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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6468 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 6468

To authorize the Secretary of Housing and Urban Development to initiate 
   a voluntary multi-year effort to transform properties with rental 
 assistance contracts under various programs into properties with long-
  term, property-based, sustainable rental assistance contracts that 
    include flexibility to address capital requirements, to enhance 
 resident choice, and to streamline and simplify the administration of 
                           rental assistance.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            December 1, 2010

    Mr. Ellison (for himself, Mr. Al Green of Texas, Ms. Edwards of 
 Maryland, Mr. Himes, and Mr. Cleaver) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL

 
To authorize the Secretary of Housing and Urban Development to initiate 
   a voluntary multi-year effort to transform properties with rental 
 assistance contracts under various programs into properties with long-
  term, property-based, sustainable rental assistance contracts that 
    include flexibility to address capital requirements, to enhance 
 resident choice, and to streamline and simplify the administration of 
                           rental assistance.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rental Housing 
Revitalization Act of 2010''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Conversion of rental assistance.
Sec. 4. Transformation authority.
Sec. 5. Property-based contracts.
Sec. 6. Project-based voucher contracts.
Sec. 7. Conforming amendments.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the Department of Housing and Urban Development (in 
        this section referred to as HUD) currently provides rental 
        assistance to more than 4.8 million households through at least 
        13 different programs that are implemented through an 
        infrastructure comprised of approximately public housing 
        agencies, more than 18,000 individual Federal contracts with 
        private owners, and hundreds of non-profit rental program 
        administrators;
            (2) the substantial unmet capital needs of the aging public 
        and assisted housing stock hinder Federal efforts to provide 
        safe, high-quality, sustainable, energy-efficient affordable 
        housing; and
            (3) the current rental assistance structure unnecessarily 
        increases transaction costs for developers and communities, 
        makes it more difficult for families in need to obtain rental 
        assistance, impedes fair access to scarce resources, and fails 
        to decrease the concentration of poor and minority families in 
        distressed or isolated neighborhoods, to expand opportunities 
        to live in mixed-income sustainable neighborhoods, or to expand 
        opportunities to live in mixed-income sustainable 
        neighborhoods, while at the same time worst-case housing needs 
        and homelessness are increasing significantly.
    (b) Purposes.--The purposes of this Act are--
            (1) to preserve affordable housing opportunities for the 
        long term, by providing the opportunity for public housing 
        agencies and private owners to convert from current forms of 
        rental assistance under a variety of programs to long-term, 
        property-based contracts that will enhance market-based 
        discipline and enable owners to sustain operations and leverage 
        private financing to address immediate and long-term capital 
        needs;
            (2) to enhance housing choice for residents;
            (3) to streamline and improve the delivery and oversight of 
        rental assistance across all rental assistance programs by such 
        means as promoting consortia, consolidation, and other locally 
        designed structures for administrative functions;
            (4) to create more uniform policies across all rental 
        assistance programs funded by the Secretary of Housing and 
        Urban Development to increase administrative efficiency at all 
        levels of program operations; and
            (5) to facilitate the adoption of energy-efficient and 
        green technologies in HUD-assisted housing in order to reduce 
        operating costs, improve residents' quality of life, and 
        enhance and protect the value of such housing.

SEC. 3. CONVERSION OF RENTAL ASSISTANCE.

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f) is amended by inserting after subsection (k) the following new 
subsection:
    ``(l) Conversion of Rental Assistance.--
            ``(1) Authority for conversion of rental assistance.--The 
        Secretary may, subject to the availability of amounts provided 
        in appropriations Acts and that otherwise become available, and 
        to the control of the Secretary of applicable accounts in the 
        Treasury of the United States, allocate amounts to public 
        housing agencies and other owners of eligible properties for 
        the voluntary conversion of existing project-based rental 
        housing assistance contracts, as specified in this subsection, 
        including annual contributions contracts, through the execution 
        of long-term, property-based assistance contracts under 
        subsection (n) (in this subsection referred to as `property-
        based contracts') or of project-based voucher rental assistance 
        contracts for additional units of assistance under subsection 
        (o)(13) (in this subsection referred to as `project-based 
        voucher contracts') with public and private owners of 
        properties assisted under--
                    ``(A) this section, excluding owners that continue 
                to request renewal of rental assistance contracts under 
                section 524 of the Multifamily Assisted Housing Reform 
                and Affordability Act of 1997 (42 U.S.C. 1437f note);
                    ``(B) section 9 of this Act (42 U.S.C. 1437g);
                    ``(C) the rent supplement program under section 101 
                of the Housing and Urban Development Act of 1965 (12 
                U.S.C. 1701s);
                    ``(D) the rental assistance program under section 
                236(f)(2) of the National Housing Act (12 U.S.C. 1715z-
                1(f)(2)); and
                    ``(E) other Federal affordable housing programs, as 
                authorized by statute.
            ``(2) Conditions and procedures for conversion process.--
        The Secretary shall provide, by notice inviting owners of 
        eligible properties to request conversion of assistance 
        pursuant to this subsection, conditions and procedures for 
        approval of such requests as the Secretary determines 
        appropriate, including conditions and procedures that--
                    ``(A) promote the rehabilitation, including energy-
                efficiency improvements and sustainable design 
                features, and long-term financial and physical 
                sustainability of properties;
                    ``(B) deconcentrate poverty;
                    ``(C) increase administrative efficiency; or
                    ``(D) promote physical accessibility for persons 
                with disabilities.
            ``(3) Required conditions.--In addition to any other 
        conditions of conversion the Secretary may require, the 
        Secretary shall ensure, through measures including requirements 
        for conversion requests, contract provisions, and the control 
        of the allocation of amounts, that--
                    ``(A) any property that is proposed for conversion 
                of assistance under this subsection and will undergo 
                substantial rehabilitation shall be subject to a 
                detailed physical condition assessment that will 
                identify rehabilitation needs, estimate repair and 
                replacement needs, and identify opportunities to 
                implement cost-effective, energy-efficient and green 
                technologies;.
                    ``(B) the number of affordable units with property-
                based assistance is not decreased by the conversion of 
                assistance under this subsection, except as provided in 
                paragraph (5) of this subsection;
                    ``(C) there is no reduction in the number of 
                families receiving rental assistance as a result of the 
                conversion under this subsection;
                    ``(D) conversion under this subsection shall not be 
                grounds for termination of tenancy; and
                    ``(E) the owner has complied with requirements 
                established by the Secretary for consultation with 
                residents about the owner's intention to apply for 
                conversion under this subsection, and any related 
                rehabilitation or demolition of units in which tenants 
                reside and any resulting relocation of tenants to other 
                units, including the applicable rights of return, which 
                requirements shall include--
                            ``(i) resident involvement in planning for 
                        and implementation of conversion, including 
                        reasonable steps to help ensure meaningful 
                        participation for residents who are limited in 
                        their English proficiency;
                            ``(ii) meetings with residents to ensure 
                        that each tenant wishing to return to 
                        revitalized on-site housing has the opportunity 
                        to express that wish and be accorded preference 
                        for tenancy; and
                            ``(iii) public meetings prior to 
                        implementing any significant amendments or 
                        changes to a conversion plan.
                For a public housing agency, a plan to convert under 
                this subsection shall be considered a significant 
                amendment to the agency plan under section 5A (42 
                U.S.C. 1437c-1), and the agency shall comply with 
                applicable requirements to consult with the resident 
                advisory board and the public concerning significant 
                amendments.
            ``(4) Agreement to provide assistance.--The Secretary may 
        provide for an agreement to provide assistance under a 
        property-based or project-based voucher contract with an owner 
        of a property in advance of final approval of conversion, to 
        facilitate the owner's ability to obtain financing or for other 
        reasons.
            ``(5) One-for-one replacement of assisted units.--
        Properties converted to assistance under this subsection may 
        have fewer assisted units under a property-based contract or 
        under a project-based voucher contract after conversion that 
        the property had immediately prior to the conversion of 
        assistance (including vacant units) only if the assistance from 
        such reduced number of units is transferred to an equal number 
        of units in a replacement property or properties, as follows:
                    ``(A) Number of units.--For 100 percent of all such 
                units in existence, as of the date of the request for 
                conversion, that are to be demolished or disposed or 
                converted to a unit that is not assisted under this 
                Act, the owner shall provide a plan acceptable to the 
                Secretary for timely replacement of each unit.
                    ``(B) Number of bedrooms.--Replacement housing 
                shall reflect the number of bedrooms that are needed to 
                adequately serve returning tenants, households 
                currently on the waiting list and to meet future needs 
                based on other market data, as determined by the 
                Secretary.
                    ``(C) Disability accessible housing.--Off-site 
                replacement housing shall not result in a decrease in 
                available inventory of disability accessible housing, 
                and all housing, where otherwise covered, shall comply 
                with the accessibility requirements of the Fair Housing 
                Act (42 U.S.C. 3601 et seq.) and section 504 of the 
                Rehabilitation Act of 1973 (29 U.S.C. 794).
                    ``(D) Location.--Replacement housing units shall be 
                developed--
                            ``(i) on the site of the property being 
                        converted; and
                            ``(ii) in the neighborhood or within the 
                        metropolitan area up to 25 miles from the 
                        property being converted, as necessary to--
                                    ``(I) comply with fair housing 
                                requirements;
                                    ``(II) deconcentrate poverty;
                                    ``(III) provide appropriate 
                                densities for the property being 
                                converted;
                                    ``(IV) promote location-efficient 
                                communities; or
                                    ``(V) meet other factors as 
                                determined by the Secretary in order to 
                                further the purposes of this subsection 
                                and subsection (m).
                    ``(E) Off-site replacement.--Replacement housing 
                developed off the site of the property being converted 
                as provided under subparagraph (D)(ii) shall meet the 
                following requirements:
                            ``(i) Economic opportunities.--Off-site 
                        replacement housing shall offer access to 
                        economic opportunities and public 
                        transportation and be accessible to social, 
                        recreational, educational, commercial, health 
                        facilities and services, and other municipal 
                        services and facilities that are comparable 
                        under such standards as the Secretary may 
                        prescribe.
                            ``(ii) Prohibition of increase of 
                        concentration of minorities.--Off-site 
                        replacement housing shall not be located in 
                        areas of minority concentration, defined in 
                        relation to the metropolitan area or rural 
                        county in which the project is located, or in 
                        areas of extreme poverty, except in areas that 
                        qualify as revitalizing neighborhoods, as 
                        defined by the Secretary.
                    ``(F) Tenant-based vouchers as replacement 
                housing.--An owner may replace up to half of the units 
                that are demolished or disposed of or permitted to be 
                unassisted under the conversion in accordance with this 
                subsection with tenant-based vouchers in housing 
                markets where there is--
                            ``(i) an adequate supply of affordable 
                        rental housing in areas of low poverty, which 
                        supply shall be demonstrated by data that show 
                        within the housing market area of the property 
                        that--
                                    ``(I) at least 80 percent of 
                                vouchers under subsection (o) issued 
                                over the last 24 months to comparable 
                                families were successfully leased 
                                within 120 days of issuance, or, if a 
                                sufficient number of comparable 
                                families have not received vouchers, an 
                                alternative measure, as the Secretary 
                                shall design, is met;
                                    ``(II) existing voucher holders are 
                                widely dispersed geographically in 
                                areas of low poverty with access to 
                                public transportation, education, and 
                                other amenities, as determined by the 
                                Secretary, among the available private 
                                rental housing stock; and
                                    ``(III) the applicant provides a 
                                market analysis demonstrating that--
                                            ``(aa) there is a 
                                        relatively high vacancy rate 
                                        among units that would meet or 
                                        exceed housing quality 
                                        standards within the market 
                                        area, as determined by the 
                                        Secretary, with rent and 
                                        utility costs not exceeding the 
                                        applicable payment standard 
                                        under subsection (o); and
                                            ``(bb) such high vacancy 
                                        rate within the market area is 
                                        expected to continue for the 
                                        next 5 years or longer; or
                            ``(ii) a judgment, consent decree, or other 
                        order of a court limits the ability of the 
                        owner to comply with the requirements under 
                        this paragraph.
                    ``(G) De minimis reduction.--Notwithstanding any 
                other provision of this subsection, the owner of a 
                property converting under this subsection may demolish 
                not more than the lesser of 5 dwelling units or 5 
                percent of the total dwelling units at the converting 
                property, but only--
                            ``(i) to reconfigure units to serve 
                        returning tenants or households currently on 
                        the waiting list;
                            ``(ii) if the space occupied by the 
                        demolished unit is used for meeting the service 
                        or other needs of residents; or
                            ``(iii) if the demolished unit was beyond 
                        repair.
            ``(6) Use restrictions.--The Secretary shall require use 
        and affordability restrictions as a condition of conversion of 
        each property to a property-based contract or project-based 
        voucher contract, as follows:
                    ``(A) Public housing.--
                            ``(i) Basic requirements.--An owner of a 
                        property assisted under section 9 approved for 
                        conversion of assistance pursuant to this 
                        subsection shall agree to provide the number of 
                        units, as required under paragraph (5), subject 
                        to the eligibility, targeting, and rent rules 
                        as provided under the property-based contract 
                        or project-based voucher contract for use as 
                        affordable housing for at least 30 years from 
                        the date of execution of the initial section 8 
                        contract after conversion and continuously for 
                        the duration of each extension or renewal of 
                        such contract offered by the Secretary or a 
                        public housing agency pursuant to subsection 
                        (n) or (o)(13).
                            ``(ii) Transfer or sale of property.--No 
                        sale or transfer of a property subject to a use 
                        agreement under this subparagraph, except 
                        properties subject to paragraph (18), shall be 
                        permitted without the prior approval of the 
                        Secretary. The Secretary shall not approve a 
                        sale or transfer to a for-profit entity, except 
                        as permitted under paragraph (13)(B) of this 
                        subsection to facilitate the use of tax credits 
                        under section 42 of the Internal Revenue Code 
                        of 1986, and shall not approve a sale or 
                        transfer to a non-profit entity unless the 
                        Secretary determines that there is no capable 
                        public entity willing to take ownership of the 
                        property.
                    ``(B) Other housing.--An owner of a property other 
                than a property assisted under section 9 entering into 
                a contract for rental assistance pursuant to this 
                subsection shall agree to provide the number of units, 
                as required under paragraph (5), subject to the 
                eligibility, targeting, and rent rules as provided 
                under the property-based or project-based voucher 
                contract for use as affordable housing for the greater 
                of the remaining term of any prior use restriction 
                existing at the time of conversion to the new rental 
                assistance contract or the initial term of the new 
                rental assistance contract.
                    ``(C) Modification of use agreement with transfer 
                of assistance.--The Secretary shall establish 
                procedures to allow for the transfer of assistance from 
                all or part of the units in a property with converted 
                assistance, at the request of an owner or upon 
                expiration or termination of a rental assistance 
                contract, to a new contract for rental assistance at a 
                replacement property or properties, subject to the 
                requirements of paragraph (5), otherwise applicable 
                legal requirements, and to a continuation of use 
                restriction at the new property. The Secretary shall 
                require owners requesting such modifications to provide 
                notice and consultation with tenants as provided in 
                paragraph (3)(E) and to assist tenants to relocate, in 
                accordance with paragraph (9).
            ``(7) Tenants residing in units at time of conversion.--
        Notwithstanding any other provision of law, a family lawfully 
        residing in an assisted unit in a property at the time of a 
        conversion of assistance under this subsection shall be 
        considered eligible for assistance under subsections (n) and 
        (o)(13), as applicable, and shall not be subject to rescreening 
        or termination of assistance or eviction from the unit or 
        denial of reoccupancy after rehabilitation because of the 
        conversion or the requirements of any other funds used to 
        finance the rehabilitation, and the requirements of section 16 
        shall not apply to such family, but shall be complied with upon 
        turnover of tenants. For purposes of section 42 of the Internal 
        Revenue Code of 1986, such otherwise compliant tenancies shall 
        be considered to be in compliance with income requirements.
            ``(8) Energy efficiency.--The Secretary may implement 
        measures to facilitate the cost-effective adoption of energy-
        efficient and green technologies in properties converting to 
        assistance under this subsection and in replacement units newly 
        constructed with assistance under this section.
            ``(9) Relocation assistance.--
                    ``(A) Applicability of uniform relocation and real 
                property acquisition policies act.--The Uniform 
                Relocation and Real Property Acquisition Policies Act 
                of 1970 (42 U.S.C. 4601 et seq.) shall apply to 
                displacement and relocation activities pursuant to the 
                conversion of rental assistance under this subsection 
                except as otherwise provided in this paragraph.
                    ``(B) Temporary relocation.--A public housing 
                agency or owner that acquires, rehabilitates, or 
                demolishes any project or building, or portion thereof, 
                in connection with the conversion or transfer of 
                assistance under this subsection may temporarily, for a 
                period not to exceed 12 months, or such other period, 
                not to exceed 24 months, as the Secretary may 
                authorize, relocate families lawfully residing in a 
                unit on the property and provide such families notice 
                and relocation assistance as required by the Secretary. 
                A relocated family shall have, upon completion of the 
                project and consistent with any guidelines issued by 
                the Secretary, the right to return if the tenant has 
                not committed serious or repeated violations of 
                material terms of the lease or occupancy agreement at 
                the time of departure from the housing subject to 
                rehabilitation or demolition, or during the temporary 
                relocation period.
                    ``(C) Moving expenses.--When assistance is 
                transferred to another property pursuant to this 
                subsection without a period of temporary relocation, 
                the public housing agency or owner shall offer each 
                family that chooses to relocate from the property from 
                which assistance is transferred to the property to 
                which assistance is transferred payment of actual, 
                reasonable, and necessary moving expenses, including 
                utility deposits, and, if the newly assisted units are 
                not owned by the public housing agency or owner, 
                payment of security deposits, credit checks, and other 
                moving-related expenses.
                    ``(D) Costs.--Displacement and relocation costs as 
                required by law or as the Secretary may direct as 
                authorized by this paragraph shall be paid from any 
                rental assistance or other funds provided by the 
                Secretary or otherwise available to a public housing 
                agency or owner that may be used for such purpose. A 
                displaced family may receive an incremental, tenant-
                based voucher under this section, if such a voucher is 
                made available.
            ``(10) Amount of monthly assistance payment to owner.--The 
        amount of the monthly assistance payment with respect to any 
        unit upon conversion shall be the difference between the 
        maximum monthly rent that the property-based or project-based 
        voucher contract provides the owner is to receive for the unit 
        plus the allowance for tenant-paid utilities and the rent that 
        the family is required to pay under section 3 of this Act.
            ``(11) Tenants over-income for continuing subsidy.--If the 
        required contribution of a family toward rent under section 3 
        exceeds the rent established for the unit and the applicable 
        utility allowance, the family may continue to reside in the 
        unit and pay the established rent. The Secretary or the public 
        housing agency shall not reduce the number of units assisted 
        under the property-based or project-based voucher contract due 
        to residency by such a family, and may use funds not required 
        for assistance under the contract in any year for other 
        authorized rental assistance.
            ``(12) Designated housing.--If the units proposed to be 
        converted pursuant to this subsection are subject to an 
        approved designation plan under section 7 (42 U.S.C. 1437e) or 
        are designed to accommodate tenants with special needs under 
        any other authority, the Secretary shall permit the designation 
        or accommodation to continue to apply to the converted units 
        under the same terms and conditions as would otherwise have 
        applied, and may permit additional designations consistent with 
        Federal statute or executive order.
            ``(13) Conversion of public housing.--In addition to such 
        other conditions as the Secretary may require, the following 
        conditions shall apply to a property assisted under section 9 
        that is converting to rental assistance under this subsection:
                    ``(A) Treatment of converted units.--The conversion 
                of units assisted under section 9 to assistance in 
                accordance with this subsection shall not be considered 
                a disposition under section 18 (42 U.S.C. 1437p).
                    ``(B) Requirements for properties with housing tax 
                credits.--Public housing agencies that utilize tax 
                credits under section 42 of the Internal Revenue Code 
                of 1986 for rental housing units converted under this 
                subsection with respect to such units shall provide 
                for--
                            ``(i) an option for the public housing 
                        agency to purchase limited partnership 
                        interests in a property containing such units 
                        after the tax compliance period under such 
                        section 42;
                            ``(ii) a provision to give a public housing 
                        agency an active role in property management 
                        decisions of such housing; or
                            ``(iii) such other provision or provisions 
                        as the Secretary may establish to ensure the 
                        preservation of the interest of the public 
                        housing agency in the property.
                    ``(C) Resident membership on board.--A public 
                housing agency that converts some or all of its units 
                to assistance in accordance with this subsection shall 
                comply with the resident board membership requirement 
                of section 2(b) (42 U.S.C. 1437(b)), as applicable.
                    ``(D) Existing contracts.--The Secretary shall 
                require, following conversion of assistance in 
                accordance with this subsection, that the Secretary and 
                the public housing agency shall continue to meet 
                obligations associated with financing pursuant to 
                section 30 (42 U.S.C. 1437z-2), including financing 
                obligations for which capital funds or operating funds 
                provided under section 9 are pledged for repayment, if 
                such obligations are not refinanced or otherwise paid 
                off, using assistance provided under the property-based 
                or project-based voucher contract or otherwise, and 
                shall comply with the terms and conditions of contracts 
                associated with such financings, energy performance 
                contracts, and similar contracts, as specified by the 
                Secretary, in effect before conversion of assistance in 
                accordance with this subsection. The Secretary may 
                require the allocation of an equitable percentage of 
                repayment obligations to be repaid from assistance 
                under the property-based or project-based voucher 
                contracts or impose such other requirements as are 
                necessary to ensure that the requirements of the 
                preceding sentence are met, without imposing greater 
                restrictions on the public housing agency than the 
                agency would have had under the original financing.
                    ``(E) Use of capital funds.--Notwithstanding any 
                other provision of law, capital funds provided pursuant 
                to section 9(d) (42 U.S.C. 1437g(d)) may be used for 
                assistance in the financing of necessary improvements 
                or other capital expenses for any project or units 
                assisted under section 9 and to be converted to 
                assistance in accordance with this subsection, 
                including making a capital contribution to such a 
                project where needed to make the financing feasible, 
                the purchase or provision of letters of credit or other 
                credit enhancements necessary to carry out successful 
                conversions, initial contributions to any necessary 
                reserves, and other financing expenses approved by the 
                Secretary. The Secretary may waive or modify 
                requirements otherwise applicable to such capital funds 
                as necessary to facilitate their use in connection with 
                conversions as authorized by this subsection.
                    ``(F) Transition rents for tenants in converted 
                public housing properties.--The Secretary shall require 
                a public housing agency to implement such changes in 
                rental payment requirements otherwise applicable to 
                tenants at the time of conversion under this subsection 
                as are necessary to prevent such tenants from having 
                rents increased solely as a result of the conversion by 
                more than 10 percent per year. The Secretary may 
                require or authorize a public housing agency to adopt a 
                specific time after which such transitional provisions 
                no longer will be effective.
            ``(14) Transfer and use of funds.--
                    ``(A) Termination of assistance under previous 
                contract.--Following conversion under this subsection, 
                additional assistance for a property shall not be 
                provided under the previous contract, agreement, or 
                authority.
                    ``(B) Unexpended assistance.--The Secretary shall 
                take necessary actions to provide that, as a condition 
                of conversion of a property, the unexpended assistance, 
                including capital funds, made available for such 
                property under a previous contract, agreement, or 
                authority (up to and including the Federal fiscal year 
                of conversion) shall be transferred to accounts 
                applicable to assistance provided under this subsection 
                to pay all or a portion of--
                            ``(i) the up-front costs of conversion;
                            ``(ii) the initial contributions to any 
                        necessary reserves;
                            ``(iii) the funding of the initial year or 
                        years of the new property-based or project-
                        based voucher contract of assistance entered 
                        into pursuant to this subsection;
                            ``(iv) the financing of necessary 
                        renovations to, or other capital expenses for, 
                        the property, including the making of capital 
                        contributions and the provision of letters of 
                        credit or other credit enhancements or 
                        financing expenses approved by the Secretary; 
                        and
                            ``(v) contract administration of converted 
                        rental assistance properties under this 
                        subsection.
                    ``(C) Transfer of funds.--To the extent provided in 
                advance in appropriations Acts, the Secretary may 
                transfer funds between accounts applicable to 
                assistance provided under section 9 and accounts 
                applicable to assistance provided under this subsection 
                and subsections (n) and (o).
            ``(15) Release of prior requirements.--A property assisted 
        under a property-based or project-based voucher contract 
        following conversion under this section shall not be subject to 
        any terms, conditions, and requirements of the previous 
        assistance from which it was converted, except as provided for 
        by this subsection and subsections (n) and (o), and by such 
        terms, conditions, and requirements as established for the new 
        assistance by the Secretary.
            ``(16) Conversion from property-based contract to project-
        based voucher contract.--A property under a property-based 
        contract may convert to a project-based voucher contract at the 
        request of the owner of the property and at the discretion of, 
        and upon approval by, the Secretary if the property meets the 
        applicable requirements under subsection (o)(13) and a public 
        housing agency eligible to administer the contract agrees to 
        such administration.
            ``(17) Notice of termination of affordability 
        restrictions.--
                    ``(A) In general.--An owner of a property that has 
                been converted to a property-based contract pursuant to 
                this subsection shall, if the owner intends not to 
                renew or extend the rental assistance contract at the 
                property, provide written notice of such intent at 
                least 12 months in advance of the intended termination 
                date. Notice shall be provided to the Secretary, the 
                chief executive officer of the State and the unit of 
                general local government (as such term is defined in 
                section 4 of the Cranston-Gonzalez National Affordable 
                Housing Act (42 U.S.C. 12704)) in which the property is 
                located, and to each tenant of the property at such 
                time and in such form as may be prescribed by the 
                Secretary through regulation.
                    ``(B) Failure to provide notice.--If an owner fails 
                to provide notice as required in subparagraph (A), the 
                owner may not evict the tenants or increase the 
                tenants' rent payments based upon the change in subsidy 
                status of the property until such time as the owner has 
                provided the notice and the 12-month period beginning 
                upon the provision of such notice has elapsed.
            ``(18) Properties in default, foreclosure, or bankruptcy.--
                    ``(A) Properties in default.--
                            ``(i) Mortgage requirement.--Any mortgage 
                        made on, or security interest otherwise granted 
                        in, any property with a rental assistance 
                        contract or agreement converted pursuant to 
                        this subsection shall include a provision for 
                        simultaneous notification to the owner of the 
                        property and the Secretary of any default under 
                        the mortgage or other security agreement.
                            ``(ii) Conversion contract requirement.--
                        Any contract or agreement to convert assistance 
                        pursuant to this subsection shall include a 
                        provision requiring the owner to notify the 
                        Secretary of any default under a mortgage made 
                        on, or security interest otherwise granted in, 
                        any property with a rental assistance contract 
                        or agreement converted pursuant to this 
                        subsection.
                            ``(iii) Authority to suspend rental 
                        assistance.--After receiving notification of a 
                        default as provided in clause (i), the 
                        Secretary may suspend all or a portion of any 
                        rental assistance payments funded by the 
                        Secretary under any contract on behalf of the 
                        property in default and use amounts from such 
                        suspended payments to cure the default. Such 
                        suspension shall not be cause for eviction of 
                        any tenant assisted under this section.
                            ``(iv) Audit.--The Secretary may conduct an 
                        audit of any property that has had rental 
                        assistance payments suspended under clause (i). 
                        The owner of such property shall make available 
                        all records of the property to the Secretary, 
                        including books of account, bank statements, 
                        and contracts for purposes of the audit.
                            ``(v) Resumption of rental assistance.--
                        Following cure of the default and subject to 
                        the results of any audit conducted under clause 
                        (iv), the Secretary may terminate, in whole or 
                        in part, the suspension of payments and resume 
                        payment in accordance with the contract. The 
                        Secretary may require the payee under the 
                        contract to take such corrective actions as the 
                        Secretary determines to be appropriate as a 
                        condition of resuming payments under the 
                        contract.
                    ``(B) Properties in foreclosure or bankruptcy.--
                Notwithstanding any provision of Federal or State law, 
                in the event of a foreclosure, or the bankruptcy of an 
                owner, of a property converted under this subsection, 
                such property shall remain subject to--
                            ``(i) such rental assistance contract and 
                        any extensions or renewal agreements thereof;
                            ``(ii) all leases between the prior owner 
                        and tenants assisted under such contract; and
                            ``(iii) any use agreement related to such 
                        contract in effect immediately before the 
                        foreclosure or bankruptcy filing.
                Any and all successors in interest in such property 
                shall assume such contract, extensions or renewal 
                agreements, leases, and related use agreement 
                obligations. In the case of a property converted from 
                assistance under section 9, prior to the sale or other 
                transfer of any ownership interest in such property 
                pursuant to a foreclosure or bankruptcy, the Secretary 
                shall have a first option to purchase, and the 
                Secretary shall exercise such option or may assign such 
                option to a public entity purchaser that exercises such 
                option in accordance with implementing regulations 
                pursuant to this subparagraph and paragraph 
                (19)(A)(iv). If the Secretary determines the property 
                is not physically viable, the Secretary may require the 
                transfer of the contract for assistance, including 
                monthly assistance payments, and use agreement to one 
                or more other properties in accordance with the 
                procedures and requirements of subsection (m)(F)(ii).
            ``(19) Federal option to purchase.--
                    ``(A) In general.--
                            ``(i) Opportunity for purchase by 
                        secretary.--Except as provided in clause (vi), 
                        an owner of a covered property, as defined in 
                        clause (v), shall not sell the covered property 
                        at any time before--
                                    ``(I) providing notice within the 
                                time periods and to the parties 
                                described in paragraph (17) of the 
                                owner's intent to sell the property; 
                                and
                                    ``(II) offering the Secretary the 
                                opportunity to purchase the property 
                                pursuant to clause (ii) of this 
                                subparagraph.
                            ``(ii) Right of secretary to make offer.--
                        Upon receipt of the notice required in clause 
                        (i)(I), the Secretary shall have the right 
                        either to purchase the property subject to 
                        terms and conditions established through 
                        regulation or to select an assignee to act on 
                        behalf of the Secretary as the purchaser before 
                        the owner enters into any agreement to sell to 
                        a third party. Failure by the Secretary or the 
                        Secretary's assignee to submit an offer to 
                        purchase the property in compliance with the 
                        conditions specified in regulation shall 
                        constitute an irrevocable waiver of the 
                        Secretary's right under this paragraph.
                            ``(iii) Relationship with other laws.--The 
                        requirements of this paragraph are in addition 
                        to, and not in lieu of, any State or local law 
                        that has established a right of first refusal 
                        to preserve affordable housing.
                            ``(iv) Regulations.--The Secretary shall 
                        issue regulations to carry out this paragraph, 
                        which may--
                                    ``(I) define such terms as the 
                                Secretary determines necessary to 
                                facilitate the understanding of the 
                                rights and obligations of the owner of 
                                the property, the Secretary, the 
                                Secretary's assignee, or tenants;
                                    ``(II) address any agreement that 
                                may be appropriate between the 
                                Secretary and the Secretary's assignee;
                                    ``(III) provide for the timing of 
                                any offer made by the Secretary to 
                                purchase the owner's property and the 
                                acceptance or refusal of the 
                                Secretary's purchase offer; and
                                    ``(IV) establish the conditions for 
                                sale of a property to the Secretary.
                            ``(v) Covered properties.--Properties 
                        covered by this paragraph include properties 
                        with assistance converted pursuant to this 
                        subsection after receiving assistance under 
                        subsection (e)(2) or section 9 of this Act, 
                        section 236(f)(2) of the National Housing Act 
                        (12 U.S.C. 1715z-1(f)(2)), or section 101 of 
                        the Housing and Urban Development Act of 1965 
                        (12 U.S.C. 1701s). For other converted 
                        properties, the Secretary and owner may agree 
                        to be bound by this paragraph.
                            ``(vi) Inapplicability of secretary's right 
                        to purchase.--Clauses (i) through (v) of this 
                        subparagraph shall not apply to any of the 
                        following actions:
                                    ``(I) A government taking of 
                                covered housing by eminent domain or a 
                                negotiated purchase in lieu of eminent 
                                domain.
                                    ``(II) A proposed transfer of 
                                assistance from the property to 
                                another, subject to terms and 
                                conditions established by the 
                                Secretary.
                    ``(B) Public housing.--For properties converted 
                from assistance under section 9, the Secretary shall 
                provide a priority, first, to a public entity, and next 
                to a non-profit entity, including a tenant 
                organization, in selecting an assignee under this 
                paragraph.
                    ``(C) Other housing.--For properties other than 
                properties converted from assistance under section 9, 
                clauses (i) through (v) of subparagraph (A) shall not 
                apply to a proposed sale pursuant to terms and 
                conditions that preserve affordability, as determined 
                by the Secretary.
            ``(20) Financing of properties with converted assistance.--
        The Secretary shall establish policies and procedures governing 
        the use of sound financing and underwriting standards for 
        properties with assistance converted under this subsection, to 
        ensure that such properties are financially sustainable for the 
        term of the assistance contract.
            ``(21) Recoveries.--To the extent provided in advance in 
        appropriations Acts, amounts obligated with respect to a 
        property under a rental assistance program, for years beyond 
        the fiscal year in which conversion of rental assistance under 
        this subsection takes place, shall be deobligated and collected 
        by the Secretary.
            ``(22) Rental assistance conversion trust fund.--
                    ``(A) Establishment.--There is established in the 
                Treasury of the United States a fund to be known as the 
                `Rental Assistance Conversion Trust Fund' (in this 
                paragraph referred to as the `Fund') for deposit of 
                amounts, to be used for the costs of the resident 
                choice option under subsection (m)(1), of conversions 
                under this subsection, including the actions under 
                paragraph (14)(B), and of the exercise of the 
                Secretary's first option to purchase under paragraphs 
                (18)(B) and (19) of this subsection, from--
                            ``(i) to the extent provided in advance in 
                        appropriations Acts, the collection of costs as 
                        authorized by this subsection, which shall not 
                        exceed $100,000 per property (or such other 
                        higher limit as the Secretary may establish 
                        after providing public notice and an 
                        opportunity to comment), as may be necessary 
                        for payment of expenses incurred by the 
                        Secretary in connection with assessing such 
                        properties for conversion, including the costs 
                        of rental comparability studies and physical 
                        needs and financial assessments, as the 
                        Secretary may require; and
                            ``(ii) the amounts deobligated and 
                        collected under paragraph (21).
                    ``(B) Availability.--Amounts in the Fund shall be 
                available only to the extent provided in advance in 
                appropriations Acts.''.

SEC. 4. TRANSFORMATION AUTHORITY.

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f), as amended by the preceding provisions of this Act, is further 
amended by inserting after subsection (l) the following new subsection:
    ``(m) Transformation Authority.--
            ``(1) Resident choice.--The Secretary shall promote 
        informed choice regarding housing opportunities for families in 
        dwelling units with rental assistance converted under 
        subsection (l) of this section by establishing procedures to 
        implement a resident choice option as follows:
                    ``(A) Right to move.--To extent of available 
                resources, each low-income family lawfully residing in 
                a unit converted under subsection (l) may move at any 
                time after residing in the property for a period of not 
                less than 24 months (which period shall run from the 
                date of the tenant's initial occupancy or, if the 
                property is rehabilitated in conjunction with the 
                conversion, from the date of conversion or the tenant's 
                initial occupancy, whichever is later), or such other 
                period as provided in subsection (o)(13) or as 
                determined by the Secretary, and may continue to 
                receive rental assistance that is subject to policies 
                comparable to those that apply to assistance under 
                subsection (o) concerning income, assistance, rent 
                contribution, affordability, and other policies as the 
                Secretary may specify by regulation.
                    ``(B) Provision of vouchers.--A public housing 
                agency administering a tenant-based voucher program 
                under subsection (o) whose property is selected for 
                conversion or that is selected to administer a rental 
                assistance contract pursuant to subsection (l) shall 
                provide vouchers to low-income families lawfully 
                residing in units converted under subsection (l) who 
                exercise their rights under the resident choice option 
                provided under subparagraph (A) as required by the 
                Secretary, but not more than one-third of the vouchers 
                that become available each year as a result of turnover 
                may be used for such purpose.
                    ``(C) Separate waiting list.--A public housing 
                agency may establish a separate waiting list for 
                families eligible to exercise such resident choice 
                option if demand for vouchers exceeds one-third of 
                turnover vouchers.
            ``(2) Streamlining rental assistance programs.--In addition 
        to the authority of the Secretary under any other provision of 
        law or as specified in this paragraph, the Secretary may 
        establish uniform policies and procedures governing properties 
        with rental assistance converted under subsection (l), 
        including policies and procedures with respect to the 
        following:
                    ``(A) Tenant organization rights.--In implementing 
                the authority under this paragraph with respect to 
                tenants' rights to organize, the Secretary shall 
                provide that--
                            ``(i) owners of properties funded under a 
                        rental assistance program and public housing 
                        agencies administering rental assistance shall 
                        not impede the reasonable efforts of tenants to 
                        organize or of tenant organizations to 
                        represent their members;
                            ``(ii) tenants and tenant organizations 
                        shall have the right to hold meetings, 
                        including meetings concerning the formation of 
                        a tenant organization, in a building receiving 
                        funding from a rental assistance program;
                            ``(iii) property owners and public housing 
                        agencies administering rental assistance under 
                        subsection (l) shall recognize legitimate 
                        tenant organizations and give reasonable 
                        consideration to concerns raised by legitimate 
                        tenant organizations;
                            ``(iv) properties with only a portion of 
                        the units funded under a rental assistance 
                        program may, at the option of the tenants of 
                        units with such assistance, have a single 
                        tenant organization representing all tenants;
                            ``(v) a tenant organization shall be 
                        considered legitimate if it meets regularly, 
                        operates democratically, is broadly 
                        representative, is independent of the public 
                        housing agency, owners, management, and their 
                        representatives, and has been established--
                                    ``(I) by the tenants in a property 
                                funded under a rental assistance 
                                program administered by the Secretary 
                                for purposes of addressing issues 
                                related to the tenants' living 
                                environment, which shall include the 
                                terms and conditions of their tenancy 
                                and other issues as determined by the 
                                Secretary;
                                    ``(II) by the participants in a 
                                rental assistance program under 
                                subsection (o), for purposes of 
                                addressing issues related to policies 
                                governing payment standards, conditions 
                                of occupied units, or other 
                                discretionary policies and program 
                                implementation issues; or
                                    ``(III) through a combination of 
                                tenant organizations, including 
                                jurisdiction-wide or area-wide 
                                organizations; and
                            ``(vi) a portion of funds made available 
                        for renewal of rental assistance shall be 
                        allocated to tenant groups, non-profit 
                        organizations, or public entities to facilitate 
                        tenants' rights to organize; such amounts, 
                        which shall not be less than the amount that 
                        would have been provided for such purposes 
                        under previously applicable funding formulas if 
                        the properties had not converted pursuant to 
                        subsection (l), may fund technical assistance 
                        and organizing activities that empower 
                        residents to participate meaningfully in 
                        planning processes and other activities related 
                        to improving or preserving the quality of their 
                        housing, subject to such terms and conditions 
                        as the Secretary may establish; allocation of 
                        funds to legitimate tenant organizations 
                        meeting the requirements of clause (v) shall 
                        not require a competitive process.
                    ``(B) Applicant and tenant procedural rights.--
                            ``(i) In general.--Applicants for, and 
                        tenants of, units with assistance converted 
                        under subsection (l) or with assistance under 
                        subsection (o) shall be timely notified of and 
                        provided the rights specified in this 
                        subparagraph upon receiving notification of, 
                        including a statement of the specific grounds 
                        for--
                                    ``(I) ineligibility for assistance 
                                or for admission to a unit assisted 
                                under this subsection;
                                    ``(II) adverse actions involving 
                                income determinations, tenant 
                                contributions, unit size, other 
                                conditions of continuing eligibility, 
                                or such other issues as determined by 
                                the Secretary; and
                                    ``(III) eviction or termination of 
                                assistance.
                            ``(ii) Procedures required.--
                                    ``(I) An applicant for, and a 
                                tenant of, a unit with assistance 
                                converted under subsection (l) or with 
                                assistance under subsection (o) may 
                                request a review of an action for which 
                                the applicant or tenant receives 
                                notification pursuant to this 
                                subparagraph. Such request for a review 
                                must be made within 30 days of receipt 
                                of any notice concerning ineligibility 
                                for assistance or for admission to a 
                                unit assisted under this section, or 
                                termination of assistance or eviction. 
                                For notices concerning any other 
                                matter, such request for a review must 
                                be made within 10 days of receipt of 
                                the notice or such longer time as the 
                                owner or agency, consistent with its 
                                written administrative policies, may 
                                permit, and before the action may be 
                                initiated or carried out.
                                    ``(II) An applicant for, and a 
                                tenant of, a unit with assistance 
                                converted under subsection (l) or with 
                                assistance under subsection (o) may 
                                request a review within a reasonable 
                                period of time of any agency or owner 
                                failure to act that has had a direct 
                                adverse impact on the applicant or 
                                tenant.
                                    ``(III) For any review concerning 
                                an eviction or termination of tenancy 
                                that involves any activity that 
                                threatens the health, safety, or right 
                                to peaceful enjoyment of the premises 
                                of other tenants or employees of the 
                                owner or agency or any violent or drug-
                                related criminal activity on or off 
                                such premises, or any activity 
                                resulting in a felony conviction, the 
                                agency or owner may establish an 
                                expedited review procedure as the 
                                Secretary shall provide, or exclude 
                                from its review procedure any such 
                                matter, in any jurisdiction which 
                                requires that prior to eviction, a 
                                tenant be given a hearing in court, 
                                which the Secretary determines provides 
                                the basic elements of due process. Such 
                                elements of due process shall not 
                                include a requirement that the tenant 
                                be provided an opportunity to examine 
                                relevant documents within the 
                                possession of the agency or owner. The 
                                agency or owner shall provide to the 
                                tenant a reasonable opportunity, prior 
                                to hearing or trial, to examine and 
                                obtain copies of any relevant 
                                documents, records, or regulations 
                                directly related to the eviction or 
                                termination.
                                    ``(IV) The review shall be 
                                conducted by a person or panel with 
                                authority to approve, amend, or 
                                withdraw the action, but not the 
                                person, or a subordinate of the person, 
                                that made the initial decision to take 
                                the action.
                                    ``(V) The entity that made the 
                                decision for the action or that failed 
                                to take an action for which a review is 
                                requested shall permit a reasonable 
                                opportunity in advance of the review 
                                for the applicant or tenant to inspect 
                                and obtain copies of documents claimed 
                                to support the action or failure to 
                                act.
                                    ``(VI) The applicant's or tenant's 
                                entire file shall be made available for 
                                review by the applicant or tenant upon 
                                request.
                                    ``(VII) The applicant or tenant may 
                                bring a representative to the review 
                                and such person may make statements on 
                                the applicant's or tenant's behalf. The 
                                applicant or tenant shall have the 
                                right to present evidence and 
                                arguments, to controvert evidence 
                                relied on by the entity, and to 
                                confront and cross-examine any witness 
                                who testifies at the review on behalf 
                                of the entity. The applicant or tenant 
                                may present arguments as to why the 
                                agency or owner should not exercise 
                                discretionary authority to undertake 
                                the action being challenged.
                                    ``(VIII) A written notice of the 
                                outcome of the review and the reasons 
                                in support of the outcome shall be 
                                provided to the applicant or tenant and 
                                representative, if any. The decision 
                                shall be based solely on the facts 
                                presented at the review.
                            ``(iii) Costs.--The reasonable costs, which 
                        shall not include attorney's fees, of providing 
                        the applicant and tenant rights under this 
                        subparagraph shall be considered operating 
                        costs of a property.
                    ``(C) Nondiscrimination and affirmatively 
                furthering fair housing.--
                            ``(i) Nondiscrimination.--All programs and 
                        activities related to providing or 
                        administering rental housing assistance, 
                        including admissions, demolition or 
                        disposition, relocation, replacement, re-
                        occupancy of housing units, and transfer of any 
                        contracts for rental assistance, shall be 
                        conducted in compliance with the civil rights 
                        laws and their implementing regulations, 
                        including the Fair Housing Act (42 U.S.C. 3601 
                        et seq.), title VI of the Civil Rights Act of 
                        1964 (42 U.S.C. 2000d et seq.), section 504 of 
                        the Rehabilitation Act of 1973 (29 U.S.C. 794), 
                        and Executive Orders 11063 and 13166, and shall 
                        not have the purpose or effect of 
                        discriminating against a tenant or prospective 
                        tenant assisted under this subsection because 
                        of such person's receipt of a voucher under 
                        this section.
                            ``(ii) Affirmatively furthering fair 
                        housing.--Owners and public housing agencies 
                        shall conduct all rental housing assistance 
                        programs and activities funded by the Secretary 
                        authorized under this Act, including 
                        admissions, demolition or disposition, 
                        relocation, replacement, re-occupancy of 
                        housing units, and transfer of any contracts 
                        for rental assistance, in a manner that 
                        affirmatively furthers fair housing as required 
                        by section 808(e)(5) of the Fair Housing Act 
                        (42 U.S.C. 3608(e)(5)).
                    ``(D) Administration of rental assistance.--In 
                implementing the authority under this subsection with 
                respect to the administration of rental assistance, the 
                Secretary may--
                            ``(i) facilitate the implementation, by 
                        public housing agencies that administer tenant-
                        based voucher programs under subsection (o), of 
                        regional portability agreements, consortia, and 
                        such other or additional methods of 
                        streamlining administration of vouchers and 
                        other rental assistance on an area-wide basis 
                        as the Secretary determines appropriate to 
                        promote greater efficiency in the use of 
                        resources and to increase informed resident 
                        choice and mobility;
                            ``(ii) allocate funds to administer 
                        contracts for properties converted under 
                        subsection (l) to entities authorized to 
                        administer rental assistance under section 
                        3(b)(6)(B) pursuant to such conditions and 
                        procedures as the Secretary may establish by 
                        notice, following an opportunity for comment. 
                        In awarding such funding, the Secretary shall 
                        promote administrative efficiency and advance 
                        the policy of resident choice as specified in 
                        paragraph (1) of this subsection; and
                            ``(iii) establish mechanisms, procedures, 
                        and policies to initiate in a single location 
                        the application process for all waiting lists 
                        for rental assistance programs administered by 
                        the Secretary in a metropolitan or rural area 
                        and to minimize the burdens on owners, public 
                        housing agencies, and applicants, including 
                        through provision of technical assistance.
                    ``(E) Physical condition standards.--In 
                implementing the authority under this subsection with 
                respect to the inspection of properties, the Secretary 
                may establish or provide for the use of uniform 
                physical condition standards.
                    ``(F) Enforcement.--
                            ``(i) Authority to bring action.--The 
                        Secretary may commence any action in an 
                        appropriate United States district court to 
                        obtain a monetary judgment or such other 
                        relief, or both, as may be available with 
                        respect to a rental assistance contract, an 
                        annual contributions contract, a use agreement, 
                        or any statute other than the Fair Housing Act 
                        (42 U.S.C. 3601 et seq.), or regulation 
                        applicable to any rental assistance program 
                        under the authority of the Secretary or the 
                        property assisted under such program, or to 
                        protect or enforce any obligation to, or right 
                        or requirement of, the Secretary under any such 
                        contract, agreement, or law. The monetary 
                        judgment or other relief may, in the court's 
                        discretion, include the attorneys' fees and 
                        other expenses incurred by the Secretary in 
                        connection with the action.
                            ``(ii) Termination and transfer of 
                        assistance.--Upon repeated or continued 
                        violation of applicable requirements, or upon 
                        substantial default of any covenants or 
                        conditions of a use agreement or rental 
                        assistance contract by the owner of a property 
                        with rental assistance, and following 
                        consultation with the primary and subordinate 
                        mortgages of the property, if any, the 
                        Secretary may terminate the rental assistance 
                        contract with such owner and, through a 
                        selection process established by regulation, 
                        transfer the rental assistance by entering into 
                        a new contract with the owner or owners of a 
                        property or properties that have the capacity 
                        to accept all assisted tenants who choose to 
                        move to such properties from the property that 
                        has had its assistance terminated. Assisted 
                        tenants that do not choose to move to the 
                        replacement properties, or if replacement 
                        properties are not available, shall be provided 
                        voucher assistance under subsection (o), which 
                        may be funded initially by the remaining funds 
                        on the terminated contract. No additional units 
                        of assistance under this section are authorized 
                        to be created as a result of such termination 
                        and transfer.
                            ``(iii) Additional equitable remedies.--
                        Notwithstanding any other provision of law or 
                        of any contract for contributions, upon the 
                        occurrence of events or conditions that 
                        constitute a default by a public housing agency 
                        with which the Secretary contracts for 
                        administration of rental assistance under this 
                        section with respect to the covenants or 
                        conditions to which the public housing agency 
                        is subject, the Secretary may--
                                    ``(I) take possession of properties 
                                solely owned by a public housing 
                                authority, rights or interests held in 
                                connection with the program for rental 
                                assistance under this section, 
                                including funds held by a depository, 
                                program receipts, and rights or 
                                interests under a housing assistance 
                                payments contract with an owner;
                                    ``(II) appoint a receiver, which 
                                may be another public housing agency or 
                                other entity at the Secretary's 
                                discretion regardless of jurisdictional 
                                limitations;
                                    ``(III) transfer the program to 
                                another public housing agency or other 
                                entity at the discretion of the 
                                Secretary regardless of jurisdictional 
                                limitations;
                                    ``(IV) seek the establishment of 
                                one or more new public housing 
                                agencies; or
                                    ``(V) require the agency to make 
                                other arrangements acceptable to the 
                                Secretary for managing all or part of 
                                the programs administered by the agency 
                                or other programs of the agency under 
                                this section.
                            ``(iv) Deposit of penalties.--
                        Notwithstanding any other provision of law, the 
                        Secretary shall apply amounts collected under 
                        this subparagraph to the Rental Assistance 
                        Conversion Trust Fund established under 
                        subsection (l)(22) or shall authorize the owner 
                        of the property or project at issue in the 
                        action to use the amounts, in accordance with 
                        the requirements of the Secretary, for the 
                        improvement of such property or project.
                    ``(G) Resident access to building information.--
                            ``(i) In general.--Upon a written request 
                        by a legitimate tenants' organization meeting 
                        the requirements of subparagraph (A)(v) of this 
                        paragraph, established with respect to a 
                        multifamily housing property covered under part 
                        245 of the Secretary's regulations (24 C.F.R. 
                        part 245) or assisted by a contract that has 
                        been converted pursuant to subsection (l), by 
                        or through its duly appointed designee or 
                        representative, the Secretary shall make 
                        available to that organization designee or 
                        representative--
                                    ``(I) information identifying the 
                                legal entities that own and manage the 
                                property, including identification of 
                                general partners and other principals;
                                    ``(II) an annual operating 
                                statement of profit and loss of the 
                                ownership and management entities 
                                identified in subclause (I);
                                    ``(III) any subsidy contracts 
                                between the ownership entities and the 
                                Secretary, and related, non-privileged 
                                correspondence between those ownership 
                                entities and the Department of Housing 
                                and Urban Development;
                                    ``(IV) any management reviews of 
                                entities identified in subclause (I) 
                                that are conducted by the Department of 
                                Housing and Urban Development and which 
                                may, pursuant to the regulations of the 
                                Department of Housing and Urban 
                                Development, be publicly disclosed; and
                                    ``(V) an annual statement, prepared 
                                by the Department's contract 
                                administrator for the subject property, 
                                of the balances of, and expenditures 
                                from, any replacement reserves and 
                                other escrow funds for the property.
                            ``(ii) Protection of information.--Such a 
                        request shall be subject to the applicability 
                        of all laws and regulations governing 
                        proprietary information, privacy rights, 
                        privileges and other established legal 
                        protections for individuals and entities, and 
                        shall not be construed to limit or otherwise 
                        alter such laws, regulations, rights, 
                        privileges, and protections, or to require 
                        disclosure of Social Security numbers, personal 
                        tax returns, or any other personal financial 
                        information of or concerning individuals who 
                        have an interest in the ownership or management 
                        entities referred to in subclause (I) of clause 
                        (i).
                    ``(H) Streamlined regulations.--The Secretary may 
                establish streamlined review and compliance 
                requirements for small or partially assisted 
                properties, or both, regardless of the form of 
                assistance provided such properties under this section.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated for the transformation of rental assistance, 
        including conversions under subsection (l), $350,000,000 for 
        fiscal year 2011 and such sums as may be necessary for each of 
        fiscal years 2012, 2013, 2014, and 2015.
            ``(4) Allocation.--The Secretary may allocate amounts for 
        the transformation of rental assistance under this subsection, 
        including for a portion of the funding of property-based and 
        project-based voucher contracts, the costs of administration of 
        a property-based or project-based voucher contract for a 
        particular property, promotion of tenant organizing rights and 
        resident mobility (including of participants in the tenant-
        based voucher program under subsection (o)), relocation 
        assistance pursuant to subsection (l)(9), efforts to 
        affirmatively further fair housing, and expenses of combining 
        administrative components of local programs under subsection 
        (o) by competition or such other procedure the Secretary 
        determines appropriate, upon publication of notice in the 
        Federal Register notice not later than 30 days before such 
        allocation is made. Except in the case of a competitive 
        allocation, if the method of allocation from year to year does 
        not change, publication of a new notice shall not be 
        required.''.

SEC. 5. PROPERTY-BASED CONTRACTS.

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f), as amended by the preceding provisions of this Act, is further 
amended by inserting after subsection (m) the following new subsection:
    ``(n) Property-Based Contracts.--
            ``(1) Authority.--Subject to the availability of amounts 
        provided in appropriations Acts and that otherwise become 
        available, and to the control of the Secretary of applicable 
        accounts in the Treasury of the United States, the Secretary 
        may enter into a property-based housing assistance payment 
        contract with respect to a property converted pursuant to 
        subsection (l) or a replacement property, and may provide funds 
        pursuant to such conditions and procedures as the Secretary may 
        establish for a public housing agency to administer or assist 
        in the administration of such property-based contract.
            ``(2) Contract term.--The Secretary may enter into a multi-
        year property-based contract for assistance pursuant to this 
        subsection, subject to the availability of appropriations for 
        each year of such contract, for the following terms:
                    ``(A) Initial term.--
                            ``(i) Public housing.--A property-based 
                        contract between the Secretary and the owner of 
                        a property assisted, prior to conversion, under 
                        section 9 shall have an initial term of not 
                        fewer than 20 years.
                            ``(ii) Other housing.--A property-based 
                        contract between the Secretary and the owner of 
                        any other property shall have a term at least 
                        equal to the term remaining on the contract 
                        being converted to a contract for rental 
                        assistance under this subsection, or may have a 
                        term of up to 20 years, as determined by the 
                        Secretary.
                    ``(B) Contract renewals and extensions.--
                            ``(i) Agreement to extend or renew.--At any 
                        time during the term of a property-based 
                        contract, the Secretary may, at the request of 
                        the owner, agree to extend or renew the 
                        property-based contract for up to a 20-year 
                        period beyond the initial contract term or the 
                        term of any renewal contract subject to the 
                        availability of appropriations for each year of 
                        such extension or renewal. In the initial 
                        contract or any renewal contract, the Secretary 
                        and the owner may agree to have such extensions 
                        or renewals of the property-based contract 
                        accepted by the owner and by the successors in 
                        interest of the owner.
                            ``(ii) Renewal contract.--
                                    ``(I) Renewal.--During the 2-year 
                                period before the expiration of a 
                                property-based contract, the Secretary 
                                shall offer, and at the request of the 
                                owner shall agree to, a renewal 
                                contract for a term of up to 20 years, 
                                subject to the requirements of 
                                subclause (II) and the availability of 
                                appropriations for each year of such 
                                renewal.
                                    ``(II) Prohibition on renewal.--The 
                                Secretary shall not offer or agree to 
                                renew a contract for the subject 
                                property--
                                            ``(aa) if the Secretary 
                                        determines, in consultation 
                                        with the tenants and the local 
                                        government, that the property 
                                        is obsolete as to physical 
                                        condition, location, or other 
                                        factors that cannot be remedied 
                                        with available Federal, State, 
                                        and local resources, making it 
                                        unsuitable as low-income 
                                        housing; or
                                            ``(bb) with an owner that 
                                        is debarred or suspended, or 
                                        found to be in serious and 
                                        repeated noncompliance with 
                                        applicable requirements 
                                        established by the Secretary.
                                    ``(III) Converted public housing.--
                                An owner of a property converted from 
                                assistance under section 9 shall accept 
                                all renewal contracts offered by the 
                                Secretary in accordance with this 
                                subparagraph.
                    ``(C) Renewals upon expiration.--
                            ``(i) In general.--At the request of an 
                        owner of a property with a property-based 
                        contract that expires or otherwise terminates 
                        to renew such expired or terminated contract in 
                        whole or in part, the Secretary shall, subject 
                        to the requirements of subparagraph 
                        (B)(ii)(II), renew such contract if eligible 
                        tenants in the property have not yet been 
                        issued tenant protection vouchers and if the 
                        rental assistance formerly provided to the 
                        property has not been transferred to another 
                        property or properties.
                            ``(ii) Partial renewal.--In the case of a 
                        partial renewal, the assistance not renewed may 
                        be transferred to another property or 
                        properties or vouchers shall be provided in 
                        accordance with subsection (k).
            ``(3) Calculation of rent to owner.--
                    ``(A) Initial calculation.--
                            ``(i) In general.--The Secretary shall 
                        establish rents for each unit assisted under a 
                        property-based contract at the level requested 
                        by the owner but not to exceed the rents 
                        derived from comparable unassisted properties 
                        in the area, up to 110 percent of the 
                        applicable area rental established by the 
                        Secretary or such higher amount approved by the 
                        Secretary based on a determination by the 
                        Secretary that such higher amount is cost-
                        effective considering the need for affordable 
                        housing by the types of households served by 
                        the property and the quality and location of 
                        the property. For a property for which the 
                        Secretary has approved under the Multifamily 
                        Assisted Housing Reform and Affordability Act 
                        of 1997 (42 U.S.C. 1437f note) a rent not in 
                        excess of the comparable rent at the time of 
                        such approval, the Secretary shall establish 
                        rents for each unit assisted under a property-
                        based contract at the higher of the level most 
                        recently approved or the rent established under 
                        the preceding sentence. Prior to the agreement 
                        to enter into a contract under this subsection, 
                        the Secretary may approve upon an owner's 
                        request a lower rent than that permitted under 
                        this clause if such lower rent is sufficient to 
                        meet the financial and physical sustainability 
                        needs of the property.
                            ``(ii) Exception properties.--
                                    ``(I) Property requirements.--The 
                                maximum monthly rent may exceed the 
                                rents derived from comparable 
                                unassisted properties in the area upon 
                                a determination by the Secretary that 
                                such exception rents are necessary to 
                                meet the financial and physical 
                                sustainability needs of the property, 
                                and that--
                                            ``(aa) the property is not, 
                                        or after planned rehabilitation 
                                        will not be, obsolete as to 
                                        physical condition, location, 
                                        or other factors, making it 
                                        unsuitable for housing 
                                        purposes; and
                                            ``(bb) a reasonable program 
                                        of property modifications in 
                                        combination with rents 
                                        determined under this clause 
                                        will be cost-effective to 
                                        extend the useful life of the 
                                        property.
                                    ``(II) Rent limitation.--The 
                                Secretary may not approve an exception 
                                above the higher of 110 percent of the 
                                applicable area rental or 120 percent 
                                of the rent for comparable unassisted 
                                properties in the area. The limitations 
                                of this subclause shall not apply if 
                                the property was, prior to conversion 
                                of assistance, subject to a rental 
                                assistance contract that has been 
                                renewed under section 515 of the 
                                Multifamily Assisted Housing Reform and 
                                Affordability Act of 1997 (42 U.S.C. 
                                1437f note) with rents established 
                                under section 514(g)(2) of such Act 
                                that, at the time of conversion of 
                                assistance, exceed the limit 
                                established in the preceding sentence.
                                    ``(III) Consideration of other 
                                funds.--In determining whether to allow 
                                an exception rent, the Secretary shall 
                                consider the availability of unexpended 
                                funds that may be used to reduce or 
                                eliminate the need for an exception 
                                rent.
                            ``(iii) Units exempt from rent control.--If 
                        a unit for which a property-based contract is 
                        established is exempt from local rent control 
                        provisions during the term of such contract, 
                        the rent for that unit shall be reasonable in 
                        comparison with other units in the area that 
                        are exempt from local rent control provisions.
                    ``(B) Rent adjustments.--A property-based contract 
                pursuant to this subsection shall provide for annual 
                rent adjustments using one or more indices established 
                by the Secretary (which shall not result in a negative 
                adjustment) by notice published in the Federal Register 
                to reflect the change in the rents and costs of 
                multifamily rental housing, except that--
                            ``(i) the contract may provide that the 
                        maximum rent permitted for a unit shall not be 
                        less than the initial rent for the unit under 
                        the initial property-based contract under this 
                        subsection;
                            ``(ii) an owner may request a rent increase 
                        above the index based on significant 
                        improvements to the property, subject to 
                        limitations in subparagraph (A) and any 
                        additional standards issued by the Secretary; 
                        and
                            ``(iii) the Secretary may at any time, and 
                        at least every 5 years, compare the maximum 
                        rent to the level of rents charged for 
                        comparable units in the private, unassisted 
                        local market, and shall, if appropriate, 
                        decrease the contract rent, subject to the 
                        limitations in clause (i) or any exception 
                        approved by the Secretary, and may, if 
                        appropriate, increase the contract rent, 
                        subject to the limitations in subparagraph (A) 
                        and clause (ii) of this subparagraph.
                    ``(C) Tax credit or home projects.--In the case of 
                a unit receiving tax credits pursuant to section 42 of 
                the Internal Revenue Code of 1986 or for which 
                assistance is provided under subtitle A of title II of 
                the Cranston-Gonzalez National Affordable Housing Act 
                (42 U.S.C. 12741 et seq.) for which a property-based 
                contract is established under this subsection, rent 
                reasonableness shall be determined as otherwise 
                provided by this paragraph, except that comparison with 
                rents for units in the private, unassisted local market 
                shall not be required if the rent is equal to or less 
                than the rent for other comparable units receiving such 
                tax credits or assistance in the project that are not 
                occupied by families assisted under a property-based 
                contract.
            ``(4) Tenant contribution.--A family shall pay as rent for 
        a unit assisted under this subsection the amount determined in 
        accordance with section 3 (42 U.S.C. 1437a).
            ``(5) Eligible tenants.--To be eligible to be a tenant for 
        a unit assisted under this subsection, a family shall, at the 
        time a family initially receives assistance under this 
        subsection, be--
                    ``(A) a family lawfully residing in a unit at the 
                time of a conversion of assistance under subsection 
                (l); or
                    ``(B) a low-income family meeting eligibility 
                criteria specified by the Secretary that fulfill the 
                requirements under paragraphs (3) and (4) of section 
                16(c) (42 U.S.C. 1437n(c)).
            ``(6) Selection of tenants.--
                    ``(A) Waiting lists.--Subject to such conditions as 
                may be established by the Secretary, selection of 
                tenants for units assisted under a property-based 
                contract under this subsection shall be subject to the 
                following:
                            ``(i) Required use.--The owner shall select 
                        families for units assisted under such a 
                        contract from a waiting list for applicants for 
                        housing assistance under this subsection. If a 
                        property has rental assistance that has been 
                        converted under subsection (l), any waiting 
                        list for the property prior to conversion shall 
                        continue to apply after the conversion.
                            ``(ii) Delay due to resident choice 
                        option.--Notwithstanding clause (i), the 
                        Secretary may establish policies to permit 
                        applicants on a tenant-based voucher waiting 
                        list whose receipt of assistance is delayed due 
                        to the resident choice option under subsection 
                        (m)(1) to exercise the option to be placed on a 
                        waiting list for applicants for housing 
                        assistance under this subsection or subsection 
                        (o)(13).
                            ``(iii) Maintenance of waiting list.--An 
                        owner may maintain a waiting list or may use a 
                        waiting list maintained by a public housing 
                        agency on such terms and conditions as agreed 
                        to by the owner and public housing agency and 
                        permitted by the Secretary.
                            ``(iv) Single and site-based waiting 
                        lists.--An owner of more than one property, or 
                        a public housing agency administering waiting 
                        lists for properties assisted under this 
                        subsection, may maintain a single waiting list 
                        for all or some of such properties or may 
                        establish a site-based waiting list for 
                        individual properties. An owner or public 
                        housing agency shall disclose to each applicant 
                        all other options in the selection of a 
                        property in which to reside that are provided 
                        by the owner or administered by the public 
                        housing agency and are available to the 
                        applicant. If a public housing agency 
                        administers site-based waiting lists for more 
                        than one property assisted under this 
                        subsection, an applicant may apply in a single 
                        location to all site-based waiting lists 
                        maintained by such an entity.
                            ``(v) Preferences.--The owner or the public 
                        housing agency administering the waiting list 
                        for the property may establish preferences or 
                        criteria for tenant selection for a unit that 
                        are consistent with the affordable housing 
                        needs established for the area in which a 
                        property is located in the consolidated plan 
                        prepared pursuant to part 91 of the Secretary's 
                        regulations (24 C.F.R. part 91), or successor 
                        regulations.
                            ``(vi) Outreach.--The owner or the public 
                        housing agency administering the waiting list 
                        for the property shall adopt affirmative 
                        marketing procedures and undertake affirmative 
                        marketing activities. Such special outreach 
                        efforts shall be targeted to those who are 
                        least likely to apply for the housing to ensure 
                        that all persons, regardless of their race, 
                        color, national origin, religion, sex, 
                        disability, or familial status, are aware of 
                        the housing opportunities in each of the 
                        owner's properties with rental assistance.
                            ``(vii) Compliance with civil rights 
                        laws.--All procedures, preferences, and 
                        criteria for waiting lists shall comply with 
                        title VI of the Civil Rights Act of 1964 (42 
                        U.S.C. 2000d et seq.), the Fair Housing Act (42 
                        U.S.C. 3601 et seq.), section 504 of the 
                        Rehabilitation Act of 1973 (29 U.S.C. 794), and 
                        other applicable civil rights laws.
                    ``(B) Selection by owner.--Each property-based 
                contract entered into by the Secretary and an owner 
                shall provide that the screening and selection of 
                families shall be the function of the owner.
                    ``(C) Prevention of displacement.--Any family who 
                resides in a unit proposed to be assisted under this 
                subsection, or in a unit to be replaced by a unit 
                proposed to be assisted under this subsection, shall be 
                given an absolute preference for selection for 
                placement in the unit proposed to be assisted, if the 
                family is otherwise eligible for assistance under this 
                subsection.
            ``(7) Leases and tenancy.--Each property-based contract for 
        a property converted under subsection (l) shall provide that 
        the lease between the tenant and the owner--
                    ``(A) shall be for an initial term of 1 year, 
                automatically renewable at the expiration of each term, 
                and that the owner may terminate a tenancy only for 
                serious or repeated violations of the terms and 
                conditions of the lease or for a violation of 
                applicable law;
                    ``(B) shall comply with subsection (c)(9); and
                    ``(C) shall contain provisions required by the 
                Secretary and State and local law.
            ``(8) Vacancy payments.--
                    ``(A) In general.--For each property with 
                assistance converted under this subsection, the owner 
                may receive, as permitted by the Secretary, for a 
                reasonable period not exceeding 60 days, vacancy 
                payments for a unit that becomes vacant, but only if--
                            ``(i) the vacancy was not the fault of the 
                        owner of the dwelling unit; and
                            ``(ii) the owner has taken and continues to 
                        take every reasonable action to minimize the 
                        likelihood and extent of any such vacancy.
                    ``(B) Limitation.--Rental assistance may not be 
                provided for a vacant unit after the expiration of the 
                60-day period specified in subparagraph (A).
                    ``(C) Prohibition of double compensation for 
                vacancies.--If the owner collects payments for 
                vacancies from other sources, the owner shall not be 
                entitled to collect vacancy payments to the extent 
                these collections from other sources plus the vacancy 
                payment exceed contract rent.
            ``(9) Physical inspections of properties.--
                    ``(A) Requirement.--The Secretary shall, for each 
                property receiving assistance under this subsection, 
                provide for inspections during the term of the 
                property-based contract to determine whether the 
                property is maintained in accordance with the physical 
                condition standards established or provided by the 
                Secretary under subsection (m)(2)(E). The schedule of 
                the inspections shall be determined by the Secretary.
                    ``(B) Failure of inspection.--The Secretary may 
                take such actions as provided by law or contract to 
                enforce and maintain compliance with applicable 
                inspection standards.
                    ``(C) Records.--The owner shall retain the records 
                of the inspection for a reasonable time and shall make 
                the records available upon request to the Secretary, 
                the Inspector General of the Department of Housing and 
                Urban Development, and any auditor conducting an audit 
                under section 5(h) (42. U.S.C. 1437c(h)).
                    ``(D) State and local inspections.--For purposes of 
                meeting the requirement under subparagraph (A), the 
                Secretary may accept inspection results from 
                inspections conducted by a State or locality or a 
                program funded or administered by a State or locality 
                if such inspection employs standards equivalent to or 
                exceeding the physical condition standards established 
                by the Secretary. Such reserve requirements shall vary 
                based on the anticipated physical needs of the 
                property.
            ``(10) Use of rental amounts.--
                    ``(A) Reserve requirements.--An owner of a property 
                with rental assistance under this subsection shall 
                comply with operating and replacement reserve 
                requirements established by the Secretary.
                    ``(B) Cash flow limitation.--The Secretary may 
                establish standards for the cash flow of a property, 
                including standards applicable upon suspension, 
                expiration, or termination of rental assistance, with 
                assistance under this subsection. Any access to cash 
                flow shall not be limited based on the tax status of 
                the property owner or project sponsor or whether the 
                property was formerly assisted under section 9.
            ``(11) Expiration or termination of contract or use 
        agreement.--
                    ``(A) Voucher assistance.--In the case of a 
                property-based contract that is no longer in effect and 
                the property is no longer subject to a use agreement, 
                in whole or in part, to the extent that amounts are 
                provided in advance in appropriation Acts, upon the 
                date of expiration of such contract or use agreement, 
                whichever is later, the Secretary shall make voucher 
                assistance under subsection (t), or in the case of a 
                contract that expires or is terminated because it does 
                not meet the requirements of paragraph (2)(B)(ii)(II) 
                of this subsection, voucher assistance under subsection 
                (o), available on behalf of each low-income family who, 
                upon the date of such expiration, is residing in an 
                assisted dwelling unit in the property, and shall, 
                subject to the availability of appropriations, provide 
                replacement vouchers under subsection (o) for any 
                vacant units subject to the contract at the time of 
                expiration or termination.
                    ``(B) Transfer of assistance.--In lieu of providing 
                vouchers pursuant to subparagraph (A) when a contract 
                expires or is terminated, the Secretary may, following 
                notice and consultation by the Secretary with tenants 
                as provided in subsection (l)(3)(E)(i), transfer 
                assistance from a contract that is not renewed in whole 
                or in part to a new contract with another property or 
                properties, and in the case of a property converted 
                from assistance under section 9, shall transfer such 
                assistance to a new contract with another property or 
                properties with priority for a public entity owner, 
                followed by a priority for a non-profit entity owner.
            ``(12) Financial reviews.--The owner of a property assisted 
        under this subsection shall provide the Secretary an annual 
        financial report of the property, prepared and submitted in 
        accordance with the requirements of the Secretary, which may 
        include certification by the owner, a certified public 
        accountant, or other person acceptable to the Secretary.''.

SEC. 6. PROJECT-BASED VOUCHER CONTRACTS.

    Paragraph (13) of section 8(o) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(o)(13)) is amended--
            (1) by striking ``structure'' each place such term appears 
        and inserting ``project'';
            (2) by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) Percentage limitation.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), not more than 20 percent of the 
                        dwelling units assisted by the agency under 
                        this subsection may be assisted with project-
                        based assistance under this paragraph.
                            ``(ii) Exception.--Up to an additional 5 
                        percent of the dwelling units assisted by an 
                        agency under this subsection may be assisted 
                        with project-based assistance under this 
                        paragraph to provide dwelling units that house 
                        individuals and families that meet the 
                        definition of homeless under section 103 of the 
                        McKinney-Vento Homeless Assistance Act (42 
                        U.S.C. 11302), that provide supportive housing 
                        to elderly persons or persons with 
                        disabilities, or that are located in areas 
                        where vouchers under this subsection are 
                        difficult to use, as specified in subparagraph 
                        (D)(ii)(II). The Secretary may, by regulation, 
                        establish additional categories for the 
                        exception under this clause.
                            ``(iii) Exception for projects converted 
                        under subsection (l).--An agency administering 
                        project-based assistance under this paragraph 
                        pursuant to a conversion under subsection (l) 
                        may attach project-based assistance under this 
                        paragraph to up to 40 percent of the dwelling 
                        units assisted by the agency under this 
                        subsection, but in no event may an agency 
                        attach project-based assistance through means 
                        other than conversion to more than the share of 
                        units permitted by clauses (i) and (ii) of this 
                        subparagraph.'';
            (3) by striking subparagraph (D) and inserting the 
        following new subparagraph:
                    ``(D) Income mixing requirement.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), of the dwelling units in any 
                        project, not more than the greater of 25 units 
                        or 25 percent of the units may be assisted 
                        under a housing assistance payment contract for 
                        project-based assistance pursuant to this 
                        paragraph. For purposes of this subparagraph, 
                        the term `project' means a single building, 
                        multiple contiguous buildings, or multiple 
                        buildings on contiguous parcels of land.
                            ``(ii) Exceptions.--
                                    ``(I) Certain households.--The 
                                limitation under clause (i) shall not 
                                apply to dwelling units assisted under 
                                a contract that are exclusively made 
                                available to elderly families or to 
                                households eligible for comprehensive 
                                social services that are made available 
                                to residents of the property. The 
                                Secretary may establish additional 
                                requirements for the monitoring and 
                                oversight of projects in which more 
                                than 40 percent of the dwelling units 
                                are assisted.
                                    ``(II) Certain areas.--With respect 
                                to areas in which tenant-based vouchers 
                                are difficult to use, as determined by 
                                the Secretary, and with respect to 
                                census tracts with a poverty rate of 20 
                                percent or less, clause (i) shall be 
                                applied by substituting `40 percent' 
                                for `25 percent' and the Secretary may, 
                                by regulation, establish additional 
                                conditions.
                                    ``(III) Exception for projects 
                                converted under subsection (l).--In the 
                                case of a project assisted under this 
                                paragraph pursuant to a conversion 
                                under subsection (l), the exception in 
                                subclause (I) shall apply to not more 
                                than 40 percent of the dwelling 
                                units.'';
            (4) by striking subparagraph (F) and inserting the 
        following new subparagraph:
                    ``(F) Contract term.--A housing assistance payment 
                contract pursuant to this paragraph between a public 
                housing agency and the owner of a project may have a 
                term of up to 20 years, subject to--
                            ``(i) the availability of sufficient 
                        appropriated funds for the purpose of renewing 
                        expiring contracts for assistance payments, as 
                        provided in appropriations Acts and in the 
                        agency's annual contributions contract with the 
                        Secretary: Provided, That in the event of 
                        insufficient appropriated funds, payments due 
                        under contracts under this paragraph shall take 
                        priority if other cost-saving measures that do 
                        not require the termination of an existing 
                        contract are available to the agency; and
                            ``(ii) compliance with the inspection 
                        requirements under paragraph (8), except that 
                        the Secretary may modify the application of 
                        paragraph (8) to properties assisted under this 
                        paragraph, through actions including permitting 
                        inspection of a sample of dwelling units in a 
                        project, avoiding duplicative requirements, and 
                        incentivizing high performance.
                The contract may specify additional conditions, 
                including with respect to continuation, termination, or 
                expiration.'';
            (5) in subparagraph (G)--
                    (A) in the second sentence, by striking ``15'' and 
                inserting ``20'';
                    (B) in the last sentence, by inserting 
                ``extension'' after ``enter into such a contract'';
                    (C) by striking the ``(G) Extension of contract 
                term.--A public housing agency may enter into a 
                contract'' and inserting the following:
                    ``(G) Extension of contract term.--
                            ``(i) In general.--A public housing agency 
                        may enter into a contract extension''; and
                    (D) by adding at the end the following new clause:
                            ``(ii) Converted properties.--In the case 
                        of projects converted from other forms of 
                        rental assistance pursuant to subsection (l), a 
                        public housing agency may decline to offer to 
                        extend the term of the underlying housing 
                        assistance payment contract for the maximum 
                        period permitted under clause (i) of this 
                        subparagraph only with the advance approval of 
                        the Secretary. The Secretary may grant approval 
                        to not extend a contract only--
                                    ``(I) if the property is obsolete 
                                as to physical condition, location, or 
                                other factors which cannot be remedied 
                                with available Federal, State, and 
                                local resources, making it unsuitable 
                                as low-income housing;
                                    ``(II) with an owner that is 
                                debarred or suspended, or found in to 
                                be in serious and repeated 
                                noncompliance with applicable 
                                requirements established by the 
                                Secretary; or
                                    ``(III) if no funding is available 
                                that can be used for such 
                                extensions.'';
            (6) in subparagraph (H)--
                    (A) in the first sentence, by striking ``(or any 
                exception payment standard approved by the Secretary 
                pursuant to paragraph (1)(D)),'' and inserting ``(or 
                any exception payment standard approved by the 
                Secretary for the area pursuant to paragraph (1)(D) or 
                for the project),'';
                    (B) by striking ``(H) Rent calculation.--A 
                housing'' and inserting the following:
                    ``(H) Rent calculation.--
                            ``(i) In general.--A housing''; and
                    (C) by adding at the end the following new clause:
                            ``(ii) Tenants over-income for continuing 
                        subsidy.--Subsection (l)(11) shall apply to all 
                        contracts under this paragraph, except that the 
                        public housing agency and the owner may agree 
                        to retain the number of dwelling units subject 
                        to a contract for assistance under this 
                        subparagraph, subject to policies issued by the 
                        Secretary.'';
            (7) by striking subparagraph (I) and inserting the 
        following new subparagraph:
                    ``(I) Rent adjustments.--
                            ``(i) In general.--A housing assistance 
                        payment contract pursuant to this paragraph 
                        shall provide for reasonable rent adjustments 
                        if requested by the owner, except that--
                                    ``(I) the adjusted rent for any 
                                unit assisted shall be reasonable in 
                                comparison with rents charged for 
                                comparable dwelling units in the 
                                private, unassisted, local market and 
                                may not exceed the maximum rent 
                                permitted under subparagraph (H); and
                                    ``(II) the contract may provide 
                                that the maximum rent permitted for a 
                                dwelling unit shall not be less than 
                                the initial rent for the dwelling unit 
                                under the initial housing assistance 
                                payments contract covering the unit.
                            ``(ii) Scheduled rent adjustments.--A 
                        housing assistance payment contract pursuant to 
                        this paragraph may, at the discretion of the 
                        Secretary, provide for annual rent adjustments 
                        using an index determined by the Secretary for 
                        adjustment of contracts under subsection (n). 
                        Such a contract shall provide that--
                                    ``(I) an owner may request a rent 
                                increase above the index based on 
                                significant improvements to the 
                                project, subject to limitations in 
                                subparagraph (H) of this paragraph and 
                                any additional standards issued by the 
                                Secretary; and
                                    ``(II) the public housing agency 
                                shall, at least every 5 years, compare 
                                the maximum rent to the level of rents 
                                charged for comparable dwelling units 
                                in the private, unassisted local 
                                market, and shall, if appropriate, 
                                decrease the contract rent, subject to 
                                the limitations in clause (i) or any 
                                exception approved by the Secretary, 
                                and may, if appropriate, increase the 
                                contract rent, subject to the 
                                limitations in subparagraph (H).'';
            (8) in subparagraph (J)--
                    (A) by striking the last two sentences;
                    (B) by inserting after the third sentence the 
                following new sentence: ``Any family who resides in a 
                dwelling unit proposed to be assisted under this 
                paragraph, or in a unit to be replaced by a unit 
                proposed to be assisted under this paragraph, shall be 
                given an absolute preference for selection for 
                placement in the proposed unit, if the family is 
                otherwise eligible for assistance under this 
                subsection.'';
                    (C) by striking ``(J) Tenant selection.--A public 
                housing agency'' and inserting the following:
                    ``(J) Tenant selection.--
                            ``(i) In general.--A public housing 
                        agency''; and
                    (D) by adding at the end the following new clause:
                            ``(ii) Site-based waiting lists.--A public 
                        housing agency may establish and utilize 
                        procedures for maintaining site-based waiting 
                        lists under which applicants may apply directly 
                        at, or otherwise designate to the public 
                        housing agency, the project or projects in 
                        which they seek to reside, except that all 
                        eligible applicants on the waiting list of an 
                        agency for assistance under this subsection 
                        shall be permitted to place their names on such 
                        separate lists, subject to policies and 
                        procedures specified by the Secretary. All such 
                        procedures shall comply with title VI of the 
                        Civil Rights Act of 1964 (42 U.S.C. 42 U.S.C. 
                        2000d et seq.), the Fair Housing Act (42 U.S.C. 
                        3601 et seq.), section 504 of the 
                        Rehabilitation Act of 1973 (29 U.S.C. 794), and 
                        other applicable civil rights laws. The owner 
                        or manager of a project assisted under this 
                        paragraph shall not admit any family to a 
                        dwelling unit assisted under a contract 
                        pursuant to this paragraph other than a family 
                        referred by the public housing agency from its 
                        waiting list, or a family on a site-based 
                        waiting list that complies with the 
                        requirements of this subparagraph. A public 
                        housing agency shall disclose to each applicant 
                        all other options in the selection of a project 
                        in which to reside that are provided by the 
                        public housing agency and are available to the 
                        applicant.'';
            (9) in subparagraph (K)(ii) by striking ``the owner has 
        notified the agency of the vacancy'' and inserting ``the unit 
        has become vacant''; and
            (10) by adding at the end the following new subparagraphs:
                    ``(N) Leases and tenancy.--Notwithstanding any 
                other provision of law, for the term of the contract 
                under this paragraph, the owner may terminate a tenancy 
                only for serious or repeated violations of the terms 
                and conditions of the lease or for violation of 
                applicable law.
                    ``(O) Properties in foreclosure or bankruptcy.--
                Notwithstanding any provision of Federal or State law, 
                for all properties assisted under this paragraph on or 
                after May 20, 2009, the provision of subsection 
                (l)(18)(B) shall apply.
                    ``(P) Conversion from project-based voucher 
                contract to property-based contract.--A property 
                assisted under this paragraph (in this subparagraph 
                referred to as a `project-based voucher contract') may 
                convert to a property-based housing assistance payment 
                contract under subsection (n) (in this subparagraph 
                referred to as a `property-based contract') at the 
                request of the owner of the property and at the 
                discretion of, and upon approval by, the Secretary if 
                the property meets the applicable requirements under 
                subsection (n), subject to the following requirements:
                            ``(i) Contracts resulting from 
                        conversion.--If the project-based voucher 
                        contract resulted from a conversion under 
                        subsection (l), the Secretary, upon approval of 
                        the request to convert to a property-based 
                        contract, shall reduce the annual contributions 
                        contract under this subsection of the public 
                        housing agency administering the project-based 
                        voucher contract by the appropriate number of 
                        units and related funding, and transfer the 
                        funding to the entity administering the 
                        project-based contract.
                            ``(ii) Contracts not resulting from 
                        conversion.--If the project-based voucher 
                        contract did not result from a conversion under 
                        subsection (l), and the public housing agency 
                        has not breached its contractual obligations 
                        concerning the property, the Secretary may 
                        approve the request only with the agreement of 
                        the public housing agency administering the 
                        project-based voucher contract to the reduction 
                        of its annual contributions contract under this 
                        subsection by the appropriate number of units 
                        and related funding.
                    ``(Q) Conversion from tenant-based vouchers to 
                property-based contract.--A property with units 
                assisted under this subsection or subsection (t) may 
                convert to a property-based housing assistance payment 
                contract under subsection (n) (in this subparagraph 
                referred to as a `property-based contract'), rather 
                than to assistance under this paragraph, at the request 
                of the owner of the property and agreement of the 
                public housing agency and at the discretion of, and 
                upon approval by, the Secretary if the property meets 
                the applicable requirements under subsection (n), 
                subject to the following requirements:
                            ``(i) Reduction of annual contributions 
                        contract.--The Secretary, upon approval of the 
                        request to convert to a property-based 
                        contract, shall reduce the annual contributions 
                        contract of the public housing agency 
                        administering the tenant-based vouchers by the 
                        appropriate number of units and related 
                        funding, and transfer the funding to the entity 
                        administering the project-based contract.
                            ``(ii) Resident choice.--Tenants in units 
                        with assistance converted under this 
                        subparagraph shall be provided with a resident 
                        choice option as provided for in subsection 
                        (m)(1).
                            ``(iii) Treatment of limitation on tenant-
                        based vouchers.--The percentage limitation on a 
                        public housing agency's tenant-based vouchers 
                        converted to property-based assistance under 
                        subparagraph (B)(iii) shall include vouchers 
                        converted under this subparagraph.
                            ``(iv) Substantial amendment.--Conversion 
                        under this subparagraph shall be considered a 
                        substantial amendment to the public housing 
                        agency's plan under section 5A(g).
                            ``(v) Consultation with residents.--The 
                        owner of the property shall comply with the 
                        requirements established by the Secretary 
                        pursuant to subsection (l)(2)(E)(i) for 
                        consultation with residents about the owner's 
                        intention to apply for conversion under this 
                        subparagraph.''.

SEC. 7. CONFORMING AMENDMENTS.

    (a) Definition.--Subparagraph (B) of section 3(b)(6) of the United 
States Housing Act of 1937 (42 U.S.C. 1437a(b)(6)(B)) is amended--
            (1) by striking ``tenant-based'' each place such term 
        appears;
            (2) in the subparagraph heading, by striking ``program'' 
        and inserting ``programs'';
            (3) and in the matter preceding clause (i), by striking 
        ``program'' and inserting ``programs''; and
            (4) by striking clauses (i) and (ii) and inserting the 
        following:
                            ``(i) any State, county, municipality, or 
                        other governmental entity or public body, or an 
                        agency or instrumentality of such an entity, 
                        and a non-profit entity, that has the 
                        capability to administer a program for 
                        assistance under such section in an efficient 
                        manner and, notwithstanding any provision of 
                        State or local law, without regard to any 
                        otherwise applicable limitations on its area of 
                        operation, as determined by the Secretary;
                            ``(ii) a consortium of public housing 
                        agencies, which shall have a legal entity or 
                        entities authorized to act as the legal 
                        representative of the consortium members; 
                        and''.
    (b) Administrative Fee.--Paragraph (1) of section 8(q) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(q)(1)) is amended by 
adding at the end the following new subparagraph:
                    ``(F) Conversion rental assistance administrator.--
                The Secretary may establish and allocate a fee, as 
                determined by the Secretary, for the administration of 
                the rental assistance for properties converted to a 
                project-based voucher contract under subsection (l).''.
    (c) Renewal of Mainstream Tenant-Based Rental Assistance Program 
Through Section 8 Voucher Program.--
            (1) Rental assistance.--Subsection (d) of section 811 of 
        the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 8013(d)) is amended by striking paragraph (4) and 
        inserting the following new paragraph:
            ``(4) Tenant-based rental assistance.--
                    ``(A) In general.--Tenant-based rental assistance 
                provided under subsection (b)(1) shall be provided 
                under section 8(o) of the United States Housing Act of 
                1937 (42 U.S.C. 1437f(o)).
                    ``(B) Conversion of existing assistance.--There is 
                authorized to be appropriated for tenant-based rental 
                assistance under section 8(o) of the United States 
                Housing Act of 1937 (42 U.S.C. 1437f(o)) for persons 
                with disabilities, an amount not less than the amount 
                necessary to convert the number of authorized vouchers 
                and funding under an annual contributions contract in 
                effect on the date of enactment of the Rental Housing 
                Revitalization Act of 2010. Such converted vouchers may 
                be administered by the entity administering the 
                vouchers prior to conversion. Such entities shall be 
                considered a public housing agency authorized to engage 
                in the operation of tenant-based assistance under such 
                section 8(o).
                    ``(C) Requirements upon turnover.--The Secretary 
                shall develop and issue, to public housing agencies 
                that receive voucher assistance made available under 
                this subsection and to public housing agencies that 
                received voucher assistance under section 8(o) of the 
                United States Housing Act of 1937 (42 U.S.C. 1437f(o)) 
                for non-elderly disabled families pursuant to 
                appropriation Acts for fiscal years 1997 through 2002 
                or any other subsequent appropriations for incremental 
                vouchers for non-elderly disabled families, guidance to 
                ensure that such vouchers continue to be provided upon 
                turnover to qualified persons with disabilities or to 
                qualified non-elderly disabled families, 
                respectively.''.
            (2) Unexpended amounts.--Unexpended amounts made available 
        in prior year appropriations Acts for the Department of Housing 
        and Urban Development under the heading ``Housing for Persons 
        with Disabilities'' or the heading ``Housing for Special 
        Populations'' for contracts under section 811 of the Cranston-
        Gonzalez National Affordable Housing Act (42 U.S.C. 8013) shall 
        be available until expended for renewal of vouchers converted 
        under section 811(d)(4)(B) of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 8013(d)(4)(B)), as amended by 
        paragraph (1) of this subsection, notwithstanding the period of 
        availability for such amounts established in such prior 
        appropriations Acts. The Secretary may reallocate such amounts 
        to administering entities for the purpose of establishing a 
        reserve in an amount determined by the Secretary up to the 
        amount as may be otherwise established by law.
            (3) Technical assistance.--The Secretary of Housing and 
        Urban Development may, to the extent amounts are made available 
        in appropriations Acts, provide technical assistance to public 
        housing agencies and other administering entities to facilitate 
        using vouchers to provide permanent supportive housing for 
        persons with disabilities, to assist States to reduce reliance 
        on segregated restrictive settings for people with disabilities 
        to meet community care requirements, to end chronic 
        homelessness (as ``chronically homeless'' is defined in section 
        401 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11361)), and for other related purposes.
    (d) Income Eligibility.--Paragraph (6) of section 16(c) (42 U.S.C. 
1437n(c)(6)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) The property-based contract program under 
                section 8(n).''.
    (e) Enforcement Provisions.--Section 29 of the United States 
Housing Act of 1937 (42 U.S.C. 1437z-1) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by striking 
                        ``and'' after the semicolon;
                            (ii) in subparagraph (C) by striking ``that 
                        has an identity of interest with the owner or 
                        the general partner of a partnership owner of 
                        the property;'' and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(D) any member of a limited liability company 
                that is the owner of such property or is the general 
                partner of a limited partnership owner or is a partner 
                of a general partnership owner.'';
                    (B) in paragraph (2)--
                            (i) in the matter preceding subparagraph 
                        (A) by inserting ``or use agreement,'' before 
                        the comma;
                            (ii) in subparagraph (A), by striking 
                        ``or'' at the end;
                            (iii) in subparagraph (B), by striking the 
                        period at the end and inserting a semicolon; 
                        and
                            (iv) by adding at the end the following new 
                        subparagraphs:
                    ``(C) failure of an owner of a property receiving 
                project-based assistance under section 8 to submit an 
                annual audited financial statement to the Secretary in 
                the form and manner established by the Secretary;
                    ``(D) failure of an owner of a property receiving 
                project-based assistance under section 8 to provide 
                management for the property that is acceptable to the 
                Secretary pursuant to regulations and requirements of 
                the Secretary, including--
                            ``(i) proper fiscal management;
                            ``(ii) proper handling of vacancies and 
                        tenanting in accordance with regulations set 
                        forth by the Secretary;
                            ``(iii) appropriate handling of rent 
                        collection;
                            ``(iv) proper property maintenance; and
                            ``(v) compliance with regulations set forth 
                        by the Secretary on tenant organization;
                    ``(E) failure to provide access to the books, 
                records, and accounts related to the operations of the 
                project; or
                    ``(F) failure to permit physical access to the 
                property or any unit of the property.''; and
                    (C) in paragraph (3), by striking ``$25,000'' and 
                inserting ``$37,500''; and
            (2) in subsection (c)(1)--
                    (A) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D), respectively; and
                    (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) shall provide the Secretary the discretion to 
                investigate any facts, conditions, practices, or 
                matters that may be deemed necessary or proper to aid 
                in the enforcement of the provisions of this Act; to 
                aid in the investigations, the Secretary may hold such 
                hearings, administer such oaths, and require by 
                subpoena the attendance and testimony of such witnesses 
                and production of such documents as the Secretary deems 
                advisable, and such subpoena authority shall include 
                the authority to require the attendance of any witness 
                and the production of documentary evidence from any 
                place in the United States at any designated place of 
                hearing; any district court of the United States within 
                the jurisdiction of which an inquiry is carried on may, 
                in the case of contumacy or refusal to obey a subpoena 
                of the Secretary issued under this section, issue an 
                order requiring compliance therewith; any failure to 
                obey such order of the court may be punished by such 
                court as a contempt thereof;''; and
            (3) in subsection (g), by striking paragraph (1) and 
        inserting the following new paragraph:
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary shall apply civil money penalties collected 
        under this section to the Rental Assistance Conversion Trust 
        Fund, established under section 8(l)(21), or shall authorize 
        the owner of the property or project at issue in the penalty 
        action to use the penalty funds, in accordance with the 
        requirements of the Secretary, for the improvement of that 
        property or project.''.
    (f) Amendments to Section 3 of the Housing and Urban Development 
Act of 1968.--Subsection (c) of section 3 of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701u(c)) is amended--
            (1) in paragraph (1)--
                    (A) by striking the paragraph designation and all 
                that follows through ``(A) In general.--The Secretary'' 
                and inserting the following:
            ``(1) Public and indian housing programs.--The Secretary''; 
        and
                    (B) by striking subparagraph (B);
            (2) in paragraph (2)--
                    (A) by striking the paragraph designation and all 
                that follows through ``(A) In general.--In other'' and 
                inserting the following:
            ``(1) Other programs.--In other''; and
                    (B) by striking subparagraph (B); and
            (3) by adding at the end the following new paragraphs:
            ``(3) Priority.--The efforts required under paragraphs (1) 
        and (2) of this subsection shall be directed in the following 
        order of priority:
                    ``(A) First, to recipients of Federal rental 
                assistance, including public housing residents, 
                residents of other federally subsidized properties, or 
                participants in the program under section 8(o) of the 
                U.S. Housing Act in the service area and metropolitan 
                area (or non-metropolitan county).
                    ``(B) Next, to low- and very low-income residents 
                in the service area and metropolitan area (or non-
                metropolitan county).
                    ``(C) Next, to other residents, as designated by 
                the Secretary by regulation.
            ``(4) Scope.--For properties with rental assistance 
        converted under section 8(l) of the United States Housing Act 
        of 1937, the requirements of paragraphs (1)(A) and (2)(A) of 
        this subsection, as in effect immediately before the enactment 
        of the Rental Housing Revitalization Act of 2010, shall 
        continue to apply.''.
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