42 USC 1437df3

Page 3969

TITLE 42—THE PUBLIC HEALTH AND WELFAHE

housing agency plans approved under section 5A of
the United States Housing Act of 1937 (as added by
subsection (a) of this section).”
§ 1437d. Contract provisions and requirements;
loans and annual contributions
(a) Conditions; elevators
The Secretary may include in any contract for
loans, contributions, sale, lease, mortgage, or
any other agreement or instrument made pursu
ant to this chapter, such covenants, conditions,
or provisions as he may deem necessary in order
to insure the lower income character of the
project involved, in a manner consistent with
the public housing agency plan. Any such con
tract shall require that, except in the case of
housing predominantly for elderly or disabled
families, high-rise elevator projects shall not be
provided for families with children unless the
Secretary makes a determination that there is
no practical alternative.
(b) Limitation on development costs
(1) Each contract for loans (other than pre
liminary loans) or contributions for the develop
ment, acquisition, or operation of public hous
ing shall provide that the total development
cost of the project on which the computation of
any annual contributions under this chapter
may be based may not exceed the amount deter
mined under paragraph (2) (for the appropriate
structure type) unless the Secretary provides
otherwise, and in any case may not exceed 110
per centum of such amount unless the Secretary
for good cause determines otherwise.
(2) For purposes of paragraph (1), the Sec
retary shall determine the total development
cost by multiplying the construction cost guide
line for the project (which shall be determined
by averaging the current construction costs, as
listed by not less than 2 nationally recognized
residential construction cost indices, for pub
licly bid construction of a good and sound qual
ity) by—
(A) in the case of elevator type structures,
1.6; and
(B) in the case of nonelevator type struc
tures, 1.75.
(3) In calculating the total development cost
of a project under paragraph (2), the Secretary
shall consider only capital assistance provided
by the Secretary to a public housing agency
that are 1 authorized for use in connection with
the development of public housing, and shall ex
clude all other amounts, including amounts pro
vided under—
(A) the HOME investment partnerships pro
gram authorized under title II of the CranstonGonzalez National Affordable Housing Act [42
U.S.C. 12721 et seq.]; or
(B) the community development block
grants program under title I of the Housing
and Community Development Act of 1974 [42
U.S.C. 5301 et seq.].
(4) The Secretary may restrict the amount of
capital funds that a public housing agency may
use to pay for housing construction costs. For
purposes of this paragraph, housing construction
15o In original. Probably should be “is”.

§ 1437d

costs include the actual hard costs for the con
struction of units, builders’ overhead and profit,
utilities from the street, and finish landscaping.
(c) Revision of maximum income limits; certifi
cation of compliance with requirements; no
tification of eligibility; informal hearing;
compliance with procedures for sound man
agement
Every contract for contributions shall provide
that—
(1) the Secretary may require the public
housing agency to review and revise its maxi
mum income limits if the Secretary deter
mines that changed conditions in the locality
make such revision necessary in achieving the
purposes of this chapter;
(2) the public housing agency shall deter
mine, and so certify to the Secretary, that
each family in the project was admitted in ac
cordance with duly adopted regulations and
approved income limits; and the public hous
ing agency shall review the incomes of fami
lies living in the project no less frequently
than annually;
(3) the public housing agency shall promptly
notify (i) any applicant determined to be ineli
gible for admission to the project of the basis
for such determination and provide the appli
cant upon request, within a reasonable time
after the determination is made, with an op
portunity for an informal hearing on such de
termination, and (ii) any applicant determined
to be eligible for admission to the project of
the approximate date of occupancy insofar as
such date can be reasonably determined; and
(4) the public housing agency shall comply
with such procedures and requirements as the
Secretary may prescribe to assure that sound
management practices will be followed in the
operation of the project, including require
ments pertaining to—
(A) making dwelling units in public hous
ing available for occupancy, which shall pro
vide that the public housing agency may es
tablish a system for making dwelling units
available that provides preference for such
occupancy to families having certain charac
teristics; each system of preferences estab
lished pursuant to this subparagraph shall
be based upon local housing needs and prior
ities, as determined by the public housing
agency using generally accepted data
sources, including any information obtained
pursuant to an opportunity for public com
ment as provided under section 1437c—1(f) of
this title and under the requirements appli
cable to the comprehensive housing afford
ability strategy for the relevant jurisdic
tion;
(B) the establishment of satisfactory pro
cedures designed to assure the prompt pay
ment and collection of rents and the prompt
processing of evictions in the case of non
payment of rent;
(C) the establishment of effective tenant
management relationships designed to as
sure that satisfactory standards of tenant
security and project maintenance are formu
lated and that the public housing agency (to
gether with tenant councils where they

§ 1437d

TITLE 42—THE PUBLIC HEALTH AND WELFARE

exist) enforces those standards fully and ef
fectively;
(D) the development by local housing au
thority managements of viable homeownership opportunity programs for low-income
families capable of assuming the responsibil
ities of home ownership;
(E) for each agency that receives assist
ance under this subchapter, the establish
ment and maintenance of a system of ac
counting for rental collections and costs (in
cluding administrative, utility, mainte
nance, repair and other operating costs) for
each project or operating cost center (as de
termined by the Secretary), which collec
tions and costs shall be made available to
the general public and submitted to the ap
propriate local public official (as determined
by the Secretary); except that the Secretary
may permit agencies owning or operating
less than 500 units to comply with the re
quirements of this subparagraph by account
ing on an agency-wide basis; and
(F) requiring the public housing agency to
ensure and maintain compliance with sub
title C of title VI of the Housing and Com
munity Development Act of 1992 [42 U.S.C.
13601 et seq.] and any regulations issued
under such subtitle.
(d) Exemption from personal and real property
taxes; payments in lieu of taxes; cash con
tribution or tax remission
Every contract for contributions with respect
to a low-income housing project shall provide
that no contributions by the Secretary shall be
made available for such project unless such
project (exclusive of any portion thereof which
is not assisted by contributions under this chap
ter) is exempt from all real and personal prop
erty taxes levied or imposed by the State, city,
county, or other political subdivision; and such
contract shall require the public housing agency
to make payments in lieu of taxes equal to 10
per centum of the sum of the shelter rents
charged in such project, or such lesser amount
as (i) is prescribed by State law, or (H) is agreed
to by the local governing body in its agreement
for local cooperation with the public housing
agency required under section 1437c(e)(2) of this
title, or (Hi) is due to failure of a local public
body or bodies other than the public housing
agency to perform any obligation under such
agreement. If any such project is not exempt
from all real and personal property taxes levied
or imposed by the State, city, county, or other
political subdivision, such contract shall pro
vide, in lieu of the requirement for tax exemp
tion and payments in lieu of taxes, that no con
tributions by the Secretary shall be made avail
able for such project unless and until the State,
city, county, or other political subdivision in
which such project is situated shall contribute,
in the form of cash or tax remission, the amount
by which the taxes paid with respect to the
project exceed 10 per centum of the shelter rents
charged in such project.

Page 3970

(e) Repealed. Pub. L. 105—276, title V, § 529(2),
Oct. 21, 1998, 112 Stat. 2569
(f) Housing quality requirements
(1) In general
Each contract for contributions for a public
housing agency shall require that the agency
maintain its public housing in a condition
that complies with standards which meet or
exceed the housing quality standards estab
lished under paragraph (2).
(2) Federal standards
The Secretary shall establish housing qual
ity standards under this paragraph that ensure
that public housing dwelling units are safe and
habitable. Such standards shall include re
quirements relating to habitability, including
maintenance, health and sanitation factors,
condition, and construction of dwellings, and
shall, to the greatest extent practicable, be
consistent with the standards established
under section 1437f(o)(8)(B)(i) of this title. The
Secretary may determine whether the laws,
regulations, standards, or codes of any State
or local jurisdiction meet or exceed these
standards, for purposes of this subsection.
(3) Annual inspections
Each public housing agency that owns or op
erates public housing shall make an annual in
spection of each public housing project to de
termine whether units in the project are main
tained in accordance with the requirements
under paragraph (1). The agency shall retain
the results of such inspections and, upon the
request of the Secretary, the Inspector Gen
eral for the Department of Housing and Urban
Development, or any auditor conducting an
audit under section 1437c(h) of this title, shall
make such results available.
(g) Substantial default; conveyance of title and
delivery of possession; reconveyance and re
delivery; payments for outstanding obliga
tions
Every contract for contributions (including
contracts which amend or supersede contracts
previously made) may provide that—
(1) upon the occurrence of a substantial de
fault in respect to the covenants or conditions
to which the public housing agency is subject
(as such substantial default shall be defined in
such contract), the public housing agency
shall be obligated at the option of the Sec
retary either to convey title in any case
where, in the determination of the Secretary
(which determination shall be final and con
clusive), such conveyance of title is necessary
to achieve the purposes of this chapter, or to
deliver to the Secretary possession of the
project, as then constituted, to which such
contract relates; and
(2) the Secretary shall be obligated to recon
vey or redeliver possession of the project as
constituted at the time of reconveyance or re
delivery, to such public housing agency or to
its successor (if such public housing agency or
a successor exists) upon such terms as shall be
prescribed in such contract, and as soon as
practicable (i) after the Secretary is satisfied
that all defaults with respect to the project