I 

108TH CONGRESS 

2D SESSION H. R. 4679 

To authorize the Secretary of Housing and Urban Development to provide 

assistance for privately owned low- and moderate-income housing with 

expiring Federal subsidies to prevent displacement of low- and moderateincome tenants, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 24, 2004 

Mr. FRANK of Massachusetts (for himself, Mr. KANJORSKI, Ms. WATERS, Mr. 

SANDERS, Mrs. MALONEY, Mr. GUTIERREZ, Ms. VELA ́ZQUEZ, Mr. WATT, 

Ms. CARSON of Indiana, Ms. LEE, Mr. CAPUANO, Mr. CROWLEY, Mr. 

CLAY, Mr. ISRAEL, Mrs. MCCARTHY of New York, Mr. BACA, Mr. 

LYNCH, Mr. EMANUEL, Mr. SCOTT of Georgia, and Mr. DAVIS of Alabama) 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 provide assistance for privately owned low- and 

moderate-income housing with expiring Federal subsidies 

to prevent displacement of low- and moderate-income 

tenants, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Displacement Preven5 tion Act of 2004’’. 
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1 SEC. 2. FINDINGS AND PURPOSE. 

2 (a) FINDINGS.—The Congress finds that— 

3 (1) there exists throughout the United States a 

4 need for decent, safe, and affordable housing; 

5 (2) the General Accounting Office (GAO) esti6 mates that— 

7 (A) there are 11,267 multifamily prop8 erties, serving approximately 914,441 house9 holds nationwide, that are financed with mort10 gages subsidized by the Department of Housing 

11 and Urban Development; 

12 (B) 1,835 of these properties, which con13 tain over 193,000 subsidized units, are financed 

14 with mortgages insured under the below-market 

15 interest rate program under section 221(d)(3) 

16 of the National Housing Act or the interest re17 duction payments program under section 236 of 

18 such Act, and these properties will be lost by 

19 2013 when the mortgages mature and the mort20 gage subsidies and low-income affordability re21 strictions related to those subsidies terminate; 

22 and 

23 (C) as a result, owners of properties with24 out rental assistance will be permitted to raise 

25 the rents in such properties to market levels, 

26 putting at risk approximately 200,000 individ-
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1 uals in over 101,000 units in properties having 

2 no other subsidy attached; 

3 (3) the GAO concludes that neither the Depart4 ment of Housing and Urban Development nor State 

5 or local agencies offer incentives to owners to keep 

6 properties affordable upon mortgage maturity; 

7 (4) the GAO also concludes that no incentives 

8 exist, such as enhanced vouchers, to protect tenants 

9 in units without rental assistance when HUD-sub10 sidized mortgages mature; 

11 (5) the GAO further concludes that the Depart12 ment of Housing and Urban Development does not 

13 require owners to provide written notice to tenants 

14 that the low-income affordability restrictions will ter15 minate when the HUD-subsidized mortgages ma16 ture; 

17 (6) when faced with similar crises in the past, 

18 the Congress acted to provide incentives for owners 

19 to continue the low-income affordability restrictions, 

20 thus ensuring that these properties remain afford21 able to low- and moderate-income households; 

22 (7) the Congress also acted to provide enhanced 

23 vouchers to tenants living in multifamily units re24 ceiving assistance under Federal low-income housing 

25 programs in cases in which the owner prepaid the 
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1 HUD-subsidized mortgage or opted out of the rental 

2 assistance contract; and 

3 (8) the Congress also required owners to pro4 vide tenants with written notice of their intent to 

5 prepay their HUD-subsidized mortgage or to opt-out 

6 of their section 8 rental assistance contract. 

7 (b) PURPOSE.—It is the purpose of this Act— 

8 (1) to promote the preservation of affordable 

9 housing units by providing assistance to owners to 

10 ensure that these dwelling units remain affordable to 

11 low- and moderate-income households; and 

12 (2) to minimize the involuntary displacement of 

13 low- and moderate-income tenants who are currently 

14 residing in multifamily properties that are currently 

15 receiving subsidies under Federal low-income hous16 ing programs, many of whom are elderly or disabled 

17 persons. 

18 SEC. 3. FEDERAL ASSISTANCE AND EXTENSION OF AF19 FORDABILITY REQUIREMENTS. 

20 (a) PROVISION OF ASSISTANCE.— 

21 (1) AUTHORITY.—The Secretary may use 

22 amounts made available under subsection (e) to pro23 vide assistance under subsections (b), (c), and (d) 

24 with respect to covered multifamily housing prop25 erties. 
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1 (2) APPLICATIONS AND SELECTION CRITERIA.— 

2 The Secretary shall provide for owners of covered 

3 multifamily housing properties to submit applica4 tions for assistance under subsections (b), (c), and 

5 (d) for covered multifamily housing properties. Sub6 ject to paragraph (3), the Secretary shall establish 

7 criteria for selection of properties to receive assist8 ance under each of subsections (b), (c), and (d), 

9 which shall take into consideration the need of a 

10 property for assistance for the purpose under this 

11 Act for which the assistance is made available. 

12 (3) PRIORITY.—The criteria established pursu13 ant to paragraph (2) for selection of properties to 

14 receive assistance under each of subsections (b), (c), 

15 and (d) shall provide priority for selection of prop16 erties based on the following factors: 

17 (A) The proximity in time of the termi18 nation date for the property. 

19 (B) The extent to which the dwelling units 

20 in the property are occupied by low-income fam21 ilies. 

22 (C) The extent to which assurances by the 

23 owner of the property provide that the afford24 ability restrictions for the property will be ex-
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1 tended beyond the period required under sub2 section (b)(4), (c)(5), or (d)(6), as applicable. 

3 (D) Such other factors as the Secretary 

4 may provide. 

5 (b) REHABILITATION ASSISTANCE.—The Secretary 

6 may provide a grant under this subsection to the owner 

7 of the property, subject to the following requirements: 

8 (1) PURPOSE.—The assistance shall be pro9 vided for the purpose of rehabilitating the property 

10 for continued use as housing affordable to low- and 

11 moderate-income families. 

12 (2) ELIGIBLE USE.—Amounts from the grant 

13 may be used only for payment of nonrecurring main14 tenance and capital improvements for the property, 

15 under such terms and conditions as are determined 

16 by the Secretary. 

17 (3) PER UNIT AMOUNT LIMITATIONS.—The 

18 amount from a grant used with respect to a dwelling 

19 unit in the property may not exceed the per unit dol20 lar amount limitation as the Secretary shall establish 

21 for purposes of this subsection for dwelling units of 

22 the applicable size. 

23 (4) REQUIRED EXTENSION OF AFFORDABILITY

24 RESTRICTIONS.—The Secretary may provide assist25 ance under this subsection for a property only if the 
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1 owner of the property enters into such binding com2 mitments as the Secretary may require, which shall 

3 be applicable to any subsequent owner, to ensure 

4 that the property will be operated, for a period of 

5 not less than 20 years that begins on the termi6 nation date for the property, in accordance with all 

7 affordability restrictions that are applicable to the 

8 property under the multifamily housing subsidy pro9 gram under which the property is assisted before the 

10 termination date. 

11 (c) ASSISTANCE FOR PURCHASE BY NONPROFIT EN12 TITIES.—The Secretary may provide a grant under this 

13 subsection to a nonprofit organization for acquisition of 

14 a covered multifamily housing property, subject to the fol15 lowing requirements: 

16 (1) PURPOSE.—The assistance shall be pro17 vided for the purpose of facilitating acquisition of 

18 properties by nonprofit organizations whose missions 

19 are to provide affordable housing to low- and mod20 erate-income families. 

21 (2) ELIGIBLE NONPROFIT ORGANIZATIONS.—A 

22 grant under this section may be made only to a non23 profit organization that provides such assurances as 

24 the Secretary may require that the organization— 

25 (A) will acquire the property; and 
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1 (B) is capable of managing the property 

2 and related facilities (either directly or through 

3 a contract) for the remaining useful life of the 

4 property and related facilities. 

5 (3) ELIGIBLE USE.—Amounts from the grant 

6 may be used only to cover any direct costs (other 

7 than the purchase price) incurred by the nonprofit 

8 organization in purchasing and assuming responsi9 bility for the property and related facilities involved. 

10 (4) PER UNIT AMOUNT LIMITATIONS.—The 

11 amount from a grant used with respect to a dwelling 

12 unit in the property may not exceed the per unit dol13 lar amount limitation as the Secretary shall establish 

14 for purposes of this subsection for dwelling units of 

15 the applicable size. 

16 (5) REQUIRED EXTENSION OF AFFORDABILITY

17 RESTRICTIONS.—The Secretary may provide assist18 ance under this subsection for a property only if the 

19 owner of the property enters into such binding com20 mitments as the Secretary may require, which shall 

21 be applicable to any subsequent owner, to ensure 

22 that the property will be operated, for the remaining 

23 useful life of the property, in accordance with all af24 fordability restrictions that are applicable to the 

25 property under the multifamily housing subsidy pro-
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1 gram under which the property is assisted before the 

2 termination date. 

3 (d) LOW- AND MODERATE-INCOME AFFORDABILITY

4 ASSISTANCE.—The Secretary may make assistance avail5 able under this subsection to the owner of a covered multi6 family housing property, subject to the following require7 ments: 

8 (1) PURPOSE.—The assistance shall be pro9 vided for the purpose of maintaining the afford10 ability of dwelling units, in properties located in 

11 strong rental markets, for low- and moderate-income 

12 families residing in the property. 

13 (2) ELIGIBILITY.—Assistance may be made 

14 available for a property only if— 

15 (A) the property is located in an area in 

16 which the Secretary determines, based on hous17 ing market indicators, such as low vacancy 

18 rates or high absorption rates, that there is not 

19 adequate available and affordable housing; and 

20 (B) the property is not owned by a non21 profit organization whose purpose in owning the 

22 housing is to provide affordable housing to low23 or moderate-income families. 

24 (3) FORM AND TERM.—The assistance shall be 

25 in the form of an annual payment and shall be pro-
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1 vided for such term as may be agreed to by the Sec2 retary and the owner of the property. 

3 (4) PREVENTION OF DUPLICATIVE SUB4 SIDIES.—Assistance may not be provided for any 

5 dwelling unit in a property during any period during 

6 which such unit is provided project-based or tenant7 based rental assistance of any kind from any source. 

8 (5) AMOUNT AND RENT LEVELS.—The Sec9 retary shall determine the amount of annual assist10 ance provided for a property based on rent levels, for 

11 the dwelling units in the property that are subject 

12 to affordability restrictions pursuant to paragraph 

13 (6), that are equal to the lesser of— 

14 (A) comparable market rents for the mar15 ket area in which the property is located for 

16 dwelling units of the applicable size; and 

17 (B) 150 percent of the fair market rentals 

18 established under section 8(c) of the United 

19 States Housing Act of 1937 for the market 

20 area in which the property is located for dwell21 ing units of the applicable size. 

22 (6) REQUIRED EXTENSION OF AFFORDABILITY

23 RESTRICTIONS.—The Secretary may provide assist24 ance under this subsection for a property only if the 

25 owner of the property enters into such binding com-
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1 mitments as the Secretary may require, which shall 

2 be applicable to any subsequent owner, to ensure 

3 that the property will be operated, for a period not 

4 shorter than the term of the assistance agreed to 

5 pursuant to paragraph (3) or 10 years, whichever is 

6 longer, that begins on the termination date for the 

7 property, in accordance with all affordability restric8 tions that are applicable to the property under the 

9 multifamily housing subsidy program under which 

10 the property is assisted before the termination date. 

11 (e) FUNDING.—For purposes of providing assistance 

12 under this section, the Secretary may make available— 

13 (1) $675,000,000 from the amounts made 

14 available under the heading ‘‘Rent Supplement’’ in 

15 chapter VI of title I of the Supplemental Appropria16 tions Act, 1983 (Public Law 98–63; 97 Stat 320) 

17 for amendments to contracts under section 101 of 

18 the Housing and Urban Development Act of 1965 

19 (12 U.S.C. 1701s) and section 236(f)(2) of the Na20 tional Housing Act (12 U.S.C. 1715z–1(f)(2) in 

21 State-aided, noninsured rental housing projects, that 

22 remain unobligated; and 

23 (2) such other sums from the amounts made 

24 available in any fiscal year under the heading re-
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1 ferred to in paragraph (1) that remain or may be2 come unobligated. 

3 SEC. 4. ENHANCED VOUCHERS. 

4 (a) REQUIREMENT.—Upon the termination date for 

5 each assisted multifamily housing project, to the extent 

6 that amounts for assistance under this subsection are pro7 vided in advance in appropriation Acts, the Secretary shall 

8 make enhanced voucher assistance under section 8(t) of 

9 the United States Housing Act of 1937 (42 U.S.C. 

10 1437f(t)) available on behalf of each family described in 

11 subsection (b). 

12 (b) ELIGIBILITY.—A family described in this sub13 section is a family who— 

14 (1)(A) is a low-income family; or 

15 (B) is a moderate-income family that is— 

16 (i) an elderly family (as such term is used 

17 in section 3(b) of the United States Housing 

18 Act of 1937 (42 U.S.C. 1437a(b)); 

19 (ii) a disabled family (as such term is used 

20 in section 3(b) of the United States Housing 

21 Act of 1937 (42 U.S.C. 1437a(b)); or 

22 (iii) residing in a low-vacancy area (as de23 termined by the Secretary); and 

24 (2) on such termination date, is residing in a 

25 dwelling unit of the project that— 
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1 (A) immediately before such termination 

2 date was assisted under the multifamily housing 

3 subsidy program for the project; and 

4 (B) is not assisted after such termination 

5 date under section 8 of such Act or pursuant to 

6 assistance under section 3 of this Act. 

7 (c) ELIGIBILITY EVENT.—Section 8(t)(2) of the 

8 United States Housing Act of 1937 (42 U.S.C. 

9 1437f(t)(2)) is amended by adding after the period at the 

10 end the following new sentence: ‘‘Such term includes, with 

11 respect to an assisted multifamily housing project (as such 

12 term is defined in section 7 of the Displacement Preven13 tion Act of 2004), the occurrence of the termination date 

14 for the project.’’. 

15 SEC. 5. NOTIFICATION REQUIREMENT. 

16 (a) TIMING.—An owner of an assisted multifamily 

17 housing property who intends to terminate or alter the af18 fordability restrictions for the property on or after the ter19 mination date for the property shall, not less than nine 

20 months before such termination date, provide written no21 tice of such termination date to the Secretary of Housing 

22 and Urban Development, the chief executive officer of the 

23 State and the unit of general local government (as such 

24 term is defined in section 104 of the Cranston-Gonzalez 

25 National Affordable Housing Act (42 U.S.C. 12704) in 
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1 which the property is located, and each tenant of the 

2 project. 

3 (b) CONTENTS.—The notice shall include— 

4 (1) a statement specifying any changes in the 

5 terms or applicability of the affordability restrictions 

6 for the property that the owner intends to make on 

7 or after the termination date for the property; 

8 (2) a statement that, if the owner proceeds with 

9 such intended changes and the Congress makes 

10 funds available, the Department of Housing and 

11 Urban Development will provide tenant-based rental 

12 assistance to all eligible residents, enabling them to 

13 choose the place they wish to rent, which may in14 clude the dwelling unit in which they currently re15 side; and 

16 (3) a statement that, if the Congress makes 

17 funds available, the owner and the Secretary may 

18 yet agree to renewal of assistance and affordability 

19 restrictions for the project, thereby obviating the 

20 need for such tenant-based rental assistance. 

21 (c) FAILURE TO PROVIDE NOTICE.—If the owner 

22 does not provide the notice required under this section, 

23 notwithstanding any inapplicability of the affordability re24 strictions for the project, the owner may not evict the ten25 ants or increase the tenants’ rent payments until such 
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1 time as the owner has provided the notice and one year 

2 has elapsed. 

3 (d) OTHER TERMS.—Any notice under this section 

4 shall comply with any additional requirements as the Sec5 retary may establish. 

6 (e) SAVINGS PROVISION.—This section may not be 

7 construed to annul, alter, affect, or preempt any provision 

8 of the law of a State or political subdivision thereof requir9 ing notice regarding termination of assistance or afford10 ability restrictions with respect to a multifamily housing 

11 project or to exempt any person from complying with such 

12 a law. 

13 SEC. 6. ANNUAL AND SEMIANNUAL REVIEWS. 

14 (a) ANNUAL REVIEW.—To ensure compliance with 

15 this Act, the Secretary shall conduct an annual review on 

16 actions taken under this Act and the status of covered 

17 multifamily housing properties and submit a report to the 

18 Congress regarding each such annual review. 

19 (b) SEMIANNUAL REVIEW.—Not less than semiannu20 ally during the 2-year period beginning on the date of the 

21 enactment of this Act and not less than annually there22 after, the Secretary shall submit reports to the Committee 

23 on Financial Services of the House of Representatives and 

24 the Committee on Banking, Housing, and Urban Affairs 

25 of the Senate stating, for such periods, the total number 
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1 of assisted multifamily housing properties for which notifi2 cation has been provided under section 5 during such pe3 riod, the total number of covered multifamily housing 

4 properties for which assistance has been provided under 

5 section 3, and the type or types of such assistance pro6 vided. 

7 SEC. 7. DEFINITIONS. 

8 For purposes of this Act: 

9 (1) AFFORDABILITY RESTRICTIONS.—The term 

10 ‘‘affordability restrictions’’ means, with respect to a 

11 covered multifamily housing property, limits imposed 

12 by regulation or regulatory agreement on tenant 

13 rents, rent contributions, or income eligibility. 

14 (2) ASSISTED MULTIFAMILY HOUSING PROP15 ERTY.—The term ‘‘assisted multifamily housing 

16 property’’ means a multifamily housing project for 

17 which assistance is provided under a multifamily 

18 housing subsidy program. 

19 (3) COMPARABLE PROPERTIES.—The term 

20 ‘‘comparable properties’’ means, with respect to a 

21 covered multifamily housing property, properties in 

22 the same market area, where practicable, that— 

23 (A) are similar to the covered multifamily 

24 housing property as to neighborhood (including 

25 risk of crime), type of location, access, street 
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1 appeal, age, property size, apartment mix, phys2 ical configuration, property and unit amenities, 

3 utilities, and other relevant characteristics; and 

4 (B) are not receiving project-based rental 

5 assistance of any kind from any source. 

6 (4) COVERED MULTIFAMILY HOUSING PROP7 ERTY.—The term ‘‘covered multifamily housing 

8 property’’ means an assisted multifamily housing 

9 project for which the termination date will occur 

10 within the 10-year period beginning on the date of 

11 the enactment of this Act. 

12 (5) LOW-INCOME FAMILY.—The term ‘‘low-in13 come family’’ has the meaning given such term in 

14 section 3(b) of the United States Housing Act of 

15 1937 (42 U.S.C. 1437a(b)). 

16 (6) MODERATE-INCOME FAMILY.—The term 

17 ‘‘moderate-income family’’ has the meaning given 

18 such term in section 229 of the Low-Income Hous19 ing Preservation and Resident Homeownership Act 

20 of 1992 (12 U.S.C. 4119). 

21 (7) MULTIFAMILY HOUSING SUBSIDY PRO22 GRAM.—The term ‘‘multifamily housing subsidy pro23 gram’’ means— 

24 (A) the below-market interest rate mort25 gage insurance program under section 
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1 221(d)(3) of the National Housing Act (12 

2 U.S.C. 1715l(d)(3)); and 

3 (B) the program for interest reduction 

4 payments under section 236 of the National 

5 Housing Act (12 U.S.C. 1715z–1). 

6 (8) NONPROFIT ORGANIZATION.—The term 

7 ‘‘nonprofit organization’’ means any private organi8 zation that has no part of its net earning inuring to 

9 the benefit of any member, founder, contributor, or 

10 individual. 

11 (9) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Housing and Urban Development. 

13 (10) TERMINATION DATE.—The term ‘‘termi14 nation date’’ means, with respect to an assisted or 

15 a covered multifamily housing property, the date 

16 that— 

17 (A) the mortgage for the property that is 

18 insured under the below-market interest rate 

19 program under section 221(d)(3) of the Na20 tional Housing Act, or for which interest reduc21 tion payments are made under section 236 of 

22 such Act, matures; and 

23 (B) the affordability restrictions applicable 

24 to the property because of assistance for the 

25 property pursuant to a multifamily housing 
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1 subsidy program terminate with respect to the 

2 property. 

3 SEC. 8. REGULATIONS. 

4 The Secretary may issue any regulations necessary 

5 to carry out this Act. 

Æ