1937, or in the use or occupancy thereof. The local authority shall not, on account of race, color, creed, or national origin, deny to any family the opportunity to apply for such housing, nor deny to any eligible applicant the opportunity to lease or rent any dwelling in any such housing suitable to its needs.

The local authority shall not discriminate because of race, color, creed, or national origin in the sale, leasing, rental, or other disposition of housing or related facilities (including land) included in any project or projects, or in the use or occupancy thereof. The local authority shall not, on account of race, color, creed, or national origin, deny to any family the opportunity to apply for such housing, nor deny to any eligible applicant the opportunity to lease or rent any dwelling in any such housing suitable to its needs.

(3) "Discriminatory practice" means any practice or action which constitutes a violation of a contract obligation, or which would constitute such a violation if the project involved were covered by a contract obligation.

(4) "Project" means any low-rent housing project in receipt of financial assistance, or federally owned and operated, under the United States Housing Act of 1937, as amended. Federally owned projects shall be treated as projects subject to a contract obligation and their Housing Project Managers shall be treated as local authorities for purposes of the procedures of this section.

(5) "Commissioner” means the Public Housing Commissioner.

(c) Complaints. (1) A complaint of a discriminatory practice may be filed with the appropriate Regional Director of the Public Housing Administration and must be filed within ninety (90) days from the date of the alleged discriminatory practice unless the time is extended by the Regional Director for good cause. A list of PHA Regional Offices, with their addresses and areas of jurisdiction, is published in the FEDERAL REGISTER under the heading "Housing and Home Finance Agency, Public Housing Administration, Description of Agency and Programs." Information as to locations and areas of jurisdiction of Regional Offices may also be obtained upon written request addressed to the Public Housing Administration, Washington, D.C., 20413.

(2) A complaint shall be in writing and signed by the complainant. It shall insofar as known to complainant, name the local authority and/or the project involved; state the time, place, and nature of the alleged discriminatory prac

86-045-68-26

tice; and set forth factual information known to the complainant supporting the allegation. It shall also state the complainant's interest in or relationship to the alleged discriminatory practice.

(3) A complaint may be filed by an authorized representative of the complainant, provided that the authorization of the representative to act for the complainant is filed with the complaint.

(d) Preliminary action on a complaint. (1) Upon receipt of a complaint, the Regional Director shall promptly and in writing acknowledge its receipt and request such additional information from the complainant as may be necessary.

(2) If it appears that the complaint relates to other than a project as defined in paragraph (b) (4) of this section, the Regional Director shall advise the complainant in writing that the Public Housing Administration lacks jurisdiction in the matter and state the reason. If the complaint relates to a project as defined in paragraph (b) (4) of this section, the Regional Director shall advise the complainant either that the project is subject to a contract obligation, quoting the specific contract provision, or that the project is not subject to a contract obligation but is subject to the "good offices" provision of section 102 of the Executive Order.

(3) If the complaint is not filed within the ninety (90) day period stipulated in paragraph (c) (1) of this section, the Regional Director shall send appropriate written notification to the complainant.

(e) Regional office inquiry. If the complaint relates to a project as defined in paragraph (b)(4) of this section, and is timely (either originally or by grant of an extension of time), the Regional Director shall conduct an inquiry into the facts. If such inquiry reveals that there is no factual basis for the complaint, and the Regional Director believes further inquiry would serve no useful purpose, he shall notify the complainant in writing that he finds no factual basis for the complaint, stating such reasons or facts as may be appropriate and advising that no further action will be taken unless the complainant submits further facts supporting the complaint. If such inquiry or any further statement submitted by the complainant reveals factual basis for the complaint, the Regional Director shall proceed as set forth below in this section. (f) Informal action. The Regional Director or his designee shall undertake

by informal means (including conferences, conciliation, and persuasion) to end, remedy, or prevent the recurrence of the discriminatory practice complaint of. If the complaint is resolved by such informal means, the Regional Director shall in writing advise both the complainant and the Local Authority to that effect and that the Public Housing Administration will take no further action on the complaint.

(g) Formal action (1) Cases under section 102 of the Executive Order. If the complaint is not resolved by informal means and the project involved is not subject to a contract obligation, the Regional Director shall submit a complete report in writing to the Commissioner for such further action, if any, as the Commissioner deems appropriate, and shall advise the complainant that the matter has been referred to the Commissioner and that the complainant will be advised by the Commissioner of any further proceedings or action taken and of the disposition of the complaint.

(2) Cases involving a contract obligation. (i) If the complaint is not resolved by informal means and the project involved is subject to a contract obligation, the Regional Director shall send written notification to the local authority which shall include available information as to the following:

(a) The name and address of the complainant;

(b) The date, place, and nature of the alleged discriminatory practice;

(c) A summary of the facts alleged by the complainant to constitute the discriminatory practice and of any other facts supporting the complainant's allegation;

(d) The fact that the project involved is subject to a contract obligation (quoting the specific contract provision applicable to the alleged discriminatory practice).

(ii) The local authority shall be requested to respond in writing within ten (10) days after receipt of such letter, or within such reasonable extension of time as may be requested within ten (10) days after receipt of such letter and granted by the Regional Director, admitting or denying the alleged discriminatory practice, stating any facts the Local Authority deems pertinent, setting forth any corrective action the local authority proposes to take, and including any other statement pertinent to the

local authority's position with respect to the alleged discriminatory practice.

(iii) Upon receipt of the local authority's response, or if the local authority fails to respond, the Regional Director shall conduct such further inquiry or investigation into the facts as he shall deem appropriate. Hearings to resolve issues of fact may be held, if the Regional Director deems appropriate, by him or his designee. The Regional Director shall make findings as to the merits of the complaint and notify the complainant and the local authority of his findings. If he finds that the local authority has violated a contract obligation, the notification shall specify action to be taken by the local authority to correct the violation and state the action, if any, to be taken by the PHA. Both the complainant and the local authority shall be notified of their right to request a review by the Commissioner of the Regional Director's findings and/or proposed action. Inquiries and hearings shall be conducted, and findings and notifications made, without undue delay.

(h) Review. The complainant or the Local Authority may, within fifteen (15) days after receipt of the Regional Director's notification of findings and proposed action, apply in writing for a review by the Commissioner; Provided, however, That such period may be extended in the discretion of the Commissioner for good cause. The application for review shall be accompanied by a written statement setting forth the reasons for reversal or modification of the findings and/or proposed action. After reviewing the record and conducting such additional inquiry or investigation of the facts (including the holding of a hearing) as the Commissioner may deem advisable, the Commissioner will affirm, modify, or reverse the findings and/or proposed action or make such other findings and statements of proposed action as the Commissioner deems appropriate and will notify the complainant and the local authority of the determination.

(i) Sanctions. Upon a final finding of a discriminatory practice by a local authority, the action to be taken against the local authority by the PHA may include:

(1) Declaring a breach or default on the part of the local authority, in accordance with the terms of the annual contributions contract covering the project in question;

(2) Refusal to enter into further contracts for financial assistance with the local authority;

(3) Cancellation or termination of contracts with the local authority;

(4) Such other action as may be appropriate and permitted by law.

(j) Waiver. The Commissioner may, for good cause, waive any of the procedural requirements in the processing of any complaint.

(k) Consultation with State or local agencies. In the inquiry into or resolution of a complaint, the Regional Director or his designee may consult with any officially constituted State or local agency charged with preventing or redressing discrimination because of race, color, creed, or national origin.

(Sec. 502(b), 62 Stat. 1284, 42 U.S.C. 1404a; sec. 203, E.O. 11063, 27 F.R. 11528) [28 F.R. 12620, Nov. 27, 1963]

§ 1500.7 Complaint procedure; nondiscrimination in low-rent public housing.

(a) Introduction. This section is issued under the authority of title VI of the Civil Rights Act of 1964, P.L. 88352, 78 Stat. 252, 42 U.S.C. 2000d-1; the regulations of the Housing and Home Finance Agency effectuating title VI of the Civil Rights Act of 1964, 24 CFR, Subtitle A, Part 1, § 1.1 et seq. of this title (herein referred to as "the HHFA regulations"); and section 502(b) of the Housing Act of 1948, 42 U.S.C. section 1404a. Notwithstanding the provisions of § 1500.6, Complaint procedures-equal opportunity in housing, the procedure prescribed in the HHFA regulations, as implemented by the Public Housing Administration in this § 1500.7, shall apply with respect to any complaint of discrimination on the ground of race, color, or national origin in the low-rent housing program under the United States Housing Act of 1937, as amended, 42 U.S.C. 1401 et seq. The procedure prescribed in § 1500.6 shall apply only to complaints of discrimination on the basis of creed.

(b) Definitions. As used in this section:

(1) "Local Authority" means a “public housing agency" as defined in section 2(11) of the United States Housing Act of 1937, 42 U.S.C. 1402(11), which is a "recipient" of or an "applicant" for Federal financial assistance under that Act as defined in § 1.2 of this title (HHFA regulations). With respect to any federally owned or operated low-rent

housing project, the housing project manager shall be deemed to be a "Local Authority" for purposes of this section.

(2) "Discrimination" means any action or practice of a local Authority of the kind prohibited by section 601 of the Civil Rights Act of 1964 or by § 1.4 (a) and (b) of this title (HHFA regulations), and, in the case of a project covered by a contract clause for equal opportunity in housing pursuant to section 101 of Executive Order 11063 (see § 1500.6(b) (2)), any action or practice prohibited by such clause relative to race, color, or national origin.

(3) "Project" means a low-rent housing project assisted under the United States Housing Act of 1937, including any low-rent housing project owned or operated by the Federal Government pursuant to said Act.

(4) "Commissioner" means the Public Housing Commissioner.

(c) Complaints—(1) Filing. Complaints of discrimination on the part of a Local Authority shall be filed with the appropriate HUD Regional Administrator. A list of HUD Regional Offices with their addresses and areas of jurisdiction appears as Appendix A to this section. Regional Administrators are authorized to extend the time for filing a complaint beyond the period specified in § 1.7(b) of this title.

(2) Content. A complaint shall be signed by the complainant or his representative and shall, insofar as known to complainant, name the Local Authority and the project involved, state the time, place, and nature of the alleged discrimination, set forth factual information known to the complainant supporting the allegation of discrimination, and state the complainant's interest in or relationship to the alleged discrimination.

(3) Acknowledgement. Receipt of a complaint shall be acknowledged promptly and in writing by or at the direction of the Regional Administrator.

(4) Further notice to complainant. The complainant will be advised in writing when investigation of the complaint indicates discrimination and the matter is resolved by informal means. In all other respects, the procedure prescribed in the HHFA regulations will apply.

(d) Effective date. This section shall be effective January 3, 1965.

(Sec. 502(b), 62 Stat. 1284, sec. 602, 78 Stat. 252; 42 U.S.C. 1404a, 2000d-1) [30 F.R. 132, Jan. 7, 1965, as amended at 32 F.R. 13808, Oct. 4, 1967]

[32 F.R. 14695, Oct. 24, 1967]

(c) Low-rent housing. Decent, safe, and sanitary dwellings within the financial reach of families of low income, and all necessary appurtenances.

(d) Families of low income. Families who are in the lowest income group and who cannot afford to pay enough to cause private enterprise in their locality or metropolitan area to build an adequate supply of decent, safe, and sanitary dwellings for their use.

(e) Local Authority. Any State, county, municipality, or other governmental entity or public body which is authorized to engage in the development or administration of low-rent housing or slum clearance. A "Local Authority" is a "public housing agency" as defined in the Act.

(f) Cooperation agreement. A contract between a Local Authority and the governing body of the locality, providing for tax exemption, elimination of unsafe and insanitary dwelling units, supplying of public services, and other forms of cooperation by the local government, and for payments in lieu of taxes by the Local Authority, in connection with a low-rent housing project.

The objectives of the program are to promote the general welfare by employing the funds and credit of the United States to assist the States and their political subdivisions to alleviate unemployment and to remedy the unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income, in urban and rural nonfarm areas, that are injurious to the health, safety, and morals of the citizens of the Nation. The objectives are carried out by providing financial assistance, pursuant to contracts, to Local Authorities applying for such assistance in developing and operating low-rent housing projects or for leasing of housing in private accommodations. Applications for financial assistance, if otherwise proper, are approved to the extent permitted by limitations contained in the Act or other statutes.

§ 1520.3 Application for financial assist

ance (other than leasing program).

A Local Authority seeking Federal financial assistance for a low-rent housing project must submit an application and a showing that the Local Authority has been organized in accordance with State law, that there is a need for the proposed low-rent housing which is not being met by private enterprise, and that the governing body of the locality has by resolution approved application for a preliminary loan and has entered into a Cooperation Agreement with the Local Authority satisfactory to the Department of Housing and Urban Development. A Preliminary Loan Contract provides for advances of funds for surveys and planning. Such a contract is tendered by HUD to the Local Authority only after approval by the Assistant Secretary for Renewal and Housing Assistance. § 1520.4 Annual Contributions Contract (other than leasing program).

An Annual Contributions Contract provides for a loan to assist in the development of a low-rent housing project and for annual contributions to assist in achieving and maintaining the low-rent character of the project. As the basis for such a contract, the Local Authority must submit a plan for its project with a showing of its feasibility, including such matters as description of site, statement of number and types of structures and dwelling units, estimate of develop

ment cost, and data supporting all features of the project. The Local Authority must also show that, except in the case of displaced or elderly families, a gap of at least 20 percent has been left between the upper rental limits for the proposed housing and the lowest rents at which private enterprise is providing housing, and is required to include a plan for relocating displaced families. An Annual Contributions Contract is tendered by HUD to the Local Authority only after approval by the Assistant Secretary for Renewal and Housing Assistance.

§ 1520.5 Leasing program.

The leasing program involves the use of privately owned housing with the aid of subsidy channeled through the Local Authority. Pursuant to section 23 of the United States Housing Act of 1937 (42 U.S.C. 1421b), HUD is authorized to make annual contributions available to Local Authorities so that privately owned dwellings may be leased for occupancy by low-income families at rents within their means. In such a leasing program, HUD pays annual contributions to cover the deficiency between the rent payable to the owner and the rent which the lowincome family can afford to pay. Before dwellings can be provided by leasing under section 23, the local governing body must adopt a resolution approving application of the section 23 provisions to the locality. An application for low-rent housing under section 23 of the Act should include data on the number of units desired, available supply, and need for the housing, amount of financial assistance estimated to be necessary, and financial feasibility of the undertaking. §1520.6

Private participation.

(a) Increased opportunities exist for participation of the private sector in the low-rent housing program. These result from the growing use of new methods of providing low-rent housing in addition to the traditional method of new construction. These include the acquisition and rehabilitation of existing housing for low-income occupancy, leasing of existing housing under section 23 (described in § 1520.5), as well as the "turnkey” technique and joint enterprise between Local Authorities and private organizations.

(b) Under the "turnkey" technique, a private developer or builder, who has a site or an option, or can obtain one, can approach the Local Authority with