
Some newly constructed or substantially rehabilitated projects have
unassisted units and assisted units. These projects are often referred
to as ``partially assisted projects.'' Because the statutory definition
of ``covered section 8 housing'' only applies to housing that is under
a contract for assistance, the subtitle D system of preferences would
not apply to unassisted units in a partially assisted project.
Additionally, nothing in this regulation establishes a cap on the
number of unassisted units for disabled families in a partially
assisted project.
While this regulation does not apply to the unassisted units in a
partially assisted project, this regulation also does not relieve any
owner of any project, including the owner of a partially assisted
project from complying with the Fair Housing Amendments Act of 1988,
section 504 of the Rehabilitation Act of 1973, the implementing
regulations for these statutes, or any other applicable statutory or
regulatory requirement, including the requirements of the National
Housing Act, with respect to the assisted or unassisted units. However,
notwithstanding the foregoing, owners may provide the preferences in
accordance with this interim rule, with respect to the assisted units.
3. Originally Designed Primarily for Occupancy by Elderly Families
The final statutory requirement for qualification as a ``covered
section 8 housing project'' is that the project must have been
originally designed for occupancy by elderly families. The statute does
not define the term ``originally'' or define the phrase ``originally
designed for occupancy by elderly families.'' However, the House Report
offers some insight on this subject. The House Report suggests that to
qualify as housing originally designed for occupancy by elderly
families, the owner of the project must have expressed an intent to
create housing for elderly tenants when the developer negotiated with
the Department for Federal financial assistance. (H.R. Rept. No. 760,
102d Cong. 2d Sess. at 141 (1992).)
Because the various types of housing projects covered by this
interim rule were developed under several different programs, and over
a period of time which spans almost two decades, there is no uniform
documentation at the Department which evidences the population group to
be served by a project. In many instances, the application in response
to a notice of funding availability (NOFA) shows that a project was
designed as an elderly housing project. However, an indication of the
population group to be served by the housing project does not always
appear in any one document.
In addition, because one of the previous definitions of ``elderly
families'' in section 3(b) of the 1937 Act included disabled families,
it is not always clear from documents that indicate a project was
developed for ``elderly families'' whether the project for elderly
families was intended to mean housing for the broader eligible category
of families (i.e., elderly families and disabled families) or for
families who qualified by virtue of age alone. Further confusion may be
added by the fact that for most of the period when this housing was
being developed, the Department policy required all housing for the
elderly (defined by age) to incorporate certain accessible features and
to design a certain percentage of the units to be accessible for
persons with physical disabilities. Typically, these units were made
available to eligible families with physical disabilities, regardless
of age.
Thus, in establishing whether a project was originally designed
primarily for occupancy by elderly families within the meaning of
subtitle D, two distinctions must be drawn: (1) The project was
designed primarily for elderly families (as opposed to non-elderly
families); and (2) the project was designed for elderly families (i.e.,
seniors), and not designed for elderly families under the broader
meaning of this term, which formerly included elderly families and
disabled families.
Recognizing all these factors, the interim rule provides for
supporting documentation to be drawn from a variety of sources. These
sources are identified as being either ``primary'' sources, or
``secondary'' sources. The interim rule provides that if at least one
of the primary sources clearly establishes that a project was
originally designed for elderly families (seniors), the owner of this
project may elect the system of preferences provided by subtitle D.
However, if another primary source establishes a design contrary to the
primary source upon which the owner would base support that the project
is a covered section 8 housing project, the owner cannot make the
election of preferences provided by subtitle D without finding support
in secondary sources. Secondary sources may then, as discussed in this
interim rule, be used to establish the use for which the project was
originally designed.
If there are no primary sources clearly establishing the original
design of the project, then original design may still be established
through secondary sources. At least two secondary sources must support
that the project was designed as elderly (seniors) housing in the
absence of primary documentation in order to establish such intention
for elderly housing. Additionally, in the case of conflict between
primary sources, and the owner chooses to rely on secondary sources,
then at least two secondary sources must support that the project was
designed as elderly (seniors) housing.
Primary sources. Primary sources that would evidence that a project
was originally designed for occupancy by elderly families (seniors)
include any of the following: the application in response to the notice
of funding availability (NOFA); the terms of the NOFA under which the
application was solicited; the regulatory agreement, the loan
commitment, the bid invitation, the owner's management plan, or any
other underwriting or financial document collected at or before loan
closing. If any one of these project documents clearly evidence that
the project was originally designed primarily for elderly families
(seniors), the owner would be eligible to elect to apply the system of
preferences provided under these regulations so long as the primary
documents do not conflict.
Secondary sources. As discussed above, if primary sources do not
evidence that the population intended to be served by the project were
elderly families (seniors), an owner may elect the system of
preferences provided by subtitle D if the owner is able to produce
evidence from two secondary sources that clearly evidence that the
project was originally designed primarily for elderly families
(seniors). Secondary sources include: (1) Lease records from the
earliest two years of occupancy for which records are available showing
that occupancy has been restricted primarily to households where the
head, spouse, or sole member is 62 years of age or older; (2) evidence
that services for elderly persons have been provided, such as services
funded by the Older Americans Act, transportation to senior citizen
centers, or programs coordinated with the Area Agency on Aging; (3)
project unit mix with a higher percentage of efficiency and one-bedroom
units [a secondary source particularly relevant to distinguishing
elderly projects under the previous section 3(b) definition (in which
disabled families were included in the definition of ``elderly
families'') from non-elderly projects and which in combination with
other factors (such as the number of accessible units) may be useful in
distinguishing projects for seniors from those serving the broader
definition of ``elderly families'' which includes disabled families];
or (4) any other relevant type of historical data unless clearly
contradicted by other comparable evidence.
As discussed above, the lack of uniform documentation, and the
possible lack of distinction between: (1) Elderly projects which are
seniors housing, and (2) elderly projects which planned to serve
disabled families equally with seniors, make the determination of
whether a project is a ``covered section 8 housing project'' a
difficult one.
The Department is specifically interested in public comment on this
issue, particularly with respect to the existence (or lack thereof) of
documentation that would show the original population group intended to
be served by the project, other types of evidence that might be
considered, and how to distinguish between: (1) Projects for elderly
families, which included, and intended to include, disabled families,
from (2) projects for elderly families which served disabled families
only incidentally.
B. Projects That Do Not Elect Subtitle D System of Preferences: Section
657
The Department emphasizes that the system of preferences provided
by subtitle D and these regulations is not mandatory, and is available
at the election of the multifamily housing owner. In accordance with
section 657 of the 1992 HCD Act, an owner of a covered section 8
housing project that does not elect to implement the system of
preferences provided by subtitle D would continue to provide housing
for elderly families without incurring any obligation (beyond that
mandated by the specific authorizing statutes and any other applicable
statutory requirements) to provide housing for elderly families and/or
non-elderly and disabled families.
For covered section 8 projects for which the owner does not elect
the subtitle D system of preferences, the new definition of ``elderly
families'' established by section 621 of the 1992 HCD Act would not
apply. Rather the former definition in section 3(b) of the 1937 Act,
which includes the non-elderly disabled families in the meaning of
``elderly families,'' would be applicable, and elderly families under
this broader definition (i.e., elderly families and disabled families)
would be eligible for units in these projects for which the election of
preferences was not taken to the same extent that such families were
eligible before enactment of the 1992 HCD Act.
The non-election of the subtitle D system of preferences does not
override any occupancy requirements affecting covered section 8 housing
designed primarily for occupancy by elderly families based on the
authority of regulatory agreements or statutory provisions governing
the FHA mortgage insurance programs. By way of example, the enabling
statute for the Section 231 Program (``Housing Mortgage Insurance for
the Elderly'') mandates that not less than 50 percent of the units in a
Section 231 project must be designed for the use of elderly persons,
meaning any person, married or single, who is 62 years of age or over.
Accordingly, not all members of the entire population group encompassed
by the pre-1992 HCD Act definition of ``elderly families'' (i.e.,
elderly families and non-elderly disabled families), are eligible for
elderly units in Section 231 projects.
Application of the pre-1992 HCD Act definition could make it
impossible to meet the statutory percentage requirement of the Section
231 Program or a higher percentage that may have been specified in the
regulatory agreement or in other authority. Therefore, owners of
Section 231 projects (where the projects are also covered section 8
housing designed primarily for occupancy by elderly families) who do
not make an election to be covered by the subtitle D system of
preferences will continue to follow the standards of Section 231 of the
National Housing Act and the terms of their regulatory agreement or
other controlling documentation in determining the eligibility of
elderly families for occupancy in their projects. This position is
consistent with section 657 of subtitle D which provides that where the
owner does not elect the preference scheme, ``elderly families'' as
defined by the pre-1992 HCD Act definition, shall be eligible for
occupancy ``to the same extent that such families were eligible before
the date of enactment [of the 1992 HCD Act.] (emphasis added.)''
III. Implementation of Preferences for Elderly Families
An owner who elects to provide preferences for elderly families in
accordance with section 651, and who can compile and, on request,
produce the required documentation to support a determination that the
project was designed primarily for occupancy by elderly families
(seniors), may, in selecting tenants for units in the project that
become available for occupancy after the effective date of this
regulation, give preference to elderly families who have applied for
occupancy in the housing.
An owner of a covered section 8 project is not required to solicit
or obtain the approval of HUD before exercising the election of
preference for elderly families provided by subtitle D. The owner, if
challenged on the issue of the ``coverage'' of the project, must be
able to support the project's coverage, and the owner's eligibility to
make the election of preference through the production of the
supporting evidence discussed earlier in this preamble. (The owner may
be challenged by, among others, existing tenants, applicants for
tenancy or HUD on this issue.) Additionally, the Department reserves
the right at any time to review and make determinations regarding the
accuracy of the determination of the project as an eligible project.
The Department can make such determinations as a result of its ongoing
monitoring of activities, or the conduct of complaint investigations
and compliance reviews required under the Fair Housing Act (42 U.S.C.
3601-19), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)
and other applicable statutes.
When establishing the preference for elderly families, an owner
also must reserve units for occupancy by disabled families who are not
elderly or near-elderly, as explained below. In no case, may an owner
evict, without good cause, a family that is lawfully residing in a unit
in a covered section 8 housing project to achieve the occupancy level
that has been determined under the system of preferences or the
reservation of units set forth in this interim rule. (Good cause would
not exist where the eviction stemmed from the system of preferences or
the reservation of units, or because of any action taken by the
Secretary or owner pursuant to subtitle D.)
A. Reservation of Units for Disabled Families Who Are Neither Elderly
Nor Near-Elderly: Section 652
If an owner elects to provide preferences for elderly families for
admission to a project or a portion of a project that is determined to
be ``covered section 8 housing project'' in accordance with section
651, then section 652 requires the owner also to reserve covered
section 8 units in the project for occupancy by disabled families who
are not elderly or near-elderly. The number of units to be reserved for
disabled families who are not elderly or near-elderly is based on a
calculation prescribed in section 652(b).
Under section 652(b), an owner who elects to provide preferences
for elderly families must determine the percentage of covered section 8
units occupied by disabled families who are not elderly or near-elderly
on October 28, 1992, which is the date of enactment of the 1992 HCD Act
(the October 28, 1992 percentage). The next step is for the owner to
compare the October 28, 1992 percentage to the percentage of covered
section 8 units occupied by disabled families who are not elderly or
near-elderly on January 1, 1992 (the January 1, 1992 percentage), in
order to determine the highest occupancy percentage of disabled
families who are not elderly or near-elderly in 1992. The owner must
reserve the highest occupancy percentage (either the October 28, 1992
percentage or the January 1, 1992 percentage), up to a maximum of 10
percent of the covered section 8 units, for disabled families who are
not elderly or near-elderly.
Under the statute and these regulations, an owner may, but is never
obligated to, admit disabled families who are not elderly or near-
elderly to more than 10 percent of the covered section 8 units. The
actual percentage required is the highest percentage in occupancy on
the two ``snapshot'' dates in 1992 (again October 28, 1992 or January
1, 1992), unless that number exceeds 10 percent, in which case the
requirement is set at 10 percent. Thus, under the statutory formula and
this interim rule, if a project did not have any disabled families who
are not elderly or near-elderly residing in the covered section 8 units
on both January 1, 1992 and October 28, 1992, the owner would not be
required to reserve any covered section 8 units for such families. The
Department believes that few, if any, projects will fall into this
category.
While the percentage of covered section 8 units required to be
reserved may vary between 10 percent and zero, the Department
reiterates that the required percentage is not a ceiling, and owners
are encouraged to reserve (or permit admission to) a higher percentage
of covered section 8 units for disabled families who are not elderly or
near-elderly where the need exists. Owners who choose to reserve (or
permit admission to) a greater percentage of covered section 8 units
than the percentage which is statutorily required for disabled families
who are not elderly or near-elderly would not incur any obligation to
continue maintaining the higher percentage (than statutorily required
by subtitle D) as vacancies arise.
In calculating actual utilization of units reserved for disabled
families who are not elderly or near-elderly, units occupied by elderly
families where a member of the family is disabled do not count as part
of the required percentage. Another factor to be considered is that the
percentage of units which are reserved under subtitle D for disabled
families who are not elderly or near-elderly is not linked to specific
units.
Since most elderly projects, even when designed for occupancy by
seniors, have a portion of the units designed to be accessible and
usable by persons with physical disabilities, there may be a tendency
to assume that these ``accessible'' units will be designated to fulfill
the required percentage of units reserved for disabled families who are
not elderly or near-elderly. This is not the case. Disabled families
who are not elderly or near-elderly and therefore qualify for the units
reserved under subtitle D may have any one of a variety of
disabilities, many of which will not require an accessible unit. Thus,
in determining whether a project has met its obligation under subtitle
D, the relevant factor is the number of disabled families who are not
elderly or near-elderly in occupancy, not the units in which they
reside. The accessible units may be occupied by elderly families, or by
a mixture of elderly families and disabled families who are not elderly
or near-elderly. Similarly, a project may have reached its required
percentage of occupancy by disabled families who are not elderly or
near-elderly, and have vacant accessible units. In such case, an owner
is under no obligation to offer these units to disabled families before
offering such units to elderly families. However, the owner must offer
such vacant accessible units to current tenants who need any of the
accessible features of the unit before offering it to the first elderly
or non-elderly family on the waiting list. In selecting from the
waiting list, the owner can give elderly disabled families who need the
accessible unit a preference over elderly non-disabled families.
The Department emphasizes that when a vacancy occurs and it is a
disabled family's turn to be placed in a project pursuant to the
preference system, the fact that the vacant unit may not be accessible,
does not entitle the housing provider to skip over the disabled family.
Where the available unit is not accessible and the disabled family
needs an accessible unit, the housing provider is to accommodate the
family, either by (1) making that unit accessible, or (2) by
transferring a tenant who is living in an accessible unit but does not
need an accessible unit to the inaccessible unit and offering the
disabled family an accessible unit.
B. Secondary System of Preferences: Section 653.
Under the statutory system of preferences, if there are an
insufficient number of elderly families to fill vacant covered section
8 units, an owner may give a secondary preference to disabled families
who are near-elderly. Similarly, if there are an insufficient number of
disabled families who are not elderly or near-elderly to fill vacant
covered section 8 units reserved for such disabled families, an owner
may give a secondary preference to disabled families who are near-
elderly to fill those units. However, in the event that there are an
insufficient number of elderly families, disabled families who are not
elderly or near-elderly, or near-elderly disabled families to fill
vacancies that occur, the owner must make vacant covered section 8
units generally available to eligible families who apply for housing,
without regard to the statutory system of preferences or reservation of
units.
The statute looks to the Department to establish a standard for
determining whether there are an insufficient number of families to
fill vacant units subject to the preferences or reservations
established in this interim rule. These standards are already in place
in the existing section 8 regulations. The interim rule provides that
before an owner can determine that there are an insufficient number of
families to fill vacant covered section 8 units, an owner must conduct
marketing to attract applicants qualifying for the preferences
(including outreach to such applicants) in accordance with
Secs. 880.601(a), 881.601(a), 883.702(a), 884.226, or 886.321(a), as
applicable. Additionally, the owner must make a good faith effort to
lease to applicants qualifying for the preferences (which must include
taking all feasible actions to fill vacancies by renting to such
families), and not reject any such applicant family except for reasons
acceptable to the Department or the contract administrator (in
accordance with HUD guidelines).
C. Waiting Lists
Owners of covered section 8 housing projects designed primarily for
occupancy by elderly families, which are required to have a percentage
of covered section 8 units reserved for disabled families who are not
elderly or near-elderly pursuant to section 652, or which have other
units available to disabled families pursuant to statutory and
regulatory requirements (e.g., near-elderly disabled families admitted
under the secondary preferences of section 653) would not be able to
use this interim rule to remove applicants from a waiting list.
Moreover, an owner would have to continue to select applicants for
covered section 8 vacant units in accordance with current HUD
procedures with the exception noted below.
Procedures presently in effect provide that the applicant's place
on the waiting list and the application of preferences determine the
order of selection for admission. Section 655 provides that the
existing Federal preferences apply within each group (i.e. elderly
families, disabled families who are not elderly or near-elderly, and
disabled families who are near-elderly) to the extent that they
currently apply under each applicable multifamily housing
program.6 Local preferences also are permitted under existing
rules.
---------------------------------------------------------------------------
\6\For example, an elderly family with a Federal preference
would be selected for a vacant unit before an elderly family without
a Federal preference.
---------------------------------------------------------------------------
However, under this interim rule, if the applicants at the top of
the waiting list are disabled families who are not elderly or near-
elderly, and such disabled families currently occupy the full
percentage of covered section 8 units required to be reserved for them
under subtitle D, the owner may, but is not required to, skip over the
disabled applicants on the waiting list, and select elderly families
for vacant covered section 8 units. The owner would only be required to
select disabled families who are not elderly or near-elderly, and who
are at the top of the waiting list for vacant covered section 8 units
when: (1) The number of disabled families who are not elderly or near-
elderly in covered section 8 units drops below the minimum required
percentage, (2) the owner has adopted a secondary preference under
section 653(a) of the 1992 HCD Act, and there are not sufficient
numbers of elderly families or near-elderly disabled families to fill
the elderly units (in accordance with section 654 of the 1992 HCD Act),
or (3) the owner has not adopted a secondary preference under section
653(a), and there are not sufficient numbers of elderly families to
fill the elderly units.
It is important to note that some projects which do not have to
reserve any units for non-elderly disabled families under subtitle D
may have disabled families who are not elderly or near-elderly on their
waiting lists. If a project originally designed primarily for occupancy
by elderly families would not have to reserve any units for disabled
families who are not elderly or near-elderly under subtitle D, the
owner would not have to admit such disabled families on the waiting
list to covered section 8 units, nor would any additional non-elderly
families have to be added to the waiting list for covered section 8
units. The owner would, of course, have to admit disabled families who
are also elderly, and provide such families with the same preference
for admission as non-disabled elderly families.
Also, an owner who has adopted a secondary preference under section
653(a) would admit, and give a preference to, near-elderly disabled
families, if there are insufficient numbers of elderly families to fill
the elderly units. An owner who has adopted a secondary preference
under section 653(a) would also admit families without regard to age
(including disabled families that are not elderly or near-elderly) if
there are not sufficient numbers of elderly families or near-elderly
disabled families to fill the elderly units (pursuant to section 654).
An owner who has not adopted a secondary preference under section
653(a) would admit applicants without regard to age (including disabled
families that are not elderly or near-elderly) if there are not
sufficient numbers of elderly families to fill the elderly units.
Even where there are sufficient numbers of elderly families to fill
the elderly units, an owner may elect to admit disabled families who
are not elderly or near-elderly to covered section 8 units, and the
Department encourages this voluntary policy, particularly where the
need exists and the units are available. Owners who choose to admit
such disabled families in excess of the statutorily-mandated minimum
may do so without incurring any continuing obligation as such disabled
families voluntarily move out, and without losing their project's
identification as a project designed primarily for occupancy by elderly
families.
In any case, when an owner's decision to provide preferences to
elderly families under subtitle D would have an adverse effect on non-
elderly families on the waiting list, the owner would be required to
notify those families of the new policy and how this policy may affect
them. The notification requirement would be triggered if the current
percentage of disabled families who are neither elderly nor near-
elderly exceeds the minimum required percentage, and non-elderly
families on the waiting list (including those with disabilities) may be
passed over for covered section 8 units for the elderly, or if the
project is one of the few which will have no units set aside for such
disabled families under subtitle D.
Justification for Interim Rulemaking
It is the Department's general policy to publish a rule for notice
and comment before issuing a rule for effect in accordance with the
Department's own rule on rulemaking, codified at 24 CFR part 10.
However, part 10 provides for exceptions from that general rule where
the agency finds good cause to omit advance notice and public
participation. The good cause requirement is satisfied when prior
public procedure is determined to be ``impracticable, unnecessary, or
contrary to the public interest.'' (See 24 CFR 10.1)
The Department finds that good cause exists to publish this interim
rule for effect without notice and prior public comment because the
Department has determined that, with the exception of possible
clarifying changes at the final rule stage, public comment will not
alter the standards set forth in this interim rule for making the
election of preferences provided by subtitle D, and is therefore
unnecessary. The interim rule adopts the standards for the election of
preferences for elderly families and reservation of units for disabled
families as set forth in the statute.
Subtitle D establishes which section 8 housing projects are
eligible for the election of preferences provided by subtitle D.
Subtitle D establishes that the ``elderly families'' eligible to reside
in covered section 8 housing projects for which the owner has made the
election of preferences provided by subtitle D are those families who
meet the definition of ``elderly families'' as set forth in section
3(b) of the 1937 Act, as amended by section 621 of the 1992 HCD Act.
Subtitle D establishes the formula by which an owner will determine the
number of units in the covered section 8 housing project that must be
reserved for occupancy by disabled families who are not elderly or
near-elderly. Subtitle D establishes the secondary system of
preferences available to owners if there are insufficient numbers of
elderly families to occupy all the units reserved for elderly families.
Subtitle D also establishes the procedures to be followed if units
remain vacant after the owner has elected to provide the secondary
system of preferences, and the procedures to be followed concerning the
order of selection within groups to whom a preference has been given.
The interim rule adopts all these statutory provisions without
substantive change.
The interim rule departs from the statute in providing the types of
documents that an owner must be able to produce in the event the owner
is challenged on the issue of whether the owner's project is eligible
for the election of preferences provided by subtitle D. The statute
does not provide how the owner may support that the owner's section 8
housing project was originally designed primarily for occupancy by
elderly families (i.e., seniors). The interim rule provides a list of
documents which the owner may rely upon as support for determining
project eligibility to make the election of preferences provided by
subtitle D.
The Department carefully considered which documents may evidence
project eligibility for the subtitle D system of preferences. As
discussed earlier in the preamble, because of the various types of
housing projects covered by subtitle D and this interim rule, and
because these housing projects were developed under several different
programs and over a period of time which spans almost two decades,
there is no uniform documentation at the Department which identifies
the population group to be served by the project. Additionally, and
again as discussed earlier in the preamble, the difficulty in
identifying the population group to be served is added by the fact that
the previous definition of ``elderly families'' in the 1937 Act
included disabled families, and the Department's policy required all
housing for the elderly (defined by age) to incorporate certain
accessible features and to design a certain percentage of units to be
accessible for persons with physical disabilities. The Department
specifically requests comments from the public on the list of
supporting documents provided in the interim rule, and this provision
may change following public comment.
The Department recognizes that there may be questions concerning
the Department's use of interim rulemaking for subtitle D of title VI,
but not for subtitle B of the title VI. Subtitle B provides public
housing agencies (PHAs) with the option, subject to certain
requirements, to designate public housing projects, or portions of
these projects, for occupancy by elderly families, by disabled
families, or elderly families and disabled families. Under subtitle B,
to elect this option, a PHA must submit an allocation plan to the
Department for review and approval before designating a project for
occupancy by one of the three categories of families listed in the
statute. Additionally, for projects to be designated for occupancy by
disabled families, the statute requires the PHA also must submit, and
receive approval of, a supportive service plan. The Department added
requirements, by regulation, to the allocation plan and supportive
service plan to supplement those set forth in the statute. For this
reason, it was necessary to provide the public with advance notice and
public comment before making those regulatory requirements effective.
Additionally, to the extent that this subtitle D rule, which
concerns section 8 housing, and the subtitle B rule, which concerns
public housing, address similar issues, the public comments on the
subtitle B rule are applicable to this interim rule. Both statutes
(subtitle D and subtitle B), which permit housing to be reserved for
occupancy by elderly families, may have the affect of reducing housing
assistance for non-elderly disabled persons. Subtitle D attempts to
minimize the reduction of housing assistance for non-elderly disabled
families by limiting the preference for elderly families to covered
section 8 housing that was originally designed primarily for occupancy
by elderly families. Subtitle D also requires owners of these covered
projects to reserve units in the covered project for disabled families
who are neither elderly nor near-elderly, and the number of units to be
reserved is determined in accordance with the formula established by
the statute.
Subtitle B attempts to minimize the reduction of housing assistance
for non-elderly disabled families by requiring housing authorities that
designate projects for elderly families to submit a plan for securing
sufficient additional resources that the agency owns, controls, or has
received preliminary notification that it will obtain, or for which the
agency plans to apply that will be sufficient to provide assistance to
not less than the number of non-elderly disabled families that would
have been housed but for the designation of the project for elderly
families. Further, both statutes prohibit the eviction of any tenant
lawfully residing in a section 8 covered project or a public housing
project because the project is to be reserved for elderly families or
to be designated for elderly families.
Persons with disabilities commenting on the subtitle B rule were
concerned about the possible reduction of public housing assistance for
non-elderly disabled families as a result of projects designated for
elderly families, and several requested that the Department not permit
designated housing. The Department anticipates that persons with
disabilities will have the same concerns about the subtitle D rule, and
perhaps make similar comments. However, in both cases, the statute
permits the reservation or designation for projects for occupancy by
elderly families, and the Department cannot preclude this an as option
for project owners or housing authorities.
Persons with disabilities commenting on the subtitle B rule
requested that the Department carefully monitor the statutory
protections provided for non-elderly disabled families. The Department
anticipates that persons with disabilities commenting on the subtitle D
rule will make similar comments. The Department will monitor both the
subtitle D reservation, and the subtitle B designation, to ensure, to
the extent possible, that there is minimum adverse impact on non-
elderly disabled families.
Persons with disabilities commenting on the subtitle B rule stated
that their concern about loss of access to projects designated for
elderly families should be construed to mean a concern about reduction
of housing assistance generally, and not concern about loss of access
to ``elderly'' projects. These commenters stated that an integrated
housing setting is not a project that houses only elderly families and
disabled families. The commenters asked the Department to make
available section 8 assistance to non-elderly disabled families so that
they could live in housing with ``mainstream'' populations. The
Department anticipates that similar comments will be made by persons
with disabilities on the subtitle D rule. The Department will make
every effort to increase section 8 housing assistance for non-elderly
disabled persons.
Given the statutory framework of the system of preferences for
elderly families authorized by the subtitle D rule, the Department
reiterates that, except for the types of documentation a project owner
should be able to produce to support a determination of eligibility to
make the election of preferences, there is very little that will change
at the final rule stage as a result of public comments. Given the
similarity of certain issues addressed by subtitle D and subtitle B,
the Department also reiterates that those comments received on the
subtitle B rule and that are applicable to this rule were taken into
consideration in developing this interim rule.
Although this interim rule is being published for effect within 30
days from the date of publication, the Department requests comments
from the public on this interim rule, and the public comments will be
considered by the Department in development of the final rule.
Additionally, in accordance with the Department's policy on interim
rules, the amendments made by this interim rule to parts 880, 881, 883,
884, and 886 will expire on the twelve-month anniversary date of
publication of this interim rule unless extended by notice published in
the Federal Register or adopted by a final rule published on or before
the twelve-month anniversary date of publication of this interim rule.
Other Matters
Executive Order 12866
This interim rule was reviewed by the Office of Management and
Budget (OMB) under Executive Order 12866 on Regulatory Planning and
Review. Any changes made in this interim rule as a result of that
review are clearly identified in the docket file, which is available
for public inspection in the Office of the Department's Rule's Docket
Clerk, room 10276, 451 Seventh St. SW., Washington, DC.
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. The finding is available for public inspection during
regular business hours in the Office of General Counsel, the Rules
Docket Clerk room 10276, 451 Seventh Street, SW., Washington, DC 20410.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive order 12612, Federalism, has determined that the policies
contained in this interim rule will not have substantial direct effects
on states or their political subdivisions, or the relationship between
the Federal government and the states, or on the distribution of power
and responsibilities among the various levels of government.
Specifically, the interim rule is directed to owners of multifamily
housing projects, and will not impinge upon the relationship between
the Federal Government and State and local governments. As a result,
the interim rule is not subject to review under the order.
Executive Order 12606, the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this interim rule does not
have potential for significant impact on family formation, maintenance,
and general well-being within the meaning of the order. This interim
rule implements the system of preferences authorized by subtitle D of
title VI of the 1992 HCD Act, which provides that owners of certain
section 8 covered projects that were originally designed primarily for
occupancy by elderly families (i.e., families whose heads, spouses or
sole members are 62 years or older) may elect to give preference in
occupancy to vacant units in the project to elderly families. Although
subtitle D provides for preferences for elderly families in projects
meeting the conditions established by subtitle D, subtitle D also
requires that owners of such projects must reserve no less than a
minimum number of units in these projects for disabled families who are
not elderly or near-elderly. The minimum number is determined in
accordance with the formula established by statute.
Since the subtitle D preference system provides a primary
preference for elderly families, and a secondary preference for
disabled families who are near-elderly, there is the possibility that
this statutory system of preferences would limit the availability of
certain section 8 housing for: (1) Disabled families who are not
elderly or near-elderly (if an owner gives preference to elderly
families for units), and (2) such families with children, and thus
adversely impact the maintenance and well-being of these families.
(Although owners can apply the same preferences and reservation of
units to families with children as to families without children, owners
cannot restrict admission to any units solely because of familial
status as long as the family qualifies for the unit on the basis of the
relevant age or disability criterion for admission.) The Department
believes that the number of projects that would be eligible for the
preferences provided by subtitle D is limited, and thus, the impact on
family maintenance and well being would not be significant within the
meaning of the order.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this interim rule, and in so
doing certifies that this interim rule would not have a significant
economic impact on a substantial number of small entities. This interim
rule reflects a system of occupancy preferences authorized by statute
which applies to section 8 newly constructed or substantially
rehabilitated housing without regard to the size of entities involved.
Regulatory Agenda
This interim rule was listed as sequence no. 1580 in the
Department's Semiannual Agenda of Regulations published on April 25,
1994 (59 FR 20424, 20446) in accordance with Executive Order 12866 and
the Regulatory Flexibility Act.
Catalog of Federal Domestic Assistance Programs. The Catalog of
Federal Domestic Assistance program number is 14.156.
List of Subjects
24 CFR Part 880
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 881
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 883
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 884
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements, Rural areas.
24 CFR Part 886
Grant programs--housing and community development, Lead poisoning,
Rent subsidies, Reporting and recordkeeping requirements.
Accordingly, 24 CFR parts 880, 881, 883, 884, and 886 are amended
as follows:
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
1. The authority citation for 24 CFR part 880 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
2. A new Sec. 880.612a is added to read as follows:
Sec. 880.612a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may elect to give preference to elderly families
in selecting tenants for assisted, vacant units in the project, subject
to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is
referred to as an ``elderly project.'' ``Elderly families'' refers to
families whose heads of household, their spouses or sole members are 62
years or older.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph
(a)(1) of this section must be able to support the project's
eligibility through the production of supporting evidence as provided
in paragraph (b) of this section.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations and compliance reviews required
under the Fair Housing Act (42 U.S.C. 3601 through 19), section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 794) and other applicable
statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: the application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
other underwriting or financial document collected at or before loan
closing; or
(ii) Secondary sources. Two or more sources of evidence such as:
lease records from the earliest two years of occupancy for which
records are available showing that occupancy has been restricted
primarily to households where the head, spouse or sole member is 62
years of age or older; evidence that services for elderly persons have
been provided, such as services funded by the Older Americans Act,
transportation to senior citizen centers, or programs coordinated with
the Area Agency on Aging; project unit mix with a higher percentage of
efficiency and one-bedroom units [a secondary source particularly
relevant to distinguishing elderly projects under the previous section
3(b) definition (in which disabled families were included in the
definition of ``elderly families'') from non-elderly projects and which
in combination with other factors (such as the number of accessible
units) may be useful in distinguishing projects for seniors from those
serving the broader definition of ``elderly families'' which includes
disabled families]; or any other relevant type of historical data,
unless clearly contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where the primary sources do not provide clear
evidence of original design of the project for occupancy primarily by
elderly families, including those cases where primary documents
conflict, secondary sources may be used to establish the use for which
the project was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph
(c)(1) of this section for occupancy by disabled families who are not
elderly or near-elderly families (hereafter, collectively referred to
``non-elderly disabled families'').
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of;
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon
January 1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for
elderly families (that is, all units except those reserved for the non-
elderly disabled families as provided in paragraph (c) of this
section), the owner may give preference for occupancy of such units to
disabled families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that
there are an insufficient number of non-elderly disabled families to
fill all the vacant units in the elderly project reserved for non-
elderly disabled families as provided in paragraph (c) of this section,
the owner may give preference for occupancy of these units to disabled
families who are near-elderly families.
(e) Availability of units to families without regard to preference.
If the owner of an elderly project who has elected to adopt the
secondary preferences in paragraph (d) of this section determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of families for whom preference, including
secondary preference, in occupancy has been given, to fill all the
vacant units in the elderly project, the owner shall make the vacant
units generally available to otherwise eligible families who apply for
housing, without regard to the preferences and reservation of units
provided in this section.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 880.601(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Federal preferences. An owner that gives preferences to elderly
families and reserves units for non-elderly disabled families in
accordance with this section also shall select applicants among each
respective group in accordance with the Federal preferences contained
in Sec. 880.613.
(h) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
(i) Expiration date of section. This section will expire on May 3,
1995.
PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
SUBSTANTIAL REHABILITATION
3. The authority citation for 24 CFR part 881 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
4. A new Sec. 881.612a is added to read as follows:
Sec. 881.612a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may elect to give preference to elderly families
in selecting tenants for assisted, vacant units in the project, subject
to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is
referred to as an ``elderly project.'' ``Elderly families'' refers to
families whose heads of household, their spouses or sole members are 62
years or older.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph
(a)(1) of this section must be able to support the project's
eligibility through the production of supporting evidence as provided
in paragraph (b) of this section.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations and compliance reviews required
under the Fair Housing Act (42 U.S.C. 3601 through 19), section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 794) and other applicable
statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: The application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
other underwriting or financial document collected at or before loan
closing; or
(ii) Secondary sources. Two or more sources of evidence such as:
Lease records from the earliest two years of occupancy for which
records are available showing that occupancy has been restricted
primarily to households where the head, spouse or sole member is 62
years of age or older; evidence that services for elderly persons have
been provided, such as services funded by the Older Americans Act,
transportation to senior citizen centers, or programs coordinated with
the Area Agency on Aging; project unit mix with a higher percentage of
efficiency and one-bedroom units [a secondary source particularly
relevant to distinguishing elderly projects under the previous section
3(b) definition (in which disabled families were included in the
definition of ``elderly families'') from non-elderly projects and which
in combination with other factors (such as the number of accessible
units) may be useful in distinguishing projects for seniors from those
serving the broader definition of ``elderly families'' which includes
disabled families]; or any other relevant type of historical data,
unless clearly contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where the primary sources do not provide clear
evidence of original design of the project for occupancy primarily by
elderly families, including those cases where primary documents
conflict, secondary sources may be used to establish the use for which
the project was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph
(c)(1) of this section for occupancy by disabled families who are not
elderly or near-elderly families (hereafter, collectively referred to
``non-elderly disabled families'').
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of;
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon
January 1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for
elderly families (that is, all units except those reserved for the non-
elderly disabled families as provided in paragraph (c) of this
section), the owner may give preference for occupancy of such units to
disabled families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that
there are an insufficient number of non-elderly disabled families to
fill all the vacant units in the elderly project reserved for non-
elderly disabled families as provided in paragraph (c) of this section,
the owner may give preference for occupancy of these units to disabled
families who are near-elderly families.
(e) Availability of units to families without regard to preference.
If the owner of an elderly project who has elected to adopt the
secondary preferences in paragraph (d) of this section determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of families for whom preference, including
secondary preference, in occupancy has been given, to fill all the
vacant units in the elderly project, the owner shall make the vacant
units generally available to otherwise eligible families who apply for
housing, without regard to the preferences and reservation of units
provided in this section.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 881.601(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Federal preferences. An owner that gives preferences to elderly
families and reserves units for non-elderly disabled families in
accordance with this section also shall select applicants among each
respective group in accordance with the Federal preferences contained
in Sec. 881.613.
(h) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
(i) Expiration date of section. This section will expire on May 3,
1995.
PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE
HOUSING AGENCIES
5. The authority citation for 24 CFR part 883 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
6. A new Sec. 883.704a is added to read as follows:
Sec. 883.704a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may elect to give preference to elderly families
in selecting tenants for assisted, vacant units in the project, subject
to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is
referred to as an ``elderly project.'' ``Elderly families'' refers to
families whose heads of household, their spouses or sole members are 62
years or older.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph
(a)(1) of this section must be able to support the project's
eligibility through the production of supporting evidence as provided
in paragraph (b) of this section.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations and compliance reviews required
under the Fair Housing Act (42 U.S.C. 3601 through 19), section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 794) and other applicable
statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: the application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
other underwriting or financial document collected at or before loan
closing; or
(ii) Secondary sources. Two or more sources of evidence such as:
Lease records from the earliest two years of occupancy for which
records are available showing that occupancy has been restricted
primarily to households where the head, spouse or sole member is 62
years of age or older; evidence that services for elderly persons have
been provided, such as services funded by the Older Americans Act,
transportation to senior citizen centers, or programs coordinated with
the Area Agency on Aging; project unit mix with a higher percentage of
efficiency and one-bedroom units [a secondary source particularly
relevant to distinguishing elderly projects under the previous section
3(b) definition (in which disabled families were included in the
definition of ``elderly families'') from non-elderly projects and which
in combination with other factors (such as the number of accessible
units) may be useful in distinguishing projects for seniors from those
serving the broader definition of ``elderly families'' which includes
disabled families]; or any other relevant type of historical data,
unless clearly contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where the primary sources do not provide clear
evidence of original design of the project for occupancy primarily by
elderly families, including those cases where primary documents
conflict, secondary sources may be used to establish the use for which
the project was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph
(c)(1) of this section for occupancy by disabled families who are not
elderly or near-elderly families (hereafter, collectively referred to
``non-elderly disabled families'').
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of;
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon
January 1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for
elderly families (that is, all units except those reserved for the non-
elderly disabled families as provided in paragraph (c) of this
section), the owner may give preference for occupancy of such units to
disabled families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that
there are an insufficient number of non-elderly disabled families to
fill all the vacant units in the elderly project reserved for non-
elderly disabled families as provided in paragraph (c) of this section,
the owner may give preference for occupancy of these units to disabled
families who are near-elderly families.
(e) Availability of units to families without regard to preference.
If the owner of an elderly project who has elected to adopt the
secondary preferences in paragraph (d) of this section determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of families for whom preference, including
secondary preference, in occupancy has been given, to fill all the
vacant units in the elderly project, the owner shall make the vacant
units generally available to otherwise eligible families who apply for
housing, without regard to the preferences and reservation of units
provided in this section.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 883.702(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Federal preferences. An owner that gives preferences to elderly
families and reserves units for non-elderly disabled families in
accordance with this section also shall select applicants among each
respective group in accordance with the Federal preferences contained
in Sec. 883.714.
(h) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
(i) Expiration date of section. This section will expire on May 3,
1995.
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
7. The authority citation for 24 CFR part 884 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
8. A new Sec. 884.223a is added to read as follows:
Sec. 884.223a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may elect to give preference to elderly families
in selecting tenants for assisted, vacant units in the project, subject
to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is
referred to as an ``elderly project.'' ``Elderly families'' refers to
families whose heads of household, their spouses or sole members are 62
years or older.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph
(a)(1) of this section must be able to support the project's
eligibility through the production of supporting evidence as provided
in paragraph (b) of this section.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations and compliance reviews required
under the Fair Housing Act (42 U.S.C. 3601 through 19), section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 794) and other applicable
statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: The application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
other underwriting or financial document collected at or before loan
closing; or
(ii) Secondary sources. Two or more sources of evidence such as:
Lease records from the earliest two years of occupancy for which
records are available showing that occupancy has been restricted
primarily to households where the head, spouse or sole member is 62
years of age or older; evidence that services for elderly persons have
been provided, such as services funded by the Older Americans Act,
transportation to senior citizen centers, or programs coordinated with
the Area Agency on Aging; project unit mix with a higher percentage of
efficiency and one-bedroom units [a secondary source particularly
relevant to distinguishing elderly projects under the previous section
3(b) definition (in which disabled families were included in the
definition of ``elderly families'') from non-elderly projects and which
in combination with other factors (such as the number of accessible
units) may be useful in distinguishing projects for seniors from those
serving the broader definition of ``elderly families'' which includes
disabled families]; or any other relevant type of historical data,
unless clearly contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where the primary sources do not provide clear
evidence of original design of the project for occupancy primarily by
elderly families, including those cases where primary documents
conflict, secondary sources may be used to establish the use for which
the project was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph
(c)(1) of this section for occupancy by disabled families who are not
elderly or near-elderly families (hereafter, collectively referred to
``non-elderly disabled families'').
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of;
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon
January 1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for
elderly families (that is, all units except those reserved for the non-
elderly disabled families as provided in paragraph (c) of this
section), the owner may give preference for occupancy of such units to
disabled families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that
there are an insufficient number of non-elderly disabled families to
fill all the vacant units in the elderly project reserved for non-
elderly disabled families as provided in paragraph (c) of this section,
the owner may give preference for occupancy of these units to disabled
families who are near-elderly families.
(e) Availability of units to families without regard to preference.
If the owner of an elderly project who has elected to adopt the
secondary preferences in paragraph (d) of this section determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of families for whom preference, including
secondary preference, in occupancy has been given, to fill all the
vacant units in the elderly project, the owner shall make the vacant
units generally available to eligible families who apply for housing,
without regard to the preferences and reservation of units provided in
this section.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 884.214(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Federal preferences. An owner that gives preferences to elderly
families and reserves units for non-elderly disabled families in
accordance with this section also shall select applicants among each
respective group in accordance with the Federal preferences contained
in Sec. 884.226.
(h) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
(i) Expiration date of section. This section will expire on May 3,
1995.
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
11. The authority citation for 24 CFR part 886 is revised to read
as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
12. A new Sec. 886.329a is added to read as follows:
Sec. 886.329a Preferences for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
involving substantial rehabilitation and assisted under this part
(including a partially assisted project) that was originally designed
primarily for occupancy by elderly families (an ``eligible project'')
may elect to give preference to elderly families in selecting tenants
for assisted, vacant units in the project, subject to the requirements
of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is
referred to as an ``elderly project.'' ``Elderly families'' refers to
families whose heads of household, their spouses or sole members are 62
years or older.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph
(a)(1) of this section must be able to support the project's
eligibility through the production of supporting evidence as provided
in paragraph (b) of this section.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations and compliance reviews required
under the Fair Housing Act (42 U.S.C. 3601 through 19), section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 794) and other applicable
statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: the application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
other underwriting or financial document collected at or before loan
closing; or
(ii) Secondary sources. Two or more sources of evidence such as:
lease records from the earliest two years of occupancy for which
records are available showing that occupancy has been restricted
primarily to households where the head, spouse or sole member is 62
years of age or older; evidence that services for elderly persons have
been provided, such as services funded by the Older Americans Act,
transportation to senior citizen centers, or programs coordinated with
the Area Agency on Aging; project unit mix with a higher percentage of
efficiency and one-bedroom units [a secondary source particularly
relevant to distinguishing elderly projects under the previous section
3(b) definition (in which disabled families were included in the
definition of ``elderly families'') from non-elderly projects and which
in combination with other factors (such as the number of accessible
units) may be useful in distinguishing projects for seniors from those
serving the broader definition of ``elderly families'' which includes
disabled families]; or any other relevant type of historical data,
unless clearly contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where the primary sources do not provide clear
evidence of original design of the project for occupancy primarily by
elderly families, including those cases where primary documents
conflict, secondary sources may be used to establish the use for which
the project was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph
(c)(1) of this section for occupancy by disabled families who are not
elderly or near-elderly families (hereafter, collectively referred to
``non-elderly disabled families'').
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of;
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon
January 1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for
elderly families (that is, all units except those reserved for the non-
elderly disabled families as provided in paragraph (c) of this
section), the owner may give preference for occupancy of such units to
disabled families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that
there are an insufficient number of non-elderly disabled families to
fill all the vacant units in the elderly project reserved for non-
elderly disabled families as provided in paragraph (c) of this section,
the owner may give preference for occupancy of these units to disabled
families who are near-elderly families.
(e) Availability of units to families without regard to preference.
If the owner of an elderly project who has elected to adopt the
secondary preferences in paragraph (d) of this section determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of families for whom preference, including
secondary preference, in occupancy has been given, to fill all the
vacant units in the elderly project, the owner shall make the vacant
units generally available to otherwise eligible families who apply for
housing, without regard to the preferences and reservation of units
provided in this section.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 886.321(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Federal preferences. An owner that gives preferences to elderly
families and reserves units for non-elderly disabled families in
accordance with this section also shall select applicants among each
respective group in accordance with the Federal preferences contained
in Sec. 886.337.
(h) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
(i) Expiration date of section. This section will expire on May 3,
1995.
Dated: April 26, 1994.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 94-10519 Filed 5-2-94; 8:45 am]
BILLING CODE 4210-27-P
