Feds Let Puerto Rico Skip Rules to Speed Hurricane Recovery
Published Date: 4/17/2025
Notice
Summary
Puerto Rico is getting special permission to bend some usual rules to speed up disaster recovery using Community Development Block Grant funds. These changes help the island buy damaged properties and rebuild faster after major 2017 disasters. The new rules kick in on April 22, 2025, making recovery smoother and more flexible with federal money.
Analyzed Economic Effects
6 provisions identified: 4 benefits, 2 costs, 0 mixed.
Eminent domain allowed to buy damaged homes
Starting April 22, 2025, Puerto Rico's housing agency (PRDOH) may use an R3 Eminent Domain process to acquire disaster-damaged owner-occupied properties that do not have clear, registered title, but only if the owner-occupant voluntarily agrees to relocate, has a proprietary interest, and PRDOH has used best efforts to clear title and contact indispensable parties.
Relocation assistance and compensation rules
Program participants will receive relocation assistance to acquire a replacement property and just compensation at least equal to PRDOH's determination of fair market value (PRDOH-determined FMV) attributable to their proprietary interest; PRDOH must base the FMV on a third-party appraisal completed no more than 12 months before the written agreement. PRDOH will not file an eminent domain action until the participant has obtained a replacement property and PRDOH has provided required compensation, and if a court awards more than the PRDOH-determined FMV, PRDOH must provide the additional amount.
Forgivable lien allowed on replacement homes
Under the R3 program PRDOH may place a forgivable lien on a participant's replacement property that is equal to or less than the difference between the replacement property's cost and the PRDOH-determined FMV attributable to the participant's interest in the disaster-damaged property.
One-for-one replacement requirement waived
HUD waives the one-for-one replacement housing requirements in section 104(d) of the Housing and Community Development Act for properties purchased and demolished through the R3 Eminent Domain process, so properties obtained under this process are not required to be replaced one-for-one under 24 CFR 42.375.
Eminent domain counted as eligible acquisition
HUD waives the HCDA section 105(a)(1) definition of acquisition so that purchases made through the R3 Eminent Domain process are considered eligible CDBG-DR acquisition activities for properties acquired under the R3 Program.
Tenant protections preserved for acquired properties
HUD requires PRDOH to continue providing tenants of disaster-damaged properties acquired through the R3 Eminent Domain process with all required URA and CDBG tenant protections, including written notices, advisory services, and replacement housing assistance payments as set out in 49 CFR part 24 and 24 CFR 570.606 (as amended by waivers).
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