Office of Real Estate Services - Project Development Guide
Chapter 10

The United States Constitution and the constitutions and laws of the States have long prescribed certain requirements when governmental bodies acquire private property. However, until the 1930s little attention was given to the effects of acquisition on the people who owned or occupied the property being acquired.

Benefits such as moving expense payments and housing payments were gradually added to various Federal programs, but these remained at minimal levels and differed widely from one Federal program to another. During the 1960s, Congress addressed these problems and, in January 1971, passed the Uniform Act. The Uniform Act was a response to the need to unify, increase protections provided to private persons affected by government projects and address the needs of the people, especially people displaced by a public project.

The Uniform Act proved to be highly successful, but eventually it required updating. In 1987, as part of the Surface Transportation and Uniform Relocation Assistance Act (STURAA), Congress amended the Uniform Act to increase payment levels, to add benefits for small businesses, and to designate the Department of Transportation as the Lead Agency for the Uniform Act for all Federal and Federally-funded programs and projects. The Federal Highway Administration has the responsibility to act for the Department of Transportation. The Uniform Act was once again amended on November 21, 1997, to add Public Law 105-117, "alien not lawfully present in the United States."

The provisions of the Uniform Act concerning relocation are found in Title II. As stated in the law, the purpose of Title II is to assure fair and equitable treatment of displaced persons so that such persons do not suffer disproportionate injury from projects designed to benefit the public as a whole. It is important to keep this purpose in mind. It will serve as a valuable guide when making decisions on difficult questions.

It also is important to understand that successful relocation is essential not only to the welfare of those to be displaced but to the progress of the entire highway project. Without the relocation of those on site, the project cannot proceed to actual construction and the highway will not be built.

10.1. RELOCATION PLANNING

Successful relocation requires planning. Housing resources must meet the needs of displaced residents in terms of size, price, rental, location, and timely availability. Advisory services and various notices, some with specific timing requirements, must be provided. Businesses must be given assistance in relocating with a minimum of disruption to their operations. Payments must be made available to displaced persons at the time they are needed to obtain replacement housing or to move. Often coordination with other displacing programs or agencies is necessary. These things do not happen automatically; they require planning.

FHWA long has stressed the value of relocation planning, but Congress gave new emphasis to planning in the 1987 amendments to the Uniform Act. Section 205 of the Act was amended to add a new Section 205(a) explicitly requiring such planning, i.e.,

"Programs or projects undertaken by a Federal agency or with Federal financial assistance shall be planned in a manner that(1) recognizes, at an early stage of the planning of such programs or projects and before the commencement of any actions which will cause displacements, the problems associated with the displacement of individuals, families, businesses, and farm operations, and (2) provides for the resolution of such problems in order to minimize adverse impacts on displaced persons and to expedite program or project advancement and completion."

In a sense, planning for relocation begins with planning for the project, since the relocation of occupants is one of the major potential impacts of any project and must be considered at an early juncture. The earlier problems are identified, the easier it will be eventually to minimize or mitigate them.

As a project progresses, the focus on the potential for relocation becomes sharper. By the time the general area to be affected has been identified, relocation planning becomes more formalized. At this stage generalized information concerning the potential relocation impact of the project is gathered and the differing impacts of alternative locations are compared. For new highways (as opposed to widening or realigning existing roads), this and other information will assist in narrowing potential project corridors to the relatively few from which the final alignment will be chosen. It also may have a major role in the selection of that alignment.

While obtaining relocation information is important for the selection process, it has another, more direct role in project management. The information obtained in the planning process will form the basis for actions the State must take to conduct the actual relocation of project occupants.

Essentially, the acquiring agency must be able to match up project occupants with appropriate relocation resources. The nature of these resources will vary, depending on the characteristics of the displaced persons. Will there be large families, low-income elderly, or persons with disabilities displaced? Will there be a shortage of available dwellings for such persons?

In addition, the State must plan for providing the advisory services displaced persons will need. Providing these services may make the difference between a successful relocation and one which delays the progress of project activities.

One effective way to obtain the information needed is to conduct a relocation survey. The elements of a relocation survey and how to prepare one are discussed in Section 5 above.

10.2. INFORMATION AND NOTICES

While the displacing agency needs information about potential displaced persons and their needs to conduct relocation in a successful manner, the displaced person has an equal or greater need for information about the displacement process. After all, it is the displaced person who will have to make a major readjustment in his or her daily life, i.e., to move to a new home or business location. In such a situation, people need to know what is going to happen to them and they need to know it in time to plan and in time to act.

The Uniform Act and the DOT/FHWA regulations require that persons to be displaced be provided the information they will need to minimize the disruption of moving and maximize the likelihood of a successful relocation. Much of this information is contained in a series of Notices from the displacing agency to the displaced person. These Notices must be delivered either in person or by certified mail. There are three basic notices. We will discuss each one in turn.

10.2.1. GENERAL INFORMATION NOTICE

At an early stage of the project, the displacing agency must provide general information about the project and the relocation program to persons who may be displaced. This information must be in writing using easily understood language. Sometimes, the information may need to be provided in a foreign language.

One of the most effective ways to convey this information is in a relocation brochure. Providing the brochure gives the relocation field worker the opportunity to meet potential displaced persons and to begin to establish a personal relationship which may prove crucial later. A well-written brochure contains the basic relocation information a displaced person needs to know, is small enough not to be intimidating, and is easy to refer back to later. You should hand out relocation brochures at all related public meetings to all persons you think may have to move.

We encourage agencies to prepare a brochure of their own or to use the brochure FHWA has developed. We believe this brochure is written broadly enough to be used in all Federal-aid or Federal programs or projects. We can make limited numbers of these brochures available to you or will loan the plates to you for use in duplication.

10.2.1.1. CONTENT OF THE GENERAL INFORMATION NOTICE

The General Information Notice provides a general description of the displacing agency's relocation program. It should include all of the following and any appropriate additional elements:

• Notification to the person that he or she may be displaced by the project;
  
  
• Instruction that he or she should not move until advised by the agency, the agency will assist them in moving and locating a replacement dwelling or business site, and moving without the assistance of the agency could jeopardize potential benefits;
  
  
• Assurance that he or she will not be required to move unless the agency has made comparable, decent, safe, and sanitary housing available;
  
  
• Assurance that he or she will not be required to move without at least 90 days notice in writing;
  
  
• Information concerning the kinds of advisory services that the agency will provide to assist in the move, including referrals to replacement housing and business sites, transportation to view such sites, help in filing claims, and other assistance;
  
  
• A description of the kinds of relocation payments which will be available to assist with the costs of the move, eligibility requirements for the payments, and information on how to obtain them; and
  
  
• Information about the person's right to appeal the agency's determinations concerning his or her benefits under the relocation program.

10.2.2. NOTICE OF RELOCATION ELIGIBILITY

The Notice of Relocation Eligibility is a major step in the relocation process. Prior to this notice the displacing agency should have provided general relocation information to all those persons who might be displaced by the project. The Notice of Relocation Eligibility informs particular persons that they will be displaced by the project and thus will be eligible for relocation benefits appropriate to their situation (homeowner, tenant, business etc.).

The trigger for this notice is the initiation of negotiations to acquire the real property where the person lives or conducts a business. The date on which this occurs generally is the date on which the property owner receives the agency's initial offer to buy the property for the amount it has determined to be "just compensation".

The regulations require that the notice be provided "promptly" in writing to persons to be displaced. Therefore, it should be issued on the same day as the offer to acquire the property or as soon thereafter as possible. The Notice of Relocation Eligibility should be delivered within seven and, in no case, later than fourteen days. Otherwise, the requirement of promptness will not be satisfied.

In unusual circumstances, where there is a need to vacate property or relocate persons before the initiation of negotiations, the agency may issue a Notice of Intent to Acquire prior to the initiation of negotiations to the current occupant.

10.2.3. NINETY-DAY NOTICE

The General Information Notice contains assurances for persons to be displaced. No one will have to move from a dwelling without at least 90 days written notice. This is one of the most important protections that the Uniform Act and the regulations provide. And a 90 day notice is not effective for a residential occupant unless a comparable replacement dwelling has been made. Realistically, a residential occupant does not have to move until at least 90 days after receipt of notice of replacement housing availability. The clock does not begin on the 90-day notice until at least one comparable dwelling is made available.

The DOT/FHWA regulations at 49 CFR 24 require that:

No lawful occupant shall be required to move unless he or she has received at least 90 days advance written notice of the earliest date by which he or she may be required to move. The 90-day notice informs the person that any person who is an alien not lawfully present in the United States is ineligible for relocation advisory services and relocation payments, unless such ineligibility would result in exceptional and extremely unusual hardship to a qualifying spouse, parent, or child.

The regulations provide two basic approaches to the content of the 90-day Notice. Under the first the agency includes in the Notice a specific date, at least 90 days away, by which Mr. Jones may have to move -- July 15 in our example above. Under the second approach, the 90-day Notice does not state a specific date, but informs Mr. Jones that in not less than 60 days the agency will provide a second notice which will state a specific date by which a move will be required, and that this latter notice will provide no less than 30 days advance notice. Note that under both approaches, the earliest date by which the agency may require a move must be at least 90 days after the 90-day Notice is given. The Agency must acquire the property in question before issuing this latter notice.

We have attached a chart illustrating these timing requirements at the end of this subsection.

In practice this process may work out in a variety of ways. For example, it may turn out that the agency does not need Mr. Jones out until August. On the other hand, the agency may elect to provide more than 90 days advance notice intentionally, that is, notifying Mr. Jones, in writing, on March 1. In either case, Mr. Jones does not have to move before July 15 and the 90-day notice requirement has been met.

The requirement for the 90 days notice applies to situations in which the agency requires an occupant to move. Where occupants move on their own before receiving a notice, it is not necessary for the agency to provide one.

Finally, some situations, expected to be rare, may require an agency to move persons with less than 90 days notice. Examples include health, safety or other reasons which make 90 days notice impracticable. However, the need of the agency for the land, the project schedule, or similar causes do not constitute sufficient reason for failing to provide 90 days notice. In exceptional instances, where less than 90 days notice is appropriate, the agency should document its reason(s) in the case file.

10.2.4. ADDITIONAL INFORMATION TO DISPLACED PERSONS

While much of the information the agency will provide to displaced persons is contained in the three notices described above, some information of great importance to them will be provided through other channels. For example, the regulations require the agency to give the person to be displaced information about the specific dwelling unit used as the comparable dwelling, its location, the price or rent used to set the upper limit of the replacement housing payment, and the basis for the determination (24.205(c)(2)(ii)(A)). This information must be provided in writing.

10.2.4.1 ALIENS NOT LAWFULLY PRESENT IN THE UNITED STATES.

Each person seeking relocation payments or relocation advisory assistance shall, as a condition of eligibility, certify:

1. In the case of an individual, that he or she is either a citizen or national of the United States, or an alien who is lawfully present in the United States.
   
   
2. In the case of a family, that each family member is either a citizen or national of the United States, or an alien who is lawfully present in the United States. The certification may be made by the head of the household on behalf of other family members.
   
   
3. In the case of an unincorporated business, farm, or nonprofit organization, that each owner is either a citizen or national of the United States, or an alien who is lawfully present in the United States. The certification may be made by the principal owner, manager, or operating officer on behalf of other persons with an ownership interest.
   
   
4. In the case of an incorporated business, farm, or nonprofit organization, that the corporation is authorized to conduct business within the United States.

A certification shall suffice in determining whether such person is either a citizen or national of the United States, or an alien who is lawfully present in the United States.

In computing relocation payments under the Uniform Act, if any member(s) of a household or owner(s) of an unincorporated business, farm, or nonprofit organization is (are) determined to be ineligible because of a failure to be legally present in the United States, no relocation payments may be made to him or her. Any payment(s) for which such household, unincorporated business, farm, or nonprofit organization would otherwise be eligible shall be computed for the household, based on the number of eligible household members and for the unincorporated business, farm, or nonprofit organization, based on the ratio of ownership between eligible and ineligible owners.

If, based on a review of an alien's documentation or other credible evidence, a displacing agency has reason to believe that a person's certification is invalid (for example a document reviewed does not on its face reasonably appear to be genuine), and that, as a result, such person may be an alien not lawfully present in the United States, it shall obtain the following information before making a final determination.

1. If the agency has reason to believe that the certification of a person who has certified that he or she is an alien lawfully present in the United States is invalid, the displacing agency shall obtain verification of the alien's status from the local Immigration and Naturalization Service (INS) Office. A list of local INS offices was published in the Federal Register in November 17, 1997 at 62 FR 61350. Any request for INS verification shall include the alien's full name, date of birth and alien number, and a copy of the alien's documentation.
   
   
2. If the agency has reason to believe that the certification of a person who has certified that he or she is a citizen or national is invalid, the displacing agency shall request evidence of United States citizenship or nationality from such person and, if considered necessary, verify the accuracy of such evidence with the issuer.

No relocation payments or relocation advisory assistance shall be provided to a person who has not provided the certification described in this section or who has been determined to be not lawfully present in the United States, unless such person can demonstrate to the displacing agency's satisfaction that the denial of relocation benefits will result in an exceptional and extremely unusual hardship to such person's spouse, parent, or child who is a citizen of the United States, or is an alien lawfully admitted for permanent residence in the United States.

"Exceptional and extremely unusual hardship" to such spouse, parent, or child of the person not lawfully present in the United States means that the denial of relocation payments and advisory assistance to such person will directly result in:

1. A significant and demonstrable adverse impact on the health or safety of such spouse, parent, or child;
   
   
2. A significant and demonstrable adverse impact on the continued existence of the family unit of which such spouse, parent, or child is a member; or
   
   
3. Any other impact that the displacing agency determines will have a significant and demonstrable adverse impact on such spouse, parent, or child.

10.2.4.2 Site Offices

Perhaps one of the most effective means of communicating with potential displaced persons is to open a local relocation office on or near the project site. Of course not every project has a workload large or difficult enough to merit a site office, but for those which do, it can be of great assistance. Opening an office early in the project's life will show occupants that the agency is interested in communicating with them. Keeping the office open at hours that are convenient for occupants demonstrates that they will not be treated in a "business as usual" fashion.

The office should be readily accessible to occupants and it should be a resource for the kinds of information and assistance occupants need, especially those to be displaced. At a site office occupants should be able to find information about what the project proposes to do, basic relocation requirements, and benefits, available replacement housing and business locations, community resources such as parks, schools, churches, shopping, and transportation, financial requirements relating to the cost of obtaining replacement housing or business sites, local codes, and other useful information as well. If a local office is not merited the relocation agent will have to provide this type of information to occupants.

10.3. RELOCATION ASSISTANCE ADVISORY SERVICES

A relocation agent must be able to work with many different people and situations. Consider the following:

A displaced person whom you have been helping to search for a replacement dwelling hurries into your office. She has found just the apartment for her family. It is available at a rent she can afford. But there is one problem; the rental agent is requiring a deposit of first and last month's rent and she doesn't have that kind of cash to spare from her family's budget. She is afraid she will lose the apartment! You can explain to her that if the apartment meets the requirements for replacement housing (decent, safe, and sanitary), you can arrange for an advance on her replacement housing payment to make the required deposits and provide a letter to the rental agent explaining her status and benefits. In the end, there will be three happy people: the displaced person who has a place to move, you because you will not have to find a comparable, and the rental agent who hopes to have rented to a good tenant.

An elderly man cannot look for replacement housing because of a disability which prevents him from driving or even using public transportation. You offer to drive him around to view a number of homes and to give him the names of several local contractors who have done remodeling work to make houses accessible and useful to people with disabilities. When he requests it, you agree to be present when he meets with a contractor.

A man comes into your office several months after a public meeting announcing a highway project and informs you that, since the meeting, the same person has visited him twice and each time tried to convince him to sell his home "before the floor falls out from under the value of his home." You counsel him not to panic and to wait for the State to contact him about the impact of the project on his dwelling. You emphasize that if his home eventually is acquired for the project, he could jeopardize substantial benefits by moving before official notice.

You help a family complete an application for public housing. You refer a frightened wife to a program which will help her to deal with her husband's alcohol problem. You patiently explain to a skeptical young legal immigrant couple that, yes, they can use their relocation payment as a downpayment on their first home.

In all of these cases you are providing relocation assistance advisory services. These services are provided in every phase and in connection with every aspect of a highway project. They involve providing information, counseling, advice, and encouragement and often require repeated and intense personal contact. Perhaps no other assistance, not even relocation payments, is more important to persons to be displaced.

Some displaced persons will require minimal advisory services; others will need extensive services. A project in an area with a large concentration of the latter will require more relocation "advisors" than one with out such problems. There simply is no substitute for knowing the area the project is impacting and for knowing the people who are to be displaced. Sometimes this knowledge must go beneath the surface to special problems or needs of the displaced person and sometimes acquiring such knowledge may require skilled interviewing and repeated contacts.

The goal is to assure that all displaced persons are relocated successfully. Your advisory assistance goal is to address all problems that prevent the displaced persons from relocating successfully.

10.3.1. WHO IS ELIGIBLE FOR ADVISORY SERVICES?

There are four categories of persons eligible to receive advisory services:

1. Persons occupying real property to be acquired for the project.
   Most of the people to whom you will provide advisory services will fall in this category. These are people who are occupants of the project site. This group may include owners and tenants of residences, owners and tenants of businesses and farms, and non-profit organizations.
   
   
2. Persons occupying real property adjacent to that being acquired who are caused substantial economic injury by the acquisition.
   The acquisition of property adjacent to a business may reduce its clientele significantly, limit accessibility, or affect it in other ways which cause it substantial harm. While such businesses are not displaced persons and, therefore, not entitled to business relocation payments, the agency must make available relocation assistance advisory services to them. Examples of such services might include consultation with the business on space needs, current market conditions, or traffic patterns or transportation as they relate to relocating the business; information regarding the availability of relocation sites; or, information about and referral to the Small Business Administration.
   
   
3. Persons who, as a result of the project, move or move personal property from real property not being acquired for the project.
   For example, the owner of a business lives across the street from his or her business location. When it is relocated across town, the owner chooses to move his or her residence also, in order to remain close to the business location.
   
   
4. Persons who move into property after acquisition and are aware that they will have to move due to the project.
   In such cases, the tenant moves in with the knowledge that they will have to move out when the project requires and that they will not receive relocation payments to assist with the move. Such "short-term occupants" are entitled to advisory services.

10.3.2. WHAT SERVICES MUST AGENCIES PROVIDE?

While a relocation agent may sometimes have to provide unusual types of assistance, there is a group of services which forms the core of a typical advisory services program. These are the basic, minimal services which the agency must make available to all displaced persons and include the following items:

1. Explain the relocation services and appropriate relocation assistance payments.
   
   
2. Explain and discuss the eligibility requirements for each relevant type of relocation payment, and at an appropriate time, determine the eligibility for payments of each displaced person.
   
   
3. As a part of this explanation, verbal and written advice should be provided that persons without a legal right to be in this country are not eligible to receive relocation payments. There should be a statement provided on all claim forms that allows each person to attest to the eligibility for relocation payments based on citizenship or a legal right to reside in this country.
   
   
4. Determine the needs of persons to be displaced for advisory assistance. The relocation agent must become familiar with the many different, and sometimes special, needs of the displaced households or businesses.
   
   
5. Make every effort to help meet the needs identified, while recognizing the importance of the displaced person's priorities and their desire, or lack of same, for assistance.
   
   
6. Provide the following specific types of services, as appropriate:
   
   
   • Current listings, including prices or rents, of replacement properties either comparable to acquired dwellings or appropriate for displaced businesses and farms;
     
     
   • Information concerning Federal and State housing and other programs offering relocation or related types of assistance;
     
     
   • Assistance in obtaining and completing application or claim forms for relocation payment or other related assistance, as needed;
     
     
   • Transportation for displaced persons to inspect potential relocation housing, when needed.

10.3.3. WHAT SPECIAL SERVICES ARE AVAILABLE?

There is a variety of social services available from a number of public and private agencies. It is important for each agency to determine the services available to the residents of the project area and the methods to obtain the services for the displaced persons.

10.4. RELOCATION ASSISTANCE PAYMENTS

One of the main purposes of the Uniform Act is to prevent affected persons from bearing an unfair share of the burden of public projects. In addition to the relocation assistance advisory services discussed above, the Uniform Act and its regulations provide relocation assistance payments to help accomplish this. Relocation assistance payments are designed to compensate displaced persons for costs which are the result of acquisition of the property on which they reside.

These payments fall into two broad categories, residential and nonresidential, that is, businesses, farms, and non-profit organizations. These two broad categories are made up of several subcategories.

10.4.1. RESIDENTIAL RELOCATION PAYMENTS

Residential relocation payments are intended for persons who move (or move personal property) from a dwelling as a result of a highway project receiving Federal financial assistance. As the chart above shows, these payments may be subdivided into three types: moving expense payments, replacement housing payments, and last resort housing payments. There are several different levels of eligibility, each with its own set of specific requirements.

10.4.1.1. RESIDENTIAL MOVING EXPENSE PAYMENTS

Residential moving expense payments are designed to compensate for the moving and related costs which a person incurs as a result of having to move from his or her dwelling or to move personal property for a Federal or federally-assisted project. They include items such as the cost of transporting household goods, packing and unpacking those goods, the cost of storage, if necessary, and other related costs (see the end of this sub-section for a list of eligible moving and related costs).

Residential moving expense payments may be computed in two ways, the actual cost method and the schedule method. The latter method, as the name indicates, involves the use of a schedule of moving costs approved and published in the Federal Register regularly by FHWA. For each State the schedule establishes fixed amounts to be paid for moving expenses, based on the number of rooms of furniture in the dwelling from which the move occurred. The schedule also provides for moves from dwellings with either little or no furniture. In some cases a displaced person will have an unusually large amount of furniture in one or more rooms, e.g., in a basement or attic. You may adjust the number of rooms and hence the schedule payment to reflect this situation. The key is to establish the number of rooms of possessions that must be moved, regardless of the location in the dwelling or outside the dwelling.

The advantage of the schedule method is that it minimizes paperwork for both the agency and the displaced person. The right-of-way section at the FHWA Division Office or the State Transportation Agency will have a copy of the latest schedule.

The actual cost method also is true to its name. It is based on the actual, reasonable cost of moving and related costs. Eligible residential moving expense costs are listed following this section. While there is no fixed dollar ceiling on payments for actual moving expenses as there is for the schedule payments, there are limits on what may be paid. First, the payment may not exceed the actual cost of the moving and related expenses. This amount will be based on receipts for the costs claimed. Second, the charges which make up the payment must be reasonable, i.e., typical of the amounts charged for a similar move. Third, the items of cost which are included in the claim for reimbursement must be necessary to accomplish the move. When making determinations concerning reasonableness and necessity, the agency should use common sense and good judgement.

An actual cost move may be carried out by a commercial mover or by the displaced person, as a self-move.

If the displaced person elects to use a commercial mover, it is necessary to obtain bids or estimates. (Good business practice would consist of obtaining two if possible. An estimate prepared by a qualified Agency staff member also may be acceptable.) Payment will be limited to the amount of the low acceptable bid. If necessary, the agency may pay the mover directly for the services. In any case, the costs claimed for reimbursement of an actual cost move must be supported by appropriate receipts, or other records.

A displaced person may elect to make an actual cost self-documented move if he or she wishes. Reimbursement will be made for the necessary costs of moving and placing all possessions in the new dwelling and necessary utility charges. A record must be maintained of all activities and the time spent, all purchases of supplies and services, and the persons performing the move. If someone elects to make a self-documented move, the agency should provide them with the hourly rate that will be paid for the moving activities.

ELIGIBLE RESIDENTIAL MOVING EXPENSES

It is up to the Agency to determine which of these expenses are necessary for each move.

1. Transportation of the displaced person and personal property up to 50 miles, unless the Agency determines that relocation beyond 50 miles is justified.
   
   
2. Payment to a commercial mover for completing all or part of the move.
   
   
3. If a self-move, payment for rental vehicles or equipment such as trucks, pads, dollies, etc.
   
   
4. Packing, crating, and unpacking of personal property.
   
   
5. Payment for the storage of personal property not to exceed 12 months if justified unless the agency determines that a longer period is necessary.
   
   
6. Insurance premiums to cover the value of personal property for damage or loss during the move or during necessary storage.
   
   
7. Replacement value of personal property lost, stolen, or damaged under certain circumstances when insurance is not reasonably available.
   
   
8. Compensation paid to persons employed to help conduct the move.
   
   
9. Special services, such as an ambulance to transfer persons who are physically disabled.
   
   
10. Payments to disconnect, dismantle, reassemble and reinstall household appliances and equipment, such as a washer, dryer, telephone, etc.
    
    
11. Other moving-related expenses the Agency determines to be reasonable and necessary, except those listed as ineligible under 10.4.2.1, the Non-Residential Moving Expense section below.

10.4.1.2. REPLACEMENT HOUSING PAYMENTS

In addition to the Moving Expense payments discussed above, the Uniform Act and the DOT/FHWA regulations provide another set of payments for persons displaced from their homes by FHWA or FHWA-assisted projects. These Replacement Housing payments are designed to help eligible displaced persons occupy housing which is decent, safe, and sanitary, adequate for their needs, and comparable to what they had before the project required their move (The precise meaning of the terms in bold will be discussed below.). These payments are available to persons who occupied dwellings as their primary place of residence only.

There are 3 categories of Replacement Housing Payments (RHPs): Purchase Supplements, Rental Assistance, and Downpayment Assistance. Sometimes even these payments are not sufficient to meet the objectives of the law and regulations and it is necessary to provide housing of last resort payments and procedures. We will discuss these supplemental payments/procedures in the next chapter.

10.4.1.2.1. REPLACEMENT HOUSING PAYMENTS: COMMON REQUIREMENTS

Each of the two categories of RHP has specific requirements for eligibility and computation. However, all RHPs have a number of features in common. Let's look at those common elements first.

1. OCCUPANCY.
   RHPs may be made only to occupants of the dwelling from which displacement occurs. This means that the dwelling was their usual place of residency or abode.
   
   
2. DISPLACEMENT.
   RHPs may be made only to displaced persons. A displaced person is one who moved or moved personal property from real property as a direct result of the Federal or Federal- aid project or program.
   
   
3. REPLACEMENT HOUSING STANDARDS.
   RHPs may be made only if the housing to which the displaced person moves meets the standards for decent, safe, and sanitary dwellings adequate in size to meet the needs of the displaced person(s). These standards concern the size and physical condition of the replacement dwelling, its utility and cost within the financial means of the displaced person. See Section 10.4.1.2.2 for a full discussion of these standards.
   
   
4. TIME LIMIT FOR PURCHASE/RENTAL OF REPLACEMENT DWELLING.
   RHPs may be made only if the displaced person purchases or rents (as appropriate) and occupies the replacement dwelling within one year. For displaced homeowners, the year begins on the later of (1) the date the person receives final payment for the displacement dwelling or, in the case of condemnation, the date the required amount is deposited with the court, or (2) the date the person is offered comparable replacement housing. A displaced tenant must rent or purchase and occupy a DSS replacement dwelling within one year of the date he or she moves from the displacement dwelling. We have included a chart illustrating these timing requirements at the end of this subsection. (Also see 10.4.1.2.6 for exceptions to these requirements.)
   
   
5. TIME LIMIT FOR FILING CLAIMS.
   RHPs may be made only if the displaced person files a claim for the payment within 18 months of the beginning of the one year period established under 4 above. However, the displacing agency may waive this limit for good cause.
   
   
6. PAYMENT LIMITED TO ACTUAL COST.

RHPs are intended to assist displaced persons in obtaining comparable replacement housing and to compensate for the increased housing-related costs due to relocation. Thus, the payment computed under an RHP, with certain exceptions specified below, is based on the cost of either a comparable replacement dwelling or the replacement dwelling actually occupied, whichever is less.

10.4.1.2.2. REPLACEMENT HOUSING STANDARDS

A basic requirement of the relocation program is to make replacement housing available to displaced persons that meets certain qualitative standards. These standards are contained in the interrelated concepts of "decent, safe, and sanitary housing" and "comparable replacement housing."

10.4.1.2.2.1. DECENT, SAFE, AND SANITARY HOUSING

The term decent, safe, and sanitary (DSS) refers to the physical condition of the replacement dwelling and its effect on the health and safety of the occupants. Basically, a dwelling which meets the requirements of a local housing and/or occupancy code will be decent, safe, and sanitary.

It is important to understand the distinction between housing/ occupancy codes and building codes. Building codes set standards for construction and apply only to new construction and certain additions and alterations. Housing/occupancy codes set standards for habitability and apply to all dwellings in a community. If an occupancy code changes to require smoke detectors, for example, all dwellings would be required to comply. Housing/occupancy codes are narrower in scope than building codes. They are concerned only with those elements which influence health and safety. Building codes are concerned with conformance to current building standards. Most local housing and occupancy codes are adaptations of one of the national model codes promulgated by code setting organizations.

10.4.1.2.2.2. MINIMUM STANDARDS

In places where there are no local housing and occupancy codes, such as rural areas or small towns, or where the codes are less stringent, the regulations apply the following minimum standards to replacement housing:

1. WATER
   The unit must have an adequate supply of potable (drinking) water.
   
   
2. KITCHEN
   In the case of a housekeeping unit, there shall be a kitchen area containing a fully usable sink properly connected to potable hot and cold water and to a sewage drainage system. Adequate space and utility service connections for a stove and refrigerator must also be provided.
   
   
3. HEATING SYSTEM
   The unit must contain a heating system capable of sustaining a healthful temperature of approximately 70 degrees, except in those areas where local climatic conditions do not require such a system.
   
   
4. BATHROOM
   The unit must have a separate, well-lighted and ventilated bathroom affording privacy to the user, containing a sink, bathtub or shower stall, and a toilet, all in good working order and properly connected to appropriate sources of water and a sewage drainage system.
   
   
5. ELECTRICAL SYSTEM
   The unit must have an adequate and safe electrical wiring system for lighting and other electrical services.
   
   
6. STRUCTURALLY SOUND
   The unit must be structurally sound, weather tight, and in good repair.
   
   
7. EGRESS
   The unit shall have a safe, unobstructed means of egress to safe, open space at ground level. If the unit is located on a second story or above, it must have access directly from or through a common corridor which has at least two means of egress.
   
   
8. ADEQUATE IN SIZE
   The unit must be adequate in size with respect to the number of rooms, bedrooms, and living space needed to accommodate the displaced person. The number of bedrooms normally will be given first consideration. There must be an adequate number of bedrooms for the occupants. A decision concerning adequacy normally would involve the correlation of the age and sex of adults and children sharing the unit and the appropriateness of sharing bedroom space.
   
   
9. ACCESSIBILITY for PERSONS WITH DISABILITIES
   For a displaced person who is disabled, the dwelling shall be free of any barriers which would preclude reasonable ingress, egress or use of the dwelling by such displaced person.

10.4.1.2.2.3. COMPARABLE REPLACEMENT DWELLING

The regulations require that no person may be required to move from a dwelling unless he or she has been offered a comparable replacement dwelling. In carrying out this requirement, the agency must offer every displaced person at least one comparable replacement dwelling and, if possible, three. This is a crucial part of the displacement process since the comparable replacement dwelling will form the basis for the computation of the Replacement Housing payment.

Many of the elements of comparability deal with the specific needs of displaced persons, e.g., financial means, access to employment, and access to public and commercial facilities. This reemphasizes the critical importance of what was stressed in the chapter on Advisory Services, the need for the agency to determine the displaced person's needs and circumstances. This can be accomplished only by personal contact with each displaced household early in the process.

The term comparable replacement dwelling means a dwelling which meets the following criteria:

1. Decent, safe, and sanitary, as described in 10.4.1.2.2.1. and 10.4.1.2.2.2. above.
   
   
2. Functionally equivalent to the displacement dwelling.
   
   
3. Adequate in size to accommodate the displaced person.
   
   
4. Located in an area that is:
   
   
• not subject to unreasonable adverse environmental conditions;
  
  
• generally not less desirable than the location of the displacement dwelling with regard to public utilities and commercial and public facilities; and
  
  
• reasonably accessible to the displaced person's place of employment.
  
  
5. Located on a typical residential site.
   
   
6. Currently available to the displaced person.
   
   
7. Within the financial means of the displaced person.

Each of these criteria is discussed below to clarify the intent of the relocation program.

1. DECENT, SAFE, AND SANITARY
   (See discussions above at 10.4.1.2.2.1 and 10.4.1.2.2.2.)
   
   
2. FUNCTIONALLY EQUIVALENT
   The term "functionally equivalent" means that the replacement dwelling should be generally similar to the displacement dwelling, substantially similar with regard to the number of rooms and area of living space, and capable of contributing to a comparable style of living. This does not mean that a replacement dwelling must meet a tape-measure comparison to the acquired property.
   
   The emphasis is on function. The replacement dwelling, when compared with the acquired dwelling, should perform the same function, provide the same utility, possess like amenities, and be capable of contributing to a comparable style of living. This requires that the principal features of the acquired dwelling be present in a comparable. Space should be available for comparable purposes as used in the acquired dwelling. For example, a workshop in an over-sized garage instead of a basement and vice versa; ample kitchen cupboards could substitute for a pantry, and out-of-season storage could be provided either in an accessible attic or a basement area. Physical inspection of the interior as well as of the exterior of selected comparable is necessary for the agent to determine the actual functional equivalency of dwellings.
   
   
3. ADEQUATE IN SIZE TO ACCOMMODATE THE DISPLACED PERSON
   In general, this requirement relates to the occupancy standards in the local housing/occupancy code. However, the particular composition of the displaced household must be taken into consideration. A family with a teenage son and daughter would require one more bedroom than one with two teenage boys. Similarly, special health-related needs of a household member could affect the size of the replacement dwelling needed.
   
   
4. NOT SUBJECT TO UNREASONABLE ADVERSE ENVIRONMENTAL CONDITIONS
   Unreasonable adverse environmental conditions may have a serious negative effect on the habitability of a replacement dwelling. Proximity to environmental influences such as sewage treatment plants, factories dispensing smoke or other pollution, salvage yards, dump sites, and similar unhealthful or unsafe conditions may make a dwelling unsuitable to be used as a comparable.
   
   
5. COMMERCIAL AND PUBLIC FACILITIES
   
   The adequacy of access to commercial and public facilities is a case-by-case judgment. It is important to determine the access needs of each displaced person to various institutions and facilities. The displacing agency must make housing available that is generally not less desirable than the displacement dwelling with regard to those institutions and facilities. A family with children would be concerned with schools. An elderly retired couple without a car would consider it important to be near a grocery store. This does not mean that the displaced person's personal desires as to particular schools or shopping areas have to be met, but a sincere attempt should be made to accommodate the displaced person's preference. The Agency must consider both needs and availability. In the real world, personal desires and tastes almost always have to be balanced and compromised.
   
   
6. ACCESS TO EMPLOYMENT
   Continued access to the displaced person's place of employment is an important consideration for replacement housing. The objective is that such housing be reasonably accessible to the person's place of employment. Referrals need not be limited to housing equally distant from employment as the displacement dwelling, but travel time or distance from the referral should not endanger continued employment. Ultimately, this is a consideration of reasonableness and practicality.
   
   
7. TYPICAL RESIDENTIAL SITE
   A typical residential site is one that is typical for the area in which it is located in terms of square footage and which contains normal site improvements, including customary landscaping. The replacement site need not include special improvements such as outbuildings, swimming pools and greenhouses (also referred to as "major exterior attributes/appurtenances"). This distinction is important for computing certain replacement housing payments for 180-day homeowners.
   
   
8. CURRENTLY AVAILABLE TO THE DISPLACED PERSON
   The displacing agency may refer displaced persons only to housing that has recently been confirmed as being available. Similarly, in making payment determinations, only currently available listings may be utilized. Thus a sales or rental dwelling no longer on the market may not be used to determine the sales or rental price of a comparable replacement dwelling. Clearly this will require close contact with sources of housing market information and a willingness to research the market for currently available housing. If housing is in short supply, innovative measures may be required to assure the availability of a comparable when an offer is made.
   
   
9. FINANCIAL MEANS
   The Uniform Act requires that comparable replacement housing must be within the financial means of the displaced person. The regulations define this concept differently for displaced homeowners than for renters. These different definitions are based on different assumptions. It is assumed that owners can afford replacement housing if they are not required to pay more for the mortgage payment on their replacement dwelling than they paid for the displacement dwelling. For tenants the assumption is that they should not pay more than 30% of gross income for rent and utilities. The tests for financial means are as follows:
   
   
   1. Owner-occupant of 180 days or more. The cost of the comparable replacement dwelling does not exceed the total amount of the acquisition price for the displacement dwelling plus the replacement housing payment.
      
      
   2. Tenant of 90 days or more or short-term owner-occupant. The monthly rent plus utilities for the replacement dwelling does not exceed the base monthly rent (the lesser of the actual average rent including utilities or 30% of the displaced person's gross monthly income) at the displacement dwelling plus the amount of the rental assistance payment. A good discussion of the "why" of financial means requirements may be found in the preamble to the Regulations published March 2, 1989.
      
      

   If replacement housing is not within the financial means of a displaced person, Replacement Housing of Last Resort may be necessary.

MINIMUM STANDARDS SUMMARY

In summary, a great deal of judgement is required in applying the minimum standards for replacement housing. The criteria sometimes become subjective in application and an attitude of reasonableness must prevail. In implementing comparability and DSS standards for replacement housing, it is important to remember the overall objective of the program: fairness and equity to displaced persons.

10.4.1.2.3. ELIGIBILITY FOR REPLACEMENT HOUSING PAYMENTS

In addition to the common elements discussed above, each Replacement Housing payment has particular rules and requirements governing eligibility and computation. The following paragraphs discuss the requirements for eligibility and explain specifically how to compute each payment. Remember the requirement to use Housing of Last Resort when replacement housing cannot be made available within the limits stated in the following paragraphs.

10.4.1.2.3.1. REPLACEMENT HOUSING PAYMENTS FOR 180-DAY HOMEOWNERS

A displaced homeowner must have occupied the dwelling from which he or she moved for at least 180 days immediately prior to the initiation of negotiations to be eligible for this category of payments. Persons within this category may be eligible for either a Purchase Supplement or a Rental Assistance payment.

1. PURCHASE SUPPLEMENT
   A payment, not to exceed $22,500, to assist in the purchase of replacement housing. It includes a Price Differential, Incidental Expenses, and a Mortgage Interest Differential payment. The Purchase Supplement is the sum of these three elements.
   
   
2. RENTAL ASSISTANCE PAYMENT
   A payment, not to exceed $5,250, to assist in the rental of a replacement dwelling. This payment is generally limited to $5250 for a person eligible for a purchase supplement since sufficient funds are made available for home ownership to be continued. It is premised on the concept that rental, rather than purchase, of a replacement dwelling is a decision that is unrelated to the acquisition of the acquired property.

10.4.1.2.3.2. REPLACEMENT HOUSING PAYMENTS FOR TENANTS AND FOR HOMEOWNERS OF 90 TO 179 DAYS

A displaced residential tenant who occupied the dwelling from which he or she was displaced for at least 90 days immediately prior to the initiation of negotiations and a displaced homeowner who occupied the dwelling from which he or she moved for at least 90 but less than 180 days prior to the initiation of negotiations is eligible for this category of payments. Persons within this category may be eligible for either a Rental Assistance payment or Downpayment Assistance.

1. RENTAL ASSISTANCE PAYMENT.
   A payment, not to exceed $5,250, to assist in the rental of a replacement dwelling. The payment is based on the difference between the monthly rent plus utilities necessary to rent a comparable replacement dwelling, as determined by the agency, and the monthly rent plus utilities for the displacement dwelling). The utilities to be considered for computation purposes include heat, light, water, and sewer.
   
   
2. DOWNPAYMENT ASSISTANCE.
   A payment, not to exceed $5250, to assist with a downpayment on the purchase of a replacement dwelling. Generally, the payment is limited to the amount the displaced person would have received for a Rental Assistance payment. However, at its discretion, an agency may adopt a policy of making a payment of up to $5250. If the agency chooses this option, it must pay the same amount in all downpayment assistance cases. This option has been elected by many state transportation agencies.
   
   A 90-179-day homeowner may not receive Downpayment Assistance which exceeds what would have been received if he or she had been a 180-day homeowner.
   
   A 180-day homeowner is not eligible to receive downpayment assistance.

REPLACEMENT HOUSING PAYMENT ELIGIBILITY

10.4.1.2.4. COMPUTATION OF REPLACEMENT HOUSING PAYMENTS

1. PURCHASE SUPPLEMENT.
   This is a payment of up to $22,500 made up of the sum of three elements, a Price Differential, Incidental Expenses, and a Mortgage Interest Differential.
   
   
   1. PRICE DIFFERENTIAL
      The difference between the price actually paid by the displaced person for a replacement dwelling and the price paid by the acquiring agency for the displacement dwelling. The price of the comparable dwelling sets the upper limit of payment computation for the Price differential.
      
      The cost of a comparable replacement dwelling must be determined to compute a Price Differential. The Agency must analyze the characteristics of the displacement dwelling (number of rooms, bedrooms, utility, square footage, etc.) and the displaced person (number of persons, age, gender, etc. of household members) to determine replacement needs.
      
      The real estate market t is searched and analyzed thoroughly, and the three properties best meeting the requirements of comparability, as discussed in replacement housing standards, are selected. To aid in this real estate market analysis, many agencies subscribe to local multiple-listing services and/or maintain close relationships with local real estate brokers. The real estate want ad section of local newspapers also may prove useful.
      
      After the three most comparable properties have been selected, an in-depth comparison should be made to select the one property which, in the opinion of the acquiring agency, is most comparable to the displacement dwelling.
      
      We strongly recommend the use of a comparison grid like the one below in making the analysis.

2. INCIDENTAL EXPENSES.
   Incidental expenses are those reasonable expenses actually incurred by the displaced person incident to the purchase of a replacement dwelling and customarily paid by the buyer. Certain of these expenses are limited as indicated below. Eligible incidental expenses include:
   
   
   1. Legal, closing, and related costs, including those for title search preparing conveyance instruments, notary fees, preparing surveys and plats, and recording fees.
      
      
   2. Lender, FHA, or VA appraisal and loan application fees.
      
      
   3. FHA Mortgage Insurance Fees.
      
      
   4. Loan origination or assumption fees that do not represent prepaid interest (limited to amount necessary for balance of existing mortgage for homeowners).
      
      
   5. Certification of structural soundness, radon and termite inspection when required or when customary for the community in which the displacement occurs.
      
      
   6. Credit report.
      
      
   7. Owner's and mortgagee's evidence or assurance of title, e.g., title insurance (not to exceed the costs for a comparable replacement dwelling.)
      
      
   8. Escrow agent's fee.
      
      
   9. State revenue or documentary stamps, sales or transfer taxes. (Not to exceed the costs for a comparable replacement dwelling).
      
      
   10. Such other costs as the Agency determines to be incidental to the purchase.
       
       
3. MORTGAGE INTEREST DIFFERENTIAL
   This payment is intended to compensate the displaced owner-occupant for increased interest costs which the he/she is required to pay for financing the replacement property. In order to qualify for this payment, the mortgage on the displacement property must have been a bona fide and valid lien in existence for at least 180 days prior to the initiation of negotiations. More than one qualifying mortgage may be considered.
   
   The payment computation is based on the unpaid balance of the existing mortgage on the displacement dwelling, its remaining term, and the current prevailing interest rate charged by lending institutions in the area of the replacement dwelling. If there is more than one mortgage outstanding on the displacement dwelling, a separate computation will be required for each mortgage.
   
   This element of the Purchase Supplement requires access to financial tables, a computer, or a financial calculator. If you are going to compute many increased mortgage interest payments, it may be useful to acquire a computer program for this purpose or a financial calculator. . The typical payment can be computed quickly and simply using these tools
   .
2. RENTAL ASSISTANCE PAYMENT
   This payment, not to exceed $5250, is based on the difference between the monthly rent and utilities necessary to rent a comparable replacement dwelling, as determined by the agency (see 10.4.3.3, under Price Differential), and the monthly rent and utilities for the displacement dwelling. Utilities include heat, light, water, and sewer.
   
   Computation of the rental assistance payment (RAP) is completed using the following formula:

If $5,250 is exceeded, housing of last resort must be used (see Section 10.4.1.3). In all instances, the cost of utilities must be included with the rent of the displacement dwelling as well as the rent of the replacement dwellings when computing the rental assistance payment.

The formula uses the term "base monthly rent." Base monthly rent is the lesser of:

1. The average (including utilities) monthly rent actually paid by the displaced person for the displacement dwelling or
   
   
2. 30% of the displaced person's monthly household income.

The base is reduced to 30% of income so that a displaced person can afford the comparable replacement dwelling.

Actual monthly rent means the typical rent paid over a representative period and, under most circumstances, this would be used. However, there are some situations when the "market rent", i.e., the probable rent that the property normally would command in the local rental market, should be substituted for actual rent.

For example, market rent should be used for a homeowner who elects to rent rather than purchase a replacement property, since he had no rent per se as a homeowner. Also, you occasionally will encounter a tenant whose contract rent is less than market rent. It is the displacing agency's responsibility to determine why the property is renting for less than market rent. If it is solely because the tenant performs a service for the landlord, such as making minor repairs and collecting rents from the other tenants, or because the tenant is a relative of the owner, the market rent may be used in the computation, unless its use would result in a hardship for the displaced person because of income or other circumstances. On the other hand, if the rent is less because the displaced person is a long-term or good tenant, the contract rent should be used.

1. UTILITY ADJUSTMENT
   Utilities are a necessary cost of housing and a part of the computation of the RAP. As noted above, the utility services to be considered are heat, light, water, and sewer. Some or all utility services may be included as a part of the monthly rent for the acquired dwelling, the comparable, or the actual replacement dwelling occupied. If any of these rents do not include all utilities, those not included must be added in order to make the elements of the computation comparable.
   
   If such an adjustment is necessary, you must determine the cost of utility services not included in the rent. You may obtain this information from the tenant (who should have utility receipts) or from local utility companies to establish either the actual utility costs for the dwelling or the average utility costs for similar dwellings. Most utility companies will cooperate in providing this information if given sufficient time to research their records.
   
   To use this nformation in a RAP computation it is necessary to set up a comparison between the displacement and replacement dwellings:

ADJUSTMENT OF BASE MONTHLY RENTAL 1. 30% of Income Rent*/comparable dwelling Actual rent*/replacement dwelling Contract Rent*/displacement dwelling Income of Displaced Person 30% of Income Difference ($400 - 300) Multiply by 42 months ($100 x 42) $ 400 400 350 1,000   -300 100 $4,200 2. Relationship Similarly, when the contract rent is less than the market rent because the displaced person is a relative of the landlord: Rent*/comparable dwelling Actual rent*/replacement dwelling Contract Rent*/displacement dwelling Market Rent*/displacement dwelling Difference ($400 - 350) Multiply by 42 months ($50 x 42) *Monthly rent, including utilities. $ 400 400 250   - 350 50 $2,400

2. DISBURSEMENT OF RENTAL ASSISTANCE PAYMENT
   Usually Rental Assistance payments are made in a lump-sum amount. Occasionally, the agency may determine, on a case-by-case basis, that there is good cause for the payment to be made in installments. However, even if the payment is being disbursed in installments, the total amount of the payment vests in the displaced person when he occupies a DSS dwelling and he need do nothing further to qualify to receive the full computed payment.
   
   
3. RENTAL ASSISTANCE PAYMENTS AND HOUSING OF LAST RESORT
   When the computed Rental Assistance payment needed to provide comparable replacement housing exceeds the statutory maximum of $5250 it becomes necessary to use the payments/benefits discussed under 10.4.1.3, Replacement Housing of Last Resort.
   
   
3. DOWNPAYMENT ASSISTANCE
   Downpayment Assistance, not to exceed $5250, is intended to assist a displaced person with a downpayment on the purchase of a replacement dwelling. The payment generally is limited to the amount the displaced person would have received for a Rental Assistance payment (computed in accordance with the procedures for renters and/or short-term owners discussed above). Thus, a RAP will be computed for all tenants and short-term homeowners, whether or not they intend to rent replacement housing. However, the agency may adopt a policy of making a payment of up to $5250. If the agency chooses this option, it must pay the same amount in all downpayment assistance cases.
   
   Eligible expenses include the required downpayment and all incidental costs necessary for purchase. The items of incidental costs are the same as those listed above for homeowners.
   
   Only tenants of 90 days or more and 90-179 day owner-occupants are eligible for Downpayment Assistance. Owner-occupants of 180 days or more are not eligible for this payment.
   
   If a displaced tenant elects to purchase, it is not necessary to locate comparables for them to purchase, only to compute and advise the tenant of the potential Rental Assistance payment as discussed above. Of course the replacement dwelling eventually purchased must meet DSS standards for the agency to make the payment.
   
   Downpayment assistance for a 90-179 day owner-occupant requires an additional step to establish payment eligibility and limitations. The downpayment assistance payment cannot exceed the amount that would have been received under the replacement housing payment computation for a 180-day owner. Therefore, a replacement housing payment must be computed as if the displaced person were a 180-day owner-occupant. The computed amount would include estimates of a Price Differential, Incidental Expenses, and an Interest Differential, as appropriate.

10.4.1.2.5. DECENT, SAFE, AND SANITARY INSPECTION

It is Federal policy not to make Replacement Housing payments for replacement housing which is not decent, safe, and sanitary (DSS). Before an RHP may be made, the displacing agency must inspect the actual replacement dwelling to assure that it meets the criteria discussed in the chapter on Replacement Housing Standards. Replacement housing also must be inspected to determine its acceptability before referring it to displaced persons. When inspecting potential replacement housing you should examine it carefully for DSS problems. Areas meriting particular attention include:

• Porches, stoops, and exterior stairs
• Roofs
• Electrical System
• Foundations
• Plumbing

In order to avoid problems, the agency should caution displaced persons not to become financially obligated to purchase (or rent) a replacement dwelling unit until the inspection has been performed. Often sales or rental agreements may be written subject to a DSS inspection by the displacing agency. If the dwelling is found not to be DSS, the displaced person should be informed of the specific deficiencies noted.

The agency's records should contain documentation of the DSS inspection. Most agencies have developed and use a pre-established form for this purpose.

Sometimes a dwelling with DSS deficiencies is still desirable to the displaced person and the agency. Such dwellings may be used as replacement housing if the deficiencies are corrected. The cost to correct DSS deficiencies may be included as a part of the price differential payment to the extent that they do not bring the cost of the dwelling above the price of the comparable. Care should be taken that the cost of repairs or improvements undertaken for the desires of the displaced person but are not necessary to correct DSS deficiencies are not included in the RHP computation.

10.4.1.2.6 OCCUPANCY REQUIREMENTS- SPECIAL CIRCUMSTANCES

Sometimes special circumstances make it impossible for a displaced person to satisfy the occupancy requirements of an RHP. The Uniform Act regulations provide that no displaced person shall be denied eligibility for a replacement housing payment solely because he or she is unable to meet occupancy requirements due to reasons beyond their control. This includes special circumstances such as a disaster, an emergency, or an imminent threat to public health or welfare, as determined by the President or the Federal agency funding the project or other reasons, such as military service or hospitalization. When failure to meet the occupancy requirement is as a direct result of the special circumstance, the occupancy requirement may be considered to be satisfied.

For example, consider several persons permanently displaced by the acquisition of their dwellings for construction of a bridge approach. In this case, a flood both damaged the bridge and forced the occupants from their homes. Due to the flood, they were not in physical occupancy of their dwellings on the date of initiation of negotiations. Since this was beyond their control, their eligibility for an RHP should not be adversely affected.

Similarly, if a displaced person fails to occupy an otherwise satisfactory replacement dwelling within one year because of being in the hospital for three months, RHP eligibility should not be affected.

10.4.1.2.7. DISASTER RELATED INSURANCE PROCEEDS

To the extent necessary to avoid duplicate compensation, the amount of any insurance proceeds received by a person in connection with a disaster related loss to the displacement dwelling shall be included in the acquisition cost of the displacement dwelling when computing the price differential.

10.4.1.2.8. CONVERSION OF PAYMENT

A displaced person who initially rents a replacement dwelling and claims and receives a rental assistance payment retains eligibility for a Purchase Supplement or Downpayment Assistance Payment, if applicable, provided he/she purchase and occupies a DSS replacement dwelling during the l-year eligibility period. Such a Purchase Supplement or Downpayment Assistance payment shall be computed in the usual manner but shall be reduced by the amount of the Rental Assistance payment already received.

10.4.1.2.9. PAYMENT AFTER DEATH

A replacement housing payment is personal to the displaced person. If he or she lived alone and dies and the complete payment has not been made, there will be no additional payments to heirs or assigns, except:

1. The amount attributable to the displaced person's period of actual occupancy of the replacement housing shall be paid.
   
   
2. The full payment should be disbursed in any case in which a member of a displaced family dies and the other family member(s) continue to occupy the replacement dwelling selected in accordance with these regulations.
   
   
3. Any portion of a replacement housing payment necessary to satisfy the legal obligation of an estate in connection with the selection of a replacement dwelling by or on behalf of a deceased person shall be disbursed to the estate.

10.4.2. NON-RESIDENTIAL RELOCATION PAYMENTS

Non-residential relocation payments are intended to compensate a business, farm, or a non-profit organization (NPO) caused to move by a highway project receiving Federal financial assistance. Payments may be made to owners, owner/occupants, and tenants. These payments may be subdivided into two types: moving expense payments and reestablishment expense payments. As with residential payments, each payment has its own set of specific requirements.

10.4.2.1. NON-RESIDENTIAL MOVING EXPENSE PAYMENTS

Non-residential moving expense payments are designed to compensate for the moving and related costs which a person incurs as a result of having to move his or her business, farm, or a non-profit organization (or to move personal property) for a Federal or federally-assisted project. They include items such as the cost of transporting personal property from the displacement to the relocation site, packing and unpacking, the cost of storage, if necessary, and other related costs.

There are two methods for computing non-residential moving expense payments, the actual cost payment method and the in-lieu payment method. A displaced business which chooses the actual cost method also may be eligible for a separate reestablishment payment; however, a business choosing the in-lieu payment method is not. The in-lieu payment is just that, in lieu of all other moving costs, and has special requirements and not all displaced businesses will be eligible. A displaced business which is eligible may choose either of these payment methods. (We have provided below lists of eligible and ineligible non-residential moving and related costs)

ELIGIBLE NON-RESIDENTIAL MOVING EXPENSES

1. Transportation of personal property. Transportation costs for a distance beyond 50 miles are not eligible, unless the Agency determines that relocation beyond 50 miles is justified.
   
   
2. Packing, crating, and unpacking of the personal property.
   
   
3. Disconnecting, dismantling, removing, reassembling, and reinstalling relocated machinery, equipment, and other personal property, including substitute personal property described at § 24.303(a)(12). This includes connection to utilities available nearby. It also includes modifications to the personal property necessary to adapt it to the replacement structure, the replacement site, or the utilities at the replacement site, and modifications necessary to adapt the utilities at the replacement site to the personal property. (Expenses for providing utilities from the right-of-way to the building or improvement are excluded under this section but may be eligible under reestablishment costs.)
   
   
4. Storage of the personal property for a period not to exceed 12 months, unless the Agency determines that a longer period is necessary.
   
   
5. Insurance for the replacement value of the personal property in connection with the move and necessary storage.
   
   
6. Any license, permit, or certification required of the displaced person at the replacement location. However, the payment may be based on the remaining useful life of the existing license, permit, or certification.
   
   
7. The replacement value of property lost, stolen, or damaged in the process of moving (not through the fault or negligence of the displaced person, his or her agent, or employee) where insurance covering such loss, theft, or damage is not reasonably available.
   
   
8. Professional services necessary for:
   
   
   1. Planning the move of the personal property,
      
      
      1. If a professional move planner is used, be sure the method of payment and the estimated amount is clear before authorization for such services is approved.
         
         
   2. Moving the personal property, and
      
      
   3. Installing the relocated personal property at the replacement location.
      
      
9. Re-lettering signs and replacing stationery on hand at the time of displacement that are made obsolete as a result of the move.
   
   
10. Actual direct loss of tangible personal property incurred as a result of moving or discontinuing the business or farm operation. The payment shall consist of the lesser of:
    
    
    1. The fair market value of the item for continued use at the displacement site, less the proceeds from its sale. (To be eligible for payment, the claimant must make a good faith effort to sell the personal property, unless the Agency determines that such effort is not necessary. When payment for property loss is claimed for goods held for sale, the fair market value shall be based on the cost of the goods to the business, not the potential selling price.); or
       
       
    2. The estimated cost of moving the item, but with no allowance for storage. (If the business or farm operation is discontinued, the estimated cost shall be based on a moving distance of 50 miles.)
       
       
11. The reasonable cost incurred in attempting to sell an item that is not to be relocated.
    
    
12. Purchase of substitute personal property. If an item of personal property which is used as part of a business or farm operation is not moved but is promptly replaced with a substitute item that performs a comparable function at the replacement site, the displaced person is entitled to payment of the lesser of:
    
    
    1. The cost of the substitute item, including installation costs at the replacement site, minus any proceeds from the sale or trade-in of the replaced item; or
       
       
    2. estimated cost of moving and reinstalling the replaced item but with no allowance for storage. At the Agency's discretion, the estimated cost for a low cost or uncomplicated move may be based on a single bid or estimate.
       
       
13. Searching for a replacement location. A displaced business or farm operation is entitled to reimbursement for actual expenses, not to exceed $1,000, as the Agency determines to be reasonable, which are incurred in searching for a replacement location, including:
    
    
    1. Transportation.
       
       
    2. Meals and lodging away from home.
       
       
    3. Time spent searching, based on reasonable salary or earnings.
       
       
    4. Fees paid to a real estate agent or broker to locate a replacement site, exclusive of any fees or commissions related to the purchase of such site.
       
       
14. Other moving-related expenses that are not listed as ineligible below, as the Agency determines to be reasonable and necessary.

INELIGIBLE MOVING AND RELATED EXPENSES

1. The cost of moving any structure or other real property improvement in which the displaced person reserved ownership.
   
   
2. Interest on a loan to cover moving expenses.
   
   
3. Loss of goodwill.
   
   
4. Loss of profits.
   
   
5. Loss of trained employees.
   
   
6. Any additional operating expenses of a business or farm operation incurred because of operating in a new location except for eligible reestablishment expenses.
   
   
7. Personal injury.
   
   
8. Any legal fee or other cost for preparing a claim for a relocation payment or for representing the claimant before the Agency.
   
   
9. Expenses for searching for a replacement dwelling.
   
   
10. Physical changes to the real property at the replacement location of a business or farm operation, except for eligible reinstallation expenses and eligible reestablishment expenses.
    
    
11. Costs for storage of personal property on real property already owned or leased by the displaced person.

10.4.2.1.1. ACTUAL COST PAYMENT

The non-residential actual cost payment, like its residential counterpart, is based on the actual, reasonable cost of moving and related costs. This means that to be reimbursed costs must be actually incurred and must be reasonable, i.e., typical of the amounts charged in the area for similar moves. In addition, the items of cost which are included in the claim for reimbursement must be necessary to accomplish the move. When making determinations concerning reasonableness and necessity, the agency should use common sense and good judgement.

There is no fixed dollar ceiling on payments for actual moving expenses, but the payment may not exceed the actual cost of the moving and related expenses. An actual cost move may be carried out by a commercial mover or by the displaced person, that is, a self-move. In either case, to be certain that the move takes place at a reasonable cost, an inventory (a detailed itemization of personal property to be moved) should be prepared. The relocation agent should verify the accuracy of the inventory and use it as a basis of comparison with bids or estimates and eventual requests for payment.

Many business moves are quite simple and straight-forward, but some may be very complicated. If appropriate in the agency's estimation, the move should be based on written specifications. Specifications are detailed instructions concerning how and when the move is to be carried out and ensure that the displaced person, the agency, and the mover all agree on what is to take place. The relocation agent should observe the move as it takes place (full-time if large or complex enough to warrant it) to insure conformance with the specifications and reasonableness of cost.

If the displaced person elects to use a commercial mover and the agency concurs, it is desirable to obtain bids or estimates, two if possible. This is the agency's responsibility! The agency may pay a reasonable amount for bid preparation, if it is necessary to do so to obtain adequate and reasonable bids. If necessary, the agency may pay the mover directly for the services. In any case, the costs claimed for reimbursement of an actual cost move must be supported by appropriate receipts or other records.

Often a self-move is advantageous to both the displacing agency and the displaced person because of specialized knowledge or skills possessed by the latter. This knowledge or skill may be difficult to find in the local moving industry or available only at great expense, whereas the displaced person's employees may be able to carry out the move more efficiently and at their regular rates of pay, which may well result in lower costs.

Reimbursement for a self-move is based on the actual cost incurred by the business for equipment and labor. Labor is to be charged at the actual rates paid by the business but not to exceed the rate charged by local moving firms for the same services. Charges for equipment owned by the business and used in the move should be prorated against its usual operating cost. It also is acceptable to pay for management time for overseeing the move.

10.4.2.1.2. ALTERNATE ACTUAL PAYMENT METHODS

In certain situations moving equipment, supplies, and other items is undesirable from the displaced business point of view. Machinery may be obsolete with little remaining economic value. Materials, for example, gravel or sand, may be bulky and heavy and cost more to move than they are worth. Other items may be of little or no value to the business at its relocation site. In these circumstances, the agency may compute the payment for a move, or a distinct portion of a move, using an alternate method known as "direct loss of tangible personal property."

Under this method, the personal property in question is not moved. Instead, it is appraised and put up for sale. The payment then is computed by: (1) subtracting the proceeds of the sale from the appraised value; and (2) adding the cost of the sale. However, the payment is limited to what it would have cost to move the item(s) in question.

Alternatively, if an owner wishes not to move a piece of equipment but, rather, to replace it at the relocation site, he may do so. Under this method, called Substitute Equipment, the owner is paid the cost of the new equipment less the proceeds of the sale of the old equipment as above. Again, the payment is limited to what it would cost to move the equipment.

While the business is required to make a good faith effort to sell the personal property on which it wishes to take a direct loss, the agency may determine in advance that there is no market for the property. In such cases, the property would be abandoned and the payment would be the lesser of the property's value for continued use or the cost to move it to the relocation site.

ELIGIBLE REESTABLISHMENT EXPENSES

The following is a list of the expenses which are included under this payment. All such expenses must be reasonable and necessary for reestablishment in the judgement of the agency:

1. Repairs or improvements to the replacement real property as required by Federal, State or local law, code or ordinance.
   
   
2. Modifications to the replacement property to accommodate the business operation or make replacement structures suitable for conducting the business.
   
   
3. Construction and installation costs for exterior signing to advertise the business.
   
   
4. Provision of utilities from right-of-way to improvements on the replacement site.
   
   
5. Redecoration or replacement of soiled or worn surfaces at the replacement site, such as paint, paneling, or carpeting.
   
   
6. Licenses, fees and permits when not paid as part of moving expenses.
   
   
7. Feasibility surveys, soil testing and marketing studies.
   
   
8. Advertisement of replacement location.
   
   
9. Professional services in connection with the purchase or lease of a replacement site.
   
   
10. Estimated increased costs of operation during the first 2 years at the replacement site, for such items as:
    
    
    1. Lease or rental charges,
       
       
    2. Personal or real property taxes,
       
       
    3. Insurance premiums, and
       
       
    4. Utility charges, excluding impact fees.
       
       
11. Impact fees or one-time assessments for anticipated heavy utility usage.
    
    
12. Other items that the Agency considers essential to the reestablishment of the business.

10.4.2.1.3. FIXED PAYMENT IN-LIEU OF ACTUAL MOVING EXPENSES (ILO)