[Federal Register Volume 59, Number 71 (Wednesday, April 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8897]


[[Page Unknown]]

[Federal Register: April 13, 1994]


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Part V





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Assistant Secretary for Public and Indian Housing



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24 CFR Parts 945 and 960




Designated Housing--Public Housing Designated for Occupancy by 
Disabled, Elderly, or Disabled and Elderly Families; Final Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Public and Indian Housing

24 CFR Parts 945 and 960

[Docket No. R-94-1694; FR-3425-F-02]
RIN 2577-AB27

 
Designated Housing--Public Housing Designated for Occupancy by 
Disabled, Elderly, or Disabled and Elderly Families

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Final rule.

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SUMMARY: This final rule implements section 622(a) of the Housing and 
Community Development Act of 1992. Section 622(a) provides public 
housing agencies (PHAs) with the option, subject to the requirements of 
this part, to designate public housing projects, or portions of public 
housing projects, for occupancy by disabled families; elderly families; 
or mixed populations (i.e., disabled families and elderly families).
    This final rule also amends existing regulations, which currently 
provide for preference for elderly families and disabled families, and 
discretionary preference for near-elderly families in ``public housing 
projects for the elderly''--that is, public housing projects that house 
mixed populations (``mixed population projects''). This final rule 
continues to provide for preference for disabled families and elderly 
families in ``mixed population projects.'' However, certain amendments 
were made to include new and revised definitions pertaining to 
``family'' as set forth in section 621 of the 1992 Act, and to provide 
for recognition of the designated housing process.

EFFECTIVE DATE: May 13, 1994.

FOR FURTHER INFORMATION CONTACT: Edward Whipple, Director, Occupancy 
Division, Department of Housing and Urban Development, 451 Seventh 
Street, SW., room 4206, Washington, DC 20410. Telephone number (202) 
708-0744 (this is not a toll-free number). Hearing-impaired persons may 
contact these offices via TDD by calling (202) 708-9300 or 1-(800) 877-
8339.

SUPPLEMENTARY INFORMATION:

I. Background--Proposed Rule

    On January 7, 1994 (59 FR 1244), the Department published a 
proposed rule that would implement section 622(a) of the Housing and 
Community Development Act of 1992 (Pub. L. 102-550, approved October 
28, 1992) (the 1992 Act). Section 622(a) amended section 7 of the 
United States Housing Act of 1937 (the 1937 Act) (42 U.S.C. 1437e) to 
provide public housing agencies (PHAs)1 with the option, subject 
to certain requirements, to designate public housing projects, or 
portions of public housing projects for occupancy by (1) disabled 
families; (2) elderly families; or (3) mixed populations (``designated 
housing''). (Section 7 of the 1937 Act, previously titled ``Congregate 
Housing'' was retitled ``Designated Housing'' by the 1992 Act. Unless 
the context indicates otherwise, the references to section 7 in this 
preamble are to section 7 as amended by section 622(a) of the 1992 
Act.)
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    \1\ Section 626 of the 1992 Act provides that the amendments 
made by subtitle B of title VI of the 1992 Act (which amendments 
pertain to the authority of PHAs to provide designated housing) 
shall not apply to lower income housing developed or operated 
pursuant to a contract between HUD and an Indian housing authority.
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    The January 7, 1994 proposed rule incorporated the statutory 
requirements for obtaining approval to designate public housing for 
occupancy by disabled families or by elderly families, and supplemented 
the statutory requirements with regulatory ones. By the expiration of 
the public comment period on March 8, 1994, 101 comments were received. 
Approximately another 200 comments were received within the two weeks 
following the expiration of the public comment period. All comments 
timely submitted were reviewed and considered. In order not to delay 
final rulemaking on designated housing, the Department made every 
effort to review the 200 comments received after the close of the 
public comment period. The Department believes that the comments 
addressed in the preamble to this rule reflect the major concerns and 
issues raised by all commenters.
    The commenters included housing authorities, associations 
representing housing authorities, elderly persons, organizations 
representing the interests of elderly persons, persons with 
disabilities, organizations representing persons with disabilities, 
State and local offices on aging, and State and local offices that 
address such matters as mental health, human services and 
rehabilitative services. The majority of the commenters were housing 
authorities.
    A number of commenters expressed support for the Department's 
proposed implementation of section 622, and praised the Department's 
efforts to strike a balance between section 622 and the civil rights 
protections for persons with disabilities contained in the Fair Housing 
Act, section 504 of the Rehabilitation Act of 1973 and the Americans 
with Disabilities Act. However, the majority of the commenters were 
highly critical of the proposed rule. While the commenters in favor of 
the proposed rule were primarily persons with disabilities, their 
advocacy organizations, and State and local offices that address 
disability issues, supporters of the proposed rule also included 
housing authorities. While the commenters opposed to the rule were 
predominantly housing authorities, associations representing housing 
authorities, elderly persons and their advocacy organizations, and 
State and local offices that address elderly issues, these commenters 
were joined by persons with disabilities and their advocacy 
organizations in voicing objections to sections of the proposed rule.
    The provisions in the proposed rule that received the greatest 
criticism were those provisions that addressed the allocation plan and 
the supportive service plan requirements. The commenters stated that 
the Department made both plans unnecessarily complex and unduly 
burdensome, with the result being that it would be impossible for PHAs 
to obtain approval to designate housing for elderly families or 
disabled families.
    The Department is appreciative of all comments submitted on the 
January 7, 1994 proposed rule. While many commenters simply expressed 
their general support or opposition to the proposed rule, other 
commenters carefully reviewed the rule, and offered detailed and 
helpful comments on regulatory implementation of section 622. The 
Department is aware that PHAs and other members of the public are 
anxious to have final regulations issued for section 622, and that the 
rulemaking process has taken longer than anticipated or desired. The 
Department believes, however, that this final rule, which takes into 
consideration public comment, improves the designated housing process 
and better serves PHAs and the families that they house.

II. Clarification of Relationship of Designated Housing Process to 
Statutes Prohibiting Nondiscrimination Against Elderly Persons or 
Persons With Disabilities

    Certain questions and issues raised by a few commenters made the 
Department aware that there may be some misunderstanding about the 
obligations of PHAs that operate designated housing under statutes that 
contain civil rights protections for elderly persons and persons with 
disabilities.
    Notwithstanding the permissibility of PHAs to designate public 
housing projects for occupancy by elderly families or by disabled 
families, PHAs must comply with section 504 of the Rehabilitation Act 
of 1973, the Fair Housing Act, the Age Discrimination Act, the 
Americans with Disabilities Act, and other applicable civil rights 
statutes and their implementing regulations. Section 622 does not alter 
the obligations and requirements imposed on PHAs by these statutes and 
their implementing regulations.
    For example, a PHA may not deny an elderly person who also is a 
person with disabilities admission to a designated project for elderly 
families, in whole or in part, on the basis of the elderly person's 
disability. Similarly, a PHA may not deny a person with disabilities 
admission to a designated project for disabled families on the basis of 
the person's age.
    The Department also notes that several commenters criticized the 
proposed rule on the basis that it appeared overly concerned with the 
housing needs of non-elderly disabled families. The Department does not 
believe that the concern for the housing needs for non-elderly disabled 
families as expressed in the proposed rule, and in this final rule, is 
unfounded or inconsistent with the statute.
    The Department is aware, as was the Congress in enacting this 
legislation, that the majority of projects to be designated will be for 
elderly families, and the group that will be most affected by this 
designation will be non-elderly disabled families. Even without the 
requirement to submit a supportive service plan in addition to the 
allocation plan, persons with disabilities are not demanding their own 
separate housing projects as are elderly families. Thus, out of concern 
that non-elderly disabled persons may have public housing assistance 
reduced as a result of designation of projects for elderly families, 
the Congress requires in section 622 that a PHA, in planning how it 
will allocate its housing resources among the families that it serves, 
must secure additional housing resources ``that will be sufficient to 
provide assistance to not less than the number of non-elderly disabled 
families that would have been housed if occupancy in such units were 
not restricted pursuant to this section.'' The proposed rule's concern, 
and that of this final rule, that persons with disabilities not be 
under-served by the designated housing process is not inconsistent with 
the statute.

III. Overview of the Final Rule

    This section provides a summary of the significant changes made to 
the designated housing process by this final rule in response to public 
comment. This section also discusses those provisions of the proposed 
rule about which substantial comments were received requesting change, 
and for which the Department declined to adopt the recommended change.

Additional Housing Resources

Inclusion of Additional Housing Resources for Which PHAs ``Plan To 
Apply''
    The final rule revises Secs. 945.103 and 945.203 which address 
additional housing resources. As revised, these sections provide that 
additional housing resources that a PHA may use to meet the housing 
needs of non-elderly disabled families who would have been housed in a 
project but for its designation as a project for elderly families 
include ``housing resources for which the PHA plans to apply during the 
period covered by the allocation plan and that it has a reasonable 
expectation of obtaining.''
    The commenters on this provision are correct that the statute 
permits inclusion in the allocation plan of housing resources for which 
the PHA ``plans to apply.'' The statute also provides that projections 
contained in the allocation plan must be ``reasonable''. Thus, in 
including in an allocation plan a description of those housing 
resources for which the PHA intends to apply, the PHA must have a 
reasonable expectation of obtaining these housing resources. 
Additionally, the time period within which the PHA plans to apply for 
additional housing resources should be limited, and the regulation 
limits the time period to that period covered by the allocation plan.
    By ``reasonable expectation of obtaining,'' the Department means 
that circumstances and factors relevant to the PHA's application for 
additional housing resources, indicate that the PHA has a reasonable 
chance to obtain these additional resources. For example, if the 
Department intends to make 3,000 units available on a competitive basis 
in a given region, and the PHA applies for 2,500 units, the chance that 
the PHA will be awarded 2,500 of the 3,000 units to be competitively 
distributed is not reasonable.
    Commenters who requested the inclusion of ``planned'' housing 
resources in the allocation plan noted that these housing resources can 
be further addressed in the biennial updates of the allocation plan. 
For example, if a PHA relies upon using housing resources for which it 
intends to apply, and subsequently fails to apply for the housing 
resources, or applies but was unsuccessful in obtaining the additional 
housing resources, the PHA must account for the lack of the additional 
housing resources in the biennial update of the allocation plan. 
Depending upon the reasons that the ``planned'' additional housing 
resources were not obtained, the Department can take appropriate 
action, including changes in the designation of the project, or require 
the PHA to take appropriate action at the time of review of the 
biennial update.
Additional Housing Resources Must Be Those Owned or Controlled, or To 
Be Owned or Controlled by PHAs
    The Department did not adopt the suggestion of several commenters 
that the final rule include housing resources owned by other entities 
that are willing to work in conjunction with the PHA. As noted above, 
the statute is clear that the housing resources to be addressed in the 
allocation plan are those that a PHA owns or controls, or will 
eventually own or control. Section 622 provides that a PHA must have 
``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 * * *.''
Revision to List of Examples of Additional Housing Resources for 
Persons With Disabilities
    The final rule removes the majority of the examples of additional 
housing resources that a PHA could utilize to provide housing 
assistance to the non-elderly disabled persons that would have been 
housed in a project were it not for designation of the project as a 
project for elderly families. On further consideration, the examples of 
additional housing resources, which did not constitute an all inclusive 
list, are more appropriately included in a notice or Handbook. The 
final rule retains examples of those additional housing resources that 
will probably be utilized by the majority of PHAs as additional housing 
resources.
    For the benefit of commenters who found the list helpful, the 
possible options for additional housing resources for persons with 
disabilities include but are not limited to the following:
    (1) Normal turn-over of units in existing projects;
    (2) Providing local preferences for a specific number of non-
elderly disabled persons for a specific general occupancy project or 
projects, in accordance with the preference provisions of 24 CFR 
960.211; for mixed population projects, as provided in 24 CFR part 960, 
subpart D; or for section 8 certificates and vouchers. Within the 
context of the PHA's overall preference system, there must be a 
demonstration that the preference will result in the desired increase 
in the number of non-elderly disabled persons housed;
    (3) Convert a project that currently houses mixed populations to 
general occupancy project, which provide a more integrated setting;
    (4) Allocation of a certain number of existing or new public 
housing units or section 8 certificates or vouchers, which will be 
accompanied by a supportive services package, which may be achieved by 
the PHA entering into an agreement with a supportive service provider 
to make these units or certificates or vouchers available in exchange 
for the provider delivering supportive services to disabled families. 
Clients of the service provider delivering the supportive services may 
not be provided these units or certificates or vouchers before other 
non-elderly disabled families already in occupancy or on the PHA's 
waiting list;
    (5) Use of modernization funds to reconfigure units and buildings 
to appropriate sizes or uses for non-elderly disabled families;
    (6) Designation of projects for occupancy only by disabled families 
(projects designated for occupancy by disabled families must have a 
supportive service plan in accordance with the requirements of 
Sec. 945.205);
    (7) Allocation to non-elderly disabled families of units in other 
projects owned or controlled by the PHA that will be vacated by elderly 
families who will relocate to the project designated for occupancy by 
elderly families;
    (8) Use of public housing development funds, or funds appropriated 
for major reconstruction of obsolete public housing to provide housing 
for disabled families;
    (9) Use of all or a portion of net increases in units available for 
occupancy in a project as a result of the rehabilitation of vacant 
units in this project which had been uninhabitable.

Projects Subject to the Requirements of Part 945

Clarification of Exemption From Designation Requirements for Mixed 
Population Projects Under Part 960
    The majority of commenters understood that a PHA with a project 
that houses a mixed population of elderly families and disabled 
families (``mixed population project''), and that intends to continue 
to house a mixed population of elderly families and disabled families, 
is not required to comply with the designation requirements of new part 
945. Other commenters stated that the proposed rule was not clear 
whether mixed population projects were required to comply with the part 
945 designation requirements.
    The final rule includes additional language to clarify that mixed 
population projects are exempt from the designation requirements of 
part 945. The final rule also clarifies that the fact that a mixed 
population project houses persons with disabilities does not require a 
supportive service plan, as does a project that is designated for 
occupancy by disabled families under part 945.
Supportive Services Required Only for Designated Housing for Disabled 
Families
    Several commenters expressed confusion about when supportive 
services are required by the designated housing process. PHAs are 
required by statute, and by this regulation, to provide or obtain 
supportive services only for projects designated for occupancy by 
disabled families. However, in designating a project for elderly 
families, the PHA must consider the needs of non-elderly disabled 
applicants for services currently provided in the project to be 
designated for elderly families.
    Section 7(d) provides, in relevant part, that ``in designing, 
developing, otherwise acquiring and operating, designating and 
providing housing and assistance under this title, each public housing 
agency shall meet to the extent practicable, the housing and service 
needs of eligible families applying for assistance under this title as 
provided in any allocation plan of the agency approved under subsection 
(f).''
    In an effort to reflect ``the extent practicable'' language of 
section 7(d), Sec. 945.103 of the proposed rule contained a paragraph 
(paragraph (d)) which stated that the requirements of Sec. 945.205 to 
submit a supportive service plan for approval to designate public 
housing for disabled families was not to be construed to mean that PHAs 
may provide supportive services only to those disabled families 
occupying designated housing for disabled families.
    The purpose of paragraph (d) in Sec. 945.103 was to encourage PHAs 
that may be currently providing supportive services to elderly families 
occupying public housing to continue to provide those services. The 
fact that a PHA may be able to deliver supportive services, or is 
currently delivering supportive services to elderly families, or to 
disabled families not occupying a designated project does not bring the 
PHA within the scope of the requirements of part 945.
    Because of the confusion over this issue expressed by a number of 
commenters, the final rule removes paragraph (d) in Sec. 945.103 from 
the final rule. The Department, however, continues to encourage PHAs to 
meet to the extent practicable the housing and supportive service needs 
of all eligible families applying for assistance.

New and Revised Definitions

Defining ``Mixed Population Project''
    The final rule provides a definition for ``mixed population 
project.'' ``Mixed population project'' is defined to mean a public 
housing project reserved for occupancy by elderly families and disabled 
families. As discussed in the preceding section, these projects are not 
required to meet the designation requirements of part 945, but must be 
reserved for occupancy by elderly families and disabled families in 
accordance with the requirements of 24 CFR part 960.
Revising the Definitions for the Various Categories of ``Families''
    The final rule also introduces a new term to clarify the specific 
category of families under discussion. Instead of referring frequently, 
and awkwardly, as was done in the proposed rule to ``families who are 
members of the group for whom the project is to be designated for 
occupancy,'' the final rule uses the term ``designated family.''
    ``Designated family'' is defined to mean the category of families 
for whom a project has been designated. Depending upon the designation 
to be made, designated families will be either elderly families or 
disabled families.
    The final rule provides, as did the proposed rule, definitions for 
the statutory terms ``families,'' ``elderly families,'' ``disabled 
families,'' and ``near-elderly families,'' but the final rule defines 
these terms in their singular context rather than the plural context. 
Additionally, the final rule makes some clarifying changes to these 
definitions.
    ``Elderly family'' is defined to clarify that an elderly family may 
include one or more elderly persons with disabilities, and members of 
the family who are not elderly.
    ``Near-elderly family'' is defined to clarify that a near-elderly 
family may include one or more near-elderly persons with disabilities, 
and members of the family who are not near-elderly.
    ``Disabled family'' is revised to clarify that this term includes a 
person with disabilities who is also elderly or near-elderly. An 
elderly person with disabilities would be eligible to reside in a 
designated project-disabled, designated project-elderly, or a mixed 
population project, subject, of course, to availability of units in 
these projects, and the person's place on the waiting list.
    As noted in the preamble to the January 7, 1994 proposed rule, the 
definitions for ``family,'' ``elderly family,'' and related terms are 
currently contained in 24 CFR part 912, entitled ``Definition of Family 
and Other Related Terms; Occupancy by Single Persons.'' Part 912, 
however, has not yet been amended to reflect the revised definitions 
provided by section 621 or to add the new terms defined in section 621. 
Under separate final rulemaking, part 912 will be amended to include 
several of the revised and new definitions set forth in section 621 
(and which are included in this final rule). When the part 912 rule is 
published in final, the Department will amend the regulations in part 
945 to remove the definitions from part 945 and to cross-reference to 
the definitions in part 912. The advantage in keeping these definitions 
in part 912 (which was established to define ``family'' and related 
terms) is that part 912 offers a convenient location to place the 
definitions for terms that are applicable to all public housing 
programs.
Revised Definition of ``Service Provider''
    In response to the many public comments that objected to the 
``licensing requirement'' for service providers, the final rule revises 
the definition of ``service provider'' to remove the requirement that 
the service provider must be licensed under State or local law. In lieu 
of this requirement, the final rule provides that the service provider 
be ``qualified and experienced'' in the provision of supportive 
services. ``Qualified'' means that if the type of supportive services 
to be delivered by the service provider requires a State or local 
license, the service provider must be in compliance with these laws.
Revised Definition of Supportive Services
    In response to public comment, specifically by persons with 
disabilities, the definition of ``supportive services'' is revised to 
clarify that this term refers to non-housing services available to 
persons residing in a development for which there is a need and demand 
by disabled families. The qualifier of ``non-housing'' before the word 
``services'' is to clarify that supportive services do not include 
plumbing, minor repair and maintenance of dwelling units that the 
housing authority is required to provide under the lease. The provision 
of supportive services in a designated project does not relieve the PHA 
of its obligation to provide similar services in other developments for 
persons with disabilities as required by 24 CFR part 8.
    The inclusion of the phrase ``for which there is a need and 
demand'' is to emphasize that PHAs should not designate public housing 
projects for occupancy by disabled families unless the disabled 
families served by the PHA and to whom the PHA intends to offer 
occupancy in the designated project clearly indicate a need and demand 
for the proposed supportive services. The consensus among commenters 
who indicated that they were persons with disabilities or who 
represented the interests of persons with disabilities was that 
designated housing for disabled families is not the preferred 
residential setting of persons with disabilities.

Allocation Plan--Development and Contents

    The final rule significantly consolidates and streamlines the 
information required to be included in the allocation plan, without, 
however, reducing information necessary to determine the possible 
adverse impact that the designation process may have on elderly 
families or disabled families, particularly non-elderly disabled 
families.
Removal of Allocation Plan Objectives
    Section 945.203(a)(2) of the proposed rule contained language that 
encouraged PHAs, in developing their allocation plan to strive to 
provide, regardless of the designation to be made, as broad a range of 
housing choice as possible to elderly families and disabled families 
with respect to the level of supportive services, and availability of 
accessible units. Additionally, this section stated that PHAs should 
strive to provide, regardless of the designation to be made, housing 
for disabled families in the most integrated setting possible.
    Several commenters stated that although these objectives are 
laudable, their inclusion in a regulation is inappropriate, and at 
variance with the statutory requirements. Other commenters stated that 
the inclusion of these objectives in the rule added to the complexity 
of the rule because it was unclear whether these objectives were 
intended to be advisory or mandatory, and it was unclear whether a PHA 
could designate a project for elderly families if these objectives were 
not met. A few commenters stated that the final rule should be revised 
to require compliance with these objectives.
    The objectives listed in Sec. 945.293(a)(2) of the proposed rule 
are advisory and not mandatory. The Department agrees with the 
commenters that these objectives are laudable, but acknowledges that 
these objectives are just that--``objectives'' and not 
``requirements''. Accordingly, to comply with the statute and minimize 
confusion concerning what is required to be addressed in the plan, and 
what is not, the final rule removes these objectives from the 
regulation. The Department is confident that without the regulatory 
reminder, PHAs will strive to meet these objectives. The Department's 
confidence is based in part on the improved public participation 
procedures for allocation plan development required by this final rule, 
and which are discussed below. The Department believes that these 
procedures will provide PHAs with valuable input on proposed allocation 
plans, including any possible problems, and options for expanding 
housing choice and creating integrated settings.
Revised Consultation Procedures for the Plan Development
    A number of commenters criticized the ``public consultation 
process'' of the proposed rule on the basis that the rule simply 
mirrored the statutory language, and failed to provide adequate 
guidance on the extent of consultation involved. The Department found 
merit in the commenters' criticism and the final rule provides for a 
two-stage consultation process.
    The first consultation occurs at the pre-plan development stage, 
and the final rule specifies the parties that must be consulted at a 
minimum. The second consultation occurs after plan development, but 
before submission of the plan to the Department. The final rule 
requires the PHA to provide for review and comment on the allocation 
plan by all members of the public. This two-stage consultation process 
was recommended by several commenters.
    For the first stage of the consultation process, the final rule 
requires the PHA to consult with the State or unit of general local 
government where the project is located. (In response to public comment 
the phrase ``where the project was located'' was changed from the 
proposed rule phrase of ``in whose jurisdiction the area served by the 
PHA is located.'') The final rule also provides for PHAs to consult 
with representative advocacy groups, where these groups exist, for each 
of the following categories of families: Disabled families, elderly 
families and families with children. The final rule establishes 
consultation with public housing residents (again in the pre-plan 
development stage) by requiring consultation with the representatives 
of the residents of the buildings proposed for designation, as a 
minimum requirement.
    For the second stage of the consultation process, the final rule 
provides for public participation review and comment on the plan. The 
commenters stated that this type of public participation process would 
provide all families affected by the designation with the opportunity 
to express their support, voice their objections, and offer comments on 
the proposed allocation plan. The Department agrees with the 
commenters, and the final rule requires that following completion of 
the draft allocation plan (and the draft of any update of the 
allocation plan) the PHA shall:
    (1) Issue public notices regarding its intent to create designated 
housing and the availability of the draft allocation plan;
    (2) Contact those parties, with whom the PHA is required by 
regulation to consult, and other individuals and agencies that 
expressed an interest in the PHA's plan;
    (3) Allow not less than 30 days for public comment on the draft 
allocation plan;
    (4) Make free copies of the draft allocation plan available upon 
request and in accessible format, when appropriate; and
    (5) Conduct at least one public meeting on the draft allocation 
plan.
    The requirement to consult with certain groups and individuals, and 
the requirement to provide public participation in the development of 
the allocation plan is to assist the PHA in better identifying issues, 
problems, and benefits involved in the proposed action. However, the 
final decision concerning the project to be designated, and how the PHA 
proposes to allocate its available housing resources rests with the 
PHA.
Submission of Summary of Comments, and Not Transcripts
    The final rule continues to allow PHAs to submit a summary of 
comments received on the allocation plan. A few commenters stated that 
submission of a summary of the comments is in conflict with the 
statutory requirement.
    The statute provides, in relevant part, that the allocation plan 
shall include ``any comments of agencies, organizations or persons with 
whom the PHA consults.'' The Department believes that the statutory 
language is sufficiently broad to permit submission of a summary of the 
comments received on the allocation plan. The PHA must maintain the 
original comments on file, and must make these comments available for 
inspection by the Department and the public.
    Other commenters stated that the proposed rule was unclear whether 
transcripts of meetings were required, and if transcripts were 
required, the commenters stated that this requirement is too 
burdensome. In referring to transcripts of meetings in the proposed 
rule, the Department did not intend to require a transcript of a 
meeting. Rather, the proposed rule intended to require retention of a 
transcript if a PHA decided to have a transcript made of a meeting. The 
final rule, however, removes all references to meeting transcripts. If 
taken, the PHA should maintain the transcript on file, together with 
comments received on the allocation plan, to be made available for 
inspection by the public. Comments made at a meeting by members of the 
public should be included in the summary of comments.
Retention of Five Year Recordkeeping Requirement for Comments
    Several comments complained that the five year recordkeeping 
requirement for the retention of comments submitted on the allocation 
plan was too lengthy a period. The commenters suggested that a two-year 
retention period should be sufficient.
    The Department disagrees with the commenters. PHAs should maintain 
the original comments received on the allocation plan to cover at least 
two biennial updates. The Department believes that the five-year record 
retention period is in the best interest of PHAs, and is not unduly 
burdensome.
Removal of Requirement To Discuss Advantages and Disadvantages of 
Designation
    The final rule removes the requirement for the PHA to address in 
the allocation plan the advantages and disadvantages that the choice of 
designation is expected to have on families served by the PHA. The 
Department agrees with the commenters that the advantages and 
disadvantages should be apparent by the information provided in the 
allocation plan.
Retention of Requirement To Document the Number of Families Who Will Be 
Denied or Delayed Housing
    A few commenters requested that the final rule not include the 
statutory requirements for PHAs to ``document the number and duration 
of instances in which housing assistance for eligible applicants will 
be denied or delayed by the agency because of a lack of appropriately 
designated units.'' The Department declines to remove this requirement 
from the rule because it is a statutory requirement.
Clarification That Delays of Concern Are Those That Are Caused by the 
Designation Process
    In response to public comment, the final rule clarifies that the 
denial of or delay in housing assistance with which the Department is 
concerned in part 945 is that which results from the designation of 
project. Delays that are caused by matters unrelated to the designation 
process are not those that will result in re-evaluation of the 
appropriateness of a PHA's designation of a project. For example, as 
one commenter noted, some PHAs have very low turn-over in their 
projects that results in denial of or delay in housing assistance that 
is unrelated to the designation process. Also, a PHA that implements 
stricter screening procedures can be expected to have an increased rate 
of denial of housing assistance among all applicants.
Determining the Extent of Denial of or Delay in Housing Assistance
    Several commenters indicated that they were uncertain what the 
statute meant by ``excessive,'' and requested the Department define 
``excessive'' in terms of a number or percentage. Instead of defining 
this term, the Department has replaced ``excessive'' with 
``substantial.''
    As discussed in the previous section, there may be a variety of 
circumstances having nothing to do with the designation of housing that 
may give rise to delays in housing assistance. The Department is 
interested in knowing whether the designation of project under part 945 
is causing a denial of or delay in housing assistance for a substantial 
number of tenants. That is, has the number of applicants denied housing 
assistance increased as a result of the designation, or (or perhaps 
also) has there been an increase (a lengthening) in the duration of 
time an applicant must wait for housing assistance as a result of the 
designation.
Revision to Requirement To Maintain Access to Similar Services and 
Housing Facilities
    The proposed rule required PHAs to describe the steps to be taken 
to ensure that disabled families (if a project was to be designated for 
elderly families) and elderly families (if a project was to be 
designated for disabled families) maintain access to services and 
housing facilities similar to those that otherwise would have been 
available to them at the project if the project had not been 
designated.
    A number of commenters objected to this requirement on the basis 
that the regulatory language was too broad, and it would be impossible 
for PHAs to guarantee similar access to all services and amenities 
available to them before designation. The Department agrees with the 
commenters, and has revised this section of the allocation plan. The 
rule now requires PHAs to describe the steps taken to facilitate access 
to supportive services provided by other agencies at the designated 
project.
    This section, however, imposes an affirmative duty on a PHA to fund 
at least the same level of supportive services needed and requested by 
non-elderly disabled families that the PHA funds for elderly families 
in the designated project.
Revision to Requirement Concerning Accessible Units
    The proposed rule required the PHA to describe the steps to be 
taken to replace any accessible units that will be unavailable as a 
result of the designation. A few commenters noted that PHAs are already 
mandated by section 504 to assess and provide for accessibility needs, 
and recommended this provision refer to the PHA's obligations under 
section 504 obligations.
    The Department agrees, and final rule requires the PHA to describe 
the steps taken by the PHA to affirmatively meet its obligations under 
24 CFR part 8 to respond to any need for accessible units that will no 
longer be available to applicants who need these units.
Removal of Requirement To Provide Information on Existing Occupancy 
Policy and Procedures
    The final rule also removes the requirement for the PHA to provide 
information on the PHA's existing occupancy policies and procedures, 
and to include a description of the PHA's HUD-approved Tenant Selection 
and Assignment Plan. With respect to the PHA's admission policies and 
procedures, the final rule requires the PHA to describe any changes the 
PHA intends to make in its admission policies to accommodate the 
proposed designation.

Allocation Plan Approval or Disapproval

Approval of Plan Because of HUD Failure To Respond Within Timeframes
    The final rule clarifies that if HUD fails to approve or disapprove 
an allocation plan within the timeframes imposed by statute, and set 
forth in this regulation, an allocation plan will be considered 
approved.
Time Limits on Resubmission of Disapproved Allocation Plans
    The proposed rule provided that if the Department disapproves an 
initial allocation plan, a PHA shall have a period of not less than 45 
days following notification of disapproval to submit amendments to the 
plan, or to submit a revised plan. ``A period of not less than 45 
days'' is the language used in the statute. A few commenters read this 
provision to mean that only 45 days would be permitted. Other 
commenters requested that there be no time limitation imposed on the 
resubmission of an allocation plan.
    The final rule continues to provide PHAs, consistent with the 
statute, with a period of at least 45 days to submit amendments to the 
plan or to submit a revised plan. The Department, however, declines to 
adopt the suggestion of some commenters that there be no time 
limitation on submission of a revised plan. In fact, on further 
consideration, the Department has decided to impose a maximum time 
limit on when a disapproved plan may be resubmitted. The Department 
believes that the passage of a substantial period of time may affect 
the data originally reported in the allocation plan, and may make it 
necessary for the PHA to hold another public meeting. Accordingly, the 
final rule provides that PHAs will have a period of no less than 45 
days, and no more than 90 to resubmit an initial allocation plan 
originally disapproved.
    The Department believes that 90 days represents a reasonable 
maximum period within which to submit a revised plan. An allocation 
plan that may require more than 90 days to make it an approvable plan, 
in all likelihood, indicates serious underlying problems with the plan. 
Accordingly, the PHA and the families that it houses are better served 
by restarting the allocation plan development process.
    The Department declines to apply, as one commenter suggested, one 
time limit to all revised plans. Some revisions required of allocation 
plans may take minimal time on the part of the PHA, and therefore 45 
days will be sufficient, while other revisions may require use of the 
longer 90-day period.

Designated Housing for Disabled Families

    The final rule makes several changes to Sec. 945.205 that addresses 
the supportive service plan component for obtaining approval to 
designate projects for disabled families. To obtain approval to 
designate a project for disabled families, section 622 requires 
submission of an allocation plan and a supportive service plan.
Supportive Service Plan Is Statutory Requirement
    Many commenters objected to the requirement to submit a supportive 
service plan in order to obtain approval for designated housing for 
disabled families. The commenters stated that it is not only unfair to 
disabled families, it is unfair to PHAs. Several commenters stated that 
this requirement reinforces the stereotype that persons with 
disabilities have special needs and are incapable of living 
independently. Other commenters stated that if the supportive service 
plan is going to be required for housing for disabled families, it also 
should be required for housing for elderly families.
    The requirement to submit a supportive service plan for designated 
housing for disabled families is a statutory requirement, not a 
regulatory one. However, the Department has made changes to this 
provision of the final rule with the intention of minimizing the 
administrative burden, and with the intention of clarifying when this 
type of housing should be considered as an alternative housing for 
persons with disabilities.
Demonstrated Need and Demand for This Housing
     The final rule provides that HUD will approve designation of a 
project for disabled families only where there is a clear demonstration 
of both a need and demand for such designation, and in the absence of 
such demonstrated need and demand, PHAs should provide for the housing 
needs of disabled families in the most integrated setting possible. The 
inclusion of a demonstration or evidence that there is a clear need and 
demand for housing that is limited to persons with disabilities is in 
response to commenters from the disability community who stressed that 
this type of housing should not be the automatic alternative to 
designated housing for elderly families.
Admission to Designated Projects for Disabled Families Need Not Be 
Based on Need for Services
    Although the designation of a project for disabled families should 
arise only where there is a real need and demand for this type of 
housing (i.e., where persons with disabilities express the need or 
demand for the services to be provided) once the project is 
established, admission to this project is not to be conditioned on a 
person with disabilities needing or opting for the service. A person 
with disabilities who chooses to reside in this project, and is next on 
the waiting list, should not be denied occupancy because the person 
does not need or have any interest in using the services to be provided 
to this project.
Non-Contiguous Units Encouraged but Not Required
    A few commenters objected to the proposed rule's implied 
prohibition against designating contiguous units. Designation of 
contiguous units is, by no means, prohibited by this final rule.
    The Department recognizes that where projects are designated for 
occupancy by elderly families, the units or floors designated will, in 
all likelihood, be contiguous, reflecting the preference of elderly 
families to reside in proximity to one another. As stated earlier in 
this preamble, the preference of the persons with disabilities who 
commented on this rule is to reside in an integrated setting, and not 
be limited to projects that house only disabled families, or that house 
only disabled families and elderly families. Thus, the reference to 
non-contiguous units in the regulation is to encourage PHAs to consider 
more integrated settings for persons with disabilities.
Clarification of When Service Provider Must Be Licensed
    As discussed earlier in this preamble, the final rule removes the 
requirement that service providers must be licensed, unless licensing 
for the type of service to be provided is required by State or local 
law.
Consultation Procedures for Supportive Service Plan
    The final rule provides the same consultation process for the 
supportive service plan that is required of the allocation plan. For 
PHAs that intend to designate a project for disabled families the 
consultation process for the supportive service plan may be performed 
concurrently with the allocation plan.

IV. Discussion of Public Comments

    Many of the issues raised by commenters have been addressed in 
section III of this preamble, which provided a summary of the principal 
features of the designated housing process as implemented by this final 
rule. Therefore, these issues are not re-addressed in this section. 
This section discusses additional issues raised by the commenters, and 
the Department's response to these issues. These comments may or may 
not have prompted additional, but less significant, changes to the 
rule. The comments are discussed in the context of the particular 
subpart or section of the rule to which they pertain.
    In addition to not discussing issues already addressed in section 
III of the preamble, the following does not discuss comments that were 
either generally laudatory or generally critical of the proposed rule, 
either of style or substantive comment, or that offered editorial 
suggestions, or suggestions regarding format that would not affect the 
meaning of the regulatory provisions.

Section 945.105  Definitions

    Comment: Two commenters recommended that the definition of 
``persons with disabilities'' be revised to eliminate the implication 
that these persons must have multiple disabilities to qualify as a 
``person with disabilities.'' Their suggested term was ``person with 
one or more disabilities.''
    Response: The term ``person with disabilities'' is the term used in 
section 622, and is also the term used in the Americans with 
Disabilities Act (ADA) (although, as discussed in the next response, 
the definition for this term is not identical in section 622 and the 
ADA). The Department believes that the definition for this term makes 
clear that to qualify as a person with disabilities, the individual 
need not have more than one disability.
    Comment: Two commenters stated that the definition of ``person with 
disabilities'' should be revised to conform to the definition provided 
in the Americans with Disabilities Act.
    Response: The definitions for the various categories of ``persons'' 
and ``families'' used in section 622 of the 1992 Act, are provided in 
section 621 of the 1992 Act. The final rule reflects the definition for 
``person with disabilities'' set forth in section 621. Additionally, 
neither the Americans with Disabilities Act or section 504 of the 
Rehabilitation Act of 1973 amended the U.S. Housing Act of 1937 to 
replace the 1937 Act's definition of ``persons with disabilities.''
    Comment: One commenter stated that the age distinction for ``near-
elderly person'' is too low and should be raised to 55. Two commenters 
stated that the definition of ``disabled families'' should include an 
age restriction, such as 55 or 50 years of age. Another commenter 
stated that the definition of ``elderly family'' should exclude any 
child under the age of 55.
    Response: The statute defines all of these terms (``near-elderly 
person,'' ``disabled family'' and ``elderly family'') and the 
Department is without authority to adopt the recommendations made by 
these commenters.
    Section 621 defines ``near-elderly person'' as a person who is at 
least 50 years of age, but below the age of 62.
    The statute does not provide for an age restriction in the 
definition of ``disabled family'' nor does it exclude as an ``elderly 
family'' a family with children who are neither elderly or near-
elderly. In fact in the final rule, the definition of ``disabled 
family'' rule clarifies that this term includes persons and other 
members of the family who may be elderly, near-elderly, or who are 
neither elderly, or near-elderly. The definition of ``elderly family'' 
clarifies that this term includes persons and other members of the 
family who may be persons with disabilities or who are neither elderly 
nor near-elderly.
    Comment: One commenter requested that the Department provide a 
definition for ``accessible'' when used in the context of a dwelling 
unit.
    Response: The definition section of the final rule includes a 
definition for ``accessible unit.'' The final rule provides that the 
term ``accessible unit'' has the meaning given this term under the 
second definition of ``accessible'' in 24 CFR 8.3, which is a 
definition familiar to PHAs.

Section 945.203 Allocation plan

    Comment: Two commenters requested that the final rule require PHAs 
to explain the methods used in arriving at information required by the 
allocation plan.
    Response: The Department declines to impose this requirement on 
PHAs. Much of the information required by the allocation plan will be 
derived from the PHA's waiting list, or from the locality's CHAS, or 
other local housing needs survey. Members of the public that may be 
interested in determining how a PHA arrived at the information 
disclosed in its allocation plan may inquire about this at the public 
meeting to be held on the allocation plan. Some of the information will 
be derived from the PHA's self-evaluation under section 504.
    Comment: Several commenters supported the use of the CHAS as a 
source of information required to be included in the allocation plan, 
but other commenters stated that the CHAS is not a useful source of 
information or is not required in their jurisdictions.
    Response: The statute specifically includes the CHAS as a source of 
data for the allocation plan. For localities where there is no CHAS, 
the final rule provides for use of any other local housing needs 
survey.
    Comment: One commenter stated that in determining additional 
housing resources that are needed to house non-elderly disabled 
persons, the rule should clearly state that if the same number of units 
would be offered to the applicant group not allowed in designated 
units, as would have been offered before the designation, then no new 
units are needed.
    Response: The Department believes that this point need not be 
explicitly stated in the rule. The statute and this final rule require 
the PHA to disclose its plan for securing additional housing resources 
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. If the PHA has the ``additional'' housing 
resources on hand, and need not secure other housing resources, then 
this is what the PHA will state in its allocation plan.
    Comment: One commenter stated that it was trivial for the 
Department to require the PHA to describe any incentives offered to 
implement voluntary transfers to achieve the objectives of the 
designation.
    Response: The Department is interested in how a PHA is successful 
in motivating families to move to a designated project, or motivating 
families to move from a project proposed to be designated. 
Additionally, the information provided by PHAs on this matter may be 
useful to other PHAs.
    Comment: Many comments were received on the types of additional 
housing resources to be provided to non-elderly disabled families. 
Persons within the disability community were divided on what 
constitutes acceptable additional housing resources. Some commenters 
stated that section 8 certificates and vouchers were not suitable 
housing resources for persons with disabilities. The majority of 
individual commenters (as opposed to advocacy organizations) requested 
the use of more section 8 certificates and vouchers for persons with 
disabilities. Other commenters stated that replacing public housing 
units with residency in a group home, or shared housing is not 
comparable to residency in a private apartment and should not be 
acceptable.
    Response: The statute provides for consideration of a variety of 
alternative housing resources for non-elderly disabled families, 
including section 8 certificates and vouchers, mixed housing, 
congregate housing, shared housing, and group homes. Accordingly, the 
Department cannot exclude consideration of use of these types of 
housing assistance by regulation. The final rule, however, provides for 
greater public input in the allocation plan than did the proposed rule. 
This provides an opportunity for persons with disabilities, and their 
representatives, to voice their objections, if any, to the additional 
housing resources for non-elderly disabled families proposed to be used 
by the PHA. The Department will look very carefully at any plan about 
which there were strong objections raised by persons with disabilities.
    Comment: A few commenters asked how the allocation plan is to 
indicate that it gave fair consideration of comments received on the 
allocation plan.
    Response: The PHA should explain how it did or did not revise its 
plan in response to public comment. Generally, the Department will be 
interested in a PHA's response to substantial negative comment on a 
proposed allocation plan.
    Comment: Three commenters objected to the fact that the proposed 
rule did not include a list of various housing options for elderly 
families.
    Response: As noted earlier in this preamble, the Congress and the 
Department anticipate that most, if not all, allocation plans will 
provide for designation of public housing projects for occupancy by 
elderly families. This is why the statute specifically requires PHAs to 
address housing resources that will be available for non-elderly 
disabled families. In the event a PHA designates a project for 
occupancy by disabled families, and the designation will result in 
denial of or delay in housing assistance to elderly families, then the 
PHA must address this issue in its allocation plan.
    Comment: Nine commenters stated that approval or disapproval of an 
allocation plan should be based only on the statutory requirements. 
Another commenter stated that the only basis for disapproval should be 
an indication that there will be disparate waiting times for groups 
waiting to be housed. Three commenters stated that the rule should make 
clear that the Department will not approve an allocation plan which 
fails to promote fair housing or which is submitted by a PHA for which 
there is documented history of discrimination against various types of 
families.
    Response: The Department has made only a few editorial changes to 
Sec. 945.203(d) which addresses the allocation plan approval criteria. 
This section tracks the statutory language. The statute provides that 
the allocation plan shall be approved if the Department determines that 
based on the plan ``and the comments submitted on the plan''--``the 
information contained in the plan is complete and accurate and the 
projections are reasonable, implementation of the plan will not result 
in excessive vacancy rates, and the plan (as described in the statute) 
can reasonably be achieved.'' The fact that the approval section of the 
regulation may focus on particular information to be contained in the 
plan (and the completeness and accuracy of this information), or 
emphasize the reasonableness of certain projections to be made does not 
mean that the Department has departed from the statutory approval 
criteria.
    Comment: One commenter suggested that the final rule require that a 
PHA whose plan has been disapproved by the Department, must undergo 
public review and comment before resubmission of the plan to the 
Department.
    Response: As discussed in section III of this preamble, the 
Department shared the concern expressed by the commenter, and has 
revised the provision in the rule that addresses when a revised plan 
may be submitted. The rule now provides that if a revised plan is 
submitted within the period set by the Department which will be no less 
than 45 days, but no more than 90 days, the PHA need not undergo a 
second consultation process. However, after 90 days, the Department is 
concerned that factors and data may have changed that will affect 
families served by the PHA, and that therefore make it necessary for 
the PHA to once again invite public review and comment. Accordingly, 
the Department established a maximum time limit of 90 days.
    Comment: Three commenters requested that the final rule provide for 
PHAs to follow the same public participation requirements on updated 
plans that govern the initial plans.
    Response: The final rule imposes (as did the proposed rule) the 
same public participation requirements on updated plans, as imposed on 
initial allocation plans. This is a statutory requirement. Section 622 
provides that ``in preparing the initial allocation plan, or updates of 
a plan, for submission under this section, a public housing agency 
shall consult with * * *.''
    Comment: Three commenters stated that the requirement to submit 
updated allocation plans every two years is burdensome.
    Response: The requirement to submit biennial updates is a statutory 
requirement.
    Comment: Two commenters stated that the Department exceeds its 
statutory authority in providing that projects for which updated plans 
were disapproved will revert to occupancy status before designation.
    Response: The Department disagrees with the commenter. The Congress 
would not have required PHAs to submit updated plans every two years if 
the Congress were not concerned that there may be instances in which 
designated housing is a failure. That is, the Congress was concerned 
that the number of families who have been denied housing assistance, or 
the delay in providing housing assistance has increased substantially 
as a result of designated housing, to cite two examples of concern. If 
one of these consequences were to occur, the Department cannot permit 
the PHA to continue to operate designated housing for which the impact 
is adverse for a substantial number of families or a protected class of 
families. However, the Department has revised the final rule to clarify 
that disapproval of the updated plan will not result in automatic 
reversal of a designated project to its predesignation occupancy 
status. As with the initial allocation plan, there may be factors that 
a PHA can, and is willing to change, that will correct the situation 
and minimize the adverse impact of the designated housing process on 
the families served by the PHA.

Section 945.205  Designated housing for disabled families

    Comment: One commenter stated that the two year commitment for a 
service provider may be in violation of some State laws that permit 
only one-year contracts.
    Response: The Department is sympathetic to this situation. However, 
the statute requires that a designated project for disabled families 
cannot be approved without a supportive service plan. The Department 
must have some assurance that if it approves the designated project for 
disabled families, the supportive services will remain in place at 
least until the PHA submits its updated allocation plan.
    Comment: Nine commenters stated that it will be difficult if not 
impossible to identify the supportive service needs of disabled 
families. These commenters stated that HUD must keep in mind that PHAs 
can no longer require disclosure of specific disabling conditions.
    Response: The Department recognizes the difficulties for PHAs to 
identify the specific disabling condition of persons with disabilities, 
and the designated housing process does not impose this type of 
investigation on PHAs. The designated housing process, as implemented 
by this final rule, intends for PHAs to informally survey residents and 
potential residents about service needs and desires. The Department's 
experience, generally, is that the public is not shy about expressing 
needs and desires. From this survey, the PHA should be able to 
determine the services that residents actually need and demand, and 
those that the PHA believes that it can reasonably provide.
    Comment: Two commenters stated that the PHA should be required to 
document the need for specific supportive services it intends to 
provide.
    Response: As discussed in Section III of the preamble, the 
revisions made to the approval process for designated housing for 
disabled families impose this type of requirement. The final rule 
provides that designated housing for disabled families will be approved 
if the allocation plan meets the requirements of Sec. 945.203 and 
demonstrates both a need and a demand for designated housing for 
disabled families. The need and demand will be based on the information 
provided in the supportive service plan that will (or should) evidence 
the need and demand for the services to be provided to families 
occupying this project.
    Comment: Six commenters stated that the final rule should provide 
that supportive services not be linked to a project, but must be 
portable.
    Response: For designated housing for disabled families, the 
supportive services are project specific. (However, the units in the 
project that constitute the designated housing need not be contiguous; 
and the Department encourages non-contiguous units.) The project 
specific aspect recognizes that if projects are designated for disabled 
families the designation in itself establishes ``separate housing'' for 
the designated families, even if non-contiguous units comprise the 
designated housing. Whenever the PHA undertakes designation of a 
project for disabled families, the Department wants assurance that 
there are sufficient numbers of persons with disabilities who are 
current tenants or applicants on the waiting list who express a need 
and demand for housing that provides supportive services (i.e., 
designated housing for disabled families).
    Comment: Eleven commenters stated that the rule must clarify that 
designated projects for disabled families are also available to persons 
not needing, or opting for supportive services.
    Response: As discussed in section III of the preamble, the final 
rule makes this clarification.
    Comment: One commenter stated that the final rule should require 
PHAs to determine which disabled families will occupy designated 
housing for disabled families.
    Response: The final rule requires PHAs, as part of the approval 
process for designated housing for disabled families, to demonstrate 
the need and demand for this type of housing. The Department believes 
that this requirement will address the concern expressed by the 
commenter.
    Comment: Seven commenters requested that the final rule clarify 
what is meant by residential supervision. The commenters stated that 
they did not want PHAs to use residential supervision to provide a more 
restrictive type of public housing for persons with disabilities.
    Response: ``Residential supervision'' refers to the assistance 
provided by a person or persons who either lives at the designated 
project for disabled families, or makes himself or herself available to 
persons with disabilities who may need assistance on a 24-hour or on-
call basis. Generally, residential supervision assistance is provided 
to persons who, as a result of seizures or paralysis, for example, may 
need assistance to be provided on a flexible basis (e.g., on-call) and 
to be available within proximity to where the person resides. The 
specific need for residential supervision must be documented in the 
supportive service plan.

Section 945.303  Requirements governing occupancy in designated housing

    Comment: One commenter requested that the final rule contain 
regulations to permit expedited removal of disruptive tenants.
    Response: The Department's regulations in 24 CFR part 966, 
governing lease and grievance procedures in public housing, already 
address this issue.

Section 945.301  Operating designated housing

    Comment: Two commenters stated that the requirement to operate 
designated housing in conformance with civil rights laws should be 
extended to the allocation plan development stages.
    Response: The Department agrees with this comment, and this section 
of the final rule provides that ``the application procedures and 
operation of designated projects'' shall be in conformity with the 
applicable civil rights and nondiscrimination statutes. Conformity with 
applicable civil rights and nondiscrimination statutes includes 
submission of the needs assessment and transition plan required by 24 
CFR 8.25.

Part 960, Subpart D--Preference for Disabled Families and Elderly 
Families in Public Housing Projects for Disabled Families and Elderly 
Families

    Comment: One commenter stated that the proposed rule did not make 
clear that elderly housing under part 960 is not the same as elderly 
housing under part 945.
    Response: The Department believes that the editorial changes made 
to part 960 in the final rule clarify the distinction between projects 
meeting the requirements of part 945, and those meeting the 
requirements of part 960. For example, the Department has changed the 
title to subpart D to read ``Preferences for Elderly Families and 
Disabled Families in Mixed Population Projects'' and uses this term 
``mixed population project'' throughout the subpart D. Use of the term 
``mixed population project'' should clarify that projects meeting the 
requirements of subpart D house both elderly families and disabled 
families.
    Comment: Six commenters stated that reference in Sec. 960.407 to 
the 10 percent limitation on families without a Federal preference 
should be revised to read ``50 percent.''
    Response: The Department has not yet issued its final regulation on 
Federal preferences. Once the Federal preferences final rule is 
published, the Department will make a conforming amendment to part 960, 
subpart D to reflect the 50 percent.

Comments on the Information Collection Requirements

    Comment: Ten commenters stated that the Department grossly 
underestimated the time for completion of the allocation plan.
    Response: The Department believes that the substantial changes made 
to the allocation plan requirements by this final rule bring the plan 
more in line with the estimated burden hours.

Other Comments and Recommendations

    Comment: Three commenters stated that they expect the most vigorous 
possible oversight by the Department of the allocation planning 
process, not only at the first step of initial approval, but biennial 
updates.
    Response: The Department has every intention to monitor, through 
careful review of initial allocation plans and biennial updates, the 
operation of designated housing, and its impact on families served by 
PHAs that operate designated housing. Monitoring also will include 
monitoring and compliance reviews under section 504, investigations of 
complaints under section 504, the Fair Housing Act, and other civil 
rights authorities.
    Comment: Four commenters stated that the final rule should require 
PHAs to preserve some mixed-use or general occupancy housing for 
persons with disabilities.
    Response: The Department certainly encourages, but cannot require, 
PHAs to maintain mixed-used or general occupancy projects for persons 
with disabilities.

V. Other Matters

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made in accordance with HUD regulations at 24 CFR part 50, which 
implements section 102(2)(c) of the National Environmental Policy Act 
of 1969 (NEPA) at the time of development of the proposed rule. This 
Finding of No Significant Impact remains applicable to this final rule, 
and is available for public inspection between 7:30 a.m. and 5:30 p.m. 
weekdays 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.

Executive Order 12866

    This final rule was reviewed by the Office of Management and Budget 
under Executive Order 12866 as a significant regulatory action. Any 
changes made in this rule as a result of that review are clearly 
identified in the docket file, which is available for public inspection 
in the Office of HUD's Rule's Docket Clerk, room 10276, 451 Seventh St. 
SW., Washington, DC.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this final rule before publication and by 
approving it certifies that the rule will not have a significant impact 
on a substantial number of small entities. The final rule establishes 
the requirements and procedures by which PHAs may designate projects, 
or portions of projects, for occupancy only by (1) elderly families, 
(2) disabled families, or (3) disabled families and elderly families. 
The rule incorporates the requirements established by statute for such 
designation. The designation of housing for occupancy by elderly 
families, disabled families, or disabled families and elderly families 
is an option provided to, not a requirement imposed on, PHAs by this 
rule.

Executive Order 12606, The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this final rule would not 
have potential for significant impact on family formation, maintenance, 
and general well-being within the meaning of the order. This final rule 
implements the designation process provided by section 622 of the 1992 
Act, the purpose of which is to assist PHAs in meeting the housing and 
supportive service needs of disabled families and elderly families. The 
supportive services provided by PHAs to disabled and elderly families 
are expected to assist these families in avoiding possible 
institutionalization, and to reduce unnecessary stress and financial 
burden on these families. Thus, the supportive services component of 
the program is anticipated to have a beneficial impact on disabled 
families and elderly families.
    Since the designation process, however, provides for elderly-only 
housing and disabled-only housing, there is the possibility that the 
designation process authorized by section 622 of the 1992 Act would 
limit the availability of housing for (1) disabled families (if a PHA 
designates elderly family-only housing), (2) elderly families (if a PHA 
designates disabled family-only housing) or (3) families with children 
(if a PHA designates disabled families and/or elderly family-only 
housing), and thus adversely impact the maintenance and well-being of 
these families. (Although it should be noted that PHAs would be 
required to admit eligible elderly families with children to designated 
projects for elderly families, and admit eligible disabled families 
with children to projects designated for disabled families.) The final 
rule, however, provides certain protections for all family types, 
including the protection provided by HUD's review and approval of a 
PHA's housing allocation plan. The purpose of this review is to ensure 
that the availability of public housing, and other housing resources 
available to the PHA, is not reduced for any of these families, 
especially non-elderly disabled families. Thus, the impact on family 
maintenance and well being that may result from the designation 
process, as implemented by the Department through this rule, would not 
be significant within the meaning of the order.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this final 
rule would not have substantial, direct effects on States, on their 
political subdivisions, or on their relationship with the Federal 
government, or on the distribution of power and responsibilities among 
the various levels of government. The is limited to implementing the 
procedures under which PHAs may opt, subject to certain requirements 
and procedures, to designate public housing projects, or portions of 
public housing projects, for occupancy by elderly families, disabled 
families, or disabled families and elderly families.

Regulatory Agenda

    This rule was listed as sequence number 1635 in the Department's 
Semiannual Agenda of Regulations, published on October 25, 1993 (58 FR 
56402, 56448) under Executive Order 12291 and the Regulatory 
Flexibility Act.

List of Subjects

24 CFR Part 945

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Public housing, Reporting and 
recordkeeping requirements.

24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Public housing.
    Accordingly, title 24 of the Code of Federal Regulations is amended 
as follows:
    1. A new part 945, consisting of Secs. 945.101 through 945.303, is 
added to read as follows:

PART 945--DESIGNATED HOUSING--PUBLIC HOUSING DESIGNATED FOR 
OCCUPANCY BY DISABLED, ELDERLY, OR DISABLED AND ELDERLY FAMILIES

Subpart A--General

Sec.
945.101  Purpose.
945.103  General policies.
945.105  Definitions.

Subpart B--Application and Approval Procedures

945.201  Approval to designate housing.
945.203  Allocation plan.
945.205  Designated housing for disabled families.

Subpart C--Operating Designated Housing

945.301  General requirements.
945.303  Requirements governing occupancy in designated housing.

    Authority: 42 U.S.C. 1473e; 42 U.S.C. 3535(d).

Subpart A--General


Sec. 945.101  Purpose.

    The purpose of this part is to provide for designated housing as 
authorized by section 7 of the U.S. Housing Act of 1937 (42 U.S.C. 
1437e). Section 7 provides public housing agencies with the option, 
subject to the requirements and procedures of this part, to designate 
public housing projects, or portions of public housing projects, for 
occupancy by disabled families, elderly families, or mixed populations 
of disabled families and elderly families.


Sec. 945.103  General policies.

    (a) Agency participation. Participation in this program is limited 
to public housing agencies (PHAs) (as this term is defined in 24 CFR 
913.102) that elect to designate public housing projects for occupancy 
by disabled families, elderly families, or disabled families and 
elderly families, as provided by this part.
    (b) Eligible housing--(1) Designation of public housing. Projects 
eligible for designation under this part are public housing projects as 
described in the definition of ``project'' in Sec. 945.105.
    (2) Additional housing resources. To meet the housing and 
supportive service needs of elderly families, and disabled families, 
including non-elderly disabled families, who will not be housed in a 
designated project, PHAs shall utilize housing resources that they own, 
control, or have received preliminary notification that they will 
obtain (e.g., section 8 certificates and vouchers). They also may 
utilize housing resources for which they plan to apply during the 
period covered by the allocation plan, and that they have a reasonable 
expectation of obtaining. PHAs also may utilize, to the extent 
practicable, any housing facilities that they own or control in which 
supportive services are already provided, facilitated or coordinated, 
such as mixed housing, shared housing, family housing, group homes, and 
congregate housing.
    (3) Exemption of mixed population projects. A PHA with a public 
housing project with a mixed population of elderly families and 
disabled families that plans to house them in such project in 
accordance with the requirements of 24 CFR part 960, subpart D, is not 
required to meet the designation requirements of this part.
    (c) Family Participation in designated housing--(1) Voluntary 
participation. The election to reside in designated housing is 
voluntary on the part of a family. No disabled family or elderly family 
may be required to reside in designated housing, nor shall a decision 
not to reside in designated housing adversely affect the family with 
respect to occupancy of another appropriate project.
    (2) Meeting stated eligibility requirements. Nothing in this part 
shall be construed to require or permit a PHA to accept for admission 
to a designated project a disabled family or elderly family who does 
not meet the stated eligibility requirements for occupancy in the 
project (for example, income), as set forth in HUD's regulations in 24 
CFR parts 912 and 913, and in the PHA's admission policies.


Sec. 945.105  Definitions.

    As used in this part:
    Act means the United States Housing Act of 1937 (42 U.S.C. 1437-
1440).
    Accessible units means units that meet the requirement of 
accessibility with respect to dwellings as set forth in the second 
definition of ``accessible'' in 24 CFR 8.3.
    Allocation plan. See Sec. 945.201.
    CHAS means the comprehensive housing affordability strategy 
required by section 105 of the National Affordable Housing Act (42 
U.S.C. 12705) or any successor plan prescribed by HUD.
    Designated family means the category of family for whom the project 
is designated (e. g., elderly family in a project designated for 
elderly families).
    Designated housing or designated project means a project (or 
projects), or a portion of a project (or projects) (as these terms are 
defined in this section), that has been designated in accordance with 
the requirements of this part.
    Disabled family means a family whose head or spouse or sole member 
is a person with disabilities. The term ``disabled family'' may include 
two or more persons with disabilities living together, and one or more 
persons with disabilities living with one or more persons who are 
determined to be essential to the care or well-being of the person or 
persons with disabilities. A disabled family may include persons with 
disabilities who are elderly.
    Elderly family means a family whose head, spouse, or sole member is 
an elderly person. The term ``elderly family'' includes an elderly 
person, two or more elderly persons living together, and one or more 
elderly persons living with one or more persons who are determined to 
be essential to the care or well-being of the elderly person or 
persons. An elderly family may include elderly persons with 
disabilities and other family members who are not elderly.
    Elderly person means a person who is at least 62 years of age.
    Family includes but is not limited to a single person as defined in 
this part, a displaced person (as defined in 24 CFR part 912), a 
remaining member of a tenant family, a disabled family, an elderly 
family, a near-elderly family, and a family with children. It also 
includes an elderly family or a disabled family composed of one or more 
elderly persons living with one or more disabled persons.
    Housing has the same meaning as ``project,'' which is defined in 
this section.
    HUD or Department means the Department of Housing and Urban 
Development including any Field Offices to which authority has been 
delegated to perform functions under this part.
    Mixed population project means a public housing project reserved 
for elderly families and disabled families. This is the project type 
referred to in NAHA as being designated for elderly and disabled 
families. A PHA that has a mixed population project or intends to 
develop one need not submit an allocation plan or request a 
designation. However, the project must meet the requirements of 24 CFR 
part 960 subpart D.
    NAHA means the National Affordable Housing Act (Pub.L. 101-625, 
approved November 28, 1990).
    Near-elderly family means a family whose head, spouse, or sole 
member is a near-elderly person. The term ``near-elderly family'' 
includes two or more near-elderly persons living together, and one or 
more near-elderly persons living with one or more persons who are 
determined to be essential to the care or well-being of the near-
elderly person or persons. A near-elderly family may include other 
family members who are not near-elderly.
    Near-elderly person means a person who is at least 50 years of age 
but below the age of 62, who may be a person with a disability.
    Non-elderly disabled person means a person with a disability who is 
less than 62 years of age.
    Person with disabilities means a person who--
    (a) Has disability as defined in section 223 of the Social Security 
Act (42 U.S.C. 423), or
    (b) Is determined to have a physical, mental, or emotional 
impairment that--
    (1) Is expected to be of long-continued and indefinite duration,
    (2) Substantially impedes his or her ability to live independently, 
and
    (3) Is of such a nature that such ability could be improved by more 
suitable housing conditions, or
    (c) Has a developmental disability as defined in section 102 of the 
Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 
6001(5)).

The term ``person with disabilities'' does not exclude persons who have 
the disease of acquired immunodeficiency syndrome or any conditions 
arising from the etiologic agent for acquired immunodeficiency 
syndrome.
    Portion of project includes: One or more buildings in a multi-
building project; one or more floors of a project or projects; a 
certain number of dwelling units in a project or projects. (Designation 
of a portion of a project does not require that the buildings, floors 
or units be contiguous.)
    Project means low-income housing developed, acquired, or assisted 
by a PHA under the U.S. Housing Act of 1937 (other than section 8) for 
which there is an Annual Contributions Contract (ACC) between HUD and 
the PHA. For purposes of this part, the terms housing and public 
housing mean the same as project. Additionally, as used in this part, 
and unless the context indicates otherwise, the term project when used 
in the singular includes the plural, and when used in the plural, 
includes the singular, and also includes a ``portion of a project,'' as 
defined in this section.
    Public housing or public housing project. See definition of 
``project'' in this section.
    Public housing agency or PHA. See 24 CFR 913.102.
    Secretary means the Secretary of Housing and Urban Development.
    Service provider means a person or organization qualified and 
experienced in the provision of supportive services, and that is in 
compliance with any licensing requirements imposed by State or local 
law for the type of service or services to be provided. The service 
provider may provide the service on either a for-profit or not-for-
profit basis.
    Single person means a person who lives alone or intends to live 
alone, who is not an elderly person, a person with disabilities, a 
displaced person, or the remaining member of a tenant family.
    Supportive service plan. See Sec. 945.205.
    Supportive services means services available to persons residing in 
a development, requested by disabled families and for which there is a 
need, and may include, but are not limited to, meal services, health-
related services, mental health services, services for nonmedical 
counseling, meals, transportation, personal care, bathing, toileting, 
housekeeping, chore assistance, safety, group and socialization 
activities, assistance with medications (in accordance with any 
applicable State laws), case management, personal emergency response, 
and other appropriate services.

Subpart B--Application and Approval Procedures


Sec. 945.201  Approval to designate housing.

    (a) Designated housing for elderly families. To designate a project 
for occupancy by elderly families, a PHA must have a HUD-approved 
allocation plan that meets the requirements of Sec. 945.203.
    (b) Designated housing for disabled families. To designate a 
project for occupancy by disabled families, a PHA must have a HUD-
approved allocation plan that meets the requirements of Sec. 945.203, 
and a HUD-approved supportive service plan that meets the requirements 
of Sec. 945.205.
    (c) Designated housing for elderly families and disabled families. 
(1) A PHA that provides or intends to provide a mixed population 
project (a project for both elderly families and disabled families) is 
not required to meet the requirements of this part. The PHA is required 
to meet the requirements of 24 CFR part 960, subpart D.
    (2) A PHA that intends to provide designated housing for elderly 
families or for disabled families must identify any existing or planned 
mixed population projects, reserved under 24 CFR part 960, subpart B, 
as additional housing resources, in its allocation plan, in accordance 
with Sec. 945.203(c)(6).


Sec. 945.203  Allocation plan.

    (a) Applicable terminology. (1) As used in this section, the terms 
``initial allocation plan'' refers to the PHA's first submission of an 
allocation plan, and ``updated allocation plan'' refers to the biennial 
update (once every two years) of this plan, which is described in 
paragraph (f) of this section.
    (2) As provided in Sec. 945.105, the term ``project'' includes the 
plural (``projects'') and includes a portion of a project.
    (b) Consultation in plan development. These consultation 
requirements apply to the development of an initial allocation plan as 
provided in paragraph (c) of this section, or any update of the 
allocation plan as provided in paragraph (f) of this section.
    (1) In preparing the draft plan, the PHA shall consult with:
    (i) The State or unit of general local government where the project 
is located;
    (ii) Public and private service providers;
    (iii) Representative advocacy groups for each of these family 
types: disabled families, elderly families, and families with children, 
where such advocacy groups exist;
    (iv) Representatives of the residents of the PHA's projects 
proposed for designation, including representatives from resident 
councils or resident management corporations where they exist; and
    (v) Other parties that the PHA determines would be interested in 
the plan, or other parties that have contacted the PHA and expressed an 
interest in the plan.
    (2) Following the completion of the draft plan, the PHA shall:
    (i) Issue public notices regarding its intention to designate 
housing and the availability of the draft plan for review;
    (ii) Contact directly those individuals, agencies and other 
interested parties specified in paragraph (b)(1) of this section, and 
advise of the availability of the draft plan for review;
    (iii) Allow not less than 30 days for public comment on the draft 
allocation plan;
    (iv) Make free copies of the draft plan available upon request, and 
in accessible format, when appropriate;
    (v) Conduct at least one public meeting on the draft allocation 
plan;
    (vi) Give fair consideration to all comments received; and
    (vii) Retain any records of public meetings held on the allocation 
plan (or updated plan) and any written comments received on the plan 
for a period of five years commencing from the date of submission of 
the allocation plan to HUD. These records must be available for review 
by HUD.
    (c) Contents of initial plan. The initial allocation plan shall 
contain, at a minimum, the information set forth in this paragraph (c).
    (1) Identification of the project to be designated and type of 
designation to be made. The PHA must:
    (i) Identify the type of designation to be made (i.e., housing for 
disabled families or housing for elderly families);
    (ii) Identify the building(s), floor(s), or unit(s) to be 
designated and their location, or if specific units are not designated, 
the number to be designated; and
    (iii) State the reasons the building(s), floor(s), or unit(s) were 
selected for designation.
    (2) Identification of groups and persons consulted and comments 
submitted. The PHA must:
    (i) Identify the groups and persons with whom the PHA has consulted 
in the development of the allocation plan;
    (ii) Include a summary of comments received on the plan from the 
groups and persons consulted; and
    (iii) Describe how the plan addresses these comments.
    (3) Profile of proposed designated project in pre-designation 
state. This component of the plan must include, for the projects, 
buildings, or portions of buildings to be designated:
    (i) The total number of families currently occupying the project, 
and
    (A) The number of families who are members of the group for whom 
the project is to be designated, and
    (B) The number of families who are not members of the group for 
whom the project is to be designated;
    (ii) An estimate of the total number of elderly families and 
disabled families who are potential tenants of the project (i.e., as 
the project now exists), based on information provided by:
    (A) The waiting list from which vacancies in the project are 
filled; and
    (B) A local housing needs survey, if available, such as the CHAS, 
for the jurisdiction within which the area served by the PHA is 
located;
    (iii) An estimate of the number of potential tenants who will need 
accessible units based on information provided by:
    (A) The needs assessment prepared in accordance with 24 CFR 8.25, 
and
    (B) A housing needs survey, if available, such as the CHAS or HUD-
prescribed successor survey;
    (iv) The number of units in the project that became vacant and 
available for occupancy during the year preceding the date of 
submission of the allocation plan to HUD;
    (v) The average length of vacancy for dwelling units in the project 
for the year preceding the date of submission of the allocation plan to 
HUD;
    (vi) An estimate of the number of units in the project that the PHA 
expects to become vacant and available for occupancy during the two-
year period following the date of submission of the allocation plan to 
HUD (i.e., if the project were not to be designated);
    (vii) An estimate of the average length of time elderly families 
and non-elderly persons with disabilities currently have to wait for a 
dwelling unit.
    (4) Projected profile of project in designated state. This 
component of the plan must:
    (i) Identify the source of the families for the designated project 
(e.g., current residents of the project, families currently on the 
waiting list, residents of other projects, and potential tenants based 
on information from the local housing needs survey);
    (ii) For projects proposed to be designated for occupancy by 
elderly families an estimate of the number of:
    (A) Units in the project that are anticipated to become vacant and 
available for occupancy during the two-year period following the date 
of submission of the allocation plan to HUD;
    (B) Near-elderly families who may be needed to fill units in the 
designated project for elderly families, as provided in 
Sec. 945.303(c);
    (iii) Describe any impact the designation may have on the average 
length of time applicants in the group for which the project is 
designated and other applicants will have to wait for a dwelling unit.
    (5) PHA occupancy policies and procedures. This component of the 
plan must describe any changes the PHA intends to make in its admission 
policies to accommodate the designation, including:
    (i) How the waiting list will be maintained;
    (ii) How dwelling units will be assigned; and
    (iii) How records will be maintained to document the effect on all 
families who would have resided in the designated project if it had not 
been designated.
    (6) Strategy for addressing the current and future housing needs of 
the families in the PHA's jurisdiction. The PHA must:
    (i) Identify the housing resources currently owned or controlled by 
the PHA, including any mixed population projects, in existence, as 
provided in 24 CFR part 960, subpart D, that will be available to these 
families;
    (ii) Describe the steps to be taken by the PHA to respond to any 
need for accessible units that will no longer be available for 
applicants who need them. The PHA has a continuing obligation under 
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) to 
provide accessible dwellings even if the project designation removes 
accessible dwellings from the inventory of possible dwellings for non-
elderly persons with disabilities;
    (iii) If a project is being designated for elderly families, 
describe the steps the PHA will take to facilitate access to supportive 
services by non-elderly disabled families. The services should be 
equivalent to those available in the designated project and requested 
by non-elderly disabled families. If the PHA funds supportive services 
for the designated project for elderly families, the PHA must provide 
the same level of services, upon the request of non-elderly disabled 
families.
    (iv) If a project is being designated for elderly families, 
identify the additional housing resources that the PHA determines will 
be sufficient to provide assistance to not less than the number of non-
elderly disabled families that would have been housed by the PHA if 
occupancy in units in the designated project were not restricted to 
elderly families (one-for-one replacement is not required). Among these 
resources may be:
    (A) Normal turnover in existing projects;
    (B) Existing housing stock that previously was not available to or 
considered for non-elderly disabled families. Examples are dwellings in 
general occupancy (family) projects that are reconfigured to meet the 
dwelling size needs of the non-elderly disabled families, or were 
previously occupied by elderly families who will relocate to the 
designated project for elderly families, or were previously vacant 
because there had not been a demand for dwellings of that size in that 
location;
    (C) Housing for which the PHA has received preliminary notification 
that it will obtain; and
    (D) Housing for which the PHA plans to apply during the period 
covered by the allocation plan, and which it has a reasonable 
expectation of obtaining.
    (v) Where a project is being designated for elderly families, 
explain how the PHA plans to secure the required additional housing 
resources. In the case of housing for which the PHA plans to apply, the 
PHA must provide sufficient information about the housing resource and 
its application to establish that the PHA can reasonably expect to 
obtain the housing.
    (vi) Describe incentives, if any, that the PHA intends to offer to:
    (A) Families who are members of the group for whom a project was 
designated to achieve voluntary transfers to the designated project; 
and
    (B) Families who are not members of the group for whom a project 
was designated to achieve voluntary transfers from the project proposed 
to be designated;
    (d) Criteria for allocation plan approval. HUD shall approve an 
initial allocation plan, or updated allocation plan, if HUD determines 
that:
    (1) The information contained in the plan is complete and accurate 
(a plan that is incomplete, i.e., missing required statements or items, 
will be disapproved), and the projections are reasonable;
    (2) Implementation of the plan will not result in a substantial 
increase in the vacancy rates in the designated project;
    (3) Implementation of the plan will not result in a substantial 
increase in delaying or denying housing assistance to families on the 
PHA's waiting list because of designating projects;
    (4) The plan for securing sufficient additional housing resources 
for non-elderly disabled persons can reasonably be achieved; and
    (5) The plan conforms to the requirements of this part.
    (e) Allocation plan approval or disapproval.--(1) Written 
notification. HUD shall notify each PHA, in writing, of approval or 
disapproval of the initial or updated allocation plan.
    (2) Timing of notification. An allocation plan shall be considered 
to be approved by HUD if HUD fails to provide the PHA with notification 
of approval or disapproval of the plan, as required by paragraph (e)(1) 
of this section, within:
    (i) 90 days after the date of submission of an allocation plan that 
contains comments, as provided in paragraph (c)(2) of this section; or
    (ii) 45 days after the date of submission of all other plans, 
including
    (A) Initial plans for which no comments were received;
    (B) Updated plans, as provided in paragraph (f) of this section; 
and
    (C) Revised initial plans or revised updated plans, as provided in 
paragraph (e)(4) of this section.
    (3) Approval limited solely to approval of designated housing. 
HUD's approval of an initial plan or updated allocation plan under this 
section may not be construed to constitute approval of any request for 
assistance for major reconstruction of obsolete projects, assistance 
for development or acquisition of public housing, or assistance under 
24 CFR part 890 (supportive housing for persons with disabilities).
    (4) Resubmission following disapproval. If HUD disapproves an 
initial allocation plan, a PHA shall have a period of not less than 45 
days or more than 90 days following notification of disapproval as 
provided in paragraph (e)(2) of this section, to submit amendments to 
the plan, or to submit a revised plan.
    (f) Biennial update of plan.--(1) General. Each PHA that owns or 
operates a public housing project that is designated for occupancy 
under this part shall update its allocation plan not less than once 
every two years, from the date of HUD approval of the initial 
allocation plan. A PHA that wishes to amend or revise its plan later 
than 90 days after HUD disapproval must begin the hearing and 
consultation process again.
    (2) Failure to submit updated plan. If the PHA fails to submit the 
updated plan as required by this paragraph (f), the Secretary may 
revoke the designation in accordance with the provisions of paragraph 
(f)(4)(ii) of this section.
    (3) Contents of updated plan. The updated allocation plan shall 
contain, at a minimum, the following information:
    (i) The most recent update of the allocation plan data, and 
projections for the next two years;
    (ii) An assessment of the accuracy of the projections contained in 
previous plans and in the updated allocation plan;
    (iii) The number of times a vacancy was filled in accordance with 
Sec. 945.303(c);
    (iv) A discussion of the impact of the designation on the 
designated project and the other public housing projects operated by 
the PHA, using the data obtained from the system developed in 
Sec. 945.203(c), including
    (A) The number of times there was a substantial increase in 
delaying housing assistance to families on the PHA's waiting list 
because projects were designated; and
    (B) The number of times there was a substantial increase in denying 
housing assistance to families on the PHA's waiting list because 
projects were designated;
    (v) A plan for adjusting the allocation of designated units, if 
necessary.
    (4) Criteria for approval of updated plan. (i) HUD shall approve an 
updated allocation plan based on HUD's review and assessment of the 
updated plan, using the criteria in (d) of this section. If HUD 
considers it appropriate, the review and assessment shall include any 
on-site review and monitoring of PHA performance in the administration 
of its designated housing and in the allocation of the PHA's housing 
resources. Notification of approval or disapproval of the updated 
allocation plan shall be provided in accordance with paragraph (e) of 
this section;
    (ii) If a PHA's updated plan is not approved, HUD may require PHAs 
to change the designation of existing or planned projects to other 
categories, such as general occupancy or mixed population projects.
    (5) Notification of approval or disapproval of updated plan. HUD 
shall notify each PHA submitting an updated plan of approval or 
disapproval of the updated plan, in accordance with the form of 
notification and within the time periods required by paragraph (e) of 
this section.

(Approved by the Office of Management and Budget under control 
number 2577-0192.)


Sec. 945.205  Designated housing for disabled families.

    (a) General. (1) In general, HUD will approve designated projects 
for disabled families only if there is a clear demonstration that there 
is both a need and a demand by disabled families for such designation. 
In the absence of such demonstrated need and demand, PHAs should 
provide for the housing needs of disabled families in the most 
integrated setting possible.
    (2) To designate a project for disabled families, a PHA must submit 
the allocation plan required by Sec. 945.203 and the supportive service 
plan described in paragraph (b) of this section.
    (3) In its allocation plan,
    (i) The PHA may not designate a project for persons with a specific 
disability;
    (ii) The designated project does not have to be made up of 
contiguous units. PHAs are encouraged to place the units in the 
project, whether contiguous or not, in the most integrated setting 
possible.
    (4) The consultation process for the allocation plan provided in 
Sec. 945.203(b) and consultation process for the supportive service 
plan provided in this section may occur concurrently.
    (5) If the PHA conducts surveys to determine the need or demand for 
a designated project for disabled families or for supportive services 
in such project, the PHA must protect the confidentiality of the survey 
responses.
    (b) Supportive Service Plan. The plan shall describe how the PHA 
will provide or arrange for the provision of the appropriate supportive 
services requested by the disabled families who will occupy the 
designated housing and who have expressed a need for these services.
    (1) Contents of plan. The supportive service plan, at a minimum, 
must:
    (i) Identify the number of disabled families who need the 
supportive services and who have expressed an interest in receiving 
them;
    (ii) Describe the types of supportive services that will be 
provided, and, if known, the length of time the supportive services 
will be available;
    (iii) Identify each service provider to be utilized, and describe 
the experience of the service provider in delivering supportive 
services;
    (iv) Describe how the supportive services will be provided to the 
disabled families that the designated housing is expected to serve (how 
the services will be provided depends upon the type of service offered; 
e.g., if the package includes transportation assistance, how 
transportation assistance will be provided to disabled families);
    (v) Identify all sources of funding upon which the PHA is relying 
to deliver supportive services to residents of the designated housing 
for disabled families, or the supportive service resources to be 
provided in lieu of funding;
    (vi) Submit evidence of a specific contractual commitment or 
commitments provided to the PHA by the sources identified in paragraph 
(b)(1)(v) of this section to make funds available for supportive 
services, or the delivery of supportive services available to the PHA 
for at least two calendar years;
    (vii) Identify any public and private service providers, advocates 
for the interests of designated housing families, and other interested 
parties with whom the PHA consulted in the development of this 
supportive service plan, and summarize the comments and recommendations 
made by these parties. (These comments must be maintained for a period 
of five years, and be available for review by HUD as provided in 
paragraph (b)(2)(vii) of this section.);
    (viii) If applicable, address the need for residential supervision 
of disabled families (on-site supervision within the designated 
housing) and how this supervision is to be provided;
    (ix) Include any other information that the PHA determines would 
assist HUD in assessing the suitability of the PHA's supportive service 
plan; and
    (x) Include any additional information that HUD may request, and 
which is appropriate to a determination of the suitability of the 
supportive service plan.
    (2) Public review and comment on the supportive service plan. In 
preparing the initial supportive service plan, or any update of the 
supportive service plan, the PHA shall:
    (i) Issue public notices regarding its intention to provide 
supportive services to designated housing for disabled families and the 
availability of the draft supportive service plan;
    (ii) Send notices directly to interested individuals and agencies 
that have contacted the PHA and have expressed an interest in the 
supportive service plan, and to parties specified in paragraph 
(b)(1)(vii) of this section;
    (iii) Allow not less than 30 days for public comment on the 
supportive service plan;
    (iv) Make free copies of the draft plan available upon request, and 
in accessible format, when appropriate;
    (v) Conduct at least one public meeting regarding the supportive 
service plan;
    (vi) Give fair consideration to all comments received; and
    (vii) Retain any records of the public meetings held on the 
supportive service plan, and any written comments received on the 
supportive service plan for a period of five years, from the date of 
submission of the supportive service plan. These records must be 
available for review by HUD.
    (c) Approval. HUD shall approve designated housing for disabled 
families if the allocation plan meets the requirements of Sec. 945.203, 
including demonstrating both a need and a demand for designated housing 
for disabled families, and if HUD determines on the basis of the 
information provided in the supportive service plan that:
    (1) There is a sufficient number of persons with disabilities who 
have expressed an interest in occupying a designated project for 
disabled families, and who have expressed a need and demand for the 
supportive services that will be provided;
    (2) The supportive services are adequately designed to meet the 
needs of the disabled families who have indicated a desire for them;
    (3) The service provider has current or past experience 
administering an effective supportive service delivery program for 
persons with disabilities;
    (4) If residential supervision is required, a written commitment to 
provide this supervision in the designated housing.

(Approved by the Office of Management and Budget under control 
number 2577-0192.)

Subpart C--Operating Designated Housing


Sec. 945.301  General requirements.

    The application procedures and operation of designated projects 
shall be in conformity with the regulations of this part, and the 
regulations applicable to PHAs in 24 CFR Chapter IX, including 24 CFR 
parts 913, 960 and 966, and, in particular, the nondiscrimination 
requirements of 24 CFR 960.211(b)(3), that include but are not limited 
to section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), Fair 
Housing Act (42 U.S.C. 3601-3619), title VI of the Civil Rights Act of 
1964 (42 U.S.C. 2000d), section 3 of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701u), the Age Discrimination Act (42 U.S.C. 
6101-6107), Executive Order 11246 (3 CFR 1964-1965 Comp., p. 339), 
Executive Order 11063, as amended by Executive Order 12259 (3 CFR 1958-
1963 Comp., p. 652 and 3 CFR 1980 Comp., p. 307), the Americans with 
Disabilities Act (42 U.S.C. 12101-12213) (to the extent the Americans 
with Disabilities Act is applicable) and the implementing regulations 
of these statutes and authorities; and other applicable Federal, State, 
and local laws prohibiting discrimination and promoting equal 
opportunity.


Sec. 945.303  Requirements governing occupancy in designated housing.

    (a) Priority for occupancy. Except as provided in paragraph (c) of 
this section, in determining priority for admission to designated 
housing, the PHA shall make units in the designated housing available 
only to designated families.
    (b) Compliance with preference regulations. Among the designated 
families, the PHA shall give preference in accordance with the 
preferences in 24 CFR part 960, subpart B.
    (c) Eligibility of other families for housing designated for 
elderly families--(1) Insufficient elderly families. If there are an 
insufficient number of elderly families for the units in a project 
designated for elderly families, the PHA may make dwelling units 
available to near-elderly families, who qualify for preferences under 
24 CFR part 960, subpart B. The election to make dwelling units 
available to near-elderly families if there are an insufficient number 
of elderly families should be explained in the PHA's allocation plan.
    (2) Insufficient elderly families and near-elderly families. If 
there are an insufficient number of elderly families and near-elderly 
families for the units in a project designated for elderly families, 
the PHA shall make available to all other families any dwelling unit 
that is:
    (i) Ready for re-rental and for a new lease to take effect; and
    (ii) Vacant for more than 60 consecutive days.
    (d) Tenant choice of housing. (1) Subject to paragraph (d)(2) of 
this section, the decision of any disabled family or elderly family not 
to occupy or accept occupancy in designated housing shall not have an 
adverse affect on:
    (i) The family's admission to or continued occupancy in public 
housing; or
    (ii) The family's position on or placement on a public housing 
waiting list.
    (2) The protection provided by paragraph (d)(1) of this section 
shall not apply to any family who refuses to occupy or accept occupancy 
in designated housing because of the race, color, religion, sex, 
disability, familial status, or national origin of the occupants of the 
designated housing or the surrounding area.
    (3) The protection provided by paragraph (d)(1) of this section 
shall apply to an elderly family or disabled family that declines to 
accept occupancy, respectively, in a designated project for elderly 
families or for disabled families, and requests occupancy in a general 
occupancy project or in a mixed population project.
    (e) Appropriateness of dwelling unit to family size. This part may 
not be construed to require a PHA to offer a dwelling in a designated 
project to any family who is not of appropriate family size for the 
dwelling unit. The temporary absence of a child from the home due to 
placement in foster care is not considered in determining family 
composition and family size.
    (f) Prohibition of evictions. Any tenant who is lawfully residing 
in a dwelling unit in a public housing project may not be evicted or 
otherwise required to vacate the unit because of the designation of the 
project, or because of any action taken by HUD or the PHA in accordance 
with this part.
    (g) Prohibition of coercion to accept supportive services. As with 
other HUD-assisted housing, no disabled family or elderly family 
residing in designated housing may be required to accept supportive 
services made available by the PHA under this part.
    (h) Availability of grievance procedures in 24 CFR part 966. The 
grievance procedures in 24 CFR part 966, subpart B, which applies to 
public housing tenants, is applicable to this part.

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

    2. The authority citation for part 960 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, 3535(d).

    3. The heading of subpart D is revised, Sec. 960.409 is removed, 
and Secs. 960.401, 960.403, 960.405, and 960.407 are revised to read as 
follows:

Subpart D--Preference for Elderly Families and Disabled Families in 
Mixed Population Projects


Sec. 960.401  Purpose.

    This subpart establishes a preference for elderly families and 
disabled families for admission to mixed population public housing 
projects, as defined in Sec. 960.405.


Sec. 960.403  Applicability.

    (a) This subpart applies to all dwelling units in mixed population 
projects (as defined in Sec. 960.405), or portions of mixed population 
projects, assisted under the U.S. Housing Act of 1937. These projects 
formerly were known as elderly projects.
    (b) This subpart does not apply to section 23 and section 10(c) 
leased housing projects or the section 23 Housing Assistance Payments 
Program where the owners enter into leases directly with the tenants, 
or to the Section 8 Housing Assistance Payments Program, the Low-Rent 
Housing Homeownership Opportunities Program (Turnkey III), the Mutual 
Help Homeownership Opportunities Program, or to Indian Housing 
Authorities. (For applicability to Indian Housing Authorities, see part 
905 of this chapter.) Additionally, this subpart is not applicable to 
projects designated for elderly families or designated for disabled 
families in accordance with 24 CFR part 945.


Sec. 960.405  Definitions.

    Designated housing. See definition of ``designated housing'' in 24 
CFR part 945.
    Disabled families. See definition of ``disabled families'' in 24 
CFR part 945.
    Elderly families. See definition of ``elderly families'' in 24 CFR 
part 945.
    Mixed population project is a public housing project, or portion of 
a project, that was reserved for elderly families and disabled families 
at its inception (and has retained that character). If the project was 
not so reserved at its inception, the PHA has obtained HUD approval to 
give preference in tenant selection for all units in the project (or 
portion of project) to elderly families and disabled families. These 
projects formerly were known as elderly projects.


Sec. 960.407  Selection preference; other preferences; single person 
occupancy.

    (a) A PHA must give preference to elderly families and disabled 
families equally in determining priority for admission to mixed 
population projects. A PHA may not establish a limit on the number of 
elderly families or disabled families who may be accepted for occupancy 
in a mixed population project.
    (b) The PHA must follow its policies and procedures for applying 
the Federal preferences contained in subpart B of this part when 
selecting applicants for admission from among elderly families and 
disabled families.
    (c) Elderly families and disabled families who do not qualify for a 
Federal preference contained in subpart B of this part, and who are 
given preference for admission under paragraph (a) of this section over 
non-elderly families and non-disabled families that qualify for such a 
Federal preference, are not subject to the statutory 10 percent 
limitation on admission of families without a Federal preference over 
families with such a Federal preference that may initially receive 
assistance in any one-year period, as provided in 24 CFR 
960.211(b)(2)(ii).
    (d) If an elderly or disabled applicant is a single person, as this 
term is defined in 24 CFR part 945, the elderly single person or the 
disabled single person shall be given a preference for admission to 
mixed population projects over single persons who are neither elderly 
nor disabled.
    (e) In offering available units to elderly families and disabled 
families in mixed population projects, units with accessible features 
should first be offered to persons with disabilities who require the 
accessibility features of the unit in accordance with the requirements 
of 24 CFR 8.27 and 24 CFR 100.202(c)(3).

    Dated: April 7, 1994.

Joseph Shuldiner,

Assistant Secretary for Public and Indian Housing.

[FR Doc. 94-8897 Filed 4-12-94; 8:45 am]
BILLING CODE 4210-33-P