P.L. 86–372, Approved September 23, 1959 (73 Stat. 654)

Sec. 202. [12 U.S.C. 1701q]  SUPPORTIVE HOUSING FOR THE ELDERLY.

(h)  Development Cost Limitations.—

(1)  In general.—The Secretary shall periodically establish development cost limitations by market area for various types and sizes of supportive housing for the elderly by publishing a notice of the cost limitations in the Federal Register. The cost limitations shall reflect—

(A)  the cost of construction, reconstruction, or rehabilitation of supportive housing for the elderly that meets applicable State and local housing and building codes;

(B)  the cost of movables necessary to the basic operation of the housing, as determined by the Secretary;

(C)  the cost of special design features necessary to make the housing accessible to elderly persons;

(D)  the cost of special design features necessary to make individual dwelling units meet the physical needs of elderly project residents;

(E)  the cost of congregate space necessary to accommodate the provision of supportive services to elderly project residents;

(F)  if the housing is newly constructed, the cost of meeting the energy efficiency standards promulgated by the Secretary in accordance with section 12709 of title 42; and

(G)  the cost of land, including necessary site improvement.

In establishing development cost limitations for a given market area under this subsection, the Secretary shall use data that reflect currently prevailing costs of construction, reconstruction, or rehabilitation, and land acquisition in the area. For purposes of this paragraph, the term “congregate space” shall include space for cafeterias or dining halls, community rooms or buildings, workshops, adult day health facilities, or other outpatient health facilities, or other essential service facilities. Neither this section nor any other provision of law may be construed as prohibiting or preventing the location and operation, in a project assisted under this section, of commercial facilities for the benefit of residents of the project and the community in which the project is located, except that assistance made available under this section may not be used to subsidize any such commercial facility.

(2)  Acquisition.—In the case of existing housing and related facilities to be acquired, the cost limitations shall include—

(A)  the cost of acquiring such housing,

(B)  the cost of rehabilitation, alteration, conversion, or improvement, including the moderate rehabilitation thereof, and

(C)  the cost of the land on which the housing and related facilities are located.

(3)  Annual adjustments.—The Secretary shall adjust the cost limitation not less than once annually to reflect changes in the general level of construction, reconstruction, or rehabilitation costs.

(4)  Incentives for savings.—

(A)  Special housing account.—The Secretary shall use the development cost limitations established under paragraph (1) or (2) to calculate the amount of financing to be made available to individual owners. Owners which incur actual development costs that are less than the amount of financing shall be entitled to retain 50 percent of the savings in a special housing account. Such percentage shall be increased to 75 percent for owners which add energy efficiency features which—

(i)  exceed the energy efficiency standards promulgated by the Secretary in accordance with section 12709 of title 42;

(ii)  substantially reduce the life-cycle cost of the housing;

(iii)  reduce gross rent requirements; and

(iv)  enhance tenant comfort and convenience.

(B)  Uses.—The special housing account established under subparagraph (A) may be used—

(i)  to supplement services provided to residents of the housing or funds set aside for replacement reserves, or

(ii)  for such other purposes as determined by the Secretary.

(5)  Design flexibility.—The Secretary shall, to the extent practicable, give owners the flexibility to design housing appropriate to their location and proposed resident population within broadly defined parameters.

(6)  Use of funds from other sources.—An owner shall be permitted voluntarily to provide funds from sources other than this section for amenities and other features of appropriate design and construction suitable for supportive housing for the elderly if the cost of such amenities is (A) not financed with the advance, and (B) is not taken into account in determining the amount of Federal assistance or of the rent contribution of tenants. Notwithstanding any other provision of law, assistance amounts provided under this section may be treated as amounts not derived from a Federal grant.