New Final Rule - Installation of Broadband Mandatory for New Construction/Sub Rehab

On December 20, 2016, the U.S. Department of Housing and Urban Development (HUD) published its Final Rule - Narrowing the Digital Divide Through Installation of Broadband Infrastructure in HUD-Funded New Construction and Substantial Rehabilitation of Multifamily Rental Housing - which requires the installation of broadband infrastructure in certain HUD-financed multifamily rental housing projects. This rule is effective January 19, 2017.

HUD now requires installation of broadband infrastructure at the time of new construction or substantial rehab of multifamily rental housing (with more than 4 rental units) that is funded or supported by HUD.  Certain exceptions apply.  The applicable HUD programs include, but are not limited to, Section 8 project-based housing assistance programs, as well as HOME, CDBG, the Project-Based Voucher program. The rule does not apply to a project whose sole financial support from HUD is either a mortgage insured by the Federal Housing Administration or a loan guaranteed under a HUD program.

HUD's goal in implementing the new rule is to help families increase earnings potential and/or increase their ability to attain a higher level of education.

The Final Rule does not require an owner/agent to begin substantial rehab when none was planned. 

This Final Rule only requires that the broadband infrastructure provided be able to receive high-speed Internet that is "accessible" in each unit. It does not require owner/agents, undertaking new construction or substantial rehab, to provide broadband service to current or future residents.

HUD also explains that they will continue to explore the possibilities of reducing the cost of broadband unfractured including allowing HUD funds to be used for operation or maintenance costs of facilitating group purchases to reduce the costs of the infrastructure itself.  Review of this new Final Rule is a "must" for any owner/agent who is planning new construction or substantial rehab.