It’s been a year. Did you know there were updates to the URA in 2024?
True enough. Effective as of June 2024. They don’t come around too often—last major updates to the rules since 2005. First, financial limits for residential and business relocation thresholds have increased since the MAP-21 updates in 2014.
What are they, and what is still somewhat unsettled and debatable?
In my opinion, the biggest impact is the notification requirements for temporary relocation. Prior to June 2024, updates to 30-day notices were the minimum standard for a date-certain notice when temporarily relocating someone from their home or business for up to 180 days (beyond the 90-day requirement). NOW, a 90-day Information Notice (at least advising the person it may be another 60 days before they receive said 30-day notice) is required. This is in addition to the General Information Notice and/or the Notice of Non-displacement and other notifications.
Probably more buried and even less direct and understandable than #1 is the requirement to notify either a Displaced Person or a Person to Be Temporarily Relocated that the “Displacing Agency” [i.e. Developer, Public Agency or other party using federal funds or having the ability to use federal assistance to execute a project] notify these persons that they intend to acquire, demolish or rehabiltate/renovate the property they live in or conduct their business. This is to be either once the first written offer is made and there is intent to use federal funds, or the award for federal funds is entered into. WARNING: HUD's guidance on this remains unclear and inconsistent. Yes, this is in addition to the General Information Notice and/or the Notice of Non-displacement and other notifications.
There has been much debate as to whether or not hotels can be used as temporary housing, given the requirement to make at least one “comparable” housing unit available. What is often overlooked is that the URA also provides that Last Resort Housing may need to be considered and planned for; this is where a hotel with per diem payments comes into play, along with possible modifications to rooms such as adding accessibility features to rooms at the project’s expense.
Financial increases? Before you do your budgets, consult with someone.
Business/Non-Profit Relocation Payments
Re-estblishment $33,200
Site Search $5,000
Businesses may be able to receive a $1,000 in site search with no documentation
Residential Replacement Housing Payment and Moving Expenses (Not considering Las Resort Housing Increases or Application of 104(d))
180-day Homeowner Occupant - $41,200
90-day Tenant Occupant - $9,570
Tenants may be eligible for up to $1,000 for application and credit check fees as a moving expense.
Our input and advice on these changes:
To comply with the 90-day notice, we added informational language to the Notice of Non-displacement in a few cases. When we may have off-site relocations, we executed the 90-day Information as a separate notice. Now, we provide a separate notice.
Advising clients to serve separate notice is in every case of an acquisition that will result in the redevelopment of residents and permanent displacement. Rehab projects; provide a separate notice of the start of the rehab, distinct from the GIN and the NND, if time permits. Often, this is handled by the General Contractor or communicated through a change of ownership. In such cases, it may be as simple as adding language to address URA compliance, thereby avoiding the need for additional notices.
Methodology, temporary housing site search analysis, and proof of your results are key. You need to reasonably show that you worked to house residents temporarily in housing that meets the URA definition of “Comparable,” which includes adequate space for all and is Decent, Safe, and Sanitary (DS&S). This does not exclude a hotel, but it also does not automatically make one acceptable either. The household size, needs, and limitations of the property have to be considered, and mitigations such as additional rooms, per diem payments, and other items may need to be added to ensure needs are met.
Start your cost estimating early. Once you make an offer on a site, consider getting expert help to create a relocation cost estimate. This is because you likely don’t fully understand the requirements, and neither does the lender. It's better to be shocked during due diligence than to face financial difficulties in construction.
You ask, does the URA affect all affordable deals? No. It still only applies to those receiving federal funds, including program funds administered through states, counties, and cities; this excludes LIHTC. A mistake is thinking you somehow get a pass because you only have a small amount of federal funds, the LIHTC takes the lead because it’s worth more, or there’s some other nuance. Best to review the issues with someone with experience such as myself.
Even if you don’t engage us, reach out and get some advice. This stuff is not so straightforward. Like many aspects of life, anything outside your area of expertise can become a distraction, diverting your focus from what you excel at, which in turn does not yield optimal results.