SEC. 4.04

Recording Secretary. The Recording Secretary shall keep the minutes of all meetings of the Board and maintain the minute book, shall be the custodian of records and of the seal of the Corporation, shall give proper notice of meetings of Directors; and in general shall perform all the duties ordinarily incident to the office of corporation secretary and such other duties as may be assigned to him by the Secretary or by the General Manager. The Recording Secretary is expressly empowered to attest all signatures and to affix the seal to all documents the execution of which on behalf of the Corporation under its seal is duly authorized.

SEC. 4.05 General Counsel. The General Counsel of the Department shall be the General Counsel of the Corporation and perform all legal work for the Corporation.

SEC. 4.06 Operations. Except as otherwise authorized by the Secretary or by the Board, the operations of the Corporation shall be

carried out through the facilities and personnel of the Department of Housing and Urban Development.

ARTICLE 5-BOOKS AND RECORDS

SEC. 5.01 Records and books. The Board of Directors shall cause to be kept records of all proceedings of Directors and such other records and books as shall be necessary and appropriate to the conduct of the corporate business. Such records and books and these Bylaws shall be kept at the principal office of the Corporation.

ARTICLE 6-AMENDMENTS

SEC. 6.01 Amendments. These bylaws may be amended or altered by a majority vote, which majority must include the vote of the Secretary, of the Board of Directors at any meeting, provided that notice of such proposed amendment shall have been given in the notice given to the Directors of such meeting.

710.6

Subpart B-New Community Criteria and

Standards

General criteria for new communities.

Specific characteristics of a new community.

710.7 Other requirements for new community development.

Subpart C-Financial and Economic Criteria
and Standards

Economic feasibility.

710.8 710.9 General financial plan and program. 710.10 Maximum Federal guarantee. 710.11 Land valuation.

Subpart E-Fee and Charge Schedule

Sec.

710.24 Application charge.

710.25

Commitment charge.

Guarantee fee.

710.26 Reopening charges.

710.27

710.28 Annual fee.

710.29

Transfer charge.

AUTHORITY: The provisions of this Part 710 issued under secs. 413, 7(d), 82 Stat. 517, 79 Stat. 670; 42 U.S.C. 3912, 3535(d).

SOURCE: The provisions of this Part 710 appear at 36 F.R. 24733, Dec. 22, 1971, unless otherwise noted.

§ 710.1

Subpart A-General

Statement of applicable law.

(a) The New Communities Act of 1968 (42 U.S.C. 3901-3914) authorizes the Secretary of Housing and Urban Development to guarantee obligations issued by private developers to help finance new community development projects. It also authorizes the Secretary to make grants to State and local public bodies and agencies to supplement the Federal assistance that is otherwise available for certain water, sewer, or open-space projects if these projects are needed or desirable in connection with an approved new community project which will make available a substantial number of housing units for persons of low and moderate income. The amount of such grants may not exceed 20 percent of project costs,

and since this is to supplement other Federal assistance, the projects must also meet the applicable requirements for regular grants under section 702 of the Housing and Urban Development Act of 1965, as amended (42 U.S.C. 3102); section 306(a) (2) of the Consolidated Farmers' Home Administration Act, as amended (7 U.S.C. 1926(a) (2)); or title VII of the Housing Act of 1961, as amended (42 U.S.C. 1500-1500e).

(b) The Act (1) amends section 202 (b) (4) of the Housing Amendments of 1955, as amended (42 U.S.C. 1492), to permit public facilities loans without regard to the population limits otherwise applicable for facilities serving a new community development; (2) amends section 24 of the Federal Reserve Act, as amended (12 U.S.C. 371), with regard to the authority of national banks to invest in obligations guaranteed under the Act; and (3) amends section 5(c) of the Home Owners Loan Act of 1933, as amended (12 U.S.C. 1464), with regard to the authority of the Federal savings and loan associations to invest in obligations guaranteed under the Act. The Secretary is also authorized to make comprehensive planning grants under section 701 of the Housing Act of 1954, as amended (40 U.S.C. 461), to official governmental planning agencies for planning in areas where rapid urbanization is expected to occur on land developed or to be developed as a new community approved under the Act.

(c) Additional assistance to new communities may be available under other Federal laws, even though they do not refer specifically to the Act or to new communities. For example, public bodies may receive Federal assistance for water and sewer and open space, schools, urban transit, and other facilities which serve new communities. Federal assistance for private sponsors would generally be available on the same basis as in other communities. For example, qualifying private sponsors may receive assistance for sales, rental, and cooperative housing projects for lower income families pursuant to sections 235 and 236 of the National Housing Act as amended (12 U.S.C. 1715z and 1715z-1).

(d) It is the declared purpose of the Act to encourage the development of new communities that

(1) Contribute to the general betterment of living conditions through the improved quality of community development made possible by a consistent design for the provision of homes, commercial and industrial facilities, public and community facilities, and open spaces;

(2) Make substantial contributions to the sound and economic growth of the areas in which they are located;

(3) Provide needed additions to the general housing supply;

(4) Provide opportunities for innovation in housing and community development technology and in land use planning;

(5) Enlarge housing and employment opportunities by increasing the range of housing choice and providing new investment opportunities for industry and commerce;

(6) Encourage the maintenance and growth of a diversified local homebuilding industry; and

(7) Include, to the greatest extent feasible, the employment of new and improved technology, techniques, materials, and methods in housing construction, rehabilitation, and maintenance under programs administered by the Department of Housing and Urban Development with a view to reducing the cost of such construction, rehabilitation, and maintenance, and stimulating the increased and sustained production of housing under such programs.

§ 710.2 Definitions.

For the purpose of the regulations in this part, the following terms shall

plans for a new community approved by the Secretary under the Act.

(f) Land development. The process of grading land, making, installing, or constructing water lines and water supply installations, sewer lines, and sewage disposal installations, steam, gas, and electric lines and installations, roads, streets, curbs, gutters, sidewalks, storm drainage facilities, and other installations or work, whether on or off the site, which the Secretary deems necessary or desirable to prepare land for residential, commercial, industrial, or other uses, or to provide facilities for public or common use. The term "land development" shall not include any building unless it is (1) a building which is needed in connection with a water supply or sewage disposal installation or a steam, gas, or electric line or installation, or (2) a building, other than a school, which is to be owned and maintained jointly by the residents of the new community or is to be transferred to public ownership, but not prior to its completion.

(g) Actual costs. The costs (exclusive of rebates or discounts) incurred by a new community developer in carrying out the land development assisted under the Act. These costs may include amounts paid for labor, materials, construction contracts, land planning, engineers' and architects' fees, surveys, taxes, and interest during development, organizational and legal expenses, such allocation of general overhead expenses as is acceptable to the Secretary, and other items of expense incidental to development which may be approved by the Secretary. If the Secretary determines that there is an identity of interest between the new community developer and a contractor, there may be included as a part of actual costs an allowance for the contractor's profit in an amount deemed reasonable by the Secretary.

§ 710.3 Information.

General information on the new community program and instructions for applying for assistance under this program, as well as information on other Federal programs which are related to new communities, may be obtained from the Assistant Secretary for Community Planning and Management, U.S. Department of Housing and Urban Development, Washington, D.C. 20410.

In determining whether a given undertaking, otherwise eligible for assistance and consistent with the purposes of the Act, is a new community, the Secretary will apply the following general criteria:

(a) A new community must include most, if not all, of the basic activities normally associated with a city or town: Housing, education, cultural facilities, transportation, commerce, industry, and recreation.

(b) It must combine these varying activities in a balanced and harmonious whole, with a view to creating an environment that is an attractive place to live, work, and shop.

(c) It must have a favorable impact upon the growth and development of the area within which it is located in terms of conserving land, minimizing transportation problems, extending the range of housing choice for all who live or may in the future live in the area, promoting needed economic development, and creating new job opportunities.

(d) It must be designed for the fullest possible range of people and families of different compositions and incomes and must be open to members of all national, ethnic, and racial groups.

§ 710.6

Specific characteristics of a new community.

(a) Size, location, and internal diversity (1) Size. No minimum or maximum size is prescribed for a new community qualifying under the Act, but its size must be significant in comparison with existing developments and communities in the area in which it is located. A new community that would be too small to have an appreciable impact in or near a metropolitan area might qualify for assistance if it were located in a rural area and were approximately as large as other communities in the area.

(2) Location. A new community may be located in any kind of area: Urban urbanizing, or rural. Wherever located, a new community must have accessibility to highways, airports, or other public transportation facilities commensurate with its size and the anticipated requirements of its population, industry, and

commerce.

(3) Relationship to surrounding development. If a new community involves development which adds to an existing community or to an existing residential, commercial, or industrial area, both the old and new development will be considered in determining whether the new community qualifies for assistance under the Act. To qualify, however, the new development must be substantial, and the old and new elements must be carefully integrated. The resulting total new community must be planned as a whole and must be demonstrably different from that which existed before. An addition to existing development of housing alone, or commercial or industrial facilities alone, will generally not be considered sufficient for this purpose. Whether or not the new community incorporates existing development, it should take account of this development in internal planning and site location decisions.

(4) Internal diversity. Although a new community need not be completely selfsufficient, it must provide in a single area the housing, public and commercial facilities, and job opportunities normally associated with a city or town. In determining the degree of internal diversity for a given site, consideration will be given to adequacy of existing or projected facilities in the immediate area. However, the community may not consist simply of housing or of housing with a minimum of commercial facilities serving only the immediate needs of people for neighborhood shopping. Nor may a new community be predominantly an industrial or commercial development, with a minimum supply of new housing.

(b) Internal development plan. A new community must have a general plan and program for its ultimate development designed to create and maintain an attractive and viable environment responsive to human needs. Among the factors which the Secretary will consider in evaluating the plan are the following:

(1) Suitability of the site for the proposed uses, harmonious relationship of these uses with surrounding development and their protection against adverse physical encroachment;

(2) Effectiveness of the land use and transportation plans and population density and distribution in promoting harmonious interrelationships and optimum internal accessibility;

(3) Preservation and enhancement of natural features such as water bodies and steep slopes; establishment and

maintenance of an accessible open-space network for conservation, natural beauty, and recreation; and effectiveness of measures to prevent environmental pollution and problems such as flooding and soil instability;

(4) Adequacy of public facilities to serve community needs, including water and sewer, schools, recreation, health facilities, streets, walkways, highways, and other transportation facilities;

(5) Adequacy of controls and incentives for promoting attractive land utilization, urban design and architecture;

(6) Phasing of all features of the plan on a schedule compatible with economic feasibility and geared to the timing of land acquisition, development, and disposition as reflected in the financial plan;

(7) The extent to which the plan contains innovative features;

(8) Adequacy of provision for relocation of existing residents and businesses to the extent required by the land use plan; and

(9) Adaptability of the plan to the various problems and alternatives which may arise as development proceeds.

(c) Housing mix. A new community must contain an adequate range of housing and a variety of housing types for both sale and rental for people of all incomes, ages, and family composition, including a substantial amount for people of low and moderate income. The following factors, among others, will be considered in determining the sufficiency of housing mix:

(1) Existing and projected distribution of families by income and size for the region in which the project is located;

(2) Existing and projected housing supply and demand, particularly for lowand moderate-income housing, in the region and market area of the project; and

(3) Income and family characteristics of persons likely to be employed in the new community.

Existing housing in standard condition or proposed to be rehabilitated within the new community, as well as new construction, may be considered in determining adequacy of housing balance. But whether this housing is to be newly constructed or rehabilitated, the new community plan must include reasonable assurances that the units planned will actually be provided. If the development of

a new community to be carried out in stages, sites for low and moderate income housing shall be included in every major residential stage.

(d) Community services and government. (1) A new community must be provided with a full range of government and public services adequate to meet the needs of all its residents. Such services may be provided by State or local government, by community organizations, or by other appropriate entities. If public facilities or utilities are to be operated by a nonpublic body, rates and charges, capital structure, rate of return, and methods of operation of the facility or utility must be regulated by a public body or by other means satisfactory to the Secretary.

(2) A new community need not be or constitute a separate political unit but may be governed through a county, city, town, or other existing political jurisdiction. Where it is contemplated that a developer or a developer-controlled organization or association will, during the course of development, perform functions normally performed by a general unit of government, provision should be made in the new community plan or plans for an orderly transfer of such functions to an appropriate governmental unit at an appropriate time.

(e) Area planning and development. The area within which a new community is to be situated must be covered by a comprehensive areawide plan or by ongoing planning promulgated or carried on by a duly authorized agency. The location of the new community and the internal development plan for the project must be consistent with such comprehensive plan or planning and must reflect consideration of any economic development programs, functional plans, and public works programs of relevant Federal, State, regional, city, or county agencies for the area in which the new community is located. The comprehensive plan or planning for the area must, in the Secretary's judgment, be sufficiently detailed to provide a reasonable basis for evaluating the relationship of the proposed new community to area population trends, major transportation facilities and development patterns, areawide land use, systems for water and sewage, open space, and recreation. In those areas where there is an area wide planning agency certified by the Secretary, consistency must be found between

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the planning performed by the certified agency and the new community.

(f) Social elements. In order to assure that project reflects social considerations and human needs, new community plans must reflect or incorporate the following:

(1) Use of citizen advisory groups, opinion surveys, or other methods of developing a design and structure for the new community that will be responsive to the needs of residents, both at the beginning and, through continuing evaluation, at later stages of development:

(2) Location and distribution of housing types and price ranges so as to prevent segregation and afford full access to facilities, and participation in activities, of the community and neighborhood by groups, families, and individuals of different economic, social, and racial backgrounds;

(3) A program of citizen participation in project activities, including use of home associations and civic organizations appropriately formulated to supplement, as necessary, opportunities offered by governmental or public institutions, and to provide for full opportunity for participation by renters and low-income residents; and

(4) Specific actions that may be needed to promote high quality schools or to encourage or assure, as appropriate, establishment of community colleges, technical or vocational education centers, adult education courses, and job retaining facilities.

(g) Disclosure of certain interests. Developers and contractors must disclose, in accordance with such procedures or forms as the Secretary may prescribe, all direct and indirect interests that may affect the arm's length character of any transactions relied upon to establish estimated or actual costs, or value, for purposes of determining the amount of obligations to be guaranteed or the amount of the proceeds of such obligations that can be disbursed. Where such interests exist, the Secretary may fix such special allowances or fees, or require special accounting for costs, or take such other actions as he may determine are reasonable and appropriate in order to prevent the guarantee of obligations, or the disbursement of funds, in excessive amounts.