Lesson 4: National objective: housing and jobs

The last two low and moderate income routes at 570.208(a) are the housing objective and the jobs objective. Both count units or positions rather than area demographics or client rolls, and both have carve outs worth knowing before you rely on the basic rule. TxCDBG's parallel criteria are 570.483(b)(3) for housing and (b)(4) for jobs.

Housing, 570.208(a)(3)

This objective covers permanent residential structures that are, on completion, occupied by low and moderate income households. How the count works depends on the size of the structure:

• One-unit structure: that single unit must be occupied by a low or moderate income household.
• Two-unit structure: at least one of the two units.
• More than two units: at least 51 percent of the units.

For rental housing specifically, occupancy alone is not enough. Occupancy has to be at affordable rents, under standards the recipient adopts and makes public. Two or more assisted rental buildings on the same or contiguous properties under common ownership and management can be counted together as a single structure.

For a single-family home, this is the objective that applies to the work GCHS does. Housing rehabilitation cannot use limited clientele, so the household living in the home is what matters, not the area and not a presumed group. TDA's Guide to Meeting a National Program Objective expects each rehabilitation beneficiary household to be low and moderate income.

Two exceptions bend the basic count.

Mixed income exception, (a)(3)(i). New construction of multifamily, non-elderly rental housing can qualify with fewer than 51 percent of units low and moderate income, as long as not less than 20 percent of the units go to low and moderate income households at affordable rents, and the CDBG share of the development cost is no greater than the low and moderate income share of units. This exists because requiring 51 percent low and moderate income occupancy on every new multifamily project would make CDBG participation in mixed income development impractical.

Rental rehabilitation, (a)(3)(ii). When CDBG funds assist rehabilitation in direct support of a recipient's Rental Rehabilitation program authorized under 24 CFR part 511, the 51 percent test applies to the units assisted by the program overall, not to each individual building. Such a program can rehabilitate one building where every unit is low and moderate income and another where none are, and still qualify overall if the total assisted units across the program clear 51 percent. The provision is tied to that specific program, so other rental rehabilitation is counted structure by structure.

Jobs, 570.208(a)(4)

An economic development activity qualifies here if at least 51 percent of the jobs created or retained, counted on a full-time equivalent basis, are held by or available to low and moderate income persons.

Retention, (a)(4)(ii). Where the activity is about saving jobs that would otherwise be lost, the recipient has to show the jobs would actually be lost without the assistance, and for at least 51 percent of those jobs, either the job is documented as currently held by a low or moderate income person, or it can reasonably be expected to turn over within two years, with concrete steps taken to fill the opening with a low or moderate income person when it does.

"Available to," (a)(4)(iii). A job counts as available to low and moderate income persons, rather than actually held by one, only under two conditions holding together: special skills that take substantial training, work experience or education beyond high school are not a prerequisite (or the business agrees to hire unqualified persons and train them), and the recipient and the business both take action to give low and moderate income persons first consideration for the opening.

Presumption by location, (a)(4)(iv) and (v). A person may be presumed to be low or moderate income if he or she resides in a qualifying census tract, or in a tract where at least 70 percent of residents are low and moderate income. A job can also be presumed to meet the objective when the assisted business and the job are located in a qualifying tract. A tract qualifies either through an Empowerment Zone or Enterprise Community designation, or by meeting all three of: a poverty rate of at least 20 percent; exclusion of the central business district from the tract, unless the poverty rate there is at least 30 percent; and one additional distress standard.

Aggregation, (a)(4)(vi). Normally the job count is done business by business. For public facilities and improvements, (a)(4)(vi)(F) sets the dividing line at $10,000 in CDBG funds per permanent full-time equivalent job. Below that figure, only the businesses the facility is principally undertaken for get aggregated into the count. At or above that figure, every business in the service area that locates or expands because of the facility, up to one year after its completion, gets aggregated together, and the combined total has to meet the public benefit standards.

Reading housing and jobs together

Both objectives share a structure worth noticing: a basic count-based rule, one or more carve outs that ease that rule for a specific, named situation, and a presumption mechanism that removes the need for individual-level documentation when a location or category already establishes the low and moderate income connection. Learn the basic rule cold first. The exceptions only make sense once you can see what they are exceptions from.

What this means in practice for GCHS

GCHS's work is overwhelmingly single-family owner-occupied rehabilitation, and the housing objective is where that work belongs, not limited clientele. For a one-unit home the test is simple: the household living there must be low or moderate income, and the file documents it household by household. The multi-unit counting rules become directly relevant the moment a project involves a duplex, a small multifamily building, or any structure with more than one unit, because then the unit count starts to matter. The jobs objective will rarely apply to GCHS's core rehabilitation work, but it belongs in this course because GCHS operates in counties where a partner jurisdiction's broader CDBG program may include economic development activities that this organization coordinates with or comments on as part of the local planning process.