DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
FALL 2016 STATEMENT OF REGULATORY PRIORITIES
FOR FISCAL YEAR 2017
Introduction
As the nation's housing agency, HUD is committed to promoting decent affordable housing and addressing housing conditions that threaten the health of residents. There are still too many homes in the U.S. with hazards that endanger the health and safety of occupants - hazards within a home and hazards outside of a home.[1] HUD's Regulatory Plan for Fiscal Year (FY 2017) focuses on two regulatory actions; one to address lead-based paint hazards within homes subsidized by HUD and a second to require that building or substantially rehabilitating HUD subsidized homes be at new Federal Flood Risk Management Standards.
In 2012, the Centers for Disease Control and Preventio (CDC) revised its guidance on childhood lead poisoning in response to recommendations by CDC's Advisory Committee on Childhood Lead Poisoning Prevention (ACCLPP), which concluded that a growing number of scientific studies show that even low blood lead levels can cause lifelong health effects. CDC accepted this recommendation. The elevated blood lead level, established in 2012 as part of CDC's response to ACCLPP, is lower than CDC's former blood lead level of concern. HUD's lead-based paint hazard control regulations, which address lead-based paint hazards in pre-1978 homes subsidized by HUD are based on the CDC's former blood lead level of concern. With CDC's issuance of new guidelines, HUD recognized that it was necessary to update HUD's lead-based paint regulations. HUD commenced working to update its regulations, but in the meantime, HUD revised its own guidelines for evaluation and control of lead-based paint hazards in housing. HUD also implemented CDC's recommended revised elevated blood lead level in its lead hazard control programs - the Lead-Based Paint Hazard Control grant program and the Lead Hazard Reduction Demonstration grant program - in the annual notices of funding availability (NOFAs) issued for these programs commencing in fiscal year 2013.
On September 1, 2016, (81 FR 60304), HUD issued its proposed rule that would formally adopt the approach used by CDC in its definition of elevated blood lead level, and provides for more comprehensive testing and evaluation where for housing where children under the age of 6 with an elevated blood lead level reside.
On January 30, 2015, President Obama issued an Executive Order (Executive Order 12690) establishing a flood management standard (the Federal Flood Risk-Management Standard) that will reduce the risk and cost of future flood disasters by requiring all Federal investments in and affecting floodplains to meet higher flood risk standards. In the United States, floods caused 4,586 deaths from 1959 to 2005. With climate change and associated sea-level rise, flooding risks have increased over time, and are anticipated to continue increasing. The National Climate Assessment (May 2014), for example, projects that extreme weather events, such as severe flooding, will persist throughout the 21st century. Severe flooding can cause significant damage to infrastructure, including buildings, roads, ports, industrial facilities, and even coastal military installations. With more than $260 billion in flood damage across the Nation since 1980, it is necessary to take action to responsibly use Federal funds, and HUD must ensure it does not wastefully make Federal investments in the same structures after repeated flooding events.
In response to the President's Executive Order, HUD commenced work on a proposed rule to revise its regulations governing floodplain management to require, as part of the decision making process established to ensure compliance with applicable Executive Orders 11988 and 13690, that HUD assisted or financed (including mortgage insurance) project involving new construction or substantial improvement that is situated in an area subject to floods be elevated or floodproofed between 2 and 3 feet above the base flood elevation (BFE), as determined by best available information. The proposed rule would also revise HUD's Minimum Property Standards for one-to-four unit housing under HUD mortgage insurance and low-rent public housing programs to require that the lowest floor in both newly constructed and substantially improved structures be built at least 2 feet above the BFE base flood elevation as determined by best available information. Building to these standards will, consistent with the executive orders, increase resiliency to flooding, reduce the risk of flood loss, minimize the impact of floods on human safety, health, and welfare, and promote sound, sustainable, long-term planning informed by a more accurate evaluation of flood risk that takes into account possible sea level rise and increased development associated with population growth.
On October 28, 2016 (81 FR 74967), HUD issued its proposed rule that would revises its regulations governing floodplain management to implement the Federal Flood Risk Management Standard.
This Statement of Regulatory Priorities highlights these two rules, which are HUD priority actions to complete during FY 2017.
Regulatory Priority: Responding to Elevated Blood Lead Levels in Children under the Age of 6
Childhood lead poisoning has long been recognized as causing reduced intelligence, low attention span, reading and learning disabilities, and has been linked to juvenile delinquency, behavioral problems, and many other adverse health effects. Current reviews by the U.S. Department of Health and Human Services (HHS), including by its Agency for Toxic Substances and Disease Registry (ATSDR) and National Institute of Environmental Health Sciences (NIEHS) and by the U.S. Environmental Protection Agency (EPA) Office of Research and Development have described these effects in detail. The removal of lead-based gasoline and paint from commerce has drastically reduced the number of children exposed to levels of lead associated with the most significant among these problems. Data from the CDC's National Center for Health Statistics show that mean blood lead levels among children ages 1 to 5 have dropped over the years. However, national statistics mask the fact that blood lead monitoring continues to find some children exposed to elevated blood lead levels due to their specific housing environment
Continued progress in lead paint abatement and interim control over the last decade, such as through HUD's Lead Hazard Control Grant programs, and HUD's enforcement of the Lead Disclosure statute has meant further significant decreases in lead exposure among children. Even so, there are a considerable number of assisted housing units that have lead-based paint in which children under age 6 reside. In 2012, the CDC issued guidance revising its definition of elevated blood lead level in children under age 6 to be a blood lead level based on the distribution of blood lead levels in the national population. Since CDC's revision of its definition, HUD has applied the revised definition to funds awarded under its Lead-Based Paint Hazard Control grant program and its Lead Hazard Reduction Demonstration grant program, and has updated its Guidelines for the Evaluation and Control of Lead-Based Paint Hazards in Housing to reflect this definition.
To further address this issue, as noted above, HUD issued a proposed rule on September 1, 2016 that would amend HUD's lead-based paint regulations on reducing blood lead levels in children under age 6 who reside in federally-owned or -assisted pre-1978 housing and formally adopt the revised definition of "elevated blood lead levels" in children under the age of 6 in accordance with guidance of CDC, and establish more comprehensive testing and evaluation procedures for the housing where such children with an elevated blood lead level reside.
HUD intends to complete this rulemaking in Fiscal Year 2017.
Aggregate Costs and Benefits
Executive Order 12866, as amended, requires the agency to provide its best estimate of the combined aggregate costs and benefits of all regulations included in the agency's Regulatory Plan that will be made pursued in FY 2016. HUD expects that the neither the total economic costs nor the total efficiency gains will exceed $100 million.
Requirements for Notification, Evaluation and Reduction of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance; Response to Elevated Blood Lead Levels
HUD Office: Office of Lead Hazard Control and Healthy Homes
Rulemaking Stage: Final Rule
Priority: Significant
Legal Authority: 42 U.S.C. 3535(d), 4821, and 4851.
CFR Citation: 24 CFR 35
Legal Deadline: None
Abstract:
This rule will amend HUD's lead-based paint regulations on reducing blood lead levels in children under age 6 who reside in federally-owned or -assisted pre-1978 housing and formally adopt the revised definition of "elevated blood lead levels" in children under the age of 6 in accordance with 2012 CDC guidance, and establish more comprehensive testing and evaluation procedures for the housing where such children with an elevated blood lead level reside. Since CDC's 2012 revision of its definition of elevated blood lead level in children under the age of 6, and pending HUD's commencement and completion of rulemaking to formally adopt CDC's revised definition, HUD applied the revised definition to funds awarded under its Lead-Based Paint Hazard Control grant program and its Lead Hazard Reduction Demonstration grant program, and HUD updated its own Guidelines for the Evaluation and Control of Lead-Based Paint Hazards in Housing to reflect this definition. CDC is continuing to consider, with respect to evolution of scientific and medical understanding, how best to identify childhood blood lead levels for which environmental interventions are recommended.
Through this rulemaking, HUD intends to formally adopt, through regulation, the CDC's approach to the definition of "elevated blood lead levels" in children under the age of 6 and addresses the additional elements of the CDC guidance pertaining to assisted housing. The final rule takes into consideration public comments received on HUD's September 2016 proposed rule.
Statement of Need
Although HUD is already applying the CDC's 2012 revised definition of elevated blood level in its lead hazard control notices of funding availability and in HUD guidelines, HUD's Lead Safe Housing rule has not yet been updated to reflect the CDC's revised definition of elevated blood lead levels, and to mandate adherence to this definition by owners and managers of federally-owned or -assisted pre-1978 housing requires rulemaking.
Alternatives:
Title X of the Housing and Community Development Act of 1992, also known as the Residential Lead-Based Paint Hazard Reduction Act of 1992 (the Act), prescribes specific lead-based paint hazard evaluation and reduction activities for federally-supported housing. To mandate compliance with revised elevated blood lead levels procedures requires rulemaking. While HUD issued updated guidelines in 2012 to encourage compliance with CDC's revised guidelines on elevated blood lead levels, it takes rulemaking to require compliance with CDC's revised definition of elevated blood lead levels in federally-supported housing.
Anticipated Costs and Benefits
The costs and benefits associated with the units affected during the first year of hazard evaluation and reduction activities under the final rule include the present value of future benefits associated with first year hazard reduction activities. For example, the benefits from costs expended for first year activities include the present value of lifetime earnings benefits for children living in the affected unit during the first year, whether that child continues living in that unit during the second and subsequent years after hazard reduction activities does not affect the benefit calculation, because the lowered lead exposure benefits all children under age 6 who reside there during the effective period of the hazard control measures (as noted above, typically 6 or 12 or more years). The costs of ongoing lead-based paint maintenance in units covered by this rulemaking are not considered in this analysis, because it is already required by the original Lead Safe Housing Rule for housing covered by this rulemaking.
Although many benefits of lead-based pain hazard reduction cannot be quantified or monetized, such as quality of life considerations such as adolescents' and adults' dissatisfaction with lower intelligence, fewer skills, reduced education and job potential, criminal behavior, unwed pregnancies, etc., HUD does not address monetized estimates of the cognitive benefits of preventing children under age 6 from developing elevated blood lead levels. Such benefits include avoiding the costs of medical treatment for children with elevated blood lead levels as well as increasing lifetime earnings associated with higher IQs for children with lower blood lead levels. In addition, blood lead levels of older children and adults living in the affected housing units would be expected to fall as a result of this rulemaking, although quantifying their blood lead changes is outside the scope of analysis for this rulemaking. Thus, the estimates of benefits represent a lower bound on the economic benefits of LBP hazard reduction because there are many other health impacts for both adults and children from lead exposure that are not quantified or monetized here. The analysis of net benefits reflects benefits over time associated with the costs incurred in the first year of hazard evaluation and reduction activities under the final rule. For example, the benefits of costs incurred in first year activities include the present value of lifetime earnings benefits for children living in the affected unit during that first year, and for children living in that unit during the second and subsequent years after hazard reduction activities.
HUD's regulatory impact analysis published with its September 2016 proposed rule more fully addresses the costs and benefits of this rulemaking, as of the proposed rulemaking stage.
Risks:
While this rule addresses a public health issue, but poses no risk to public health, safety, or the environment.
TIMETABLE:
Action Date FR CITE
NPRM 09/01/2016 81 FR 60304
Final 12/00/2016
Regulatory Flexibility Analysis Required: No
Small Entities Affected: No
Government Levels Affected: State, Local
Federalism Affected: No
Energy Affected: No
International Impacts: No
Agency Contact:
Warren Friedman
Office of Lead Hazard Control and Healthy Homes
U.S. Department of Housing and Urban Development
451 7th Street, SW
Washington DC 20410
PHONE: 202 402-7698
RIN: 2501-AD77
Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard
HUD Office: Office of the Secretary.
Rulemaking Stage: Final Rule
Priority: Significant
Legal Authority: 42 U.S.C. 3535(d) and 4332; and Executive Order 11991, 3 CFR, 1977 Comp., p.123.
CFR Citation: 24 CFR 50, 58, and 200
Legal Deadline: None
Abstract:
This rule will revise HUD's regulations governing floodplain management to require, as part of the decision making process established to ensure compliance with Executive Order 11988 (Floodplain Management) as amended by Executive Order 13690 (Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input), that a HUD assisted or financed (including mortgage insurance) project involving new construction or substantial improvement that is situated in an area subject to floods be elevated or floodproofed between 2 and 3 feet above the base flood elevation (BFE), as determined by best available information. The revision to 24 CFR part 55 uses the framework of E.O. 11988 which HUD has implemented for almost 40 years and does not change the requirements and guidance specifying which actions require elevation and floodproofing of structures. Specifically, the rule would require that non-critical actions be elevated 2 feet above the BFE. In addition, the rule would require that critical actions be elevated above the greater of the 500-year floodplain or 3 feet above the BFE. This rule also would enlarge the horizontal area of interest commensurate with the vertical increase, but the rule does not change the scope of actions to which the floodplain review process or elevation requirements in 24 CFR part 55 apply. The rule would also revise HUD's Minimum Property Standards for one-to-four unit housing under HUD mortgage insurance and low-rent public housing programs to require that the lowest floor in both newly constructed and substantially improved structures be built at least 2 feet above the BFE as determined by best available information. Building to these standards will, consistent with the executive orders, increase resiliency to flooding, reduce the risk of flood loss, minimize the impact of floods on human safety, health, and welfare, and promote sound, sustainable, long-term planning informed by a more accurate evaluation of flood risk that takes into account possible sea level rise and increased development associated with population growth. This rule also would revise a categorical exclusion available when HUD performs the environmental review under the National Environmental Policy Act and related Federal laws by making it consistent with changes to a similar categorical exclusion that is available to HUD grantees or other responsible entities when they perform these environmental reviews. This change will make the review standard identical regardless of whether HUD or a grantee is performing the review. Elevation standards for manufactured housing receiving mortgage insurance are not covered in this rule.
Statement of Need:
This rule revises HUD's floodplain management regulations in response to Executive Order 13690 and recommendations of the Mitigation Framework Leadership Group (MitFLG). Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input, called for a new floodplain standard established with stakeholder input. In addition to addressing risks identified by MitFLG associated with the predicted sea level rise, the standards presented in this rule also address a market failure of information regarding flood risk and moral hazard associated with flood insurance and federal disaster assistance. HUD is promulgating these new standards, which it must do through rulemaking, in order to protect HUD's investments and ensure uninterrupted provision of affordable housing.
Executive Order 13690 directed Federal agencies to avoid, to the extent possible, adverse impacts associated with floodplain development. Based on evidence from the National Climate Assessment and the Intergovernmental Panel on Climate Change, MitFLG, consisting of representatives from various federal agencies, proposed the establishment of the Federal Flood Risk Management Standard (FFRMS). These standards, at least two feet of freeboard above base flood elevation for non-critical actions and three feet of freeboard for critical actions, address the Executive Order's directive of reducing adverse impact development in floodplains which, as many studies indicate, are expanding fairly rapidly. The explicit standards provided in this rule are needed because developers, homeowners and renters do not fully internalize the risk and costs of potential flooding. There is evidence that many homeowners are either not fully aware of the risk of a flood occurring or that they discount the cost of a flood if it occurs. In some cases, owners simply underestimate the risk of flooding.
Alternatives:
In developing new floodplain management standards, HUD considered several alternative approaches to establishing the standard: climate-informed science approach (CISA); freeboard value approach (FVA); and the 0.2 percent annual chance flood approach (0.2PFA). HUD chose the FVA over the CISA and 0.2PFA for a variety of reasons. First, the FVA can be applied consistently to any area participating in the NFIP. The FVA can be calculated using existing flood maps. This is not true for the CISA standard unless HUD were to establish criteria for every community regarding the application of particular climate and greenhouse gas scenarios and associated impacts. Rather than requiring this level of review and analysis, HUD chose the more direct FVA. Second, the two alternative approaches to FVA require expertise that may not be available to all communities. The 0.2 Percent Flood is not mapped in all communities and requires a significant degree of expertise to map over an area or for an individual site. The same is also true for the CISA standard, which requires not just historical analysis but a greater anticipation of trends and future conditions. Third, HUD determined that it is not practicable to establish the CISA or the 0.2 Percent Flood for all projects. HUD funds or assists tens of thousands of small projects each year. For example, repaving a road or rehabilitating a single family home may not necessitate the extra amounts of cost required by the CISA and 0.2 Percent Flood approaches. Fourth, many states and communities already have success applying a freeboard approach to floodplains. Due to the familiarity that many communities have with freeboard, the FVA was seen as a very practical approach with documented history of application.
In addition, HUD, as part of MitFLG working group, considered varying levels of elevation above base flood elevation, specifically 1, 2 and 3 feet above BFE. Based on expected sea level rise and the cost of elevation, HUD is providing the standard recommended by MitFLG, which requires at least 2 feet above freeboard, or for critical actions, at least 3 feet above freeboard.
Anticipated Costs and Benefits:
The standards provided under this rule, requiring at least two feet of freeboard above base flood elevation, will increase the construction cost HUD's assisted and insured new construction and substantially improved properties located in the 1 percent annual chance floodplain. This rule amends HUD's current standard which requires elevation to at least the base flood elevation. Thus, the elevation standards are not new, but rather revised to an increased height. In addition, 20 states, plus the District of Columbia and Puerto Rico, already require elevation exceeding HUD's current standard of elevation to the base flood level (BFE+1). Further, four states - Indiana, Montana, New York and Wisconsin - already require residential structures elevated with a minimum of at least two of freeboard (BFE+2). Thus, the cost of compliance in these states would be less than those that have no minimum elevation requirements in the floodplain.
Developers receiving HUD assistance who are not currently building to the proposed standard of 2 feet above base flood elevation (BFE+2) can meet the proposed standards by either elevating the lowest floor of the structure or by floodproofing to the new standard and limiting the first floor to non-residential uses. Alternatively, developers could choose to locate outside of the floodplain and the affected horizontal expansion, or reduce substantial improvement projects to less than 50 percent of the market or pre-disaster value of the structure, which would no longer classify the project as "substantial".
The standards to be provide in this rule are intended to protect HUD-assisted and insured structures and the owners and tenants in these units. Thus, the benefits of the rule include reduced building damage and decreased costs to tenants temporarily displaced due to flooding, including avoided search costs for temporary replacement housing and lost wages. The annual reduction in insurance premiums provides an adequate measure of the reduction in expected damages, assuming that the NFIP rates are calculated in order to maintain a non-negative balance. In this case, the premiums for catastrophic insurance would be slightly higher than, but similar to, the expected value of the claim to pay for administrative costs.
HUD's regulatory impact analysis published with its September 2016 proposed rule more fully addresses the costs and benefits of this rulemaking, as of the proposed rulemaking stage.
Risks:
While the rule addresses a rule, the rule poses no risk to public health, safety, or the environment.
TIMETABLE:
Action Date FR CITE
NPRM 10/28/2016 81 FR 74967
Final 12/00/2016
Regulatory Flexibility Analysis Required: No
Small Entities Affected: No
Government Levels Affected: State, Local
Federalism Affected: No
Energy Affected: Yes
International Impacts: No
Agency Contact:
Danielle Schopp
Director, Office of Environment and Energy
Office of Community Planning and Development
U.S. Department of Housing and Urban Development
451 7th Street, SW
Washington, DC 20410
(202) 708-1201
RIN: 2501- AD62
[1]Language modeled on language from page 4 of HUD's 2009 Healthy Homes Strategic Plan. http://www.hud.gov/offices/lead/library/hhi/hh_strategic_plan.pdf.