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Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices (2014)

Chapter: Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization

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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
×
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
×
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Chapter 5 - Issues, Challenges, and Strategies for Improvement or Optimization." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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86 C H A P T E R 5 Introduction A critical component of the research was to conduct an analysis of key elements of the state project development and delivery process to identify opportunities for a more effective integration of real property-related activities with the rest of the process. The analysis included an evaluation of issues and challenges affecting all project development and delivery pro- cess activities with a real property component as well as the identification of strategies for improvement or optimization to address those issues and challenges. Part of the analysis was to determine the need and jus- tification for process activities, whether the extent of these activities should be modified, and whether their timing or position in the overall process should be modified to ensure an optimized process (including eliminating redundant activities and/or processes and converting sequential activity sequences to concurrent activity sequences). As described in Chapters 3 and 4 and Appendix C, this analysis resulted in a series of process diagrams (the Level 1, Level 2, and Level 3 diagrams) and activity descriptions, as well as a reference work schedule depicting the acquisition of real property and relo- cation advisory services. This chapter summarizes issues and challenges that affect project development and delivery process activities that typi- cally have a real property component and identifies strategies for process improvement or optimization to address those issues and challenges. For many activities, the list of issues, challenges, and strategies was based on the responses pro- vided by stakeholders during the surveys and interviews con- ducted during the first phase of the research. In other cases, the source was information gathered through additional inter- views with stakeholders, feedback obtained during the peer exchange, as well as issues, best practices, and lessons learned from previous studies or experience. Many project development and delivery process activities could have real property elements. To ensure the analysis was manageable, the research team focused only on process activi- ties with a significant real property component (see Figure 11 in Chapter 3, and Appendix C). Activities with a relatively minor real property impact were not evaluated or emphasized. Definition, Selection, Financing, and Scheduling Prepare Cost Estimate and Identify Funding Sources Issues and challenges include: • Not involving right-of-way personnel in planning and pro- gramming, or underestimating the importance of involv- ing right-of-way staff in planning and project scoping. Such involvement is particularly critical when the need to involve right-of-way personnel may not be readily apparent to proj- ect managers (e.g., for meeting federal and state accessi- bility requirements, identifying real property requirements and challenges to support environmental commitments, and identifying difficult locations from a real property acquisi- tion perspective). • Inadequate planning-level cost estimates for real property acquisition. • Project funding uncertainty (e.g., if the funding source is not identified; the funding source is identified but is not adequate to meet the project scope; a combination of fund- ing sources is identified but one or more sources are uncer- tain; or there are changes in funding levels). • Matching funds uncertainty (e.g., a source is not yet identi- fied or local and state matching funds are inadequate). • Scaling the project scope to match the available funding versus the project need. • Not clearly defining the project purpose and need. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged as part of the team performing project scoping and cost Issues, Challenges, and Strategies for Improvement or Optimization

87 estimating. Legal personnel experienced in real estate should also be involved, especially if large or complex real property acquisitions are expected. • Seek executive-level commitment about early engagement of right-of-way staff in the project development process and be willing to raise concerns proactively to executive management if this early engagement is not occurring on projects. • Have right-of-way personnel perform impact analysis for the proposed project to assess the size and complexity of real property activities, and ensure the initial planning- level project schedule includes the findings of the real property assessment. • Develop statewide guidelines for planning-level cost esti- mates that include requiring that any estimate of real property cost is prepared by right-of-way personnel. The guidelines for the real property estimate should include contingency levels that decrease as the project team gains a greater understanding of the real property impacts on a project (e.g., 20 percent for the initial planning-level esti- mate, 10 percent for estimates prepared after completing the preliminary design, and so on). The guidelines should include the use of real property cost escalation factors for projects in fast-growing areas or where starting a project is likely to affect land values significantly prior to the actual acquisition of property for the transportation project. The guidelines also should include protocols or procedures to monitor the quality of the planning-level real property cost estimates against both the estimate prepared at the start of the real property acquisition phase and the actual acquisi- tion cost for a project. NCHRP Report 625 provides addi- tional guidance for developing real property cost estimates throughout the project development process (53). • Coordinate with agency environmental personnel to understand mitigation requirements that might result in the need to acquire additional real property and then ensure that this cost is properly reflected in the estimate. • Engage external stakeholders, including the FHWA division realty specialist, before developing the initial real property cost estimate in situations that involve potentially large or complex real property acquisitions. This is particularly crit- ical in situations that involve federal land transfers or tribal lands. Part of the responsibilities of state DOT right-of-way personnel is to develop relationships with the appropriate representatives of the various federal agencies or tribes. • Have state DOT right-of-way personnel prepare (or at least review) planning-level cost estimates and real prop- erty impact assessments for LPA real property acquisitions, particularly if state DOT personnel have more experience in real property acquisition activities than LPA staff. • Use standardized forms that include real property compo- nents to develop transportation project scopes that facili- tate the development of preliminary cost estimates and schedules. The real property components should include both real property acquisition and an assessment of potential relocation assistance impacts and requirements. NCHRP Project 08-88 is conducting an assessment of scoping practices around the country, including a review of forms used by different state DOTs, and will develop a suggested framework for developing project scopes. Beyond the preparation of project-level, preliminary- level scopes, cost estimates, and schedules, state DOTs could pursue strategies to facilitate corridor preservation and the identification of future real property needs and requirements. Corridor preservation techniques help to avoid or minimize the impacts of transportation projects that involve widening existing alignments or developing new alignments (54, 55). Examples of corridor preservation strategies include: • Formalize protocols that enable the official registration of transportation plans with land title registration offices. These protocols would enable those offices to add notes or caveats to title certificates on the future use of a corridor. • Introduce mechanisms for transportation agencies to acquire real property or provide compensation during the planning phase (e.g., through taxing districts to fund advance real property acquisition programs). This strategy would enable communities to preserve corridors for future transportation use or in hardship situations (e.g., if a prop- erty owner cannot sell a property because of a caveat on the property title certificate on the future use of a corridor). • Establish mechanisms that facilitate effective information exchanges among all stakeholders involved in the corri- dor preservation effort, including transportation agencies, planning agencies, property owners, appraisal districts, local and county governments, and the public. One such mecha- nism involves the use of GIS-based proposed acquisition overlays (published on easily accessible websites) that show proposed corridors in relation to landmarks and existing parcels and enable stakeholders to provide comments. • Establish protocols that enable transportation agencies to provide input on building setbacks on corridors des- ignated for future road expansion. One mechanism to achieve this objective is to enable transportation agencies to review and comment on building permit applications submitted to and managed by local jurisdictions. Secure Federal, State, and Local Agreements Issues and challenges include: • Project funding uncertainty (e.g., if the funding source is not identified; the funding source is identified but inadequate to

88 meet the project scope; several funding sources, including local and state matching funds, are identified but one or more sources are uncertain; or there are changes in fund- ing levels). • Risk avoidance or reluctance by agencies to enter into agreements. • Complexity of interagency agreements. • Lack of state legislative authority for LPAs to enter into agreements. • Lack of long-term cooperative agreements between state DOTs and LPAs. • Short tenure of key personnel at different agencies. • Insufficient availability of state DOT right-of-way staff to support or assist with LPA right-of-way activities. • Delays by federal agencies in responding to state requests to acquire property. Some survey participants indicated that GSA is slow to transfer property for federal-aid proj- ects even when there has been no need to transfer funds. In addition, GSA does not share its appraisals with the state DOT, even though the state provides its appraisal to the federal government. Strategies for improvement or optimization include: • Assign state DOT right-of-way personnel to provide over- sight and/or advisory support to LPAs. Legal personnel experienced in real estate should also be involved, espe- cially if large or complex real property acquisitions are expected. • Engage external stakeholders, including the FHWA divi- sion realty specialist, in situations that involve potentially large or complex real property acquisitions. Part of the responsibilities of state DOT right-of-way personnel is to develop relationships with the appropriate representatives of the various federal, state, and local agencies. • Execute multi-level MOUs with LPAs, federal agencies, tribes, and other agencies that outline long-term and short- term goals, describe rights and responsibilities, and provide a framework that generates trust between the parties. Well- structured multi-level MOUs can facilitate the execution of project-level agreements to acquire real property needed for transportation projects. Alternative Analysis and Preliminary Plans Conduct Conceptual Design Meeting Issues and challenges include: • Not involving right-of-way personnel in preliminary design activities, or underestimating the importance of involving right-of-way staff in preliminary design activities. Involv- ing right-of-way personnel is particularly critical when the need to do so may not be readily apparent to proj- ect managers (e.g., meeting federal and state accessibility requirements, identifying real property requirements and challenges to support environmental commitments, and identifying potentially challenging locations from a real prop- erty acquisition and relocation assistance perspective). • Not identifying clearly the need to collect information about land uses, archaeological sites, easements, potentially prob- lematic or challenging real property acquisitions, and con- trol of access to the roadway right-of-way. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged in conceptual design meetings. Legal personnel experienced in real estate should also be involved, especially if large or complex real property acquisitions are expected. • Seek executive-level commitment for early engagement of right-of-way staff in the project development process and be willing to raise concerns proactively to executive manage- ment if this early engagement is not occurring on projects. Collect Data for Preliminary Design Issues and challenges include: • See Conduct Conceptual Design Meeting. Strategies for improvement or optimization include: • See Conduct Conceptual Design Meeting. • Formalize the use of forms and procedures to conduct an assessment of real property and relocation assistance impacts within the proposed project limits as part of the process to collect data for preliminary design and identify any antici- pated special acquisition requirements and/or relocation impacts, such as lack of replacement housing for displaced residences or local economic impacts by displacing large businesses. The procedure should include transcribing the results of the assessment to project summary checklists and forms to prepare or update the project scope. Obtain Permission to Enter Property Issues and challenges include: • Ambiguity in state law, which may not clearly give an agency the right of entry for survey purposes even when the agency clearly has the right to acquire a property by eminent domain. • Inadequate coordination with property owners who, because they are not familiar with (or have concerns about)

89 the project, do not initially allow agency-authorized per- sonnel to enter the property. • The first communication with property owners about a potential project taking place in person with members of the environmental teams, surveyors (or other agency- authorized officials) who are attempting to enter a property for survey purposes, soil core sampling, species assessments, and other similar activities. Strategies for improvement or optimization include: • Clarify state laws about the right of an agency to enter a prop- erty for survey purposes if the property is being assessed for potential acquisition as part of a transportation project. • Coordinate early and often with property owners who may be potentially affected by a proposed transportation project. Conduct Value Engineering Study Issues and challenges include: • Not involving real property subject matter experts as part of the teams that conduct VE studies. Strategies for improvement or optimization include: • Require the inclusion of real property subject matter experts on the teams that conduct VE studies, including design-build projects. Legal personnel experienced in real estate should also be involved, especially if large or com- plex real property acquisitions are expected. • Modify VE study procedures to require the evaluation of opportunities to reduce or eliminate real property impacts, as well as the assessment of potential cost savings. Environmental Process Prepare Draft Environmental Documentation Issues and challenges include: • Not involving right-of-way personnel in environmental process activities, or underestimating the importance of involving right-of-way staff in the environmental process. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged in the environmental process. Legal personnel should also be involved, especially if large or complex real property acquisitions might be expected. • Have a senior right-of-way agent assigned to every trans- portation project. This agent is a member of the project team, attends public meetings, and has the overall respon- sibility to ensure the project is cleared on time to meet bid date requirements. • Involve an FHWA realty specialist early when potential exists for situations that might require a conditional envi- ronmental clearance or a federal land transfer. • Involve right-of-way personnel in the use and application of planning and environmental linkage (PEL) techniques. • Identify and document environmental justice (EJ) and lim- ited English proficiency (LEP) population impacts early. Conduct Public Meetings Issues and challenges include: • See Prepare Draft Environmental Documentation. • Not using appropriate visualization or public outreach tools to effectively communicate with property owners. Strategies for improvement or optimization include: • See Prepare Draft Environmental Documentation. • Utilize appropriate visualization tools (including anima- tions, 3D visualizations, and other techniques) to explain the project and illustrate anticipated benefits and impacts to property owners, utility owners, other stakeholders, and the public. • Train public relations personnel on real property acquisi- tion laws, regulations, concepts, and procedures to reduce the risk of misinforming stakeholders and the public when addressing property acquisition topics and issues. • Develop stakeholder outreach and public awareness pro- grams that include a systematic approach for addressing property owner concerns to change the public perception of acquisition of private property under eminent domain. Meet Environmental Commitments After Clearance Issues and challenges include: • Lack of a monetary hold to address environmental issues associated with a property. The presence of environmental contamination within a property can decrease the value and usability of the property. If it is necessary to acquire contaminated property as part of a transportation project, the agency’s preference is usually for the owner to remediate the site prior to the purchase. However, this option might not be realistic (e.g., because of urgency or location char- acteristics). In this case, the agency acquires the property

90 and pays for the remediation. The agency might go to trial to recover the costs, but frequently, the agency ends up absorbing the cost because the likelihood of recovering the cost through litigation is small. A similar situation occurs if existing contamination migrates from an adjacent property to the real property the agency has acquired. The agency either requires the responsible party to remediate the con- tamination or pays for the remediation and then attempts to recover the costs. • Difficulty tracking environmental commitments and miti- gation efforts (including maintenance requirements) after project construction has ended. Strategies for improvement or optimization include: • Make sure that plan sheets depict environmental commit- ments clearly. • Take remedial actions to reduce the risks and impacts from contamination on the property to a manageable level. It is not always necessary to achieve pre-contamination levels. • Implement a tracking system to monitor all environmen- tal commitments and mitigation efforts through the con- struction phase and, if appropriate, during operations and maintenance. Conduct Environmental Reevaluation Issues and challenges include: • Not involving right-of-way personnel in environmental reevaluations, or underestimating the importance of involv- ing right-of-way staff in environmental reevaluations. • Not being proactive reaching programmatic agreements with FHWA outlining specific delegations and authority to streamline environmental reevaluations. The courts have generally stated that if a reevaluation addresses a signifi- cant impact that should have been addressed in the origi- nal environmental document, a supplement is required to fill any gaps, and more reporting is necessary. Rapidly developing areas frequently experience land use and popu- lation changes. However, these changes do not necessarily rise to the level of a significant impact. A programmatic agreement with the respective FHWA division would help to address this issue. It is also important to keep in mind that, for environmental litigations, a review of the record of the agency as a whole is frequently necessary. Strategies for improvement or optimization include: • Use standardized forms, including e-forms, to conduct environmental reevaluations. One of the reasons is that court decisions are clear that a complete, accurate admin- istrative record must explain the factors and impacts that were re-evaluated and include a decision rationale. Stan- dardized forms can be useful to address this requirement. In many cases, documentation includes keeping a record of negative declarations that justify decisions that find no negative environmental impacts. • Develop and implement interagency agreements between the state DOT and FHWA that contain specific delegations for environmental reevaluations (56). Design and PS&E Assembly Conduct Design Meeting Issues and challenges include: • Not involving right-of-way personnel throughout the design phase, or underestimating the importance of involv- ing right-of-way staff early on during the design phase. • Pressure at many state DOTs to accelerate or compress the design phase in an effort to shorten the development and delivery of transportation projects. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged throughout the design phase. Legal personnel should also be involved, especially in large or complex real property acquisitions. • Use scheduling software to manage the acquisition of real property, including the identification of critical path activities and an analysis of what-if scenarios to anticipate potential impacts both to the project itself and the specific activities required to support the acquisition of real prop- erty. The software should also be used to manage reloca- tion assistance advisory and payment services. • Develop reporting tools such as red-flag summaries to identify situations that might result in significant project delays in connection with real property activities (e.g., real properties that would likely end up in condemnation proceedings). • Request input from right-of-way personnel when deter- mining the anticipated letting date, including measures such as anticipated duration of the real property activi- ties and dispersion measures (typical range and standard deviation). • Include a provision in design-build projects requiring the design-builder to coordinate with agency right-of-way per- sonnel for the definition of appropriate lead times for the completion of real property acquisition activities. For design-build projects, it is common for the state DOT to retain right-of-way responsibilities. The exception could be temporary easements, in which the design-builder may have flexibility to complete this activity on its own.

91 Typically, agencies hand off the project to a design-builder after completing the schematic and identifying the proj- ect footprint. A default lead time could be included in the contract (e.g., 18 months to acquire real property after the authorization to acquire property has been issued or after receiving an updated right-of-way map depicting updated property requirements). However, the contract should also include a provision to allow different durations for specific situations depending on the complexity of the acquisition and/or relocation activities involved. Develop Final Horizontal and Vertical Alignments Issues and challenges include: • See Conduct Design Meeting. • Changes in horizontal or vertical alignment that alter the project limits and, therefore, affect the real property acqui- sition scope, schedule, and cost. This issue becomes more critical as the design phase advances and the agency has less flexibility to reallocate resources to meet the original letting schedule. • Inadequate project design, which causes inaccuracies in the determination of real property needed for the project. Strategies for improvement or optimization include: • See Conduct Design Meeting. Conduct Detailed Design Issues and challenges include: • See Conduct Design Meeting. • Design changes that alter the project limits and, therefore, affect the real property acquisition scope, schedule, and cost. As with the development of final horizontal and ver- tical alignments, the issue of design changes becomes more critical as the design phase advances and the agency has less flexibility to reallocate resources to meet the original letting schedule. Strategies for improvement or optimization include: • See Conduct Design Meeting. Conduct 30 Percent, 60 Percent, and 90 Percent Design Meetings Issues and challenges include: • See Conduct Design Meeting. Strategies for improvement or optimization include: • See Conduct Design Meeting. Prepare PS&E Package Issues and challenges include: • See Conduct Design Meeting. Strategies for improvement or optimization include: • See Conduct Design Meeting. • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Prepare Right-of-Way Certification. Conduct Final Design and Initial Construction Coordination Meetings Issues and challenges include: • See Conduct Design Meeting. • Not involving right-of-way personnel if some real property acquisition activities will be continuing during the con- struction phase. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged throughout the design phase and during construction, particularly if real property still needs to be acquired dur- ing the construction phase. Legal personnel also should be involved, especially in large or complex real property acquisitions. • Allow for construction clearance approvals on a parcel-by- parcel basis similar to design-build project provisions. Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance Provide Planning and Real Property Acquisition Linkages Issues and challenges include: • See under Definition, Selection, Financing, and Scheduling: – Prepare Cost Estimate and Identify Funding Sources. – Secure Federal, State, and Local Agreements.

92 Strategies for improvement or optimization include: • See under Definition, Selection, Financing, and Scheduling: – Prepare Cost Estimate and Identify Funding Sources. – Secure Federal, State, and Local Agreements. Conduct Real Property Research Issues and challenges include: • See under Alternative Analysis and Preliminary Plans: – Collect Data for Preliminary Design. – Obtain Permission to Enter Property. • See under Environmental Process: – Prepare Draft Environmental Documentation. Strategies for improvement or optimization include: • See under Alternative Analysis and Preliminary Plans: – Collect Data for Preliminary Design. – Obtain Permission to Enter Property. • See under Environmental Process: – Prepare Draft Environmental Documentation. • Start the title search and appraisal process (without nego- tiation) as part of the preliminary design phase. For early analyses, assume total acquisitions in all alternatives. As needed, this strategy might involve hiring in-house or consultant appraisers earlier in the process. • Document situations that might involve advance acquisitions. • Document situations that might involve hardship acqui- sitions as well as situations that might involve protective buying acquisitions (which can be done after the agency has notified the public that it has selected a preferred align- ment, or a public hearing has been held or an opportunity for the hearing has been afforded). Coordinate with Other Stakeholders Issues and challenges include: • See under Alternative Analysis and Preliminary Plans: – Collect Data for Preliminary Design. – Obtain Permission to Enter Property. – Conduct Value Engineering Study. • See under Environmental Process: – Prepare Draft Environmental Documentation. – Conduct Public Meetings. • Unreasonable delays in the coordination with other state and federal agencies on federal land acquisitions. • Unreasonably short timeframe to interact with property owners and other stakeholders effectively and fairly. • Limited or ineffective interaction with property owners and tenants, which increases the risk of confusion and mis- understandings that could have financial implications for the agency. Confusion might occur, for example, when ten- ants in an apartment complex learn that they might need to move and the message from the agent is ambiguous about timing or suggests that the move is imminent when in real- ity it may be years away. As a result, tenants begin to move out, negatively affecting the property owner’s ability to con- duct business, resulting in an economic loss for which the agency could be held liable. • Other stakeholders not identifying a central point of con- tact for interactions with the agency, including negotia- tions, acquisitions, relocation assistance, and payments. Strategies for improvement or optimization include: • See under Alternative Analysis and Preliminary Plans: – Collect Data for Preliminary Design. – Obtain Permission to Enter Property. – Conduct Value Engineering Study. • See under Environmental Process: – Prepare Draft Environmental Documentation. – Conduct Public Meetings. • Proactively identify and develop a working relationship with critical points of contact at other agencies that interact with the state DOT to facilitate coordination in all aspects of the real property acquisition process. • Include longer lead times (based on historical experience) in the project schedule if a federal land transfer or other inter- agency coordination is expected, thus setting expectations within the state DOT that acquisition activities may take longer than normal for the project. • Develop guidelines for interacting with property owners and tenants to ensure the agency provides adequate infor- mation to potential displaced persons, while minimizing the risk of confusion and misunderstanding that could have financial implications for the agency. Prepare Right-of-Way Map and Property Descriptions Issues and challenges include: • Low level of quality and completeness of right-of-way maps. • Errors in the calculation of the area of the real property to be acquired, causing multiple revisions in a variety of criti- cal documents that depend on the accuracy of that calcu- lation and affecting subsequent real property acquisition activities. • Using parcel sketches that are not supported by proper survey control, resulting in deliverables that cannot be

93 integrated with other project development and delivery process activities. • Frequent project changes that result in modifications to the amount of real property that needs to be acquired and, therefore, in the time it takes to complete right-of-way maps. • Inconsistency in the use of CAD libraries, protocols, and standards during the preparation and production of right- of-way maps. • Lack of expertise by consultants when preparing right-of- way maps. • Higher costs for contractor-prepared right-of-way maps than originally anticipated. In one example mentioned in the survey, the official cost to prepare right-of-way maps using contractors was only slightly higher than what the cost would have been using in-house forces. However, the agency ended up spending a significant amount of time supervising and reviewing the contractors’ work. The state DOT estimated that the total cost was twice as much when using contractors than if the state DOT had done the work internally. Strategies for improvement or optimization include: • Enforce CAD protocols and standards strictly to ensure the quality and completeness of right-of-way maps. • Enforce the requirement for every parcel to be properly documented using accepted survey standards and proce- dures, including the identification of parent tracks, taking areas, and remainder areas, as well as the integrated calcu- lation of those areas. • Upgrade CAD design libraries with a goal to support long- term property management strategies, including the use of GIS-based techniques to support those goals. • Upgrade CAD and survey standards to make both real property information and final survey products part of the deliverables to the agency and long-term document archival practices. Obtain Authorization to Acquire Real Property Issues and challenges include: • Inconsistency across states regarding definitions of advance or early acquisitions, and inconsistency between the defi- nition of early or advance acquisition in 23 CFR and the definition of advance acquisition in 23 U.S.C. 108. • Conducting real property acquisition activities without the proper authorization. Streamlining, for example, should not result in the loss of property rights or the property owners’ right to due process. Appraising properties with- out completing the right-of-way map is streamlining but does not allow for due process. Strategies for improvement or optimization include: • Standardize or clarify definitions in 23 U.S.C. 108 and 23 CFR. • Implement online information systems to facilitate the review of documentation needed for the authorization to acquire property. Conduct Appraisal or Waiver Valuation For activities that are explicitly accounted for in the Uni- form Act, from appraisals to relocation payments, the follow- ing issues, challenges, and strategies are disaggregated into the following categories: Uniform Act; federal regulations; and policies and procedures. Issues and challenges associated with the Uniform Act include: • Lack of a proper definition in the Uniform Act for what constitutes a low fair market value. Issues and challenges associated with federal regulations include: • Routinely requiring appraisals for low-value, non- complicated parcels. • Federal land acquisition appraisals taking significantly longer to prepare than other properties. As a reference, federal land acquisition appraisals frequently follow the Uniform Appraisal Standards for Federal Land Acquisitions (also called the “yellow book”) (57). Issues and challenges associated with policies and proce- dures include: • See Prepare Right-of-Way Map and Property Descriptions. • Having to re-conduct the appraisal or waiver valuation if there are changes to the right-of-way map, often adding months to the process. • Lack of specifications and forms or insufficient specifica- tions and standardized appraisal forms, resulting in lack of uniformity in appraisal approaches and lower quality appraisals. The resulting appraisals may be deficient in content, comparable research may be inadequately con- ducted or documented, value conclusions may be unreli- able, and damages may be unsupported. A related problem is the lack of adequate procedures in place to deal with appraisers that do not follow specifications, deliver a low quality product, or do not meet deadlines. Unfortunately,

94 because of a lack of performance guidelines, the result in these situations is frequently to decide to continue working with the same contractor instead of imposing penalties or hiring new contractors. • Not following proper procedures for conducting apprais- als in the case of donations. • Inadequate appraiser expertise to appraise billboards prop- erly and outdoor advertising companies not sharing data needed to produce complete appraisals. • Assigning a fixed, arbitrary number of appraisals to one appraiser without taking into account factors such as par- cel size and complexity, required time and effort to con- duct the appraisal, which makes it difficult for an appraiser to complete all assigned appraisals on time and prevents agencies from developing and managing reasonable real property acquisition work schedules. • Difficulty finding qualified or experienced appraisers. For example, appraisers may be qualified in general terms but may not be familiar with state-specific regulations and policies. Similarly, appraisers may have insufficient train- ing for conducting appraisals for transportation projects, which often include partial acquisitions and special situa- tions such as abandoned railroad real property or crossings. • Operating or abandoned railroad property appraisals taking significantly longer to prepare than other types of properties because of difficulties in coordinating with rail- road companies. • Appraisal contracts that tie payments to the number of appraisals conducted but do not include robust performance measures related to appraisal quality and completeness. • Requiring two levels of appraisal review without taking into consideration whether the second review is always warranted or needed—a requirement that can add several months to the process. • Difficulty assessing the impact on appraisals related to the termination of leases that are valuable to the property owner or to a tenant depending on whether the leases are above or below market values. Strategies for improvement or optimization associated with the Uniform Act include: • Introduce the concept of, and provide a definition for, uncomplicated real property, and specify a regulatory pro- cedure to distinguish between uncomplicated and compli- cated real property for identifying when a waiver valuation is acceptable. One advantage of using a threshold tied to the concept of uncomplicated real property (as opposed to low fair market value) is that it introduces flexibility by focusing on the need to conduct formal appraisals as a func- tion of the level of complexity and risk associated with the appraisal instead of an artificial, fixed monetary threshold. Alternatively, states could define the threshold to distinguish between complicated and uncomplicated real property. In this case, states would need to determine a reasonable appraisal waiver limit for uncomplicated parcels, which could be either fixed or variable depending on the location. For example, high-cost areas or cities would have a higher waiver threshold than low-cost areas or cities. The threshold could be based on historical data and/or county assessment data. The procedure and/or thresholds for individual states could be subject to review and approval by FHWA. Strategies for improvement or optimization associated with federal regulations include: • Establish a tiered approach for determining when it is neces- sary to conduct appraisals and appraisal reviews. For exam- ple, if the anticipated value is less than $25,000, the appraisal and formal reviews would be waived. If the appraisal is greater than $25,000 and less than $500,000, the appraisal would require an expedited review at the district level. If the appraisal is greater than $500,000, the appraisal would, in addition, require a review at the division or central office level. For properties that are already on the market, the agency would be able to certify the value and make a written offer based on an evaluation of the asking price. • Make greater use of the increased flexibility provided by MAP-21 to start the appraisal process before the comple- tion of the environmental review. Provisions enabling the use of federal funds for the early acquisition of real prop- erty prior to completion of the environment approval are included in 23 U.S.C. 108(c) and (d). Strategies for improvement or optimization associated with policies and procedures include: • Implement a protocol for updating appraisals in areas or situations where market values tend to change rapidly. The protocol would address cases where a complete reappraisal is necessary and cases where an expedited appraisal or waiver valuation might be sufficient. This type of protocol could also be used to update appraisals if design changes result in changes to real property requirements. • Assign appraisal jobs using a list of pre-approved or pre- certified appraisers to avoid or minimize delays associated with the procurement process. The list could be updated at pre-specified intervals (e.g., at the beginning of the fiscal year). State DOTs could recommend or require LPAs to use appraisers from the state DOT approved list. State agencies could also offer to pay for a property owner’s appraisals as long as the appraiser is pre-certified by the agency and there is an agreement to disclose the appraisal or the data used for the appraisal.

95 • Develop well-written scopes of work with input from both appraisers and reviewers. A related strategy involves com- municating with all appraisers who will work on a project (potentially during a project kick-off meeting) to explain the policy and procedures for determining items such as uneconomic remnants, reasonableness of access, when it is necessary to acquire access rights versus using police pow- ers, and what to look for in permits. This strategy ensures uniformity in appraisal approaches and an adequate base knowledge and consistency to prevent review appraisers from having to struggle with last-minute changes. Involv- ing other real estate and legal personnel in those meet- ings is also helpful to ensure clarity and uniformity across the board. • Require appraisers to understand the need for contribu- tory value, personal versus real property, and tenant versus fee owner impacts on acquisition and relocation. • Use standardized appraisal forms with clear instructions about the information needed for each section. This strat- egy provides new appraisers with direction and enables them to work more independently. It also reduces paper- work and saves time during negotiations and condemna- tion proceedings, as well as when preparing right-of-way certifications. AASHTO could serve as a clearinghouse for templates, forms, and business practices. • Simplify legal description requirements for acquisitions less than a certain threshold. • Procure appraisal and appraisal review services through a method other than a low-bid process and set up a per- formance measurement system that focuses on appraisal quality instead of just the number of appraisals completed by contractors. A reliable appraisal audit program should be in place to verify appraisal quality and the effectiveness of the performance measurement system. • Allow minor appraisal adjustments to be made by making redline appraisal adjustments in CAD-generated deed descriptions. • Implement administrative appraisal reviews instead of (or before) full technical reviews. An administrative review could still result in a full technical review of the appraisal in question if warranted. • Leverage previous research conducted by FHWA (6), con- ducting research on federal land acquisition appraisals to develop a better understanding of why federal land acqui- sition appraisals take significantly longer to prepare than appraisals for other properties. Establish Just Compensation No issues and challenges associated with the Uniform Act or with federal regulations were identified in relation to establishing just compensation. Issues and challenges associ- ated with policies and procedures include: • Incentives added to the just compensation amount that have a negative impact on residential relocation assistance payments if the total budget for acquisitions and reloca- tion assistance is fixed. Under these circumstances, adding an incentive to the amount believed to be just compensation has the effect of reducing the amount left for residential relocation assistance services. No strategies for improvement or optimization associated with the Uniform Act or with federal regulations were identi- fied. Strategies for improvement or optimization associated with policies and procedures include: • Develop a multitier approach to enable districts, not only the central office, to establish just compensation for acqui- sitions below a certain threshold. For example, a district could be responsible for establishing just compensation if the fair market value is below a certain threshold. The cen- tral office could be responsible for establishing just com- pensation if the fair market value is equal to or greater than that threshold. • Separate incentives from the amount believed to be just compensation. By untying incentives from the establish- ment of just compensation, the amount available to pro- vide relocation assistance to property owners would not be reduced. Prepare and Make Written Offer No issues and challenges associated with the Uniform Act were identified. Issues and challenges associated with federal regulations include: • Current business practices not encouraging agencies and property owners to use a fixed, non-negotiable period dur- ing which property owners can review the offer. As a result, property owners often do not respond to the offer on time, causing delays in the acquisition process or leading the pro- cess to condemnation proceedings. Federal regulations are not prescriptive on this issue, suggesting but not requiring that agencies provide a 30-day period to a property owner to review the offer. • Lack of standards on the level of language complexity used in offer letters. According to the regulations, all notices to property owners must be in plain, understandable lan- guage. The lack of an appropriate standard often causes confusion about what acceptable language and terminology to use, however, which can lead to problems for property

96 owners who may lack the background or knowledge needed to understand the terms used in the offer letter. Issues and challenges associated with policies and proce- dures include: • Difficulty identifying the owner of record when several entities own the real property or because of the corporate structure associated with the ownership. Strategies for improvement or optimization associated with the Uniform Act include: • Enable the use of electronic communications to make the offer, including email and web-based protocols. At a minimum, use these technologies before the first person- to-person meeting, although depending on the situation, it might be possible to conduct the entire negotiation and acceptance of the offer electronically. A critical requirement is to implement an offer receipt protocol that the agency, the property owner, and the courts can find acceptable. This strategy has the potential to offer significant time and cost savings. However, it would be necessary to conduct pilot studies to identify potential implementation barriers, challenges, best practices, and appropriate tools. A poten- tial challenge is the loss of personal contact and rapport with property owners. Agencies would need to consider different ways of communication, depending on the needs and sometimes the preferences of each property owner. Strategies for improvement or optimization associated with federal regulations include: • Provide property owners with a clear statement (along with the written offer) setting up the maximum duration for negotiations and the conditions under which an agency can extend this period. This statement is critical because property owners need to be fully aware of the timeline they have so they can take all the actions necessary to review and respond properly to the offer. To ensure credibility, property owners should be able to request an extension to the nego- tiation period. The conditions under which extensions are allowed should be strict and applied consistently; however, for flexibility, these conditions could vary depending on the project and the type of real property acquisition involved. • Implement a streamlined process for low-cost temporary easements by allowing a field agent to complete the acqui- sition with one face-to-face meeting. The initial contact can be made by phone to review the land title and other property information. All remaining pre-acquisition activ- ities also can be completed before the first visit when the written offer is presented to the property owner. Strategies for improvement or optimization associated with policies and procedures include: • Require presentation of the appraisal at the time of the offer. A well-presented offer helps property owners under- stand the project impacts to their property, which can save time during negotiations and result in cost savings and less litigation. A carefully drafted appraisal that properly docu- ments impacts and the basis for the analysis is extremely valuable, not just for determining the fair market value of the real property but also for facilitating communication among all stakeholders. • Use appropriate visualization techniques, including 3D models and virtual reality animations, to improve commu- nications with property owners, thus helping to minimize delays and reduce the likelihood that the acquisition will go to condemnation. Acquire by Negotiation Issues and challenges associated with the Uniform Act include: • Use of the eminent domain power by pipeline and elec- tric transmission line operators causing difficulties for transpor tation agencies that are negotiating acquisition and relocation options with property owners (e.g., if the urgent need to complete a pipeline or electric transmis- sion line project results in higher payments to property owners). In these cases, the pressure on transportation agencies increases because property owners tend to increase their monetary demands. Issues and challenges associated with federal regulations include: • Inadequate time provided to a property owner to review the written offer. Federal regulations are not prescriptive on this issue; 49 CFR 24 suggests but does not require that agencies provide a 30-day period to a property owner to review the offer. Some state agencies attempt to acceler- ate the acquisition of real property by giving little time to property owners to review the offer. This practice is counterproductive because it can generate resistance from property owners, often leading to condemnation, increas- ing overall costs, and delaying the entire process. Issues and challenges associated with policies and proce- dures include: • Lacking a mandatory or recommended mediation period before a real property acquisition can proceed to condem- nation proceedings, which can result in a higher number

97 of acquisitions going to condemnation, causing additional delays and higher acquisition costs. • Delays caused by having to wait a certain number of days (e.g., 30 days in Florida) between reaching a purchase agree- ment and the actual closing. • Delays caused by having to obtain individual signatures from each property owner when the acquisition involves common areas in condominiums. • Reimbursing property owners for attorney fees during condemnation proceedings but not during the negotiation phase, a practice that gives property owners an incentive to proceed with litigation rather than reach an agreement through negotiations. • External entities (e.g., law firms) advising property owners not to negotiate as a tactic to obtain more money during condemnation proceedings. • Contractors summarizing negotiations as reaching an impasse when more negotiations would be appropriate. Many agencies use a low-bid procurement process and a per-parcel billing system for real property acquisition contracts. This contractual structure tends to encourage contractors to finalize negotiations in the least amount of time in an effort to maximize their profit. In addition, after receiving payment for their services, contractors might be unavailable or unwilling to have follow-up meetings with property owners. Agencies may then be forced to find new negotiators who need extra time to develop rapport and a working relationship with the property owners. • Contractors being less responsive to property owners than agency personnel, having fewer in-person and follow-up meetings with property owners, or not being sufficiently familiar with the project area and therefore lacking cred- ibility with property owners. The contracting structure at many agencies leads contractor agents to work on mul- tiple projects, limiting their availability to work on each individual project. One result of this structure is property owners not recognizing contractors as valid agency repre- sentatives, preferring to deal directly with state DOT offi- cials or deciding against negotiations in favor of litigation. Property owners often prefer to work with contractors who understand the local market and specific characteris- tics of the area. Trust issues can arise if the appraisal is not based on updated, local data, or if it has been conducted elsewhere by out-of-area agents. • Hourly billing contracts not being monitored properly, either because of inadequate resources or because of in- adequate project management experience at the agency. Some agencies use an hourly billing system that requires contractors to spend a minimum number of hours per week with property owners (while also requiring that the total cost of negotiations per parcel not exceed an upper limit). In practice, issues can arise with allocating the nec- essary resources to manage this type of contract, including having experienced agency or contract personnel and the availability to manage the contractors effectively. • Having to execute separate contracts for related services such as titles and closings. Current practices vary from state to state. Some agencies support title transfers and closings through separate procurement processes, which can result in additional delays. • Differences in perception between agencies and prop- erty owners about the purpose of the negotiation phase, which may have a negative impact on the agency’s abil- ity to acquire property through negotiations. Many prop- erty owners believe that the state DOT has a tendency to “lowball” valuations and that the negotiation phase is their only opportunity to restore the balance through a back- and-forth process that can take as long as necessary until balance is reached. In contrast, the view at many agencies is that the purpose of the negotiation phase is to make an offer, stick with that offer as much as possible, and require a strong justification for any variation from that offer. • Risks and unknown parameters associated with the lump- sum payment demonstration program in MAP-21. The main purpose of this initiative is to expedite the acquisition of residential property, avoid condemnation proceedings, and decrease administrative costs. Lump-sum payments include both acquisition and relocation assistance. A potential risk of not separating these two payments is that displaced property owners may not be aware of all the potential relocation risks and costs (because the lump-sum payment is agreed upon before the relocation takes place), potentially resulting in an economic loss for that property owner. In addition, interest by attorneys in lump-sum- payment cases will likely increase because of the possibil- ity of higher fees (since the payments are combined) than would be the case if the payments were separated, resulting in lower net payments to displaced property owners. Strategies for improvement or optimization associated with the Uniform Act include: • Introduce legislation to make pipeline and electric trans- mission operators subject to Uniform Act provisions whenever they acquire real property through the power of eminent domain, regardless of whether the acquisition involves federal funds. This practice would level the playing field between pipeline and electric transmission operators and transportation agencies should both groups of orga- nizations need to acquire real property in the same area or region. The legislation could also encourage or require effective communication and coordination among stake- holders, particularly if multiple projects by multiple agen- cies can cause an upward pressure in property valuations.

98 Strategies for improvement or optimization associated with federal regulations include: • Require (not simply suggest) agencies to provide property owners with enough time to review an offer. Regulations need to be more prescriptive on this matter, requiring a minimum duration instead of simply suggesting a minimum duration. (Current regulations suggest 30 days as the minimum time needed to review an offer.) The required minimum dura- tion should be reasonable and adequate for property own- ers to take all the necessary actions to review and respond to an offer properly. This duration could vary depending on the characteristics and complexity of the real property (e.g., 30 days for a small residential unit with a fair market value below a certain amount, but 60 days for more com- plex properties). • Make the use of possession-and-use agreements a standard practice. According to regulations, possession-and-use agreements are intended for use on an isolated basis, but in practice they are used more frequently. These agreements enable an agency to take possession of a property before closing to conduct all activities necessary for the project, and can extend to the agency’s contractors and permitting of utility facilities. As part of the agreement, the state pays an agreed-upon amount (which could be the fair market value or a percentage of this value) to the grantor, and this amount is then deducted from the final settlement amount or award (if the acquisition goes to condemnation). Strategies for improvement or optimization associated with policies and procedures include: • Develop a multitier approach for assigning and conducting negotiations. For example, for low-value, uncomplicated properties, an unlicensed real estate agent could conduct and finalize negotiations with the property owner. For real property with a fair market value greater than $25,000 and less than $500,000, a certified agent would need to con- duct the negotiation. If the fair market value is greater than $500,000, a certified, pre-approved negotiator (perhaps with concurrence from the central office) would need to conduct the negotiation. • Make the use of acquisition incentives a standard prac- tice to facilitate direct negotiations with property owners. The incentive amount could be based on or vary accord- ing to the amount of the written offer. However, if an appraisal conducted by the property owner is above the agency-approved appraisal or if the negotiated amount is higher than the agency-approved appraisal, the higher amount would be used to determine the incentive amount. If incentives are used on a project, the incentives should be available to all property owners affected by the project. Properties undergoing condemnation proceedings would not be eligible for an incentive. This strategy is applicable where state laws allow incentive payments. • Implement contracting practices that take into consid- eration the need for production, while at the same time guaranteeing property rights and the need for contractors to spend quality time with property owners. Examples of potential practices include: – Introducing flexibility by, for example, screening bidders and requesting a best and final offer (BAFO) from the selected bidders. The agency then makes a final determi- nation based on criteria such as best meeting the goals and objectives of the solicitation, best meeting quality and reliability requirements, effect on productivity, most customer-focused solution, and agent experience. – Developing a list of pre-approved agents based on past performance evaluation results. Pre-approved agents tend to command higher fees, but the higher cost can easily be absorbed in the form of higher negotiation success rates, which, in turn, results in lower condemnation rates. – Developing specific contract scopes that clearly indicate what the agency expects instead of making a general statement that the contractor will provide negotiation and relocation assistance services. – Using milestones and attaching performance measures to each milestone as part of the billing and payment pro- cess. For example, the Texas DOT has established three milestones for the release of partial payments to contrac- tors. The first payment (25 percent of the total cost of a contract) is released upon presentation of the offer to the property owner, the second payment (45 percent) is released upon presentation of the final offer, and the remaining 30 percent is released upon closing. – Including productivity and performance objectives as part of the billing and payment process when using profes- sional contract or hourly billing services for negotiations. Some agencies (e.g., the Virginia DOT) have established an hourly billing system that requires contractors to spend a minimum number of hours per week with property owners and requires that the total cost of negotiations per parcel cannot exceed an upper limit. This strategy requires the agency to allocate project managers with experience in the management of this type of contract and the use of performance measures that look at the acquisition process in a holistic manner. – Conducting surveys of property owners about their experience and interaction with negotiators. On com- pletion of the negotiation process, and regardless of its outcome, agencies would collect feedback about the effectiveness of internal and external agents and use this information, along with other performance measures, to assess agents and develop a list of approved agents.

99 • Eliminate the requirement for a 30-day holding period between reaching a purchase agreement and the actual closing. • Make the use of possession-and-use agreements a standard practice to enable the agency to take possession of a prop- erty before closing during the negotiation phase. • Monitor the progress and results of the MAP-21 dem- onstration program for lump-sum payments. The program is intended to streamline the relocation process for residen- tial owner-occupants by allowing a lump-sum payment for acquisition and relocation assistance if elected by the dis- placed occupant. A positive aspect of providing this type of payment is the added flexibility for property owners to be able to handle the payments they receive from the agency. However, as mentioned previously, certain risks will need to be monitored, including property owners not being fully aware of the actual relocation costs they might incur. • Establish or recommend a mandatory mediation period before a property acquisition can proceed to condem- nation. Mediation can accelerate the resolution of cases, compared to waiting for a trial date and going through the condemnation process, therefore increasing the number of properties that can be acquired during the negotiation phase. This process can also help agencies understand why negotiations were unsuccessful at first and identify strate- gies to address those deficiencies. • Allow condominium owners’ associations to represent and sign for all interested parties when the state DOT acquires common areas in condominium properties. Payments could be made to the association for disbursement to indi- vidual owners. This strategy would substantially reduce or eliminate the need to obtain individual signatures. • Ensure that property owners understand the meaning and purpose of the negotiation phase to avoid confusion and misunderstanding about the process. Brochures, manuals, and other written documentation should describe clearly the purpose of and the activities conducted during the negotiation phase. • Reimburse property owners for reasonable attorney and other subject matter expert fees incurred during the nego- tiation phase as a tactic to encourage the completion of the acquisition through negotiations. To ensure the integrity of the process, the agency should spell out ahead of time the conditions, limits, and protocols to follow (including defining what constitutes reasonable and how to proceed if the final offer is higher than the original offer). • Implement a dual process in which the agency conducts negotiations and settlements while preparing the paper- work to go to condemnation proceedings. Although this strategy commits the agency to some additional costs to prepare condemnation materials that may not be used in every case, it can save valuable time if negotiations fail. This strategy needs to be implemented carefully to avoid the risk of coercion, including the prohibition of using it as a tool during negotiations with property owners. If the property owner is aware of the existence of the dual pro- cess, the acquisition agent must clarify its purpose to avoid confusion and misunderstanding. • Use a pre-selected list of attorneys for titles and closings rather than having to contract these services for every acquisition as a mechanism to save time. Acquire by Condemnation No issues and challenges associated with the Uniform Act or with federal regulations were identified. Issues and chal- lenges associated with policies and procedures include: • State laws not allowing the use of the quick-take proce- dure to obtain possession prior to the determination of the award, making it necessary for agencies to wait until the end of the condemnation proceedings. • Increased access to information online that leads property owners to decline negotiations and proceed with condem- nation proceedings in an effort to receive higher payments. The range of public information available can vary from objective data that pertain to similar acquisition cases to speculative content that attempts to influence property owners into pursuing the condemnation route as a tactic to receive more money. • State laws requiring the agency to absorb virtually all expenses incurred by both the state and the property owner during condemnation proceedings, which makes it more difficult to settle out of court and increases costs because there is no incentive for a property owner to negotiate. • Not developing adequate documentation when preparing appraisals or conducting negotiations, which affects the agency’s case if an acquisition goes to condemnation. • State laws not limiting the duration of condemnation pro- ceedings. The longer a condemnation action is unresolved, the more interest is earned on the outstanding amount. This situation is exacerbated by the application of interest rates accruing on condemnation claims or associated with possession-and-use agreements, which are too high com- pared to market conditions. • State procedures resulting in inexperienced attorneys being appointed to handle condemnation proceedings for transportation projects, or attorneys being appointed who lack knowledge of the transportation project development and delivery process. The result of this practice is delays and additional costs. • Lacking a mandatory or recommended mediation period before a real property acquisition can proceed to condem- nation proceedings. The lack of a mediation process can

100 result in more acquisitions going to condemnation, caus- ing additional delays and higher acquisition costs. No strategies for improvement or optimization associated with the Uniform Act or with federal regulations were identi- fied. Strategies for improvement or optimization associated with policies and procedures include: • Adjust the interest rate accruing on condemnation claims or possession-and-use agreements to reflect market conditions. • Introduce time limits for condemnation proceedings, includ- ing amending state laws to provide a timeframe for filing actions in condemnation cases and holding property own- ers accountable for missed field meetings, as these meetings require significant preparation and lead time. • Introduce legislation limiting attorney fees up to a certain percentage of the award. • Adjust schedules, budget, and resources based on data from adjacent projects. This strategy would allow agencies to manage a project by taking into account facts from other projects (e.g., condemnation rates) to capture real condi- tions that take place frequently and are likely to appear in the future. • Require or recommend a mandatory mediation period before a property acquisition can proceed to condemnation. Mediation can accelerate the resolution of cases, therefore increasing the number of properties that can be acquired during the negotiation phase. This process can also help agencies identify strategies to address deficiencies in the negotiation process. Demolish and Dispose Improvements No issues and challenges associated with the Uniform Act or with federal regulations were identified. Issues and chal- lenges associated with policies and procedures include: • See under Environmental Process: – Meet Environmental Commitments After Clearance. – Conduct Environmental Reevaluation. • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Coordinate with Other Stakeholders. No strategies for improvement or optimization associated with the Uniform Act or with federal regulations were identi- fied. Strategies for improvement or optimization associated with policies and procedures include: • See under Environmental Process: – Meet Environmental Commitments After Clearance. – Conduct Environmental Reevaluation. • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Coordinate with Other Stakeholders. Prepare Right-of-Way Certification No issues and challenges associated with the Uniform Act or with federal regulations were identified. Issues and chal- lenges associated with policies and procedures include: • Issues related to the quality and completeness of appraisals (e.g., appraisals that are deficient in content, comparable research that is not adequately conducted or documented, value conclusions that are unreliable, and damages that are not supported). Improperly documented appraisals can result in delays issuing right-of-way certifications. No strategies for improvement or optimization associated with the Uniform Act or with federal regulations were identi- fied. Strategies for improvement or optimization associated with policies and procedures include: • Use standardized appraisal forms with descriptions of the information needed for each section. This strategy provides new appraisers with direction and enables them to work more independently. It also reduces paperwork and saves time during negotiations, condemnation proceedings, and while preparing right-of-way certifications. Determine Relocation Assistance Eligibility Issues and challenges associated with the Uniform Act include: • Lack of a definition for the term “unlawful occupancy” in the case of non-residential property. The act only defines un- lawful occupancy in the context of residential real property. Issues and challenges associated with federal regulations include: • Difficulty determining whether a person is lawfully pres- ent in the United States. One reason for this difficulty is the lack of reliable tools at the federal level to make this determination. Although agencies have had success with the self-certification provisions in 49 CFR 24, collecting information from persons who are illegally present in the United States is challenging because those persons tend not to volunteer information easily. Another challenge to the certification process is the difficulty relocation agents and state DOTs face in verifying the validity of documents such

101 as birth certificates, permanent residency cards, visas, and passports. A related issue is the liability that state agencies incur if they collect and archive copies of documents that contain personal identifiable information (PII). Another related issue that often arises in the field pertains to the safety of the agents who must interact with and collect information from individuals of unknown identity and intentions. • Difficulty determining whether a person occupies a residen- tial or non-residential real property unlawfully or whether someone has moved into such a property solely for obtain- ing relocation assistance services. One reason for this issue is the lack of a process or test that agents can use to reveal the true intention of the occupants of the property. An increase in the amount of reestablishment payments for businesses is likely to cause some businesses to move into a property only for obtaining relocation assistance services. This is also likely to happen if the reestablishment payment does not have a financial cap. This issue extends beyond the diffi- culty already described in connection with the Uniform Act because the act defines unlawful occupancy only in connec- tion with residential property, whereas 49 CFR 24 refers to both residential and non-residential property. • Difficulty determining that denying relocation assistance to a person who is unlawfully present in the United States would cause an exceptional and extremely unusual hard- ship to a spouse, parent, or child of that person. Although 49 CFR 24 provides a definition of what an exceptional and extremely unusual hardship is, in practice it can be very difficult to determine objectively that an exceptional and extremely unusual hardship is likely to occur. The case of a family that includes young or disabled children who are citizens of the United States is probably straightforward to assess (but the assessment is still subjective), but the case of a family where children are still minor, but older (e.g., age 15 years or 16 years), is more difficult. • Difficulty determining relocation assistance eligibility for property owners whose center of economic activity is not located at the property to be acquired (e.g., in the case of a property owner whose business is renting property, but his/her business office is not located at the property being acquired). FHWA considers these property owners as displaced persons and, therefore, eligible for reloca- tion assistance. However, no distinction is made between those whose center of economic activity is located at the property being acquired and those whose business office is located elsewhere. In practice, state agencies need to pro- vide relocation assistance services to both property owner and displaced tenants, even when the property owner’s center of economic activity is not relocated, which is oner- ous for the agency. • Difficulty determining whether a business is eligible for relocation assistance services in the case of partial acquisi- tions. For example, a partial acquisition that affects several parking spaces can result in a loss to a business. However, determining that the loss is substantial can be very difficult in practice. • Difficulty determining whether the occupant of a mobile home is eligible for relocation assistance services if there is a partial acquisition of a mobile home park but indepen- dent mobile homes do not have independent amenities or services (e.g., water, gas, or electricity). The criterion for determining eligibility is whether a remaining part of the property is not adequate to continue the operation of the park; however, in practice it can be difficult to make that determination. • Difficulty determining what constitutes lawful activity for businesses in order to assess eligibility for relocation assis- tance services. No standard or guidance on how to make this determination is provided in 49 CFR 24. For example, in practice it may be necessary to determine whether a busi- ness activity is lawful or unlawful, or what to do if there are discrepancies between state and federal laws. Another issue is related to the location where the business activity takes place (e.g., if the activity is lawful but the business violates zoning restrictions). • Difficulty determining whether to provide relocation assis- tance services to entities that conduct business at a location being acquired. For example, flea markets or hair salons may operate as independent businesses within a prem- ises and pay rent or a commission to the property owner. They may share parts of the premises and share equip- ment, however, and the public might not be aware that the entities are separate businesses. Not all state DOTs believe that those entities should receive relocation assistance services. Issues and challenges associated with policies and proce- dures include: • Different agencies within a state following different inter- pretations of relocation assistance policies (e.g., one or more LPAs may apply policies that differ from those at the state DOT, sometimes in violation of the Uniform Act and/or federal regulations). Strategies for improvement or optimization associated with the Uniform Act include: • Amend the Uniform Act to include a definition for the term “unlawful occupancy” in the case of non-residential prop- erty. The act only defines unlawful occupancy in the context of residential real property.

102 Strategies for improvement or optimization associated with federal regulations include: • Develop a standard and tools for determining whether a person is lawfully present in the United States. Although agencies have had success with the self-certification provi- sions in 49 CFR 24, collecting information from persons who are illegally present in the United States is challeng- ing because those persons tend not to volunteer informa- tion easily and because it is difficult to verify the validity of documents such as birth certificates, permanent residency cards, visas, and passports. • Develop a standard or procedure for determining the permanent place of residence of a displaced person. For example, agencies could request that displaced persons provide certain documents, such as the last tax return, driver’s license, and house lease, and verify that the address is the same on all documents. If there are discrepancies, agencies would then require the address to be updated and matched on all the documents before the agencies provide owners with any type of relocation assistance services. • Develop tools and guidance for determining what con- stitutes an exceptional and extremely unusual hardship in situations of mixed households involving a displaced person’s spouse, parent, and/or child who are citizens or permanent residents in the United States. • Develop criteria for determining relocation assistance eligibility for property owners whose center of economic activity is not located at the property to be acquired (e.g., in the case of a property owner whose business is renting property, but the business office is not located at the prop- erty being acquired). • Develop guidance for determining whether a business is eligible to receive relocation assistance services in the case of partial acquisitions. Guidance must include examples of best practices as well as specific criteria for determination. • Develop criteria and guidance for determining what con- stitutes lawful activity for businesses to assess eligibility for relocation assistance services. It would be necessary to establish different types of criteria to account for factors such as the type of business activity and the location where the business activity takes place. • Update the regulations to ensure that relocation assistance services are provided to all the entities that conduct busi- ness within the premises of a real property being acquired (i.e., not just to the owner of the property). Alternatively, develop guidance to clarify when to provide relocation assistance services to those entities so that state DOTs can apply the same standard systematically. Strategies for improvement or optimization associated with policies and procedures include: • Ensure that the interpretation and application of policies within a state are consistent with the agreement that each state has with FHWA. Although these agreements can vary from state to state, the application of state policies should be consistent within the state while ensuring that these poli- cies comply with the Uniform Act and federal regulations. Provide Relocation Assistance Advisory (Residential) Issues and challenges associated with the Uniform Act include: • Difficulty complying with the law in the case of persons who are unlawfully present in the United States if not pro- viding a certain amount of services to them would cause unwanted project delays. Providing notice of the need to move is an example of a service that, under normal cir- cumstances, agencies would recognize as a valid relocation assistance advisory service. Failing to provide that notice can cause delays that affect the project schedule and can result in additional costs because agencies must deal with the legal ramifications and expenses of going through the eviction process. However, agencies frequently do not rec- ognize as valid any services provided to persons who are unlawfully present in the United States, and one conse- quence is that agencies are unwilling to compensate con- tractors for providing those services. Issues and challenges associated with federal regulations include: • Lack of guidance in the regulations, manuals, and other documentation regarding how to describe in plain lan- guage the meaning of certain terms (e.g., replacement dwelling, comparable replacement dwelling, or displace- ment dwelling). This lack of guidance can cause confusion to agents and displaced persons alike, resulting in situa- tions such as an agent suggesting that a displaced person could move to a comparable replacement dwelling that the agency is using as a reference to estimate benefits. In this example, the reaction by the displaced person is predict- ably negative because of the perception that the agency is imposing a specific replacement dwelling (particularly if other comparable replacement dwellings are available). • Requiring several comparable replacement dwellings (when one comparable replacement dwelling is sufficient given local market conditions), which can extend consid- erably the process.

103 Issues and challenges associated with policies and proce- dures include: • Agents not being familiar with all the available federal or state programs that may be of assistance to displaced per- sons. Even if the agents are familiar with those programs, they often do not have the technical expertise to assist dis- placed persons in completing the forms to apply for such programs. • Logistical issues that make it difficult to comply with the regulatory requirement to provide transportation to a dis- placed person to inspect housing. For example, an agency might have the policy of not allowing the use of state- owned vehicles to transport persons who are not state employees. In another situation, an agent (either from the agency or working for a contractor) may need to provide transportation to a person who has one or more small chil- dren and cannot leave the children with anybody else, but the agent’s vehicle does not have the necessary equipment (i.e., child safety or booster seats). Likewise, the vehicle insurance might not provide adequate coverage (e.g., pri- vate vehicles intended for private use typically are not cov- ered for business use on a regular basis). • Improperly trained or inexperienced agents who lack presentation and communication skills to explain key elements of the relocation assistance advisory services to displaced persons. This lack of qualifications extends to ineffectiveness in working within the transportation proj- ect schedule, particularly when a displaced person fights the relocation. • Contracting practices that reward fast completion of assigned work without proper consideration for thor- oughness and high quality. In a typical situation, payment is a function of the number of relocations completed, regardless of the complexity of the relocation assistance advisory services needed. For example, the payment for a relocation that involves a family with two elderly indi- viduals and three disabled children living in the same dwelling may be the same as the payment for providing relocation assistance to a single person living in a stu- dio apartment. Such a practice encourages contractors to focus on the easiest cases first to satisfy the minimum requirements specified in the contract and start receiving payments. Doing so comes at the expense of the more dif- ficult cases, however, which the agency frequently needs to resolve later. These cases can result in additional delays because agencies are forced to restart the hiring process, and the newly selected contractor needs to spend a sig- nificant amount of time becoming familiar with the cases and developing a working relationship with the displaced persons. Strategies for improvement or optimization associated with the Uniform Act include: • Acknowledge that not providing a minimum level of ser- vices to persons who are unlawfully present in the United States is a problem that affects the ability of state DOTs to complete real property activities to help deliver transpor- tation projects on time and within budget. Not being able to provide advisory services or relocation payments to per- sons who are unlawfully present in the United States makes the relocation process problematic and time-consuming. It prevents state DOTs from being able to allocate resources, including hiring consultants, to deal with this problem. It is critical to raise awareness by documenting case studies to ensure that stakeholders understand that this is a prob- lem that needs to be addressed. It may also be necessary to amend the Uniform Act to enable agencies to provide those services (either as a valid relocation assistance ser- vice or explicitly as a non-relocation assistance service) and make the cost to provide those services eligible for reimbursement. Strategies for improvement or optimization associated with federal regulations include: • Amend regulations, manuals, and other documentation to describe in plain language the meanings of terms such as “replacement dwelling,” “comparable replacement dwell- ing,” or “displacement dwelling.” • Provide flexibility to agencies by not requiring several comparable replacement dwellings when one compa- rable replacement dwelling is sufficient given the local market conditions. Strategies for improvement or optimization associated with policies and procedures include: • Develop and deliver information packages and training so that agents become familiar with all the available federal or state programs that may be of assistance to displaced persons. It is also suggested that training include providing information about all the forms displaced persons might need to apply for such programs. • Establish adequate insurance coverage and equipment requirements for any vehicle that the agency will use (or require contractors to use) to provide transportation to displaced persons. • Develop training programs that emphasize both techni- cal topics and the presentation and communication skills needed to explain key elements of the relocation assistance advisory services that are available to displaced persons.

104 • Implement contracting practices that emphasize both the need for production and the need for thoroughness and high quality, more specifically by recognizing that different types of relocations affect the project schedule differently and that leaving complex relocations to the end is more likely to affect the project’s critical path. The payment structure and schedule should reflect these differences. To assist in this process, it is important to identify the type and complexity of potential relocation requirements early in the project development process (e.g., during the planning phase or the environmental review). Provide Relocation Assistance Advisory (Non-Residential) Issues and challenges associated with the Uniform Act include: • Lack of a definition and a standard for what constitutes a suitable replacement location, causing problems for both agencies and displaced persons because of the difficulty to determine what is suitable as well as any ramifications concerning the relocation schedule. Agencies must provide current and continuing information on the availability, purchase prices, and rental costs of suitable locations. How- ever, although agencies develop location listings, these loca- tions frequently do not meet the requirements of businesses in relation to occupancy, zoning, or other requirements, resulting in additional delays because the businesses have to find more suitable locations. In addition, as opposed to residential moves, the Uniform Act does not require find- ing a suitable replacement location for businesses before the agency can issue a 90-day written notice by which time the move is required. In practice, agencies frequently issue these notices even if a suitable replacement location has not been identified. Issues and challenges associated with federal regulations include: • See Determine Relocation Assistance Eligibility. • Difficulty for businesses to find, move into, and become established at the suitable replacement location within 90 days. Even if a suitable replacement location has been identified, physically moving and reestablishing a business at the new location can take much longer than 90 days. Both the Uniform Act and the regulations indicate that 90 days is the minimum for the advance notice. By not recogniz- ing that different types of businesses can have widely dif- ferent relocation needs and schedules, however, a common assumption in practice is that the 90-day notice is accept- able in all cases. Issues and challenges associated with policies and proce- dures include: • Agents being unfamiliar with all the available federal or state programs that may be of assistance to displaced per- sons or being unable to assist displaced persons in com- pleting the forms to apply for such programs. • Contracting practices that reward fast completion of the assigned work without proper consideration for thor- oughness and high quality. For example, the payment for providing relocation assistance to a small family-owned business that does not include any type of equipment and is conducted by only one person is the same as the payment for providing relocation assistance to a factory that employs hundreds of employees. As with residential relocations, the practice of rewarding fast completion encourages contractors to focus on the easiest cases first, at the expense of the more difficult cases. The agency fre- quently needs to resolve more difficult cases later, which can result in additional delays because agencies are forced to restart the hiring process, and the selected contractor needs significant time to become familiar with the cases and develop a working relationship with the displaced persons. Strategies for improvement or optimization associated with the Uniform Act include: • Develop a definition and a standard on what constitutes a suitable replacement location, including appropriate requirements that should be met before agencies can pro- vide a notice by when the move is required. Strategies for improvement or optimization associated with federal regulations include: • Recognize that different types of businesses can have widely different relocation needs and schedules. More specifically, recognize that even if a suitable replacement location has been identified, physically moving and reestablishing a business at the new location can take much longer than 90 days. The regulation should account for this possibility in relation to the duration of the advance written notice by when the move is required. • Update regulations to ensure that relocation assistance services are provided to all the entities that conduct busi- ness within the premises of a real property being acquired (i.e., not just to the owner of the property). Alternatively, develop guidance to clarify when to provide relocation assistance services to those entities so that state DOTs can apply the standard consistently.

105 Strategies for improvement or optimization associated with policies and procedures include: • Develop information packages and training so that agents can become familiar with all the available federal or state programs that may be of assistance to displaced persons, and gain familiarity with all the forms displaced persons might need to apply for such programs. • Implement contracting practices that emphasize both the need for production and the need for thoroughness and high quality, specifically by recognizing that different types of non-residential relocations have different impacts on the project schedule and that completing simple reloca- tions early and leaving complex relocations until later is more likely to affect the project’s critical path. Performance measures and the payment structure and schedule should reflect these differences. To indicate agency expectations clearly, contract scopes should be specific, describing the expected services for different types or levels of relocation assistance required instead of simply stating, for example, that the contractor will provide relocation advisory assis- tance services. To assist in this process, it is important to identify the type and complexity of potential relocation requirements early in the project development process (e.g., during the planning phase or the environmental review). Issue Relocation Payments (Residential) Issues and challenges associated with the Uniform Act include: • Relocation payment limits not being adequate to cover res- idential relocation expenses. Many state DOTs highlighted this issue during the 2011 survey and follow-up interviews. In 2012, based on recommendations from listening ses- sions for regulatory changes that went into effect in 2005, MAP-21 adjusted relocation payments as follows (5): – Maximum replacement housing payment for displaced property owners increased from $22,500 to $31,000. – Maximum rental assistance payment for displaced ten- ants increased from $5,250 to $7,200. – Authorization was included to adjust (by regulation) the amounts above to take into consideration cost of living, inflation, and other factors. Monitoring the implementation of these amendments over time will help to determine if the relocation payment limit issue is still valid. • Difficulty determining compliance with the required num- ber of days a displaced person must reside at a displaced dwelling to qualify for relocation payments. This issue also was highlighted by many state transportation officials during the 2011 survey and follow-up interviews. Before MAP-21, there were two eligibility thresholds (90 days and 180 days). In 2012, MAP-21 eliminated the 180-day threshold for property owners. The Uniform Act is silent regarding rental agreement payments in cases where a homeowner resides at a displaced dwelling for at least 90 days (prior to the initiation of negotiations) and decides to rent instead of acquiring a new property. Likewise, the act does not address what happens if the duration of resi- dency at a displaced dwelling is less than 90 days. Issues and challenges associated with federal regulations include: • Lack of adequate guidance regarding eligibility for last- resort housing in the case of displaced persons who occupy a rental dwelling for less than 90 days. The regulations indi- cate that a displaced person who does not meet length-of- occupancy requirements could be eligible for comparable replacement rental housing under certain circumstances, and that the agency must issue such payment as a replace- ment housing of last resort. In practice, any number of subsequent occupants of the same rental dwelling could be eligible for a last-resort housing replacement. • Lack of clarity regarding maximum payment limits for last-resort housing. In practice, funds at state DOTs are limited. The Uniform Act indicates that the displacing agency may exceed the maximum amounts authorized for replacement housing on a case-by-case basis in accordance with federal regulations. Some guidance on the matter is provided by 49 CFR 24, but in practice, this guidance is subject to considerable interpretation, making it difficult to identify when last-resort housing assistance is necessary or how cost-effective it is. • Length of time required to identify and select replacement dwellings, particularly for tenants. In practice, displaced persons tend not to move to the comparable replacement dwelling that was used as a reference for determining their benefits. However, because the requirements pertaining to the availability of replacement dwellings are strict and pri- vate rental markets at some locations do not remain stable for long periods, the result is more difficulty and a longer time to identify and select comparable dwellings. Issues and challenges associated with policies and proce- dures include: • Children’s inability to receive relocation payments if they experience exceptional and extremely unusual hardship because their parents are unlawfully present in the United States and, therefore, are ineligible to receive relocation

106 assistance services. The ability of underage children to con- duct normal money or banking transactions can be limited in practice, making it more difficult for them to receive relocation payments or make informed decisions to sup- port the relocation process. • Adding the relocation payment to the amount paid to acquire the property as part of a single, combined real property acquisition payment can cause tax ramifications for property owners. Relocation payments are not taxable income. However, part of the amount paid to acquire the property could be taxable (e.g., if there is a capital gain). Combining both payments into a single, larger payment without providing proper documentation could result in a higher tax burden for the displaced property owner, in effect reducing the relocation payment. This risk highlights the need to monitor the implementation of the lump-sum payment demonstration program. • Risks and unknown parameters associated with the lump- sum payment demonstration program in MAP-21. The main purpose of this initiative is to expedite the acqui- sition of residential property, avoid condemnation pro- ceedings, and decrease administrative costs. Lump-sum payments include both acquisition and relocation assis- tance. A potential risk of not separating these two pay- ments is that displaced property owners may be unaware of all the potential relocation risks and costs at the time the lump-sum payment is agreed on, which may result in an economic loss for that property owner. Also, the likely increase in interest by attorneys in lump-sum payment cases (because of the possibility of higher fees when the payments are combined) may result in lower net payments to displaced property owners. Strategies for improvement or optimization associated with the Uniform Act include: • Monitor the implementation of the amendments intro- duced in 2012 by MAP-21 to determine the effectiveness of the maximum replacement housing payments allowed. Strategies for improvement or optimization associated with federal regulations include: • Develop adequate guidance regarding eligibility for last- resort housing in the case of displaced persons who occupy a rental dwelling for less than 90 days. A strategy to discour- age short-term rentals after the renter vacates the property involves using protective rental agreements by which the agency pays the owner rent and the owner agrees not to allow others to occupy the rental property. • Broaden the comparable replacement dwelling methodol- ogy for estimating relocation payments to include state- developed schedules if sufficient comparable housing is available and multiple displaced persons exist with com- parable housing requirements. For example, in California, representative dwellings (as opposed to specific dwellings) are used to calculate relocation payments. This method is particularly useful if numerous residential displaced per- sons on the same project have very similar requirements for comparable replacement housing. For the calculation, the relocation agent gathers as many comparable dwellings as possible and determines a mean purchase price or rent, which provides the basis for the determination of eligible price differential payments or rental assistance payments. • Change the concept of availability required for compara- ble replacement dwellings. Regulations should recognize that most displaced persons do not move to the compa- rable replacement dwelling that was used as a reference for determining relocation payments. • Develop a systematic process approved by FHWA to deal with negative equity situations. To date, there have only been temporary waivers of the methodology for calculat- ing relocation housing payments in the case of negative equity situations. Strategies for improvement or optimization associated with policies and procedures include: • Establish reliable mechanisms to ensure that children whose parents are unlawfully present in the United States can receive and manage relocation payments. Some states issue instruments such as debit or credit cards to the chil- dren and allow their parents to use them. • If combined acquisition and relocation payments are issued, establish a clear separation between the relocation payment and the amount paid to acquire the property to prevent the risk of the relocation payment becoming tax- able income. • Monitor the progress and results of the MAP-21 demon- stration program for lump-sum payments. • Enable electronic payments and direct deposit options to streamline relocation payments. • Change limits to the timeframe within which displaced persons can submit claims. • Make the use of relocation incentives a standard practice. The incentives could vary depending on the time it takes to vacate the property. For example, for property owners, the incentive could be a certain amount if the property is conveyed and vacated within 45 days, a lower amount if it is conveyed and vacated within 60 days, an even lower amount if it is conveyed and vacated within 90 days, and zero afterwards. For residential tenants, the threshold structure could be similar, except that the incentive would only cover vacating the property. An additional incentive

107 includes providing a payment to displaced persons so that they remain at the property until the agency acquires the property. Issue Relocation Payments (Non-Residential) Issues and challenges associated with the Uniform Act include: • Insufficient relocation payment limits to cover non- residential relocation expenses. As with residential reloca- tion payment limits, this issue was highlighted by many state DOTs during the 2011 survey and follow-up inter- views. In 2012, based on recommendations from listen- ing sessions for regulatory changes that went into effect in 2005, MAP-21 adjusted relocation payments as follows (5): – Maximum amount for fixed payment relocations increased from $20,000 to $40,000. – Maximum amount for actual reestablishment expenses increased from $10,000 to $25,000. – Authorization was included to adjust (by regulation) the amounts above to take into consideration cost of living, inflation, and other factors. Monitoring the implementation of these amendments over time will help to determine if the relocation payment limit issue is still valid. • Not allowing a fixed payment option if the sole business at the displacement dwelling or site is renting the dwelling or site to others. Issuing fixed payments to non-residential property owners is typically easier and faster than review- ing, approving, and issuing actual expense payments. Issues and challenges associated with federal regulations include: • Difficulty determining what constitutes an eligible actual moving expense. The Uniform Act requires the deter- mination of actual reasonable and related expenses in connection with the move, but in practice, making this determination based on the requirements in 49 CFR 24 can be challenging and time-consuming. Examples include: – Difficulty assessing the cost to reinstall equipment, particularly when utility upgrades are necessary at the replacement site. It is not always easy to assess whether the utility upgrade is actually necessary because of the move or an attempt to get a free upgrade with project funds. – Lack of guidance about how to proceed in the case of insufficient insurance to cover stolen, lost, or damaged property that was either irreplaceable or for which a monetary value was difficult to assess. – Lack of guidance about who is eligible for professional services for planning the move of personal property. – Difficulty determining the direct loss of personal prop- erty that results from moving. In most cases, the cost of moving is less than the current value of the item. Even though it can be difficult and time-consuming, how- ever, estimating this value is required. Agencies and relocation agents often lack the expertise to conduct this assessment, and hiring subject matter experts increases the cost to complete the analysis. – Difficulty determining the validity of substitute per- sonal property expenses. Although the intent of the regulation was to decrease relocation costs by selecting the less expensive option (i.e., moving existing personal property versus replacing the property with a substi- tute item at the replacement site), in practice this is an incentive to find a justification for discarding existing personal property and replacing it with new personal property at the replacement site. – The cost to search for replacement locations frequently exceeding the maximum $2,500 allowance. Issues and challenges associated with policies and proce- dures include: • Providing both fixed and non-fixed relocation payments to the same displaced person. The Uniform Act and the regu- lations require choosing one of the two payment options. Strategies for improvement or optimization associated with the Uniform Act include: • Monitor the implementation of the amendments intro- duced in 2012 by MAP-21 to determine the effectiveness of the maximum non-residential relocation payments allowed. • Ensure that relocation payments are provided to all the enti- ties that conduct business at the property being acquired (i.e., not just to the owner of the property). Alternatively, developing guidance to clarify when to provide relocation payments to those entities so that state DOTs can apply the standard systematically. Strategies for improvement or optimization associated with federal regulations include: • Simplify the criteria and requirements for determining actual reasonable moving and related expenses. Businesses routinely require more than the maximum allowed to search for replacement locations ($2,500) and more than the maximum allowed to complete the reestablishment process at the replacement site ($25,000). Documenting,

108 reviewing, and approving actual moving expenses is cum- bersome and time-consuming. Strategies that simplify the criteria, requirements, and documentation associated with this process are likely to have a significant impact on non- residential relocations. Examples include, but are not lim- ited to, the following: – Use relocation estimates (particularly when the expense is likely to exceed the maximum) and/or historical pay- ment data as an acceptable basis to document actual reasonable expenses. – Remove the option to purchase substitute personal property because this is not a requirement in the Uni- form Act and because implementing it will address the current incentive to discard existing personal prop- erty and replace it with new personal property at the replacement site. – Remove the fair market value in place of the item com- ponent in the calculation for loss of tangible personal property and simply pay the amount equal to the rea- sonable expenses that would have been required to move such property. Strategies for improvement or optimization associated with policies and procedures include: • Make the use of relocation incentives a standard practice. These incentives could vary depending on the time it takes to vacate the property. For example, for business relocations, the incentive could be a certain amount if the property is conveyed and vacated within 60 days, a lower amount if it is conveyed and vacated within 90 days, and zero afterwards. For business tenants, the threshold structure would be sim- ilar, except that the incentive only covers vacating the prop- erty. Additional incentives include providing a payment to displaced persons so that they remain at the property until the agency acquires the property and using protective rent payments to property owners, particularly in the case of multi-unit dwellings, to prevent the property from being rented after the property has been vacated. Another strat- egy is to improve or update relocation payments for busi- nesses to encourage businesses to reestablish locally instead of moving to other cities, states, or nations. • Enable electronic payment and direct deposit options to streamline relocation payments. • Establish limits to the timeframe within which displaced businesses can submit claims. • Develop a historical database of reestablishment payments to enable estimates that are more reliable when preparing for or managing specific relocation projects. In a typical situation, the relocation agent must find suitable replace- ment locations available on the market and determine the eligible reestablishment expenses for those locations. Having a historical database of payments would enable agents to prepare better estimates and inform displaced persons (before the relocation process starts) about the expenses they are eligible to receive. The historical database would also facilitate the assessment of the reestablishment expenses submitted by displaced persons to ensure that the expenses are reasonable and necessary. Property Management Inventory and Manage Property Interests Issues and challenges include: • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Prepare Right-of-Way Map and Property Descriptions. • Difficult-to-use databases or information systems for man- aging real property. At many agencies, the information sys- tem currently used for this purpose is an adaptation of the information system the agency uses to track the acquisition of real property, but this system was never envisioned or designed for long-term property asset management. Many of these systems do not include linkages to spatial databases or the ability to display CAD files or other documents asso- ciated with individual real property interests. • Limited use of data management platforms such as CAD and GIS to support property management functions among personnel who would benefit the most from using those platforms. Issues include lack of access to CAD or GIS software licenses (e.g., if the number of contracted licenses is limited to certain workstations or individuals), and lack of familiarity or practical experience by right-of- way personnel and contractors with CAD or GIS software. • Inappropriate file formats. Many state DOTs produce right- of-way maps in a CAD environment (e.g., MicroStation or AutoCAD), but the official plan-of-record requirement is to produce a copy in PDF, some image format (frequently of poor resolution), or paper. At many agencies, right-of- way maps still exist in old paper roll format. Further, there might not be a formal requirement to include the original CAD files as part of the permanent archive. As a result, the original CAD files are not available to support prop- erty management functions in a CAD or GIS environment effectively. • Non-georeferenced files depicting the location of real property or files that are georeferenced but do not comply with accepted survey standards and procedures regarding positional accuracy requirements. • Inadequate computing resources to support property man- agement functions. Examples of problems include insuf- ficient bandwidth to serve files, maps, and documents

109 efficiently; low file storage capacity; insufficient or inefficient database implementations; and inadequate or unfriendly user interfaces. • Inadequate implementation plans that focus on short-term solutions without accounting for future planning and expan- sions, including how to manage the integration of old paper files into the inventory of real property, how to manage coordination and integration with other internal and exter- nal stakeholders, and funding provisions for system main- tenance and upgrades to ensure the future sustainability of the system. • Difficulty tracking authorized uses of the right-of-way such as permitted driveway and utility installations as well as unauthorized uses such as illegal encroachments. • Inability to provide a reliable accounting of the total real property owned or managed by the agency. Strategies for improvement or optimization include: • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Prepare Right-of-Way Map and Property Descriptions. • Develop property management systems that include user interfaces that support georeferenced information in CAD and GIS-based formats, as well as industry-standard spa- tial data formats such as keyhole markup language (KML), which is an official Open Geospatial Consortium (OGC) standard. A wealth of information is available in GIS for- mat, including data sources that agencies own and manage as well as data sources managed by other agencies. However, agencies also own and manage a wealth of information in CAD format. Most CAD files are now georeferenced (with the added advantage of being produced using accepted survey standards and procedures), which makes the pro- cess of integrating this information with other spatial data- bases considerably easier. Effective property management would also require the capability to load and display coor- dinate data such as that obtained with field data collectors equipped with global positioning system (GPS) receivers, as well as supporting files such as pictures, video clips, and notes. User interfaces should also provide the capability to link to commonly used viewers such as Bing, Google Earth, and Google Street View. • Follow a system engineering approach for the develop- ment of property management systems. Many agencies have comprehensive guidelines and procedures for the development of information technology (IT) products. Frequently, these standards are state-level standards that cover all state agencies and include elements such as plan- ning (including stakeholder and administration buy-in), requirements analysis, design, development, testing, imple- mentation, deployment, and decommission. Right-of-way officials and administrators should become familiar with this framework to develop implementation plans for prop- erty management systems that are feasible and have a real- istic chance of succeeding. • Develop an implementation plan that focuses both on short-term benefits and long-term expansions, including how to manage the integration of old paper files into the inventory of real property, how to manage coordination and integration with other internal and external stakehold- ers, and funding provisions for system maintenance and upgrades to ensure the future sustainability of the system. • Enable mobile data access and field data entry and upload- ing. Mobile data access and field data collection and uploading requires investment of resources but can result in considerable savings, including instant access to spatial data, documents, and other information of interest, as well as the capability to collect data in the field and wirelessly upload the data to the agency’s data servers. • Develop robust property management system require- ments as a front-end to any software acquisition or devel- opment process. Examples of critical requirements include: – Support for georeferenced data in a wide range of for- mats, including CAD, GIS, and KML. – Color-coding of properties on the online map display according to the property status throughout its lifetime (e.g., negotiation, condemnation, in possession, leased, sold, and so on). – Web-based interface that facilitates access by external stakeholders and the public to relevant real property information, including location, property descriptions, deed information, and appraisal and acquisition his- tory. The interface should enable users to prepare a wide range of tabular and map-based queries and reports. – Capability to track attribute information and the status of a wide range of real property, such as parcels, min- eral rights, real property access, easements, leases, and licenses. Examples of attribute information include parcel ID, project ID, area, funding source and status (particularly if the acquisition involved federal funds), and encumbrance status. – Integration with other systems at the agency, including project management, document management, permits, maintenance, and financial information. Integration should take place at several levels, including database levels (by using foreign keys, table relationships, and other elements) and interface levels (by enabling que- ries and direct data links). – Integration with county and/or state cadastral informa- tion systems. – Mobile data access and field data entry and uploading. – A focus on ease of data entry. Examples of requirements include linking to existing systems to facilitate the use of

110 drop-down menus (therefore minimizing the need for free-form text boxes), single-point data entry (to avoid having to enter data more than once), and intuitive, uncluttered user interfaces. – Capability to link to other agency-owned systems that track authorized uses of the right-of-way such as per- mitted driveway and utility installations. – Capability to identify, track, and handle unauthorized uses such as illegal encroachments. – Robust database design that focuses on table indexing, reduction or elimination of unnecessary data redun- dancy, and efficient data querying and reporting. – Adequate system design, including sufficient band- width to serve files, maps, and documents efficiently; adequate file storage capacity; and an efficient database implementation. – A focus on high quality real property data. Examples include requiring the use of standard survey-level procedures to generate parcel outlines and polygons in a CAD environment while preparing right-of-way maps, avoiding the use of informal hand-free tracing approaches to generate parcel outlines, and avoiding the use of parcel sketches that are not tied to appro- priate survey controls (e.g., roadway centerlines, which can change over time). Other requirements include integrating survey and CAD software to manage parcel polygons and updating CAD design libraries to include and manage parcel polygons. – Multitier structure to document positional accuracy requirements and levels depending on the quality of the information available about real property. • Establish templates for the roles and responsibilities of multiple parties that use infrastructure corridors (10). Lease Property Interests Issues and challenges include: • See Inventory and Manage Property Interests. • Difficulty determining real property that could be leased or that has a potential to generate revenue or add value to the property asset. Strategies for improvement or optimization include: • See Inventory and Manage Property Interests. • Establish a standard protocol and lease template for utility attachments to roadway structures (10). • Promote the use of agreements with LPAs to encourage the identification of locations where real property could be leased. For example, a state DOT could enter into an agree- ment with a city to enable the city to manage state-owned sidewalks and pedestrian areas at locations that attract businesses and tourists. The city would then lease specific sections to local businesses such as restaurants, generating revenue for both the state DOT and the city. Dispose Property Interests Issues and challenges include: • See Inventory and Manage Property Interests. • Difficulty determining real property that might be eligible for disposal as surplus property. • Difficulty valuing agency-owned real property, particularly if traditional appraisal approaches yield estimates that do not reflect what the market would bear. This can be prob- lematic if there is a requirement to sell surplus property at the appraised market value but the market is not in an appreciation trend. Attempting to sell these properties at auction would likely result in no bidders (unless the fair market value requirement can be relaxed). • State laws and regulations requiring the approval of the state transportation commission or other governing bod- ies for every sale of surplus property. • Placing indefinite holds on real property to prevent their sale without a strong business justification. Strategies for improvement or optimization include: • See Inventory and Manage Property Interests. • Promote market-based initiatives to encourage the identi- fication and valuation of real property that could be eligi- ble for disposal as surplus property. Such initiatives might include: – Implement a web-based property management system that shows all the real property owned by the agency and enables stakeholders and the public to conduct queries by location, status, and other parameters. – Develop criteria and mechanisms to facilitate local analy ses and valuations. – Depending on the type of real property, implement a system that enables online bidding by stakeholders and the public. • Periodically review holds that prevent the sale of real prop- erty to evaluate their need and justification. • Amend state laws and regulations that currently require the approval of the state transportation commission or other governing bodies for every sale of surplus property. A tiered structure for approvals could be established depending on the amount and location of the real property. • Allow the addition of minor improvements to maximize the value of a real property interest.

111 Utility Conflict Analysis, Permits, Relocation, and Reimbursement Provide Planning and Utility Process Linkages Issues and challenges include: • Not involving right-of-way personnel in planning and pro- gramming, or underestimating the importance of involv- ing right-of-way staff in planning and project scoping. • Lack of interest by utility owners in early participation in the project development process. Lack of interest prevents the agency from getting potentially valuable information about major facilities that might conflict with the project. From a utility owner’s perspective, it is not cost-effective to spend time and resources on a project that still has too many uncertainties, particularly if the associated expenses are not reimbursable. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged as part of the team performing project scoping and cost estimating. Legal personnel experienced in utility reloca- tions should also be involved, particularly if complex utility relocations are anticipated. • Develop a systematic procedure to update utility cost esti- mates throughout the project development process with an explicit methodology that includes variable contin- gency levels, depending on the design status. Conduct Coordination Meetings Issues and challenges include: • Not involving right-of-way personnel in planning and pro- gramming, or underestimating the importance of involv- ing right-of-way staff in planning and project scoping. • Lack of utility owners’ interest in early participation in the project development process. Strategies for improvement or optimization include: • Ensure that right-of-way personnel are consistently engaged as part of the team performing project scoping and cost estimating. • Make sure right-of-way personnel are invited to participate in district and division level meetings with utility owners. Prepare and Execute Utility Agreements Issues and challenges include: • Complexity of the utility cost estimation and reimburse- ment process. Preparing and submitting utility cost esti- mates demands significant time and effort from utility owners. Federal regulations designate the method of work, either force account or contract, and the method for devel- oping utility relocation costs, preferably based on actual direct and related indirect costs. The regulations also clarify that federal funds may participate in amounts actually paid for utility relocations. Although quantities and unit costs are acceptable, utility owners typically have to prepare cost estimates broken down into cost categories such as materi- als and supplies, labor, transportation, equipment, and over- head, as well as account for salvage, credits, and betterments. • Imbalance between the requirement to submit preliminary cost estimates and the recognition that federal funds may participate in amounts actually paid for utility relocations. Utility owners know this, which causes them to question why they need to spend so much time and effort developing esti- mates because, in the end, the agency will have to reimburse them for the actual cost to relocate their eligible facilities. • Delays due to frequent changes in the project design. Some utility owners have to submit supplemental agreements every time there is a change in work characteristics. In addi- tion, delays in the approval of supplemental agreements cause utility contractors to stop for several weeks, which translates to additional delays and extra costs. Strategies for improvement or optimization include: • Streamline and standardize utility cost data submissions. Standardization of utility cost estimation procedures ben- efits both agency and utility owners. In particular, stan- dardized procedures enable the agency to compare cost estimates across districts. • Develop a systematic procedure to update utility cost esti- mates throughout the project development and delivery process with an explicit methodology that includes vari- able contingency levels, depending on the design status. • Include utility relocations in the highway contract. If fea- sible, this strategy can give utility owners more time to plan for the relocation and ensure that utility relocations only take place if a project actually moves to a construction phase. The state DOT can also reduce or avoid contrac- tor delay claims more effectively because the contractor is responsible for the relocations. • Develop web-based systems to automate the preparation of utility cost estimates and the submission of utility agree- ment forms and supporting documentation. Monitor Utility Relocations and Reimburse Utility Owners Issues and challenges include: • Requirement to justify discrepancies in the final bill, par- ticularly when the total relocation cost is lower than the

112 original estimate by more than a certain amount or per- centage. Particularly for projects that run under budget, utility owners find this requirement cumbersome and unnecessary. • Compressed project development schedules at state DOTs that affect the utility coordination process, which affects the time that utility owners have for relocation. Challenges in completing the acquisition of real property before utility owners start developing utility relocation projects further complicate the relocation process. There are cases when acquisition of real property extends into construction. This hampers utility owners’ ability to develop relocation projects because of the uncertainty of available right-of- way and potential environmental issues, such as aquifers and endangered species. • Late submission of billings by utility owners. In practice, situations often arise in which a utility owner submits bill- ings years after the relocation has been completed. In some cases, utility owners do not submit final billings at all. Such delays in submitting billings are a source of delay and in- efficiency at state DOTs because of the additional time and effort needed to track the missing or late billings and the inability to close projects properly. Strategies for improvement or optimization include: • Notify utility owners about project schedule changes as soon as possible to enable those utility owners to reallocate resources and minimize unnecessary expenditures. • For non-reimbursable utility relocations, promote the use of financial incentives that are tied to pre-established utility relocation milestones that have been agreed upon through coordination between the agency and the utility owner. Failure of the utility owner to meet milestones would cause the utility to forfeit all or a pre-established percentage of the incentive compensation, in effect causing the utility owner to relocate its facilities at its own expense. Project Management Establish Project Management Team Issues and challenges include: • Not involving or underestimating the importance of involv- ing right-of-way, legal, environmental, construction, and maintenance personnel in the project management team. This issue is particularly critical if the need to involve these personnel may not be readily apparent to project managers (e.g., for meeting federal and state accessibility requirements, identifying real property requirements and challenges to sup- port environmental commitments, and identifying poten- tially challenging locations from a real property acquisition and relocation assistance perspective). Strategies for improvement or optimization include: • Ensure that right-of-way, legal, environmental, construc- tion, and maintenance personnel are engaged in establish- ing the project management team. • Seek executive-level commitment for early engagement of right-of-way staff in the project management team and be willing to raise concerns proactively to executive manage- ment if this early engagement is not occurring on projects. Manage Project Development and Delivery Process Issues and challenges include: • Performance measures that focus on the duration to acquire real property without taking into consideration issues such as the degree to which right-of-way person- nel were properly involved in earlier project development phases and the degree to which right-of-way personnel were involved in determining project schedules. Other issues that affect the feasibility or robustness of time-based performance measures include staff shortages and turn- over and the availability and effectiveness of training and other professional development opportunities. • Focusing on streamlining and accelerating project deliv- ery at the expense of property rights and the right to due process. Strategies for improvement or optimization include: • Use standardized forms that include real property compo- nents to develop transportation project scopes that facili- tate the development of preliminary cost estimates and schedules. The real property components should include both real property acquisition and an assessment of poten- tial relocation assistance impacts and requirements. It is worth noting that NCHRP Project 08-88 is conducting an assessment of scoping practices around the country, including a review of forms used by different state DOTs, and will develop a suggested framework for developing project scopes. • Develop performance measures and program data collec- tion plans that focus on collecting meaningful informa- tion about the effectiveness of the property acquisition and property management functions. Examples of perfor- mance measures include: – Number of real property interests at critical milestones (e.g., approved for acquisition, acquired by negotiation, acquired by mediation, acquired by condemnation pro- ceedings, in possession, and acquired or in possession prior to letting).

113 – Number of residential displaced persons and number of persons who are ineligible for relocation assistance services (including the reasons they are ineligible). – Number of non-residential displaced persons by major categories (e.g., property owners, tenants, type and size of business, and relocation needs and requirements). – Time to complete critical real property activities in rela- tion to major transportation project milestones such as development of planning-level project scopes and cost estimates, approval of the environmental document, approval to acquire property, completion of the design phase, letting, and beginning of construction, and more. – Cost estimates, budgets, and expenditures in real prop- erty acquisition and relocation assistance services at crit- ical transportation project milestones, from planning to construction. Cost estimates, budgets, and expenditures should include direct costs as well as project manage- ment, legal support services, and administrative sup- port costs. For a proper evaluation of expenditures, dollar amounts should include a category to measure the cost to the state to acquire real property through condemnation. – Quality of real property deliverables at critical mile- stones. Measuring the quality of real property deliv- erables should include both internal measures (i.e., measures provided by agency personnel) and external measures (i.e., measures provided through surveys of property owners and tenants on the quality of the ser- vice provided by agency personnel and contractors dur- ing the real property acquisition and relocation phase). – Number of surplus property interests at different stages (e.g., identified, approved for sale, leased, and sold). – Time to complete critical property management activities. – Costs incurred and revenue generated from property leases and sales. – Quality of property management services provided using both internal measures (i.e., measures provided by agency personnel) and external measures (i.e., mea- sures provided through surveys of property owners and tenants on the quality of the services provided by the agency). – Number of training opportunities offered and received, categorized by topic and staff training needs and requirements. – Link between training opportunities and career advancement within the agency. – Budget allocated to right-of-way staff training and pro- fessional development. – Staff turnover rate. • Use statistical techniques (including central tendency and dispersion measures) to track the duration and resources used for the completion of critical milestones. One use of this information is to enable the agency to adjust the duration of certain activities based on real project data (e.g., the number of days needed to provide property own- ers to review offers). The agency could also use this infor- mation for scheduling purposes and for allocating funds and resources. • Incorporate risk management techniques into the prop- erty acquisition and relocation functions by explicitly con- sidering elements such as vulnerabilities, risk levels, and mitigation strategies to address those risks. This analysis could be used to provide more realistic estimates of dura- tions and costs with an explicit risk-based representation of contingencies that vary along the project development process as more accurate information becomes available. Other Issues and Strategies for Improvement or Optimization Program Management and Administration Issues and challenges include: • See under Project Management: – Manage Project Development and Delivery Process. • Institutional structures that do not encourage the transi- tion to electronic document management practices and keep requiring paper copies of most real property acquisi- tion and relocation documents. Strategies for improvement or optimization include: • See under Project Management: – Manage Project Development and Delivery Process. • Decentralize signing authority, approval, and acceptance of acquisition documents by moving more approval author- ity to the local level. • Work with LPAs to pursue corridor management and corridor preservation strategies. The basis for the appli- cation of these strategies includes municipal comprehen- sive plans, municipal and county transportation plans, regional transportation plans, municipal and county sub- division regulations, and local zoning and development regulations. The greatest opportunity to undertake these initiatives is at the local level with adopted comprehensive plans and zoning. The reason is that LPAs have the ability to regulate subdivision of property, land use density, and other aspects of site development along highway corridors. Most of the tools needed for corridor management and corridor preservation are contained within local subdivi- sion regulations and zoning ordinances, which are the two key tools that cities use to implement their comprehensive

114 plans. Local plans may also contain specific components, policies, or objectives on corridor management and cor- ridor preservation, including prioritization of corridors within the community for corridor management and/or corridor preservation programs. Staffing and Training Issues and challenges include: • Difficulty hiring and retaining staff with adequate real property acquisition experience. • Too many silos because of the level of specialization within the staff, resulting in too many hand-offs and limited suc- cession planning. • Lack of recognition of required real property skill sets within the agency and lack of career paths and promotion opportunities within the engineering-centric culture typi- cally found at state DOTs. • Inadequate funding for training and professional develop- ment opportunities for right-of-way personnel, along with the related issue of availability of training only in certain areas (e.g., appraisals) but not in other critical right-of-way functions. • LPAs not having the required skills or knowledge to under- stand and implement regulations due to inexperience and understaffing. • Out-of-state trainers who are not familiar with the laws, regulations, and procedures of the state where they are conducting training. Strategies for improvement or optimization include: • Market and champion the importance of right-of-way as a discipline within the state DOT structure, including the development of information outreach programs within the agency promoting the right-of-way profession as a career path and implementing more equitable pay levels to attract more qualified right-of-way professionals and support staff. • Encourage professional development by providing reim- bursement for courses and other training opportunities offered through universities, community colleges, IRWA, and AASHTO, and by linking these training opportunities to career advancement within the organization. • Promote the development of cost-effective, highly inter- active online training opportunities, while continuing to offer traditional classroom courses for advanced topics. • Provide training in topical areas that are critical but fre- quently not emphasized (e.g., local culture, policies, and customs; local market conditions and the use of local, up- to-date data; necessary communication skills to develop rapport with property owners quickly and effectively; and conflict resolution techniques). Training should also focus on technical areas such as CAD, GIS, and other geospatial technologies. • Provide cross-training opportunities within the agency to allow for more flexibility and reduce delays due to unnec- essary dependence on a reduced number of right-of-way personnel within the agency. Cross-training should include providing headquarters or regional staff with the opportu- nity to work on projects across regions and to go to other regions to provide training and mentoring. It should also include conducting meetings with officials from other dis- tricts or regions on a regular basis to learn from each other and to ensure consistency of practices throughout the state. • Train and allocate adequate clerical support to complete paperwork and forms in support of right-of-way person- nel. Doing this will help to leverage the time of experienced right-of-way professionals and result in fewer errors, cor- rections, and iterations between district and central offices. • Develop partnerships with universities and community colleges to develop and conduct training in real property topic applications in transportation. This strategy also includes working with engineering schools to expand their transportation curriculum to include courses or programs on real property acquisition and management and integra- tion of these processes within the project development and delivery process. • Develop partnerships with contractors to develop cross- training opportunities and to help with the retention of insti- tutional knowledge in both the public and private sectors. Outsourcing Issues and challenges include: • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Prepare Right-of-Way Map and Property Descriptions. – Conduct Appraisal or Waiver Valuation. – Acquire by Negotiation. – Provide Relocation Assistance Advisory (Residential). – Provide Relocation Assistance Advisory (Non- Residential). • Lack of an adequate mechanism to evaluate contractors. Some state agencies do not evaluate the performance of contractors who have performed work for the agency in the past. Other agencies conduct evaluations during or at the end of the contract but do not use the evaluation results as a selection criterion for future procurements, rendering the evaluation process less meaningful. In other situations, different officials within the same agency may have different perspectives on the performance of the same

115 contractor, but the agency lacks a systematic approach to consolidate these different views. As a result, a contractor may be hired based on a positive prior performance in one district even though there may be negative reviews for the same contractor from other districts within the same agency. • Initial proposals that appear to be competitive but, following the contract award, encounter contract modifications that drive costs up significantly due to revisions, scheduling, and other factors. The final cost of outsourcing is actually higher (and could end up being more expensive than conducting the work in-house) after taking into account the time and resources needed to oversee the contracts and review and make corrections to the contractor’s deliverables. • Contractors having performance problems when handling an entire real property acquisition project. Outsourcing right-of-way functions seems to be more effective for han- dling specific functions or handling high-peak workloads. Contractors may be hired who have expertise in some right- of-way functions but little or no expertise in other areas. Evaluations of contractors’ proposals may not account properly for these variations and potential deficiencies in expertise. Moreover, agencies may use the same contract structure for the entire real property acquisition project as for handling individual project components without includ- ing specific provisions for handling the significantly higher risks and uncertainties associated with the entire project. • LPA contractors not having enough expertise, cutting cor- ners, or not following federal or state laws or regulations and/or established policies and procedures. Strategies for improvement or optimization include: • See under Right-of-Way Map, Authorization to Acquire Property, Property Acquisition, and Relocation Assistance: – Prepare Right-of-Way Map and Property Descriptions. – Conduct Appraisal or Waiver Valuation. – Acquire by Negotiation. – Provide Relocation Assistance Advisory (Residential). – Provide Relocation Assistance Advisory (Non- Residential). • When selecting contractors, review and approve the resumes of every single individual, and include a provision to approve or deny any new hires. An in-depth knowledge of the firms and their staff enables the agency to select the right firm for a particular job. It is also critical to use the evaluation results from previous projects as a selection criterion for future procurements. • Develop contract templates that include precise require- ments for robust scopes of work, identification of specific deliverables and the expected completeness and quality, and payment schedules that are linked to the submission of quality deliverables. Depending on the need, it could be critical to develop templates for a variety of contract- ing requirements ranging from specific right-of-way func- tions to complete projects, including specific provisions to handle risk and uncertainty for each type of contract. • Use pre-approved lists of on-call contractors, which reduces the need for more frequent contractor bidding and selection cycles. As projects come up, the agency chooses contractors from the pre-approved list through a mini-bid process. This strategy enables the agency to be flexible in responding to variations in project demands. • Work with or require LPAs to hire contractors from the list of pre-approved contractors that the state DOT uses. Summary This chapter summarized issues and challenges affecting transportation project development and delivery process activities that typically have a major real property compo- nent. It also identified various strategies for improvement or optimization to address those issues and challenges. Table 13 summarizes the issues, challenges, and strategies that were identified during the research. In total, the research team identified 174 issues and challenges and identified 195 strate- gies for improvement or optimization. The list in Table 13 is organized as follows: • Project development and delivery process activities with a significant real property component (42 activities, as shown in Chapter 3, Figure 11)—161 issues and challenges, 179 strategies: – Definition, selection, financing, and scheduling (2 activ- ities). – Alternative analysis and preliminary analysis (4 activities). – Environmental process (4 activities). – Design and PS&E assembly (6 activities). – Right-of-way map, authorization to acquire prop- erty, property acquisition, and relocation assistance (17 activities). – Property management (3 activities). – Utility conflict analysis, permits, relocation, and reim- bursement (4 activities). – Project management (2 activities). • Other—13 issues and challenges, 16 strategies: – Program management and administration. – Staffing and training. – Outsourcing. The number of unique issues, challenges, and strategies is lower than the total number of listed issues and challenges because some issues, challenges, or strategies are mentioned

116 Project Development and Delivery Process Activity with a Significant Real Property Component No. of Issues Identified No. of Strategies Identified DEFINITION, SELECTION, FINANCING, AND SCHEDULING 14 15 Prepare Cost Estimate and Identify Funding Sources 6 12 Secure Federal, State, and Local Agreements 8 3 ALTERNATIVE ANALYSIS AND PRELIMINARY PLANS 7 8 Conduct Conceptual Design Meeting 2 2 Collect Data for Preliminary Design 1 2 Obtain Permission to Enter Property 3 2 Conduct Value Engineering Study 1 2 ENVIRONMENTAL PROCESS 7 14 Prepare Draft Environmental Documentation 1 5 Conduct Public Meetings 2 4 Meet Environmental Commitments After Clearance 2 3 Conduct Environmental Reevaluation 2 2 DESIGN AND PS&E ASSEMBLY 11 12 Conduct Design Meeting 2 5 Develop Final Horizontal and Vertical Alignments 3 1 Conduct Detailed Design 2 1 Conduct 30%, 60%, and 90% Design Meetings 1 1 Prepare PS&E Package 1 2 Conduct Final Design and Initial Construction Coordination Meetings 2 2 RIGHT-OF-WAY MAP, AUTHORIZATION TO ACQUIRE PROPERTY, PROPERTY ACQUISITION, AND RELOCATION ASSISTANCE 93 99 Provide Planning and Real Property Acquisition Linkages 1 1 Conduct Real Property Research 2 5 Coordinate with Other Stakeholders 6 5 Prepare Right-of-Way Map and Property Descriptions 7 4 Obtain Authorization to Acquire Real Property 2 2 Conduct Appraisal or Waiver Valuation1 1a 2b 11c 1a 2b 10c Establish Just Compensation1 1 2 Prepare and Make Written Offer1 2 1 1 2 2 Acquire by Negotiation1 1 1 11 1 2 12 Acquire by Condemnation1 7 5 Demolish and Dispose Improvements1 2 2 Prepare Right-of-Way Certification1 1 1 Determine Relocation Assistance Eligibility1 1 8 1 1 7 1 Provide Relocation Assistance Advisory (Residential)1 1 2 4 1 2 4 Provide Relocation Assistance Advisory (Non-Residential)1 1 2 2 1 2 2 Issue Relocation Payments (Residential)1 2 3 3 1 4 6 Issue Relocation Payments (Non-Residential)1 2 1 1 2 1 4 1 For activities explicitly accounted for in the Uniform Act, from appraisals to relocation payments, the issues, challenges, and strategies are disaggregated according to the following categories: a Uniform Act. b Federal regulations. c Policies and procedures. 2 Not a specific project development and delivery process activity. Table 13. Issues, challenges, and strategies for improvement or optimization.

117 Table 13. (Continued). Project Development and Delivery Process Activity with a Significant Real Property Component No. of Issues Identified No. of Strategies Identified PROPERTY MANAGEMENT 16 15 Inventory and Manage Property Interests 9 7 Lease Property Interests 2 3 Dispose of Property Interests 5 5 UTILITY CONFLICT ANALYSIS, PERMITS, RELOCATION, AND REIMBURSEMENT 10 10 Provide Planning and Utility Process Linkages 2 2 Conduct Coordination Meetings 2 2 Prepare and Execute Utility Agreements 3 4 Monitor Utility Relocations and Reimburse Utility Owners 3 2 PROJECT MANAGEMENT 3 6 Establish Project Management Team 1 2 Manage Project Development and Delivery Process 2 4 OTHER2 13 16 Program Management and Administration2 2 3 Staffing and Training2 6 8 Outsourcing2 5 5 in connection with more than one activity. In total, the research team identified 153 unique issues and challenges and 176 unique strategies for improvement or optimization. Most strategies listed in Table 13 are process-related strate- gies that state DOTs could implement without the need for changes in laws or regulations. For completeness, Table 13 also connects 75 issues and challenges and 82 strategies with activities (from appraisals to relocation payments) that are explicitly accounted for in the Uniform Act. For these activi- ties, the issues, challenges, and strategies are disaggregated according to the following categories: • Uniform Act—9 issues and challenges, 9 strategies. • Federal regulations—21 issues and challenges, 22 strategies. • Policies and procedures—45 issues and challenges, 51 strategies.

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TRB’s National Cooperative Highway Research Program (NCHRP) Report 771: Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices provides improved, integrated real property procedures and business practices in the project development and delivery process. The report also provides suggestions to improve property management practices. The report is accompanied by a CD-ROM that contains an integrated model of the transportation project development and delivery process, including a real property acquisition and relocation assistance model and reference work schedule.

The CD-ROM is also available for download from TRB’s website as an ISO image. Links to the ISO image and instructions for burning a CD-ROM from an ISO image are provided below.

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CD-ROM Disclaimer - This software is offered as is, without warranty or promise of support of any kind either expressed or implied. Under no circumstance will the National Academy of Sciences or the Transportation Research Board (collectively "TRB") be liable for any loss or damage caused by the installation or operation of this product. TRB makes no representation or warranty of any kind, expressed or implied, in fact or in law, including without limitation, the warranty of merchantability or the warranty of fitness for a particular purpose, and shall not in any case be liable for any consequential or special damages.

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