[Federal Register Volume 59, Number 137 (Tuesday, July 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17496]
[[Page Unknown]]
[Federal Register: July 19, 1994]
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Part IV
Department of Housing and Urban Development
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Office of the Assistant Secretary for Community Planning and
Development
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24 CFR Part 583
Supportive Housing Program; Final Rule
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development
24 CFR Part 583
[Docket No. R-94-1631; FR-3379-F-01]
RIN A506-AB45
Supportive Housing Program
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
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SUMMARY: This is the final rule for the Supportive Housing Program, a
program to provide assistance for housing and supportive services for
homeless persons authorized by title IV, subtitle C of the Stewart B.
McKinney Homeless Assistance Act, 42 U.S.C. 11381 (McKinney Act).
EFFECTIVE DATE: August 18, 1994.
FOR FURTHER INFORMATION CONTACT: The Office of Special Needs Assistance
Programs, Room 7262, Department of Housing and Urban Development, 451
Seventh Street SW, Washington, DC 20410; (202) 708-1234 or, TDD for
hearing and speech-impaired, (202) 708-2565. (These are not toll-free
numbers.)
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act
The information collection requirements contained in this rule have
been submitted to the Office of Management and Budget (OMB) for review
under the Paperwork Reduction Act of 1980, and approved under OMB
control number 2506-0112.
II. Background
Section 1403 of the 1992 HCD Act amended title IV of the McKinney
Act by striking subtitles C and D (the Supportive Housing Demonstration
and SAFAH programs, respectively), and replacing them with a new
subtitle C, which authorizes the Supportive Housing Program. (The
Supportive Housing Demonstration program consisted of the Transitional
Housing and the Permanent Housing for Handicapped Homeless programs.)
On March 15, 1993, the Department published an interim rule (58 FR
13870), hereafter referred to as the ``first interim rule,''
implementing the Supportive Housing Program. The first interim rule is
codified at 24 CFR 583. On May 10, 1994, the Department published a
second interim rule at 52 FR 24252 which amended the application and
selection criteria provisions of the rule and clarified the
Comprehensive Housing Affordability provisions.
The Supportive Housing Program combines the features of the
Demonstration programs and the SAFAH program into one single program of
assistance to governmental entities and private nonprofit organizations
to provide housing and supportive services to homeless persons.
As stated in the first interim rule, Transitional Housing,
Permanent Housing for Handicapped Homeless, and SAFAH projects
previously approved under those program regulations (24 CFR parts 577,
578, and 579, respectively) will continue to be subject to those
regulations. However, projects that are renewed under the new
Supportive Housing Program are subject to these regulations.
Finally, the Department is publishing this final rule for effect
immediately upon publication. Generally, in accordance with section
7(o) of the Department of Housing and Urban Development Act, the
Department does not publish a rule or regulation for effect until after
the expiration of the 30-day calendar period beginning on the day after
the rule or regulation is published. However, because section 427 of
the Stewart B. McKinney Homeless Assistance Amendments Act of 1992 (42
U.S.C. 11387) provides that the final rule implementing the new
Supportive Housing Program is to be ``effective upon issuance,'' this
provision of section 7(o) does not apply to this final rule.
III. Discussion of Public Comments From Interim Rule
The Department received 17 public comments in response to the
interim rule. The comments were from local governments, housing
authorities, and nonprofit organizations and advocacy groups for
homeless individuals. The final rule contains changes made to the
interim rule in response to public comments. The following discussion
summarizes the comments and provides HUD's responses to those comments.
Definitions: Sec. 583.5
Homeless Family
Several commenters suggested that HUD broaden the definition of
homeless family with children to include parent/child relationships
that exist without legal recognition of that relationship. One
commenter suggested that the definition also include a dependent child
over 18 who is mentally or physically disabled. One commenter
recommended that homeless parents who have been separated from their
children through foster care be permitted to enter SHPs with their
children.
The Department does not believe that the definition of homeless
families with children restricts serving families that include these
types of relationships. A dependent child over 18 who is mentally or
physically disabled can certainly be served. The term ``homeless family
with children'' is defined in the rule only so that the Department can
determine that it meets the statutory requirement that at least 25
percent of the funds appropriated for the program be used for homeless
families with children. Therefore, the definition has not been changed.
Homeless Person
A number of commenters felt that HUD should expand the definition
of homeless person. Several commenters recommended that the definition
include a person who will be evicted from a dwelling unit within 30
days, released from an institution within 30 days, or required to leave
within the time an opening is likely to be available in the supportive
housing program. One commenter recommended that the definition include
individuals who are doubled or tripled up with family or friends. One
commenter stated that the term ``adequate'' was vague in the definition
(``fixed, regular and adequate nighttime residence'').
HUD does not believe that the current interpretation of
homelessness need be expanded as suggested. The Department's focus
remains on serving the most needy. This is most readily determined by
the test that a person is homeless if, without HUD assistance, she or
he would have to spend the night in a shelter or in a place not meant
for human habitation. With regard to the term ``adequate'', the
definition in the rule reflects the statutory language exactly.
Permanent Housing for Homeless Persons With Disabilities
The interim rule defines permanent housing for homeless persons
with disabilities to mean community-based housing for homeless persons
with disabilities that provides long-term housing and supportive
services for not more than (1) 8 such persons in a single structure or
contiguous structure; (2) 16 such persons, but only if not more than 20
percent of the units in a structure are designated for such persons; or
(3) more than 16 persons if the applicant demonstrates that local
market conditions dictate the development of a large project and such
development will achieve the neighborhood integration objectives of the
program within the context of the affected community.
One commenter objected to the requirement, in the definition of
permanent housing for homeless persons with disabilities, that an
applicant must demonstrate that local market conditions justify the
development of a permanent supportive housing project for more than 16
persons. This requirement is imposed by section 424(c)(1) of the
McKinney Act, which requires that an applicant provide a
``justification'' for a permanent supportive housing project with more
than 16 persons.
Supportive Services
Several commenters recommended that the definition of supportive
services be expanded to include providing legal assistance to obtain
permanent housing, housing subsidies, and other entitlements such as
income support, food and medical assistance. The Department does not
believe that the current definition of supportive services excludes
legal assistance to obtain permanent housing, housing subsidies and
other entitlements. Not every eligible supportive service is listed in
the definition. However, for clarification, the regulatory definition
has been expanded to specifically state that supportive services
include ``but are not limited to'' the services listed. Grantees and
participants are reminded that most homeless persons qualify for free
legal assistance and that, except for filing lawsuits, persons other
than licensed attorneys may provide the services mentioned by the
commenters, most likely at a lower cost.
Use of SHP Funds
Eligible Activities/Projects: Sec. 583.1
The interim rule provides in Sec. 583.1 that supportive housing
funds may be used for: (1) Transitional housing to facilitate the
movement of homeless individuals and families to permanent housing; (2)
permanent housing that provides long-term housing for homeless persons
with disabilities; (3) housing that is, or is part of, a particularly
innovative project for, or alternative methods of, meeting the
immediate and long-term needs of homeless persons; or (4) supportive
services for homeless persons not provided in conjunction with
supportive housing.
Two commenters objected to restricting permanent housing projects
under the Supportive Housing Program to disabled homeless persons.
While section 424(a) of the McKinney Act restricts projects under the
permanent housing component to homeless persons with disabilities, the
Department does have the authority to make SHP funds available for
permanent housing projects for other homeless persons under the
innovative component.
One commenter objected to the use of SHP funds to provide services
for homeless persons unrelated to housing. Because section 425 of the
McKinney Act authorizes the provision of supportive services for
homeless persons not provided in conjunction with supportive housing,
and section 429 of the McKinney Act requires that at least 10% of
appropriations be allocated for providing supportive services not
provided in conjunction with supportive housing, the rule remains
unchanged in this regard.
One commenter suggested that HUD expand the rule to include new
construction of supportive service facilities. Because new construction
of supportive service facilities is not an eligible activity under
Sec. 423(a)(2) of the McKinney Act, the Department does not have the
authority to expand the rule in this respect.
Improving Existing Facilities: Sec. 583.100
One commenter suggested that HUD allow SHP funds to be used to
rehabilitate projects to preserve and bring existing housing stock up
to code. Another commenter argued that recipients should be allowed to
use SHP funds to improve existing transitional housing facilities, or
to complete projects in progress.
Currently, SHP funds may be used to expand existing facilities in
order to increase the number of homeless persons served and to provide
additional supportive services. The Department agrees that existing
facilities may also be improved to the extent that such improvements
are needed for public health and safety, and has modified Sec. 583.100
to reflect this. Finally, with regard to the use of SHP funds for
completion of projects in process, HUD does not believe that it is
necessary to broaden the use of SHP funds to cover completion of
projects in progress since presumably projects in progress are already
funded through completion.
Property Damages: Sec. 583.115(b)(2)
One commenter felt that grant funds should be available to pay for
property damages caused by a program participant. The Department
agrees, and has added as an eligible leasing cost the use of up to one
month's rent to pay a landlord who is not the recipient for any damage
to housing due to the action of a homeless participant.
Grants for Supportive Services Costs: Sec. 583.120
One commenter objected to the limitation of six months for
providing supportive services after a homeless person leaves a
transitional housing project, and recommended that recipients provide
supportive services following placement in permanent housing for up to
12 months. The Department believes that providing supportive services
beyond six months following placement in permanent housing expands the
definition of transitional housing beyond what the statute envisions.
SHP funds can be used for permanent housing resources for homeless
persons with disabilities.
Grants for Operating Costs: Sec. 583.125
One commenter suggested that maintenance reserve be included as an
operating cost. HUD does not believe that it is necessary to include
maintenance reserve as an operating cost. Because of recent changes in
the homeless programs' financial system, recipients do not lose
unexpended operating funds at the end of each year; they are carried
over to the next operating year. Since the operating budget may include
a repair and maintenance line item, it is no longer necessary to set up
a separate reserve account to ensure that funds are available each
year; the balance of repair and maintenance grant funds will carry
over.
Commitment of Grant Amounts for Leasing, Supportive Services, and
Operating Costs: Sec. 583.130
One commenter questioned whether the reference in Sec. 583.130 to
HUD's obligation of funds for a period ``not to exceed five operating
years'' meant that grants for supportive services will be available for
up to five years. The Department agrees that this point requires
clarification, and has modified Sec. 583.120 to show that grants for
supportive services will also be available for up to five years.
Administrative Costs: Sec. 583.135
Several commenters objected to the limitation of 5% for
administrative expenses, and suggested that the Department increase the
cap on administrative expenses to between 7% and 10%. Because section
426(i) of the McKinney Act establishes a 5% cap on administrative
expenses, the Department does not have the authority to increase the
cap.
Limitations on Use of Assistance: Sec. 583.150
Several commenters objected to the prohibition against using SHP
funding in structures assisted under other Federal programs. This
provision has been frequently misinterpreted due, in part, to its
complex language and, in part, to a more stringent provision contained
in the proposed rule published on January 6, 1992 for the Supportive
Housing Demonstration Program. The restriction in the first interim
rule prohibited using SHP funds to assist a structure that has been
assisted with other Federal funds. The first interim rule did not
prohibit using SHP funds to assist residents of a structure, where
either the structure or the residents have been assisted with other
Federal funds. For example, applicants could provide supportive
services funded by SHP to such residents. Another commenter felt that
SHP funds should be allowed to be used for units in any structure
receiving Federal assistance, except directly to units receiving HUD
rental assistance. Again, the first interim rule did not prevent SHP
funds from assisting a pro rata share of the units. That is, if only a
portion of a structure's units have been assisted with Federal funds,
the unassisted units could be assisted with SHP funds.
Nevertheless, HUD believes that this provision is counterproductive
with regard to encouraging the development of permanent affordable
housing. This is particularly true given the limited rent-paying
ability of homeless participants and the likelihood that recipients
will need other resources to meet operating costs. The section has been
deleted from the rule.
Predevelopment Costs
One commenter suggested that HUD allow SHP grants to be used for
certain predevelopment costs incurred prior to award of HUD funding.
HUD does not agree. It has been a long-standing practice not to
reimburse for costs such as those incurred to determine project
feasibility, options to secure site control, and other costs associated
with preparing an application.
Program Requirements
Grants for Acquisition and Rehabilitation; New Construction
Several commenters objected to the development cost caps for
acquisition and rehabilitation and new construction in Secs. 583.105
and 583.110. Because section 423(a) of the McKinney Act establishes
development cost caps for acquisition and rehabilitation, and new
construction, HUD does not have the authority to eliminate or raise the
development cost caps.
Matching Requirements: Sec. 583.145
Several commenters suggested that HUD reduce the matching
requirement of Sec. 583.145 from a 100% match, and permit the use of
non-cash resources for matching. Because section 426(e) of the McKinney
Act requires a 100% cash match of any grant for acquisition,
rehabilitation or new construction under the Supportive Housing
Program, the rule remains unchanged in this regard.
Sharing of Supportive Service Costs
One commenter suggested that HUD require a 25% share of supportive
service costs of sponsors for each year of the grant. Since section
423(a)(5) of the McKinney Act authorizes HUD to pay 100% of the cost of
supportive services the rule remains unchanged in this regard.
Habitability Standards: Sec. 583.300(b)
Several commenters recommended that HUD modify the habitability
standards in Sec. 583.300(b) with respect to space and security, and
interior air quality. Several commenters recommended that the
regulations specifically prohibit funding projects for congregate
temporary shelters. A few commenters suggested that each resident
should be guaranteed private living space with a lock on the door. One
commenter felt that HUD should require that bedroom sizes in supportive
housing projects conform with other federal housing programs, and that
families have private food storage and preparation facilities. With
respect to interior air quality, one commenter suggested more detailed
regulatory requirements, including a requirement which assures that
building ventilation is sufficient to reduce the risk of transmission
of airborne illnesses.
While there are many ways in which the standards could be expanded
to address more specific issues, the Department believes that the
standards as set forth in Sec. 583.300(b), together with applicable
local health and safety standards, adequately address habitability.
Ongoing Assessment of Supportive Services: Sec. 583.300(d)
Several commenters recommended that HUD modify Sec. 583.300(d) to
require that if a recipient determines that a participant needs a
particular service which is not provided by the recipient, the
recipient must either provide the service, contract out the needed
service, or refer the participant to another agency. The Department
believes that a regulatory provision requiring the recipient to provide
supportive services for any identified need of a participant would
unreasonably burden recipients. However, the Department expects that
recipients who are unable to provide needed services will coordinate
with other providers to assure their availability, to the extent
practicable.
Residential Supervision: Sec. 583.300(e)
Several commenters objected to the residential supervision
requirement for scattered site projects. The Department agrees that in
some situations residential supervision may not be necessary, and that
recipients should make the determination whether residential
supervision is appropriate. Section 583.300(e) has been modified to
reflect this.
Participation of Homeless Persons: Sec. 583.300(f)
Section 583.300(f) requires that at least one homeless person or
formerly homeless person participate on the board of directors or an
equivalent policymaking entity of the Supportive Housing project. This
requirement is waived if an applicant is unable to meet it and presents
a plan, for HUD approval, to otherwise consult with homeless or
formerly homeless persons in considering and making such policies and
decisions. One commenter suggested that a waiver to Sec. 583.300(f) be
granted only where clear evidence exists that homeless persons are
being involved in the decision-making process in meaningful ways. HUD
has not received any requests for a waiver of Sec. 583.300(f) and would
not grant one except where clearly warranted. As with any other
regulatory requirement, grantees who do not meet the provisions of the
rule are subject to the normal sanctions of the program.
One commenter asked to what extent should homeless persons be
involved in the supportive housing facility. As indicated in the
statute, homeless persons should be involved in supportive housing
activities to the maximum extent practicable.
Confidentiality: Sec. 583.300(h)
Two commenters felt that Sec. 583.300(h) should be expanded to
ensure that all sensitive participant information is confidential. The
Department believes that the current regulations adequately address the
issue of confidentiality, and is not aware of any problems involving
the disclosure of confidential information concerning homeless
individuals. If in the future problems arise, the Department will
revisit this issue at that time.
Termination of Housing Assistance: Sec. 583.300(i)
Several commenters were concerned that Sec. 583.300(i) did not
provide adequate due process protections prior to termination of
housing assistance, and argued that participants should be treated as
tenants for purposes of due process prior to eviction. Several
commenters suggested that the Department make clear that the
regulations not preempt any state or local law which guarantees greater
protections during the termination process. Two commenters felt that
the regulations should be more explicit as to the procedures required
prior to termination of housing assistance, and notify homeless
participants of their rights prior to termination. One commenter also
felt that HUD should carefully monitor a recipient's adherence to due
process requirements. Two commenters argued that a violation of program
requirements should not serve as basis for termination of housing
assistance to residents.
Section 583.300(i) requires that a recipient provide a formal
process to a homeless participant that recognizes the homeless
participant's right to due process, prior to termination of a homeless
participant's housing assistance. Currently, the regulations require,
at a minimum, that recipients must provide: (1) Written notice to the
participant which contains a clear statement of the reasons for
termination; (2) a review of the decision, in which the participant is
given the opportunity to present written or oral objections to a person
other than the person (or subordinate of such person) who made or
approved the termination decision; and (3) prompt written notice of the
final decision to the participant. The Department believes that the
current regulations adequately protect a homeless person's due process
rights. With regard to the preemption concern, the Department cannot
affirm that the regulations do not preempt any state or local law. The
Transitional Housing component with its 24-month limitation preempts
such laws.
Finally, the issue of whether a violation of the SHP rules is a
basis for termination of housing assistance has been subject to
considerable debate within the Department. Section 426(i) of the
McKinney Act allows a recipient to terminate assistance if a homeless
participant violates program requirements. Section 583.300(i) allows a
recipient to determine which program violations will result in a
termination of housing assistance; however, section 583.300(i) also
provides that recipients should only terminate assistance in the most
severe cases. At this time, the Department believes that recipients
should continue to have the discretion and flexibility to determine
which program violations serve as the basis of termination of
assistance.
Term of Commitment; Repayment of Grants; Prevention of Undue Benefits:
Sec. 583.305
One commenter objected to the conversion of a project which is no
longer needed for supportive housing to one that serves low income
persons, arguing that if a project is no longer needed for supportive
housing then the project should be approved only for use for the very
low income, rather than just for low income persons. Section 423(b)(3)
of the McKinney Act authorizes the conversion of a project which is no
longer needed for supportive housing to a project for low income
persons. As such, the Department does not have the authority to limit
conversion of SHP projects to serve only very low income persons,
rather than just low income persons.
One commenter objected to the requirement that grantees operate for
at least 20 years a project which was acquired, rehabilitated or
constructed under the SHP unless HUD also provides operating and
supportive service funding for 20 years. Section 423(b)(1) of the
McKinney Act requires that projects which were acquired, rehabilitated
or constructed under the SHP be operated by grantees for the purpose
specified in the application for at least 20 years.
Application Process/Selection Criteria
Rating Criteria: Sec. 583.215
Several commenters recommended that the Department modify the
rating criteria in Sec. 583.215 to specifically include: (a)
Participation of homeless and formerly homeless; (b) provision of
employment opportunities for homeless in the project, (c) due process
protections to be adopted for a particular project; (d) proven
effectiveness of an applicant; or (e) site control by the applicant.
One commenter objected to targeting the ``hardest to serve'' homeless
as a rating criterion, arguing that it was too restrictive. One
commenter objected to the use of innovation as a rating criterion. Two
commenters recommended that the determination of ``hardest to serve''
be made on the local level. One commenter felt that the current rating
criteria will discriminate against rural and suburban communities with
few or no shelters and with a homeless population which is living with
friends and family.
Section 426(b) of the McKinney Act requires that the rating
criteria include: (1) Ability of the applicant to develop and operate a
project; (2) innovative quality of the proposal in providing a project;
(3) need for the type of project proposed by the applicant in the area
to be served; (4) extent to which the amount of assistance to be
provided under this part will be supplemented with resources from other
public and private sources; (5) cost effectiveness of the proposed
project; and (6) extent to which the applicant has demonstrated
coordination with other Federal, State, local, private and other
entities serving homeless persons in the planning and operation of the
project, to the extent practicable.
Section 426(b)(7) also authorizes the Secretary to add additional
criteria, if appropriate, to carry out the SHP in an effective and
efficient manner. In accordance with Sec. 426(b)(7), the first interim
rule added two additional rating criteria: (7) extent to which the
project targets homeless persons living in emergency shelters or in
places not designed for, or ordinarily used as, a regular sleeping
accommodation for human beings; and (8) quality of the project. Earlier
this year, the Department published a second interim rule for SHP in
which the rating criteria were revised to reflect the statutory
flexibility allowed. Accordingly, the first interim rule was modified
by deleting the rating criteria that do not appear in the statute
(i.e., criterion 7 (extent of targeting) and criterion 8 (quality of a
project)), and including the statutory language that allows such other
rating factors as the Department determines to be appropriate. Any
additional rating criteria will now appear in the annual notice of
funds availability (NOFA) and may be adjusted from year to year based
upon experience.
Selecting Applicants: Sec. 583.220
One commenter recommended that HUD modify Sec. 583.220(c) so that
in the event of a tie between applicants HUD would use two rating
criteria, rather than one, to break the tie. This commenter also
suggested that the Department use the rating criteria in 583.215(b)(6)
(``extent to which the applicant has demonstrated coordination with
other Federal, State, local, private and other entities serving
homeless persons in the planning and operation of the project'') and
Sec. 583.215(b)(8) (``quality of the project'') to break a tie, rather
than the rating criterion in Sec. 583.215(b)(3) (``need for the type of
project proposed by the applicant in the area to be served'').
The second interim rule made this an issue to be covered in the
annual NOFA rather than in the regulations. Moreover, based upon HUD's
experience in similar programs and the predecessor programs to the SHP,
the Department does not believe that the use of one factor as a tie
breaker is problematic. (The Department has never had a tie among
applicants at the funding line in the SHP program or predecessor
programs.)
Competitive Distribution of SHP Funds
One commenter objected to the competitive process for selecting
recipients, and suggested that SHP funds be distributed to localities
on a needs basis instead. Section 426(b) of the McKinney Act requires
that the Secretary select applicants through a national competition
based upon statutory selection criteria, and other selection criteria
established by the Secretary.
Miscellaneous Comments
Renewal Grants
One commenter objected to the use of October 28, 1992 in
Sec. 583.235(a) as an arbitrary cutoff date for renewal of grants on a
noncompetitive basis. The Department selected October 28, 1992 as the
cutoff date because that is the date of enactment of the 1992 HCD Act.
No grantee has been excluded from renewing a grant in a predecessor
program as a result of the October 28, 1992 cutoff date.
One commenter suggested that HUD allow grantees who are recipients
of multiple grants to combine these grants into one at the annual
renewal date of any grant to provide administrative cost savings to HUD
and the grantee. The Department agrees that there may be situations
where it is cost effective to combine grants for renewal purposes.
However, this may be done only on a case by case basis, and will not be
addressed in the program regulations.
Technical Assistance: Sec. 583.140
One commenter suggested that HUD provide technical assistance to
help nonprofit providers build the capacity to successfully develop
facilities and programs. Another commenter recommended that HUD provide
technical assistance to service providers on ways to minimize risk of
transmission of infectious diseases.
The first suggestion, since it appears to be for supportive housing
projects, would be an eligible use of technical assistance funds under
the regulations. The second suggestion would be an eligible use of
technical assistance funds under the regulations, if done in
conjunction with supportive housing projects.
Because the first interim rule was ambiguous as to whether HUD
staff could provide technical assistance, the rule has been revised to
make clear that HUD staff may do so. Technical assistance for
supportive housing activities can often be provided most effectively by
HUD staff.
The rule has also been revised to delete the two percent provision
and to clarify the purpose of the technical assistance. While HUD
anticipates reserving no more than two percent annually, the provision
now enables HUD to spend more than that percent as necessary to improve
the capacity of homeless providers and achieve the purpose of the
program.
Resident Rent: Sec. 583.315
Two commenters suggested that Sec. 583.315(b), which addresses the
use of rent, prohibit rent which is set aside for the participant's use
in moving to permanent housing from counting as available income for
public assistance programs. The Department does not have the authority
in this program to exclude rent which is set aside for a participant's
use in moving to permanent housing from counting as available income
for public assistance programs. However, the Department is discussing
this issue with the Department of Health and Human Services.
Waiting Lists
One commenter recommended that the final rule address a housing
authority's use of waiting lists for the SHP. The Department does not
believe that a housing authority's waiting list should necessarily be
used to fill spaces in a supportive housing project. Homeless persons
are often transient, and the Department does not believe that the use
of a waiting list is the most effective way of identifying homeless
persons.
Advertising SHP Projects
Several commenters felt that HUD should add a detailed regulatory
provision for advertising the availability of supportive housing
projects. Some of the suggestions included requiring recipients to post
notices throughout the community, and send written notice to those on
waiting lists with a federal preference based on homelessness. One
commenter felt that a more detailed regulatory provision is necessary
to assure that supportive housing projects are filled in accordance
with fair housing requirements. HUD believes the current regulatory
provisions are adequate with regard to fair housing requirements and
advertising. The language in section 583.325 (b) and (c) addresses
these issues specifically. The regulation states that use of assistance
under this program must comply with the requirements of the Fair
Housing Act and title VI of the Civil Rights Act of 1964, and that
applicants must ensure that homeless persons can obtain information
concerning the availability of supportive housing. Compliance with
these requirements is a matter which is subject to monitoring by HUD.
Serving Community Residents
One commenter suggested that the SHP be more flexible and permit
nonprofit agencies to serve community residents in addition to families
or individuals residing in their facilities. Section 424 of the
McKinney Act authorizes supportive services for homeless persons. The
Department does not have the authority to permit nonprofit agencies to
provide supportive services to community residents who are not
homeless.
Technical Corrections
Commitment of Grant Amounts for Leasing, Supportive Services, and
Operating Costs: Sec. 583.130
This section is amended to clarify that HUD will obligate funds
upon execution of a grant agreement, rather than upon approval of an
application for assistance, as stated in the first interim rule. This
section was in conflict with Sec. 583.410, which states that funds are
obligated when HUD and the applicant execute a grant agreement.
Limitations on Use of Assistance: Sec. 583.150
The Department has added Sec. 583.150(c), Participant control of
site, to clarify that certain uses of SHP funds are not practicable
where a homeless family or individual will eventually own or control
the site. Applicants requesting acquisition, rehabilitation, or new
construction funds must certify that the site will be used for homeless
persons for not less than 20 years. As a practical matter, no applicant
will be able to make this certification where the participant will
eventually control the site. Therefore, this section precludes
applicants from requesting acquisition, rehabilitation, or new
construction funds under such circumstances.
Displacement, Relocation, and Acquisition: Sec. 583.310
The Department is making three changes to this section. At section
583.310(f) the rule is clarified regarding the definition of
``displaced person'' when site changes occur. The rule states that one
of the determining factors is the date the recipient submits a request
for an application amendment to HUD.
At section 583.310(g) the term ``selection of the project site, if
later'' is deleted because it is unnecessary. Formerly the sentence
indicated that the term initiation of negotiations occurred at the time
of execution of grant agreement or at project selection, if later.
However, site control must be obtained before grant agreement execution
and, therefore, could not occur at a later time.
A definition of ``project'' consistent with the use of the term
under the Uniform Relocation Act is added at section 583.310(h).
Resident Rent: Sec. 583.315
This section is amended to include the age of family members in the
calculation of resident rent in Sec. 583.315(a)(1). This was
inadvertently left out of the interim rule.
IV. Other Matters
A. Environmental Impact
A Finding of No Significant Impact with respect to the environment
was made on the Interim Rule in accordance with HUD regulations in 24
CFR Part 50 which implements Section 102(2)(C) of the National
Environmental Policy Act of 1969, 42 U.S.C. 4332. That Finding is
available for public inspection during regular business hours in the
Office of the Rules Docket Clerk, Office of the General Counsel,
Department of Housing and Urban Development, Room 10276, 451 Seventh
Street SW, Washington, DC 20410. Since the environmental provisions of
this Final Rule are unchanged from those published in the Interim Rule,
the original Finding of No Significant Impact is still valid.
B. Executive Order 12612, Federalism
The General Counsel has determined, as the Designated Official for
HUD under section 6(a) of Executive Order 12612, Federalism, that the
provisions in the rule requiring applicants to assume the
responsibilities for environmental review, decisionmaking, and action
under NEPA and other environmental authorities have Federalism
implications. While the assignment of these responsibilities under
section 104(g) of the Housing and Community Development Act of 1974 is
discretionary with HUD, it is authorized by and clearly the intent of
section 443 of the McKinney Act. Therefore, the policy is not subject
to review under Executive Order 12612.
C. Executive Order 12606, the Family
The General Counsel, as the designated official under Executive
Order 12606, The Family, has determined that some of the policies in
this proposed rule may have a potential significant impact on the
formation, maintenance, and general well-being of participating
homeless families. Participation of families in the program can be
expected to support family values, by helping families remain together;
by enabling them to live in decent, safe, and sanitary housing; and by
offering the supportive services that are necessary to acquire the
skills and means to live independently in mainstream American society.
Since the impact on the family is considered to be a beneficial one, no
further review is necessary.
D. Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The program
has been designed to allow applicants to design programs that provide
housing and supportive services to homeless families and individuals
with as little regulation as possible under the existing law.
E. Regulatory Agenda
This rule was listed as item no. 1653 in the Department's
Semiannual Agenda of Regulations published on April 25, 1994 (59 FR
20424, 20462) under Executive Order 12866 and the Regulatory
Flexibility Act.
List of Subjects in 24 CFR Part 583
Homeless, Rent subsidies, Reporting and recordkeeping requirements,
Supportive housing programs--housing and community development,
Supportive services.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance program numbers are
14.235 and 14.236.
For the reasons stated in the preamble, 24 CFR part 583 is amended
by adopting the interim rule published in the Federal Register on March
15, 1993 (58 FR 13870) and amended by an interim rule published in the
Federal Register on May 10, 1994 (59 FR 24252) as final with the
following amendments to read as follows:
PART 583--SUPPORTIVE HOUSING PROGRAM
1. The authority citation for part 583 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 11389.
2. In Sec. 583.5, the introductory text for the definition of
``Supportive services'' is revised to read as follows:
Sec. 583.5 Definitions.
* * * * *
Supportive services means services, which may be designed by the
recipient or program participants, designed to address the special
needs of the homeless persons to be served by the project. Supportive
services include, but are not limited to: * * *
* * * * *
3. In Sec. 583.100, paragraphs (b)(3), (b)(4) and (b)(5) are
redesignated (b)(4), (b)(5) and (b)(6), respectively, and a new
paragraph (b)(3) is added to read as follows:
Sec. 583.100 Types and uses of assistance.
* * * * *
(b) * * *
(3) Bring existing facilities up to a level that meets State and
local government health and safety standards;
* * * * *
4. In Sec. 583.115, paragraph (b)(2) is amended by adding a
sentence to the end, to read as follows:
Sec. 583.115 Grants for leasing.
* * * * *
(b) * * *
(2) Leasing individual units. * * * Recipients may use grant funds
in an amount up to one month's rent to pay the non-recipient landlord
for any damages to leased units by homeless participants.
5. In Sec. 583.120, paragraph (a) is amended by revising the first
sentence, to read as follows:
Sec. 583.120 Grants for supportive services costs.
(a) General. HUD will provide grants to pay (as described in
Sec. 583.130 of this part) for the actual costs of supportive services
for homeless persons for up to five years. * * *
* * * * *
6. Section 583.130 is revised to read as follows:
Sec. 583.130 Commitment of grant amounts for leasing, supportive
services, and operating costs.
Upon execution of a grant agreement covering assistance for
leasing, supportive services, or operating costs, HUD will obligate
amounts for a period not to exceed five operating years. The total
amount obligated will be equal to an amount necessary for the specified
years of operation, less the recipient's share of operating costs.
(Approved by the Office of Management and Budget under OMB Control
Number 2506-0112)
7. Section 583.140 is revised to read as follows:
Sec. 583.140 Technical assistance.
(a) General. HUD may set aside funds annually to provide technical
assistance, either directly by HUD staff or indirectly through third-
party providers, for any supportive housing project. This technical
assistance is for the purpose of promoting the development of
supportive housing and supportive services as part of a continuum of
care approach, including innovative approaches to assist homeless
persons in the transition from homelessness, and promoting the
provision of supportive housing to homeless persons to enable them to
live as independently as possible.
(b) Uses of technical assistance. HUD may use these funds to
provide technical assistance to prospective applicants, applicants,
recipients, or other providers of supportive housing or services for
homeless persons, for supportive housing projects. The assistance may
include, but is not limited to, written information such as papers,
monographs, manuals, guides, and brochures; person-to-person exchanges;
and training and related costs.
(c) Selection of providers. From time to time, as HUD determines
the need, HUD may advertise and competitively select providers to
deliver technical assistance. HUD may enter into contracts, grants, or
cooperative agreements, when necessary, to implement the technical
assistance.
8. In Sec. 583.150, paragraph (b) is removed, paragraph (c) is
redesignated as (b), and a new paragraph (c) is added to read as
follows:
Sec. 583.150 Limitations on use of assistance.
* * * * *
(c) Participant control of site. Where an applicant does not
propose to have control of a site or sites but rather proposes to
assist a homeless family or individual in obtaining a lease, which may
include assistance with rent payments and receiving supportive
services, after which time the family or individual remains in the same
housing without further assistance under this part, that applicant may
not request assistance for acquisition, rehabilitation, or new
construction.
9. In Sec. 583.300, paragraph (e) is amended by revising the first
sentence, to read as follows:
Sec. 583.300 General operation.
* * * * *
(e) Residential supervision. Each recipient of assistance under
this part must provide residential supervision as necessary to
facilitate the adequate provision of supportive services to the
residents of the housing throughout the term of the commitment to
operate supportive housing. * * *
* * * * *
10. In Sec. 583.310, paragraphs (f)(1)(i) and (g) are revised, and
paragraph (h) is added, to read as follows:
Sec. 583.310 Displacement, relocation, and acquisition.
* * * * *
(f) Definition of displaced person. (1) For purposes of this
section, the term ``displaced person'' means a person (family,
individual, business, nonprofit organization, or farm) that moves from
real property, or moves personal property from real property
permanently as a direct result of acquisition, rehabilitation, or
demolition for supportive housing projects assisted under this part.
The term ``displaced person'' includes, but may not be limited to:
(i) A person that moves permanently from the real property after
the property owner (or person in control of the site) issues a vacate
notice, or refuses to renew an expiring lease in order to evade the
responsibility to provide relocation assistance, if the move occurs on
or after the date the recipient submits to HUD the application or
application amendment designating the project site.
* * * * *
(g) Definition of initiation of negotiations. For purposes of
determining the formula for computing the replacement housing
assistance to be provided to a residential tenant displaced as a direct
result of privately undertaken rehabilitation, demolition, or
acquisition of the real property, the term ``initiation of
negotiations'' means the execution of the agreement between the
recipient and HUD.
(h) Definition of project. For purposes of this section, the term
``project'' means an undertaking paid for in whole or in part with
assistance under this part. Two or more activities that are integrally
related, each essential to the others, are considered a single project,
whether or not all component activities receive assistance under this
part.
11. In Sec. 583.315, paragraph (a)(1) is revised to read as
follows:
Sec. 583.315 Resident rent.
(a) Site control. (1) 30 percent of the family's monthly adjusted
income (adjustment factors include the number of people in the family,
age of family members, medical expenses, and child care expenses);
* * * * *
Dated: July 6, 1994.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 94-17496 Filed 7-18-94; 8:45 am]
BILLING CODE 4210-29-P
