[Federal Register Volume 67, Number 137 (Wednesday, July 17, 2002)]
[Rules and Regulations]
[Pages 47212-47213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17928]



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Part IV





Department of Housing and Urban Development





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24 CFR Part 570



Requirement of HUD Approval Before a Grantee May Undertake CDBG-
Assisted Demolition of HUD-Owned Housing Units; Final Rule

  Federal Register / Vol. 67, No. 137 / Wednesday, July 17, 2002 / 
Rules and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 570

[Docket No. FR-4698-F-02]
RIN 2506-AC10


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

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

ACTION: Final rule.

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SUMMARY: This final rule amends the Community Development Block Grant 
(CDBG) Entitlement program regulations by requiring grantees to obtain 
HUD's approval to demolish HUD-owned housing units. The amendment will 
ensure that HUD receives notification of a grantee's intent to use CDBG 
funds to demolish HUD-owned housing units. In addition, the application 
of this rule will aid in preserving the supply of affordable housing 
that is available to low- and moderate-income persons. This final rule 
follows publication of a proposed rule on January 22, 2002, which 
elicited one comment. The one comment supported the rule, which HUD is 
adopting without change.

DATES: Effective Date: August 16, 2002.

FOR FURTHER INFORMATION CONTACT: Sue Miller, Director, Entitlement 
Communities Division, Office of Block Grant Assistance, Room 7282, U.S. 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410; telephone (202) 708-1577 (this is not a toll-free 
number). Hearing- or speech-impaired individuals may access the 
telephone number listed in this section by calling the toll-free 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background--The January 22, 2002, Proposed Rule

    On January 22, 2002 (67 FR 2958), HUD published a proposed rule to 
revise the CDBG Entitlement program regulations at 24 CFR 570.201(d), 
to prohibit grantees from using CDBG funds for the demolition of HUD-
owned housing units without prior approval from HUD. Before this 
amendment, the regulation at Sec. 570.201(d) required that a grantee 
obtain HUD's approval to demolish HUD-assisted housing units. The 
preamble to the proposed rule indicated that, although the CDBG 
regulations did not contain a definition of the term ``HUD-assisted 
housing units,'' the term had been considered to include various forms 
of subsidized housing such as section 8 or public housing. It had not 
been HUD policy to interpret the regulation as including HUD-owned 
properties. Thus, this amendment to Sec. 570.201(d) will ensure that 
CDBG-assisted demolition of HUD-owned housing units could be carried 
out only with the prior approval of HUD.
    The proposed rule also stated that HUD believed that the amendment 
will aid in achieving three primary objectives: (1) Ensure that 
grantees notify HUD of their plans to demolish HUD-owned housing units; 
(2) prevent grantees from demolishing, without reasonable cause, HUD-
owned housing units; and, (3) ensure that grantees preserve the supply 
of affordable housing available to low- and moderate-income persons.

II. This Final Rule

    This final rule follows publication of the January 22, 2002, 
proposed rule. The proposed rule invited public comment on the revision 
to 24 CFR 570.201(d). The comment period closed on March 25, 2002. One 
comment was received that urged HUD to adopt the rule. Accordingly, 
because the commenter encouraged the adoption of the rule, and because 
HUD believes this final rule will achieve the objectives described in 
the proposed rule of January 22, 2002, and restated above, HUD is 
adopting the proposed rule without change.

III. The Public Comment

    The one comment received in response to the issuance of the 
proposed rule on January 22, 2002, supported the rule. The commenter 
stated that it believes ``requiring HUD approval before CDBG funds can 
be used to demolish HUD-owned properties will help ensure the existence 
of integrated housing opportunities and the continued supply of 
affordable housing for minority and low- and moderate-income 
communities.'' The commenter wrote that HUD oversight of CDBG funds 
used in the demolition of HUD-owned housing units will help to ensure 
that grantees do not violate the anti-discrimination provisions of the 
Fair Housing Act. The commenter further added that adoption of the rule 
is critical to ensure the financial stability of the FHA mortgage 
insurance program. According to the commenter, the costs of unnecessary 
demolitions, often resulting in liens being placed on the property, and 
the decrease in value of the property after demolition, result in the 
FHA insurance program suffering significant losses.

IV. Findings and Certifications

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 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4223). The Finding of No Significant Impact remains 
available for public inspection weekdays between the hours of 7:30 a.m. 
and 5:30 p.m. in the Office of the Rules Docket Clerk, Office of 
General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this rule before publication and by 
approving it certifies that this rule does not have a significant 
economic impact on a substantial number of small entities. There are no 
anti-competitive discriminatory aspects of the rule with regard to 
small entities and there are not any unusual procedures that need to be 
complied with by small entities.

Executive Order 13132, Federalism

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

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and on the private sector. This final rule does not impose 
a Federal mandate on any State, local, or tribal governments, or on the 
private sector, within the meaning of the Unfunded Mandates Reform Act 
of 1995.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program number is 
14.218.

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List of Subjects in 24 CFR Part 570

    Administrative practice and procedure, American Samoa, Community 
development block grant, Grant programs-education, Grant program-
housing and community development, Guam, Indians, Loan programs-housing 
and community development, Low and moderate income housing, Northern 
Mariana Islands, Pacific Islands Trust Territory, Puerto Rico, 
Reporting and recordkeeping requirements, Student aid, Virgin Islands.

    Accordingly, for the reasons stated in the preamble, HUD amends 24 
CFR part 570 to read as follows:

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

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

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


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


Sec. 570.201  Basic eligible activities.

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

    Dated: June 27, 2002.
Donna M. Abbenante,
General Deputy Assistant Secretary for Community Planning and 
Development.
[FR Doc. 02-17928 Filed 7-16-02; 8:45 am]
BILLING CODE 4120-29-P