icf international, inc. moderator: nicole bouvier july 13, 2010 1

ICF INTERNATIONAL, INC. Moderator: Nicole Bouvier

07-13-10/1:00 pm CT Confirmation # 4226931

ICF INTERNATIONAL, INC.

Moderator: Nicole Bouvier July 13, 2010 1:00 pm CT

Operator: Good day everyone and welcome to the Fair Housing Act Section 3 and Section 504

Requirements webinar.

Today's webinar is being recorded. However, you will be muted until there are specific

instructions for taking questions. We will be taking questions throughout the presentation at

various intervals.

If you have a question, please change your feedback box from green to purple to let us know that

you have a question. The feedback box is in the upper right-hand corner of Live Meeting. We will

take questions throughout the presentation. We will let you know that you can ask your question

by pressing star-1 on your touchtone telephone. If your question has been answered, please

remove yourself from queue by pressing star 2.

Please wait until we've indicated intervals for the question-and-answer periods. Once you finish

asking your question, please change your feedback box back to green.

At this time, I'd like to turn the webinar over to Nicole Bouvier, who will be moderating today's

webinar. Please go ahead.



Nicole Bouvier: Thank you. Hi everybody. I want to thank you for joining us on this webinar about Fair

Housing requirements Section 3 and Section 504. My name is Nicole Bouvier. I am from ICF

International. I'm here with Kelly Price, who is also from ICF, and we'll be your primary speakers

this afternoon.

We are very fortunate to have a bunch of HUD experts with us as well. John Laswick from the

Office of Block Grant Assistance and the NSP program is on the line. And Jason Chang and Mark

Matulef, who are both from the Office of General Counsel, the Fair Housing Compliance Division,

are on the line. So we're hoping between all of us, we'll be able to tackle and clarify whatever

questions you have.

We also have a handful of technical experts in the background to help with Live Meeting and the

conference call line, so you may hear other voices periodically if there are technical issues.

The Operator explained how to ask questions. I want to elaborate just on a couple of points. After

each area that we're going to discuss, Fair Housing Act Requirements Section 3 and Section 504,

we'll stop for questions.

And there will be a slide reminding you of the directions for asking questions. So you don't have

to memorize all of those - the requirements of how to get on the line.

We are going to ask - Live Meeting has a feature to write in questions. We're going to ask, unless

it's a technical question, that somebody might be able to help you offline, for content questions,

please call in and ask them because it's just a little bit more efficient so that we can have dialogue

about what the issues are that we're trying to discuss instead of trying to interpret from a written

question.



So that's kind of the logistical information to get us started. Skipped a slide already, sorry about

that.

Okay, today's agenda, we are generally talking about the civil rights and related laws that apply to

the Neighborhood Stabilization Program. That's the primary topic of today. And there are many of

those laws.

We are emphasizing today three key areas. We're going to be talking about what fair housing is

and how to affirmatively further fair housing and meet the affirmatively furthering fair housing

requirements of NSP. We'll talk about the accessibility requirements, both those under Section

504 and those in the Fair Housing Act.

And we're going to talk about the economic opportunity requirements under Section 3. I will be

covering the first two topics and my colleague, Kelly Price, will talk about Section 3.

As I said, there are many applicable civil rights laws to NSP. Our country has gone to great

lengths to protect the rights of citizens and residents. Today we're going to talk about primarily

the Fair Housing Act, which is Title XIII of the Civil Rights Act of 1968 as amended, which really

applies to all public and private sector housing.

So everything in the Fair Housing Act for the most part applies throughout the nation to

everybody. And we'll talk about that at some length and focus in specifically on affirmatively

furthering fair housing, which applies to recipients of federal and HUD funding.

We're then going to talk about some of the laws that apply specifically to federal and HUD

funding. And key among those are Section 504 of the Rehabilitation Act, which protects people

with disabilities from discrimination in housing, and Section 3 of the Housing and Urban



Development Act of 1968, which ties economic development initiatives and objectives to the

receipt of HUD funds.

There are a number of executive orders that also protect against unlawful discrimination. There's

a recent executive order, 13166, about making sure people with Limited English Proficiency,

that's the LEP in the slide, have access to programs and HUD funding.

And HUD issued guidance about LEP requirements in January of 2007. So if you haven't seen

that Federal Register notice, you should check it out. It's available on the Fair Housing web site. It

basically requires grantees to take reasonable steps to ensure that people with limited English

proficiency have access to HUD programs.

So, all of these rules and laws collectively are designed to protect civil rights. They might have

different nuances in terms of remedies or specific things that are unlawful. We're going to kind of

talk both collectively and individually about some of the laws.

And I'm not an attorney, so the OGC folks when it matters, which law says what, they're going to

jump in and help me out on that. But I'm going to give you the general what are the requirements.

The Fair Housing Act is - its intent is to prohibit discrimination in housing on the basis of race,

color, religion, sex, national origin, familial status, or disability.

It provides for nondiscrimination in housing and equal opportunity in the provision of housing

services, housing-related functions, facilities, and improvements, and for federal programs it

basically says there needs to be equal opportunity in all program benefit. And it provides for equal

opportunity in employment.



I'll define disability later when we talk about more about Section 3 and accessibility issues. But I

want to spend a minute talking about familial status, which was one of the newer protected

classes. And these groups are generally referred to as protected classes. You'll hear that term a

number of times this afternoon.

Familiar status basically means it's not okay to discriminate against families with children,

children being people below age 18 who are living with or about to live with a parent or a

guardian. It includes pregnant women. It includes people who are about to adopt.

So while somebody may have been rented a unit when they did not have children, if then they

decide to adopt, they can't be evicted because they plan to have a child.

It is okay for jurisdictions to have reasonable occupancy standards, those being, you know, rules

that say we don't want to see more than two people living in one bedroom or whatever.

But those standards can not have the effect of discriminating against any of these protected

classes. And they can't be defined in terms of age or gender or race.

It is okay to have senior housing. And under the Fair Housing Act, there are three exceptions for

senior housing. The first is housing that's designed for seniors under a federal, state, or local

government program, so that would pretty much cover senior housing developed with NSP funds.

The other two exceptions are housing that is occupied solely by seniors aged 62 and over and

senior housing for people aged 55 and over provided three conditions are met - the first 80% of

the units are occupied by at least one senior; the second the policies, procedures, and advertising

in some cases must specify that the intent is to house seniors only; and third the management

has procedures in place to verify the age of the people living there through, you know, checking

birth certificates or driver's licenses or other government-issued documentation.



The entire - if it's a senior facility, the entire building or project or community of houses must be

reserved for seniors. It can't just be a part of the building. But that - but senior housing is an

exception under the Fair Housing Act.

So what are the grantee's obligations? When you receive NSP funds, what does that mean to you

in terms of promoting fair housing?

Basically a handful of things and I'll talk more about each of these. It's not okay to discriminate in

housing unlawfully. It would not be whether you were private or receiving HUD funds, but it's

definitely not if you're receiving HUD funds.

It's not - you need to administer your NSP activities without discriminating against the protected

classes. You need to ensure that your housing partners are complying with fair housing laws.

And that means basically if you use a sub-recipient or a contractor to carry out any portion of the

program, you need to make sure that they're complying with fair housing laws. And you need to

affirmatively further fair housing.

I'm going to take a quick minute to talk about not discriminating in housing, which I hope is not

news to anybody, but I want to be thorough and cover it, and what it means to ensure that your

housing partners comply with fair housing laws. And then on the next we'll start - we'll talk further

about affirmatively further fair housing.

Not discriminating in housing unlawfully means you can't discriminate in terms of the sale and

rental of housing. You can't change terms and conditions of use, things like security deposit

leases, that sort of thing, for some - for people in protected classes, but not for others.



You can't discriminate in your advertising, no steering, no blockbusting. You can't withhold

information or mislead people with only certain information in an effort to influence a housing

choice. Those things I hope are pretty easily understood.

Sometimes when you apply those things, it might get a little tricky, but let me give - so I'll give you

a couple of examples, but I'm not going to spend a lot of time on this unless people have

questions later.

It would be unlawful to ask a person about their disability if they have a disability or the nature of

it. It would be okay to ask all applicants regardless of whether they seem to have a disability or

not if they're able to meet the terms of their lease.

If you have concerns about whether somebody is able to live independently, as a housing

provider you really aren't allowed to talk - ask those questions. It's up to the person seeking

housing to determine if they're able to live independently or not.

You can't require a higher security deposit from a family with children because you're concerned

that the housing unit might be destroyed or might have more damage because there are children

in the house. The security deposit is a term of the housing. It needs to be the same for all

applicants.

And you couldn't deny somebody a unit because they use an assistance animal because the

housing has a no-pets policy. An assistance animal is an accommodation that somebody needs

to use and enjoy the housing unit and they're entitled to have an assistance animal regardless of

the pets policy because an assistance animal is not a pet.



So those are some of the ways that those rules actually, you know, apply in real-life situations. In

general it's okay to base decisions on whether you're going to sell or rent to somebody on

standard criteria that is applied consistently to all applicants.

And we usually use financial qualifications, employment information, references, those kinds of

things. That's okay. But it isn't okay to discriminate otherwise.

A few minutes about how to ensure that your housing partners are complying with fair housing

laws - this is pretty straightforward. The most important thing to do is make sure you're

communicating the fair housing requirements to them so that they know what it is that's expected

of them.

So you should do that in any briefing with your housing partners about what the NSP

requirements are, make sure you're covering fair housing issues, and you should make sure

these requirements are conveyed in your written agreements.

You should require the use of the Fair Housing logo. It is nationally known as the thing that says

we don't discriminate. People recognize it. You should use it and encourage its use.

You may want to specify certain advertising requirements to affirmatively market properties (or

the) program. If you have a large non-English-speaking population, you may want to require a

housing partner to make sure certain ads or applications or program information is translated and

made available to people who don't speak English.

And you want to make sure you're requiring recordkeeping that helps you monitor how well your

housing partner is doing at reaching diverse members of the community.



You have some recordkeeping requirements that I'm going to talk about in a minute and you

certainly at a minimum want to require that your partners are giving you the data that you then

need to report to HUD. And we'll talk about that in a few minutes.

I'm going to jump into affirmatively furthering fair housing. There are two sets of requirements

depending on if you're a state or a local jurisdiction or if you're a nonprofit for what it means to

affirmatively further fair housing.

All NSP grantees need to certify that they will affirmatively further fair housing. For a jurisdiction, a

state or a local government, that means three things. It means that you're going to conduct an

analysis of impediments to fair housing choice.

You're going to take actions to overcome the effects of those impediments that you identify in that

analysis. And you're going to maintain records to show that you've both done the analysis and

you've taken actions to minimize or eliminate the impediments to fair housing.

This is a - can be a complicated area. It's not intended to be complicated. It's pretty

straightforward. Fair housing choice means maximizing choices and availability of housing for

people in protected classes.

That might mean lessening racial, ethnic, and economic concentrations of housing, facilitating

desegregation, promoting racially-inclusive housing patterns, increasing accessibility, housing

that's accessible for people with physical or sensory impairments.

The ultimate goal is that all people with the same financial means should have the same housing

choices in the jurisdiction regardless of whether they're in one of those protected classes or not.



And what this requirement says that you have to affirmatively further fair housing is it says it's not

enough to simply not discriminate, but that may not really lead to full fair housing choice in the

jurisdiction.

If you use HUD money, you have an obligation to do more than simply not discriminate. You must

take additional steps to promote greater fair housing choice in the jurisdiction.

Okay, so what is an analysis of impediments and what do you actually have to look at?

There actually are no specific requirements about the content of an analysis of impediments, so

the jurisdiction really has a little bit of flexibility here. But I'm going to tell you what I think is

encouraged and recommended to really - get a good analysis that will lead to helping improve fair

housing choice in the jurisdiction.

You should do a comprehensive review of the jurisdiction's laws, regulations, and policies that

impact for each protected class the location, availability, and accessibility of housing.

We kind of start with the jurisdiction stuff because that's the thing you have control over. You - if

you're looking at your laws and your policies, your regulations, how your programs are carried

out, those are thing that you can improve and change and do better in.

Those are things you can control. You don't need to stop in your analysis at things that are only in

the public sector control. You should also look at private sector barriers.

You - to the extent that you can find out, you want to learn about what is the issue or what are the

issues related to discrimination in the sales or rental market, in the lending industry, the insurance

industry, the appraisal industry. Are there practices that are reinforcing segregated housing

patterns in the community?



You may not have a lot of information in those areas. And as part of the analysis of impediments

and the actions to address those impediments, it would certainly be okay to find ways to get more

information.

You might want to look at public attitudes, the not-in-my-backyard or NIMBY effect that reinforces

certain housing patterns or inability to promote accessible housing or housing for people with

disabilities.

You can point to existing conditions in the neighborhoods, in your neighborhoods or in your

jurisdiction where you might have geographic concentrations already of publicly-assisted housing

and minority communities or low income people and how those existing conditions might reinforce

those same housing patterns unless there's something different that's done to promote more fair

housing. And you might want to look at things as diverse as transportation and employment and

think about how that affects fair housing choice.

So you have a lot of flexibility to think about what are the barriers to fair housing choice and really

ensuring that all people have access to all available housing in the jurisdiction. And you want to

think about looking at things that have the effect of limiting choice regardless of the intent.

And that's why I speak to employment and transportation. Those issues might have the effect of

limiting choice, even though they're really not related to - they're not directly housing, but they

might have the effect of limiting housing choice.

So we encourage you to be broad and understand your issues as best you can and - so that you

can address them better.



There is no HUD requirement about updating the analysis of impediments annually, but you are

encouraged to update the analysis of impediments whenever there are big market changes,

housing market conditions and changes in your jurisdiction, so for those of you who have NSP

funds, this means you have some serious foreclosure issues, that would in most cases be

construed as a pretty big change in the housing market conditions.

And it would be time to look at updating your analysis of impediments and maybe taking a look at

the whole foreclosure issue in the community and how that's impacted different protected

classes.

So again, that's not a HUD requirement, but it is encouraged. You should coordinate your AI with

your consolidated planning process because much of the data that you'll need to do the AI you'll

use in your con plan.

And we would recommend that you think about the actions to address the impediments to fair

housing choice annually when you do your annual action plan. So there's some overlap there and

you should take advantage of that.

Okay, the second requirement after your analysis is done is to take actions to overcome the

impediments. Your actions should align with the impediments. So you - if you have a problem

with discrimination in the housing market, you want to tackle and take actions that directly

address discrimination in the housing market.

You'll need to know your community and think about choosing actions in a strategic way. In some

communities, there might be a choice to tackle those impediments that have the biggest impact

on fair housing choice in the jurisdictions and they'll want to get more bang for the buck and really

invest in tackling the big issues.



In other communities where this might be a more controversial issue, you might want to focus

initially on things where there's more agreement and start - so that you can build some

consensus and understanding and - with all of the stakeholders before you move forward with

something that might be considered more aggressive, so you need to think about the - HUD

doesn't dictate what actions you have to take or which impediments you have to overcome. You

have choices about that and you need to think through what makes the most sense in your

community.

And finally, you need to maintain records about all of your affirmatively furthering fair housing.

That means keeping a copy of your analysis of impediments and any updates you do.

This is not a document that gets submitted to HUD, but HUD will want to look at it when they

monitor in all likelihood and they may request looking at it if they get complaints or if they have

concerns or at any point they really have the right to ask to see it, so you want to make sure you

have it. And make sure you do it. There needs to be substance behind your affirmatively

furthering fair housing certification.

You want to keep records related to the actions that you're taking. Again, you need to document

that you're doing this. And so if you're doing special advertising or public outreach, you want to

keep a copy of what you've - a copy of your ad and dates and newspapers or whatever your

media is that you're - where you're publishing it. You want to make sure you have a copy and can

document that you've taken these actions.

And you need to keep records on - any records that are related to the analysis of impediments

and the impact of the actions on the impediments. You want to keep those records.



And you should be evaluating how effective are we - how effective are these actions, are we

tackling anything, are we making any improvements. You want to make sure you're keeping

some records on that evaluation.

Okay, so now I'm going to talk about nonprofit grantees. Obviously nonprofits don't have as much

control or impact jurisdiction-wide, but a nonprofit nonetheless certifies that they will affirmatively

further fair housing. And what they have more control over is their NSP activities.

So to affirmatively further fair housing as a nonprofit grantee, you're basically agreeing to

affirmatively market NSP-assisted housing. That means you'll provide information to and

otherwise attract eligible persons in the housing market to the program without regard to their

protected class status and I would say maybe go a step further and make sure you're providing -

you're making sure your identifying who those people are who would not otherwise come to seek

out this housing and make sure you're reaching them.

Okay, and you want to further fair housing in your NSP activities. So you want to increase access

for people with disabilities through your housing design and construction.

You want to provide language assistance services to people with limited English proficiency. And

you want to think about increasing housing opportunity and choice for protected class members

by thinking about where you put your new and rehabilitated housing to the extent that you have

control over location.

The intent of this certification is to say nonprofits, when you take HUD funds, we expect you,

again, to do more than the minimum of simply not discriminating against people, but to make sure

you're marketing your program to reach all people who might be eligible for the housing

regardless of their protected class status.



And the other thing you want to do as a nonprofit grantee, you should know and understand what

your local jurisdiction's analysis of impediments says about fair housing choice. And that may

help you think through what are the ways that we can actually break down some of the fair

housing choice barriers in the jurisdiction.

And finally, your recordkeeping requirements, these are basically CDBG recordkeeping

requirements that are - that apply to NSP grantees. You need to keep data on racial, ethnic, and

gender characteristics for applicants, participants, and beneficiaries in NSP, employment in NSP

operating fund - units that are funded by NSP and CDBG, and for households that are displaced

by NSP and CDBG.

And as we discussed, you want to keep records on your efforts to affirmatively further fair housing

and to meet the limited English proficiency requirements.

This web site is the Fair Housing and Equal Opportunity Office web site at HUD. It has links to

any - all kinds of information that you might need, including laws, regs, policy, HUD guidance, that

sort of thing, but also program materials and a bunch of HUD information that's been translated

and made available in other languages, so you might want to take a look at that. And if you need

more information about any of the requirements or anything, this is a great starting place for you.

Okay, we are at our first opportunity to stop for questions. And, again, press star-1 to get into the

queue. If you would change your feedback in this upper corner, upper right-hand corner to purple

if you have any questions about what we've talked about so far, and this - we have much more to

discuss, but if you have questions about the fair housing and affirmatively furthering fair housing

requirements, now would be the time.

Operator: We'll take our first question from Denise Fletcher with Self-Help Enterprises.



Nicole Bouvier: Hi Denise.

Denise Fletcher: Yeah, do you have a best practices on the analysis?

Nicole Bouvier: Best practices. They're - I don't have a sample one, although somebody from HUD might

know of one. But I actually - the HOME Program Office did a series, Fair Housing for HOME

Program Participants. And one of the brochures in that series is about affirmatively furthering fair

housing.

And it does go into some detail about an analysis of impediments and the contents of it. And it

specifies what are the data things in your con plan that overlap and kind of how to piggyback

those two.

There's also a fair housing planning document that HUD published in 1995 I believe. And I do not

think I have it on the web link later that gives you some other HUD resources.

But if you go to the Fair Housing homepage, you can find that fair housing planning document.

And that is very comprehensive as well in terms of telling you the things you can do to do a really

strong AI.

Denise Fletcher: And where was the first resource you mentioned?

Nicole Bouvier: The HOME Program has a series called Fair Housing for HOME Program Participants.

And are you familiar with the HOME Program?

Denise Fletcher: Yes.



Nicole Bouvier: Okay. So if you go on their web site under model program guides or model guides, I

forget the exact name of it, there is a series in fair housing there. And one of those publications

focuses exclusively on affirmatively furthering fair housing. It has some things that are only

relevant to HOME, but honestly very few. Almost all of these requirements would be the same for

NSP.

Denise Fletcher: Thank you.

Nicole Bouvier: Sure.

Operator: We'll go next to Harry Islas with San Joaquin County.

Nicole Bouvier: Hi Harry. Hello?

Harry Islas: Can you hear me now?

Nicole Bouvier: Yes, I can.

Harry Islas: Okay, thank you. If we were to have an apartment complex, what consideration would we

give or be required to give to applicants who have say violent criminal histories or molestation

history convictions or documented gang membership or other potentially - situations that

potentially would be disruptive to the living environment?

Nicole Bouvier: Excellent question. And if I answer this incorrectly, I know somebody from HUD will

correct me. But if the - if you want - in your selection criteria you specify that you won't rent to

people with background of criminal activity or convictions of criminal activity, that's a legitimate

and lawful way to weed out applicants.



So when I said we could use references, yes, you want to have - if some of those behaviors are

because of a disability and they maybe haven't been convicted or they might have issues related

to behavior that are really driven by the disability, I think it gets a little trickier. But I think you're -

you've got to focus on convictions and criminal records.

Harry Islas: Okay.

Nicole Bouvier: And then you can, you know, but that gives you the standard criteria that's legitimate.

Harry Islas: Okay.

Mark Matulef: This is Mark. Let me add to that that I don't have the - I don't - I can't say specifically what,

you know, what procedures have to be in place for housing developed under the NSP program.

HUD has some general requirements on admission and occupancy for persons who are

offenders or who have been charged with a criminal act or who have drug activity.

They tend to pertain to public housing and Section 8, but depending on your, you know, the

subsidy that you have in place in the development, there may be some particular requirements

and definitions that you have to use.

I would suggest the first place to make sure that if you're going to do any screening on that basis

that you have that written into your tenant selection policies, first and foremost, but you also may

want to consult HUD's regulations under 24 CFR Part 5, which has our general regulations on

defining, you know, occupancy and - or admissions and continued occupancy requirements that

do - that are - some of which are cross-cutting between the programs.



But there may be some particular guidance out there for, you know, for NSP. And I continue to -

maybe that's something that the program staff can get back on in terms of permitted tenancy

policies like that.

Harry Islas: Okay. I appreciate that and thank you for your help on that.

Mark Matulef: Right. I'd also like to add on for the previous questioner, probably the best resource for

entities that are thinking about doing an analysis of impediments is HUD's Fair Housing Planning

Guide.

And that's available on the web at www.hud.gov. And all you have to do is, you know, type in on

the search Fair Housing Planning Guide or analysis of impediments and one of the first links

you'll get to is the Fair Housing Planning Guide. There may also be some - as we speak, I'm

going to take a look and see if there are some examples of AIs that HUD publishes on line.

Harry Islas: Okay, thank you.

Operator: We'll take our next question from Jeanne Redondo with National Farm Workers AZ Housing

Development, LLC.

Jeanne Redondo: Hi. Thank you for taking my question. Are there different construction and design

requirements for single-family rehab versus multifamily rehab to further fair housing? For

example, you know, in an acquisition rehab resale program with single family, are you required to

implement all of Section 504 as you would for a multifamily home? Or can you take it as a

customer service based upon the person that wants to buy the home?

Nicole Bouvier: Jeanne, can I ask you to hold that question until we cover the accessibility requirements?



Jeanne Redondo: Sure.

Nicole Bouvier: Because I think some of your question will be answered shortly.

Jeanne Redondo: Okay, great.

Nicole Bouvier: Okay? And if there's - if you still have extra questions after, call back in because we'll

have time to ask them.

Jeanne Redondo: Okay, thank you. Okay.

Nicole Bouvier: Thanks.

Operator: We'll take our next question from Vaughn Lewis with the City of Hamilton, Ohio.

Vaughn Lewis: Yes, I'd like to know will the presentation be available to be printed out.

Nicole Bouvier: Yes. And Courtney, I may need you to jump in and tell people exactly how to access that.

Courtney Smith: Yes. Actually the presentation is right now available in the handout section of Live

Meeting. It's in your upper right-hand corner. And it will also be posted on the NSP resource site

and it should be live by later today.

Vaughn Lewis: All right, thank you.

Courtney Smith: Sure.

Operator: And with that, there are no further questions.



Nicole Bouvier: Great. Thank you all for calling in. Those were great questions. And Jeanne, we are

jumping right to accessibility. Okay, again, we have a myriad of laws, a handful of laws that cover

protecting people with disabilities.

Today, we're going to talk about primarily two key laws that you need to think about and worry

about under NSP, Section 504 of the Rehabilitation Act of 1973 and, again, the Fair Housing Act,

which as we discussed applies to all housing, private and public. Section 504 is targeted for

federally-assisted housing.

There's an overlap of these laws, just as there are in the general civil rights laws that we've

already talked about. And generally if you comply with Section 504 and the Fair Housing Act,

you're covered for compliance with the Architectural Barriers Act and there are really only a very

limited number of cases where ADA kicks in for our housing program, so we're not going to spend

much - any time on that. We're really going to focus on the two that have the most impact on

NSP.

The intent of accessibility laws - the - people with disabilities are protected under the Fair Housing

Act in all ways - in all of the ways that the other protected classes are protected, so you can't

discriminate against people with disabilities in all of the standard ways that we've already talked

about.

But there's a recognition that in addition, people with disabilities can't fully use and enjoy housing

if they're not - if there are physical barriers. So these accessibility laws in the - this section of the

Fair Housing Act really speak to not only prohibiting discrimination against people with disabilities

in housing, but removing the physical barriers in housing stock and building new housing that is

accessible.



And Section 504 in particular also ensures that the grantee's overall housing program is

accessible to people with disabilities. And I'm going to talk about each of those things.

Before I do, I want to make sure everybody understands what it means to have a disability. The

definition, a person with a disability has a physical or a mental impairment that substantially limits

one or more major life activities, major life activities being seeing, walking, using limbs, hearing,

caring for oneself, that's sort of thing.

It includes visual, hearing, and mobility impairment. It includes AIDS, HIV infection. It includes

people with mental or developmental disabilities or mental illness. It includes people with a prior

drug addiction if they're not currently using illegal drugs.

And it covers people with a disability and people who may be perceived to have a disability. And

the example I think of there is if an applicant is homosexual, they may be discriminated against

because somebody might perceive or fear that they have AIDS regardless of whether they

actually have AIDS or HIV.

So all of the Fair Housing Act coverage that we've already talked about applies to people with

disabilities, plus there are specific design and construction standards that are designed to

eliminate the physical barriers in housing so that people with disabilities can fully use and enjoy

the housing that's developed with in this instance NSP funds.

All right, I'm going to talk about three different sets of requirements under rental housing and new

construction and home ownership. So I'm going to start with federally-funded rental housing and

new construction, new construction of multifamily housing with five or more units, and housing

that has substantial alterations or rehabilitation of multifamily housing where there are 15 or more

units.



And Section 504 uses the term substantial alternations and defines it as projects where the cost

of the alternations is 75% or more of the replacement cost of the completed facility.

Okay, for new - multifamily new construction with more than five or more units and for multifamily

substantial alterations with 15 or more units, this is what's required.

You must make accessible a minimum of 5% of the units or at least one unit for people who have

mobility impairments, basically for use of a wheelchair, and you may - must make an additional

2%, minimum of 2% of the units or at least one unit for - accessible for people with a hearing or a

vision impairment. You must make the entrance and exit routes and the common spaces, public

use areas of the facility must all be made accessible.

Currently the accessibility standard under Section 504 is the Uniform Federal Accessibility

Standards or UFAS. And it - the NSP Learning Site and I think in the handout section on Live

Meeting, there's a link for you to find the UFAS if you don't already have it.

And there's a link for a resource that's been published by the Fair Housing office at HUD that's a

checklist so that inspectors can verify whether a unit meets UFAS or not. That's a great resource.

So basically there's a 5% of the units for mobility impairment, an additional 2% of the units for

hearing and vision impairment, and that applies to any new construction with five or more units,

multifamily, and any rehabilitation or substantial alterations with 15 or more units.

It gets a little trickier when you're doing other rental housing alternations that don't necessarily

meet that definition of substantial. Basically that means you're just doing a little bit of rehabbing a

unit. You're not fixing the whole unit completely.



You have to make the unit accessible to the maximum extent feasible and you have to make

those portions of the unit that you are rehabbing accessible. So if you're only renovating a

bathroom, the bathroom needs to be made accessible.

You need to make the entire unit accessible for - in this other alternations category if three things

are occurring - if you're renovating the kitchens, including removing your cabinets, if you're

renovating the bathroom, replacing tub or shower or toilet, and if you're replacing the entrance

door jambs. If you're doing those three things, we call it a full rehab and you need to make the

unit fully accessible.

You need to make - if you're doing, you know, a lower level - if you're doing less rehabilitation -

and this is the provision that's kicking in - you need to make accessible units up to the 5% and the

2% requirements, so 5% of the - you need to do this until 5% of the units in you project are

accessible to people with mobility impairments and 2% of the units are accessible to people with

sensory impairments.

Your routes and common areas need to be made accessible. And for those elements that you're

rehabbing that need to be accessible, you need to use the UFAS standard.

HUD really strongly recommends you make the whole unit accessible if you're doing a fair

amount of rehab, whether or not it technically meets the definition of substantial alternations

because a partially-accessible unit isn't really usable by a person with disabilities. So if you can,

go for the whole thing.

And home ownership has a different set of requirements. This is for new construction and

rehabilitation when you're doing projects for home ownership. There you need to make the unit

accessible when it's requested by a prospective buyer.



And the accessibility features need to meet the needs of the buyer/occupant. You don't need to

make the entire unit accessible. So if you have a buyer who has sensory impairments, you don't

need to make the unit wheelchair-accessible under UFAS. But to the extent that you're making

features accessible, you need to use the UFAS standard for those needed features.

There's a really good publication that was developed under the HOPE VI program. Again, it's in

the attachments link here and it will be made available on the NSP web site. It's a publication

under HOPE VI about thinking about design and construction issues for home ownership

projects.

You will always want to think in terms of making a unit adaptable as well. You - with the housing

markets in some places being what they are, you might start by thinking you have a home

ownership project and it may in the end be a rental project.

And you might need to make it accessible at some point to meet your requirements. So you want

to think about ways to make it adaptable so that if at some point you need to make it accessible,

it's not that costly or difficult to do.

The Fair Housing Act has a separate set of design and construction requirements. And, again,

these apply to - because it's out of the Fair Housing Act, it applies to public and private housing,

so hopefully your architects and developers are somewhat familiar with these requirements by

now. They should be.

These requirements - design and construction requirements apply to covered multifamily

dwellings. And that includes newly-constructed housing, whether or not it’s financially - or

federally-assisted, that are available for first occupancy after March 1991.



And it covers the ground floor units in buildings with four or more units and any buildings with four

or more units that have one or more elevators. So basically the units that are accessible either

because they're on the ground floor or they're accessible because they are serviced by elevators,

those units need to be designed and constructed to meet the Fair Housing Act requirements,

which are found in 100.204 C.

This level of accessibility is not as stringent as the level of accessibility that's required by UFAS.

It's considerably less. It covers a larger number of units, but the standard is a lesser standard.

And it's definitely not the same as UFAS.

This level of accessibility really is making sure that the units can be relatively easily made

adaptable to a person with disabilities later. So it talks about reinforcement in bathroom walls, but

you don't need to install grab bars. So you would want to install wider doorways, have accessible

routes to and within the unit and that sort of thing.

And HUD has done some really good work in looking at some national building standard models

that are safe harbors for this level of design and construction.

And there's a web site that's posted in the handout section here and that will be in the NSP web

site that you can look at to see what are some model standards that you can use to make sure

you're complying with the Fair Housing Act design and construction standards.

All right, I'm going to move - so that's all of the - those are the compliance - accessibility

compliance as it relates to specific units. And now I'm going to talk about the accessibility

requirements that relate to running a program or administering NSP program in particular.

Program accessibility means that the housing program, when viewed in its entirety, is accessible

to and uses - is useful by people with disabilities. It sort of acknowledges that in certain instances



a certain building may not really be readily made accessible. Certain rehabs might not or

whatever.

But in the big picture, it says you really need to look at and make sure people with disabilities

have access to your programs. And it also speaks to how people use your program, how they find

you, whether they learn about you in the first place and know to even ask.

So examples include making sure you have effective communication with applicants,

beneficiaries, and members of the public. This might mean providing sign language or translation

or advertising in a pretty wide area to make sure you're reaching all possible applicants or making

sure your beneficiaries understand any rules that you need to convey or policies or information

that you need to convey about the program. It means making reasonable accommodations for

people with disabilities.

And it means making sure that there's wheelchair access to the program in terms of your public

face, where you do intakes, where you have public hearings, where you have tenant meetings,

that sort of thing. So that's a handful of examples that speak to this idea of program accessibility.

I'm going to elaborate on two points. I referred to reasonable accommodations. And that pretty

much defines what a reasonable accommodation is.

It's a change in a policy, practice, or service that enables a person with a disability full use and

enjoyment of the housing unit. In general, the housing provider needs to determine on a case-by-

case basis whether an accommodation request is reasonable and how to make provisions that

it's not reasonable, if it imposes an undue financial or administrative burden on the program

administrator.



A couple examples so you can get some sense, it doesn't always mean spending more money,

but it could. For a housing provider, multifamily housing, they may have a parking lot and they

have no assigned spaces and a person with a mobility impairment might request that a space be

- a parking space be assigned to them located near their unit so that they can more readily get

into their unit without having to slog through the parking lot.

That would generally be considered a reasonable request. It doesn't really have a cost. And it

makes it possible for that disabled person to using the housing that's provided under the program.

Another instance, people are pretty familiar with ramps and that sort of thing to create wheelchair

access. If you have a laundry room or a mailroom or some public use in the building that requires

steps to get to, it would be a reasonable accommodation and a reasonable request to provide a

ramp if you have a tenant or an applicant in a wheelchair.

There's no real undue financial or administrative burden. Those kinds of accommodations are

NSP-eligible costs, so you can use your NSP funds to make those accommodations. And so you

would be required to do that.

There's one additional thing related to the accessible units and accessibility of housing that I want

to mention.

Marketing - so you've built units that are accessible to people with disabilities. What's your

obligation to actually rent or sell them to people with disabilities? And are you required to leave it

empty until you have an applicant, a qualified applicant who can move in?

Section 504 says you have to make a reasonable effort. You have to take reasonable steps to

make your accessible units available to people with disabilities who need those accessibility

features.



This is another place in affirmatively furthering fair housing where a grantee might want to require

its housing providers to advertise specifically to any community groups or social service providers

that serve people with disabilities to make sure information is getting to them about available

accessible units.

And HUD requires that you offer these units first to disabled persons who might reside in the

building already in a non-accessible unit to make sure that they are able to access an accessible

unit, move into an accessible unit when it becomes available; second to offer an accessible unit

to anybody on a waiting list who might need the accessibility features and only then can you rent

or sell it to - rent, I'm pretty much talking about to a person who does not have a disability.

If you do rent a unit to a person who does not have a disability, we would encourage you to

include a special clause in that lease that says if we have somebody who needs the accessibility -

accessible unit, we would move you to a different unit so that they can move in and have it. And

so that way you can really - you need to take reasonable steps to make sure people with

disabilities reside in accessible units.

Okay, and so again here's two pretty general web sites that focus on accessibility issues. The first

one is HUD's Fair Housing and Equal Opportunity Office. And, again, it's got a lot of information

there and links to a lot of other sources.

And the second, the fairhousingfirst.org is an accessibility web site that has particular emphasis

and use to architects and buildings and lots of information about the standards and the design

and construction requirements. So I wanted to include that to make sure people had some of -

access to some of that more technical information.

Okay, so we are ready again to take some questions if we have them, same procedures.



Operator: Okay, we'll take our first question from Catherine Crosby with the City of Dayton.

Catherine Crosby: I think I figured it out.

Nicole Bouvier: Okay.

Catherine Crosby: Thanks.

Nicole Bouvier: Okay, thanks. That was easy.

Operator: We'll take our next question from Amy Kish Wruck with the City of Chicago.

Amy Kish Wruck: Hi there. Can you hear me?

Nicole Bouvier: Yes, hi Amy.

Amy Kish Wruck: Hi. My question is regarding historic properties and Section 504. Are there any

exceptions for making historic properties accessible and how would you document that?

Nicole Bouvier: That's an excellent question and I have to say I don't know the answer to it. Is there

anybody on the line who does? Or is that something we can check out?

Mark Matulef: Yeah, this is Mark. I - I mean, we can - I'll look up something that, you know while you're

on with the next call or the next segment. But yes, there is a historical building exception. It's

limited.



Obviously it would have to be - it's not just any old building. I think you would have to provide

documentation. I think you usually provide it from the applicable, you know...

Female: (Sure).

Mark Matulef: ...((inaudible)) officer.

Amy Kish Wruck: For example, it's part of like our national historic district.

Mark Matulef: Well, yeah, it would have to be - it couldn't just be part of the district. I think...

Amy Kish Wruck: Okay.

Mark Matulef: ...it would have to be a historic structure. I don't know about contributing buildings, but

we're really talking about an exception because of the building itself is historic in nature not just

part of a historic district.

Amy Kish Wruck: Okay and it's also a city landmark. It's been established as a designated landmark by

the city.

Mark Matulef: Yeah, I think in any case you would probably want to get - and, I mean, in my experience

in HUD transactions, it's always helpful to get, you know, a letter from the State Historic

Preservation Officer.


Mark Matulef: Or if you're in a municipality that has its - or a county that has its own preservation officer,

official preservation officer that's part of, you know, a, you know, local planning review, you



probably want to get - this is a general suggestion. You probably want to get some kind of a

review anyway. You're probably doing that anyway. And so that would provide you some, you

know, evidence that your building is a historic building. I will try to find out in the short term, but

this may be something that we'd want to get on a, you know, on a later broadcast, you know, on

this sort of all Q&A because I can't say for sure what the, you know, what the, you know, the best

material to keep in your file or the best, you know, material to send in.

Generally these are not self - exceptions to the 504 requirements are not self-certifying.


Mark Matulef: And you probably would have to submit a request to a - to the appropriate local HUD

office.

Amy Kish Wruck: Oh, and that would be the Office of Fair Housing?

Mark Matulef: Well, that would be - you would go to the Program Office and then they would probably

consult with the Office of Fair Housing.

Amy Kish Wruck: Okay. Very good. Thank you.

Operator: We'll take our next question from Shameka Union with the City of Galveston.

Shameka Union: Hi. I had a question in regards to the accessibility compliance for - with NSP.

Nicole Bouvier: Mm-hm.



Shameka Union: For the new construction, are you required to make all of your units handicap-

accessible with the ramps or the elevators? Or is it based on who you sell the unit to for

residential?

Nicole Bouvier: It's new construction home ownership.

Shameka Union: Mm-hm. Okay.

Nicole Bouvier: Okay. You're required to make accessibility features that are required by your buyer.

Shameka Union: Okay.

Nicole Bouvier: Okay, so it wouldn't necessarily be all of your units, but any features that are needed by

the buyer.

Shameka Union: Okay.

Mark Matulef: This is Mark. I think this may be another topic that we want to get back to people on

because if the - even if the tenure is - if the tenure of the occupancy tenure is home ownership,

but you're looking at a multifamily project, you know, you know, a condo building or some kind of

planned use development, then you have - and if you have five-plus units, it may change the

nature of your project.

And it - there are - the HUD's regulations have particular, you know, have - to particular single-

family programs in some particular ways, but obviously because NSP is a very new program, it's

not going to be covered under some of the particular exceptions on the part 8 rules.



So it may be - it's probably worth it, you know, if you're talking about, you know, absolutely, you

know, freestanding buildings or a relatively small project, you know, with very few units, yes, I

think you're gearing those - the accessibility to the accessibility needs of the pre-identified

occupants.

But if you're talking about a condo building or some kind of planned use, then you're talking about

the possibility that the multifamily housing requirements are going to apply.

Operator: And we'll take our next question with Suparna Robertson with Pasco County.

Suparna Robertson: Hi, this is Suparna. I have a couple of questions. One I wanted to ask about the

accessibility requirements. When we talked about the disabled person, does it have to be a

documented disability or, you know, if it's an apparent disability, which is put in the paperwork at

the time the unit is rented or purchased, that would count as well.

Nicole Bouvier: I think it - you're not - this is a little bit of a tricky area. You're not really able to ask

somebody about the nature of their disability or their - what their disability is, but you are able to

request documentation that there is a disability and the accommodation that would be

appropriate.

Suparna Robertson: Right. But if say the owner or tenant, you know, volunteers and provides the

information, for example, you know, if they have an elderly member in the family or a child who is

disabled or, you know, some kind of disability among the family and, you know, put it down saying

that, you know, I would need special accommodation for this disabled member, would you just

take the word of the person or would you need some kind of documentation in that scenario to

make sure that before you are using funds to put in all of the ADA requirements that, you know,

you have some documentation because you are making modifications...



Nicole Bouvier: My understanding is that you can request documentation of the need for the

accommodation or the accessibility feature if you want, but you're not required to document that.

HUD is okay with spending of funds on making units accessible.

Suparna Robertson: Okay.

Nicole Bouvier: So that if you want to make them accessible, that's fine.

Suparna Robertson: And also my second question was would the laws apply to say a person who is not

say on the lease or, you know, as part of the homeowner if, you know, one person is purchasing

the property or renting the property and, you know, has one or two family members who might be

considered disabled and they are not on the lease or anywhere in the document, would it be

required to provide the accessibility or meet the accessibility requirements for these members?

Nicole Bouvier: If they're expected to occupy the unit, yes.

Suparna Robertson: Okay. Okay. Thank you.

Mark Matulef: This is Mark. Let me just add briefly that I think those are excellent questions. I think the,

you know, the how accessible a unit needs to be is part of an answer of whether or not you are

going to develop, you know, the accessible or adaptable unit, you know, to be available, you

know, for any, you know, for any occupant or whether you're tailoring it for particular occupants in

a single family - I mean, in a home ownership scenario.

So as you know, as was mentioned earlier, if you're talking about a home ownership scenario,

you're - it only needs to be accessible to the needs of the occupant.



But if you're building an accessible unit, you know, per design and construction standards or

UFAS standards under, you know, under 504, the - and you're saying that the - you're

designating this unit as an accessible unit, it will be accessible for, you know, any occupant, you

know, into the future, then it has to meet the entire standard if you're holding it out as accessible.

Suparna Robertson: Okay. Okay. It's kind of like a Catch-22. You know, you can't ask the question if a

family has a disabled member and then at the same time, you know, if there is a disabled

member in that family, it is required that, you know, they have the accessibility to use different

parts of the unit, you know.

Mark Matulef: Well, if you don't know, then it's difficult for you to be held to a standard.

Mark Matulef: But you do have to make some kind of inquiry to find out if there's a particular need. And,

you know, almost every standard HUD rental - or program application or rental application has a -

it has a series of questions on is there a family member or a household member, you know, that

needs particular features, you know, to accommodate, you know, a disability or, you know,

special features to make the unit accessible.

Suparna Robertson: Right.

Mark Matulef: So you're not asking a question about the nature of the individual's disability. You're asking

if that person has a need. But you don't have to - you may not have to rely on the question or

your rental agent may not have to rely on the question. If you see somebody show up and fill out

an application who has a, you know, a mobility assistance device like a wheelchair or a walker

have some notice that that person has some kind of need. And I think that means that’s a good

opportunity to ask the question do you have a particular, you know, accessibility need.



You can also rely on information that you might have received already if the person is already a

recipient of, you know, some type of, you know, rental housing assistance that's mobile to the

tenant, then you may be able to rely on that determination that's been made already.

Suparna Robertson: Yeah, my question was a little more directed to members of the family and of the

person who is renting or buying the home.

Mark Matulef: Right. So the requirements goes beyond the the owner or the person who signs the lease

to people who are regularly occupying - regularly part of the household and expected to occupy

the unit.

Suparna Robertson: Okay. Thank you, Mark.

Mark Matulef: Yeah.

Operator: We'll take our next question from Mark Asturias with Irvine Community Land Trust.

Nicole Bouvier: Hi Mark.

Mark Asturias: Yes, hi. Can you hear me?

Nicole Bouvier: Yep.

Mark Asturias: Okay and this may be as Mark has suggested that there's going to be a follow-up on this,

but our program is an acquisition rehab of existing ownership units and retail to owners. But we're

buying condominiums and they are all second- or third-floor non-elevator-served. They're stair

only.



So if we're going to get applicants that are coming in that are asking for an accommodation for

access to the units, do we have to consider the - that accommodation request? Or is it only the

unit itself, the entry, but for the unit and the interior? I mean, frankly, we're not going to be able to

make changes to the building because we don't control the entire building.

Nicole Bouvier: I may immediately defer to this to Mark. But I want to get a little bit of clarification. You

have a multifamily structure.

Mark Asturias: Yes...

Nicole Bouvier: ...multifamily structure with 15 or more units, so you're doing a substantial rehab of 15 or

more units.

Mark Asturias: ((inaudible)) it's eight or more units.

Nicole Bouvier: Eight or more.

Mark Asturias: Eight or more units, ownership.

Nicole Bouvier: Ownership.

Mark Asturias: ...attached and it's basically four units on the ground, four units on the second floor.

They're stacked flat. We're buying the second floor units. They're only served by stairs.

So if we put the program out and offer the units for sale and we get somebody who is

handicapped and otherwise financially able to acquire the unit and they come to us and they say

you need to install an elevator so I can get up to the unit, is that a reasonable accommodation

request that we have to meet?



Nicole Bouvier: I'm going to do a couple of generic comments and then I'm going to see if Mark wants to

tackle some of the specifics.

Reasonable accommodation is, again, case by case. So somebody might want to look at this and

talk to you more about some of the specifics to answer this question.

I think Mark said if it's a condo, I think there might be some - there might need to be some more

guidance about the home ownership angle on this because I think previously if it's home

ownership, the - it - yeah, I'm - Mark, I'm just going to defer it to you. I'm not even going to try.

Mark Matulef: I think this is worth a discussion, you know, with the local HUD office...

Mark Matulef: ...particular, but let me just say in general, you know, if you're going to be - if you're going

to rehabilitate a. you know, a, you know, a - if your project is going to be 15-plus units and it's a

substantial alteration project, then it doesn't really matter what the, you know, what the

occupancy tenure is, you know, ownership or rental.

It's going to be considered a multifamily project under our - under - for 504, under 504 rules. And

there's going to need to be some, you know, some accessible units in the property, you know,

designed or, you know, built into the project.

Nicole Bouvier: Mark, this is Nicole. I'm sorry to interrupt and cut you off there, but I actually think that's

an issue that's not completely clear, nor has it been consistently stated by HUD about the

multifamily structure if it's home ownership.

Nicole Bouvier: And that may be - I - because I think in our prior conversation yesterday, this was

something we talked about. I think at this point, that interpretation I'm not sure has really been put



out there in writing. And you might want to - we might want to just defer that piece of that question

and put it out on the NSP web site.

Mark Asturias: I would appreciate it. This is, again, Mark from the Land Trust. The question I have, just to

be clear, is we are not buying the entire complex. We are buying one unit, maybe two, out of eight

existing units ((inaudible)).

Nicole Bouvier: Oh, you're only buying one or two units.

Mark Asturias: And they are the second-floor units. We are - the complex does not want to sell, but they

are - but they have a couple of foreclosure units. And we're trying to buy the foreclosure units.

So you've got an HOA because it's a condominium association. And they don't want to modify the

exterior of the building. They don't want to add elevators. They don't want to change the

stairways. They don't want to put in ramps. It's a 35-year-old building.

Then we get somebody that comes in and says I'm in a wheelchair. I have the financial

wherewithal to buy that second-floor unit, but I need you to put an elevator in there. What does

that do to the Land Trust?

Nicole Bouvier: Can we take that question offline...

Mark Asturias: Sure.

Nicole Bouvier: ...and try to get you a written answer or some kind of response after the call or something

in the next few days?

Mark Asturias: Sure, I'd appreciate it.




Operator: We'll go next to Jason Betham with Development Bank of American Samoa.

Jason Betham: Hi. With the exception of cost, is there a reason that for rental units, multifamily rental

units, that a developer wouldn't make all of the units accessible?

Nicole Bouvier: People might have their reasons. I would think cost would be one of them, primary ones.

I don't know.

John Laswick: Well, this is John Laswick. I mean, you've got to look at the market. I mean, you might not

need them all to be accessible either, so it kind of - it depends on where you are and what kind of

community you've got.

I mean, if you've got a lot of, you know, a high percentage of people with disabilities, then that's

one thing. But, you know, it may be pointless to convert all of them if they won't ever be occupied,

so…

Jason Betham: Okay, because our community is, you know, we have large communal families and a lot

of times the elderly will live with their children for many, many years. So we may have applicants

who are stable, but will have, you know, an elderly family member who will be disabled that...

John Laswick: Right. Well, that case it might make sense, yeah.

Nicole Bouvier: Right. Right and there, you know, you might want to think about the distinction between

the UFAS standard and the Fair Housing Act standard because it might make sense to build

things to an - that are more readily adaptable, but not necessarily fully accessible under UFAS.



Mark Matulef: Right. This is Mark. I want to echo that that this is not a new issue for HUD. I think as, you

know, as we learn more about housing that's build in different parts of the country, you know,

housing that's built in, you know, in particular lands that, you know, on tribal lands or on specially-

designated land, people have different ideas about, you know, what a family is and different

senses of obligations of how to care for family members as their needs change.

And the two places to look for building and design that, you know, for the future is, you know,

adaptable design or, you know, under - or design and construction under Fair Housing Act

standards, but also adaptable design that's part of UFAS, which is similar, but it's a little bit

different.

You know, some multifamily developments have not only units that are immediately accessible,

immediately qualify as a UFAS-accessible unit, but are ones that could be converted to

accessible because of some design features. And building in some of the design features at the

beginning is a good way of reducing cost in the future.

Some of those adaptable features have to do with, you know, making sure that, you know, that

you have reinforcements behind walls in bathrooms so that you can hang grab bars or, you know,

or be it - or, you know, replace, you know, bathing fixtures, ways of designing kitchens so that it's

easier to remove cabinetry and put in, you know, accessible cabinetry.

Building in some of that flexibility at the beginning, having wider doorways, for example, building

more units at grade, you know, having ramps on the property instead of stairs on the exteriors,

you know, on, you know, outside the property are good ways of building in accessibility so that

the cost of making it a unit accessible later is a lot lower.

Jason Betham: All right, thank you very much.



Operator: We'll go next to Emma-Petrie Barcelona with the City of Lakewood.

Emma Petrie-Barcelona: Hi. My question is about single-family rehab for home ownership. And I'm

wondering about if we do ever have any people interested in or have purchase agreements who

do have disabilities and would like some expensive accessibility features, whether it's a ramp or

say lowering cabinets or things like that that have already been finished, are we able to add those

costs into the purchase price? Or do we just have to spend the money, not getting it back?

John Laswick: Well, I - from the financial side - this is John - I mean, I think it's a function of, you know,

what the family can afford. So, you know, that's going to be true regardless of what improvements

you're making to the building.

So I think it would just be part of that calculation. And if you're starting to get into territory where

they can't afford it, then you would have to, you know, write that off.

Emma Petrie-Barcelona: Okay. But assuming the numbers work at least on the NSP side, but they're -

it's within the affordability, we can raise the price in order to meet - to install that?

John Laswick: Yes.

Emma Petrie-Barcelona: Okay.

Nicole Bouvier: And I think - this is Nicole again. I'm going to piggyback what Mark said a few minutes

ago. I think when you're designing your home ownership program, you should think about looking

at design and construction standards that are more readily adaptable less expensively because

you could very well get an applicant who needs accessibility features and you kind of want to plan

to be ready for that so that it doesn't break the deal.



Emma Petrie-Barcelona: Oh, yeah, we're doing 1920s houses, so...

Nicole Bouvier: Oh, okay.

Emma Petrie-Barcelona: ...((inaudible)) deal with, so...

Nicole Bouvier: (Okay).

Emma Petrie-Barcelona: ...inside we are, but that's good to know.

Nicole Bouvier: Okay. Thanks for your call.

Emma Petrie-Barcelona: Thank you.

Operator: We'll go next to Amy Kish Wruck with the City of Chicago.

Amy Kish Wruck: Hi. My question is regarding what would constitute a multifamily project. If we had five

single-family homes that were transferred to a single developer under different redevelopment

agreements, would that be considered a multifamily project?

Nicole Bouvier: Are they financed collectively, processed collectively, developed as a project?

Amy Kish Wruck: I don't know what you mean by processed collectively.

Nicole Bouvier: Are they - are you treating them as a - in terms of the way you're financing it, is the

financing for all five units?



Amy Kish Wruck: Well, this hasn't happened yet, so we don't have to.

Nicole Bouvier: I'm looking for the Section 504 definition, but it definitely speaks to whether they're under

a single contract, five or more units under a single contract.

Amy Kish Wruck: Right, but if they were under different redevelopment agreements, but went to the

same developer?

Nicole Bouvier: They're being conveyed as a package to the developer for redevelopment so that - or if I

am understanding this correctly, their origins are separate.

Male: Are you doing the assembly and then conveying them as a package to the developer?

Amy Kish Wruck: This hasn't happened in real life yet. I am just...

Male: Yeah, let's - okay, if you were...

Amy Kish Wruck: Okay, let's say I was.

Male: ...if you were, I mean, because the issue is the, you know is the - is, you know, sort of, you know,

looking for indicators in the, you know, in the - for example, in the transactional documents if you

as a locality or other entity doing the assembly from multiple sources if you're paying them under

a development agreement, then it looks - it is beginning to look like a project with five or more

units.


Nicole Bouvier: Right.



Amy Kish Wruck: Okay. So the fact that they would have separate redevelopment agreements doesn't

really matter because we are packaging them as, you know, one project. Am I hearing that

correctly?

Male: I think it - yes. I - but I think you have to look at your - you have to see - I think, you know, the

evidence is in the way that you're conveying it, developing it, financing it in terms of defining a

project.

Amy Kish Wruck: Okay. What if they weren't all going to be redeveloped at the same point in time? What

if the developer had the capacity of doing three units at once and then maybe months later

started work on - working on the other two units?

Male: Well, again, if it's under the same, you know, development contract or, you know, other kind of

agreement, it's really part of the same program. It might be perceived as being the same project.


Male: I would, you know, this is another good - I would take the facts and, you know, just discuss that

with your counsel and - but also you can ask HUD, you know, to look at that, you know, and to

suggest some other ways that you might look at your project. And I think that there's a lot of

counterbalancing issues. It's not inexpensive to write all new transactional documents for each

individual property transfer.

Amy Kish Wruck: Right.



Male: There's a lot of effort to do that. And you get a, you know, you get some advantage by packaging

your project or working out of the same development agreement and then having individual sales,

but under a single agreement.

You, you know, there are some economies there. And, you know, if in trying to save some money

on the, you know, on the accessibility side, you may end up spending more money on the

transactional side.

Amy Kish Wruck: Right. Right. That makes sense. Okay.

Operator: And we'll take our next question from Mike Radcliffe with the Twin Cities Habitat for Humanity.

Mike Radcliffe: Good afternoon. I have a question that focuses specifically on home ownership here. We

don't do any rental, but when I've been looking at a lot of these documents, the drawing the

distinction between when it is single family, when it's multifamily, gets somewhat ambiguous.

We do town home projects, we do ((inaudible)) buildings, but they're all sold to individual families

when the families actually own the land underneath them and so trying to understand when this

applies and when this doesn't. It gets a little murky and I'm trying to look for some clarification on

the home ownership side, specifically, I guess, as to what constitutes multifamily.

Nicole Bouvier: Right and how Section 504 applies.

Mike Radcliffe: Exactly.

Nicole Bouvier: Right. I - I'm going to be honest with you. I think there is - may not be full clarity in terms

of how this regulation is interpreted on this issue, but - and I - so I'm wondering - I'm not sure how



to answer this. And I'm wondering if we should defer this to trying to clarify it and get something

on the NSP web site.

Mark Matulef: The way HUD has historically handled the home ownership tenure housing is to have sort

of - some program-specific requirements in the regulations. The regulations are admittedly out of

date because they refer to a really - past generations of single-family - rather past generations of

home ownership tenure HUD programs.

So the sort of current realm of HUD programs are not addressed explicitly in the current

regulations. That doesn't mean that there haven't been interpretations for particular programs.

But as new programs roll out, they - I think we're all seeing that there's a need to address the

applicability of these requirements to the new programs as they come out.

Female: Right.

Mark Matulef: The problem is that the way the rule was drafted, you know, now we're looking at, you

know, 20-plus years because it was drafted to accommodate the existing range of home

ownership programs - 235, mutual self-help Indian housing.

And for the most part, those programs are not generating any new housing. They're selling off or

they're finished. So FHEO and HUD know that it's time to, you know, to make some revisions to

the regulation and I can't speak more than that. But I think that there's - that those are really

excellent questions and they're ones that need to get resolved.

Nicole Bouvier: Yeah, that's a good explanation, Mark. Thank you.

Mike Radcliffe: Thank you.



Operator: We'll take our next question from Cynthia Rouse with Urban Revitalizers.

Cynthia Rouse: Hi, good afternoon. This is regarding Section - the Section 3 requirement. Could you

explain where does the compliance fall? Who does it fall upon? Is it the grantee or the contractor

when it comes to Section 3?

Nicole Bouvier: Section 3 - you know what? That's our next topic. And so if I could ask you to be patient

and let's wrap up our accessibility-related questions and hopefully we'll answer your Section 3

question in the presentation and if not you can call back when we get to Section 3. Is that okay?

Cynthia Rouse: Sure. Will it be posted online, too, because I don't know if I'll be able to call back?

Nicole Bouvier: Yes.

Cynthia Rouse: Okay, great. Thanks.

Nicole Bouvier: This whole session will be, yeah.

Cynthia Rouse: Great.

Nicole Bouvier: And if you look at the handout for the slides, it may be addressed in the slides. You can

get those slides in a couple of hours I think Courtney said. Okay?

Cynthia Rouse: Okay. Great. Thank you.

Nicole Bouvier: Thanks.



Mark Matulef: Oh, this is Mark. Can I add for the earlier question about historic properties the place for

the developer or the local sponsor to begin looking is at HUD's regulation at 24 CFR Section 831,

historic properties. And it's not very specific as to the entire protocol, but it basically describes

what the exception is and it also fully describes the limited nature of the exception.

Nicole Bouvier: Great. Thank you, Mark.


Nicole Bouvier: Okay, great. All right, so we are now going to start talking about Section 3. And I am

going to turn this webinar over to my colleague, Kelly Price.

Kelly Price: Thanks Nicole. This is Kelly Price again from ICF. Good afternoon everyone. I'm going to try

to tackle the subject of Section 3. And I'm going to try to get through the slides relatively quickly

so that in case we do have questions, we can get it all in by the time that we have today. Lots of

discussion, so this webinar is going - it's going to go to the limit I believe.

Section 3 is the section of the Housing and Urban Development Act of 1968, which is where it

gets its name. The implementing regulations for HUD are at 24 CFR Part 135, so that's where

you can find everything you need to know about Section 3. And it is an interesting read, so I

recommend that everyone make sure you have that if you have questions about Section 3.

Grantees actually certify compliance with Section 3 either through their grants agreement process

or through their annual certifications, of which there are many as part of their action plans and

grant agreements again.

Section 3 - the purpose of Section 3 is to ensure that employment and economic opportunities

that are generated from certain types of HUD programs, which does include NSP - NSP is



basically CDBG funds - that those opportunities to the greatest extent feasible - and that

language is important - be directed towards low and very low income persons and to business

concerns, which provide those economic opportunities to low and very low income persons

generally in the project area.

This regulation is not specific to race or gender. It is not be confused with some of the equal

opportunity requirements, which we have not covered on this webinar necessarily.

Section 3 is truly about providing opportunities for low and very low income persons and business

opportunities that are generated from certain HUD grant programs, which does include NSP.

One key thing to keep in mind, though, people often sort of panic about this - it - the regulation

uses the term opportunities arising from Section 3-covered assistance. And by that, we

essentially mean new jobs and those contracts that arise from that assistance. So we'll talk more

about that in just a minute.

The biggest question everyone has and a caller just a few minutes ago, which is what applies to

whom and where do the responsibilities lie, and that is basically summarized here in this slide.

Your best reference for this will be the Section 3 regulations as we mentioned a minute ago, Part

135. There is NSP guidance, which is posted as content on the Live Meeting site over to the left

on the top corner where it says content. There is NSP-specific Section 3 guidance.

However, some folks may find the specific wording of some sentences in that guidance to be a

little bit misleading. And so we're going to try to clarify that today. But your regulations will be your

best source of information in that regard.



As far as the applicability of Section 3, recipients that receive $200,000 or more in covered

assistance - which, again, covered assistance does include NSP, NSP1, NSP2, and whatever

may come down the road - are required to comply with Section 3.

The key thing is that the term recipient is actually defined in the regulation. That is a very broad

term. It's in essence the grantee is receiving the funds from HUD, but the term recipient as it's

used in Section 3 is a much broader term. That term basically refers to any entity that receives in

this case NSP assistance with the only exception being the end beneficiary.

So Section 3 will apply if you have received a $200,000 or more NSP grant, which every grantee

under NSP1 or NSP2 did. It will apply generally to the grantee.

And we'll talk about that in just a minute. It will also apply down to sub-grantees if you use that

term, sub recipients, developers, contracted administrators, et cetera.

We will talk more in a minute about employment and contracting. And so I may save a little bit

more on this next bullet, but it does include jobs that support rehab and construction activities.

Folks often think of this only as construction jobs, but, again, I would direct your attention to the

regulation, which clearly spells out certain other types of supportive-type positions, including

management and administrative positions that directly support rehab and construction activities

like a rehab specialist, an engineer, that type of position.

So, again, recipients, grantees, that receive $200,000 or more in NSP funds from HUD are

covered by Section 3 and required to comply to Section - with Section 3. That requirement further

flows down to sub-grantees, sub-recipients, developers, et cetera.



The types of activities that are covered are going to be housing construction, housing

rehabilitation, and other public construction, so if any of you are doing what would be called

Category E activities like redevelopment activities that might involve some sort of other type of

public construction, that would also be covered, so any housing rehabilitation, housing

construction, and related activities, as well as other public construction.

Further, the other level of this that some folks are aware of already, which is that contracts or

subcontracts for construction-related work, again, housing rehabilitation, housing construction,

other public construction, if that contract or subcontract exceeds $100,000, the responsibility for

Section 3 compliance is then shared with that contractor or subcontractor. And the key term there

is shared with the contractor or subcontractor.

So there needs to be a partnership with that entity to ensure that Section 3 is being complied with

and documented. However, back to the caller earlier, the recipient of the funds, the grantee, will

still be responsible for compliance because you've certified compliance to HUD.

One exception in terms of contracts and subcontracts would be those that involve supplies or

materials that do not involve installation. Under NSP, we do have some situations where there

are contracts and subcontracts, for example, in projects involving Habitat for Humanity that might

involve construction materials that do not involve installation as part of that contract would be

excluded from that $100,000 threshold. So that's the triggers. That's the key thing.

What am I required to do if I'm a grantee or a further a recipient, a sub-grantee, a contracted

administrator, all of these different parties involved in NSP?

This is outlined in the regulations. That's Part 135.32 and very clearly stated, grantees are

required - recipients are required to implement procedures that will notify residents of the area, as

well as businesses, of the Section 3 requirements and opportunities.



Obviously we're required as well to notify contractors and subcontractors of the Section 3

requirements so that they are informed. Similar to what Nicole said earlier regarding fair housing

and other requirements, we need to make sure that they know what the requirements are as they

apply to them and in fact similar to the Davis-Bacon labor standards requirements, you have to

include the Section 3 language as we call it, the actual specific requirement for compliance with

Section 3 and all solicitations, bid documents and contracts and subcontracts.

So that language should be in all contract and subcontract and bid and procurement documents.

You of course should not be using contractors or subcontractors that have outstanding Section 3

violations that have not complied with the rules and have some process or procedure that has

been taken against that firm. You’ll want to look at the excluded parties list just then as one

reference to check that.

Obviously you’re going to document your actions taken to comply with Section 3 so as with many

of these requirements, it’s all about documentation so we want to make sure that those bid

documents, those contract documents, the procedures, any other outreach we’ve done and so

forth which we’ll talk more about in just a minute have been documented and that we can

demonstrate those efforts to HUD and other parties that may come asking for that information.

One key thing here at the bottom of the slide which we’ve got several slides to follow on relates to

numerical goals. A lot of folks - I know when I train across the country on these programs - a lot of

folks sort of feel like they’re not clear on exactly how do I demonstrate compliance with Section 3.

What is expected of me as a grantee or from my contractor and not sure there’s quite that much

awareness but there actually are specific numerical goals for both hiring and contracting in the

regulations so let’s spend a little bit of time talking about that.



Again this is spelled out in the regulations in Subpart B. For hiring, Section 3 goal is 30% of

aggregate number of new hires. Again this would be for covered activities.

So those would be activities relating to housing rehab, housing construction and public

construction that 30% of those aggregate number of new hires be Section 3 residents and there

is a definition of a Section 3 resident which I’ll go over in just a minute so that’s our hiring goal.

On the contracting and subcontracting side, the goal is 10% of the total dollar amount of covered

construction contracts. Remember the term covered construction contract means those contracts

or subcontracts that exceed $100,000 so 10% of the total dollar amount of covered construction

contracts would go to Section 3 businesses and that again is a term that has a definition in the

regulations which we’ll go over here in just a second.

Key thing to remember on the hiring side, 30% of new hires to Section 3 residents. On the

contracting side, 10% of the total dollar amount of those $100,000 or more contracts need to go

to Section 3 businesses.

Section 3 residents are defined as residents of public housing or individuals that reside in the

metropolitan area or if you’re in a non-metropolitan area, the county in which the project is

occurring and whose income does not exceed the HUD low-income limit and low-income here is

defined as 80% of median and below.

So low income, very low-income residents who live in a non-metropolitan county in which the

project is located or if it’s a metropolitan area are considered Section 3 residents.

Residents of public housing are also considered Section 3 residents and in fact in a minute we’ll

talk about how to comply, what are some of the suggestions from grantees to our demonstrating

compliance.



One tool you can use to actually certify that someone is indeed a Section 3 resident so that you

can sort of document and count that towards your goal, HUD’s actually provided you with a

sample certification form on their Website and we’ve given you that link here.

It’s also provided as one of the handouts up on the top toolbar with Live Meeting you can see the

little sort of three-page icon. That’s actually the handouts for today’s session that you can print off

after we finish the call so that certification form is provided for you.

A Section 3 business is defined as a business that 51% or more owned by Section 3 residents so

back to the previous definition so it’s majority ownership by residents of public housing or low-

income persons who live in that project area.

Or it could be a business whose permanent full-time employees are at least 30% Section 3

residents. Now in other words they can show that they’re current payroll in essence has at least

30% of Section 3 residents or within three years of date of first employment with the firm, they

were Section 3 residents so sort of counting backwards if you will.

Or a business can also demonstrate that it’s a Section 3 business by commitment to subcontract

out at least 25% of the business from that contract to a business that needs to be above

definition.

In other words it may not on its own qualify as a Section 3 business, but it’s committing to award

at least 25% of that contract value to businesses that do meet those qualifications so

subcontracting out not too dissimilar from your minority and women’s business enterprise-type

requirements that many of you are familiar with in your procurement processes at the local level.



Again HUD has provided you with a sample certification. If you’re going to obviously set aside

preferences and arrange - have procedures - which provide for trying to meet the goals of Section

3 with regard to business concerns, you’re going to want to have a way to document that in fact

those businesses are indeed Section 3 businesses and again HUD has provided a sample form

for your use. The link is here and we’ve also provided it as a handout.

Nicole, I just lost the slide. Okay.

Nicole Bouvier: There you go. Sorry. I don’t think I touched anything but I might have.

Kelly Price: There we go. We’re back. Sorry, folks. The question again that we often get is sort of the

how to, how do I actually carry this out? How do I meet those 30% of hiring goals or the 10% of

contracting goals and the answer is here in part.

There’s some great information again on the Section 3 Website, HUD’s Website. These are just a

few of the examples that are provided but I’m sure there are others that many of you may have.

With regard to hiring and in fact training is one other way to demonstrate compliance. Some

grantees, some recipients and contractors in fact have entered into what is referred to as first-

source hiring agreements with organizations that represent Section 3 residents.

In other words, those’ll be the organizations they would turn to. To the extent they have a new job

opening, they would refer to that organization or that organization would refer persons to them

and they have some arrangement regarding that, perhaps even some way to qualify folks and

even better some way to train them for their position.



The other way some grantees and non-profits have demonstrated compliance with this

requirement is to sponsor or have referral source to local or state employment training programs,

workforce training programs that they can jointly work with in terms of providing information.

Another means to an end here also is to advertise, outreach, those sorts of terms you might use

out in the neighborhoods, the project areas where the projects are taking place with both

individuals as well as businesses and neighborhood organizations to do local advertising that

reaches their folks in the area to let them know about these opportunities for hiring, training or

contracting on these projects.

And finally some folks are actually now coordinating in a much more meaningful way their

economic development or workforce planning efforts at the local level with housing efforts.

In other words, they’re actually talking years in advance about how to coordinate programs that

are related to economic development and workforce training with a plan for housing projects and

other public construction projects so that those two types of programs can be most effective. In

terms of contracting, some of the ways to achieve the goal here.

Contracting of course is always going to be subject to both the federal as well as either state or

local depending on where there’s more stringent requirement so you will always have your own

procurement or purchasing standards and codes you will need to follow. Within those codes and

standards however, you can utilize things like a database or a registration list or there’s different

terms that are used.

Most of these are now online and local and state governments are using these to register

businesses sort of like your online version of the certification process and then those lists are

available when the grantee, subrecipient, developer, contractor needs to know who it can



potentially turn to to submit bid documents, to send bid announcements to and/or to team up with

the proposed for example on a specific project.

So using those types of registration lists and databases has proved to be very helpful. Many of

those already exist in some states, in particular and some of them again are also used jointly with

minority women business enterprise requirements.

The other obvious method as well in terms of contracting will be to utilize preferences and by

preferences what we mean is again you have to follow the federal-state-local procurement codes

and standards and requirements.

Within those standards and requirements to the extent you have written those and are adhering

to those, you may be able to utilize a system whereby a preference is provided for firms-

businesses that meet the Section 3 contractor definition and/or provide additional points or

additional linking in your process.

Whatever your process is depending on that procurement and the size of that contract, again

defaulting to your local, state and federal procurement codes but you can incorporate a

preference for a business that meets the Section 3 business definition. You may not be able to do

a preference based on specific geographic location of a business.

You certainly cannot usurp the equal opportunity requirements in the process but Section 3 itself,

meeting that definition and helping to demonstrate compliance with that requirement is allowed

under procurement requirements so that is the primary way on the contracting side to meet the

Section 3 requirements.

And one point I want to make on all of these hiring and contracting examples is that in no case is

any firm required to hire an otherwise unqualified person and in no case would a grantee or a



contractor-developer be required to enter into a contract or a subcontract with a business that

cannot fulfill the contract.

So you can still have your typical procurement procedures which require that a business

demonstrate its capacity, its financial capability, its experience, so forth and so on to demonstrate

that it does have the ability to fulfill the contract that you’re entering into so in no case do these

usurp those traditional business procedures.

One other obligation that recipients have with regard to Section 3 is to submit an annual report on

Section 3. I’ve been a bit surprised as I’ve trained across the country on these requirements that

some folks don’t even know this report is required or exists and I think you’re seeing sort of a

stepped-up enforcement from HUD on it and they’ve actually made it very easy for you to

complete.

You can actually complete the report and submit it online now through the Section 3 Website and

it’s giving you the link here again. The report is due annually. It would be due at the same time as

your annual performance report so those of you for example that are NSP-1 grantees that are

local state governments, that would be the same time as your caper, for example.

Now the report does indicate that it’s a quarterly report. You’ll just indicate that it’s Q4 or Quarter

4 when you complete it. Now the report is about two pages, two-and-a-half pages in length. It

requires a report on hires and how many of those hires would be Section 3 residents and what

types of positions and so forth.

It requires some information about Section 3 contracting and then finally sort of a narrative

description, a summary of those efforts and if those goals were not met, what were the issues

regarding not meeting the goals?



Talk about that a little bit more and I hope I’m not rushing through this but we’re getting close to

our time here which is that a lot of folks were saying that they may have been monitored recently

on this and felt a bit in the dark on Section 3 and I think the key is that you need to understand

that just like any of the other requirements, we need to document compliance.

We’ve got to demonstrate our efforts and so again those numerical goals are going to be the

standard that we would attempt to achieve. If those goals cannot be met, what were the

justifications for that? What were the other efforts that were taken?

Were there certain barriers that were encountered in terms of qualifications of persons or firms or

other market conditions and any other relevant information that can enable HUD to make a

determination. If you’re carrying out other training efforts and outreach efforts to businesses,

you’d want to note those in your documentation.

I think, Nicole, that is it. Here’s again just a general reference to the HUD Website. There’s a lot

of information there and a lot of really good samples, particularly from the public housing world

which I would also recommend to you.

If you’re a grantee that’s not very familiar with Section 3, the public and then the housing world is

very much so and there are some good samples of ways that they demonstrate compliance,

some of which are on the HUD Website so with that Nicole, I guess we need to get on to

questions because we don’t have a lot of time left.

Operator: We’ll take our first question from Delesa Parrish with the City of Lauderhill.

Delesa Parrish: Thank you. Good afternoon. I have a question regarding the American Disabilities Act.

When you have model units, are they subject to the public accommodation requirements and

when is the tailoring of the unit addressed, prior to or after the tenants?



Kelly Price: Mark, can I just throw that to you? Mark, are you still on the line? Okay, well, I’m sorry. I’m

going to have to maybe take this question offline because I wasn’t really prepared to talk about

ADA. Jason, is that something you can answer?

Jason Chang: No, not specifically, but if we can take that question offline we can certainly get the answer

back to you.

Delesa Parrish: Okay, I had two more parts to the question so should I also give those offline?

Jason Chang: Yeah, if they’re related to that.

Delesa Parrish: Yes, they are. Thank you.

Kelly Price: Thanks. Sorry about that.

Delesa Parrish: That’s okay. I had typed it in and they told me to call in.

Operator: We’ll take our next question from Denise Fletcher with Self-Help Enterprises.

Denise Fletcher: Question, can a non-profit qualify as a Section 3 business and if so, is it based on their

board of directors as far as ownership, if that’s one of the criteria, and then the second or third

question, is there a place where you can see the list of registered Section 3 businesses?

Kelly Price: I may take the last one first and go backwards if that’s okay with you. There is not a national

list of certified or registered Section 3 businesses if you will. That is really done down at the state

level and in few cases at the - excuse me, at the local level - and in a few cases at the state level

so unfortunately there is no national database or registry that I’m aware of.



As far as a non-profit being qualified as a Section 3 business, that is not envisioned in the current

definition in the regulations and I guess the question would be non-profits aren’t owned by

Section 3 residents.

They may be on the board but they’re not - they don’t have - an ownership stake. If they did, it

wouldn’t be a non-profit so I’m not sure that works but I want to defer to HUD because there are

some other...

Male: Yeah, my answer would be it just depends on how the non-profit is structured.

Denise Fletcher: Okay.

Male: If, you know, if the non-profit is structured in such a way that it fits within HUD’s definition of a

Section 3 business then yes that they would qualify. Now you know, there are a number of ways

in which non-profits out there and their ownership and the business structure of that non-profit is

made of so I couldn’t tell you generally and we would just take a look at it on a case-by-case

basis.

Kelly Price: Okay, so for that caller, if you have the specifics and I’d like just to mention through the ask-

a-question function on the NSP Help site, that would be the best tool for you in particular because

that’s a somewhat customized question for us to get a response back to you in a timely manner.

Thank you. That was a good question.

Operator: We’ll go next to Brenda Bailey with Okaloosa County Clerk of Courts. Ms. Bailey? Ms. Bailey,

your line is live.

Kelly Price: Lost her.



Operator: We’ll move on to Glenna Matekel with the State of Utah.

Glenna Matekel: Hi. I have two or three questions and maybe a couple of just statements with some

respect to some research that we have been doing in order to try and be in compliance with

Section 3.

It’s really high on our - in the forefront - of our minds right now because we’re undergoing a state

audit and the state auditors are looking very closely at compliance with Section 3 because I

guess that in the guidance tool from HUD, they’re being asked to look at that so it may be one

way that HUD is stepping-up their enforcement of Section 3.

Number 1, is the state considered the recipient, so the state’s - I’m from a state program - so the

state’s allocation of say six-and-a-half million dollars would be the first threshold being met. Is that

correct?

Kelly Price: Yes.

Glenna Matekel: Okay and so then from there, the subcontractor or the subrecipient would be whoever

we contracted funds to to carry out a project and of course, we only contract with jurisdictions -

county or city jurisdictions - and then they can sponsor another layer with a non-profit or a special

service district or something of that nature so the first threshold is met by the state’s allocation.

Kelly Price: Correct.

Glenna Matekel: The second threshold then is anything that exceeds the $100,000 mark.



Kelly Price: No, at that level, it’d be the $200,000 mark. They are covered under the term recipient and

again, I would refer you to the definition section of Part 135. There is a specific and long definition

of recipient but it does include subgrantees, subrecipients, developer, you know, it goes on and

on.

Glennan Matekel: All right, so initially I think we were interpreting that probably correctly. We were

looking at anything in excess of $200,000 and then the $100,000, beyond that. With respect to a

Section 3 business and/or a Section 3 resident, out here in the West we have large expanses of

geographical area and in our state program, we allocate our funds on a regional basis.

So if it’s a Section 3 business, would they have to be licensed in the city that is carrying out - that

the project - is being located in?

Kelly Price: I’ll just refer to Jason. I don’t know if this...

Jason Chang: Yeah, no, the business does not have to be local. The Section 3 regulations do provide for

preferences based on the geographic location but that doesn’t exclude outside firms from bidding

as a Section 3 business so long as they comply with the definition.

Glenna Matekel: To one of the definitions.

Jason Chang: Correct.

Glenna Matekel: Okay and...

Kelly Price: And again to the extent you demonstrate that you’ve made efforts as well and you were

unsuccessful because there weren’t terms available within a regional geographic distance that



made it cost-prohibitive, this documents those efforts and that would be in essence what I

referenced earlier as a barrier that you may have faced.

Glenna Matekel: Right.

Kelly Price: For your sub grantee.

Glenna Matekel: Okay and we would only count those that are in the non-metropolitan county if the

project was being carried out in a unincorporated portion of the county. Is that correct?

Jason Chang: Yes, whichever jurisdiction that the project is in.

Glenna Matekel: Okay.

Kelly Price: So with - that would typically be a non-metro.

Jason Chang: Right, so for western states, yes, a lot of them tend to be the non-metropolitan counties.

Glenna Matekel: Right, some counties that only have 1300 people in them I guess would be non-

metropolitan so of course, you know, the state auditor had their interpretations of what Section 3

was too and they want to issue findings based on their interpretation which I think right now

there’s a vast area of interpretation here and the report instructions are not very clear as well.

And so we have been filling-out the report for a couple of years just on the projects that we would

list the contracts that exceeded the $200,000 threshold and then reported whether there were any

new employment opportunities from those contracts.



And we gave her the contact information for the HUD headquarters office in D.C. and she called

and spoke to someone there. Of course we tried many times to have somebody talk to us but

they don’t call us back but the minute somebody says auditor behind their name, they call them

back.

So she said so kind of I was wrong in my interpretation and you were kind of wrong in your

interpretation and so two wrongs don’t make a right and so the interpretation apparently from

HUD headquarters is that you only report contracts that have expended those amounts of money

on your report.

Jason Chang: That’s correct.

Glennan Matekel: And so it’s not just - so we were reporting contracts that had been awarded in excess

of $200,000 but I guess you don’t report them until they actually expend...

Jason Chang: That’s correct. You know why that is is a lot of times especially in CDBG situations where

you get the award in FY 2010 but you don’t expend until 2011 or 2012 depending on the program

in which she gets the funds or that you spend it over three years and so we’re on our side we

know when the money goes out. We just don’t know when the money gets spent and that’s why

the reporting only requires for when the funds get expended.

Glenna Matekel: So for example, we just completed that report because our performance evaluation

report was due and it so as to be the B-09 award year. That’s what our award was called is B-09.

So in the past, our interpretation would be contracts that were funded from that award, from that

program year but really what we’re saying is yeah, we’re reporting for the ’09 program year but

we may be reporting on funds that were 2007 funds or 2008 funds because they’re now just being

expended.



Jason Chang: Right.

Glennan Matekel: So it really has - the report has - no relationship to the allocation that you got for the

2009 program year.

Jason Chang: Right, that’s correct. Really the report - what we want in the report - is sort of a continuing

snapshot of how the money is expended.

Glenna Matekel: And so up on the first page of the report, you have to write down what your allocation is

for that 2009 year that you’re reporting on but it really has no - that allocation - really has no

relationship to what you’re saying was expended on the report because you’re not really

expending 2009 money.

Is that correct, because there’s no way if you - especially if you - have a multi-year contract so the

first year, that contract’s $100,000. The second year say in 2008, your first year you award that’s

100,000 in 2007 so that doesn’t exceed the $100,000 mark.

The second year you use that same contract number with another $100,000 so you’ve exceeded

your $100,000 threshold but no money has been expended, then in 2009 you give that contract

another $100,000 and that’s when they start spending money because now they’ve got enough

money to actually carry out the project.

And so their instruction was you would not report on that money until they had actually expended

more than $100,000.



Jason Chang: That’s correct. In terms of the reporting, you know, if you haven’t expended, there’s

nothing to report on and so it’s a multi-year phased situation where you didn’t expend on the first

two years so you’d spend in the third year, that’s when you would report that.

Glenna Matekel: Okay. I’m kind of just making those statements because again, I think there’s a lot of

room to question what the report is really asking and the way that the questions are defined, it

really doesn’t say that. It really doesn’t...

Jason Chang: I think if you look at the online form of the Section 3 reporting form, it makes it a little bit

clearer and also if you’re on the Section 3 Website, you can contact the Section 3 office to get

more clarification in terms of what you would need to report that year.

Glenna Matekel: Because it actually says awarded, the total dollar amount of all construction contracts

awarded on the project so the project I guess by definition meaning your program year allocation?

Jason Chang: Yeah, I mean, I think they have for many things and how much you get awarded is one of

the things you get asked for but also we’re also interested in what was expended as well. I mean,

it’s not an either-or situation.

Glenna Matekel: Okay. We’ll leave it at that because they also said they know that this form leaves a lot

to be desired and apparently there’s some efforts going on to make it a better form and actually

ask the questions that they want answered and they weren’t unhappy with our report.

They said that probably that’s what they would expect to see from because they know the

demographics of the states and so forth but I was just making those statements in case there was

anybody else who has been confused by what they were actually supposed to be reporting,

because we’re being caught off-guard quite a bit by this form and what it wants and, you know,



the different things that we call ourselves and what we call the people we contact with and so

forth.

So that helps a lot with the questions I did ask and your answers so I’m done.

Operator: We’ll take our next question from Shameka Union with the City of Galveston. Shameka, your

line is live. Please go ahead.

Lloyd Stokes: Hello. My name is Lloyd Stokes. I’m attending the Webinar with Shameka and I had a

question about the procurement activities. Do the Section 3 requirements apply to the HUD

procurement activities?

Jason Chang: I’m sorry, as far as federal procurement activities or HUD funds that you are then

procuring? I’m not understanding your question.

Lloyd Stokes: Well, do they apply to the federal acquisition regulation system?

Jason Chang: Well, the part only applies to HUD’s procurement activities and not to HUD’s recipients.

Lloyd Stokes: Okay.

Kelly Price: Yeah, I mean, just to clarify, you have to of course follow your acquisition procurement

procedures but Section 3’s a separate requirement that you also have to comply with, so the two

have to be in pardon the expression sort of happily joined together and that can be done with the

right procurement standards and processes and so forth.

Lloyd Stokes: Okay. Thank you.



Operator: We’ll go next...

Kelly Price: I’m sorry, I didn’t mean to interrupt, operator. This is Kelly. I don’t know how long they want to

roll with questions or do we want to - Nicole, I will turn to you or Courtney.

Nicole Bouvier: Operator, can you tell us how many more questions we have?

Operator: There are three additional questions in the queue.

Nicole Bouvier: Okay, okay. Let’s do that. If it’s okay, we’ll go ahead with that.

Operator: We’ll take our next from Ken Horrillo with the City of Modesto.

Ken Horrillo: Yes, I have a question regarding where you can find - I’m in the central valley, central valley

California here - and I’m trying to find out any other Section 3 companies in the area or as a

location. We have kind of a hard time interacting with our local something’s here in the valley. Is

there a Website or is there a way of being able to find out where they are?

Nicole Bouvier: Again, no. Unfortunately, it’s a real localized sort of issue so to meet that definition that

we talked about earlier, the definition of a Section 3 business would be a business that is owned

by 51% or more of Section 3 residents or has a certain number of employees who are Section 3

residents or is a business who will then subcontract with Section 3 businesses and so that’s going

to be a very local issue.

My recommendation to you would be to take some of the other steps that we mentioned earlier in

one of the previous slides with regard to outreach to if you have a local economic development

agency, you might talk to your local public housing authority to see if they have contractors

they’ve used that are Section 3 that you might be able to add to your list to send solicitations to.



You may want to do some sort of public announcement outreach kind of advertisement type thing

but it is a very localized sort of case-by-case situation. Unfortunately, that may not be the answer

you wanted to hear but it’s really the only way to find out where these businesses exist and if in

fact they do actually qualify or can be certified as a Section 3 business.

Ken Horrillo: Now our local housing authority wouldn’t they be required to have a Section 3 list?

Nicole Bouvier: They’re not required to. Again, it’s not listed in the regulations as a requirement. It’s

something that’s just used in practice as a way to implement Section 3 but they’d be a very good

place I would start to find out who perhaps their Section 3 coordinator is or the person who does

some of their contracting and subcontracting.

They probably have created some sort of list and that might be a good place to start. You may

also want to refer to your state community development agency as well. They may have some

recommendations for you or some sort of statewide list.

Ken Horrillo: Okay, well thank you. I have an additional question regarding source of funding. If it’s

CDBG funding, if the activity is CDBG or NSP, one of the two, it doesn’t make any difference

what the source of funding is as long as it could be used to bring more Section 3 contractors to

the table, correct?

Nicole Bouvier: Right, but the regulations actually list the types of covered assistants, probably going to

be in housing being one and then various housing and community development programs of

which the home program, community development block grant and thus NSP are included in that

sort of lump of housing and community development programs.



So there is a wide range of HUD financial grant programs that are covered by Section 3 if you will

or trigger Section 3 compliance. Does that help?

Ken Horrillo: Yes, it does. Thank you.

Nicole Bouvier: Sure.

Operator: We’ll go next to Kathi Ranford with the City of Cincinnati.

Kathi Ranford: Good afternoon. You talked about for - and I appreciate the young lady’s comments about

the summary report - but what I wanted to know is is that our caper’s not usually done until the

end of March and we have been told that our summary report is due January the 10th. Is that a

conflict or because if we submit it at the time of caper, then it’s going to be late if the January 10th

date is what we’re supposed to go by.

Jason Chang: No, yeah, there’s been some confusion in the past in terms of what the due date is. If you

do have a case, an annual caper support, it would go in with the caper so it will be March. For

other jurisdictions though, January 10th is the deadline.

Kathi Ranford: I’m sorry, for what?

Nicole Bouvier: For other jurisdictions, January 10th has been a deadline but if you or I’m assuming for

NSP grantees that they have to submit an annual capers and it is when your caper is due.

Kathi Ranford: Okay, let me follow-up with a question, then. We - just NSP - but then we also have

CDBG, we have home funds. Are the turn-in dates different for each one of those funding sources

but we do our caper and all of those I think are included in that caper, all those funding sources?



Nicole Bouvier: No, they would not be different. I think what he’s saying is that if you submit a caper, then

that is your deadline. There are funded recipients from HUD that don’t submit a caper because

remember...

Kathi Ranford: Oh, okay, I didn’t know that.

Nicole Bouvier: ...well remember again, related to the last question a gentleman asked, there are a

number of programs that HUD provides assistance under that are covered by Section 3 like

public housing and public housing entities don’t submit a caper so, you know, so that’s why

there’s perhaps a misunderstanding and a difference there.

But if you submit a caper, I believe based on what you were saying is that that is in fact your

deadline and of course HOME and CDBG would be in the those other entitlement block grant

programs to be covered...

Kathi Ranford: Included in that caper report?

Nicole Bouvier: ...correct, yeah.


Kathi Ranford: So we should not get a finding if our ((inaudible)) is later than January the 10th?


Kathi Ranford: Okay, well, we’ll see.

Nicole Bouvier: You heard it here.



Kathi Ranford: Okay. I’m going to write that down, and I have another question that’s fairly long. I know

we don’t have a lot of time so I’d like to be able to have the opportunity to talk with someone

about that maybe offline.

Jason Chang: Yeah, I just want to use this opportunity. You can either submit the questions to the NSP’s

Website or you can also direct your question to the Section 3 office via e-mail which is

[email protected].

Kathi Ranford: Okay. I’ve done that. I’ve not had a response so I’ll try the NSP Website then. Okay.

Thank you very much. I appreciate it.


Operator: We’ll take our final question from Kristina Hayes with Anoka County.

Kristina Hayes: Hello. My question is kind of a clarification I guess on the thresholds. There isn’t just

really to determine who’s responsible for implementing Section 3. Is that correct?

Nicole Bouvier: Not really. I don’t know that I - and Jason certainly jump in here - I don’t know that I

would construe them that way. The initial threshold of course is the recipient threshold of

$200,000 so again all NSP-1 and NSP-2 grantees are going to be at that threshold.

Now again going back to the states, a question we had earlier, there may be another layer and

even another layer of which the dollar amounts may start to get smaller but you may have

subgrantees, developers, contract administrators, other parties that are participating in NSP right

now.



So you would continue to look at those grants to see if they meet the definitely of recipient which

the threshold there again is $200,000. Contractors - covered contractors - that’s where we get

into the $100,000 threshold but that is a shared responsibility.

This is not unlike any of the other what we call cross-cutting federal requirements that apply

under the HUD programs which is that unfortunately as a grantee, you never get to wash off

responsibilities or delegate fully to other entities.

So you are in effect always going to be covered by the requirements, always going to have to

demonstrate compliance. You’ll be the one collecting information, putting that into the report and

so forth.

Kristina Hayes: Okay, but even if...

Nicole Bouvier: I’m sorry, go ahead.

Kristina Hayes: Well, we as the recipient of the NSP funding, we have administrative contracts

specifically between like 40 and 60,000 so they’re still subject to Section 3 but we’re the only

ones that have the Section 3 like responsibility, correct, that they’ve been passed to the

contractor?

Nicole Bouvier: That’s right, it would stay with you at the recipient level and in fact there’s a special -

there’s language in the regulation - which speaks to that so if you met the $200,000 threshold but

don’t have any $100,000 or more covered contracts and again I refer you to that specific

definition, then the responsibilities stay at the recipient level.

Kristina Hayes: Okay, okay.



Nicole Bouvier: And you may not have any employment opportunities that arise from the assistance or

not. If you don’t, make sure you document that you didn’t and why so that it doesn’t, you know,

zeroes across the report are probably going to get more questions.

Kristina Hayes: Right, okay.

Nicole Bouvier: Jason, is there anything you would add to that?

Jason Chang: No, you said it perfectly.

Kristina Hayes: Okay, thank you very much.

Nicole Bouvier: Sure, sure.


Courtney Smith: Well, thank you everybody for your participation. I think that nearly wraps us up. We are

asking if you can take just a minute or two to fill-out an evaluation form to let us know if this was

helpful and that sort of thing, it would be really useful to us to continue to make these Webinars

as focused on your needs as we can. Anybody have anything else to add?

Nicole Bouvier: We’d just like to thank our presenters from ICF and from HUD and once again emphasize

that if you can take this evaluation, you can take it right through the Live Meeting site and that

would be great. We appreciate your feedback.

Male: And if you do have questions that we haven’t been able to answer, please submit those to the “ask

a question” box on the resource exchange at www.hud.gov/nspta. We can track them better that



way and we’re trying to get all our questions going through that system now so we’d appreciate

that. That way it won’t get lost. Thank you.

Nicole Bouvier: Thank you everybody for your participation.

Operator: And that does complete today’s Web seminar. We thank you for your participation and best of

luck with your NSP implementation.

END

icf international, inc. moderator: nicole bouvier july 13, 2010 1

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