These new rules are subject to review by the Office of Management and Budget and may even be included in any review of late published rules established by the Obama Administration, by the 115th Congress or the Trump Administration. Enforcement for compliance with both of these new obligations is a community’s eligibility for federally assisted low- and moderate-income housing funding and Community Development Block Grant funding. Assuming OMB approval and no review by the Trump Administration, the following are summaries and effective dates of the new rules.
Narrowing the Digital Divide Through Installation of Broadband Infrastructure in HUD-Funded New Construction and Substantial Rehabilitation of Multifamily Rental Housing Order
As of Jan. 19,[1] any new and substantially rehabilitated[2] public housing project of four or more units must include infrastructure capable of supporting broadband access[3] to residents, unless the federal fund recipient[4] can document one of the following three grounds for waivers:
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Location of property makes it infeasible;
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Costs of broadband infrastructure deployment changes the nature of the project or is an undue financial burden; or
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Nature of the structure being rehabbed makes installation infeasible.There is little guidance given as to what needs to be provided to obtain a waiver under the three listed criteria.
Modernizing HUD’s Consolidated Planning Process To Narrow the Digital Divide and Increase Resilience to Natural Hazards
Any Consolidated Plan filed after Jan. 1, 2018 must demonstrate broadband and natural hazard planning, including documentation, including data and evidence, of newly mandated consultations with public and private stakeholders.
HUD’s Consolidated Plan is a planning mechanism designed to help states and local governments assess their affordable housing and community development needs and make data-driven, place-based investment decisions. The Consolidated Planning process serves as the framework for a community-wide dialogue to identify housing and community development priorities that align and focus funding from HUD’s formula block grant programs.
The new groups with which local and state governments must consult includes broadband Internet service providers, organizations engaged in seeking to narrow the digital divide and promote digital inclusion (including schools and digital literacy organizations), as well as agencies that manage flood-prone areas, public land or water resources and emergency management agencies. Jurisdictions submitting Consolidated Plans must provide broadband data sufficient to describe Internet needs within low- and moderate-income housing, including the needs for connections to the household and “the need for increased competition by having more than one broadband Internet service provider serve the jurisdiction.”[5]
[1] The rule creates a three-month delay in the effective date for projects funded by CDBG. Rather than Jan. 19, projects that first receive CDBG funds as of April 19 are subject to the new broadband infrastructure rule. State Community Development Block Grant recipients have an additional three months to comply, or until July 18, per 24 CFR 570.482(c)(5).
[2] The substantial rehabilitation threshold is reached if either: 1.) The complete replacement of the electrical system or other work for which the pre-construction cost estimate is equal to or greater than 75 percent of the electrical system’s replacement cost; or 2.) Rehabilitation of housing in which the pre-construction estimated cost is equal to or greater than 75 percent of the total estimated cost of replacement.
[3] The regulation defines broadband infrastructure to include cable and fiber optic wiring, as well as wireless infrastructure, that is capable of meeting the FCC’s definition of “advanced telecommunication capability.” The FCC currently defines that term as broadband with at least 25 Megabits per second (Mbps) of downstream capability, and 4 Mbps of upstream capability.
[4] The rule applies to 10 different public housing programs, but does not apply to multifamily rental housing that only has a mortgage insured by HUD’s Federal Housing Administration or with a loan guaranteed under a HUD loan guarantee program.
