HUD Environmental Review

Before you begin the environmental review process, you need to define the project. This can be challenging and it is important to understand the proposed project scope in its entirety and include all potential activities that could be part of the project. According to federal regulations, the project description should include all phases or all known work anticipated in the next three to five years. You must group together and evaluate as a single project all individual activities, which are related geographically or functionally or are logical parts of a composite action. Additional details on project aggregation can be found at 24 CFR 58.32. Your project description should include the following details:

• The project’s exact location
• Site existing conditions including current buildings
• The size of the site parcels
• Proposed changes to structures/land
• Beneficiaries (numbers, types), impact to the community
• All potential funding sources, including all grants or federal/state subsidies the project might receive, for instance a low-income housing tax credit.

There are four different levels of environmental reviews performed by DOLA and selecting the correct one is based upon the proposed project activities:

• Exempt
  • The Exempt level of review applies to projects that have no physical component - only planning or administration such as:
    • Grant management and administration
    • Environmental studies or assessments, engineering and design costs
    • Information and financial services
    • Public services
    • Purchase of insurance, tools
    • Technical assistance and training
    • Inspection and testing of properties
  • A complete list of exempt activities can be found at 24 Part 58.34(a). The Exempt and CENST format is used to complete this level of review.
• CENST or Categorically Excluded Not Subject to 58.5
  • The CENST level of review applies to projects that have no physical component and include acceptable activities such as:
    • Tenant-based rental assistance;
    • Supportive services including health care, housing services, permanent housing placement, etc.;
    • Operating costs, including maintenance, security, etc.;
    • Economic development activities;
    • Activities to assist homebuyers to purchase existing dwelling units;
    • Affordable housing pre-development costs, legal, consulting, admin costs (i.e., “soft costs”);
    • Approval of supplemental assistance to a project previously approved under Part 58
  • A complete list of CENST activities can be found at 24 CFR Part 58.35(b). The Exempt and CENST format is used to complete this level of review.
• CEST or Categorically Excluded Subject to 58.5
  • The CEST level of review applies to projects that have a limited physical component such as:
    • Acquisition, repair, improvement, reconstruction, or rehabilitation of existing public facilities and improvements (other than buildings) without change in size or capacity of more than 20 percent. For example:
      • Replacement of water or sewer lines
      • Reconstruction of curbs and sidewalks
      • Repaving of streets
    • Special projects directed to the removal of material and architectural barriers that restrict the mobility of and accessibility to the elderly and handicapped persons
    • Rehabilitation of building and improvements under specific conditions
    • An individual action on a single family property (maximum four units on one site) or scattered sites
    • Acquisition or disposition of, or equity loans on an existing structure, or acquisition of vacant land provided that the structure or land acquired, financed, or disposed of will be retained for the same use.
    • Combinations of the acceptable activities
  • A complete list of activities eligible for CEST level of review can be found at 24 CFR 58.35(a). The Part 58 CEST format is used to complete this level of review.
• EA or Environmental Assessment
  • The EA level of review applies to projects that do not fall under Exempt or Categorically Excluded categories (CENST or CEST) and have an advanced physical component such as:
    • New Construction
    • Major rehabilitation
    • Acquisition
    • Change in land use
  • A complete list of EA requirements can be found at 24 CFR Part 58.40 and the Part 58 EA format is used to complete this level of review.

After the level of environmental review has been determined, the next step is to complete the environmental review document. The Exempt and CENST format are lower levels of review and can be completed by a DOLA Housing Specialist or the DOLA Environmental Compliance Officer. The CEST and EA formats are higher levels of review and many of the compliance categories require qualified professionals to make determinations of the environmental impact such as for Historic Preservation, Contamination and Toxic Substances, Explosive and Flammable Hazards, and Endangered Species. If you do not have a qualified environmental specialist in-house, then you will need to hire an environmental contractor or environmental firm to complete the review for your project.

The CEST and EA level of reviews require a public notice to be published for a specific amount of time. The exception is if a CEST review converts to Exempt, which occurs when there are no mitigation factors required. The EA level review will always require a public notice publication.  The purpose of the public notice is to inform the public about a proposed project and allow them to submit comments and objections regarding its potential environmental impacts. HUD allows for public notices to be published in a newspaper of general circulation within the affected area, on the Responsible Entity's (RE) website, or through other appropriate means to reach potential impacted parties, such as posting at a post office or public library. Proof of the publication or posting must be documented and kept in the Environmental Review Record (ERR).

• Public notice example Notice of Intent (NOI) - CEST
• Public notice example Finding of No Significant Impact (FONSI) - EA
• RROF and Certification HUD Form 7015.15

The Environmental Review Record (ERR) is extremely important because (1) it is proof that you have completed the environmental review process and (2) an incomplete ERR could result in loss of funding. The ERR is a living set of documents and must contain a well-organized written record of the process and determinations made throughout the review. The ERR may need to be updated even after the environmental review has been completed. The ERR must be available for inspection.

The ERR must contain the environmental review document and the following:

• All associated environmental reports including technical studies
• All backup documentation i.e. letters, maps, architectural plans, etc.
• Public notice affidavits or proof of publication
• Signed Authority to Use Grant Funds (AUGF)
• Agency correspondence
• Proof of implemented mitigation measures

If your environmental review requires environmental mitigation, the Responsible Entity (RE) must document that the mitigation measures have been correctly implemented at the completion of a project. This may include mitigation issues such as radon, asbestos, lead based paint, site contamination, and site noise to name a few. Documentation of required mitigation may include radon testing and proof of mitigation system installation, Voluntary Cleanup and Redevelopment (VCUP) application approval and No Action Determination (NAD) letter from CDPHE, proof of noise attenuation utilized in the completed build, etc. All mitigation documents must be included in the Environmental Review Record (ERR).