ments and standards governing the Housing Assistance Plan (HAP).

(1) Purpose. The HAP is required as part of the application for assistance. under this Part. The HAP serves as a measure of the conditions of the applicant's housing stock and the needs of lower (low and moderate) income persons for housing assistance. Further, the HAP serves to establish goals for assistance best suited to meet the needs of lower income persons and to further the revitalization of the community, including the restoration and rehabilitation of stable neighborhoods to the maximum extent possible, and the reclamation of the housing stock where feasible through the use of a broad range of techniques for housing restoration by local government, the private sector, or community organizations, including provisions of a reasonable opportunity for tenants displaced as a result of such activities to relocate in their immediate neighborhood. The HAP must propose general locations for assisted housing which promote greater choice of housing opportunities and avoid undue concentrations of assisted persons in areas containing a high proportion of lower-income persons, and which further fair housing and assure the availability of public facilities and services adequate to support housing facilities. In addition, all communities are expected to share in providing expanded housing opportunities for lower-income persons and to participate in areawide solutions of housing problems through promotion of spatial deconcentration of housing opportunities for lower income per

sons.

(2) Use. The HAP is not only a requirement for assistance under this Part, but it serves as the means for HUD to distribute assisted housing resources to applicants. The HAP offers applicants a means to implement strategies to conserve and expand its housing stock in order to provide a decent home in a suitable living environment for all persons, but principally those of lower income. The HAP should facilitate the reduction of the isolation of income groups within communities and geographic areas, affirmatively further fair housing and pro

.

mote the diversity and vitality of neighborhoods.

(3) Responsibility of applicant. Applicants are responsible for implementation of the housing assistance plan in an expeditious manner. This includes the timely achievement of all goals for assisted housing and particularly those which address the needs of families and large families requiring rental assistance. Applicants are expected to take all actions within their control to facilitate the implementation of an approved housing assistance plan including those actions specified in §§ 570.306(b)(3)(iii) and (b)(4)(ii), as well as the development of Section 8 housing when notifications of funding availability are not responded to by private developers.

(4) Period covered by HAP. The HAP shall be submitted and be effective for time periods as follows:

(i) Housing Assistance Plans submitted to HUD after the publication date of these regulations but prior to August 1, 1978 shall be designed to complete the requirement that housing assistance provided pursuant to the three-year goals set forth in the HAP approved during 1976 shall have been provided in the same proportion as those goals by houshold type (elderly and handicapped, families and nonelderly individuals, and large families). Accordingly, applicants shall submit an annual housing action program pursuant to § 570.306(b)(4) which will propose goals for housing assistance to be provided in Federal Fiscal Year 1979 which, when combined with all housing assistance provided in FFY 1977 and 1978 will result in the provision of housing assistance in the same proportion as the three year goals, by household type, set forth in the HAP submitted in 1976. For the purposes of 24 CFR 891, the three-year goal for HAP's submitted prior to August 1, 1978 is the three-year goal submitted in the 1976 HAP including any amendments thereto. For example, an applicant which has provided housing assistance primarily for elderly households during FFY 1977 and 1978 is expected to establish goals this year in the annual housing action program for families and large families so that as

sistance provided during FFY 1977, 1978 and 1979 will be in the same proportion, by household type, as the 1976 three-year goal. In addition, the applicant shall identify general locations for new construction and substantial rehabilitation units or projects. For HAP's submitted prior to August 1, 1978, general locations shall be applicable to the housing assistance goals as described above in this paragraph; however, the requirements for identifying such locations are set forth in § 570.306(b)(3)(ii). Unless there have been substantial changes in the housing conditions and housing assistance needs, an applicant is required to submit only an annual goal and the general locations for proposed new construction and substantial rehabilitation.

(ii) Housing Assistance Plans submitted after August 1, 1978 shall be submitted once every three years as described in § 570.306(b) and shall cover a three year period. However, each annual application shall include an annual housing action program. Although some revision and updating may be necessary during this period because of the availability of new data sources or significant changes in local conditions or needs, the HAP shall be in effect for three program years. A new HAP shall be submitted every third program year thereafter.

(iii) A Hold Harmless Entitlement applicant cubmitting a HAP after August 1, 1978, but not proposing to apply for a grant under Subpart F of these regulations during its phase out year, is subject to this section except that the establishment of a three-year numerical goal as described in § 570.306(b)(3)(i) is not applicable.

(5) Relationship to previously approved HAP's. (Effective August 1, 1978.) Applicants are not relieved of their responsibilities to continue to address goals established to meet the needs for assisted housing identified in prior program years. Accordingly, applicants who had approved component goals designed to address the needs of a particular tenure type (owner or renter), houshold type, (elderly and handicapped, family and non-elderly individuals, or large family), or hous

ing type (existing, substantial rehabilitation, or new construction), or any combination of the above, which have not been substantially met, shall include goals to meet such needs prior to providing further assistance for tenure, household, or housing types for which established goals have been substantially met. For example, an applicant which has identified a substantial need, and established goals for families and large families, but nonetheless has met only the goals or a substantial portion of the goals, established for elederly households shall meet the goals established for families and large families before providing additional assistance to elderly households.

(b) Housing Assistance Plan Content. The application shall contain a housing assistance plan which includes:

(1) Housing Conditions. The applicant shall describe the condition of the existing housing stock in the community by providing a statistical profile by tenure type (owner and renter), which describes housing conditions by number of units in standard and in substandard condition. If a housing rehabilitation program is proposed as part of the applicant's strategy statement as set forth in §570.304(b), the number of units which are suitable for rehabilitation shall be stated. Estimates shall be made of vacancy rates for non-seasonal available units in standard condition, using the best estimate at the time the application is prepared, but in no case including units to be vacant at a future date.

(2) Housing Assistance Needs. The applicant shall describe the housing assistance needs of lower income per

sons.

The data for such description generally shall be derived from Federal census data; except that the applicant may also utilize other more recent data generally available from public or private sources, including areawide, regional, or State planning agencies; provided that the deviations from estimates derived from the Federal census data or from areawide, regional, or State planning agency assessments are explained. All applicants which are

within the jurisdiction of an areawide planning organization having an approved Areawide Housing Opportunity Plan (AHOP) must use the data presented in the Plan. Applicants which are within the jurisdiction of an areawide planning organization which does not have an approved AHOP should use the same census, areawide, or State data unless more recent, generally available data exist for an individual applicant.

(i) The applicant shall provide estimates of housing assistance needs of lower-income persons currently residing in the community, by tenure type and by household type (lower-income households which are elderly and handicapped, families and non-elderly individuals, and large families), for all households, including those households to be displaced by public action and, where information is available, by private action during the three year program. Such estimates shall also be provided for any identifiable segment of the total group of lower-income households in the community.

(ii) The applicant shall assess the housing assistance needs of lowerincome households (by household type for all households and all minority households), who could reasonably be expected to reside in the community.

(A) (Effective August 1, 1978.) An applicant community in a metropolitan area shall utilize the following methodology to derive the minimum estimate of the number of lowerincome households who could be expected to reside in the applicant community during the three year period of applicability of the HAP. First, the metropolitan area percentage of lowerincome households shall be determined using Section 8 Income Limits. Second, the total number of households in the applicant's jurisdiction shall be determined. Third, the total number of households from step two shall be multiplied by the percentage from step one, the product of which is the total required number of lowerincome households. Fourth, the number of lower-income households currently residing in the applicant's jurisdiction shall be determined. Fifth, the number of lower-income house

holds currently residing from step four shall be subtracted from the total required number of lower-income households produced in step three, the remainder of which is to be divided by one minus the metropolitan area percentage of lower-income households, the result being the gross estimate of the number of lower-income households expected to reside in the applicant community. Sixth, applicants shall then determine the estimate of the number of lower-income households who reasonably may be expected to reside by multiplying the gross estimate of the number of lower-income households expected to reside by onethird. This estimate of the number of lower-income households who reasonably may be expected to reside shall be cited in the applicant's assessment of the overall housing assistance needs of lower-income households. An applicant with a gross estimate of the number of households expected to reside of zero as a result of the fifth step in the above methodology is not required to set forth a housing need for an additional number of lowerincome households expected to reside. An applicant obtaining a negative gross estimate as a result of the fifth step shall record the gross estimate of the number of households expected to reside as a zero.

EXAMPLE

Step 1. SMSA Y Lower Income Household Percentage: 40 percent.

Step 2. City W Total Number of Households currently residing: 5,000.

Step 3. City W Total Number of Households Currently Residing > SMSA LowerIncome Household Percentage=Total required number of lower-income households: 5,000×40%=2,000.

Step 4. City W Total Lower-Income Households Currently Residing: 1,000.

Step 5. (City W Total required number of lower-income households City W LowerIncome Households Currently Residing)/(1 SMSA

Lower-Income

Households of Lower

Percentage) = Gross Estimate Income Households. Expected to Reside: (2,000 1000)/(1 40%)=1,000/60%=1,667.

Step 6. City W gross estimate of the number of lower-income households expected to reside/3=the estimate of the number of lower-income households who reasonably may be expected to reside 1,667/3=556.

(B) An applicant in a nonmetropolitan area, for which relevant Federal census data are not available, shall submit its best estimate of the number of lower-income households who reasonably could be expected to reside in the community, based on data generally available from Federal, State, areawide, or local sources.

(iii) Use of alternative methodologies for determining estimates of lowerincome households expected to reside developed by State or areawide planning organizations; (Effective August 1, 1978.) HUD may, at its option, determine that a State or an areawide planning organization has developed an alternative methodology for one or both of these elements which evidences compliance with the objectives of this Part and is a more precise means to measure such needs within the specific geographic area of its jurisdiction. The basis for such determinations are set forth in 24 CFR Part 891, Subpart E. Having so determined, HUD may, at its option, authorize the use of such methodology, in lieu of the methodology set forth in § 570.306(b)(2)(ii), by all applicants within the jurisdiction of such areawide planning organizations.

(A) HUD shall inform all affected applicants, by publication of a Notice in the FEDERAL REGISTER, of those State or areawide planning organizations where an alternative methodology has been approved by HUD and whether such methodology will be used in lieu of the methodology set forth in § 570.306(b)(2)(ii).

(B) In determining whether an alternative methodology developed by a State or an areawide planning organization is to be used in lieu of a methodology set forth in this Part, HUD will consider whether such alternate methodology provides the estimates required to meet the standards of acceptability set forth in paragraphs (b) and (c) of this section and is statistically and mathematically sound.

(C) HUD shall monitor the estimates developed through an approved State or areawide planning organization alternative methodology. Although areawide organizations are encouraged to develop methodologies which are

innovative in scope and suited to the circumstances of the jurisdiction of the areawide planning organizations, HUD may withdraw approval of or require modification of an alternative methodology which is determined to produce estimates which are plainly inconsistent with the objectives of this Part.

(iv) In addition, the applicant shall provide a narrative statement which summarizes any special housing conditions in the community and special housing needs found to exist in the total group of lower-income households in the community. Such summary shall include but need not be limited to, discussion of:

(A) Female heads of households;
(B) Individual minority groups;
(C) Handicapped persons;

(D) Special housing conditions such as concentrations of mobile homes; and

(E) Special housing needs related to a community's economic base such as military housing, migrant workers, and retirement centers.

(3) Three Year Housing Program. (Effective August 1, 1978 except as provided for paragraph (ii) in § 570.306(a)(4)(i).) The applicant shall describe a three year housing program for implementation of its communty development and housing strategy:

(i) Goals. The program shall specify, by tenure type, household type, and housing type, a realistic three year goal for the number of dwelling units or persons to be assisted. The statement of the three year goal for assisted dwelling units also shall take into consideration housing conditions with respect to the availability of existing units of standard quality and units suitable for rehabilitation and shall meet the standards set forth in § 570.306(c)(1).

(ii) General Locations. The program shall identify the general locations of proposed new construction housing units or projects, and substantial rehabilitation units or projects, for the programs subject to 24 CFR 891 and, to the extent feasible, other assisted housing programs identified in the goals for lower-income persons on maps as called for in § 570.304(d). The

locations shall be identified by census tract (or enumeration districts or geographic quadrants in those jurisdictions where a census tract includes a substantial area, such as an entire community). General locations for housing projects shall contain at least one site which conforms to the site and neighborhood standards established for the appropriate HUD assisted housing program. Where an applicant proposes assisted housing resources in areas of concentration of minorities or federally assisted housing, general locations outside of such areas also shall be proposed in order to ensure the provision of assisted housing in a balanced manner.

(iii) Actions to be taken. The program shall describe those actions which will be necessary for the applicant to take to address any special housing needs and conditions cited in § 570.306(b)(2)(iv), as well as any actions determined necessary, on the basis of findings of past performance reviews pursuant to Subpart O of these regulations, to achieve the housing assistance goals, and shall set forth a timetable for such actions. In addition, applicants anticipating difficulty in achieving goals in newly prepared HAPs shall set forth action required to achieve those goals. The actions may include, but are not limited to: (A) Acquisition of sites and provision of site improvements for the development of assisted housing; (B) adoption or modification of local ordinances and land use measures to facilitate the development of assisted housing including institution of local referendum actions, where necessary; (C) issuance of appropriate zoning changes, building permits, utility connections and similar administrative requirements; (D) formation of a local housing authority or execution of an agreement with a housing authority having powers to provide assisted housing within the jurisdiction of the applicant; (E) removal of local residency preferences for assisted housing; (F) promotional and assistance activities to encourage developers to initiate assisted housing or to allocate a portion of their planned unsubsidized developments for assisted housing,

and to encourage owners to make units available for Section 8 existing housing programs; and (G) measures to reduce the cost of housing development, such as tax abatement, waiver of fees and other administrative costs.

(4) Annual Housing Action Program. For each program year as part of the annual submission, the applicant shall describe a program of actions to carry out each program year increment in order to achieve the three year housing program. The annual action program shall:

(i) Specify, by tenure type, household type, and housing type, a realistic annual goal for the number of dwelling units or persons to be assisted, including the relative proportion of new, rehabilitated, and existing units best suited to the needs of lower-income persons indentified by the applicant; and

(ii) Set forth specific actions, if any, to be undertaken during the program year to assure the implementation of the three-year housing program including those actions described in paragraph (b)(3)(iii) of this section.

(c) Standards and criteria for approval of HAPS. The following standards and criteria shall apply to the reviews and determinations of acceptability of housing assistance plans and shall be effective as of the date of publication of these regulations except as otherwise noted:

(1) Goals for assisted housing-(i) Proportionality. The three year housing assistance goals shall address the needs of the three household types (elderly and handicapped, families and non-elderly individuals, and large families) within each tenure type (owner and renter) in the same proportion as the total lower-income housing needs identified in the HAP, of those household types, by tenure type. Certain adjustments to this requirement are permitted as follows.

(A) HUD may grant an exception from this requirement when an applicant document special needs arising from displacement of significant numbers of households of a particular size; natural disasters; meeting the housing requirements of section 105 (f) and (h) of the U.S. Housing Act of 1949, as