II 

114TH CONGRESS 

2D SESSION S. 3537 

To authorize the Department of Housing and Urban Development to transform neighborhoods of extreme poverty into sustainable, mixed-income 

neighborhoods with access to economic opportunities, by revitalizing severely distressed housing, and investing and leveraging investments in 

well-functioning services, educational opportunities, public assets, public 

transportation, and improved access to jobs. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 9, 2016 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To authorize the Department of Housing and Urban Development to transform neighborhoods of extreme poverty 

into sustainable, mixed-income neighborhoods with access 

to economic opportunities, by revitalizing severely distressed housing, and investing and leveraging investments in well-functioning services, educational opportunities, public assets, public transportation, and improved 

access to jobs. 

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


SSpencer on DSK4SPTVN1PROD with BILLS
2 

•S 3537 IS

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Choice Neighborhoods Initiative Act of 2016’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purposes. 

Sec. 3. Definitions. 

Sec. 4. Grant authority. 

Sec. 5. Eligible entities. 

Sec. 6. Eligible neighborhoods. 

Sec. 7. Authorized activities. 

Sec. 8. Interagency consultation and notification of available funding. 

Sec. 9. Transformation plan and selection. 

Sec. 10. Program requirements. 

Sec. 11. Demolition and disposition. 

Sec. 12. Administration by other entities. 

Sec. 13. Withdrawal of funding. 

Sec. 14. Annual report. 

Sec. 15. Program evaluation. 

Sec. 16. Funding. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—Congress finds that— 

8 (1) the geographic concentration of poverty re9 mains a serious and often unrecognized challenge to 

10 the ability of poor families and children to access op11 portunity and move up the economic ladder; 

12 (2) the HOPE VI program, authorized by sec13 tion 24 of the United States Housing Act of 1937 

14 (42 U.S.C. 1437v), presented a successful first step 

15 in transforming neighborhoods of extreme poverty 

16 with severely distressed housing into revitalized 

17 mixed-income neighborhoods; 


SSpencer on DSK4SPTVN1PROD with BILLS
3 

•S 3537 IS

1 (3) there remains a large amount of severely 

2 distressed public and privately owned assisted hous3 ing concentrated in neighborhoods of extreme pov4 erty; and 

5 (4) a broader approach is needed, using con6 centrated and coordinated neighborhood investment 

7 from multiple sources to transform neighborhoods of 

8 extreme poverty into communities that will improve 

9 the quality of life of current and future residents. 

10 (b) PURPOSES.—The purposes of this Act are— 

11 (1) to transform neighborhoods of extreme pov12 erty into mixed-income neighborhoods of long-term 

13 viability, by revitalizing severely distressed housing, 

14 improving access to economic opportunities, and in15 vesting and leveraging investments in well-func16 tioning services, effective schools and education pro17 grams, public assets, public transportation, and im18 proved access to jobs; 

19 (2) to grow communities and metropolitan 

20 areas by concentrating, leveraging, and coordinating 

21 Federal, State, local, and private funding for public 

22 transportation, education, housing, energy, health 

23 and mental health services, supportive services, pub24 lic safety, and environmental programs and initia25 tives; 


SSpencer on DSK4SPTVN1PROD with BILLS
4 

•S 3537 IS

1 (3) to support positive outcomes for all neigh2 borhood residents, including improvements in edu3 cational achievements, and economic self-sufficiency; 

4 and 

5 (4) to ensure that current residents benefit 

6 from transformation by preserving affordable hous7 ing in the neighborhood or providing residents with 

8 the choice to move to affordable housing in another 

9 neighborhood of opportunity. 

10 SEC. 3. DEFINITIONS. 

11 For purposes of this Act, the following definitions 

12 shall apply: 

13 (1) AFFORDABLE HOUSING.—The term ‘‘afford14 able housing’’ includes— 

15 (A) assisted housing, as defined in para16 graph (2); or 

17 (B) private housing for which the Sec18 retary requires the owner or purchaser of the 

19 project to maintain affordability for not fewer 

20 than 30 years, in accordance with use restric21 tions promulgated in regulations by the Sec22 retary, which restrictions shall be— 

23 (i) contained in a legally enforceable 

24 document recorded in the appropriate 

25 records; and 


SSpencer on DSK4SPTVN1PROD with BILLS
5 

•S 3537 IS

1 (ii) consistent with the long-term via2 bility of the project as rental or homeown3 ership housing. 

4 (2) ASSISTED HOUSING.—The term ‘‘assisted 

5 housing’’ means housing assisted under— 

6 (A) section 8 or 9 of the United States 

7 Housing Act of 1937 (42 U.S.C. 1437f and 42 

8 U.S.C. 1437g); and 

9 (B) section 221(d)(3) or section 236 of the 

10 National Housing Act (12 U.S.C. 1715l and 12 

11 U.S.C. 1715z–1). 

12 (3) COMMUNITY DEVELOPMENT CORPORA13 TION.—The term ‘‘community development corpora14 tion’’ has the meaning given that term in section 

15 204(b)(11) of the Departments of Veterans Affairs 

16 and Housing and Urban Development, and Inde17 pendent Agencies Appropriations Act, 1997 (12 

18 U.S.C. 1715z–11a(b)(11)). 

19 (4) CRITICAL COMMUNITY IMPROVEMENTS.— 

20 The term ‘‘critical community improvements’’ 

21 means— 

22 (A) development or improvement of com23 munity facilities to promote upward mobility, 

24 self-sufficiency, or improved quality of life for 

25 residents of the neighborhood, such as construcVerDate Sep 11 2014 00:52 Dec 15, 2016 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3537.IS S3537

SSpencer on DSK4SPTVN1PROD with BILLS
6 

•S 3537 IS

1 tion or rehabilitation of parks and community 

2 gardens, environmental improvements or site 

3 remediation at affected sites; and 

4 (B) activities to promote economic develop5 ment, such as development or improvement of 

6 transit, retail, community financial institutions, 

7 public services, facilities, assets or other com8 munity resources. 

9 (5) EXTREME POVERTY.—The term ‘‘extreme 

10 poverty’’ means, with respect to a neighborhood, 

11 that the neighborhood— 

12 (A) has a high percentage of residents 

13 who, based on the most recent data collected by 

14 the Bureau of the Census— 

15 (i) are estimated to be in poverty; or 

16 (ii) have extremely low incomes; and 

17 (B) is experiencing distress related to— 

18 (i) per capita crime rates over three 

19 or more years that are significantly higher 

20 than the per capita crime rates of the city 

21 or county in which the neighborhood is lo22 cated; 

23 (ii) high rates of vacant, abandoned, 

24 or substandard homes relative to the city 

25 or county as a whole; 


SSpencer on DSK4SPTVN1PROD with BILLS
7 

•S 3537 IS

1 (iii) a low-performing public school; 

2 (iv) other such factors as determined 

3 by the Secretary that further the purposes 

4 of this Act; or 

5 (v) any combination of such factors. 

6 (6) FAMILIES.—The term ‘‘families’’ has the 

7 meaning given that term in section 3(b)(3) of the 

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

9 1437a(b)(3)). 

10 (7) INSTITUTION OF HIGHER EDUCATION.—The 

11 term ‘‘institution of higher education’’ has the 

12 meaning given that term in section 102 of the High13 er Education Act of 1965 (20 U.S.C. 1002). 

14 (8) LONG-TERM VIABILITY.—The term ‘‘long15 term viability’’ means, with respect to a neighbor16 hood, that the neighborhood is sustainable on an 

17 economic, educational, and environmental basis. 

18 (9) PUBLIC HOUSING AGENCY.—The term 

19 ‘‘public housing agency’’ has the meaning given that 

20 term in section 3(b)(6) of the United States Hous21 ing Act of 1937 (42 U.S.C. 1437a(b)(6)). 

22 (10) SECRETARY.—The term ‘‘Secretary’’ 

23 means the Secretary of Housing and Urban Develop24 ment. 


SSpencer on DSK4SPTVN1PROD with BILLS
8 

•S 3537 IS

1 (11) SEVERELY DISTRESSED HOUSING.—The 

2 term ‘‘severely distressed housing’’ means a public 

3 or assisted housing project (or building in a project) 

4 that— 

5 (A)(i) requires major redesign, reconstruc6 tion, or redevelopment, or partial or total demo7 lition, to correct serious deficiencies in the 

8 original design (including inappropriately high 

9 population density), deferred maintenance, 

10 physical deterioration or obsolescence of major 

11 systems, and other deficiencies in the physical 

12 plant of the project; and 

13 (ii) is a significant contributing factor to 

14 the physical decline of and disinvestment by 

15 public and private entities in the surrounding 

16 neighborhood; or 

17 (B) was a project described in subpara18 graph (A) that has been legally vacated or de19 molished, but for which the Secretary has not 

20 yet provided replacement housing assistance 

21 other than tenant-based assistance. 

22 (12) SUPPORTIVE SERVICES.—The term ‘‘sup23 portive services’’ includes all activities for public or 

24 assisted housing tenants that live in or are displaced 

25 from the projects being revitalized under this Act, 


SSpencer on DSK4SPTVN1PROD with BILLS
9 

•S 3537 IS

1 that will promote upward mobility, self-sufficiency, 

2 or improved quality of life, including such activities 

3 as literacy training, remedial and continuing edu4 cation, job training, financial literacy instruction, 

5 day care, youth services, aging-in-place, public trans6 portation, physical and mental health services, eco7 nomic development activities, and other programs 

8 for which the community demonstrates need. 

9 SEC. 4. GRANT AUTHORITY. 

10 The Secretary is authorized to make competitive 

11 grants to eligible entities that submit transformation plans 

12 that will further the purposes of this Act in eligible neigh13 borhoods. 

14 SEC. 5. ELIGIBLE ENTITIES. 

15 Entities eligible to be grantees under this Act include 

16 local governments, public housing agencies, community de17 velopment corporations, assisted housing owners, and 

18 other for-profit and nonprofit entities. 

19 SEC. 6. ELIGIBLE NEIGHBORHOODS. 

20 Eligible neighborhoods for grant funds under this Act 

21 include neighborhoods with— 

22 (1) a concentration of extreme poverty; 

23 (2) severely distressed housing; and 

24 (3) a potential for long-term viability, once key 

25 problems are addressed, including neighborhoods 


SSpencer on DSK4SPTVN1PROD with BILLS
10 

•S 3537 IS

1 with characteristics such as proximity to educational 

2 institutions, medical centers, central business dis3 tricts, major employers, effective transportation al4 ternatives (including public transit, walking, and bi5 cycling), and being close to low-poverty neighbor6 hoods. 

7 SEC. 7. AUTHORIZED ACTIVITIES. 

8 (a) IN GENERAL.—Activities authorized to be funded 

9 under this Act are those that will further the purposes 

10 of this Act, in accordance with a transformation plan ap11 proved under section 9, to carry out transformational pro12 grams and initiatives. 

13 (b) REQUIRED ACTIVITIES.—The following author14 ized activities shall be contained in the transformation 

15 plan to be submitted under section 9 and implemented by 

16 a grantee under an approved transformation plan: 

17 (1) The transformation of housing through re18 habilitation, preservation, or demolition, or any com19 bination thereof, and replacement of severely dis20 tressed housing projects that incorporates energy ef21 ficient design principles. 

22 (2) Activities that promote the economic self23 sufficiency of residents of the revitalized housing 

24 and of the surrounding neighborhood. 


SSpencer on DSK4SPTVN1PROD with BILLS
11 

•S 3537 IS

1 (3) Activities that preserve affordable housing 

2 in the neighborhood and other activities necessary to 

3 ensure that existing residents have access to the 

4 benefits of the neighborhood transformation. 

5 (4) Activities that demonstrate that each tenant 

6 relocated from severely distressed housing who wish7 es to return to the revitalized on-site housing in the 

8 neighborhood or to replacement housing outside of 

9 the neighborhood, can return, and shall be provided 

10 a preference in accordance with the program re11 quirements in section 10(1). 

12 (5) Activities that meet the program require13 ments for replacement of housing units in section 

14 10(5). 

15 (6) Activities that meet the fair housing pro16 gram requirements in section 10(6) and the accessi17 bility requirements in section 10(7). 

18 (7) Appropriate service coordination, support 

19 services, mobility counseling, and housing search as20 sistance for residents displaced as a result of revital21 ization of severely distressed projects. 

22 (8) Involvement of residents of severely dis23 tressed housing and of the neighborhood in planning 

24 and implementation of the transformation plan, in25 cluding reasonable steps to help ensure meaningful 


SSpencer on DSK4SPTVN1PROD with BILLS
12 

•S 3537 IS

1 participation for residents who, as a result of their 

2 national origin, are limited in their English pro3 ficiency. 

4 (9) Relocation assistance, including tenant5 based rental assistance renewable under section 8 of 

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

7 1437f), and supportive services for families that are 

8 displaced, including mobility and relocation coun9 seling over multiple years, reasonable moving costs, 

10 and security deposits. 

11 (10) Tracking of tenants relocated during rede12 velopment throughout the life of the grant or until 

13 full occupancy of replacement housing, whichever is 

14 longer. 

15 (11) Links to local education efforts, as de16 scribed in subsection (c)(4). 

17 (c) ELIGIBLE ACTIVITIES.—In addition to the activi18 ties required under subsection (b), activities eligible for 

19 funding under this Act include— 

20 (1) new construction, acquisition or rehabilita21 tion of public, assisted, and privately owned housing 

22 that incorporates sustainable design principles, in23 cluding energy efficiency; 


SSpencer on DSK4SPTVN1PROD with BILLS
13 

•S 3537 IS

1 (2) new construction, acquisition, or rehabilita2 tion of mixed-use developments that include public 

3 or assisted housing; 

4 (3) the acquisition, demolition, or disposition of 

5 properties, including Federal Housing Administra6 tion-foreclosed properties; 

7 (4) programs administered in collaboration with 

8 local educators and others to engage in local commu9 nity planning, to help increase access to place-based 

10 programs that combine a continuum of effective 

11 community services, strong family support, and com12 prehensive education reform to improve the edu13 cational and life outcomes for resident children and 

14 youth; 

15 (5) providing support services for residents pri16 marily focused on case management, service coordi17 nation (including family self-sufficiency coordina18 tors), workforce development, financial literacy, and 

19 technical assistance to enable residents to access 

20 programs from other key agencies and local service 

21 providers, in order to help residents with stable 

22 housing, improve outcomes for children, enhance 

23 adults’ capacity for self-sufficiency and economic se24 curity, and services for the elderly and persons with 

25 disabilities to maintain independence; 


SSpencer on DSK4SPTVN1PROD with BILLS
14 

•S 3537 IS

1 (6) rehabilitation, physical improvement and de2 velopment of community facilities that are primarily 

3 intended to facilitate the delivery of economic, com4 munity, and supportive services which have a signifi5 cant benefit to residents of housing assisted by the 

6 grant and residents of off-site replacement housing; 

7 (7) work incentives designed to help public and 

8 assisted housing residents access jobs and move to9 ward self-sufficiency; 

10 (8) partnerships involving the police, commu11 nity organizations, and other entities to reduce crime 

12 and promote safety; 

13 (9) partnering with employers and for-profit 

14 and nonprofit organizations to create jobs and job 

15 training opportunities, with a focus on job opportu16 nities accessible by mass transit; 

17 (10) activities that promote sustainable neigh18 borhoods and incorporate principles of sustainable 

19 design and development; 

20 (11) critical community improvements not oth21 erwise covered by this Act; 

22 (12) loss reserves to protect residents of hous23 ing assisted by the grant and continue the project in 

24 case of default, foreclosure, or any other adverse fi25 nancial event; and 


SSpencer on DSK4SPTVN1PROD with BILLS
15 

•S 3537 IS

1 (13) land assembly and land banking. 

2 (d) ELIGIBLE METHODS OF SUPPORT.—Activities 

3 carried out with amounts from a grant under this Act may 

4 be carried out through endowments, revolving loan funds, 

5 reserves, or other instruments that the Secretary approves 

6 for new construction or rehabilitation, tenant services, and 

7 ongoing operating and capital needs. 

8 (e) FUNDING RESTRICTIONS.— 

9 (1) RESTRICTION ON ACTIVITIES.— 

10 (A) IN GENERAL.—No funds made avail11 able under this Act may be used for construc12 tion or rehabilitation of a K–12 school building 

13 or institution of higher education. 

14 (B) NON-HOUSING ACTIVITIES AND SUP15 PORTIVE SERVICES.—For each grant under this 

16 Act, the grantee shall comply with each of the 

17 following requirements: 

18 (i) Not more than 30 percent of the 

19 amount of the grant may be used for eligi20 ble activities under paragraphs (4) through 

21 (13) of subsection (c). 

22 (ii) Not more than 5 percent of the 

23 amount of the grant may be used for eligi24 ble activities under paragraphs (8) and (9) 

25 of subsection (c). 


SSpencer on DSK4SPTVN1PROD with BILLS
16 

•S 3537 IS

1 (2) WAIVER.—The Secretary may waive the 

2 funding limits in this subsection in order to promote 

3 the purposes of this Act. 

4 SEC. 8. INTERAGENCY CONSULTATION AND NOTIFICATION 

5 OF AVAILABLE FUNDING. 

6 (a) ANNUAL CONSULTATION.—The Secretary shall 

7 consult with appropriate Federal agencies to identify addi8 tional funding opportunities that may be available to eligi9 ble neighborhoods and ensure that eligible entities and 

10 grant recipients are aware of such opportunities as follows: 

11 (1) The Secretary shall consult with the Sec12 retary of Labor, the Secretary of Education, the 

13 Secretary of Transportation, the Secretary of Health 

14 and Human Services, the Administrator of the Envi15 ronmental Protection Agency, the Attorney General, 

16 and other agencies, as the President may prescribe. 

17 (2) The Secretary shall include in the notifica18 tion of funding availability for the Choice Neighbor19 hoods program information about other Federal 

20 funding opportunities that the Secretary determines 

21 to be related to the Choice Neighborhoods program. 

22 (3) The Secretary shall consult with the Sec23 retary of Labor, the Secretary of Education, the 

24 Secretary of Transportation, the Secretary of Health 

25 and Human Services, the Administrator of the EnviVerDate Sep 11 2014 00:52 Dec 15, 2016 Jkt 069200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S3537.IS S3537

SSpencer on DSK4SPTVN1PROD with BILLS
17 

•S 3537 IS

1 ronmental Protection Agency, the Attorney General, 

2 and other agencies, as the Secretary may prescribe, 

3 to identify barriers to and opportunities for greater 

4 coordination of Federal resources for meeting the 

5 purposes of this Act. 

6 (b) REPORTS TO CONGRESS.—The Secretary shall— 

7 (1) not later than 1 year after the date of en8 actment of this Act, submit a report to the Com9 mittee on Banking, Housing, and Urban Affairs of 

10 the Senate and the Committee on Financial Services 

11 of the House of Representatives identifying barriers 

12 and opportunities to the coordination of Federal 

13 funding to meet the purposes of this Act, including 

14 any regulatory or statutory recommendations for ad15 dressing such barriers; and 

16 (2) issue an annual report to be posted on the 

17 website of the Department of Housing and Urban 

18 Development that identifies Federal funding oppor19 tunities for eligible neighborhoods and best practices 

20 in coordinating Federal funding for purposes of this 

21 Act. 

22 SEC. 9. TRANSFORMATION PLAN AND SELECTION. 

23 (a) TRANSFORMATION PLAN.—An application for a 

24 grant under this Act shall be submitted in the form of 

25 a transformation plan that— 


SSpencer on DSK4SPTVN1PROD with BILLS
18 

•S 3537 IS

1 (1) demonstrates how the transformation plan 

2 will achieve the desired priority outcomes of trans3 forming a distressed neighborhood of extreme pov4 erty into a mixed-income neighborhood with high5 quality, safe, affordable housing, economic opportu6 nities, well-functioning services, public assets, access 

7 to jobs, public transportation, and effective edu8 cation programs and public schools, including char9 ter schools and other autonomous public schools; 

10 (2) includes a long-term affordability plan that 

11 describes how the grantee will maintain affordable 

12 housing in the neighborhood over the succeeding 50 

13 years or longer, including affordability provisions re14 lating to dwelling units provided using assistance 

15 under the grant under this Act, and an agreement 

16 by the applicant to update such plan every 5 years 

17 during such period; 

18 (3) demonstrates how the required activities 

19 under section 7(b) will be carried out, with par20 ticular focus on the housing transformation; 

21 (4) describes the other eligible activities listed 

22 in section 7(c) that will occur in support of the 

23 housing transformation; 

24 (5) defines desired outcomes of the strategy, 

25 identifies the population that will benefit, describes 


SSpencer on DSK4SPTVN1PROD with BILLS
19 

•S 3537 IS

1 the challenges they face, and the evidence base that 

2 informs the proposed strategies that will result in 

3 the desired outcomes for the community and resi4 dents; and 

5 (6) includes such other information and shall be 

6 submitted at such time and in accordance with pro7 cedures as the Secretary shall prescribe. 

8 (b) SELECTION CRITERIA.—The Secretary shall es9 tablish criteria for the award of grants under this Act, 

10 which shall include the extent to which the transformation 

11 plan— 

12 (1) demonstrates the ability of the plan to fur13 ther the purposes of this Act, as evidenced by, 

14 among other factors, a track record of effective part15 nerships and community engagement; 

16 (2) demonstrates inclusive local planning with 

17 input from local government, housing owners and 

18 providers, educators, residents, local community or19 ganizations, public schools, early learning programs, 

20 health service organizations, and community stake21 holders in the development and implementation of a 

22 sustainable revitalization program; 

23 (3) coordinates multiple funding resources, in24 cluding public, private, and philanthropic funding, 

25 and emphasizes collaboration between the local govVerDate Sep 11 2014 00:52 Dec 15, 2016 Jkt 069200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S3537.IS S3537

SSpencer on DSK4SPTVN1PROD with BILLS
20 

•S 3537 IS

1 ernment, early learning programs, and public 

2 schools, or a public housing agency, or all three; 

3 (4) submits current data showing that the 

4 neighborhood targeted for revitalization is in need of 

5 and can benefit from the authorized activities de6 scribed in section 7 and proposed in the trans7 formation plan; 

8 (5) demonstrates that the neighborhood has, or 

9 will have, the potential for long-term viability; 

10 (6) demonstrates the capability and record of 

11 the applicant and the partners of the applicant for 

12 managing housing redevelopment or modernization 

13 projects and meeting performance benchmarks; 

14 (7) demonstrates that sustainable building and 

15 energy efficient design principles are incorporated or 

16 will be incorporated in the activities; 

17 (8) demonstrates that the neighborhood has, or 

18 will have within a reasonable time, public transpor19 tation that provides effective access to economic op20 portunities and commercial and public services; 

21 (9) demonstrates that the residents of revital22 ized housing developments have or will have access 

23 to high-quality educational opportunities, including 

24 early learning and effective K–12 public schools, in 

25 or outside of the neighborhood; 


SSpencer on DSK4SPTVN1PROD with BILLS
21 

•S 3537 IS

1 (10) demonstrates that the transformation plan 

2 includes the provision of appropriate supportive serv3 ices and activities that promote economic self-suffi4 ciency of residents, and a plan to sustain those serv5 ices; 

6 (11) demonstrates that the transformation plan 

7 provides support for residents displaced as a result 

8 of the revitalization of the project, including assist9 ance in obtaining housing in areas with low con10 centrations of poverty and minority populations; 

11 (12) demonstrates that sufficient housing op12 portunities are available in the neighborhood to be 

13 revitalized and in areas with low concentrations of 

14 poverty and minority populations to accommodate 

15 displaced residents; 

16 (13) has a well-documented assessment of the 

17 number of households with special needs for ongoing 

18 supportive services residing in the public or assisted 

19 properties that are the target of the grant and an 

20 effective plan to address those needs; 

21 (14) demonstrates the ability to leverage funds 

22 from— 

23 (A) other programs of the Department of 

24 Housing and Urban Development; 


SSpencer on DSK4SPTVN1PROD with BILLS
22 

•S 3537 IS

1 (B) other Federal, State, or local pro2 grams; or 

3 (C) the private sector, including donations 

4 of land or services; 

5 (15) replaces the public and assisted housing 

6 units in accordance with section 10(5), if targeting 

7 a project that meets the definition of section 

8 3(11)(B); 

9 (16) demonstrates, if feasible, phased redevelop10 ment that provides for demolition and construction 

11 of dwelling units in phases, to limit disruptions to 

12 residents; 

13 (17) demonstrates how the applicant will use 

14 indicators of housing redevelopment, neighborhood 

15 quality, resident well-being, and other outcomes to 

16 measure success, manage program implementation, 

17 and engage stakeholders, consistent with require18 ments established by the Secretary; and 

19 (18) demonstrates compliance with any other 

20 factors and priorities, as the Secretary may pre21 scribe through a notice of funding availability and 

22 that further the purposes of this Act. 

23 SEC. 10. PROGRAM REQUIREMENTS. 

24 The following requirements shall apply to any grant 

25 made under this Act: 


SSpencer on DSK4SPTVN1PROD with BILLS
23 

•S 3537 IS

1 (1) HOUSING CHOICE OPPORTUNITIES FOR RE2 TURNING TENANTS.—An approved transformation 

3 plan under section 9 shall demonstrate that each 

4 former tenant who wishes to return to the on-site or 

5 off-site replacement housing may return if the ten6 ant was lease-compliant at the time of departure 

7 from the housing subject to rehabilitation or demoli8 tion, and would be eligible, as of the time of such 

9 return, for occupancy under the eligibility, screening, 

10 and occupancy standards, policies, or practices appli11 cable to the housing from which the resident was 

12 displaced, as in effect at such time of displacement. 

13 A returning tenant shall be provided a preference for 

14 occupancy of on-site or off-site replacement units be15 fore such units are made available to any other eligi16 ble households, or the tenant may choose to retain 

17 or obtain tenant-based voucher assistance provided 

18 under section 8(o) of the United States Housing Act 

19 of 1937 (42 U.S.C. 1437f(o)), for relocation from 

20 the properties revitalized under this Act. 

21 (2) RELOCATION AND NOTICE.—All relocation 

22 activities resulting from, or that will result from, 

23 demolition, disposition, or both demolition and dis24 position, to be carried out under a transformation 


SSpencer on DSK4SPTVN1PROD with BILLS
24 

•S 3537 IS

1 plan relating to a grant under this Act shall be sub2 ject to the following requirements: 

3 (A) THE UNIFORM RELOCATION ACT.—The 

4 Uniform Relocation Assistance and Real Prop5 erty Acquisition Policies Act of 1970 (42 

6 U.S.C. 4601 et seq.) shall apply to all reloca7 tion activities pursuant to a transformation 

8 plan under this Act, except as otherwise pro9 vided in this Act. 

10 (B) RELOCATION PLAN.—The applicant 

11 shall submit to the Secretary, before acquisition 

12 or demolition, a relocation plan providing for 

13 the relocation of residents occupying the public 

14 or assisted housing for which the demolition or 

15 disposition is proposed. 

16 (3) NOTICE UPON APPROVAL OF APPLICA17 TION.—Within a reasonable time after notice to the 

18 applicant of the approval of an application for a 

19 grant under this section, the applicant shall provide 

20 notice in writing, in plain and non-technical lan21 guage, to the residents of the public and assisted 

22 housing subject to the approved transformation plan 

23 that— 

24 (A) states that the application and trans25 formation plan has been approved; 


SSpencer on DSK4SPTVN1PROD with BILLS
25 

•S 3537 IS

1 (B) describes the process involved to relo2 cate the residents, including a statement that 

3 the residents may not be relocated until the 

4 conditions in this section have been met; 

5 (C) provides information regarding reloca6 tion options; and 

7 (D) advises residents of the availability of 

8 relocation counseling. 

9 (4) NOTICE BEFORE RELOCATION.—Except in 

10 the cases of a substantial and imminent threat to 

11 health or safety, not later than 90 days before the 

12 date on which residents will be relocated, the grantee 

13 shall provide notice in writing, in plain and non14 technical language, to each family residing in a pub15 lic or assisted housing project that is subject to an 

16 approved transformation plan, and in accordance 

17 with such guidelines as the Secretary may issue gov18 erning such notification of the demolition, their 

19 rights, and relocation options. 

20 (5) ONE-FOR-ONE REPLACEMENT OF PUBLIC

21 OR ASSISTED HOUSING UNITS.—Each trans22 formation plan that provides for dwelling units to be 

23 demolished or disposed shall provide as follows: 

24 (A) NUMBER OF UNITS.—For 100 percent 

25 of all such dwelling units in existence, as of the 


SSpencer on DSK4SPTVN1PROD with BILLS
26 

•S 3537 IS

1 date of the application for the grant, that are 

2 to be demolished or disposed, the trans3 formation plan shall provide for replacement of 

4 the dwelling unit. 

5 (B) NUMBER OF BEDROOMS.—Replace6 ment housing for demolished properties shall 

7 reflect the number of bedrooms that are needed 

8 to adequately serve returning tenants, house9 holds currently on the waiting list and that are 

10 needed based on other market data, except that 

11 in instances where the tenants of the original 

12 properties need a different number of bedrooms 

13 than households on the waiting list, the plan 

14 may enable displaced tenants to exercise their 

15 opportunity under paragraph (1), using a ten16 ant-based voucher in the original neighborhood 

17 or other neighborhood of the tenants’ choice. 

18 (C) LOCATION.— 

19 (i) REPLACEMENT UNITS.—Replace20 ment housing units shall be developed— 

21 (I) in the neighborhood being re22 vitalized; and 

23 (II) within the metropolitan area, 

24 up to 25 miles from the original 

25 project site, as necessary to— 


SSpencer on DSK4SPTVN1PROD with BILLS
27 

•S 3537 IS

1 (aa) comply with fair hous2 ing requirements; 

3 (bb) deconcentrate poverty; 

4 (cc) redevelop on site with 

5 appropriate densities; or 

6 (dd) meet other factors, as 

7 determined by the Secretary in 

8 order to further the purposes of 

9 this Act. 

10 (ii) REPLACEMENT HOUSING OUTSIDE

11 IMMEDIATE NEIGHBORHOOD.—Replace12 ment housing outside the immediate neigh13 borhood shall offer access to economic op14 portunities and public transportation and 

15 shall be accessible to social, recreational, 

16 educational, commercial, health facilities 

17 and services, and other municipal services 

18 and facilities that are comparable, under 

19 such standards as the Secretary may pre20 scribe. 

21 (iii) OFF-SITE REPLACEMENT HOUS22 ING.—Off-site replacement housing, out23 side the immediate neighborhood, shall not 

24 be located in areas of minority concentra25 tion, defined in relation to the metropolitan 


SSpencer on DSK4SPTVN1PROD with BILLS
28 

•S 3537 IS

1 area or rural county in which the Choice 

2 Neighborhoods project is located, or in 

3 areas of extreme poverty. 

4 (D) TYPES OF UNITS.—Replacement hous5 ing is public housing or other assisted housing 

6 units, excluding tenant-based vouchers, unless 

7 permitted in this section. 

8 (E) USE OF PROJECT-BASED VOUCHERS

9 FOR REPLACEMENT HOUSING.—The Secretary 

10 may require the use of project-based voucher 

11 assistance under section 8(o)(13) of the United 

12 States Housing Act of 1937 (42 U.S.C. 

13 1437f(o)(13)) to meet the replacement require14 ment. Where project-based voucher units are 

15 developed as replacement housing, subpara16 graph (D) of such section 8(o)(13), relating to 

17 percentage limitation and income-mixing re18 quirement for project-based voucher assistance, 

19 shall not apply. The Secretary may waive or 

20 modify other provisions of such section 8(o)(13) 

21 to promote the purposes of this Act. 

22 (F) TENANT-BASED VOUCHERS AS RE23 PLACEMENT HOUSING.—A grantee may replace 

24 up to 20 percent of the public housing or other 

25 assisted housing dwelling units that are demolVerDate Sep 11 2014 00:52 Dec 15, 2016 Jkt 069200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S3537.IS S3537

SSpencer on DSK4SPTVN1PROD with BILLS
29 

•S 3537 IS

1 ished or disposed of under the transformation 

2 plan with tenant-based vouchers in housing 

3 markets where there is an adequate supply of 

4 affordable rental housing in areas of low pov5 erty. Such supply shall be demonstrated by data 

6 that shows within the housing market or area 

7 served by the Choice Neighborhoods project 

8 that— 

9 (i) a minimum of 80 percent of vouch10 ers issued over the preceding 24 months to 

11 comparable families were successfully 

12 leased within 120 days of issuance or, if a 

13 sufficient number of comparable families 

14 have not received vouchers, the Secretary 

15 shall design an alternative measure; 

16 (ii) existing voucher holders are widely 

17 dispersed geographically, as determined by 

18 the Secretary, among the available private 

19 rental housing stock, including in areas of 

20 low poverty; and 

21 (iii) the grantee provides a market 

22 analysis demonstrating that there is a rel23 atively high vacancy rate, as determined by 

24 the Secretary, within the market area with 

25 rent and utility costs not exceeding the apVerDate Sep 11 2014 00:52 Dec 15, 2016 Jkt 069200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S3537.IS S3537

SSpencer on DSK4SPTVN1PROD with BILLS
30 

•S 3537 IS

1 plicable payment standard under section 

2 8(o) of the United States Housing Act of 

3 1937 (42 U.S.C. 1437f(o)). 

4 (6) FAIR HOUSING.—The demolition or disposi5 tion, relocation, replacement, and re-occupancy of 

6 housing units under this Act shall be carried out in 

7 a manner that affirmatively furthers fair housing, as 

8 required under section 808(e) of the Civil Rights Act 

9 of 1968 (42 U.S.C. 3608(e)). Grantees shall adopt 

10 affirmative marketing procedures and require af11 firmative marketing activities of project owners and 

12 managers which special outreach efforts shall be tar13 geted to those who are least likely to apply for the 

14 housing, to ensure that all persons, regardless of 

15 their race, color, national origin, religion, sex, dis16 ability, or familial status are aware of the housing 

17 opportunities in each project funded under this Act. 

18 (7) ACCESSIBILITY REQUIREMENTS.—All new 

19 construction and substantial alterations of existing 

20 buildings receiving assistance under this Act shall 

21 comply with the requirements of the Rehabilitation 

22 Act of 1973 (29 U.S.C. 701 et seq.), the Uniform 

23 Federal Accessibility Standards, the Fair Housing 

24 Act (42 U.S.C. 3601 et seq.), and any other require25 ments, as determined by the Secretary. 


SSpencer on DSK4SPTVN1PROD with BILLS
31 

•S 3537 IS

1 (8) AFFORDABILITY REQUIREMENT.—The 

2 owner of a property assisted with funding under this 

3 Act shall agree to a period of affordability for the 

4 property which shall be not less than the period of 

5 affordability to which the property is already subject 

6 and remains subject, or 30 years, whichever is great7 er. 

8 (9) COST LIMITS.—Subject to the provisions of 

9 this Act, the Secretary shall establish cost limits on 

10 eligible activities under this Act sufficient to provide 

11 for effective transformation programs. 

12 (10) ENVIRONMENTAL REVIEW.—For purposes 

13 of environmental review, assistance and projects 

14 under this Act shall be treated as assistance for spe15 cial projects that are subject to section 305(c) of the 

16 Multifamily Housing Property Disposition Reform 

17 Act of 1994 (42 U.S.C. 3547(c)), and shall be sub18 ject to the regulations issued by the Secretary to im19 plement such section. 

20 (11) GRANTEE REPORTING.—The Secretary 

21 shall require grantees under this Act to report the 

22 sources and uses of all amounts expended and other 

23 information for transformation plans for the annual 

24 report of the Secretary to Congress or other pur25 poses, as determined by the Secretary. 


SSpencer on DSK4SPTVN1PROD with BILLS
32 

•S 3537 IS

1 SEC. 11. DEMOLITION AND DISPOSITION. 

2 The demolition or disposition of severely distressed 

3 public and assisted housing pursuant to a transformation 

4 plan is exempt from the provisions of section 18 of the 

5 United States Housing Act of 1937 (42 U.S.C. 1437p). 

6 SEC. 12. ADMINISTRATION BY OTHER ENTITIES. 

7 The Secretary may require a grantee under this Act 

8 to make arrangements satisfactory to the Secretary for 

9 use of an entity other than the original grantee to carry 

10 out activities assisted under the transformation plan, if 

11 the Secretary determines that such action will help to ef12 fectuate the purposes of this Act. 

13 SEC. 13. WITHDRAWAL OF FUNDING. 

14 If a grantee under this Act does not proceed within 

15 a reasonable time frame in implementing the trans16 formation plan of the grantee, or does not otherwise com17 ply with the requirements of this Act or the grant agree18 ment, as determined by the Secretary, the Secretary is au19 thorized to withdraw any grant amounts under this Act 

20 that have not been obligated by the grantee. The Secretary 

21 may redistribute any withdrawn amounts to one or more 

22 other eligible entities capable of proceeding expeditiously 

23 in the same locality in carrying out the transformation 

24 plan of the original grantee, or as such plan may be modi25 fied and approved by the Secretary, or, if that is not feaVerDate Sep 11 2014 00:52 Dec 15, 2016 Jkt 069200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S3537.IS S3537

SSpencer on DSK4SPTVN1PROD with BILLS
33 

•S 3537 IS

1 sible, to one or more other applicants that has already re2 ceived assistance under this Act. 

3 SEC. 14. ANNUAL REPORT. 

4 The Secretary shall submit to Congress an annual re5 port setting forth— 

6 (1) the number, type, and cost of affordable 

7 housing units revitalized pursuant to this Act; 

8 (2) the amount and type of financial assistance 

9 provided under and in conjunction with this Act, in10 cluding a specification of the amount and type of as11 sistance provided for educational opportunities, serv12 ices, public assets, public transportation, and access 

13 to jobs; and 

14 (3) the impact of grants made under this Act 

15 on the original residents, the target neighborhoods, 

16 and the larger communities within which they are lo17 cated. 

18 SEC. 15. PROGRAM EVALUATION. 

19 The Secretary shall conduct, and shall submit a re20 port to Congress on, an evaluation of the Choice Neighbor21 hoods program, with respect to which— 

22 (1) the Secretary shall— 

23 (A) select an outside expert firm to con24 duct the evaluation of the Choice Neighbor25 hoods program; and 


SSpencer on DSK4SPTVN1PROD with BILLS
34 

•S 3537 IS

1 (B) consult with the Secretary of Labor, 

2 the Secretary of Education, the Secretary of 

3 Transportation, the Secretary of Health and 

4 Human Services, the Administrator of the En5 vironmental Protection Agency, the Attorney 

6 General, and other appropriate agencies on the 

7 evaluation of the program and selection of the 

8 evaluation firm; 

9 (2) the Secretary shall submit to Congress a re10 port of the results of the evaluation 5 years after the 

11 initial grant awards, and annually thereafter; and 

12 (3) the factors to be considered within the eval13 uation include measures of— 

14 (A) resident engagement within and after 

15 the transformation process; 

16 (B) neighborhood improvement, including 

17 changes in property values, demographic 

18 changes, access to transportation, and survey 

19 data on resident satisfaction; 

20 (C) self-sufficiency, including changes in 

21 resident and neighborhood income, and changes 

22 in neighborhood and resident employment sta23 tistics; 


SSpencer on DSK4SPTVN1PROD with BILLS
35 

•S 3537 IS

1 (D) educational improvement, including 

2 student performance data, student mobility and 

3 absenteeism, and parental involvement; and 

4 (E) other indicators as determined appro5 priate by the Secretary. 

6 SEC. 16. FUNDING. 

7 There are authorized to be appropriated the fol8 lowing: 

9 (1) $350,000,000 for fiscal year 2017, and such 

10 sums as may be necessary in each of fiscal years 

11 2018 through 2021, for grants under this Act. Of 

12 the funding authorized in any fiscal year, up to 10 

13 percent is authorized for planning grants. In award14 ing planning grants, the Secretary may elect to base 

15 selection on a subset of the required provisions of 

16 this Act. In any fiscal year, up to 5 percent is au17 thorized for technical assistance and program eval18 uation efforts related to grants awarded under this 

19 Act, or under predecessor programs. 

20 (2) Such sums as may be necessary for each of 

21 fiscal years 2017 through 2021, for providing ten22 ant-based assistance for relocation and for rental as23 sistance under section 8 of the United States Hous24 ing Act of 1937 (42 U.S.C. 1437f), for the purposes 

25 of complying with section 10(2) of this Act, but not 


SSpencer on DSK4SPTVN1PROD with BILLS
36 

•S 3537 IS

1 to exceed the amount of assistance for the number 

2 of units demolished or disposed of under section 

3 10(2). 

(3) Not less than 2 4 ⁄3 of amounts made available 

5 in any fiscal year under this Act shall be used for, 

or 2 6 ⁄3 of the number of housing units assisted under 

7 this Act shall be, public housing units, subject to de 

8 minimis variations, as may result from the grantee 

9 selection process. 

Æ 


SSpencer on DSK4SPTVN1PROD with BILLS