narrowing the digital divide through installation of ...€¦ · 2 live in hope why me? mercy loan...
TRANSCRIPT
Narrowing the Digital Divide Through Installation of Broadband Infrastructure
in HUD-Funded New Construction and Substantial Rehabilitation of Multifamily
Rental Housing
October 12th, 2017
Background Why me? Why HUD? Why Broadband?
Rule Purpose Definitions
Broadband Infrastructure Substantial Rehabilitation Speed
HUD Programs Included Exclusions
Financing broadband infrastructure
Agenda
LIVE IN HOPE 2
Why Me? Mercy Loan Fund- Community Development
Financial Institution (CDFI)
To create stable, vibrant, and healthy communities by developing, financing and operating program-enriched housing for families, seniors and people with special needs who lack the economic resources to access quality, safe housing opportunities.
Tony asked me to be a part of this panel because of Mercy Loan Fund’s commitment to the promotion of broadband technology.
Background- Why me?
LIVE IN HOPE 3
Why HUD?
Background-Why HUD?
LIVE IN HOPE 4
March 23rd, 2015 Obama Administration Presidential memorandum
“Expanding Broadband Deployment and Adoption by Addressing Regulatory Barriers and Encouraging Investment and Training.”
‘Access to high-speed broadband is no longer a luxury, but it is a necessity for American families, businesses, and consumers.’
Background-Why HUD?
LIVE IN HOPE 5
March 23rd, 2015 Presidential memorandum President Obama further noted that the Federal
Government has an important role to play in developing coordinated policies to promote broadband deployment and adoption, including promoting best practices, breaking down regulatory barriers and encouraging further investment.
Part of the memorandum called for a Broadband opportunity council of which HUD was a member.
May 18th, 2016 HUD published a proposed rule seeking to require the installation of broadband infrastructure on all new construction or substantial rehabilitation in multifamily projects supported by HUD.
Background-Why HUD?
LIVE IN HOPE 6
March 23rd, 2015 Presidential memorandum
May 18th, 2016 HUD Proposed rule
July 18th, 2016 Comment Period Closed
December 20th, 2016 HUD final rule effective January 19th, 2017
Just under the wire…
Background-Why HUD?
LIVE IN HOPE 7
ASSumption
Background-Why Broadband?
LIVE IN HOPE 8
President Obama’s memorandum points out that it is not only access to the internet that is needed, but access at a certain speed
The memorandum references a report produced by Ericsson ‘Socioeconomic Effects of Broadband Speed’. Link to report
This report looked at both Macroeconomic and Microeconomic factors in relation to broadband speed. R2
Background-Why Broadband?
LIVE IN HOPE 9
Macroeconomic effects
Doubling broadband speeds for an economy can add 0.3 percent to GDP growth
Economic effects, including increased innovation and productivity in business
Social effects, including better access to services and improved healthcare
Environmental effects, including more efficient energy consumption
Background-Why Broadband?
LIVE IN HOPE 10
Microeconomic effects
In OECD countries, gaining 4 Mbps of broadband increases household income by USD 2,100 per year
In BIC countries, introducing a 0.5 Mbps broadband connection increases household income by USD 800 per year
In OECD countries, upgrading from 0.5 Mbps to 4 Mbps increases income by around USD 322 per month
In BIC countries, upgrading from 0.5 to 4 Mbps increases income by USD 46 per month
Background-Why Broadband?
LIVE IN HOPE 11
To narrow the digital divide in low income communities served by HUD
To provide a platform for individuals and families to participate in the digital economy and increase their access to economic opportunities.
Rule- Purpose
LIVE IN HOPE 12
Final Rule
HUD requires installation of broadband infrastructure at the time of new construction or substantial rehabilitation of multifamily rental housing that is funded or supported by HUD
Limited exceptions
Rule
LIVE IN HOPE 13
Broadband Infrastructure
Cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure—including wireless infrastructure—as long as the installation results in broadband infrastructure in each dwelling unit meeting the Federal Communications Commission's (FCC's) definition in effect at the time the pre-construction estimates are generated.
Rule - Definitions
LIVE IN HOPE 14
Substantial Rehabilitation
For programs that do not already have a definition of substantial rehabilitation Work on the electrical system with estimated costs equal to
or greater than 75 percent of the cost of replacing the entire electrical system, or when the estimated cost of the rehabilitation is equal to or greater than 75 percent of the total estimated cost of replacing the multifamily rental housing after the rehabilitation is complete.
Calculation done on pre rehabilitation estimates for the work.
Rule - Definitions
LIVE IN HOPE 15
Definitions- Speed
LIVE IN HOPE 16
FCC defines broadband speeds as 25 Megabits per second download, 3 Megabits upload
Current HUD speed requirements
25 Megabits per second download
3 Megabits per second upload
Federal Communications Commission Definition at the time pre-construction estimates are generated.
Definitions- Speed
LIVE IN HOPE 17
The following Nationwide and Colorado maps show where fixed residential broadband services of at least 25 Mbps download and 3 Mbps upload is deployed and where it is not deployed.
https://www.fcc.gov/maps
Definitions- Speed
LIVE IN HOPE 18
Definitions- Speed
LIVE IN HOPE 19
Financing broadband infrastructure- Property Level HUD will approve broadband infrastructure as part of the
new or rehab construction budget.
HOME Funds
Housing Trust Fund
CDBG
LIHTC
Banks (Community Reinvestment Act (CRA))
Partnerships Cities/ Libraries
Educational institutions
Banks/ Federal Reserves
CDFI’s
Financing broadband infrastructure
LIVE IN HOPE 20
Financing broadband infrastructure- Community Level
USDA RD guarantee loan program and grants
Cities
Utility Cooperatives
Privately- owned (Comcast-Google Fiber)
Banks (CRA) Infrastructure Opportunity
Financing broadband infrastructure
LIVE IN HOPE 21
Financing broadband infrastructure- Community Level
Dallas Fed Publication on CRA Primary Purpose definition- serve LMI individuals and
communities
Community Development definition- revitalize and stabilize LMI areas
Service Test- proof that alternate delivery systems are being used
CRA Q & A published in 2016
Financing broadband infrastructure
LIVE IN HOPE 22