TS

Section 9. Rehabilitation Demonstrations

Rehabilitation by the LPA of acquired properties in the project area for demonstration and guidance purposes, where authorized under State and local law, is an eligible project activity.

SUBMISSION OF PROPOSALS TO HHFA

Any proposals for rehabilitation demonstrations by the LPA at the time of submission of Part I of the Application for Loan and Grant shall be set forth in Item H of the Rehabilitation and Conservation Report (see Section 12-1-7). Any subsequent LPA proposals not submitted with Part I shall be submitted to the HHFA Regional Office for concurrence and shall consist of the data called for in Item H.

LIMITATIONS

The LPA shall not acquire for demonstration purposes, in any project area, structures which contain or will contain more than (1) 100 dwelling units, or (2) 5 percent of the total number of dwelling units in the project area which, under the Urban Renewal Plan, are to be repaired or rehabilitated, whichever is the lesser. The number of dwelling units before rehabilitation as well as after rehabilitation must not exceed the limitation in (1) or (2), whichever is the lesser.

TYPES OF REHABILITATION DEMONSTRATIONS

Demonstrations of individual properties may be conducted to the extent necessary to illustrate for property owners the kinds and methods of rehabilitation that are practicable in an area or for certain types of properties. These may serve as demonstration homes and information centers as well as "how to do it" laboratories.

Demonstrations of groups of properties shall be of sufficient scope, within the above limitations, to stimulate property owners to improve their properties, and to stimulate investors and industry to undertake large-scale rehabilitation. They may also illustrate how an organized rehabilitation industry can achieve efficient uses of labor and mass purchases on a large-scale or job-by-job basis. For group demonstrations, street improvements, tree planting, and other site preparatory work shall be scheduled so that the full effect of large-scale upgrading can be illustrated when the improvement of properties is completed. Spot clearance shall be similarly coordinated.

IMPROVEMENT OF PROPERTIES

All property improvement work by the LPA for demonstration purposes shall be by contract and shall be carried out in accordance with the

requirements of Chapter 11-3 and Section 12-1-4.

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POLICIES AND REQUIREMENTS

DISPOSAL OF REHABILITATION DEMONSTRATION PROPERTIES

Properties improved by the LPA may be sold at predetermined prices (see Section 14-3-4) or by competitive bidding (see Section 14-3-5). Under the predetermined price procedure, no preference shall be afforded to an owner-occupant to repurchase a property acquired from him.

Disposal agreements shall contain such additional provisions as are necessary to carry out the demonstration objectives. This may involve delay in delivery of possession, or agreement by the purchaser for access to the property at appropriate times for demonstration purposes.

REHABILITATION DEMONSTRATIONS WITH IMPROVEMENTS BY OTHER THAN LPA

The LPA may also conduct rehabilitation demonstrations without expending project funds for the improvement of properties. It may acquire and resell the properties at their fair value, with the purchaser being obligated to upgrade the properties to Property Rehabilitation Standards. Or it may acquire a property, improve it for demonstration purposes from nonproject funds, and then resell the property at its fair value. Costs of improving the property which are financed with other than project funds, and which are not included in Gross Project Cost, may be deducted from the disposition proceeds in determining the net amount to be deposited in the project accounts. The first alternative may be the only method available in jurisdictions where LPA's do not have authority to improve acquired properties.

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CHAPTER 2. SUBMISSION REQUIREMENTS

SURVEY AND PLANNING APPLICATION

With the Survey and Planning Application (see Section 4-1-1), the LPA shall submit:

(1) Rehabilitation and Conservation Data (Checklist Code No. R 115), including:

(a) Preliminary evidence that each of the required factors listed in Section 12-1-2 for the proposed treatment is present. (b) Results of the limited exterior survey (see Section 12-1-6). (2) Estimated costs of planning for conservation on Form H-627, Survey and Planning Budget (Section 31-1-1, Exhibit A). If any work is to be performed under contract or by agreement, list on Form H-681, Survey and Planning Work Activities To Be Performed Under Contract (Section 31-1-1, Exhibit C); if by LPA staff, list on Form H-630, Local Public Agency Staffing and Salary Schedule (Section 31-1-1, Exhibit B).

PART I OF APPLICATION FOR LOAN AND GRANT

With Part I of the Application for Loan and Grant (see Section 4-2-1), the LPA shall submit:

(1) Rehabilitation and Conservation Data (Checklist Code No. R 221), including:

(a) Specific evidence that each of the required factors listed in Section 12-1-2 for the proposed treatment is present.

(b) Rehabilitation and Conservation Report (see Section 12-1-7). (2) Cost estimates for carrying out rehabilitation and conservation activities, on Form H-6220, Project Expenditures Budget, and H-6121, Data Supporting Project Expenditures Budget (Section 31-2-3, Exhibits A and B).

CHAPTER 2. CONSERVATION

Section 1. Property Conservation Standards

The term Property Conservation Standards means the combination of code standards and conservation requirements which are established for properties to be retained in the conservation area.

The term code standards means the requirements of local building, housing, zoning, plumbing, electrical, fire prevention, and other laws related to housing construction and to use, maintenance, and occupancy of properties.

The term conservation requirements means the criteria, in addition to code standards, which are established for properties in the conservation area to assure their restoration to a sound condition. Conservation requirements may be either (1) requirements which residential properties must meet in order to be eligible for FHA Section 220 mortgage insurance, or (2) comparable requirements, if conventional mortgage financing is to be used for either residential or nonresidential properties. These requirements shall be developed by the LPA in consultation with HHFA Regional Office staff, FHA or mortgage lending institutions if FHA assistance is not anticipated, and local code officials. They shall be adapted to the physical conditions prevailing in the area and the anticipated effect of the conservation program on the individual properties.

Property Conservation Standards shall be:

(1) Sufficiently high to assure the long-term useful life of the properties and to justify the costs involved.

(2) Feasible of practical application to existing physical conditions within the area.

The LPA's conservation program shall be directed at achieving the Property Conservation Standards for all properties to be retained in the conservation area.

At the time of the final project audit (see Chapter 18-1), (1) Property Conservation Standards shall have been accomplished on at least 75 percent of these properties, (2) code standards shall have been achieved on at least 95 percent of the properties, and (3) the LPA must be making a continuing effort to eliminate deficiencies on the remaining properties.