---
kind: "section"
citation: "42 U.S.C. § 1437z–5"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1437z–5"
heading: "Required conversion of distressed public housing to tenant-based assistance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1437z-5"
units:
  - "Chapter 8 — Low-Income Housing"
  - "Subchapter I — General Program of Assisted Housing"
---

# §1437z–5. Required conversion of distressed public housing to tenant-based assistance

- (a) **Identification of units—** Each public housing [agency](/usc/42/8262.md?p=1) shall identify all public housing [projects](/usc/42/13641.md?p=2) of the public housing [agency](/usc/42/8262.md?p=1) that meet all of the following requirements:
  - (1) The [project](/usc/42/13641.md?p=2) is on the same or contiguous sites.
  - (2) The [project](/usc/42/13641.md?p=2) is determined by the public housing [agency](/usc/42/8262.md?p=1) to be distressed, which determination shall be made in accordance with guidelines established by the [Secretary](/usc/42/242q–4.md?p=2), which guidelines shall take into account the criteria established in the Final Report of the National Commission on Severely Distressed Public Housing (August 1992).
  - (3) The [project](/usc/42/13641.md?p=2)—
    - (A) is identified as distressed housing under [paragraph (2)](#a-2) for which the public housing [agency](/usc/42/8262.md?p=1) cannot assure the long-term viability as public housing through reasonable [modernization](/usc/42/300s–3.md?p=9) expenses, density reduction, achievement of a broader range of family income, or other measures; or
    - (B) has an estimated cost, during the remaining useful life of the [project](/usc/42/13641.md?p=2), of continued operation and [modernization](/usc/42/300s–3.md?p=9) as public housing that exceeds the estimated cost, during the remaining useful life of the [project](/usc/42/13641.md?p=2), of providing tenant-based assistance under [section 1437f of this title](/usc/42/1437f.md) for all families in occupancy, based on appropriate indicators of cost (such as the percentage of total development costs required for [modernization](/usc/42/300s–3.md?p=9)).
- (b) **Consultation—** Each public housing [agency](/usc/42/8262.md?p=1) shall consult with the appropriate public housing residents and the appropriate [unit of general local government](/usc/42/11851.md?p=12) in identifying any public housing [projects](/usc/42/13641.md?p=2) under [subsection (a)](#a).
- (c) **Plan for removal of units from inventories of PHAs—**
  - (1) **Development—** Each public housing [agency](/usc/42/8262.md?p=1) shall develop and carry out a 5-year plan in conjunction with the [Secretary](/usc/42/242q–4.md?p=2) for the removal of public housing units identified under [subsection (a)](#a) from the inventory of the public housing [agency](/usc/42/8262.md?p=1) and the annual contributions contract.
  - (2) **Approval—** Each plan required under [paragraph (1)](#c-1) shall—
    - (A) be included as part of the public housing [agency](/usc/42/8262.md?p=1) plan;
    - (B) be certified by the relevant local official to be in accordance with the comprehensive housing affordability strategy under title I of the Housing and Community Development Act of 1992; and
    - (C) include a description of any disposition and demolition plan for the public housing units.
  - (3) **Extensions—** The [Secretary](/usc/42/242q–4.md?p=2) may extend the 5-year deadline described in [paragraph (1)](#c-1) by not more than an additional 5 years if the [Secretary](/usc/42/242q–4.md?p=2) makes a determination that the deadline is impracticable.
  - (4) **Review by Secretary—**
    - (A) **Failure to identify projects—** If the [Secretary](/usc/42/242q–4.md?p=2) determines, based on a plan submitted under this subsection, that a public housing [agency](/usc/42/8262.md?p=1) has failed to identify 1 or more public housing [projects](/usc/42/13641.md?p=2) that the [Secretary](/usc/42/242q–4.md?p=2) determines should have been identified under [subsection (a)](#a), the [Secretary](/usc/42/242q–4.md?p=2) may designate the public housing [projects](/usc/42/13641.md?p=2) to be removed from the inventory of the public housing [agency](/usc/42/8262.md?p=1) pursuant to this section.
    - (B) **Erroneous identification of projects—** If the [Secretary](/usc/42/242q–4.md?p=2) determines, based on a plan submitted under this subsection, that a public housing [agency](/usc/42/8262.md?p=1) has identified 1 or more public housing [projects](/usc/42/13641.md?p=2) that should not have been identified pursuant to [subsection (a)](#a), the [Secretary](/usc/42/242q–4.md?p=2) shall—
      - (i) require the public housing [agency](/usc/42/8262.md?p=1) to revise the plan of the public housing [agency](/usc/42/8262.md?p=1) under this subsection; and
      - (ii) prohibit the removal of any such public housing [project](/usc/42/13641.md?p=2) from the inventory of the public housing [agency](/usc/42/8262.md?p=1) under this section.
- (d) **Conversion to tenant-based assistance—**
  - (1) **In general—** To the extent approved in advance in appropriations Acts, the [Secretary](/usc/42/242q–4.md?p=2) shall make budget authority available to a public housing [agency](/usc/42/8262.md?p=1) to provide assistance under this chapter to families residing in any public housing [project](/usc/42/13641.md?p=2) that, pursuant to this section, is removed from the inventory of the [agency](/usc/42/8262.md?p=1) and the annual contributions contract of the [agency](/usc/42/8262.md?p=1).
  - (2) **Conversion requirements—** Each [agency](/usc/42/8262.md?p=1) carrying out a plan under [subsection (c)](#c) for removal of public housing dwelling units from the inventory of the [agency](/usc/42/8262.md?p=1) shall—
    - (A) notify each family residing in a public housing [project](/usc/42/13641.md?p=2) to be converted under the plan 90 days prior to the displacement date, except in cases of imminent threat to health or safety, consistent with any guidelines issued by the [Secretary](/usc/42/242q–4.md?p=2) governing such notifications, that—
      - (i) the public housing [project](/usc/42/13641.md?p=2) will be removed from the inventory of the public housing [agency](/usc/42/8262.md?p=1); and
      - (ii) each family displaced by such action will be offered comparable housing—
        - (I) that meets housing quality standards; and
        - (II) which may include—
          - (aa) tenant-based assistance, except that the requirement under this clause regarding offering of comparable housing shall be fulfilled by use of tenant-based assistance only upon the relocation of such family into such housing;
          - (bb) [project](/usc/42/13641.md?p=2)-based assistance; or
          - (cc) occupancy in a unit operated or assisted by the public housing [agency](/usc/42/8262.md?p=1) at a rental rate paid by the family that is comparable to the rental rate applicable to the unit from which the family is vacated.
    - (B) provide any necessary counseling for families displaced by such action;
    - (C) ensure that, if the [project](/usc/42/13641.md?p=2) (or portion) converted is used as housing after such conversion, each resident may choose to remain in their dwelling unit in the [project](/usc/42/13641.md?p=2) and use the tenant-based assistance toward rent for that unit;
    - (D) ensure that each displaced resident is offered comparable housing in accordance with the notice under [subparagraph (A)](#d-2-A); and
    - (E) provide any actual and reasonable relocation expenses for families displaced by such action.
- (e) **Cessation of unnecessary spending—** Notwithstanding any other provision of law, if, in the determination of the [Secretary](/usc/42/242q–4.md?p=2), a [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2) of a public housing [agency](/usc/42/8262.md?p=1) meet or are likely to meet the criteria set forth in [subsection (a)](#a), the [Secretary](/usc/42/242q–4.md?p=2) may direct the [agency](/usc/42/8262.md?p=1) to cease additional spending in connection with such [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2) until the [Secretary](/usc/42/242q–4.md?p=2) determines or approves an appropriate course of action with respect to such [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2) under this section, except to the extent that failure to expend such amounts would endanger the health or safety of residents in the [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2).
- (f) **Use of budget authority—** Notwithstanding any other provision of law, if a [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2) are identified pursuant to [subsection (a)](#a), the [Secretary](/usc/42/242q–4.md?p=2) may authorize or direct the transfer, to the tenant-based assistance program of such [agency](/usc/42/8262.md?p=1) or to appropriate site revitalization or other capital improvements approved by the [Secretary](/usc/42/242q–4.md?p=2), of—
  - (1) in the case of an [agency](/usc/42/8262.md?p=1) receiving assistance under the comprehensive improvement assistance program, any amounts obligated by the [Secretary](/usc/42/242q–4.md?p=2) for the [modernization](/usc/42/300s–3.md?p=9) of such [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2) pursuant to [section 1437l](/usc/42/1437l.md) of this title (as in effect immediately before the effective date under [section 503(a)](/usc/42/503.md?p=a) of the Quality Housing and Work Responsibility Act of 1998);
  - (2) in the case of an [agency](/usc/42/8262.md?p=1) receiving public housing [modernization](/usc/42/300s–3.md?p=9) assistance by formula pursuant to such [section 1437l](/usc/42/1437l.md) of this title, any amounts provided to the [agency](/usc/42/8262.md?p=1) which are attributable pursuant to the formula for allocating such assistance to such [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2);
  - (3) in the case of an [agency](/usc/42/8262.md?p=1) receiving assistance for the major reconstruction of obsolete [projects](/usc/42/13641.md?p=2), any amounts obligated by the [Secretary](/usc/42/242q–4.md?p=2) for the major reconstruction of such [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2) pursuant to [section 1437c(j)(2) of this title](/usc/42/1437c.md), as in effect immediately before the effective date under [section 503(a)](/usc/42/503.md?p=a) of the Quality Housing and Work Responsibility Act of 1998; and
  - (4) in the case of an [agency](/usc/42/8262.md?p=1) receiving assistance pursuant to the formulas under [section 1437g of this title](/usc/42/1437g.md), any amounts provided to the [agency](/usc/42/8262.md?p=1) which are attributable pursuant to the formulas for allocating such assistance to such [project](/usc/42/13641.md?p=2) or [projects](/usc/42/13641.md?p=2).
- (g) **Removal by Secretary—** The [Secretary](/usc/42/242q–4.md?p=2) shall take appropriate actions to ensure removal of any public housing [project](/usc/42/13641.md?p=2) identified under [subsection (a)](#a) from the inventory of a public housing [agency](/usc/42/8262.md?p=1), if the public housing [agency](/usc/42/8262.md?p=1) fails to adequately develop a plan under [subsection (c)](#c) with respect to that [project](/usc/42/13641.md?p=2), or fails to adequately implement such plan in accordance with the terms of the plan.
- (h) **Administration—**
  - (1) **In general—** The [Secretary](/usc/42/242q–4.md?p=2) may require a public housing [agency](/usc/42/8262.md?p=1) to provide to the [Secretary](/usc/42/242q–4.md?p=2) or to public housing residents such information as the [Secretary](/usc/42/242q–4.md?p=2) considers to be necessary for the administration of this section.
  - (2) **Applicability of section 1437p—** [Section 1437p of this title](/usc/42/1437p.md) shall not apply to the demolition of public housing [projects](/usc/42/13641.md?p=2) removed from the inventory of the public housing [agency](/usc/42/8262.md?p=1) under this section.

## Source credit

(Sept. 1, 1937, ch. 896, title I, § 33, as added Pub. L. 105–276, title V, § 537(a), Oct. 21, 1998, 112 Stat. 2588.)

## Notes

### Editorial Notes

### References in Text

Title I of the Housing and Community Development Act of 1992, referred to in subsec. (c)(2)(B), is title I of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3681. For complete classification of title I to the Code, see Tables.

Section 1437l of this title, referred to in subsec. (f)(1), (2), was repealed by Pub. L. 105–276, title V, § 522(a), Oct. 21, 1998, 112 Stat. 2564.

Section 503(a) of the Quality Housing and Work Responsibility Act of 1998, referred to in subsec. (f)(1), (3), is section 503(a) of Pub. L. 105–276, which is set out as an Effective Date of 1998 Amendment note under section 1437 of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective and applicable beginning upon Oct. 1, 1999, except as otherwise provided, with provision that Secretary may implement section before such date except to extent otherwise provided, see section 503 of Pub. L. 105–276, set out as an Effective Date of 1998 Amendment note under section 1437 of this title.

### Transition

Pub. L. 105–276, title V, § 537(c), Oct. 21, 1998, 112 Stat. 2592, provided that: Use of amounts.—Any amounts made available to a public housing agency to carry out section 202 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 (enacted as section 101(e) of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Public Law 104–134; 110 Stat. 1321–279)) [former 42 U.S.C. 1437l note] may be used, to the extent or in such amounts as are or have been provided in advance in appropriation Acts, to carry out section 33 of the United States Housing Act of 1937 [42 U.S.C. 1437z–5] (as added by subsection (a) of this section). Savings provision.—Notwithstanding the amendments made by this section [enacting this section and repealing provisions set out as a note under section 1437l of this title], section 202 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 (42 U.S.C. 14371 [1437l] note) and any regulations implementing such section, as in effect immediately before the enactment of this Act [Oct. 21, 1998], shall continue to apply to public housing developments identified by the Secretary or a public housing agency for conversion pursuant to that section or for assessment of whether such conversion is required prior to enactment of this Act.”