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Suggested Citation:"Chapter 6 - Conclusions and Suggestions." 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 6 - Conclusions and Suggestions." 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 6 - Conclusions and Suggestions." 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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Page 120
Page 121
Suggested Citation:"Chapter 6 - Conclusions and Suggestions." 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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Page 121
Page 122
Suggested Citation:"Chapter 6 - Conclusions and Suggestions." 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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Page 122
Page 123
Suggested Citation:"Chapter 6 - Conclusions and Suggestions." 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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118 C H A P T E R 6 Conclusions The purpose of NCHRP Project 20-84 was to (a) develop improved, integrated real property procedures and business practices in the project development and delivery process; and (b) develop suggestions to improve property manage- ment practices. Of particular interest was comparing typical business practices against the requirements in the Uniform Act (as codified in 42 U.S.C. 4601 et seq.), but without regulatory encumbrances. The goal of this analysis was to determine which business process elements were critical to the mission of the real property function according to federal law requirements (and identify strategies to improve or optimize those elements), and which business process elements were not critical and, therefore, could be improved or removed. Online Survey, Follow-Up Interviews, and Peer Exchange The research team conducted an online survey, follow-up interviews, and a peer exchange to (a) assess real property acquisition and property management practices around the country and (b) gather ideas on issues, challenges, and best practices. A comprehensive literature review of prior studies and initiatives complemented this information-gathering exercise. The online survey included two versions of the sur vey instrument, one for state DOT officials and one for consul- tants. The follow-up interviews and the peer exchange com- plemented the online survey to clarify some of the responses and to seek additional information with respect to specific issues, strategies, and potential suggestions. Major highlights from these activities include: • Issues, challenges, and business practices. The highest- impact challenges that state DOTs face when acquiring real property for transportation projects arise from changes to real property acquisition needs late in the design phase and a lack of involvement of right-of-way staff during design. Not involving right-of-way personnel in earlier phases (planning and programming, preliminary design, and the environmental process) and during utility coordination also causes major problems. Survey respondents also pointed to critical staffing issues, including difficulty to hire and retain staff with adequate real property acquisition experience and staff turnover. • Outsourcing real property activities. In general, state DOTs value using consultants when the internal workload is heavy and the DOT does not have the resources to accommodate the demand. However, feedback from state DOTs indicates there are serious issues. Examples of issues include the qual- ity of deliverables, quality of customer service, and amount of management required. Other issues include higher overall costs to the state DOT and higher condemnation rates. • Performance measures. State DOTs use and need a variety of performance measures in connection with the acquisi- tion of real property for transportation projects. Although most participants agreed about the need to measure the effectiveness of the real property acquisition process, several participants cautioned against using performance measures blindly in the context of a process that involves taking private property for the benefit of a transportation project. • Changes to laws and regulations. Only a few participants indicated that there was an urgent need for changes to laws and regulations (whether federal or state). Nonethe- less, participants highlighted the need for some changes (e.g., in relation to appraisal waiver limits, relocation ben- efits for businesses, and timelines related to condemnation proceedings). • Business practices, unique processes, and strategies. Participants provided substantial feedback regarding busi- ness practices, unique processes, and strategies their agen- cies have implemented, or are planning to implement, to streamline real property processes. For example, participants Conclusions and Suggestions

119 highlighted the need to improve internal coordination within their agencies, particularly with respect to the timing for involvement of right-of-way personnel. Participants also highlighted the need for more effective coordination with external stakeholders (e.g., federal agencies, railroad com- panies, and utility owners). Several ideas involved raising the limit on appraisal waivers or evaluating situations that involve low-impact business risks. Other ideas involved rais- ing the limit for relocation payments (primarily for busi- nesses) and using incentives to encourage more effective participation by property owners. • Training. State DOTs provide two types of training and devel- opment opportunities (in-house and external) in addition to on-the-job training and mentoring. Some of the courses are state-certified or pre-approved for continuing education credits for real estate and appraisal licensing. Some agencies have agreements with colleges in their state that offer courses on real property topics. Participants highlighted that train- ing opportunities have decreased substantially in recent years because of budgetary constraints. • Property management. Agencies use a variety of data management platforms for property management pur- poses. Although databases and web-based mapping tools are increasingly used, CAD or GIS platforms are not used frequently to support property management activities. The highest-impact issue reported by participants related to difficult-to-use databases or information systems to manage real property assets. Difficulty in tracking and monitoring real property uses was also highlighted as having a significant impact, including how to deal with illegal or unauthorized encroachments. Integrated Transportation Project Development and Delivery Process Modeling The research team conducted a review of practices around the country to identify existing project development and deliv- ery workflows, and developed a reference integrated model of the transportation project development and delivery process that takes into account real property acquisition workflows and requirements. For completeness, the research team developed three versions of the project development and delivery process, as follows: • Level 1. This high-level depiction of the entire process, shown in Chapter 3, Figure 10, considers both phases and functional areas, including real property acquisition and property management. • Level 2. This intermediate-level depiction of the entire transportation project development and delivery process is shown in Chapter 3, Figure 11. • Level 3. This detailed depiction of the real property acqui- sition process according to the Uniform Act, as codified in 42 U.S.C. 4601 et seq., is shown in Figure 23. These models are provided as a project deliverable in Microsoft Visio 2010 format and PDF. Developing the reference (or unencumbered) real property acquisition and relocation assistance model involved analyzing each provision in the three subchapters of 42 U.S.C. 4601 et seq. and mapping each provision to its corresponding location on the transportation project development and delivery process, i.e., taking into consideration functional areas and interdepen- dencies. This process was challenging because the Uniform Act does not follow a sequential or chronological order of activities. However, it was critical to complete this activity to identify criti- cal paths and opportunities for improvement or optimization of the process. For completeness, the research team also devel- oped a mapping between Uniform Act and federal regulation provisions. A review of Uniform Act provisions in relation to the over- all project development and delivery process and actual prac- tice highlighted a few major areas that the act does not address or cover. Some of these areas are as follows: • Interaction between the project development and deliv- ery process and the real property development and delivery process, including location(s) along the project develop- ment process where real property acquisition activities could or must start. • Encouragement of beginning real property activities (other than relocation) earlier in the process. • Appraisal standards and scope of work. • Situations in which LPAs acquire property. • Business ownership of properties being acquired. • Updating of offers of just compensation. • Situations involving the unit rule concept in relation to the various physical components of real estate. • Handling of mobile homes and outdoor advertising signs (particularly off-premises signs), as real or personal property. In the case of outdoor advertising signs, a common issue is how to separate the acquisition of the sign itself from the acquisition of the leasehold interest of the sign company, which pertains to the specific sign location, not to the entire company. • Mediation before condemnation proceedings. Reference Real Property Acquisition and Relocation Assistance Work Schedule The research team developed a reference work schedule that incorporates Uniform Act requirements and procedures into the reference (or typical) transportation project and

120 delivery process. The work schedule includes tasks that repre- sent Level 2 model swim lanes and activities as well as Level 3 model activities. The reference work schedule was developed in Microsoft Project 2010. Files for the reference work sched- ule are provided on CRP-CD 154 in Project format and PDF. The reference work schedule could be used for a variety of applications. Examples include, but are not limited to, assign- ing resources to tasks, managing project budgets, analyzing workloads, facilitating coordination with internal and external stakeholders, adjusting schedules, monitoring project progress, and preparing reports. Agencies could also use the work sched- ule to train internal and external stakeholders on project devel- opment and delivery process interdependencies and Uniform Act requirements. Every project is different, which has an impact on indi- vidual task durations. In practice, agencies tend to assume predictable durations for real property acquisition activities (e.g., 18–24 months between appraisals and letting). Agencies also use simple static Gantt charts to document and schedule real property activities. However, using scheduling software tools to conduct what-if scenarios to understand and anticipate the impact of activity changes in the overall schedule and the critical path of the real property process is not common. Also not common is the use of statistical methods to derive central tendency and dispersion estimators of right-of-way activity durations. However, developing this capability is crit- ical to understanding uncertainties and risks, particularly in situations that can affect not just the acquisition of real prop- erty but also the entire project (e.g., when an acquisition goes to condemnation proceedings). One reason is that, as the dura- tion to acquire real property increases, the level of uncertainty (and therefore the risk to the project) also increases. Strategies for Improvement or Optimization The research team analyzed 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 focused on process activities with a significant real property component, with a goal of identifying issues and challenges as well as strategies for improvement or optimization to address those issues and challenges. To ensure that the analysis was manageable, the research team focused only on process activities with a sig- nificant real property component. The list of issues, challenges, and strategies was based on responses that stakeholders provided during the surveys and interviews, as well as on lessons learned from previous studies or from experience. In Chapter 5, Table 13 summarized the issues, challenges, and strategies that were identified during the research. In total, the research team identified 174 issues and challenges and 195 strategies for improvement or optimi- zation. In total, the research team identified 153 unique issues and challenges and 176 unique strategies for improvement or optimization. Of these 176 strategies, more than 140 are process-related strategies that state DOTs could implement without the need for changes in laws or regulations. Chap- ter 5 provided a detailed description of each strategy. A very small sample of process-related strategies follows, organized into policies and procedures, contracting practices, and use of advanced technologies: • Suggested changes to agency policies and procedures: – Modify state DOT project development manuals and guidelines to specifically require the involvement of right-of-way personnel in the planning, scoping, and environmental phases and the early stages of the design phase. – Enforce CAD protocols and standards strictly to ensure the quality and completeness of right-of-way maps. – Enforce the requirement that every parcel be properly documented using accepted survey standards and pro- cedures, including the identification of parent tracks, taking areas, and remainder areas, as well as the integrated calculation of those areas. – Implement a protocol for updating appraisals in areas or situations where market values tend to change rap- idly. The protocol would address cases where a complete reappraisal is necessary and cases where an expedited appraisal or waiver valuation might be sufficient. – Develop a multitier approach to enable districts, not only the central office, to establish just compensation for acquisitions below a certain threshold. – Separate incentives from the amount believed to be just compensation. – Require presentation of the appraisal at the time of the offer. – Develop a multitier approach for assigning and con- ducting negotiations. • Suggested changes in contracting procedures: – Utilize best value selection processes for appraisers and right-of-way consultants. – Utilize master contracts completed on an annual or other periodic basis with task orders for specific projects issued off the master contracts to reduce the lead time needed to acquire consultant staff for a specific project. – Incorporate performance goals into consultant contracts and utilize past performance against these standards for future consultant selections. • Utilization of advanced technologies: – Implement web-based database management systems to manage the real property acquisition process.

121 – Implement database management systems that utilize CAD and GIS technologies to support property man- agement functions. – Utilize visualization techniques to communicate with property owners effectively about the scope of the project and the proposed real property acquisitions needed to support the project. – Utilize Internet-based tools to transmit offers and other required documents to property owners electronically. Table 13 also shows the issues and strategies in connection with activities that are explicitly accounted for in the Uniform Act, from appraisals to relocation payments (in total, 75 issues and challenges, as well as 82 strategies). For these activities, the issues, challenges, and strategies are disaggregated according to the following categories: • Uniform Act—nine issues and challenges, nine strategies. • Federal regulations—21 issues and challenges, 22 strategies. • Policies and procedures—45 issues and challenges, 51 strategies. Strategies that involve potential changes to the Uniform Act include the following: • Introduce and define the concept of uncomplicated real property, and specify a regulatory procedure to distinguish between uncomplicated and complicated real property for identifying when a waiver valuation is acceptable. • Include a definition for the term “unlawful occupancy” in the case of non-residential property. The act only defines unlawful occupancy in the context of residential real property. • Enable the use of electronic communications to make the offer, including email and web-based protocols. • Enable agencies to provide a minimum level of services to persons who are unlawfully present in the United States because of the recognition that not doing so affects the abil- ity of state DOTs to complete real property activities to help deliver transportation projects on time and within budget. • Develop a definition and a standard for what constitutes a suitable replacement location, including appropriate require- ments that should be met before agencies can provide a notice by when the move is required. The remaining strategies related to the Uniform Act involve monitoring the implementation of MAP-21. Similarly, strategies that involve potential changes to federal regulations include the following: • Establish a tiered approach for determining when it is nec- essary to conduct appraisals and appraisal reviews. • Require, not simply suggest, that agencies provide property owners with enough time to review an offer. • 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. • Develop standards and tools for determining whether a person is lawfully present in the United States. • Develop a standard or procedure for determining the permanent place of residence of a displaced person. • Develop tools and guidance for determining what constitutes an exceptional and extremely unusual hardship in situations of mixed households that involve individuals who are the displaced person’s spouse, parent, or child and who are citizens or permanent residents in the United States. • Implement a streamlined process for low-cost temporary easements. • Make the use of possession-and-use agreements a standard practice. • Develop guidance for determining whether a business is eligible to receive relocation assistance services in the case of partial acquisitions. • Develop criteria and guidance for determining what con- stitutes lawful activity for businesses to assess eligibility for relocation assistance services. • Ensure that relocation assistance services are provided to all the entities that conduct business within the premises of a real property being acquired. Alternatively, develop guidance to clarify when to provide relocation assistance services to those entities so that state DOTs can apply the same standard systematically. • Describe in plain language the meaning of certain terms (e.g., “replacement dwelling,” “comparable replacement dwelling,” or “displacement dwelling”). • Provide flexibility by not requiring several comparable replacement dwellings when one comparable replacement dwelling is sufficient given the local market conditions. • Recognize that different types of businesses can have widely different relocation needs and schedules. • 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. • Develop criteria for determining relocation assistance eligi- bility for property owners whose center of economic activity is not located at the property to be acquired. • Broaden the comparable replacement dwelling methodol- ogy for estimating relocation payments to include state- developed schedules in cases where sufficient comparable housing is available and there are multiple displaced persons with the same comparable housing requirements. • Change the concept of availability required for comparable replacement dwellings.

122 • Develop a systematic process to deal with negative equity situations. • Simplify the criteria and requirements for determining actual reasonable moving and related expenses because of the recognition that businesses routinely require more than the maximum allowed to search for replacement locations or complete the reestablishment process at the replacement site. In summary, NCHRP Project 20-84 produced the following results: • An integrated model of the transportation project develop- ment and delivery process, a real property acquisition and relocation assistance model in accordance with 42 U.S.C. 4601 et seq., and a standalone version of the integrated pro- cess model (as provided in CRP-CD 154). • A reference real property acquisition and relocation assis- tance work schedule. A standalone version of the refer- ence work schedule also was developed and included on CRP-CD 154. • A detailed list of improvement or optimization strategies to address issues and challenges that affect project devel- opment and delivery process activities with significant real property components. Suggestions Implementing the results of this study nationwide will likely yield benefits such as the following: • A streamlined real property acquisition and relocation assis- tance business process that facilitates data exchange and encourages communication and coordination among stake- holders, including stakeholders within the same agency. • Improvements in efficiency and reduction of redundancy in real property activities by maximizing the use of concurrent (as opposed to linear) activities. • Increased knowledge by project managers, engineers, and planners about real property procedures, eliminating sources of delays that frequently span the entire project development and delivery cycle. • More effective integration of real property activities within the project development and delivery process. • More effective management of real property assets through the implementation of efficient inventory and database practices that take full advantage of survey-quality data that the agency already collects to support the acquisition of real property. • Integration between various information systems that collect or process information about real property assets, uses allowed on those assets (e.g., through permits, leases, and agreements), and monitoring of illegal encroachments. • Increased visibility and professional opportunities for right- of-way staff within state DOTs. • More effective contracting practices that result in higher quality, cost-effective deliverables for the agency and more competent (and competitive) contractors. The anticipated audience for the research deliverables will be stakeholders, such as FHWA, state DOTs, LPAs, appraisers, right-of-way service consultants and contractors, and other right-of-way professionals. These stakeholders will directly benefit from the development and implementation of stream- lined real property business practices. Indirectly, property owners will also take an interest in the research products under the premise that a streamlined real property and relocation assistance process will benefit all the parties involved in this process. Logical champions to take a leadership role for imple- mentation of the research results include the FHWA Office of Planning, Environment, and Realty; AASHTO; right-of-way and design divisions at state DOTs; and relevant TRB, IRWA, and American Society of Civil Engineers (ASCE) committees. Public-sector real estate professionals and other interested stakeholders can contribute to implementation by advocating at the federal level for consideration of the proposed changes to the Uniform Act and the suggested changes to federal regu- lations, and advocating at the state level for potential changes to state laws as required to implement the changes. General suggestions to implement the research results include: • Engage research product champions early and assign specific challenges for successful implementation of the research suggestions to each champion. • Publish and promote the research results through website links (e.g., at FHWA and TRB), presentations to state DOTs, and newsletters. • Identify funding mechanisms and submit proposal for the implementation of the research products at one or more state DOTs (e.g., through pilot programs sponsored by the FHWA Office of Planning, Environment, and Realty). • Develop guidebooks, sample templates and scoping forms, and other materials to support the implementation of sug- gested policy changes at state DOTs. These materials could be developed by the FHWA Office of Planning, Environ- ment, and Realty through research projects or by AASHTO through pool-funded studies or initiatives. • Evaluate, at the state level, the potential for increased use of technology to support real property business functions. • Initiate a pooled fund study through AASHTO to define requirements, prepare a business case, and evaluate the potential for AASHTOWare™ applications to support integrated state DOT real property business functions.

123 • Develop criteria for monitoring the progress of implemen- tation. Examples of potential criteria include: – Number of state DOTs that adopt elements of the inte- grated project development and delivery process model or the reference work schedule. – Demand for the use of training materials and/or requests for presentations. – Improvement in the effectiveness of the real property acquisition and relocation assistance process (e.g., in terms of average number of days required to acquire real property, costs, property owner satisfaction with the ser- vices received from the agency, and number of properties acquired by condemnation). – Ranking of real property acquisition in national surveys that document causes of delay and cost overruns in proj- ect development and delivery. Suggestions to facilitate implementation of the research results at state DOTs nationwide include the following: • Update relevant manuals, brochures, and other similar documents at the federal level and corresponding publi- cations at the state DOT level to depict both the project development and delivery process and the acquisition of real property and relocation assistance process using the Level 1, Level 2, and Level 3 process diagrams (Figure 10, Figure 11, and Figure 23, respectively, all in Chapter 3). For some publications, particularly those that include depic- tions of the Level 2 or Level 3 diagrams, it is advisable or necessary to include partial or complete descriptions of the corresponding activities as shown in Appendix C. • Make the Level 1, Level 2, and Level 3 diagrams (both Visio and PDF files) as well as the reference work schedule (both Project and PDF files) that appear on CRP-CD 154 available online so that they can be accessed more broadly by the transportation community. • Develop a diagram similar to the Level 3 diagram to depict 49 CFR 24 workflows. Comparing this diagram to the Level 3 diagram (which depicts the real property acquisi- tion and relocation assistance process in accordance with the Uniform Act) would illustrate sequences and inter- dependencies according to the regulations, which could be used for outreach and training efforts. The diagram would also further illustrate differences between the act and the regulations, which could be used to identify and visual- ize regulations that exceed the basic requirements in the Uniform Act. • Develop a 1-day course through NHI, IRWA, or other, similar organizations, that provides an overview of the integrated project development and delivery process model, the reference work schedule, and the suggested strategies, and provides guidance to state DOTs and LPAs on the adoption of these models and strategies. • Seek funding through FHWA for state-specific imple- mentation assessment workshops to help states identify gaps in their current real property business practices (in terms of the process models) and to develop detailed implementation plans for transitioning to the suggested process models.

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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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