 It's hard to imagine now, but one day a public project may be built right through this neighborhood. The sounds of children playing and scenes of families gathering for backyard barbecues would be replaced by the construction of a needed highway, airport, or similar public works project. So what happens to those families in the homes when they are displaced? According to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, housing must be made available to displaced persons before they are required to move, and the housing that's available must also be comparable. Sounds simple, but it's not. Comparable housing can mean different things to different people. As defined in federal regulations, a comparable dwelling is one which is functionally equivalent and substantially the same as the acquired dwelling. For example, this home has eight rooms, four bedrooms, two bathrooms, a living room, and a dining room. The size of the home, 2,000 square feet. Now by law, this family must be provided a similar home with basically the same features to meet the functional equivalence requirement, meaning you can do the same type of activities in the given room and space available. Take a look at this chart. Three replacement homes have been chosen for a family. The first has eight rooms, four bedrooms, two bathrooms, and 1,900 square feet. The second home has about the same square footage, but fewer rooms and bathrooms. The third is a little larger than the original home. Now of the three, which one is functionally equivalent? Replacement three would be the choice, since it meets all the functional equivalencies even though the square footage is slightly higher. Here's another example. In this home, the owners chose to create a master bedroom by removing a wall that separated two smaller bedrooms. Functionally, the home now has three bedrooms, one of which is a large master bedroom. So a comparable replacement home needs to be basically the same size, but with pre-bedrooms with one capable of serving as a master bedroom. But there's something else that must be considered. Besides functional equivalence, the replacement home must be substantially the same in a variety of aspects. No two homes are the same, because a home is more than just a house. To determine what is substantially the same, you must consider several points spelled out in federal regulations. First, is the agency selected replacement home located in an equally desirable neighborhood? You must make sure the new home is not located in an area subject to unreasonable and adverse environmental conditions, like next to an airport or a landfill. The replacement home should also be located on a typical sized site with customary landscaping, and it must be sufficient in size to accommodate the occupants. When choosing comparable housing, we're looking for an area that is free of any adverse environmental conditions, and by that we mean we're choosing a neighborhood similar to what they're in today. We would not look in a neighborhood that was next to a junkyard or next to a sewer treatment plant. For example, this is a most unusual home. It was originally a convent, and it's over 150 years old. Inside it has all the modern conveniences. You know, we're really concerned about this project. We don't think that you'll be able to replace the home that we have. Not only is it a very large home, and we have a lot of sentimental attachment to it, but also it's an historic home. Come on, let me show you around. Our home has a total of 10 rooms. There's five bedrooms, three and a half baths, and approximately 3,800 square feet of living area. Another feature that our house has that you don't usually find in the city is that we have a full side yard with a pond on it. There are other homes in the neighborhood built about the same time, but most lack the same square footage. There are modern replicas of older homes nearby, but they are smaller. In a nearby neighborhood, there are similar sized homes, but they tend to be much more expensive. The area is considered more desirable than the subject neighborhood. The homes are clustered around a small landscaped park and are constructed of better materials. The dilemma we face is to replace the home in a much more expensive neighborhood or consider a home lacking certain amenities of the subject property. Situations like this are common. While determining a replacement home, use reasonable judgment and consider trade-offs which offset amenities that may be lacking. Since no two homes are exact twins, we need to use a reasonable degree of judgment. For example, a 30-year-old home in excellent condition might be considered comparable to a 10-year-old home in average condition. Earlier we mentioned availability of housing. Remember, you cannot require someone to move until another comparable dwelling is made available. So how is a home made available? For homeowners and tenant occupants, the government will make a replacement unit available by guaranteeing adequate funds to purchase or rent a comparable replacement dwelling. The payments are called replacement housing payments. They are often referred to by a wide variety of names such as rental subsidy, purchase supplement or price differential. Housing is made available by providing additional funds to assist with renting or purchasing a replacement home. The next important step. When does the replacement housing need to be available? You must be able to offer the displaced homeowner an actual dwelling they can occupy at two critical time periods. The first. When calculating the replacement housing payments, the amount must be based on a unit that is available. Second. At the time you actually ask a person to move, you may not issue a notice to vacate unless housing is immediately available. Now that we know about comparable housing and when it must be available, it's time to look into some other requirements of the Uniform Act. The housing we use to compute payment eligibility and the housing that a family ultimately purchases must be decent, safe and sanitary or DSS. Replacement homes must meet six minimum DSS standards. First, they must be structurally sound. In other words, in good repair and weather tight. They must have a safe wiring system meeting local electrical code requirements. There must be adequate heating if necessary and adequate space for the intended occupants. That includes a bathroom in good working order and a kitchen for all types of dwellings other than sleeping rooms. DSS also requires safe egress or exit to an open space at ground level and be reasonably barrier free for handicapped persons. Location is another key factor when considering replacement housing. People choose a place to live for a variety of reasons, cost, access to employment, schools, services, shopping and even for religious reasons. Be aware of these potential considerations when selecting replacement housing. The location required in the regulations does not mean the same location, instead it means a location that is not less desirable. For example, many families choose a neighborhood because of schools. So it's reasonable to attempt to place those families in the same school attendance area or district. If that isn't possible, a neighborhood should be found that offers the same quality of schools. Also, some people choose a location because it's close to work. In these situations, distance to employment may be a critical factor. You'll need to consider this when choosing a replacement neighborhood. For instance, the suburban area outside the city of St. Louis is made up of many communities. Each has its good and bad points. If access to employment is of particular concern, you'll find a wide radius of possibilities around employment centers. In other words, there are several communities where you can select comparable housing. What we mean when we say that we attempt to locate property in a subject area that is equally or more desirable than the displacement property is that we are searching for neighboring areas that a reasonable person would consider to be equal to or better than the area that people are being displaced from. Remember, location issues are subjective and people will have different opinions. This is reasonable judgment because ultimately it's a judgment issue. A comparable replacement dwelling must also meet the financial means of the displaced person or family. For homeowners, you must supplement the purchase price of the comparable dwelling to ensure the owner is essentially returned to the same financial status. For tenants, you must supplement the comparable replacement rent, which exceeds the current rent, or to the extent that it exceeds 30% of the household income. In short, for owners, use the make-whole approach. And for tenants, use the make-whole approach or an income subsidy based on the criteria detailed in 49 CFR Part 24.402. In most circumstances, rules established by federal regulations will help guide your relocation decisions. But there are exceptions and trade-offs to consider based on available housing in your market. Some of the selection criteria used for replacement housing for displaced families is that they are in an equal or better desirable, similar type neighborhood, and that they have access to public facilities such as schools, hospitals, and transportation, and also that the access to their employment is equal or better. The key? Analyze your situation and use regulatory latitude with prudence. Relocating homeowners or tenants because of a public project can become a volatile issue. Everyone will be happy. Resolving those emotional and financial issues can be very difficult. The federal guidelines requiring you to find decent, safe, and sanitary housing that is functionally equivalent and substantially the same are designed to help you reduce the emotional and financial issues during relocation. When you drive to and from work on today's modern transportation system, rarely do you think about the complexities of planning and building highways. Many of us think about the traffic and how long it will take to get from here to there. But before this highway was built or before any public project occurs, families and businesses must move to make way for the project. In this video, we want to look at assistance that must be offered to businesses displaced by public projects. Whether it's a new highway or any other public project, the Uniform Act requires government agencies to provide advisory assistance and moving cost payments. Each business has its own specific needs, but generally advisory assistance means an agency must provide services to minimize the impact of the move. For example, you might offer a list of potential business sites for relocation. You might also provide zoning information or help the affected business with filling out governmental claim forms. Reestablishment payments necessary to relocate a business and its personal property fall into three categories. They are reimbursements for actual moving costs, reestablishment payments and fixed payments. Let's discuss the first of these payments, the actual reasonable and related expenses. There is no financial cap to these actual costs and the benefits can be substantial. Public agencies are required to make reasonable and necessary payments to relocate the personal property of a business. Here are some actual costs an agency must pay in the relocation process. Transportation Picking up, hauling and delivering items from one location to another. Packing, including crates, boxes and pallets, anything that needs to be packed before being moved. This cost also includes labor to get the job done. Works and reconnects. Both can potentially be significant payments. It means you must dismantle and reinstall equipment, machinery and other items. More on this a little later. Storage Occasionally, you must pay to store certain items that cannot be immediately moved. You can pay for replacement value insurance and pay for licenses or permits and certifications required of the business moving from one location to another. Losses The performing agency can also pay the replacement value of personal property lost, stolen or damaged in the move. There are also professional services. You may offer these support services to plan a move and the reinstallation of personal property. Payments can also be offered for replacement signs and stationery made obsolete by the relocation. A business may also choose to abandon property, that is, not move specific items yet receive payment for them. Likewise, a business may choose not to move an item and replace it at the new location with a substitute item. You can assist with the purchase of this substitute. Payments are also available for sale costs such as advertising if you require the business to sell items of personal property as part of the move. The option to abandon items or substitute items provides great flexibility to the business. When the business operator fully understands their options, they find it useful. Let's look in more detail at one of the moving cost benefits. The Disconnect Reconnect Payments Consider this example of moving heavy machinery. This metal lathe will require dismantling and disconnection of utilities. To prepare it for moving, someone knowledgeable about this type of machinery generally performs this work. The person is often referred to as a rigor or millwright and he could be responsible for disconnection of compressed air, gas, water, electricity or control connections. The machinery must also be lifted and moved to a truck for hauling. In this project, a forklift is used to move the lathe which had been placed on a pallet. Once the lathe is delivered to the new site, the installation and reconnection process begins. Pads or foundations to accommodate the equipment are sometimes needed. They are typically footings made of concrete. The machine is then anchored to those pads to prevent movement. Next, all of the services like utilities, water, air and gas are connected. Finally, the equipment is ready to run at the new location. One of the complicating factors of moves such as this one is determining to what extent the provisions of utility should be included as part of the move. The regulation provides some guidance but it is designed to cover a large variety of circumstances. In this particular instance, the electrical distribution bus is real estate. In industrial plants such as this one, it is routinely valued as a part of the real estate. The individual electrical takeoffs from the bus are personal property, typically abandoned in place and should be replaced as part of our moving payment. Additionally, when you move machinery, you could lose certain grandfathering for the installation or method of operation of the machinery. If you move across state lines or even to another city, various code requirements may dictate how the machinery is installed. The only legally proper way to reinstall a piece of equipment is in compliance with local codes. You may consider code required modifications that are directly associated with a specific item of personal property to be part of the move cost. These modifications cannot be general modifications to the entire building or property but must be directly associated with the equipment. When Barrett and Gould moved their equipment to this new location in New Hampshire, the company was requested to install a safety barrier around each piece of equipment. The state agreed to pay for additional safety barriers around the machines because in the previous location, certain machines were situated in such a way that they would either be up against a wall or in some way there would limit access, personnel access to the machines. Whereas in this current location, the way the machines were situated, we had to provide in order to be up to code, we had to provide a personnel barrier to keep people away from the machine. Another requirement, increase the general level of lighting in the plant. The physical barriers around the work area of each machine are a reimbursable moving cost since it is a code requirement associated with a specific item of personal property. However, the increased amount of general lighting is not considered a moving cost since it is an improvement to the whole facility. But you could provide some payment for general lighting improvements in a category we call Reestablishment. These are additional costs beyond the moving benefits and principally associated with the replacement location as opposed to the personal property. The following are benefits associated with reestablishment of a business. Codework You can authorize payments to improve or repair the replacement business site to meet any governmental code. For example, remember the discussion about Barrett and Ghoul's lighting improvements? Payments for code requirements may be the proper category to pay for improved general lighting. Certain modifications to accommodate the business in its replacement location are acceptable costs. You also have the authority to pay for exterior signs identifying the new business location and pay for utility hookups from their source to the building. Licenses, permits and fees are acceptable costs but you might consider paying for this with the moving cost expenses. You may recall that licenses and permits are also allowed as a moving cost. The distinction between the two is that those licenses associated with the business entity are moving costs such as a license to conduct business. Those associated with the new location are usually a reestablishment cost such as an occupancy permit. You can pay for testing and studies associated with moving a business. These include marketing studies, soil testing and feasibility reports that help a business select a new location. Advertisement costs that help notify customers and the public of the new business location are approved payments. Professional services are paid for as they relate to the purchase or lease of a replacement site. If the new business expects increased operating costs in the move to a new location, you can pay those higher costs during the first two years. This is the only payment that's based on a projection of costs, not the actual cost. And finally, an impact fee can be reimbursed. This is a fee charged by municipally owned utilities or local government jurisdictions. It's a one time payment based on anticipated impacts at the new business location. Some of these costs are associated with reestablishing a business being moved from one location to another. Earlier we talked about the unlimited amount that can be paid for moving a business, however the reestablishment costs are limited to $10,000. Because the reestablishment payment is limited, it is important to determine what should be paid as a moving expense and what should be paid as a reestablishment expense. For example, say your business operated in an area where a business license wasn't needed, and in the new location, a license is required. It would be better to pay for that license as an actual moving cost rather than a reestablishment cost. Since reestablishment payments are limited to $10,000, you'll want to properly pay as many items as possible under the category of actual moving costs to maximize the reimbursement of all costs. Before concluding the subject of reestablishment payments, let's look at some items that are not eligible for reimbursement. The first ineligible item covers the purchase of assets such as office equipment, furniture, machines, trade fixtures and real estate. Under this prohibition, you can't, for example, purchase new desks for an office or hand tools for a workstation. You also cannot buy land, construct buildings or substantially rehabilitate a building shell. The second category of ineligible items, you can't purchase the raw materials for manufacturing, production supply or product inventory used in a business. For example, you can't purchase the sheet metal used in a metal stamping process. And the third category, businesses sometimes borrow money to pay for various expenses or to purchase or renovate replacement property. Interest costs associated with borrowed money are not an eligible reestablishment payment. And lastly, you can't pay for any reestablishment benefit to a part-time, in-home business that does not contribute materially or, one, have gross receipts of at least $5,000, or two, have annual net earnings of at least $1,000, or three, contribute at least a third of the owner's gross income. Remember, it's your obligation to provide advisory assistance to every business. At a minimum, you should make sure the business has an understanding of all of its potential entitlements, including actual moving costs and reestablishment costs. Keep in mind that the purpose of the business relocation provisions is to move personal property and assist in the reestablishment of that business. However, there's no guarantee that every business can be relocated. You should make every effort to pay for all eligible costs to assure the continued economic viability of the business. While the process can get complicated, do your best to examine your options and ask questions to get your agency and the affected business through the process.