Title 42, The Public Health and WelfareRelease 119-110
§1437z–5 Required Conversion of Distressed Public Housing to Tenant-based Assistance
Title 42 › CHAPTER 8 — LOW-INCOME HOUSING › SUBCHAPTER I — GENERAL PROGRAM OF ASSISTED HOUSING › § 1437z–5
Summary
Public housing agencies must find all of their housing projects on the same or contiguous sites that they decide are "distressed" under rules the HUD Secretary sets (which look at the August 1992 National Commission report). A project is covered if the agency cannot make it viable as public housing with reasonable fixes, density changes, or income-mixing, or if keeping and modernizing it would cost more over its remaining life than giving the current families tenant-based rental help. Agencies must talk with the residents and the local government when they pick these projects. Agencies must make and carry out a 5-year plan, with HUD, to take identified projects out of their public-housing stock and contracts. The plan must be part of the agency’s overall housing plan, certified as fitting the local housing strategy, and describe any sale or demolition plans. HUD can extend the deadline by up to 5 more years, can force changes if an agency misses or misidentifies projects, and can stop an agency from spending more on a project while HUD decides (unless the spending is needed for health or safety). If Congress provides the money, HUD can give funds to the agency so families can get tenant-based assistance. Agencies must give families 90 days’ notice before displacement (except for dangerous emergencies), offer comparable housing that meets quality standards (including tenant-based or project-based help, or another agency unit at a similar rent), provide counseling, pay reasonable moving costs, and allow residents to stay and use tenant-based help for their unit if the building remains housing. HUD may move funds that were set aside for modernization or reconstruction of the project to tenant-based help or approved site work. HUD can require information from agencies and may remove projects itself if agencies fail to act. Section 1437p does not apply to demolitions done under these rules.
Full Legal Text
Title 42, §1437z–5
The Public Health and Welfare, Source: USLM XML via OLRC
(a)Identification of units
Each public housing agency shall identify all public housing projects of the public housing agency that meet all of the following requirements:
(1)The project is on the same or contiguous sites.
(2)The project is determined by the public housing agency to be distressed, which determination shall be made in accordance with guidelines established by the Secretary, which guidelines shall take into account the criteria established in the Final Report of the National Commission on Severely Distressed Public Housing (August 1992).
(3)The project—
(A)is identified as distressed housing under paragraph (2) for which the public housing agency cannot assure the long-term viability as public housing through reasonable modernization expenses, density reduction, achievement of a broader range of family income, or other measures; or
(B)has an estimated cost, during the remaining useful life of the project, of continued operation and modernization as public housing that exceeds the estimated cost, during the remaining useful life of the project, of providing tenant-based assistance under section 1437f of this title for all families in occupancy, based on appropriate indicators of cost (such as the percentage of total development costs required for modernization).
(b)Consultation
Each public housing agency shall consult with the appropriate public housing residents and the appropriate unit of general local government in identifying any public housing projects under subsection (a).
(c)Plan for removal of units from inventories of PHAs
(1)Development
Each public housing agency shall develop and carry out a 5-year plan in conjunction with the Secretary for the removal of public housing units identified under subsection (a) from the inventory of the public housing agency and the annual contributions contract.
(2)Approval
Each plan required under paragraph (1) shall—
(A)be included as part of the public housing agency plan;
(B)be certified by the relevant local official to be in accordance with the comprehensive housing affordability strategy under title I of the Housing and Community Development Act of 1992; and
(C)include a description of any disposition and demolition plan for the public housing units.
(3)Extensions
The Secretary may extend the 5-year deadline described in paragraph (1) by not more than an additional 5 years if the Secretary makes a determination that the deadline is impracticable.
(4)Review by Secretary
(A)Failure to identify projects
If the Secretary determines, based on a plan submitted under this subsection, that a public housing agency has failed to identify 1 or more public housing projects that the Secretary determines should have been identified under subsection (a), the Secretary may designate the public housing projects to be removed from the inventory of the public housing agency pursuant to this section.
(B)Erroneous identification of projects
If the Secretary determines, based on a plan submitted under this subsection, that a public housing agency has identified 1 or more public housing projects that should not have been identified pursuant to subsection (a), the Secretary shall—
(i)require the public housing agency to revise the plan of the public housing agency under this subsection; and
(ii)prohibit the removal of any such public housing project from the inventory of the public housing agency under this section.
(d)Conversion to tenant-based assistance
(1)In general
To the extent approved in advance in appropriations Acts, the Secretary shall make budget authority available to a public housing agency to provide assistance under this chapter to families residing in any public housing project that, pursuant to this section, is removed from the inventory of the agency and the annual contributions contract of the agency.
(2)Conversion requirements
Each agency carrying out a plan under subsection (c) for removal of public housing dwelling units from the inventory of the agency shall—
(A)notify each family residing in a public housing project to be converted under the plan 90 days prior to the displacement date, except in cases of imminent threat to health or safety, consistent with any guidelines issued by the Secretary governing such notifications, that—
(i)the public housing project will be removed from the inventory of the public housing agency; and
(ii)each family displaced by such action will be offered comparable housing—
(I)that meets housing quality standards; and
(II)which may include—
(aa)tenant-based assistance, except that the requirement under this clause regarding offering of comparable housing shall be fulfilled by use of tenant-based assistance only upon the relocation of such family into such housing;
(bb)project-based assistance; or
(cc)occupancy in a unit operated or assisted by the public housing agency at a rental rate paid by the family that is comparable to the rental rate applicable to the unit from which the family is vacated.
(B)provide any necessary counseling for families displaced by such action;
(C)ensure that, if the project (or portion) converted is used as housing after such conversion, each resident may choose to remain in their dwelling unit in the project and use the tenant-based assistance toward rent for that unit;
(D)ensure that each displaced resident is offered comparable housing in accordance with the notice under subparagraph (A); and
(E)provide any actual and reasonable relocation expenses for families displaced by such action.
(e)Cessation of unnecessary spending
Notwithstanding any other provision of law, if, in the determination of the Secretary, a project or projects of a public housing agency meet or are likely to meet the criteria set forth in subsection (a), the Secretary may direct the agency to cease additional spending in connection with such project or projects until the Secretary determines or approves an appropriate course of action with respect to such project or projects under this section, except to the extent that failure to expend such amounts would endanger the health or safety of residents in the project or projects.
(f)Use of budget authority
Notwithstanding any other provision of law, if a project or projects are identified pursuant to subsection (a), the Secretary may authorize or direct the transfer, to the tenant-based assistance program of such agency or to appropriate site revitalization or other capital improvements approved by the Secretary, of— (1)
(2)in the case of an agency receiving public housing modernization assistance by formula pursuant to such section 1437l of this title, any amounts provided to the agency which are attributable pursuant to the formula for allocating such assistance to such project or projects;
(3)in the case of an agency receiving assistance for the major reconstruction of obsolete projects, any amounts obligated by the Secretary for the major reconstruction of such project or projects pursuant to section 1437c(j)(2) of this title, as in effect immediately before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998; and
(4)in the case of an agency receiving assistance pursuant to the formulas under section 1437g of this title, any amounts provided to the agency which are attributable pursuant to the formulas for allocating such assistance to such project or projects.
(g)Removal by Secretary
The Secretary shall take appropriate actions to ensure removal of any public housing project identified under subsection (a) from the inventory of a public housing agency, if the public housing agency fails to adequately develop a plan under subsection (c) with respect to that project, or fails to adequately implement such plan in accordance with the terms of the plan.
(h)Administration
(1)In general
The Secretary may require a public housing agency to provide to the Secretary or to public housing residents such information as the Secretary considers to be necessary for the administration of this section.
(2)Applicability of section 1437p
section 1437p of this title shall not apply to the demolition of public housing projects removed from the inventory of the public housing agency under this section.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
Title I of the Housing and Community Development Act of 1992, referred to in subsec. (c)(2)(B), is title I of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3681. For complete classification of title I to the Code, see Tables. section 1437l of this title, referred to in subsec. (f)(1), (2), was repealed by Pub. L. 105–276, title V, § 522(a), Oct. 21, 1998, 112 Stat. 2564. section 503(a) of the Quality Housing and Work Responsibility Act of 1998, referred to in subsec. (f)(1), (3), is section 503(a) of Pub. L. 105–276, which is set out as an
Effective Date
of 1998 Amendment note under section 1437 of this title.
Statutory Notes and Related Subsidiaries
Effective Date
Section effective and applicable beginning upon Oct. 1, 1999, except as otherwise provided, with provision that Secretary may implement section before such date except to extent otherwise provided, see section 503 of Pub. L. 105–276, set out as an
Effective Date
of 1998 Amendment note under section 1437 of this title. Transition Pub. L. 105–276, title V, § 537(c), Oct. 21, 1998, 112 Stat. 2592, provided that: “(1) Use of amounts.—Any amounts made available to a public housing agency to carry out section 202 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 (enacted as section 101(e) of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Public Law 104–134; 110 Stat. 1321–279)) [former 42 U.S.C. 1437l note] may be used, to the extent or in such amounts as are or have been provided in advance in appropriation Acts, to carry out section 33 of the United States Housing Act of 1937 [42 U.S.C. 1437z–5] (as added by subsection (a) of this section). “(2)
Savings Provision
.—Notwithstanding the
Amendments
made by this section [enacting this section and repealing provisions set out as a note under section 1437l of this title], section 202 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 (42 U.S.C. 14371 [1437l] note) and any
Regulations
implementing such section, as in effect immediately before the enactment of this Act [Oct. 21, 1998], shall continue to apply to public housing developments identified by the Secretary or a public housing agency for conversion pursuant to that section or for assessment of whether such conversion is required prior to enactment of this Act.”
Reference
Citations & Metadata
Citation
42 U.S.C. § 1437z–5
Title 42, The Public Health and Welfare
Last Updated
Sep 22, 2026
Release point: 119-110