Before you begin the environmental review process you need to define the project. This sounds easy, but 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 (PDF) 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, and
• ALL potential funding sources, including all grants or federal/state subsidies the project might receive, for instance a low-income housing tax credit.

In addition, if your proposed project is proposed housing or infrastructure project it is important to include the following components of project construction:

• Ground disturbance: locations and dimensions, including depths, of all ground disturbance
  • Important for potential impacts related to archaeological and paleontological resources, and from contaminated soil and soil erosion
• Planned Construction Equipment:
  • Important for determining potential impacts to air quality, soil erosion/water quality
• Construction Schedule:
  • Important for determining potential impacts to biological resources/protected species
• Proposed construction staging locations
• Waste management practices on and off-site

There are five different types of environmental review and selecting the correct one is based upon the proposed project activities.

Exempt and “CENST” or Categorically Excluded Not Subject to 58.5

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).

“CENST” or Categorically Excluded Not Subject to 58.5

Projects applicable for the CENST level of review have no physical component and acceptable activities include:

• 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 activities eligible for CENST level of review can be found here.

Both Exempt and CENST levels of environmental review use the same file that can be accessed on the HUD Exchange.

“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) and the template file to use is available here. A CEST environmental review is a “mini” Environmental Assessment.

Environmental Assessment

If your project is not exempt or categorically excluded (CEST or CENST), an Environmental Assessment (EA) must be prepared. EAs are typically required when the proposed project has activities such as new construction or a change in land use. A complete list of EA requirements can be found here and the template file to use is available here.

If you believe your project may be eligible for a tiered environmental review or need an environmental impact statement (EIS), please contact the HCD Environmental Services Team.

After the level of environmental review has been determined, the next step is to complete the environmental review document. If you have any questions related to the environmental review process, you may contact the HCD Environmental Services Team.

All environmental reviews require analysis of at least some of the Federal Laws and Authorities. Analysis of each Federal Law and Authority requires completion of the appropriate HUD worksheet that must be attached to your environmental document. HUD worksheets have been developed for either “Responsible Entities” or “Partner”.

Responsible Entity is the state (HCD) or local government that assumes responsibility for the environmental review.

Partners include applicants, consultants, contractors, nonprofits, and public housing authorities who assist with the environmental review process but may not legally take responsibility for completing the environmental review.

If your project requires agency consultation and you are not the responsible entity, please reach out to HCD’s Environmental Services Team.

Please note: Agency consultation letters must be sent by the responsible entity and may not be sent by a partner. Each of the following links provides guidance and templates that should be used during your environmental review preparation process.

Analyzing Federal Laws and Authorities

The best environmental reviews consistently use the latest available resources as a guide. The HUD Exchange – Related Federal Laws and Authorities website provides the most up to date information and should be used as a step by step guide for analysis of each topic, including:

Prior to analyzing each topic you should review the information presented on the HUD Exchange, use it as a guide and resource, and download the appropriate worksheet. HCD has prepared a guide on How to Prepare a HUD Worksheet (PDF).

The HUD Exchange – Evaluating Impacts for Environmental Assessment should be referenced before the EA Factors and Categories section is prepared. At the HUD Exchange, you will find eGuides for Land Development, Socioeconomic, Community Facilities and Services, Natural Features, and Climate and Energy.

Evaluating the impacts for the EA categories is based on relevant information and analysis and the preparer can make a determination using one of four codes: 1) Minor beneficial impact; 2) No impact anticipated; 3) Minor adverse impact; or 4) Significant or potentially significant impact.

• Public notice distribution lists
• Notice date guidelines
• Sample Notice of Intent to Request Release of Funds (RROF) - English and Spanish - HUD Exchange
• RROF and Certification HUD Form 7015.15
• RROF Completed Example (PDF)

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, plus the following:

• All associated environmental reports, including technical studies
• Public notices including proof release for request of funds
• Agency correspondence
• Proof mitigation measures were implemented

Issues commonly found in an ERR are:

• Publication dates too short
• Project description lacks detail Inconclusive
• Compliance/Mitigation Documentation
• Mitigation measures not included in FONSI

If your environmental review contains environmental mitigation, the Responsible Entity must document that the mitigation measures have been correctly implemented. This may include preparing an Environmental Monitoring Desk Review Checklist or an Environmental Monitoring On-Site Review Checklist.