View Rule

Through this proposed rule, HUD continues its efforts to narrow the digital divide in low-income communities served by HUD by providing, where feasible and with HUD funding, broadband access to communities in need of such access. Broadband is the common term used to refer to a very fast connection to the Internet. Such connection is also referred to as high-speed broadband or high-speed Internet. In this rule, HUD proposes to require installation of broadband infrastructure at the time of new construction or substantial rehabilitation of multifamily rental housing that is funded by HUD. Installation of broadband infrastructure at the time of new construction or substantial rehabilitation is generally easier and less costly than when such installation is undertaken as a stand-alone effort. The proposed rule, however, recognizes that installation of broadband infrastructure may not be feasible for all new construction or substantial rehabilitation, and therefore the proposed rule allows limited exceptions to the installation requirements. Installing unit-based high-speed Internet in multifamily rental housing that is newly constructed and substantially rehabilitated with HUD funding will not only expand affordable housing for low-income families but will provide a platform for individuals and families residing in such housing to participate in the digital economy, and increase their access to economic opportunities.

Statement of Need:

The proposed rule is part of several mutually supportive efforts being taken by the Administration to close the digital divide for low-income communities. As noted above, many low-income Americans do not have broadband Internet at home. Given the populations impacted by the digital divide, HUD is at the forefront of implementing these Administration efforts. The digital divide in broadband access, connectivity, and use disproportionately affects certain Americans: those who earn less than $25,000 annually; individuals who did not finish high school; and African Americans and Hispanics. Eighty-four percent of households with HUD assistance make less than $20,000 per year, and 63 percent are African American or Hispanic (46 percent and 17 percent, respectively). Of these HUD-assisted household, 38 percent have children who are 18 years or younger. The proposed rule will build on the success of ConnectHome by ensuring that when construction or significant rehabilitation is done using HUD funds, the infrastructure needed for broadband access is included in the work.

Summary of the Legal Basis:

None.

Alternatives:

Construction and rehabilitation standards are regulatory in nature, so amending them to require the installation of broadband infrastructure requires rulemaking. Without amending the construction and rehabilitation standards, there is no way to require grantees to install broadband infrastructure in multifamily housing.

Anticipated Costs and Benefits:

The proposed rule would provide that for new construction or substantial rehabilitation of multifamily rental housing funded by HUD that, as part of the new construction or substantial rehabilitation to be undertaken, such activity must include installation of broadband infrastructure. Installing broadband infrastructure will be an additional cost when doing HUD-funded new construction/substantial rehabilitation. However, HUD notes that none of the HUD covered programs listed in this rule require a grantee to undertake new construction or substantial rehabilitation. New construction and substantial rehabilitation are eligible activities that grantees may take using HUD funds. Therefore, entities will not incur any costs than they otherwise would incur by voluntarily undertaking new construction or substantial rehabilitation, and the costs of these activities are funded by HUD.

            Further, HUD is seeking to minimize the costs of installation by pairing the installation requirements with new construction or rehabilitation work when costs are lower than installation broadband infrastructure when no other work is being done. Additionally, HUD is proposing to define substantial rehabilitation as significant work (50 percent or more of full system replacement) on one or more of the following systems: electrical, mechanical, or plumbing. This further minimizes the costs of the rule by ensuring that only significant work that would lower the burden of installing broadband infrastructure triggers the proposed requirements.

            HUD also recognizes that there may be some communities or buildings where installing broadband infrastructure is infeasible or impractical due to a variety of circumstances (e.g., no broadband access is available near the community, the building itself may have some difficulties in supporting the infrastructure). In these instances, HUD is reserving the right to determine that installation of broadband infrastructure is not feasible and excusing the grantee from the installation requirement.

Risks:

This rule poses no risk to public health, safety, or the environment.