Failure to comply with mandates could lead to loss of federal housing funds
By Gerard Lavery Lederer and Drew Clark.
Recognizing that we are in the age of connectivity, the U.S. Department of Housing and Urban Development has proposed requirements for broadband accessibility in federally funded, multi-family housing projects and mandate local governments include broadband access as part of the master planning for federally funded facilities.
The predicate for HUD’s actions can be found in a White House report on broadband growth, which found that 93 percent of families with incomes of more than $100,000 in 2013 had high-speed Internet access at home, compared to just 43 percent of households making less than $25,000.
To bridge this divide and expand broadband access to low-income Americans, HUD has proposed two mandates for local jurisdictions to evaluate the availability of and install broadband infrastructure in the housing it funds. Ultimately, the responsibility to tackle digital inclusion issues will fall on state and local governments that are engaged in efforts to bring more community members into the digital age.
“By ensuring that future HUD-funded properties are broadband ready, we are making long-term investments in the 21st Century global economy that go beyond modems and laptops,” HUD Secretary Julián Castro said in a press release. “We want to give our residents and their children the opportunity to bridge the digital divide by connecting to the world of opportunity.”
The first proposed mandate would require the installation of broadband infrastructure in most new construction of multi-family housing projects being funded by HUD. This infrastructure install proposal would also apply to developments being substantially rehabilitated. A substantial rehabilitation has been defined by HUD as electrical-system work greater or equal to 75 percent of replacing the entire electrical system.
The proposal builds upon HUD’s ConnectHome program — an initiative implemented in 28 communities across the nation aimed at extending broadband access to families in HUD-assisted housing. Through the initiative, service providers and nonprofits offer no- and low-cost broadband access, as well as technical training, digital literacy programs and electronic devices to residents.
Under the second proposed mandate, state and local governments would be obligated to assess the broadband needs of low- and moderate-income residents and documented their efforts to meet these needs as part of their “Consolidated Plan” – an obligation for HUD funding eligibility. The result will not only be the mandate of the new expanded Consolidated Plan, but the obligation that municipalities include broadband access in their planning and decision making on how and where to invest future HUD funds.
Additionally, the rule would have local governments consider the vulnerability and resilience of a housing development occupied by low- and moderate-income residents to natural hazard risks. This proposal sees jurisdictions planning ahead to reduce the impacts of climate change on residents living in HUD housing.
Broadband Infrastructure Directive
The recommended mandate defines broadband infrastructure as cables, fiber optics, wiring and permanent infrastructure, such as wireless, that supports high-speed Internet in each unit and meets current Federal Communications Commission broadband definition standards of downloads at 25 megabits per second and 3 megabits a second uploads — regardless of whether Internet providers offer such access in the area.
With the FCC reevaluating broadband benchmarks every few years, these HUD rule changes would be altered on a rolling basis to mirror commission standard updates.
HUD’s proposal would require broadband infrastructure be installed in new construction or significant revamps of housing in the following 10 programs:
- Choice Neighborhoods Implementation Grant
- Community Development Block Grant
- Continuum of Care
- HOME Investment Partnerships
- Housing Opportunities for Persons with AIDS
- Housing Trust Fund
- Project-based Voucher
- Public Housing Capital Fund
- Section 8
- Supportive Housing for the Elderly and Persons with Disabilities Program
This excludes multi-family rental housing that has a mortgage insured by HUD’s Federal Housing Administration or developments with loans under a HUD load guarantee program.
The installation of broadband infrastructure is considered common practice by HUD. According to the Federal Register notice, a recent survey by the National Association of Homebuilders found that, in the last 12 months, only 4 percent of surveyed multi-family housing developers did not install landline wires and jacks in rental units. As such, HUD seeks to codify the usual private-market practice.
However, HUD has acknowledged instances where installing infrastructure may not be feasible due to location and structural issues. Bringing broadband services to rural areas, for example, poses challenges given rural systems contend with lower household densities than urban areas. The Department notes that not all retrofit projects are equal and investing in broadband systems could be impractical. In these cases, program recipients will be responsible for justifying the infeasibility.
To give HUD-fund receiving developers time to factor in the installation of broadband, the Department would apply the rule changes to projects with unestablished budgets and funding not yet approved.
Although no new funding is proposed for either mandate, the rule change would make costs for such federally directed actions recoverable under a sizeable array of HUD funding programs. HUD has not specified costs for installing high-speed Internet infrastructure, given the wide range of technologies that can be used to fulfill the requirement and scope of development projects or rehabilitations.
Public comments to the proposed mandates are currently under review by HUD.
For more in-depth coverage examining the issues of digital inclusion in public housing and the role local governments play in creating access to broadband services, check out Best Best & Krieger’s Legal Alerts on the FCC’s Lifeline Order, HUD broadband proposals and E-Rate funding for city-owned connections.
Gerard Lavery Lederer is a partner in Best Best & Krieger LLP’s Municipal Law practice group. He is one of the nation’s leading experts on marketplace solutions for the integration of technology into commercial real estate. Mr. Lederer is the author of Critical Connections and Wired for Profit, two leading guides on the integration of telecommunications technology into office buildings. He can be reached at email@example.com.
Drew Clark practices at the intersection of telecommunications, policy and the law. As of counsel to Best Best & Krieger LLP’s Municipal Law practice group, Drew puts his experience to work for public agencies in the areas of Internet technology, broadband deployment and intellectual property by drafting and negotiating contracts and addressing legal and policy issues. He can be reached at firstname.lastname@example.org.