Section 1.3: Special Considerations for Projects Involving Property Acquisition and Rehabilitation

Davis-Bacon Wage Requirements

Davis-Bacon Wage Requirements apply only to SRO component projects with nine or more assisted housing units. These requirements establish the prevailing wages to be paid and the documentation to be maintained for contractors and subcontractors working on Federally-assisted construction projects.

Davis-Bacon applies to these S+C/SRO projects even though the grant funds are used only after completion of the rehabilitation, because the S+C/SRO funding is seen as enabling the project to occur. Of course, the use of other Federal resources such as HOME or CDBG in the rehabilitation would likely by themselves trigger the Davis-Bacon requirements.


The S+C program is subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 - see Section 582.335 of the S+C regulations. Federal relocation requirements state that any person who moves as a direct result of acquisition, rehabilitation or demolition for a Federally-assisted project (whether or not HUD funded the acquisition, rehabilitation or demolition) is entitled to relocation assistance.

HUD encourages S+C grantees to minimize displacement of individuals, families, businesses, or non-profit organizations as a result of rental assistance provided under the S+C program. Relocation of residents from a property to be used for a S+C project can be costly and time-consuming. Any grantee considering a property that would require relocation should carefully assess the expense associated with this undertaking, prior to application submission. The costs associated with relocation cannot be paid for with the S+C grant money.

S+C units must be vacant in order to receive rental assistance, but do not have to be vacant at the time of application.

It is important to provide occupants of units that are being proposed for acquisition, rehabilitation, or demolition as part of the S+C application with timely informational notices regarding their relocation rights, including a general information notice to be sent at the time the grant application is submitted to HUD.

Environmental Review

All of HUD's competitive homeless assistance programs, including S+C, are subject to the National Environmental Policy Act (NEPA). S+C grant recipients must have an environmental review completed and approved by HUD before spending S+C funds.

Complete environmental reviews are required for all S+C projects involving acquisition, rehabilitation or new construction - typically PRA with rehabilitation and SRO projects. Limited environmental reviews are required for "leasing only" projects. The exception is tenant-based rental assistance where no environmental review is required since TRA projects are not subject to environmental assessments and are not subject to the related Federal laws and authorities. (See 24 CFR Part 58 "Environmental Review Procedures for Entities Assuming HUD Environmental Responsibilities.")

Environmental Requirements

For existing residential properties proposed for use in a S+C program, the environmental finding must document that the property to be leased meets the following standards:

  1. It is not located within coastal barrier resources designated under the Coastal Barriers Resources Act;
  2. It is not located within a coastal high hazard area unless the building is designed for location in a coastal high hazard area (see 24 CFR 55.1(c )(3));
  3. It is free of hazardous materials, contamination, toxic chemicals and gasses, and radioactive substances where a hazard could affect the health and safety of proposed occupants; and
  4. It is not located within the floodplain.

Documenting Compliance

There are two options for documenting environmental review compliance: a programmatic review which is performed once for the entire program or an individual review which assesses each identified property prior to its selection for the S+C program. These are described in detail in Appendix C.

A statutory change occurred in February 2001 that changed the definition of "responsible entity" in charge of environmental reviews. PHA applicants may now use non-recipient States or units of general local government to perform the environmental review. 1 References in S+C program regulations to 24 CFR part 50: Protection and Enhancement of Environmental Quality are no longer effective.

Who Conducts the Review

The reviews are to be completed by either: 1) a "responsible entity" (as described in 24 CFR part 58); or 2) the HUD field office CPD Director under 24 CFR part 50.

  1. Generally, environmental reviews have to be performed by responsible entities (either the unit of general local government where the S+C project is operating or the State) whether or not the grantee itself is a unit of general local government or a State.
  2. If a responsible entity, other than a recipient, is either unwilling or unable to perform an environmental review for grantees who are nonprofit organizations or public housing authorities, HUD may designate another responsible entity to conduct the review or may conduct the review itself.


For more information on environmental reviews for leasing activities, refer to Appendix C: SNAPShots newsletter Vol. 1, No. 1.

1Memo dated February 21, 2022 from Richard H. Broun, Office of Community Viability, DVP. "Applicability of 24 CFR part 58 to grants for Supportive Housing, Shelter Plus Care, and Housing Opportunities for People with AIDS." Back