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CHAPTER 2. THE TITLE I PROGRAM

Of the programs identified in Chapter 1-1, the Title I program most complex. It is the program under which cities, in partnershi private enterprise and with Federal Government support, und urban renewal.

Most of this Manual is devoted to Title I policies and require This Chapter summarizes certain aspects of the program by w preparation for the more detailed discussions contained in succe Parts.

PROJECT DEFINED

"Urban renewal project" is a term referring to specific acti undertaken by a local public agency (LPA) in an urban renewal to prevent and eliminate blight and deterioration. An urban re project may involve (1) slum clearance and redevelopment, (2) servation and rehabilitation, or (3) a combination of both. It include acquisition of land, site clearance, installation of streets, p and other improvements, disposition of acquired land for use accordance with an Urban Renewal Plan, and carrying out plans locally financed improvement of buildings in the area which are acquired. Title I funds cannot be spent for the construction, re or improvement of any building on the project land, except demonstrations by the LPA of conservation of acquired properties project area. (See Section 12-2-5.)

For statutory definition of an urban renewal project, see Sec 110(c) of Title I.

FINANCIAL AIDS SUMMARIZED

The Net Project Cost is generally the difference between all c of a project and the proceeds from disposal of land. (See Sect 17-1-1.)

The Net Project Cost of an urban renewal project is shared by Federal Government and the LPA.

The local contributions to Net Project Cost are called local grants aid. They may be provided in the form of cash, site clearance wo land donations, project improvements, and supporting facilities, wh may include public buildings or other public works and facilities. ( Chapters 17-3 and 17-4.)

Planning Advance

Federal funds may be advanced to an LPA to finance survey a planning work necessary before actual operations for the Title I proj can be undertaken. (See Section 17-2-1.)

Advances are also authorized for Feasibility Surveys (see Part 42) and for General Neighborhood Renewal Plans (see Part 43).

Temporary Loan

A temporary loan is used by the LPA as working capital in acquiring real estate, clearing the site, and preparing the area for redevelopment or conservation and rehabilitation. Such a loan may be either of the following:

(1) A direct loan from the Federal Government. (See Section 17-6-3.)

(2) A loan from a private financial institution. The loan is secured by the availability of Federal funds, if needed, for repayment of the loan. (See Section 17-6-4.)

Definitive Loan

A definitive loan, for a period up to 40 years, may be used to refinance short-term temporary loans when project land is leased rather than sold to a redeveloper. A definitive loan is amortized from the rental income derived from the land.

Capital Grant

When the area is ready for redevelopment or conservation and rehabilitation, acquired land is disposed of by sale, lease, or retention for its fair value for uses in accordance with the Urban Renewal Plan. If the total return from disposition of land, including the capital value of any land disposed of by lease, is less than the cost of carrying out the whole project, the loss (Net Project Cost) is shared by the Federal Government and the LPA. The Federal share is in cash and is called the project capital grant. (See Chapter 17-5.)

Relocation Grant

Relocation Payments in limited amounts may be made by an LPA to individuals, families, and businesses for their reasonable, necessary moving expenses and any direct loss of property resulting from their displacement from an urban renewal area. The LPA is reimbursed in full for these expenditures through a relocation grant from the Federal Government. (See Sections 16-3-1 and 17-5-2.)

BASIS FOR PROJECT CAPITAL GRANT

There are three types of urban renewal projects, depending on the basis on which the project capital grant is established.

Project on Two-Thirds Grant Basis

A project capital grant is limited to two-thirds of Net Project Cost, except for a project which qualifies for a three-fourths grant under one of the following categories.

Project on Three-Fourths Grant Basis in Small Municipality

A project capital grant may be paid up to three-fourths of Net Project Cost for a project in a small municipality having a population, according to the most recent decennial census, of either:

(1) 50,000 or less; or

(2) 150,000 or less and located in a redevelopment area designated by the Secretary of Commerce under Section 5(a) of the Area Redevelopment Act.

Project on Three-Fourths Grant Basis with Limited Project Costs

A project capital grant may be paid up to three-fourths of Net Project Cost for any project for which the Net Project Cost excludes the costs of survey, planning, administrative, legal, and certain other expenses. (See Section 17-1-1.)

RESIDENTIAL AND NONRESIDENTIAL RENEWAL

Generally, projects must be undertaken in urban renewal areas that are principally concerned with housing, i.e., the project areas must be either predominantly residential in character before renewal or predominantly residential after renewal. Specific exceptions to this rule are:

(1) Projects for which the governing body of the LPA determines that renewal for predominantly nonresidential uses is necessary for the proper development of the community, in accordance with Section 110(c) of Title I. (See Chapter 3-2.)

(2) Projects located in redevelopment areas certified to the Administrator by the Secretary of Commerce in accordance with the provisions of Section 113 of Title I. (See Chapter 3-2.)

(3) Projects in urban renewal areas involving colleges, universities, or hospitals, as such projects are defined in Section 112 of Title I. (See Chapter 3-2.)

(4) Projects located in major disaster areas, as defined in Section 111 of Title I, in need of redevelopment or rehabilitation as a result of the disaster. (See Section 44-1-1.)