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Section 5: Replacement Housing Payments

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Overview

The replacement housing payment is the amount which, when added to the acquisition cost of the displacement dwelling, equals the lesser of:

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  • the reasonable cost of a comparable replacement dwelling, according to policies on replacement housing supplement computations; or
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  • the purchase price of the DSS replacement dwelling purchased and occupied by the displaced person.
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Eminent Domain/Administrative Settlement

For condemned property, the acquisition price of the displacement dwelling is the amount of the final judgment rendered. When a replacement housing payment is computed based on an adjusted value for the displaced dwelling (the subject) and the final judgment or administrative settlement does not specify how much of the award is for the displaced dwelling and its related land and attributes, then re-compute a preliminary housing supplement by adjusting the subject’s value in the same proportion as the award is to the approved value. For example, if the award increases the value of the parcel by 10 percent, then increase the subject value used for the preliminary supplement by 10 percent.

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Mixed-Use and Multi-Family Properties Acquired

If the displacement dwelling was part of a property that contained another dwelling unit and/or space used for Non-residential purposes, and/or is located on a lot larger than typical for residential purposes, consider only that portion of the acquisition payment that is attributable to the displacement dwelling as its acquisition cost when computing the price differential.

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Insurance Proceeds

To the extent necessary to avoid duplicate compensation, include insurance proceeds received by a person because of loss to the displacement dwelling due to a catastrophic occurrence (e.g. fire, flood) in the acquisition cost of the displacement dwelling when computing the price differential.

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Owner Retention of Displacement Dwelling

If the owner elects to retain ownership of his dwelling, move it from the displacement site, and reoccupy it on a replacement site, then the purchase price of the replacement dwelling is the sum of:

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  • cost of moving and restoring the dwelling to a condition comparable to that before the move;
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  • costs to make the unit a DSS replacement dwelling;
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  • fair market value of the replacement site for residential use unless the displacee rented the displacement site and there is a reasonable opportunity for the displacee to rent a suitable replacement site; and
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  • retention value (cost) of the dwelling if such retention value is reflected in the acquisition cost (parcel appraisal) used in computing the replacement housing supplement.

Typically, cost of retaining and relocating a dwelling is less than the acquisition cost of the parcel, and the displacee is not eligible to receive any part of an approved supplement.

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