Much has been written about the “digital divide” – the connectivity gap between demographics and regions that have access to the internet, and those that do not have access or have restricted access. Fewer than half of low-income families have access to the internet. The digital divide puts these families at a disadvantage by limiting their educational and economic opportunities.  

In an effort to narrow the digital divide in low-income communities, HUD proposed a new rule that would require installation of broadband infrastructure at the time of new construction or substantial rehabilitation of multifamily rental housing funded by HUD. “Substantial rehabilitation” is defined to include (i) “significant work” on the property’s electrical system that is equal to or greater than 75% of the cost of replacing the entire electrical system; or (ii) rehabilitation of the property the estimated cost of which is equal to or greater than 75% of the replacement cost of the property after the rehabilitation is complete. The rule provides for some exceptions to the broadband installation requirements where the owner can demonstrate that such installation is not feasible due to the location of the property, the expense of installation or the structure of the building.    

HUD’s proposal would only apply to new construction and substantial rehabilitation of multifamily rental housing funded by HUD programs, such as CDBG, HOME and Section 8. The rule would apply to projects which have not yet established budgets or received funding approval. The proposed rule would not apply to multifamily rental housing supported by only an FHA insured mortgage or a loan guaranteed under a HUD loan guarantee program and would not apply to single-family housing.  Further, the proposed rule only requires the installation of broadband infrastructure on the property so that high-speed internet is accessible in each unit. It does not require property owners to provide internet service to residents.

The aforementioned proposed rule was published at 81 Fed. Reg. 31181. Comments to the proposed rule are due by July 18, 2016.

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