[Federal Register Volume 81, Number 96 (Wednesday, May 18, 2016)]
[Proposed Rules]
[Pages 31181-31192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11352]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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 

  Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / 
Proposed Rules  

[[Page 31181]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 92, 93, 570, 574, 578, 880, 881, 883, 884, 886, 
891, 905, 983

[Docket No. FR 5890-P-01]
RIN 2501-AD75


Narrowing the Digital Divide Through Installation of Broadband 
Infrastructure in HUD-Funded New Construction and Substantial 
Rehabilitation of Multifamily Rental Housing

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: Through this proposed rule, HUD continues its efforts to 
narrow the digital divide in low-income communities served by HUD by 
providing, where feasible and with HUD funding, broadband 
infrastructure to communities in need of such infrastructure. Broadband 
is the common term used to refer to a very fast connection to the 
Internet. Such connection is also referred to as high-speed broadband, 
broadband Internet, or high-speed Internet. In this proposed rule, HUD 
proposes to require installation of broadband infrastructure at the 
time of new construction or substantial rehabilitation of multifamily 
rental housing that is funded or supported by HUD. Installation of 
broadband infrastructure at the time of new construction or substantial 
rehabilitation is generally easier and less costly than when such 
installation is undertaken as a stand-alone effort. The proposed rule, 
however, recognizes that installation of broadband infrastructure may 
not be feasible for all new construction or substantial rehabilitation, 
and, therefore, the proposed rule allows limited exceptions to the 
installation requirements. Installing unit-based broadband 
infrastructure in multifamily rental housing that is newly constructed 
or substantially rehabilitated with or supported by HUD funding will 
provide a platform for individuals and families residing in such 
housing to participate in the digital economy, and increase their 
access to economic opportunities.

DATES: Comment due date: July 18, 2016.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule. All communications must refer to the above docket 
number and title. To receive consideration as public comments, comments 
must be submitted through one of the two methods specified below.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make comments immediately available 
to the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    No Facsimiled Comments. Facsimiled (faxed) comments are not 
acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number via TTY by calling the Federal Relay Service at 
800-877-8339 (this is a toll-free number). Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For Community Planning and Development 
programs, Marion McFadden, Office of Community Planning and 
Development, Room 7204, telephone, 202-708-2111 (this is not a toll-
free number). For Office of Multifamily Housing programs, Katie 
Buckner, Office of Housing, Room 6222, telephone 202-402-7140 (this is 
not a toll-free number). For Office of Public and Indian Housing 
programs, Dominique Blom, Office of Public and Indian Housing, Room 
4130, telephone 202-402-4181 (this is not a toll-free number). The 
address for all individuals is Department of Housing and Urban 
Development, 451 7th Street SW., Washington, DC 20410-0500. Persons 
with hearing or speech impairments may access these numbers through TTY 
by calling the Federal Relay Service at 800-877-8339 (this is a toll-
free number).

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of This Proposed Rule

    The purpose of this proposed rule is to require installation of 
broadband infrastructure at the time of new construction or substantial 
rehabilitation of multifamily rental housing that is funded or 
supported by HUD.\1\ This rulemaking does not require a HUD-funded 
grantee to undertake new construction or substantial rehabilitation, 
but when a grantee does choose to pursue such activity for multifamily 
rental housing with HUD funding, this proposed rule would require 
installation of broadband infrastructure. While the proposed rule only 
requires affected grantees to install one form of broadband 
infrastructure, HUD suggests that grantees consider whether installing 
more than one form of broadband infrastructure would be beneficial to 
encourage competition among service providers on quality and price. 
Installing unit-based broadband infrastructure in multifamily rental 
housing that is newly constructed and

[[Page 31182]]

substantially rehabilitated with or supported by HUD funding will 
provide a platform for individuals and families residing in such 
housing to participate in the digital economy, and increase their 
access to economic opportunities.
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    \1\ This proposed rule applies to all projects with project-
based Section 8 housing assistance payment (HAP) contracts (other 
than Mod Rehab or Mod Rehab Single Room Occupancy (SRO) projects), 
regardless of whether the properties receive specific funding to pay 
directly for substantial rehabilitation or new construction, as 
defined in this proposed rule.
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B. Summary of Major Provisions of This Proposed Rule

    This proposed rule would require installation of broadband 
infrastructure at the time of new construction or substantial 
rehabilitation of multifamily rental units funded by the following 
programs:
    1. Choice Neighborhoods Implementation Grant program;
    2. Community Development Block Grant (CDBG) program, including the 
CDBG Disaster Recovery program;
    3. Continuum of Care program;
    4. HOME Investment Partnerships program;
    5. Housing Opportunities for Persons With AIDS program;
    6. Housing Trust Fund program;
    7. Project-Based Voucher program;
    8. Public Housing Capital Fund program;
    9. Section 8 project-based housing assistance payments programs, 
including, but not limited to, the Section 8 New Construction, 
Substantial Rehabilitation, Loan Management Set-Aside, and Property 
Disposition programs; and
    10. Supportive Housing for the Elderly and Persons with 
Disabilities program.
    The requirements of the proposed rule would not apply to 
multifamily rental housing that only has a mortgage insured by HUD's 
Federal Housing Administration or with a loan guaranteed under a HUD 
loan guarantee program.
    HUD is proposing to define broadband infrastructure as cables, 
fiber optics, wiring, or other permanent infrastructure, including 
wireless infrastructure, as long as the installation results in 
broadband infrastructure in each dwelling unit meeting the definition 
created by the Federal Communications Commission (FCC), which currently 
is 25 Megabits per second (Mbps) download, 3 Mbps upload. In addition, 
HUD is proposing that, for programs that do not already have a 
definition of substantial rehabilitation, substantial rehabilitation be 
defined as work on the electrical system that is equal to or greater 
than 75 percent of the cost of replacing the entire electrical system, 
or when the cost of the rehabilitation is equal to or greater than 75 
percent of the total estimated cost of replacing the multifamily rental 
housing after the rehabilitation is complete.

C. Costs and Benefits of This Proposed Rule

    The costs and benefits of this proposed rule are difficult to 
quantify, but they can be described qualitatively. This proposed rule 
only requires that the broadband infrastructure provided is to receive 
high-speed Internet that is ``accessible'' in each unit; it does not 
require those recipients of funding undertaking new construction or 
substantial rehabilitation to provide a regular subscription to 
broadband service (even at a cost) to current or future residents. 
Furthermore, the definition of broadband infrastructure in the proposed 
rule is broad enough to include coaxial cable television (TV) wiring 
that supports cable modem access or even permanent infrastructure that 
would provide broadband speeds to dwelling units wirelessly. The 
rulemaking also provides for exceptions to the installation 
requirements for where the installation is too costly to provide due to 
location or building characteristics.
    A recent survey by the National Association of Homebuilders found 
that just 4 percent of the surveyed multifamily housing developers 
never installed landline wires and jacks in multifamily units completed 
in the past 12 months.\2\ In recent years, HUD's competitive grants for 
new construction under the Choice Neighborhoods program have sought the 
provision of broadband access. Therefore, this rulemaking simply 
proposes to codify what is considered common practice in the private 
market today when new construction or substantial rehabilitation is 
undertaken.
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    \2\ NAHB, Multifamily Market Survey 3rd Quarter 2015. November 
2015. There were 90 responses, and of the responses, 18 percent 
indicated it was Not Applicable, presumably because they had not 
completed any projects in the past 12 months. The survey covers all 
multifamily construction including lower quality Class B and Class 
C. It does not provide details on the developers or projects that 
did not install landlines.
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    Given the wide range of technologies that may be employed to meet 
the requirements of this proposed rule, it is not possible to specify 
the cost of the technology and how much additional burden this may be 
for owners or developers building or providing substantial 
rehabilitation to HUD-assisted rental housing. If the broadband 
infrastructure is wiring connected to proximate telephone or cable 
company networks, the cost is not expected to be significant, as all 
electrical work in a multifamily project is estimated to be only about 
10 percent of the construction cost; \3\ running an additional cable 
through existing electrical conduits would be a minimal incremental 
cost. If the broadband infrastructure is wireless, the cost will be for 
the equipment, which varies greatly by the design and size of the 
project, as does the cost per unit. Given that the costs of 
installation of broadband infrastructure are only a portion of the 10 
percent of construction costs, the requirement proposed by this 
rulemaking is not expected to measurably reduce the size of the housing 
or the number of units to be constructed. At most, installation of 
broadband infrastructure may reduce the provision of other amenities or 
nonessential finishes, but HUD considers even these reductions. 
Additionally, the proposed rule only applies to new construction or 
substantial rehabilitation that is supported with HUD-provided 
resources.
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    \3\ 2015 National Building Cost Manual. Ed. Ben Moselle. 
Carlsbad, CA: Craftsman Book Company. https://www.craftsman-book.com/media/static/previews/2015_NBC_book_preview.pdf, pg. 19.
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    Materials on the benefits of narrowing the digital divide are 
voluminous. Having broadband Internet in the home increases household 
income \4\ and yields higher education achievement for students.\5\ On 
July 2015, the Council of Economic Advisers issued the report ``Mapping 
the Digital Divide,'' which examines progress in the United States in 
narrowing the digital divide and the work that still needs to be done, 
especially in the Nation's poorest neighborhoods and most rural 
communities.\6\ However, this proposed rule's limited scope in only 
requiring the installation of infrastructure instead of providing 
Internet access also limits the benefits of the proposed rule. The 
benefit of the proposed rule is that where broadband Internet service 
can be made available, the tenant, residing in housing with broadband 
infrastructure, will be assured of the ability to access broadband 
Internet service, whether they choose and are able to afford Internet 
service or not. This puts

[[Page 31183]]

broadband Internet service within reach, especially where other 
charitable and public social programs, including HUD's ConnectHome 
program, provide free or reduced-cost service.
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    \4\ Ericsson, Arthur D. Little, and Chalmers University of 
Technology. Socioeconomic Effects of Broadband Speed. September 
2013. http://www.ericsson.com/res/thecompany/docs/corporate-responsibility/2013/ericsson-broadband-final-071013.pdf.
    \5\ Davidson, Charles M. and Michael J. Santorelli. ``The Impact 
of Broadband on Education.'' December 2010. https://www.uschamber.com/sites/default/files/legacy/about/US_Chamber_Paper_on_Broadband_and_Education.pdf, pg. 24.
    \6\ See Council of Economic Advisers. ``Mapping the Digital 
Divide.'' Issue Brief. July 2015. https://www.whitehouse.gov/sites/default/files/wh_digital_divide_issue_brief.pdf.
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II. Background

    On March 23, 2015, President Obama issued a Presidential memorandum 
on ``Expanding Broadband Deployment and Adoption by Addressing 
Regulatory Barriers and Encouraging Investment and Training.'' \7\ In 
this memorandum, the President noted that access to high-speed 
broadband is no longer a luxury, but it is a necessity for American 
families, businesses, and consumers. The President further noted that 
the Federal Government has an important role to play in developing 
coordinated policies to promote broadband deployment and adoption, 
including promoting best practices, breaking down regulatory barriers, 
and encouraging further investment.
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    \7\ See Barack Obama. ``Presidential Memorandum--Expanding 
Broadband Deployment and Adoption by Addressing Regulatory Barriers 
and Encouraging Investment and Training.'' March 23, 2015. https://www.whitehouse.gov/the-press-office/2015/03/23/presidential-memorandum-expanding-broadband-deployment-and-adoption-addr.
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    On July 15, 2015, HUD launched its Digital Opportunity 
Demonstration, known as ``ConnectHome,'' in which HUD provided a 
platform for collaboration among local governments, public housing 
agencies, Internet service providers, philanthropic foundations, 
nonprofit organizations, and other relevant stakeholders to work 
together to produce local solutions for narrowing the digital divide in 
communities across the nation served by HUD. The demonstration, or 
pilot, commenced with the participation of 28 communities.\8\ Through 
contributions made by the Internet service providers and other 
organizations participating in the pilot, residents living in public 
and HUD-assisted housing in these 28 communities will receive 
discounted broadband service, technical assistance, literacy training, 
and electronic devices that provide for accessing high-speed Internet.
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    \8\ See Connect Home. ``About the Pilot.'' http://connecthome.hud.gov/pilot.
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    The importance of all Americans having access to the Internet 
cannot be overstated. As HUD stated in its announcement of the Digital 
Opportunity Demonstration, published in the Federal Register on April 
3, 2015, at 80 FR 18248, knowledge is a pillar to achieving the 
American Dream--a catalyst for upward mobility as well as an investment 
that ensures each generation has opportunities to succeed. Many low-
income Americans do not have broadband Internet at home, contributing 
to the estimated 66 million Americans who lack basic digital literacy 
skills.\9\ Without broadband adoption and the skills to use Internet 
technology at home, children and adults can miss out on the high-value 
educational, economic, and social impact that high-speed Internet 
provides. It is for these reasons that HUD is exploring ways, beyond 
ConnectHome, to narrow the digital divide for the low-income 
individuals and families served by HUD multifamily rental housing 
programs. This proposed rule presents one such additional effort.
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    \9\ See Connect Minnesota. ``Digital Literacy: A Critical Skill 
for all Minnesotans.'' July 2013. http://www.connectednation.org/sites/default/files/mn_digital_literacy_final.pdf.
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III. This Proposed Rule

A. Multifamily Rental Housing Covered by This Proposed Rule

    This proposed rule would apply to new construction and substantial 
rehabilitation of multifamily rental housing in the HUD programs that 
authorize and fund such activities. These programs are listed in 
Section II.B of this preamble. The proposed rule would not apply to 
multifamily rental housing with a mortgage insured by HUD's Federal 
Housing Administration (FHA) or with a loan guaranteed under a HUD loan 
guarantee program.\10\ Further, this proposed rule would not apply to 
new construction or substantial rehabilitation of single-family or 
single-unit housing.
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    \10\ See the Section 108 Loan Guarantee program, for which the 
regulations are found in 24 CFR part 570, subpart M; the Loan 
Guarantee program for Indian Housing, for which the regulations are 
found in 24 CFR part 1005; the Section 184 Loan Guarantees for 
Native Hawaiian Housing, for which the regulations are found in 24 
CFR part 1007; and the Title VI Loan Guarantee Program, for which 
the regulations are found in 24 CFR part 1000, subpart E.
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    HUD proposes to require installation of broadband infrastructure in 
individual housing units at the time of new construction or substantial 
rehabilitation of multifamily rental housing, because while such 
installation is not without cost, the cost can be reduced by providing 
the installation at the time when housing is first being built or 
substantially rehabilitated.

B. HUD Programs Covered by This Proposed Rule

    As provided in section I.B. of this preamble, this proposed rule 
would apply to multifamily rental housing that is to be newly 
constructed or substantially rehabilitated with funds under the 
following HUD programs, as implemented through the regulations or under 
authorities cited below:
    1. Choice Neighborhoods Implementation Grant program, for which the 
requirements are found in HUD notices of funding availability (NOFAs);
    2. Community Development Block Grant (CDBG) program, for which the 
regulations are found in 24 CFR part 570;
    3. Continuum of Care (CoC) program, for which the regulations are 
found in 24 CFR part 578;
    4. HOME Investment Partnerships (HOME) program, for which the 
regulations are found in 24 CFR part 92;
    5. Housing Opportunities for Persons With AIDS (HOPWA) program, for 
which the regulations are found in 24 CFR part 574;
    6. Housing Trust Fund (HTF) program, for which the regulations are 
found in 24 CFR part 93;
    7. Project-Based Voucher program, for which the regulations are 
found in 24 CFR part 983;
    8. Public Housing Capital Fund program, for which the regulations 
are found in 24 CFR part 905;
    9. Section 8 project-based housing assistance payments programs, 
including, but not limited to, the Section 8 New Construction, 
Substantial Rehabilitation, Loan Management Set-Aside, and Property 
Disposition programs; and
    10. Supportive Housing for the Elderly and Persons with 
Disabilities program, for which the regulations are found in 24 CFR 
part 891.
    One of HUD's major new construction and substantial rehabilitation 
programs, the Choice Neighborhoods program, already requires broadband 
infrastructure in new construction units and permits the use of Choice 
Neighborhood funds for broadband infrastructure in substantially 
rehabilitated units. In addition, Choice Neighborhood grantees may use 
up to 15 percent of their grants for Critical Community Improvements, 
of which neighborhood broadband programs are considered an eligible 
expense. The Choice Neighborhoods program supports locally driven 
strategies to address struggling neighborhoods with distressed public 
or HUD-assisted housing through a comprehensive approach to 
neighborhood transformation. The program is designed to catalyze 
critical improvements in neighborhood assets, including vacant 
property, housing, services, and schools. One of the three core goals 
of the Choice Neighborhoods program is to replace distressed public and 
assisted housing with high-quality, mixed-income

[[Page 31184]]

housing.\11\ The Choice Neighborhoods program is implemented through 
annual NOFAs. HUD's Fiscal Year (FY) 2014 Choice Neighborhoods NOFA 
requires housing to be built with broadband Internet 
infrastructure.\12\
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    \11\ United States Department of Housing and Urban Development. 
``Choice Neighborhoods.'' http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/cn.
    \12\ See United States Department of Housing and Urban 
Development. ``Choice Neighborhoods Planning Grants Notice of 
Funding Availability.'' June 4, 2014. http://portal.hud.gov/hudportal/documents/huddoc?id=13CNP-FR5800N13.pdf.
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C. When Installation of Broadband Infrastructure May Be Infeasible

    As noted in the Summary, HUD recognizes that installation of 
broadband infrastructure will not be feasible for every new 
construction or substantial rehabilitation of multifamily rental 
housing proposed to be covered by this proposed rule. For example, HUD 
recognizes that constructing or undertaking substantial rehabilitation 
of multifamily rental housing in certain areas may make installation of 
broadband infrastructure infeasible. As the Rural Utilities Service of 
the U.S. Department of Agriculture (USDA) stated in a final rule 
entitled ``Economic Benefits of Broadband Deployment in Rural Areas,'' 
published on February 6, 2013,\13\ bringing broadband services to rural 
areas presents challenges because rural systems must contend with lower 
household density than urban systems. Similarly, the particular type or 
structure of covered multifamily rental housing to be substantially 
rehabilitated may also make the installation of broadband 
infrastructure infeasible. The proposed rule therefore offers 
exceptions to broadband installation requirements when a funding 
recipient determines that installing broadband infrastructure is not 
feasible. Recipients and owners will be responsible for maintaining 
documentation that justifies the recipient's determination of 
infeasibility. HUD will consider providing additional guidance on this 
issue when the final rule becomes effective.
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    \13\ http://www.gpo.gov/fdsys/pkg/FR-2013-02-06/pdf/2013-02390.pdf.
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D. Rule Terminology

Broadband
    As noted in the Summary, ``broadband'' is the common term used to 
refer to a very fast connection to the Internet. Such connection is 
also referred to as high-speed broadband or high-speed Internet. HUD 
recognizes that broadband is defined by several agencies as Internet 
access of at least a certain speed.\14\ HUD is proposing to require 
that, where feasible, infrastructure be installed to provide every 
housing unit covered by this proposed rule with the ability to access 
the Internet that meets the definition adopted by the FCC--currently 25 
Mbps download, 3 Mbps upload-- regardless of whether any Internet 
service provider offers such access in a given location. This will 
provide the capacity for future broadband adoption without having to 
undertake additional renovation work. If the FCC modifies its 
definitions in the future, HUD's requirements for any new construction 
or substantial rehabilitation undertaken after the definition change 
will also change.
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    \14\ For example, see the U.S. Department of Agriculture 
definition at 7 CFR 1738.2 (requiring download speeds of at least 4 
Mbps, or the Federal Communications Commission's definition in its 
2015 Broadband Progress Report at https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-10A1.pdf (defining broadband as having download 
speeds of at least 25 Mbps).
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Broadband Infrastructure
    The broadband infrastructure that needs to be installed to provide 
families in covered multifamily rental housing with broadband access 
will vary according to the housing being constructed or rehabilitated 
and the plans of the entity doing such construction or rehabilitation. 
Therefore, HUD proposes a flexible definition, allowing entities 
undertaking new construction or substantial rehabilitation to install 
the broadband infrastructure that is most feasible given the specifics 
of the construction or substantial rehabilitation to be undertaken. HUD 
proposes to require installation of cables, fiber optics, wiring, or 
other infrastructure, as long as the installation results in broadband 
accessibility in each dwelling unit. HUD proposes only to require the 
installation of broadband infrastructure on the property, not to 
require that grantees be responsible for ensuring an external 
connection between the property and an Internet service provider (ISP).
Substantial Rehabilitation
    While some of the HUD programs listed in Section II.B of this 
preamble define what is meant by ``substantial rehabilitation,'' the 
majority of the covered programs do not define this term. Therefore, 
for the sole purpose of determining when substantial rehabilitation of 
covered multifamily rental housing would trigger installation of 
broadband infrastructure and, except in the HOPWA program, where 
substantial rehabilitation is already defined, HUD proposes to define 
``substantial rehabilitation'' to mean:
    (1) Significant work on the electrical system of the multifamily 
rental housing. ``Significant work'' is defined as work that is equal 
to or greater than 75 percent of the cost of replacing the entire 
electrical system. In the case of multifamily rental housing with 
multiple buildings with more than 4 units, ``entire system'' refers to 
the electrical system of the building(s) undergoing rehabilitation; or
    (2) Rehabilitation of the multifamily rental housing in which the 
estimated cost of the rehabilitation is equal to or greater than 75 
percent of the total estimated cost of replacing the multifamily rental 
housing after the rehabilitation is complete. In the case of 
multifamily rental housing with multiple buildings with more than 4 
units, the replacement cost used in this determination would be the 
replacement cost of the building(s) undergoing rehabilitation.

E. Compliance Timeline

    HUD intends for this proposed rule to apply to projects that have 
not yet established their budgets and had funding approved, in order to 
give recipients and owners adequate time to factor the installation of 
broadband infrastructure into their new construction or substantial 
rehabilitation plans.

F. Rule's Objective

    With this proposed rule, HUD seeks to take another important step 
toward narrowing the digital divide by providing residents in covered 
multifamily rental housing that is to be newly constructed or 
substantially rehabilitated with infrastructure that supports access to 
broadband Internet service, thereby increasing access to educational 
and economic opportunities for these residents.

IV. Specific Questions for Comments

    While HUD welcomes comments on all aspects of this proposed rule, 
HUD is seeking specific comment on the following questions:
    1. In light of the policy objectives discussed in the preamble, 
should this proposed rule be applied to other HUD programs, 
particularly additional multifamily housing programs (such as Rental 
Supplement (RS), Rental Assistance Payment (RAP), Moderate 
Rehabilitation Programs (Mod Rehab), etc.) or programs addressing 
single-family housing? Should any programs covered by this proposed 
rule be removed?

[[Page 31185]]

    2. Given that the definition of the term ``substantial 
rehabilitation'' will determine which projects (other than new 
construction) are affected by this rulemaking, should the definition be 
changed in any way?
    3. How much does it cost to add the installation of broadband 
infrastructure to a pre-planned new construction or rehabilitation 
project? Are HUD's estimates for the labor and materials costs for 
installing broadband infrastructure accurate? What data can the public 
share with HUD about the most cost-effective way for broadband 
infrastructure to be installed during a new construction or 
rehabilitation project?
    4. The proposed rule provides exceptions to the requirements if 
compliance would be infeasible due to cost, location, or structural 
concerns. Are these exceptions too broad or too narrow? What is the 
best way for grantees to demonstrate to HUD that installation of 
broadband infrastructure is infeasible, and what would appropriate 
sanctions be if grantees do not comply even if it was feasible? Do any 
grantees have experience with a project in which installing broadband 
infrastructure was physically or economically infeasible, and under 
what circumstances was it infeasible?
    5. When evaluating whether the rehabilitation being done meets the 
threshold in the definition of substantial rehabilitation, should HUD 
use the pre-rehabilitation estimates for the project alone, or should 
HUD include increases in rehabilitation costs that arise in the process 
of rehabilitation?

V. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned. Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. This proposed rule was determined to be a 
``significant regulatory action'' as defined in section 3(f) of the 
Executive order (although not an economically significant regulatory 
action, as provided under section 3(f)(1) of the Executive order).
    As discussed, this proposed rule furthers HUD's efforts to narrow 
the digital divide in low-income communities served by HUD. 
Specifically, HUD proposes to require installation of broadband 
infrastructure at the time of new construction or substantial 
rehabilitation of multifamily rental housing that is funded by HUD. As 
noted in the Executive Summary, the costs and benefits of this proposed 
rule are difficult to quantify, but they can be described 
qualitatively.

A. Benefits

    The evidence demonstrating the benefits of narrowing the digital 
divide is well documented. In just one example, a study conducted by a 
former Chair of the President's Council of Economic Advisers used data 
on the amount of time Internet users spend online to estimate that 
Internet access produces thousands of dollars of consumer surplus per 
user each year.\15\ As noted above, however, the benefits of Internet 
technology have not been evenly distributed and research shows that 
there remain substantial disparities in both Internet use and the 
quality of access. This digital deficit is generally concentrated among 
older, less educated, and less affluent populations.\16\
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    \15\ Council of Economic Advisers July 2015 report, supra, 
citing Austan Goolsbee and Peter J. Klenow, Valuing Consumer 
Products by the Time Spent Using Them: An Application to the 
Internet National Bureau of Economic Research Working Paper No. 
11995 (February 2006) available online at: http://www.nber.org/papers/w11995.
    \16\ Ibid.
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    HUD recognizes that the proposed rule's limited scope in only 
requiring the installation of infrastructure, instead of providing 
Internet access, also limits the benefits of the proposed rule. 
Specifically, the benefit of the proposed rule is that where broadband 
Internet can be made available at a limited price, the tenant, residing 
in housing with broadband infrastructure, will be assured of the 
ability to access broadband Internet service, whether they choose and 
are able to afford Internet service or not. This proposed rule, 
therefore, would put broadband Internet service within reach where 
other charitable and public social programs, including HUD's 
ConnectHome program, provide free or reduced cost service.

B. Costs

    It is not possible to specify the exact costs that recipients and 
owners may incur as a result of the proposed rule, given the variety of 
available technologies that may be used to satisfy the new broadband 
requirements. However, available data indicates that any costs 
associated with this proposed rule will be minimal.
    As is displayed on table I, broadband Internet access can be 
provided using two general technologies: Wired and wireless, each with 
several specific technologies. Broadband can be delivered over wired 
lines using very-high-bit-rate digital subscriber lines (VDSL), cable 
lines, power lines (BPL), or fiber optic platforms. Using wireless 
technologies, broadband can be provided using satellite, fixed 
wireless, mobile wireless, and Wi-Fi platforms.

                                    Table I--Types of Broadband Technologies
----------------------------------------------------------------------------------------------------------------
                                                                               Access requirement
                                                               -------------------------------------------------
               Platform                    Connection type                                     Not part of
                                                                 Part of infrastructure       infrastructure
----------------------------------------------------------------------------------------------------------------
Wired
Digital Subscriber Line (VDSL).......  Copper wire............  Yes....................  Router & Modem.
Cable Modem..........................  Copper wire............  Yes....................  Router & Modem.
Fiber................................  Fiber Optic wire.......  Yes....................  Router & Modem.
Broadband over Power Lines (BPL).....  Copper wire............  Yes....................  Router & Modem.
Wireless
Satellite............................  Over the Air--satellite  None...................  Router & Modem.

[[Page 31186]]

 
Fixed Wireless.......................  Over the Air--Longer     None...................  Router & Modem.
                                        Range Directional
                                        Equipment.
Mobile Wireless......................  Over the Air--Cellular.  None...................  Router & Modem.
Wireless Fidelity (WiFi).............  Over the Air--Short-     None...................  Router & Modem.
                                        Range Wireless
                                        Technology.
----------------------------------------------------------------------------------------------------------------

    Whereas wired lines technologies may require some sort of physical 
infrastructure consisting of internal wiring within the dwelling unit, 
wireless technologies do not require any additional physical 
infrastructure within the building. With wireless technology, the 
signal travels through the air to the customer, who uses a connection 
technology, such as a modem, to access the services. For wireless 
technologies, the infrastructure cost to the property boundary 
(connection to the service provider) is nil ($0). However, the 
availability of wireless broadband service is limited and evolving, so 
HUD expects many builders will opt to install wired broadband 
infrastructure.
    Building costs of installing wired infrastructure are limited to 
in-dwelling wiring, as this is all that is required by the proposed 
rule. Within the unit or the building, the electrical work consists of 
running cable (meeting the requirements of category (Cat) 5e or Cat 6 
wire), installing jacks and plates, and minor construction work (such 
as drilling and patching walls). Fiber optic cables are rarely run in 
the dwelling unit but are installed by the service provider outside the 
unit; the non-fiber optic wiring then makes broadband accessible within 
the unit. Depending on the market, some of the cost is also born by the 
service provider.
    The average per-unit cost for wiring for broadband Internet is 
approximately $200 \17\ (see table II). These costs are simply 
estimates of one method of complying with the requirements of the 
proposed rule. Labor costs will also vary based on the region and 
whether the installation is being done as part of substantial 
rehabilitation or new construction. At most, installation of broadband 
infrastructure may reduce the provision of other amenities or 
nonessential finishes, but even these reductions are considered 
unlikely.
---------------------------------------------------------------------------

    \17\ http://www.homewyse.com/services/cost_to_install_electrical_wiring.html

                          Table II--Sample Cost To Install Electrical Wiring (1 Wiring)
----------------------------------------------------------------------------------------------------------------
                  Item                                   Quantity                       Low            High
----------------------------------------------------------------------------------------------------------------
Electrical Wiring Labor (Hours)           2.1 hours.............................         $160.07         $205.10
Labor estimate to install electrical
 wiring, route, secure, and connect new
 NMB-B wiring run for single receptacle,
 up to a 40' run. Includes planning,
 equipment, and material acquisition,
 area preparation and protection, setup
 and cleanup.
Electrical Wiring Materials and Supplies  1 Wiring (unit).......................           20.00           25.00
Cost of related materials and supplies
 typically required to install
 electrical wiring including connectors,
 fittings, and mounting hardware.
                                                                                 -------------------------------
    Total Costs (1 Wiring)..............  ......................................          180.07          230.10
----------------------------------------------------------------------------------------------------------------

    HUD also notes that the proposed rule is drafted so as to minimize 
the costs of the new installation requirements. For example, the 
proposed rule does not mandate any rehabilitation or construction, and 
the decision to undertake such activities appropriately remains with 
recipients and owners. Rather, the scope of the proposed regulatory 
changes is limited to requiring the installation of broadband 
infrastructure if the recipient or owner elects to undertake new 
construction or substantial rehabilitation. The proposed rule minimizes 
the economic impacts on recipients and owners by recognizing that the 
installation of broadband infrastructure is generally less burdensome 
and costly at the time of new construction or substantial 
rehabilitation than when such installation is undertaken as a stand-
alone effort.
    Moreover, this proposed rule only requires the installation of 
broadband infrastructure that is ``accessible'' in each unit. The 
proposed rule does not require recipients or owners to provide a 
regular subscription to broadband Internet service (even at a cost) to 
residents. Also minimizing the economic costs of the proposed 
regulatory changes is the fact that the proposed definition of 
broadband infrastructure is broad enough to include cable television, 
fiber optic cabling, and wireless infrastructure providing appropriate 
broadband connectivity to the individual units. As discussed above in 
this Executive Summary, multifamily HUD or standard- market new 
construction typically provides telephone landline and cable TV 
connectivity. Further, HUD's competitive grants for new construction 
under the Choice Neighborhoods program have, in recent years, sought 
the provision of broadband.
    A review of HUD internal databases, summarized on table III, shows 
that in 2013, the 58,677 units within the targeted programs were newly 
constructed or rehabilitated. However, HUD's data did not contain 
specific information to be able to determine how many of the units that 
underwent rehabilitation met the definition of ``substantial 
rehabilitation'' contained in the proposed rule, so the number of

[[Page 31187]]

affected units would be smaller than is contained in the table. In 
addition, data on affected units newly constructed using CDBG funding 
is unavailable, as grantee reports do not separate multifamily from 
single-unit new construction.

                                         Table III--HUD-Assisted New Construction and Substantial Rehabilitation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Sec. 8                           Sec. 8                                       HOME
                                                          RAD      811 PRAC   202 PRAC     202      HOPE VI      PIH        CDBG      Rental     Totals
--------------------------------------------------------------------------------------------------------------------------------------------------------
New Construction
2012.................................................  .........        506      2,405  .........        146        703
2013.................................................        110        583      2,034  .........         44        297  .........     19,424     22,492
2014.................................................        100        482      1,592  .........  .........  .........  .........     11,596
Rehabilitation
2012.................................................  .........  .........         25  .........  .........         36
2013.................................................        199         15  .........        109  .........         16     20,918     14,928     36,185
2014.................................................  .........         28         15  .........  .........  .........     15,716      6,965
                                                                                                                                              ----------
    FY 2013 Totals...................................  .........  .........  .........  .........  .........  .........  .........  .........     58,677
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Further, a review found that multifamily (5-plus unit) HUD or 
standard-market new construction typically provides telephone landline 
and many provide cable TV connectivity.\18\ A recent survey by the 
National Association of Homebuilders found that just 4 percent of the 
surveyed multifamily housing developers did not install landline wires 
and jacks in multifamily units completed in the past 12 
months.18 19 In recent years, HUD's competitive grants for 
new construction under the Choice Neighborhoods program have required 
the provision of broadband.\20\ Therefore, this proposed rule simply 
codifies what is considered common practice in several programs.
---------------------------------------------------------------------------

    \18\ For example under ``Class 4 Low Average Quality'' the 
Craftsman 2015 National Building Cost Manual lists cable TV as a 
standard feature. Only ``Class 5'' minimum quality does not list 
cable or a computer network as a standard feature. All electrical 
work is estimated to be 10 percent of project cost. 2015 National 
Building Cost Manual, supra, p. 19.
    \18\ NAHB, Multifamily Market Survey, supra.
    \19\ Note that HUD's definition of accessibility is more 
restrictive than the FCC's because HUD considers only the building 
itself.
    \20\ United States Department of Housing and Urban Development. 
``Choice Neighborhoods Planning Grants Notice of Funding 
Availability,'' supra, p. 32. ``Broadband Access. All FY2014 and 
FY2015 Implementation Grantees will be required, as part of their 
Transformation Plan, to include infrastructure that permits unit-
based access to broadband Internet connectivity in all new units. 
Grantees may use Choice Neighborhoods funds to provide unit-based 
broadband Internet connectivity, which includes the costs of 
installing broadband infrastructure and hardware in units, but not 
the costs of Internet service for residents. Regular and informed 
Internet adoption can increase access to the job market, as well as 
health, education, financial and other services. Further, in-home 
broadband Internet access is an attractive, and in most cases, 
standard amenity that can be used to market the mixed-income 
community created through the Transformation Plan.''
---------------------------------------------------------------------------

    Accordingly, most recipients and owners already meet the standards 
established in the proposed rule, and the new regulatory requirements 
will impose minimal, if any, new economic costs. HUD has addressed 
those rare situations where the proposed new requirements may prove too 
costly by granting exceptions to the installation requirements where 
the installation is economically infeasible due to location or building 
characteristics.
    The docket file is available for public inspection in the 
Regulations Division, Office of General Counsel, Department of Housing 
and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 
20410-0500. Due to security measures at the HUD Headquarters building, 
please schedule an appointment to review the docket file by calling the 
Regulation Division at 202-708-3055 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
via TTY by calling the Federal Relay Service at 800-877-8339 (this is a 
toll-free number).
Impact on Small Entities
    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities.
    The proposed rule would provide that for new construction or 
substantial rehabilitation of multifamily rental housing funded by HUD, 
as part of the new construction or substantial rehabilitation to be 
undertaken, such activity must include installation of broadband 
infrastructure. None of the HUD-covered programs listed in this 
proposed rule require a grantee to undertake new construction or 
substantial rehabilitation. Instead, new construction and substantial 
rehabilitation are eligible activities that grantees may take using HUD 
funds. Therefore, small entities will not incur any costs than they 
otherwise would incur by voluntarily undertaking new construction or 
substantial rehabilitation, since the costs of these activities, 
including the installation of broadband infrastructure, are funded by 
HUD. For these reasons, this proposed rule will not have a significant 
economic impact on a substantial number of small entities.
    Notwithstanding HUD's determination that this proposed rule will 
not have a significant economic effect on a substantial number of small 
entities, HUD specifically invites comments regarding any less 
burdensome alternatives to this proposed rule that will meet HUD's 
objectives, as described in this preamble.
Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This proposed rule will not impose any Federal 
mandates on any State, local, or tribal governments or the private 
sector within the meaning of the UMRA.
Paperwork Reduction Act
    The information collection requirements contained in this proposed 
rule must be submitted to OMB under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3520) for review and approval. In accordance with the 
Paperwork Reduction Act, an agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless the collection displays a currently valid OMB control number.

[[Page 31188]]

    The burden of the information collections in this proposed rule is 
estimated to be minimal. The reporting of new construction or 
substantial rehabilitation activity under the programs covered by this 
proposed rule is not increased through the installation of broadband 
infrastructure. However, the information collection that is new is the 
documentation required of the grantee that the location of proposed new 
construction makes installation of broadband infrastructure infeasible, 
or that the cost of installing the infrastructure would result in a 
fundamental alteration in the nature of its program or activity or in 
an undue financial burden. The total number of grantees that undertake 
new construction or substantial rehabilitation, as defined in this 
proposed rule, with HUD funds is currently low, and this is reflected 
in the respondents.

                                       Reporting and Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
                                                                     Response
             Information collection                  Number of       frequency     Burden hours    Total burden
                                                    respondents      (average)     per response        hours
----------------------------------------------------------------------------------------------------------------
Documentation of inability to undertake                    1,000               1               2           2,000
 installation of broadband infrastructure.......
                                                 ---------------------------------------------------------------
    Totals......................................           1,000               1               2           2,000
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this proposed rule. Comments 
must refer to the proposal by name and docket number (FR-5890-P-01) and 
must be sent to: HUD Desk Officer, Office of Management and Budget, New 
Executive Office Building, Washington, DC 20503, Fax number: 202-395-
6947, and Collette Pollard, Reports Liaison Officer, Department of 
Housing and Urban Development, 451 7th Street SW., Washington, DC 
20410.
Environmental Review
    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations in 24 CFR 
part 50 that implement section 102(2)(C) of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for 
public inspection, during regular business hours, in the Regulations 
Division, Office of General Counsel, Department of Housing and Urban 
Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500, 
or online at www.regulations.gov. Due to security measures at the HUD 
Headquarters building, please schedule an appointment to review the 
FONSI by calling the Regulations Division at 202-708-3055 (this is not 
a toll-free number). Individuals with speech or hearing impairments may 
access this number via TTY by calling the Federal Relay Service at 800-
877-8339 (this is a toll-free number).
Executive Order 13132, Federalism
    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive order. This proposed rule does not have 
federalism implications and does not impose substantial direct 
compliance costs on State and local governments nor preempt State law 
within the meaning of the Executive order.
Catalog of Federal Domestic Assistance
    The Catalog of Federal Domestic Assistance numbers applicable to 
the programs that would be affected by this rule are: 14.218, 14.225, 
14.228, 14.239, 14.241, 14.267, 14.850, 14.871, and 14.872.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs-housing and community development, 
Individuals with disabilities, Intergovernmental relations, Loan 
programs-housing and community development, Low and moderate income 
housing, Mortgage insurance, Penalties, Pets, Public housing, Rent 
subsidies, Reporting and recordkeeping requirements, Social security, 
Unemployment compensation, Wages.

24 CFR Part 92

    Administrative practice and procedure, Low and moderate income 
housing, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 93

    Administrative practice and procedure, Grant programs-housing and 
community development, Low and moderate income housing, Manufactured 
homes, Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 570

    Administrative practice and procedure, American Samoa, Community 
development block grants, Grant programs-education, Grant programs-
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.

24 CFR Part 574

    Community facilities, Grant programs-housing and community 
development, Grant programs-social programs, HIV/AIDS, Low and moderate 
income housing, Reporting and recordkeeping requirements.

[[Page 31189]]

24 CFR Part 578

    Community development, Community facilities, Grant programs-housing 
and community development, Grant programs-social programs, Homeless, 
Reporting and recordkeeping requirements.

24 CFR Part 880

    Grant programs-housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 881

    Grant programs-housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 883

    Grant programs-housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 884

    Grant programs-housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements, Rural areas.

24 CFR Part 886

    Grant programs-housing and community development, Lead poisoning, 
Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 891

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

24 CFR Part 905

    Grant programs-housing and community development, Public housing, 
Reporting and recordkeeping requirements.

24 CFR Part 983

    Grant programs-housing and community development, Low and moderate 
income housing, Rent subsidies, Reporting and recordkeeping 
requirements.

    Accordingly, for the reasons stated in the preamble, HUD proposes 
to amend 24 CFR parts 5, 92, 93, 570, 574, 578, 880, 881, 883, 884, 
886, 891, 905, and 983 as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for part 5 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437n, 3535(d), Sec. 
327, Pub. L. 109-115, 119 Stat. 2936, Sec. 607, Pub. L. 109-162, 119 
Stat. 3051, E.O. 13279, and E.O. 13559.

0
2. In Sec.  5.100, add the definitions of ``Broadband infrastructure'' 
and ``Substantial rehabilitation'' in alphabetical order, to read as 
follows:


Sec.  5.100  Definitions.

* * * * *
    Broadband infrastructure means cables, fiber optics, wiring, or 
other permanent (integral to the structure) infrastructure that is 
capable of providing access to Internet connections in individual 
housing units that meet the definition of ``advanced telecommunications 
capability'' determined by the Federal Communications Commission under 
section 706 of the Telecommunications Act of 1996 (47 U.S.C. 1302).
* * * * *
    Substantial rehabilitation, for the purposes of determining when 
installation of broadband infrastructure is required as part of 
substantial rehabilitation of multifamily rental housing, unless 
otherwise defined by a program, means work that involves:
    (1) Significant work on the electrical system of the multifamily 
rental housing. ``Significant work'' means complete replacement of the 
electrical system or other work that is equal to or greater than 75 
percent of the cost of replacing the entire electrical system. In the 
case of multifamily rental housing with multiple buildings with more 
than 4 units, ``entire system'' refers to the electrical system of the 
building undergoing rehabilitation; or
    (2) Rehabilitation of the multifamily rental housing in which the 
estimated cost of the rehabilitation is equal to or greater than 75 
percent of the total estimated cost of replacing the multifamily rental 
housing after the rehabilitation is complete. In the case of 
multifamily rental housing with multiple buildings with more than 4 
units, the replacement cost must be the replacement cost of the 
building undergoing rehabilitation.
* * * * *

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

0
3. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12701-12839.

0
4. Amend Sec.  92.251 by revising the introductory text of (a)(2) and 
adding paragraphs (a)(2)(vi) and (b)(1)(x) to read as follows:


Sec.  92.251  Property standards.

    (a) * * *
    (2) HUD requirements. All new construction projects must also meet 
the requirements described in this paragraph:
    * * *
    (vi) Broadband infrastructure. If the housing is a building with 
more than 4 rental units, the construction must include installation of 
broadband infrastructure, as this term is defined in 24 CFR 5.100, 
except where the participating jurisdiction documents that:
    (A) The location of the new construction makes installation of 
broadband infrastructure infeasible; or
    (B) The cost of installing the infrastructure would result in a 
fundamental alteration in the nature of its program or activity or in 
an undue financial burden.
    (b) * * *
    (1) * * *
    (x) Broadband infrastructure. If the housing is a building with 
more than 4 rental units, any substantial rehabilitation, as defined in 
24 CFR 5.100, must provide for installation of broadband 
infrastructure, as this term is also defined in 24 CFR 5.100, except 
where the participating jurisdiction documents that:
    (A) The location of the substantial rehabilitation makes 
installation of broadband infrastructure infeasible;
    (B) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (C) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
* * * * *

PART 93--HOUSING TRUST FUND

0
5. The authority citation for part 93 continues to read as follows:

    Authority:  42 U.S.C. 3535(d), 12 U.S.C. 4568.
0
6. Amend Sec.  93.301 by revising the introductory text of (a)(2) and 
adding paragraphs (a)(2)(vi) and (b)(1)(x) to read as follows:


Sec.  93.301  Property standards.

    (a) * * *
    (2) HUD requirements. All new construction projects must also meet 
the requirements described in this paragraph:
    * * *
    (vi) Broadband infrastructure. If the housing is a building with 
more than 4 rental units, the construction must

[[Page 31190]]

include installation of broadband infrastructure, as this term is 
defined in 24 CFR 5.100, except where the grantee documents that:
    (A) The location of the new construction makes installation of 
broadband infrastructure infeasible; or
    (B) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden.
    (b) * * *
    (1) * * *
    (x) Broadband infrastructure. If the housing is a building with 
more than 4 rental units, any substantial rehabilitation, as defined in 
24 CFR 5.100, must provide for installation of broadband 
infrastructure, as this term is defined in 24 CFR 5.100, except where 
the grantee documents that:
    (A) The location of the substantial rehabilitation makes 
installation of broadband infrastructure infeasible;
    (B) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (C) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
* * * * *

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

0
7. The authority citation for part 570 continues to read as follows:

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

0
8. In Sec.  570.202, add paragraph (g) to read as follows:


Sec.  570.202  Eligible rehabilitation and preservation activities.

* * * * *
    (g) Broadband infrastructure. Any substantial rehabilitation, as 
defined by 24 CFR 5.100, of a building with more than 4 rental units 
must include installation of broadband infrastructure, as this term is 
also defined in 24 CFR 5.100, except where the grantee documents that:
    (1) The location of the substantial rehabilitation makes 
installation of broadband infrastructure infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
0
9. In Sec.  570.204 add paragraph (a)(5) to read as follows:


Sec.  570.204  Special activities by Community-Based Development 
Organizations (CBDOs).

    (a) * * *
    (5) Any new construction or substantial rehabilitation, as defined 
by 24 CFR 5.100, of a building with more than 4 rental units must 
include installation of broadband infrastructure, as this term is also 
defined in 24 CFR 5.100, except where the grantee documents that:
    (i) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (ii) The cost of installing broadband infrastructure would result 
in a fundamental alteration in the nature of its program or activity or 
in an undue financial burden; or
    (iii) The structure of the housing to be substantially 
rehabilitated makes installation of broadband infrastructure 
infeasible.
* * * * *
0
10. Add paragraph (c)(4) to Sec.  570.482 to read as follows:


Sec.  570.482  Eligible activities.

* * * * *
    (c) * * *
    (4) Broadband infrastructure in housing. Any new construction or 
substantial rehabilitation, as defined by 24 CFR 5.100, of a building 
with more than 4 rental units must include installation of broadband 
infrastructure, as this term is also defined in 24 CFR 5.100, except 
where the State documents that:
    (i) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (ii) The cost of installing broadband infrastructure would result 
in a fundamental alteration in the nature of its program or activity or 
in an undue financial burden; or
    (iii) The structure of the housing to be substantially 
rehabilitated makes installation of broadband infrastructure 
infeasible.
* * * * *

PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS

0
11. The authority citation for part 574 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12901-12912.

0
12. Add Sec.  574.350 to subpart D to read as follows:


Sec.  574.350  Additional standards for broadband infrastructure.

    Any new construction or substantial rehabilitation, as substantial 
rehabilitation is defined by 24 CFR 574.3, of a building with more than 
4 rental units must include installation of broadband infrastructure, 
as this term is defined in 24 CFR 5.100, except where the grantee 
documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 578--CONTINUUM OF CARE PROGRAM

0
13. The authority citation for part 578 continues to read as follows:

    Authority: 42 U.S.C. 11371 et seq., 42 U.S.C. 3535(d).

0
14. In Sec.  578.45, add paragraph (d) to read as follows:


Sec.  578.45  Rehabilitation.

* * * * *
    (d) Broadband infrastructure. Any substantial rehabilitation, as 
defined by 24 CFR 5.100, of a building with more than 4 rental units 
must include installation of broadband infrastructure, as this term is 
also defined in 24 CFR 5.100, except where the grantee documents that:
    (1) The location of the substantial rehabilitation makes 
installation of broadband infrastructure infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
0
15. In Sec.  578.47, add paragraph (c) to read as follows:


Sec.  578.47  New construction.

* * * * *
    (c) Broadband infrastructure. Any new construction of a building 
with more than 4 rental units must include installation of broadband 
infrastructure, as this term is defined in 24 CFR 5.100, except where 
the grantee documents that:

[[Page 31191]]

    (1) The location of the new construction makes installation of 
broadband infrastructure infeasible; or
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden.

PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION

0
16. The authority citation for part 880 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

0
17. Add Sec.  880.212 to subpart B to read as follows:


Sec.  880.212  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR 
SUBSTANTIAL REHABILITATION

0
18. The authority citation for part 881 continues to read as follows:

    Authority:  42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

0
19. Add Sec.  881.212 to subpart B to read as follows:


Sec.  881.212  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE 
HOUSING AGENCIES

0
20. The authority citation for part 883 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

0
21. Add Sec.  883.314 to subpart C to read as follows:


Sec.  883.314  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW 
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING 
PROJECTS

0
22. The authority citation for part 884 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

0
23. Add Sec.  884.125 to subpart A to read as follows:


Sec.  884.125  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL 
ALLOCATIONS

0
24. The authority citation for part 886 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

0
25. Add Sec.  886.139 to subpart A to read as follows:


Sec.  886.139  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
0
26. Add Sec.  886.339 to subpart C to read as follows:


Sec.  886.339  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 891--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS WITH 
DISABILITIES

0
27. The authority citation for part 891 continues to read as follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f, 3535(d), and 8013.


[[Page 31192]]


0
28. In Sec.  891.120, add paragraph (f) to read as follows:


Sec.  891.120  Project design and cost standards.

* * * * *
    (f) Broadband infrastructure. Any new construction or substantial 
rehabilitation, as defined by 24 CFR 5.100, of a building with more 
than 4 rental units must include installation of broadband 
infrastructure, as this term is also defined in 24 CFR 5.100, except 
where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
0
29. Add Sec.  891.550 to subpart E to read as follows:


Sec.  891.550  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

PART 905--THE PUBLIC HOUSING CAPITAL FUND PROGRAM

0
30. The authority citation for part 905 continues to read as follows:

    Authority: 42 U.S.C. 1437g, 42 U.S.C. 1437z-2, 42 U.S.C. 1437z-
7, and 3535(d).

0
31. In Sec.  905.312, add paragraph (e) to read as follows:


Sec.  905.312  Design and construction.

* * * * *
    (e) Broadband infrastructure. Any new construction or substantial 
rehabilitation, as defined in 24 CFR 5.100, of a building with more 
than 4 rental units must include installation of broadband 
infrastructure, as this term is also defined in 24 CFR 5.100, except 
where the PHA documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be rehabilitated makes 
installation of broadband infrastructure infeasible.

PART 983--PROJECT-BASED VOUCHER (PBV) PROGRAM

0
32. The authority citation for part 983 continues to read as follows:

    Authority: 42 U.S.C. 1437f and 3535(d).

0
33. Add Sec.  983.157 to subpart D to read as follows:


Sec.  983.157  Broadband infrastructure.

    Any new construction or substantial rehabilitation, as defined by 
24 CFR 5.100, of a building with more than 4 rental units must include 
installation of broadband infrastructure, as this term is also defined 
in 24 CFR 5.100, except where the owner documents that:
    (1) The location of the new construction or substantial 
rehabilitation makes installation of broadband infrastructure 
infeasible;
    (2) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (3) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.

    Dated: April 21, 2016.
Juli[aacute]n Castro,
Secretary.
[FR Doc. 2016-11352 Filed 5-17-16; 8:45 am]
 BILLING CODE 4210-67-P