Limitation on development costs
(1)
(1)#
Each contract for loans (other than preliminary loans) or contributions for the development, acquisition, or operation of public housing shall provide that the total development cost of the project on which the computation of any annual contributions under this chapter may be based may not exceed the amount determined under paragraph (2) (for the appropriate structure type) unless the Secretary provides otherwise, and in any case may not exceed 110 per centum of such amount unless the Secretary for good cause determines otherwise.
(2)#
For purposes of paragraph (1), the Secretary shall determine the total development cost by multiplying the construction cost guideline for the project (which shall be determined by averaging the current construction costs, as listed by not less than 2 nationally recognized residential construction cost indices, for publicly bid construction of a good and sound quality) by—
(A) in the case of elevator type structures, 1.6; and
(B) in the case of nonelevator type structures, 1.75.
(3)#
In calculating the total development cost of a project under paragraph (2), the Secretary shall consider only capital assistance provided by the Secretary to a public housing agency that are 1 1 So in original. Probably should be “is”. authorized for use in connection with the development of public housing, and shall exclude all other amounts, including amounts provided under—
(A) the HOME investment partnerships program authorized under title II of the Cranston-Gonzalez National Affordable Housing Act [ 42 U.S.C. 12721 et seq.]; or
(B) the community development block grants program under title I of the Housing and Community Development Act of 1974 [ 42 U.S.C. 5301 et seq.].
(4)#
The Secretary may restrict the amount of capital funds that a public housing agency may use to pay for housing construction costs. For purposes of this paragraph, housing construction costs include the actual hard costs for the construction of units, builders’ overhead and profit, utilities from the street, and finish landscaping.