Thinking about repositioning your PHA’s assets? Section 18 might be the right tool, but how do you know for sure? This week, we’re unpacking the five essential questions every PHA should ask before submitting a Section 18 application.
1. Is Section 18 Demolition or Disposition Right for my PHA?
The Special Applications Center (SAC) of HUD allows Public Housing Agencies (PHAs) to pursue demolition, disposition, or a combination of both under Section 18. If a PHA receives demolition approval, public housing funds may be used to cover demolition costs. Alternatively, disposition approval allows the PHA to transfer the property—via sale, ground lease, or another method—to a third party. Disposition can occur at or below fair market value.
The requirements for a Section 18 application vary based on whether demolition or disposition is being pursued. Factors such as property vacancy, operating reserves, and intended future use of the site will help determine which path is most appropriate. The Affordable Housing Consulting team at D3G specializes in Section 18 and is available to help your PHA evaluate whether demolition, disposition, or both best align with your strategic goals.
2. Does My Property Meet HUD’s Criteria?
To gain approval, PHAs must demonstrate that their property meets one or more HUD-defined justification criteria. These criteria differ depending on whether demolition or disposition is pursued, but often include:
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Physical obsolescence
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Cost thresholds related to repairs vs. redevelopment
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Scattered site inefficiency, such as non-contiguous parcels
Understanding these justifications is essential to a successful application. If you’re unsure which criteria your properties may meet, D3G’s Affordable Housing Consulting team can help evaluate your options and determine eligibility under Section 18.
3. What Reports and Documentation Will My PHA Need?
All Section 18 applications must include required documentation such as:
- HUD Form 52860
- A Board Resolution authorizing the application
- A completed Part 58 Environmental Review
Depending on your justification strategy, additional reports may be needed. For example:
- A Physical Needs Assessment to demonstrate obsolescence
- An appraisal to determine the site’s fair market value
If you’re unsure which materials are necessary for your specific application, D3G can assist in identifying and assembling the required documentation to streamline the process.
4. Does My PHA Need Local Support?
Local and internal support is critical to a successful Section 18 application. HUD requires evidence of engagement and buy-in from:
- Local government, in the form of a support letter
- The PHA Board, via resolution
- PHA residents, through documented consultation
D3G has helped PHAs and developers navigate these engagement requirements and is prepared to support your team through community and stakeholder outreach to meet HUD standards.
5. How Will My PHA Utilize Its TPVs?
Once a Section 18 demolition or disposition is approved, PHAs may apply for Tenant Protection Vouchers (TPVs) for any units occupied within 24 months before SAC approval. TPVs must be requested through a separate application to the HUD Field Office and are not automatically issued with the Section 18 approval.
PHAs can choose to administer TPVs as either tenant-based or project-based assistance, depending on their repositioning strategy. Whether focused on permanent relocation, redevelopment, or preserving affordability, D3G can help your agency determine the best use of your TPVs and guide you through the application process.
Need Help Navigating Section 18?
D3G’s Affordable Housing Consulting team is here to support your PHA through every step, from eligibility and documentation to strategy and stakeholder engagement. Contact our team or learn more about our Affordable Housing Consulting Services.
