Consolidated Plan Revisions and Updates, 6950-6971 [06-1182]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 71, Number 27 (Thursday, February 9, 2006)]
[Rules and Regulations]
[Pages 6950-6971]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-1182]



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Part III





Department of Housing and Urban Development





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24 CFR Parts 91 and 570



Consolidated Plan Revisions and Updates; Final Rule

Federal Register / Vol. 71, No. 27 / Thursday, February 9, 2006 / 
Rules and Regulations

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 91 and 570

[Docket No. FR-4923-F-02]
RIN 2501-AD07


Consolidated Plan Revisions and Updates

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Final rule.

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SUMMARY: This rule makes streamlining and clarifying changes to the 
consolidated plan regulations of state and local governments so that 
the plans are more results-oriented and useful to communities in 
assessing their own progress toward addressing the problems of low-
income areas. The rule also eliminates obsolete and redundant 
provisions and makes other changes that conform these regulations to 
HUD's public housing regulations that govern the Public Housing Agency 
(PHA) Plan. A consolidated plan is a document that jurisdictions submit 
to HUD if they receive funding under any of HUD's Community Planning 
and Development formula grant programs. The consolidated plan also 
serves as the jurisdiction's planning document for the use of the funds 
received under these programs.

DATES: Effective Date: March 13, 2006.

FOR FURTHER INFORMATION CONTACT: Salvatore Sclafani, Office of 
Community Planning and Development, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Room 7240, Washington, DC 20410-
7000. Telephone: (202) 708-1817. (This is not a toll-free number.) 
Individuals with hearing and speech impairments may contact this 
telephone number through the toll-free Federal Information Relay 
Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    On December 30, 2004, HUD published the proposed rule to update and 
streamline the consolidated plan (69 FR 78830). The rule built on the 
existing framework that established the consolidated plan as a 
collaborative process whereby a community establishes a unified plan of 
housing and community development actions. That framework gave states 
and local governments the flexibility to use existing plans and 
strategies to help citizens understand the jurisdiction's priority 
needs, and assess the jurisdiction's progress toward meeting identified 
goals and objectives through measurable indicators.
    The proposed rule resulted from an extensive consultation process 
that involved stakeholders representing the interests of state and 
local governments and low-income persons. In Fiscal Year (FY) 2002, the 
President's Management Agenda directed HUD to work with local 
stakeholders to streamline the consolidated plan by making it more 
results-oriented and useful to communities in assessing their own 
progress toward addressing the problems of low-income areas. To launch 
this activity, several HUD Office of Community Planning and Development 
(CPD) field offices held focus group sessions with grantees and other 
stakeholders in February 2002 to discuss ways to streamline the 
consolidated plan and improve performance measurement. On March 14, 
2002, CPD convened a national planning meeting to introduce the concept 
of the Consolidated Plan Improvement Initiative. In attendance were 
public interest groups, grantees, other stakeholders, along with staff 
from HUD Headquarters and field offices, and from the Office of 
Management and Budget (OMB).
    At a meeting of these stakeholders, participants agreed that 
addressing the issues of streamlining and performance measurement would 
be best served by small working groups that represent the full range of 
people involved in and affected by the consolidated plan, including 
grantee practitioners, public interest groups, HUD staff, and other 
stakeholders. Six working groups were created to assess alternative 
planning requirements, examine and suggest performance measures, and 
identify communities that would be willing to test pilots of 
alternative planning procedures. The Department carefully considered 
ideas generated by the working groups concerning alternative planning 
requirements and suggestions for improving the consolidated plan. 
Representatives from the following national groups participated in the 
working groups: Council of State Community Development Agencies, 
National Community Development Association, National Association for 
County, Community and Economic Development, National Association of 
Housing and Redevelopment Officials, and National Low Income Housing 
Coalition.
    Alternative planning procedures were tested by representatives of 
state and local governments that participated in eight pilots. One 
pilot looked at streamlining the consolidated plan by referencing 
existing documents to avoid requiring redundant information. Another 
pilot evaluated alternative means of satisfying non-housing community 
development plan requirements. A third pilot addressed alternative 
formats for submission of consolidated plans, action plans, and 
performance reporting. A fourth pilot explored ways to enhance the 
citizen participation process. A fifth pilot involved development and 
use of templates. The sixth pilot involved coordination of consolidated 
plan and PHA plan. A seventh pilot explored the development and review 
of tools to submit consolidated plans, track results, and report 
performance. An eighth pilot documented useful practices for 
streamlining and performance measurement. An analysis of these pilots 
helped HUD determine how the consolidated planning process and 
regulatory requirements might be streamlined, made more results-
oriented, and ultimately made more useful to communities in addressing 
the needs of their low-income residents and areas.
    This rule also conformed the consolidated plan regulations to 
sections 568 and 583 of the Quality Housing and Work Responsibility Act 
of 1998 (Pub. L. 105-276, 112 Stat. 2461, approved October 21, 1998, 
codified at 42 U.S.C. 12705). Those sections required state and local 
consolidated plans to describe the manner in which the jurisdiction 
will help address the needs of public housing, and also mandated that a 
consolidated plan from a state or unit of general local government in 
which any troubled PHA is located must include a description of the 
manner in which the state or local government will provide financial or 
other assistance to remove the PHA's troubled designation. Those 
sections of the rule also made certain other conforming amendments and 
clarification changes.

II. This Final Rule

    This final rule takes into consideration the public comments 
received on the December 30, 2004, proposed rule. After reviewing the 
public comments, the significant changes described below have been 
incorporated into the final rule.

A. Executive Summary

    The Department believes an executive summary is useful and has 
included references to this requirement at Sec. Sec.  91.200, 91.220, 
91.300, and 91.320. The final rule does not specify the precise content 
or format. However, the executive summary must include a summary of 
objectives and outcomes

[[Page 6951]]

identified in the consolidated plan, and an evaluation of past 
performance.

B. Chronic Homelessness

    The references to including any persons that are chronically 
homeless in the inventory of facilities and services at Sec.  91.210 
and Sec.  91.310 have been modified to make it clear that a separate 
inventory identifying chronic homeless facilities and services is not 
required. Rather, the inventory should include an estimate of the 
percentage or number of beds and supportive services programs that are 
serving people that are chronically homeless, to the extent that 
information is available to the jurisdiction.

C. Relative Allocation Priorities

    The Department has decided to eliminate the requirement regarding 
relative allocation priorities and to allow jurisdictions to designate 
one. The regulation has also been revised to make it clear that the 
jurisdiction must describe the relationship between the allocation 
priorities and the extent of need given to each category of priority 
needs, particularly among extremely low-income, low-income, and 
moderate-income households. The plan should be explicit about what the 
jurisdiction plans to do with formula grant funds in the context of 
their larger strategy.

D. Objectives and Outcomes

    The consolidated plan's strategy requirements are modified to take 
into account the proposed performance measurement framework that was 
developed by a working group that included representatives from 
national groups, including the Council of State Community Development 
Agencies; the National Association for County, Community and Economic 
Development; and the National Community Development Association. 
Changes have been made to Sec.  91.215 and Sec.  91.315 indicating that 
these requirements will be provided in accordance with guidance issued 
by HUD.

E. Abandoned Buildings

    Data regarding the number of vacant or abandoned buildings should 
be included in the Housing Market Analysis section of the consolidated 
plan rather than in the section dealing with the non-housing community 
development plan. The estimate of the number of vacant or abandoned 
buildings and whether units are available that are suitable for 
rehabilitation should be provided to the extent information is 
available.

F. Resources

    The Department agreed that local jurisdictions should include Low-
Income Housing Tax Credits (LIHTCs) among the federal resources 
discussed in the consolidated plan, even though HUD does not administer 
them. The importance of the LIHTC program to jurisdictions cannot be 
overstated as a means of accomplishing the goals of a jurisdiction to 
provide housing for extremely low-income and low-income households.

III. Summary of Public Comments

    The comment period for the proposed rule closed on January 31, 
2005. HUD received 53 comments, including 20 from local governments or 
groups representing their interests, 22 from states or groups 
representing their interests, five from groups representing the 
interests of homeless or low-income persons, one from an organization 
representing a coalition of organizations advocating for the interests 
of persons with disabilities, two from trade associations representing 
home builders and manufactured housing, and three from individuals. 
Low-income advocates, cities, and states often expressed opposing views 
on the rule.
    For example, one of the groups representing low-income persons 
welcomed improvements in the rule that increased the emphasis on 
accountability and results, but indicated that many consolidated plans 
fail to demonstrate how funds allocated by the plan address the needs 
of extremely low-income persons. That group indicated that federal 
funds should be used to solve the most pressing problems and that 
failure to link spending decisions to priority needs should be a factor 
that HUD can use to disapprove a plan. On the other hand, one of the 
groups representing local governments thought some of the proposed 
changes to the rule went beyond the current statute and were too 
prescriptive, particularly in the area of assigning quantifiers to 
priority needs and requiring grantees to estimate the amount of funding 
in target areas. That group expressed concern that HUD might use these 
reports to penalize communities for not reaching their goals. Another 
group representing local governments said that requiring jurisdictions 
to address the chronically homeless in the strategic plan and to 
include specific action steps to end chronic homelessness in the action 
plan diminished the consolidated plan's ability to be a ``concise'' and 
``streamlined'' document. This new requirement would ask CPD formula 
programs to be accountable for yet another objective, making it less 
targeted and less streamlined. One state suggested that HUD, by 
focusing on trying to influence grantees to use their resources on 
assisting the homeless, especially the chronic homeless, was violating 
both the intent of the consolidated plan as well as Congress's 
directions to HUD that prevents HUD from conveying federal housing 
priorities to local governments.

IV. Summary of Public Comments From Local Governments and Interest 
Groups

A. Concise Action-Oriented Management Tool

    Groups representing local governments expressed support for making 
the consolidated plan a concise, action-oriented management tool. One 
group representing local governments was pleased that some concerns 
were addressed in the proposed rule but was disappointed that the 
``revisions and updates'' appeared to have usurped the ``streamlining 
effort'' in favor of additional requirements, particularly in the area 
of assigning quantifiers to priority needs and requiring grantees to 
estimate the amount of funding they will use in target areas. Another 
group representing local governments expressed support for the 
Consolidated Plan Management Process (CPMP) Tool as part of the 
streamlining effort, but felt the Tool did not produce a consumer-
friendly document that allowed community residents to understand the 
goals and achievements of their jurisdictions' federal grant programs. 
The group urged HUD to amend the CPMP Tool so that it generates a 
document that more simply communicates program goals. One county cited 
the addition or expansion of required narratives on homelessness and 
public housing as prime examples that made the process more burdensome 
and questioned why it was necessary to repeat information contained in 
other HUD documents in consolidated plans. It suggested that it would 
be far simpler to cross-reference the pages of the relevant document 
where the information could be found. One large city suggested that HUD 
permit localities with PHAs the option of cross-referencing materials 
contained in their approved PHA Plan or other similar documents. Two 
other cities also indicated that it was redundant to require 
jurisdictions to include needs identified in the PHA Plan.
    HUD response: The final rule provides more flexibility while also 
asking for more accountability in terms of the ability to track 
results. With

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respect to the CPMP Tool, the Department plans to revise the tool so 
that it generates a document that more simply communicates program 
goals. The Department will also allow jurisdictions the option to 
cross-reference pages of relevant documents like the PHA Plan and 
Continuum of Care Plan in order to streamline the consolidated plan and 
make the process less burdensome. The Department will issue 
supplemental guidance on how local jurisdictions can implement some of 
these requirements.

B. Citizen Participation

    Representatives of county officials and local governments supported 
the language at Sec.  91.1 and Sec.  91.105 to include a broader list 
of stakeholders in the consolidated planning process and encouraging 
jurisdictions to explore alternative public involvement techniques such 
as focus groups and use of the Internet. A national group representing 
homebuilders also expressed support for widening the participation of 
stakeholders, which it suggested would help foster more public-private 
partnerships and leverage more community resources. Several cities and 
counties indicated to HUD that they had already undertaken efforts to 
broaden stakeholder involvement. One city, however, commented that 
broadening the scope of the required section would be a time-consuming 
administrative burden and should be deleted.
    HUD response: The Department has determined that including a 
broader list of stakeholders in the process and encouraging alternative 
public involvement techniques would not significantly increase the 
administrative burden.
    Executive Summary. The preamble of the proposed rule invited 
comment on whether an executive summary would be a useful tool for both 
citizens and jurisdictions. The preamble also indicated that HUD was 
particularly interested in comments on what specific information should 
be included in an executive summary and whether the benefit of an 
executive summary would outweigh the burden. Eleven local governments 
and one of the groups representing their interests expressed support 
for an executive summary, thought it might be useful, and indicated 
that many communities currently use one. Another group representing 
local governments, however, did not support an executive summary as a 
way of simplifying the information for the general public. Instead, it 
suggested that HUD reduce the scope and administrative burden of the 
consolidated plan itself, to what would essentially be an executive 
summary and argued an executive summary would add more work. Some 
commenters that support an executive summary indicated that the summary 
would be a powerful and meaningful document only if jurisdictions were 
allowed to present it in a format that was most consistent with local 
citizen participation and program management processes. Most local 
governments felt that because each jurisdiction knew the most effective 
way to provide that information to citizens and governing bodies, HUD 
should not be mandating the format. A group representing low-income 
housing advocates also thought a well-written executive summary would 
be a useful device for citizen participation and expressed support for 
maintaining citizen participation requirements and continuing to seek 
input on how to make citizen participation as effective and meaningful 
as possible. One local government indicated that it made extended use 
of an executive summary not only in its five-year plan and annual 
action plan but also in its Consolidated Annual Performance and 
Evaluation Report. The city suggested that the executive summary 
include not only short-term and long-term performance goals and the 
major activities and projects a city plans to fund, but also provide a 
strong evaluation of the previous year's results, information on 
targeting of consolidated plan funds, and information on how these 
funds directly affected neighborhoods. Three cities expressed 
reservations about an executive summary. One maintained that the 
strategic plan should be well organized so that it functions as an 
executive summary. Another indicated that an executive summary would 
become a burden to both citizens and jurisdictions unless other changes 
were made that condense or consolidate the changes. A third said it 
should be left to the option of grantees because, in trying an 
executive summary format in the past, the city found it raised more 
questions from readers than if one had not been written.
    HUD response: The Department believes an executive summary is 
useful and has included references to this requirement at Sec. Sec.  
91.200, 91.220, 91.300, and 91.320. The final rule does not specify the 
precise content or format. However, the executive summary must include 
a summary of objectives and outcomes identified in the consolidated 
plan, and an evaluation of past performance.

C. Clarification of Chronic Homelessness

    While representatives of county officials and local governments 
supported the goal of ending chronic homelessness, they cited the 
difficulty of identifying and tracking transient individuals and 
families. In addition, they cited the difficulty of asking CPD formula 
programs to be accountable for yet another objective, thereby making 
the plans less targeted and streamlined. One group expressed a concern 
that the definition of chronic homelessness was too broad and difficult 
to determine in most cases, and impossible in many. Several communities 
suggested expanding the definition to include families, while others 
indicated that funds were too limited. Others cited the expansion in 
the number of narratives dealing with chronic homelessness as 
burdensome and the need for a more explicit linkage with the Continuum 
of Care process. One city stated that a separate inventory identifying 
chronic homeless facilities was not needed, and that instead, it was 
the programs and priorities that should be identified.
    HUD response: The Department recognizes that jurisdictions may find 
it difficult to maintain documentation for a chronically homeless 
person and has developed technical assistance guides that describe 
methods for identifying and counting the homeless. These are available 
at: https://www.hud.gov/offices/cpd/homeless/hmis/assistance/
index.cfm#materials. The Department believes there should be a more 
explicit linkage with the Continuum of Care process, and the definition 
of chronic homelessness is identical with the definition that is used 
in that process. The 2006 consolidated plan update for the city of 
Seattle, which is available at: https://www.cityofseattle.net/
humanservices/director/consolidatedplan/default.htm, provides an 
example of the linkage between the Continuum of Care process, the King 
County/Seattle Ten Year Plan to End Homelessness, and the Consolidated 
Plan. In addition, the reference to including any persons that are 
chronically homeless in the inventory of facilities and services at 
Sec.  91.210 has been modified to make it clear that a separate 
inventory identifying chronic homeless facilities and services is not 
required. Rather, the inventory should include an estimate of the 
percentage or number of beds and supportive services programs that are 
serving people that are chronically homeless, to the extent that 
information on those subjects is available to the jurisdiction. With 
regard to the term ``disabling condition,'' the

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term applies specifically to the sections of the consolidated plan that 
relate exclusively to chronically homeless people.

D. Removal of Barriers to Affordable Housing

    One representative of the local governments agreed with the 
constructiveness of working to remove barriers to affordable housing 
development. However, the representative did not think the HUD-27300 
Form would be useful in collecting information on regulatory barriers, 
since it did not ask specific-enough questions about regulatory 
barriers so that the results could be aggregated nationally. Two cities 
commented that the additional language contained in Sec.  91.220(j), 
which specified annual actions to address affordable housing barriers, 
was too restrictive and should be eliminated. While recognizing the 
importance of the topic, two other local jurisdictions opposed adding 
additional requirements and cited the complexity of the issue.
    HUD response: The Department believes that the removal of barriers 
to affordable housing is an important issue and has decided to include 
the additional clarifying language with the understanding that it is 
not imposing a new requirement.

E. Clarification of Strategic Plan Provisions

    Priorities and Priority Needs. Representatives of county officials, 
local governments, and most commenters did not find the current method 
of assigning ``relative'' allocation priorities of ``high,'' 
``medium,'' and ``low'' particularly useful. Some large cities 
suggested making it optional or assigning a federal, federal/local, 
local, or no-priority designation to more clearly communicate how a 
community intends to fund a need and with what resources (which could 
tie into the proposed measurement framework). One city argued that the 
designation should be linked not to the funding, but to whether the 
need is high, medium, or low. Another city indicated that only those 
needs that will be funded should be included in the consolidated plan, 
and that an amendment could be made with the new priorities if 
priorities changed later.
    HUD response: The Department has decided to eliminate the 
requirement regarding relative allocation priorities but to allow 
jurisdictions to designate one. The regulation has also been revised to 
make it clear that the jurisdiction must describe the relationship 
between the allocation priorities and the extent of need given to each 
category of priority needs, particularly among extremely low-income, 
low-income, and moderate-income households. The consolidated plan 
should be explicit about what the jurisdiction intends to do with 
formula grant funds in the context of their larger strategy. For 
example, jurisdictions may wish to indicate that they intend to 
allocate formula grant funds for gap financing, while using tenant-
based rental assistance or vouchers for low-income households that 
require a deeper subsidy. The rationale for establishing the allocation 
priorities should flow logically from the analysis. As part of the 
analysis, the jurisdiction must also identify any obstacles to 
addressing underserved needs.
    Summary of objectives. A number of commenters indicated that the 
consolidated plan's strategy requirements should be influenced by a 
proposed performance measurement framework that has been developed by a 
working group that included representatives from the Council of State 
Community Development Agencies; the National Association for County, 
Community and Economic Development; and the National Community 
Development Association. HUD has been working with the working group to 
develop workable outcome measures that will be acceptable to the 
Department and its grantees.
    HUD response: Changes are being made to Sec.  91.215(a)(4) 
indicating that these requirements would be provided in accordance with 
guidance issued by HUD.
    Non-homeless special needs. One national group representing persons 
with disabilities was concerned that the reference to persons with 
disabilities in the priority housing needs table is only to those 
persons who may require housing with supportive services. The group 
recommended the reference to persons with disabilities in the priority 
housing needs table not be limited to persons that may require housing 
with supportive services but to all people with disabilities, since 
many people with disabilities do not need supportive housing but do 
need decent, safe, and affordable housing. The group was also concerned 
that the proposed rule did not refer to the President's New Freedom 
Initiative, a nationwide effort that encourages both the removal of 
barriers to community living for people with disabilities, and the 
integration of persons with disabilities into local communities. 
Another group expressed a concern that the proposed rule did not 
promote integration between the consolidated plan and the Analysis of 
Impediments (AI) to Affirmatively Furthering Fair Housing (AFFH).
    HUD response: The Department agrees that the reference to persons 
with disabilities in the priority needs table should not be limited to 
persons that require supportive services, and will make the appropriate 
changes to the consolidated plan guidelines and instructions. With 
regard to the President's New Freedom Initiative, the consolidated plan 
rule requires communities to conduct an analysis to identify 
impediments to fair housing choice and take appropriate actions to 
overcome the effects of any impediments. In addition, the Department 
issued a notice (CPD Notice 05-03) addressing the President's New 
Freedom Initiative. This notice, which is available on HUD's Web site 
https://www.hud.gov/offices/cpd/lawsregs/notices/2005/index.cfm, 
encourages communities to develop ``comprehensive, effective working 
plans'' aimed at providing services to individuals with disabilities in 
the most integrated settings possible.
    With regard to the second comment, this final rule focuses on 
streamlining the consolidated plan and making it more results-oriented 
in accordance with the President's Management Agenda. The final rule 
does not address the topic of affirmatively furthering fair housing 
that the Department believes merits separate consideration and 
consultation with stakeholders. The Department is considering a 
proposed rule that would invite comments on better ways to integrate 
the Consolidated Plan and the Analysis of Impediments to AFFH. The 
Department is also considering issuing guidance dealing with AFFH and 
other fair housing issues.
    Dollars to address. Almost all commenters agreed with the proposal 
to eliminate the requirement to quantify ``dollars to address'' in the 
non-housing community development plan. One large city, however, argued 
for retention of the requirement to quantify ``dollars to address'' 
non-housing community development needs. It argued that the estimated 
``dollars to address'' has a practical utility for understanding the 
scope of unmet needs.
    HUD response: The Department has decided to eliminate the 
requirement to quantify ``dollars to address'' in the non-housing 
community development plan, but to allow jurisdictions to provide an 
estimate of ``dollars to address'' unmet needs or to identify estimated 
dollars that will be targeted to address the need.
    Abandoned Buildings. Most commenters said they did not

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understand the intention behind mandating jurisdictions to estimate the 
number of abandoned buildings and that there appeared to be many 
logistical problems with this requirement, including definitional and 
data collection issues. One commenter indicated that the requirement to 
estimate the number of abandoned buildings in the non-housing community 
development plan would be redundant because the Housing Market Analysis 
of the plan includes data on the number of abandoned buildings as part 
of its calculation of the housing vacancy rate, and because the 
description of the condition of housing includes the number of 
abandoned (residential) buildings. Others indicated that collecting 
this information would be burdensome, unless there were specific plans 
for a site.
    HUD response: The Department agrees with the comment that this 
provision would be redundant because the Housing Market Analysis 
section of the consolidated plan should include both an estimate of the 
number of vacant or abandoned buildings as part of its calculation of 
the housing vacancy rate and the description of the condition of 
housing. Therefore, the Department has determined that data regarding 
the number of vacant or abandoned buildings should be included in the 
Housing Market Analysis section of the consolidated plan instead of the 
section dealing with the non-housing community development plan. The 
estimate of the number of vacant or abandoned buildings and whether 
units in the building are suitable for rehabilitation should be 
provided to the extent information is available.
    For jurisdictions that wish to use it, HUD will make data available 
from the U.S. Postal Service on the number of vacant addresses at the 
census tract level, and plans to provide updated data on the number of 
vacant addresses annually. The U.S. Postal Service collects data on 
addresses that are vacant 90 days or longer. The Department finds 
vacant and abandoned buildings depress property values, reduce tax 
revenues, attract crime, and serve as a good measure of neighborhood 
blight. Vacant properties also degrade the quality of life for 
remaining residents. A large number of vacant buildings in a 
neighborhood increases the likelihood that property values will 
continue to decline and that further abandonment will persist.
    Lead-based Paint Hazards. A national organization advocating 
solutions to childhood lead poisoning commented that jurisdictions 
should describe how their plan for the reduction of lead-based hazards 
will increase access to housing without such health hazards. In 
addition, one commenter on HUD regulations that address barriers to the 
production and rehabilitation of affordable housing stated that HUD 
should clarify that the consolidated plan should describe the 
relationship between plans for reducing lead hazards and the extent of 
lead poisoning and lead hazards.
    HUD response: The Department agrees and has modified Sec.  
91.215(i) accordingly. In addition, the description of the consultation 
process described in Sec.  91.200 is being modified to include a 
reference to consultations with state or local health and child welfare 
agencies regarding lead-based paint hazards conducted in accordance 
with Sec.  91.100(a)(3).

F. Action Plan

    Federal resources. With regard to describing resources, one city 
expressed concern that the clarified term ``federal resources'' 
included Section 8 resources made available to the jurisdictions and 
competitive McKinney-Vento Homeless Assistance Act funds. The city 
maintained that by including these funds as resources in the action 
plan, it might be inferred that these funds are available for 
allocation through the consolidated plan process, which is not the 
case. Another city argued that an estimate of Section 8 funding should 
be contained in the PHA's annual plan and that the best a jurisdiction 
could do for a tabulation of competitive McKinney-Vento resources would 
be an estimate. Another city indicated that only those jurisdictions 
that administer Section 8 vouchers and public housing programs should 
be required to report on the vast breadth of the public housing 
requirements listed in the consolidated plan. Therefore, jurisdictions 
should be mandated to report on public housing requirements on a more 
limited, scaled-down basis in the consolidated plan. This would help 
jurisdictions that might choose to fund an occasional public housing 
project without duplicating the reporting requirements that already 
exist in the Public Housing Agency Plan.
    HUD response: The Department recognizes that Section 8 funds and 
McKinney-Vento Homeless Assistance funds may be administered by other 
entities. The regulation only requires the jurisdiction to identify 
these programs as sources of funding.
    A national group representing homebuilders and one representing 
low-income housing advocates said it would also be useful to include 
expected allocations of LIHTC in its discussion of expected federal 
resources, even though HUD does not administer the LIHTC program. They 
pointed out that the importance of the LIHTC program to jurisdictions 
cannot be overstated and that jurisdictions should consider linking 
Section 8 rental assistance to LIHTC projects as a means of 
accomplishing their goals to provide housing for extremely low-income 
and low-income households.
    HUD response: The Department agrees that LIHTCs should be listed 
among the federal resources.
    Summary of annual objectives. One representative of the local 
governments expressed support for the provision requiring jurisdictions 
to submit a summary of annual objectives and also indicated that most 
of its members already meet this requirement. One city also asked for 
clarification as to whether the annual objectives identified in the 
action plan were a subset of the specific objectives identified in the 
strategic plan. Another city thought it was unclear whether this 
provision would actually enhance the quality, utility, and clarity of 
the action plan since objectives tend to be broad. Still another city 
thought the provision was unnecessary since it was addressed by other 
parts of the plan.
    HUD response: The Department believes a summary of annual specific 
objectives is a useful feature of the action plan since it identifies 
the subset of specific objectives that jurisdictions expect to achieve 
during the forthcoming program year.
    Activities to be undertaken. One group representing low-income 
housing advocates recommended that the consolidated plan include a 
stronger linkage between the priority needs identified in the plan and 
the action plan. It said jurisdictions should spend federal funds to 
solve the most pressing problems and that the failure of plans to link 
spending decisions to priority needs should be one of the factors that 
HUD considers when it approves a consolidated plan.
    HUD response: The Department agrees the consolidated plan must 
describe the linkage between priority needs identified in the plan and 
activities that are funded. Section 105(b)(8) of the Cranston-Gonzalez 
National Affordable Housing Act requires that the plan of the 
jurisdiction describe how the plan will address housing and homeless 
needs, describe the reasons for allocation priorities, and identify any 
obstacles to addressing underserved needs. Since the allocation of 
resources is described in the action plan, the Department has revised 
the section of the regulation dealing with

[[Page 6955]]

the description of activities to be undertaken by requesting grantees 
to describe the reasons for their allocation priorities and to identify 
any obstacles to addressing their underserved needs.
    Outcomes. Groups representing local governments expressed support 
for measuring outcomes and accomplishments in the consolidated plan so 
that the positive impact of CPD formula programs may be compellingly 
communicated at the national level. However, one group pointed out that 
it does not support reporting on outcomes if doing so becomes a means 
by which HUD uses these reports to penalize communities for not 
reaching their goals. Planning is not an exact science, and funding 
levels, lack of viable projects, along with many other factors can 
determine if goals will be met.
    Nine local governments commented on this provision. One large city 
recommended that HUD modify the provision by permitting localities to 
demonstrate that they currently provide appropriate housing and 
community development performance measures through other documents and 
by enabling these jurisdictions to meet the federal requirement by 
cross-referencing (e.g., providing the Internet site address for) 
materials published by the locality. The large city pointed out that 
requiring detailed outcome measures to somehow be reconfigured to fit 
the specific parameters of the consolidated plan would lead to 
additional burdensome accounting without necessarily improving the 
public's sense of the situation.
    Another city agreed that outcome measures should be included. 
However, the commenter argued that the use of outcome measures to 
measure the result of each activity was misguided and would result in 
redundant and duplicative entries. The commenter indicated that outcome 
measures measure long-term results, such as assessed valuation, crime 
rates, poverty rates, etc. It was that city's experience that it takes 
more than one activity to result in a significant change in an outcome 
measure. The city added that outcome measures should be associated with 
the achievement of a larger goal such as neighborhood revitalization, 
homeownership, and employment rates. For example, in its plan, the city 
could claim that up to ten different activities could be linked to a 
single outcome such as homeownership rate. The jurisdiction suggested 
that outcome measures be required to measure stated larger goals, 
rather than small activities, and then associate activities with each 
goal. This would eliminate a great deal of confusion and needless 
paperwork.
    Others supported outcome measures, but only if they were 
implemented in a meaningful way and did not place an undue burden on 
jurisdictions. Some jurisdictions felt that maximum flexibility must be 
provided to grantees in determining outcomes based on local program 
experience and knowledge of current housing and community development 
needs, and supported development of such outcome indicators from a 
broad spectrum, with input from residents, city departments, related 
city agencies, counties, states, other grantees, and non-profit and 
for-profit organizations. They did not think it necessary that either 
the Department, or the Office of Management and Budget needed to define 
national outcome measures. One large city thought that until outcome 
measures were further developed by the Department and published, it was 
premature to add this requirement to the rule. Another said it was not 
able to take a position since HUD had not released its guidance 
regarding specific outcome measures: It requested that HUD publish a 
proposed rule on the specific outcome measures rather than issuing 
guidance in order to allow an opportunity to review and submit comments 
on an area that would greatly impact the way jurisdictions do business. 
However, it strongly opposed the insertion of, as burdensome and of no 
practical or analytical use, a provision at Sec.  91.520 requiring that 
the performance report ``must explain variances between proposed and 
actual outcomes.''
    HUD response: The Department has decided to require outcomes in the 
consolidated plan rule in accordance with guidance to be issued by HUD. 
Accordingly, it has modified the provision at Sec.  91.520 by requiring 
that the performance report explain why progress was not made toward 
meeting goals and objectives. HUD published a notice outlining the 
framework for a draft performance measurement system for comment in the 
Federal Register on June 10, 2005 (70 FR 34004).
    Percentage of funds to target areas. Groups representing local 
governments expressed concern about this provision and did not 
understand the relevance of requiring a jurisdiction to estimate the 
percentage of funds the jurisdiction plans to dedicate to target areas, 
since at least 70 percent of the distribution of CDBG funds is mandated 
to be spent on projects that benefit low- and moderate-income persons. 
While expressing support for funding activities in target areas, one 
group opposing this requirement indicated that it suggests that HUD is 
pushing jurisdictions to spend funds in target areas, which also 
creates the impression that if grantees do not spend funds in target 
areas, they may be sanctioned or penalized in some manner. The group 
indicated that using a target area approach in funding activities is a 
locally determined decision and one that should remain as such.
    Eight local governments also commented on this provision. One city 
suggested that it would be better to require a listing, in the action 
plan, of any target areas as well as funds and projects dedicated to 
those target areas. Another indicated that there already is a 
requirement to provide a description of the geographic distribution of 
funds and that additional details required in federal regulations 
usually translate into extra research, documentation, recordkeeping, 
and reports. Some jurisdictions said they do not have target areas and 
jurisdictions and should have the flexibility to serve low- and 
moderate-income clients throughout the jurisdiction. Others urged HUD 
to make the designation of target areas (and specific objectives for 
those areas) optional, rather than having the federal government 
mandate the kind of system to be employed.
    HUD response: The Department believes that identification of the 
percentage of funds a jurisdiction plans to dedicate to target areas 
will be useful in determining the degree to which activities are being 
carried out in a concentrated manner.
    One-year housing goals. A representative of local governments 
argued that it is too narrow a requirement if jurisdictions must 
specify a goal for the number of homeless, non-homeless and special 
needs families to be assisted by three different categories of housing 
assistance. When a double breakdown of data like this is required, the 
numbers become artificial estimates and are confusing to the public. 
However, the group indicated that setting separate goals for the number 
of homeless, non-homeless and special needs families to be assisted is 
useful and would inform the public of the community's priorities. 
Similarly setting separate goals for the number of households to be 
served by rent assistance, new construction units, rehab, or 
acquisition is also good and would inform the public of the community's 
priorities. Several other cities thought this requirement might be 
redundant or duplicative of the goals required in the strategic plan.
    HUD response: The Department agrees with the point made by the 
group representing local governments and is clarifying the regulation 
to require two sets of annual housing goals. One set of

[[Page 6956]]

annual goals is for the number of households to be served by rent 
assistance, new construction units, rehabilitation, or acquisition 
during the year with funds made available by HUD to the jurisdiction. A 
second set of annual goals is for the number of homeless, non-homeless, 
and special needs families to be assisted during the program year with 
funds made available by HUD to the jurisdiction. The program funds 
providing the benefits (i.e., CDBG, HOME, HOPWA, ESG) may be from any 
funding year or combined funding years.
    Estimate amount of CDBG funds to benefit low/mod persons. One of 
the groups representing local governments expressed support for 
including an estimate of the amount of CDBG funds that would be used 
for activities benefiting low- and moderate-income persons. Two cities, 
however, commented that requiring an estimate of the amount of CDBG 
funds used for activities benefiting low- and moderate-income persons 
was redundant because the program already requires that at least 70 
percent of a jurisdiction's CDBG funding benefit this income group. A 
group representing low-income advocates, however, indicated that the 
consolidated plan requires an assessment of the number of extremely 
low-income, low-income, and moderate-income people who need affordable 
housing and to whom the jurisdiction will provide affordable housing. 
It thought it would be incongruous if jurisdictions were not expected 
to demonstrate how low-income people are actually aided by CDBG funds.
    HUD response: The Department believes this provision should be 
required by the regulation, since Section 104(a)(2) of the Housing and 
Community Development Act of 1974 requires the jurisdiction's statement 
of community development and housing activities include the estimated 
amount of funds proposed to be used for activities that will benefit 
persons of low- and moderate-income.

G. Submission Requirements

    Needs, Market Analysis, and Strategic Plan. One of the groups 
representing local governments and one local government strongly 
supported giving jurisdictions the flexibility to submit and update 
plans in a manner that facilitates orderly program management. A local 
government indicated that allowing for this flexibility will greatly 
improve the ability of urban counties to synchronize the consolidated 
planning process with the 3-year cooperation agreement cycle and other 
local planning and data collection cycles.
    Consolidated Plan Submission. Clarifying changes are made to Sec.  
91.15 and Sec.  91.200 identifying both the submissions that make up 
the component parts of the consolidated plan submission and the 
sections of the rule that contain the comprehensive housing 
affordability strategy for local jurisdictions.

H. Public and Assisted Housing

    Financial and other assistance for troubled housing. One group 
representing local governments commented that requirements related to 
public housing would seem to encumber the consolidated planning process 
rather than streamline it. Requiring a jurisdiction to ``describe the 
manner in which the jurisdiction will address the needs of public 
housing and the financial or other assistance the jurisdiction will 
provide to improve the operations of a public housing agency if that 
agency is designated as ``troubled'' is beyond the scope of CPD's 
formula grant programs and becomes a logistical nightmare for urban 
counties that have many PHAs within their jurisdictions. Three local 
jurisdictions also commented on these provisions. One jurisdiction said 
providing financial or other assistance for troubled PHAs constituted 
an unfunded mandate, especially to an agency that may not even be an 
agency of the grant recipient. Two jurisdictions thought it was 
appropriate to address the needs of public housing. Two jurisdictions 
also objected to giving HUD the ability to disapprove a plan or risk 
future funding if a jurisdiction either did not offer assistance or 
provide information on how it would help a PHA to remove a troubled 
designation.
    HUD response: As indicated in the preamble of the proposed rule, 
these amendments were made pursuant to the requirements of sections 568 
and 583 of the Quality Housing and Work Responsibility Act of 1998 (42 
U.S.C. 12705). The statute requires that the consolidated plan of a 
jurisdiction describe the manner in which the jurisdiction will address 
the needs of public housing and the financial or other assistance it 
will provide to improve the operations of a PHA designated as 
``troubled,'' in order to remove such designation. The statute also 
considers the failure to include a description of the manner in which a 
jurisdiction will provide financial or other assistance to remove a 
PHA's troubled designation as cause for HUD to disapprove a 
consolidated plan or determine that one is substantially incomplete. 
Also, HUD is clarifying that the provision at Sec.  91.500 applies to 
states as well as units of general local government. Such assistance 
need not be financial assistance but can include other assistance such 
as technical assistance provided by the jurisdiction.

V. Summary of Public Comments From State Governments and Interest 
Groups

A. Concise Action-Oriented Management Tool

    A group representing state community development agencies expressed 
support for HUD's efforts to streamline the consolidated plans and 
action plans and reduce the administrative burdens on states. However, 
they argued that several provisions would not streamline the 
preparation of plans or were inconsistent with the state role as a 
grantor agency. Among the issues raised were provisions that would 
require reporting on activities and outcomes that cannot be funded or 
achieved primarily with the formula grant programs covered by the 
consolidated plan. For example, state grantees would be required to 
describe their strategy for ``helping homeless persons (especially any 
persons that are chronically homeless) make the transition to permanent 
housing and independent living.'' Several states contended that 
requiring additional information regarding chronic homelessness, public 
housing, and outcome measurement would entail considerable additional 
work for which HUD has committed no additional administrative or 
planning funds. Several states also indicated that the proposed rule 
failed to take into account the unique nature of the small cities CDBG 
program as administered by the states. One state said it would make 
more sense to include some of the requirements in applications 
submitted by applicants instead of in the plan submitted to HUD. Some 
states indicated some of the requirements involving public housing 
would be redundant since some of this information was already included 
in local PHA plans. Many states expressed that putting outcome measures 
in the final rule was premature since more work was needed before this 
change was implemented.
    HUD response: HUD recognizes that the states as grantor agencies 
have less control over fulfillment of sections of the regulations 
dealing with annual goals and performance than do local jurisdictions. 
However, states are expected to provide the information to the extent 
that they are able to do so. HUD recognizes that states generally do 
not originate specific projects or activities, but offer programs 
through which local communities apply to

[[Page 6957]]

accomplish specific objectives. These local applications are submitted 
after the consolidated plan is submitted to HUD and approved. With 
regard to the provisions dealing with chronic homelessness, this 
section has been revised to require estimation ``to the extent 
practicable.'' The information about public housing has been included 
because it is a comprehensive housing affordability strategy (CHAS) 
statutory requirement. However, the Department will also allow states 
the option to cross-reference pages of relevant documents like the PHA 
plan and Continuum of Care Plan in order to streamline the consolidated 
plan and make the process less burdensome. Also, the Department may 
issue supplemental guidance on how states can implement some of these 
requirements.

B. Citizen Participation

    Representatives of state governments recommended that HUD continue 
to pursue ways that state grantees can use electronic and other forms 
of input, particularly to help states reach rural populations. In 
addition, representatives of state governments recommended that HUD 
allow input from local governments to meet citizen participation 
requirements, since they are representatives of citizens and are more 
likely to provide input to states than individual citizens. Several 
states were in agreement with provisions to include citizens, 
organizations, businesses, and other stakeholders among those that 
should be involved in the citizen participation process and exploring 
alternative public involvement techniques. However, one state objected 
to adding quantitative ways to measure efforts that encourage citizen 
participation. One state suggested the section be modified to state 
that ``the citizen participation process should encourage participation 
of citizens of the jurisdiction, and agencies, organizations, and 
private for-profit businesses and private non-profit entities that are 
involved with, or affected by, the programs or activities covered by 
the consolidated plan.'' Another state indicated that an analysis and 
evaluation of performance should be referenced and made available to 
citizens during the citizen participation process for the annual plan 
so that citizens and others could view the progress the grantee is 
making on addressing the identified needs in the strategy.
    Executive Summary. The preamble of the proposed rule invited 
comment on whether an executive summary would be a useful tool for 
citizens as well as jurisdictions. It also indicated that HUD was 
particularly interested in comments on what specific information should 
be included in an executive summary and whether the benefit of an 
executive summary would outweigh the burden. While some states 
considered the concept of an executive summary as having some benefit, 
they said it would be more useful to entitlement communities. Some 
thought that HUD's intent was to make local citizens aware of programs 
and activities, but argued that requiring that proposed projects and 
activities be stated would amount to restating the content of the 
consolidated plan and thus would hardly be a ``summary.'' Several 
states suggested that condensing state plans would not be worth the 
effort and a table of contents would be much more effective and could 
accomplish the same goal.
    HUD response: The Department has determined that including a 
broader list of stakeholders in the process and encouraging alternative 
public involvement techniques would not significantly increase the 
administrative burden. Accordingly, it has modified the section to make 
it clear that it refers to entities that are involved with or affected 
by programs covered by the consolidated plan. The Department also 
believes an executive summary is useful and has included references to 
this requirement at Sec. Sec.  91.300 and 91.320. To meet the concerns 
raised by the commenters, HUD will allow states to determine the format 
but that the executive summary must include a summary of objectives and 
outcomes identified in the consolidated plan and an evaluation of past 
performance.

C. Clarification of Chronic Homelessness

    A group representing state community development organizations 
indicated there were several problems associated with implementing the 
proposed changes involving chronic homelessness. Its first concern was 
that the definition of a ``chronically homeless person'' was far too 
restrictive and ignored the existence of chronically homeless families, 
including couples without children and disabled parents with children. 
Moreover, it expressed concern about the ability of grantees to 
document either such disabling conditions or the length of time that 
each individual has been homeless. Such documentation would require, at 
a minimum, a year's worth of high quality data in the grantee's 
Homeless Management Information System (HMIS). Also, the proposed 
addition to include an inventory of all facilities meeting the needs of 
the chronically homeless is unnecessary from the perspective of factors 
that may influence the state's method of distribution for the Emergency 
Shelter Grant program and is impractical at the state level, 
particularly since the provision does not limit the inventory of 
facilities to those that have received CDBG funding. One state claimed 
there was no basis in the statute for the definition of chronic 
homelessness and that while such priorities are reasonable for making 
competitive funding decisions, such requirements should not be imposed 
on the consolidated plan. Another state indicated that the resources 
for chronically homeless are not expected to be much different than 
they are for other homeless persons. Several states indicated that the 
proposed changes regarding the chronic homelessness provide tracking 
challenges. One state that was in the early stages of building its HMIS 
indicated that it eventually would be able to extract chronic homeless 
data from HMIS, but could not do so at present. Further, the chronic 
homeless definition includes persons who have been homeless at least 
three times in a year, and most states are not going to have data in 
their systems to determine whether a household meets that part of the 
homeless definition. Homeless shelters in small communities have small, 
usually volunteer staff and don't have time to spend an hour with each 
homeless person to determine if that person has a disabling condition, 
nor can they document how often the person has been homeless. The state 
pointed out that the federal, ten-year Census could not adequately 
document this and small organizations will have a difficult time 
providing this information, and the requirement could affect the amount 
they are funded. On the other hand, another state expressed a concern 
that the regulations did not include a discussion on ``coordinated 
discharge policy'' and asked for more guidance on this issue.
    HUD response: In response to these comments, the Department 
recognizes that states and local governments may find it difficult to 
maintain documentation for chronically homeless persons. The Department 
wishes to point out that the CHAS statute requires states and local 
jurisdictions to describe their strategy on addressing the emergency 
shelter and transitional housing needs of homeless persons (including a 
brief inventory of facilities and services that meet such needs). The 
statute does not limit the description to the projected use of 
Emergency Shelter Grant funds. However, the Department is modifying the 
reference to including

[[Page 6958]]

any persons that are chronically homeless in the inventory of 
facilities and services at Sec.  91.310, to make it clear that a 
separate inventory identifying chronic homeless facilities and services 
is not required. Rather, the inventory should include an estimate of 
the percentage or number of beds and supportive services programs that 
are serving people that are chronically homeless, to the extent that 
information is available to the state. States are encouraged to use 
information from their Continuum of Care applications to satisfy this 
requirement. The existing regulations at 24 CFR 91.310(c) currently 
require states to describe programs for ensuring that persons returning 
from mental and physical health institutions receive appropriate 
supportive housing. The regulations at Sec. Sec.  91.225 and 91.325 now 
require states and local jurisdictions to include a certification that 
they have developed a coordinated discharge policy. Such a policy 
should include policies and protocols for the discharge of persons from 
publicly funded institutions or systems of care (such as health care 
facilities, foster care, or other youth facilities, or correction 
programs and institutions) in order to prevent such discharge from 
immediately resulting in homelessness for such persons. HUD will issue 
supplemental guidance on what elements should be included in such a 
policy.

D. Removal of Barriers to Affordable Housing

    A group representing state community development agencies stated 
that it was difficult for states to meet goals for affordable housing 
barrier removal because states have very minimal control over the major 
barriers identified by HUD (zoning, local fees, etc). Zoning and land 
use decision-making are an inherently local process, subject to a range 
of influences including market forces and citizen input. One state 
indicated that it had already addressed those areas over which the 
state has regulatory control and that the existing regulatory relief 
barrier requirement on HUD's Notice of Funding Availability process is 
sufficient to reward those HUD applicants that have made efforts to 
reduce constraints on affordable housing. Another suggested that these 
issues could be addressed in the applicant's application, but they 
could not require a local jurisdiction to change its policies. Still 
another indicated it was not clear exactly what kinds of barriers HUD 
believes still exist and what specific information it has on such 
barriers in local communities. It suggested that HUD share this 
information with grantees so that they could better respond to these 
issues.
    HUD response: The Department recognizes that states have less 
control over barrier removal than do entitlement jurisdictions. The 
Department believes the removal of barriers to affordable housing is 
important and has decided to include the additional clarifying language 
with the understanding that it is not imposing a new requirement. The 
Department has also established a regulatory barrier clearinghouse at 
https://www.huduser.org/rbc/ that provides examples of how communities 
can identify and remove barriers to affordable housing.

E. Clarification of Strategic Plan Provisions

    Priorities and Priority Needs--Relative priorities. A group 
representing state community development agencies recommended that HUD 
remove this classification system for high, medium, or low priorities 
in favor of the overarching goals and outcomes established by each 
grantee, which will be required if other sections of this rule are 
implemented. The group argued that these goals and outcomes should 
become, in effect, the priorities established by the grantee to meet 
the intent of the statutory provision pertaining to priorities.
    Most of the states that commented welcomed the elimination of the 
requirement to designate relative priorities. One said the new 
performance and outcome measures should serve this purpose more 
effectively. Another indicated that a priority could be important to a 
state, but that it may not spend federally allocated money on that 
priority. Indicating where federal funds will be spent could easily be 
accomplished with a checkbox, or something similar and less able to be 
misconstrued. HUD and citizens should be able to discern the relative 
importance a jurisdiction has placed on funding a certain area by 
looking at the goals relative to unmet needs. The same state felt that 
general priorities and the reasons for allocation priorities are better 
described in narratives where program obstacles can be identified. 
Also, many programs are not designed to serve extremely low-income 
households, for instance, without supplementary operating subsidy. One 
state suggested local communities be able to assign their own 
prioriti