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Community Development

Compliance Review

Contact Info

phone

(216) 664-4094

The City of Cleveland’s Compliance Section is within the Department of Community Development’s Administrative Services Division. The Division’s Compliance section performs all of the compliance tasks for Federally funded activities within the Department of Community Development, Building & Housing, Economic Development, Public Health, and Department of Aging. 

Compliance is broken into four (4) major areas: Environmental Review, Uniform Relocation Act, Labor, and Home Affordability Monitoring. Compliance also works closely with the City’s Office of Equal Opportunity as it oversees contract labor compliance with Chapter 187 (Cleveland Areas Businesses Code) and  Chapter 188 (Fannie M Lewis Cleveland Resident Employment Law).

Environmental Review

The environmental review process is required for all federally funded projects to ensure that the project does not negatively impact the surrounding environment and that the property site itself will not have an adverse environmental or health effect on end users. Not every project is subject to a full environmental review, but every project must be in compliance with NEPA and other related Federal and state environmental laws.

The environmental review process produces an environmental review record. This process must be completed before project-related actions are taken as federal law prohibits the commitment or expenditure of federal funds until the environmental review process is complete. 

Developers may not spend public, private or federal funds, or execute a legally binding agreement for property acquisition, rehabilitation, conversion, repair, or construction pertaining to the project until environmental clearance has been achieved through the environmental review process.

Developers must avoid any action that would preclude the selection of alternative
choices before a project clears the environmental review process.

Activities that have physical impacts or which limit the choice of alternatives cannot be undertaken, even with the developer or other project participant’s own funds, prior to obtaining environmental clearance. 

For the purposes of the environmental review process, “commitment of funds” includes:

  1. Execution of a legally binding agreement (such as a property purchase or construction
    contract);
  2. Expenditure of federal funds;
  3. Use of non-federal funds on actions that would have an adverse impact--- e.g., demolition, dredging, filling, excavating; and
  4. Use of non-federal funds on actions that would be “choice limiting”--- e.g., acquisition of real property; leasing property; rehabilitation, demolition, construction of buildings or structures; relocating buildings or structures, conversion of land or buildings/structures.

Documents that may be needed to complete the environmental review process include Phase I studies, Phase II studies, lead studies, asbestos studies, noise studies, site pictures, and market studies. 

Mitigation plans may need to be developed for the project to move forward.

The environmental review process timeframe may last 60 days, or longer, depending on the complexity of the project.

URA Review

The Uniform Relocation Assistance and Real Property Acquisition Act applies to projects anticipating or receiving Federal assistance and that involve acquisition, demolition, rehabilitation, or conversion activities. Federal funds added to a project at any time will trigger URA regulations extending back to the beginning of a project. The regulation applies to all public and private entities, profit and non-profit entities, and individuals utilizing Federal funds. 

The URA also provides relocation protection, services, and financial support for residential and business owners or tenants who are temporarily relocated or permanently displaced as a result of a project using Federal funds.

It is vital that developers or agencies consult a URA Officer at the very beginning stages of a project. This helps with planning and guidance to avoid contract or payment delays, or any sanction within the City or HUD. The URA Officer will provide guidance on URA Regulations and the support documentation required to demonstrate compliance with Federal Regulations. 

Notices are given in the instances of voluntary or involuntary acquisition, temporary relocation, and permanent displacement.

Labor Compliance - Section 3 and Davis Bacon

Section 3 projects are housing rehabilitation, housing construction, and other public construction projects assisted under HUD programs that provide housing and community development financial assistance when the total amount of assistance to the project exceeds 

  • a threshold of $200,000 in federal funding, or, 
  • $100,000 of funding from HUD Lead Hazard Control and Healthy Home resource.

The benchmark for ‘Section 3 Workers’ is set at 25% or more of the total number of labor hours worked by all workers on a Section 3 project.  The benchmark for ‘Targeted Section 3 Workers’ is set at 5% or more of the total labor hours worked by all workers on a Section 3 project. 

The Davis-Bacon Act requires the payment of prevailing wage rates (which are determined by the U.S. Department of Labor) to all laborers and mechanics on Federal government and District of Columbia construction projects in excess of $2,000. 

Construction includes alteration and/or repair, including painting and decorating of public buildings or public works. HOME funds used for construction costs on a new construction or rehabilitation housing project with 12 or more ‘assisted units’ will trigger the Davis-Bacon Act.

Affordability Compliance Monitoring

Affordability Compliance Monitoring consists of five (5) areas to ensure compliance with the Departments’ written policies and procedures for all aspects of HOME, NSP and ARPA program operations, which include but are not limited to, the following:

To ensure that tenants are paying rents in accordance with HUD-established income limits for the year. HUD Rents and Income Limits for the year will be used during the audit. All mandatory supporting documents to the annual Rent report will be reviewed and validated for verification purposes. This section also includes Utility Allowance review.

HUD requires all assisted units must be decent, safe, sanitary, and in good repair.  Owners may be required to provide documentation evidencing assisted units are suitable for occupancy, taking into consideration State and local health, safety, and other applicable codes, ordinances, and requirements during the affordability period for the project. 

The accounting section will require, receive, and assess the financial health of a project during its affordability period. Required documentation includes an operating budget, balance sheet, income statement, tenant accounts payable and receivables, beginning and ending cash balances, and replacement reserves. 

The City reviews the Property Manager’s Affirmative Marketing Plan, asks for a report that evidences the race/ethnicity of tenants and applicants for the project and requests changes to be made if any are required. 

The City collects and reviews a sample of leases for the assisted units in the project. The City reviews the leases to make sure they are for the appropriate terms and are in compliance with the prohibited terms under the CFR