Relocation Benefits Rise with Federal Rule Change

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Last year, the federal government significantly changed how it handles compensating people relocated by property seizures. The Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) was amended to increase available compensation, broaden the definition of a “displaced” person and improve assistance by finding suitable replacement properties.

Congress passed the URA in 1970 to impose consistent federal standards for compensating people displaced by infrastructure projects and other federally-funded land acquisition initiatives. Different agencies employed different standards for compensating displaced individuals, and during mid-20th century urban renewal projects, compensation for low-income individuals was often lower.

The URA thus requires reimbursement and enforces other protections for individuals who must move due to any “program or project.” The enabling Congressional measure defines this as “any activity or series of activities undertaken by a federal agency or with federal financial assistance received or anticipated in any phase of an undertaking in accordance with the federal funding agency guidelines.” In other words, not only infrastructure projects apply, but any relocation stemming from federal funding can trigger URA obligations.

The Department of Transportation sets policies according to the URA, and the Federal Highway Administration implements them. According to the Department of Housing and Urban Development, the policy’s fundamental goal is “to provide uniform, fair and equitable treatment” in dealing with relocation, and ensure that “decent, safe and sanitary housing” is available to replace the home a person is forced out of.

The rule change went into effect last June and changed multiple aspects of the law. For one, it raised the benefit ceiling to $9,570, accounting for inflation over the prior 12 years, while also shortening the minimum qualifying occupancy threshold from 180 days to 90. For “homeowner occupants,” according to the Eminent Domain Report, the limit increased from $22,000 to $41,200. Before 2024, the rule hadn’t been amended in two decades, and payments reflected neither overall inflation nor housing cost increases. The maximum relocation revenue available was $5,250, while the cost of a local move can exceed $2,500. 

“Increasing benefit levels help keep pace with inflation,” then Federal Highway Administrator Shailen Bhatt said of the ceiling increase. “This update ensures we meet the needs and preferences of folks impacted by displacement and helps the federal government minimize impacts throughout the relocation process.” Furthermore, it requires agencies to reimburse individuals for ancillary moving-related expenses, such as rental application and credit check fees.

The rule change builds on the URA’s original intent by expanding the categories of people entitled to benefits under the law. People who are temporarily relocated now must receive relocation assistance, and in some cases so do people who must move thanks to a voluntary sale. Concerning housing safety, new properties must comply with the strongest relevant regulations. It increased standards for property quality as well. Agencies will also be required to report annually on land acquisition efforts.

The modified law aims to keep individuals in the same neighborhoods if they desire and not downgrade them to areas with cheaper homes while mandating that agencies work with relocated individuals to guarantee that their desires are fully met. Furthermore, agencies need to do research and plan to anticipate challenges in advance.

The Federal Register claims that the rule change’s initial cost to agencies will be low, around $2.2 million over ten years, but the fund transfers will cost $214.6 million across a decade. Nonetheless, authorities praised the move. Then Transportation Secretary Pete Buttigieg said, “This final rule includes critical updates that make sure those protections match the needs of the 21st Century – and offer fair compensation and moving assistance to the people impacted by projects.”

Relocations are an often necessary, but fraught, part of business for affordable housing providers. Widening the window required for notice and clarifying relocation standards aligns with current practice for relocations. In a recent panel discussion at National Housing & Rehabilitation Association’s 2024 Fall Forum, Jassia Feliz with Boston-based Beacon Communities discussed how her firm handled relocations during a thorough renovation of its Lenox Apartments complex. Feliz noted that differences in relocation standards amongst programs, namely Section 8, raised challenges. Cathy Hoog, who works with housing authorities north of Boston, also noted that “physical disabilities or mental health challenges” compound relocation issues.

Some state-level entities have developed strategies to implement URA requirements. For instance, professional service provider Horne worked with Puerto Rico, establishing an “anti-displacement plan” specifically for instances where URA obligations come into play. In New York State, Horne was hired to facilitate meetings with impacted communities and worked with real estate professionals to ensure that individuals were relocated to high-quality properties. In Massachusetts, Hoog praised Housing Opportunities Unlimited, a relocation-focused firm, for its ability to facilitate tenant input and conduct necessary feasibility activities.

The rule change will likely add new demands for public housing authorities. As agencies seek to renovate aging properties, those using federal funds must expand the scope of their mitigation efforts. However, doing so will ensure that relocations are handled in a way that meets the tenant’s needs.