A new notice from the U.S. Department of Housing and Urban Development provides further guidance on when Davis-Bacon wage requirements may apply to existing housing. This notice follows up on a final rule, which was published in June 2014, amending the regulations for HUD’s Section 8 Project-Based Voucher program.
According to Ballard Spahr, the notice explains that Davis-Bacon requirements apply to existing project-based voucher (PBV) units when the work that will be done either before the execution of the Housing Assistance Payment (HAP) contract or within 18 months after execution qualifies as project development. Development is defined as construction or rehabilitation of PBV housing.
The notice also clarifies the applicability of Davis-Bacon requirements under RAD’s second component. According to the notice, rehabilitation of existing projects as part of a RAD conversion to a PBV HAP contract constitute “development” and trigger Davis-Bacon requirements.
Click here to read the notice.
HUD Clarifies Davis Bacon Rules for RAD II
On June 25, 2014, HUD updated the regulations governing the Section 8 Project-Based Voucher (PBV) program. One of the changes within this final rule pertained to labor standards, specifically that Davis Bacon wage requirements would be applicable to projects involving existing housing, which impacted second component RAD projects that met the definition of existing housing.
On December 23, 2014, HUD released a Notice detailing and clarifying its enforcement policy with respect to application of Davis-Bacon Wage and the second component of the RAD program.
Given the central HUD announces in this recent Notice that it will exercise its enforcement discretion in the following manner:
- HUD will NOT enforce Davis Bacon requirements for the following second component RAD projects that qualify as existing housing:
- Projects that were submitted to HUD and approved to proceed before June 25, 2014; or
- Projects that were submitted to HUD and approved to proceed prior to December 31, 2014 and involve LIHTCs due to expire on or before December 31, 2014;
- HUD will enforce Davis Bacon requirements for second component RAD projects that qualify as existing housing submitted to HUD and approved to proceed after December 31, 2014.
- Davis-Bacon wage requirements will continue to be enforced with respect to first component RAD projects where Davis Bacon wage requirements are specified
