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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3537 Introduced in Senate (IS)]

<DOC>

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.

    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 ``Choice 
Neighborhoods Initiative Act of 2016''.
    (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. 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.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) the geographic concentration of poverty remains a 
        serious and often unrecognized challenge to the ability of poor 
        families and children to access opportunity and move up the 
        economic ladder;
            (2) the HOPE VI program, authorized by section 24 of the 
        United States Housing Act of 1937 (42 U.S.C. 1437v), presented 
        a successful first step in transforming neighborhoods of 
        extreme poverty with severely distressed housing into 
        revitalized mixed-income neighborhoods;
            (3) there remains a large amount of severely distressed 
        public and privately owned assisted housing concentrated in 
        neighborhoods of extreme poverty; and
            (4) a broader approach is needed, using concentrated and 
        coordinated neighborhood investment from multiple sources to 
        transform neighborhoods of extreme poverty into communities 
        that will improve the quality of life of current and future 
        residents.
    (b) Purposes.--The purposes of this Act are--
            (1) to transform neighborhoods of extreme poverty into 
        mixed-income neighborhoods of long-term viability, by 
        revitalizing severely distressed housing, improving access to 
        economic opportunities, and investing and leveraging 
        investments in well-functioning services, effective schools and 
        education programs, public assets, public transportation, and 
        improved access to jobs;
            (2) to grow communities and metropolitan areas by 
        concentrating, leveraging, and coordinating Federal, State, 
        local, and private funding for public transportation, 
        education, housing, energy, health and mental health services, 
        supportive services, public safety, and environmental programs 
        and initiatives;
            (3) to support positive outcomes for all neighborhood 
        residents, including improvements in educational achievements, 
        and economic self-sufficiency; and
            (4) to ensure that current residents benefit from 
        transformation by preserving affordable housing in the 
        neighborhood or providing residents with the choice to move to 
        affordable housing in another neighborhood of opportunity.

SEC. 3. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Affordable housing.--The term ``affordable housing'' 
        includes--
                    (A) assisted housing, as defined in paragraph (2); 
                or
                    (B) private housing for which the Secretary 
                requires the owner or purchaser of the project to 
                maintain affordability for not fewer than 30 years, in 
                accordance with use restrictions promulgated in 
                regulations by the Secretary, which restrictions shall 
                be--
                            (i) contained in a legally enforceable 
                        document recorded in the appropriate records; 
                        and
                            (ii) consistent with the long-term 
                        viability of the project as rental or 
                        homeownership housing.
            (2) Assisted housing.--The term ``assisted housing'' means 
        housing assisted under--
                    (A) section 8 or 9 of the United States Housing Act 
                of 1937 (42 U.S.C. 1437f and 42 U.S.C. 1437g); and
                    (B) section 221(d)(3) or section 236 of the 
                National Housing Act (12 U.S.C. 1715l and 12 U.S.C. 
                1715z-1).
            (3) Community development corporation.--The term 
        ``community development corporation'' has the meaning given 
        that term in section 204(b)(11) of the Departments of Veterans 
        Affairs and Housing and Urban Development, and Independent 
        Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-11a(b)(11)).
            (4) Critical community improvements.--The term ``critical 
        community improvements'' means--
                    (A) development or improvement of community 
                facilities to promote upward mobility, self-
                sufficiency, or improved quality of life for residents 
                of the neighborhood, such as construction or 
                rehabilitation of parks and community gardens, 
                environmental improvements or site remediation at 
                affected sites; and
                    (B) activities to promote economic development, 
                such as development or improvement of transit, retail, 
                community financial institutions, public services, 
                facilities, assets or other community resources.
            (5) Extreme poverty.--The term ``extreme poverty'' means, 
        with respect to a neighborhood, that the neighborhood--
                    (A) has a high percentage of residents who, based 
                on the most recent data collected by the Bureau of the 
                Census--
                            (i) are estimated to be in poverty; or
                            (ii) have extremely low incomes; and
                    (B) is experiencing distress related to--
                            (i) per capita crime rates over three or 
                        more years that are significantly higher than 
                        the per capita crime rates of the city or 
                        county in which the neighborhood is located;
                            (ii) high rates of vacant, abandoned, or 
                        substandard homes relative to the city or 
                        county as a whole;
                            (iii) a low-performing public school;
                            (iv) other such factors as determined by 
                        the Secretary that further the purposes of this 
                        Act; or
                            (v) any combination of such factors.
            (6) Families.--The term ``families'' has the meaning given 
        that term in section 3(b)(3) of the United States Housing Act 
        of 1937 (42 U.S.C. 1437a(b)(3)).
            (7) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given that 
        term in section 102 of the Higher Education Act of 1965 (20 
        U.S.C. 1002).
            (8) Long-term viability.--The term ``long-term viability'' 
        means, with respect to a neighborhood, that the neighborhood is 
        sustainable on an economic, educational, and environmental 
        basis.
            (9) Public housing agency.--The term ``public housing 
        agency'' has the meaning given that term in section 3(b)(6) of 
        the United States Housing Act of 1937 (42 U.S.C. 1437a(b)(6)).
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (11) Severely distressed housing.--The term ``severely 
        distressed housing'' means a public or assisted housing project 
        (or building in a project) that--
                    (A)(i) requires major redesign, reconstruction, or 
                redevelopment, or partial or total demolition, to 
                correct serious deficiencies in the original design 
                (including inappropriately high population density), 
                deferred maintenance, physical deterioration or 
                obsolescence of major systems, and other deficiencies 
                in the physical plant of the project; and
                    (ii) is a significant contributing factor to the 
                physical decline of and disinvestment by public and 
                private entities in the surrounding neighborhood; or
                    (B) was a project described in subparagraph (A) 
                that has been legally vacated or demolished, but for 
                which the Secretary has not yet provided replacement 
                housing assistance other than tenant-based assistance.
            (12) Supportive services.--The term ``supportive services'' 
        includes all activities for public or assisted housing tenants 
        that live in or are displaced from the projects being 
        revitalized under this Act, that will promote upward mobility, 
        self-sufficiency, or improved quality of life, including such 
        activities as literacy training, remedial and continuing 
        education, job training, financial literacy instruction, day 
        care, youth services, aging-in-place, public transportation, 
        physical and mental health services, economic development 
        activities, and other programs for which the community 
        demonstrates need.

SEC. 4. GRANT AUTHORITY.

    The Secretary is authorized to make competitive grants to eligible 
entities that submit transformation plans that will further the 
purposes of this Act in eligible neighborhoods.

SEC. 5. ELIGIBLE ENTITIES.

    Entities eligible to be grantees under this Act include local 
governments, public housing agencies, community development 
corporations, assisted housing owners, and other for-profit and 
nonprofit entities.

SEC. 6. ELIGIBLE NEIGHBORHOODS.

    Eligible neighborhoods for grant funds under this Act include 
neighborhoods with--
            (1) a concentration of extreme poverty;
            (2) severely distressed housing; and
            (3) a potential for long-term viability, once key problems 
        are addressed, including neighborhoods with characteristics 
        such as proximity to educational institutions, medical centers, 
        central business districts, major employers, effective 
        transportation alternatives (including public transit, walking, 
        and bicycling), and being close to low-poverty neighborhoods.

SEC. 7. AUTHORIZED ACTIVITIES.

    (a) In General.--Activities authorized to be funded under this Act 
are those that will further the purposes of this Act, in accordance 
with a transformation plan approved under section 9, to carry out 
transformational programs and initiatives.
    (b) Required Activities.--The following authorized activities shall 
be contained in the transformation plan to be submitted under section 9 
and implemented by a grantee under an approved transformation plan:
            (1) The transformation of housing through rehabilitation, 
        preservation, or demolition, or any combination thereof, and 
        replacement of severely distressed housing projects that 
        incorporates energy efficient design principles.
            (2) Activities that promote the economic self-sufficiency 
        of residents of the revitalized housing and of the surrounding 
        neighborhood.
            (3) Activities that preserve affordable housing in the 
        neighborhood and other activities necessary to ensure that 
        existing residents have access to the benefits of the 
        neighborhood transformation.
            (4) Activities that demonstrate that each tenant relocated 
        from severely distressed housing who wishes to return to the 
        revitalized on-site housing in the neighborhood or to 
        replacement housing outside of the neighborhood, can return, 
        and shall be provided a preference in accordance with the 
        program requirements in section 10(1).
            (5) Activities that meet the program requirements for 
        replacement of housing units in section 10(5).
            (6) Activities that meet the fair housing program 
        requirements in section 10(6) and the accessibility 
        requirements in section 10(7).
            (7) Appropriate service coordination, support services, 
        mobility counseling, and housing search assistance for 
        residents displaced as a result of revitalization of severely 
        distressed projects.
            (8) Involvement of residents of severely distressed housing 
        and of the neighborhood in planning and implementation of the 
        transformation plan, including reasonable steps to help ensure 
        meaningful participation for residents who, as a result of 
        their national origin, are limited in their English 
        proficiency.
            (9) Relocation assistance, including tenant-based rental 
        assistance renewable under section 8 of the United States 
        Housing Act of 1937 (42 U.S.C. 1437f), and supportive services 
        for families that are displaced, including mobility and 
        relocation counseling over multiple years, reasonable moving 
        costs, and security deposits.
            (10) Tracking of tenants relocated during redevelopment 
        throughout the life of the grant or until full occupancy of 
        replacement housing, whichever is longer.
            (11) Links to local education efforts, as described in 
        subsection (c)(4).
    (c) Eligible Activities.--In addition to the activities required 
under subsection (b), activities eligible for funding under this Act 
include--
            (1) new construction, acquisition or rehabilitation of 
        public, assisted, and privately owned housing that incorporates 
        sustainable design principles, including energy efficiency;
            (2) new construction, acquisition, or rehabilitation of 
        mixed-use developments that include public or assisted housing;
            (3) the acquisition, demolition, or disposition of 
        properties, including Federal Housing Administration-foreclosed 
        properties;
            (4) programs administered in collaboration with local 
        educators and others to engage in local community planning, to 
        help increase access to place-based programs that combine a 
        continuum of effective community services, strong family 
        support, and comprehensive education reform to improve the 
        educational and life outcomes for resident children and youth;
            (5) providing support services for residents primarily 
        focused on case management, service coordination (including 
        family self-sufficiency coordinators), workforce development, 
        financial literacy, and technical assistance to enable 
        residents to access programs from other key agencies and local 
        service providers, in order to help residents with stable 
        housing, improve outcomes for children, enhance adults' 
        capacity for self-sufficiency and economic security, and 
        services for the elderly and persons with disabilities to 
        maintain independence;
            (6) rehabilitation, physical improvement and development of 
        community facilities that are primarily intended to facilitate 
        the delivery of economic, community, and supportive services 
        which have a significant benefit to residents of housing 
        assisted by the grant and residents of off-site replacement 
        housing;
            (7) work incentives designed to help public and assisted 
        housing residents access jobs and move toward self-sufficiency;
            (8) partnerships involving the police, community 
        organizations, and other entities to reduce crime and promote 
        safety;
            (9) partnering with employers and for-profit and nonprofit 
        organizations to create jobs and job training opportunities, 
        with a focus on job opportunities accessible by mass transit;
            (10) activities that promote sustainable neighborhoods and 
        incorporate principles of sustainable design and development;
            (11) critical community improvements not otherwise covered 
        by this Act;
            (12) loss reserves to protect residents of housing assisted 
        by the grant and continue the project in case of default, 
        foreclosure, or any other adverse financial event; and
            (13) land assembly and land banking.
    (d) Eligible Methods of Support.--Activities carried out with 
amounts from a grant under this Act may be carried out through 
endowments, revolving loan funds, reserves, or other instruments that 
the Secretary approves for new construction or rehabilitation, tenant 
services, and ongoing operating and capital needs.
    (e) Funding Restrictions.--
            (1) Restriction on activities.--
                    (A) In general.--No funds made available under this 
                Act may be used for construction or rehabilitation of a 
                K-12 school building or institution of higher 
                education.
                    (B) Non-housing activities and supportive 
                services.--For each grant under this Act, the grantee 
                shall comply with each of the following requirements:
                            (i) Not more than 30 percent of the amount 
                        of the grant may be used for eligible 
                        activities under paragraphs (4) through (13) of 
                        subsection (c).
                            (ii) Not more than 5 percent of the amount 
                        of the grant may be used for eligible 
                        activities under paragraphs (8) and (9) of 
                        subsection (c).
            (2) Waiver.--The Secretary may waive the funding limits in 
        this subsection in order to promote the purposes of this Act.

SEC. 8. INTERAGENCY CONSULTATION AND NOTIFICATION OF AVAILABLE FUNDING.

    (a) Annual Consultation.--The Secretary shall consult with 
appropriate Federal agencies to identify additional funding 
opportunities that may be available to eligible neighborhoods and 
ensure that eligible entities and grant recipients are aware of such 
opportunities as follows:
            (1) The Secretary shall consult with the Secretary of 
        Labor, the Secretary of Education, the Secretary of 
        Transportation, the Secretary of Health and Human Services, the 
        Administrator of the Environmental Protection Agency, the 
        Attorney General, and other agencies, as the President may 
        prescribe.
            (2) The Secretary shall include in the notification of 
        funding availability for the Choice Neighborhoods program 
        information about other Federal funding opportunities that the 
        Secretary determines to be related to the Choice Neighborhoods 
        program.
            (3) The Secretary shall consult with the Secretary of 
        Labor, the Secretary of Education, the Secretary of 
        Transportation, the Secretary of Health and Human Services, the 
        Administrator of the Environmental Protection Agency, the 
        Attorney General, and other agencies, as the Secretary may 
        prescribe, to identify barriers to and opportunities for 
        greater coordination of Federal resources for meeting the 
        purposes of this Act.
    (b) Reports to Congress.--The Secretary shall--
            (1) not later than 1 year after the date of enactment of 
        this Act, submit a report to the Committee on Banking, Housing, 
        and Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives identifying barriers 
        and opportunities to the coordination of Federal funding to 
        meet the purposes of this Act, including any regulatory or 
        statutory recommendations for addressing such barriers; and
            (2) issue an annual report to be posted on the website of 
        the Department of Housing and Urban Development that identifies 
        Federal funding opportunities for eligible neighborhoods and 
        best practices in coordinating Federal funding for purposes of 
        this Act.

SEC. 9. TRANSFORMATION PLAN AND SELECTION.

    (a) Transformation Plan.--An application for a grant under this Act 
shall be submitted in the form of a transformation plan that--
            (1) demonstrates how the transformation plan will achieve 
        the desired priority outcomes of transforming a distressed 
        neighborhood of extreme poverty into a mixed-income 
        neighborhood with high-quality, safe, affordable housing, 
        economic opportunities, well-functioning services, public 
        assets, access to jobs, public transportation, and effective 
        education programs and public schools, including charter 
        schools and other autonomous public schools;
            (2) includes a long-term affordability plan that describes 
        how the grantee will maintain affordable housing in the 
        neighborhood over the succeeding 50 years or longer, including 
        affordability provisions relating to dwelling units provided 
        using assistance under the grant under this Act, and an 
        agreement by the applicant to update such plan every 5 years 
        during such period;
            (3) demonstrates how the required activities under section 
        7(b) will be carried out, with particular focus on the housing 
        transformation;
            (4) describes the other eligible activities listed in 
        section 7(c) that will occur in support of the housing 
        transformation;
            (5) defines desired outcomes of the strategy, identifies 
        the population that will benefit, describes the challenges they 
        face, and the evidence base that informs the proposed 
        strategies that will result in the desired outcomes for the 
        community and residents; and
            (6) includes such other information and shall be submitted 
        at such time and in accordance with procedures as the Secretary 
        shall prescribe.
    (b) Selection Criteria.--The Secretary shall establish criteria for 
the award of grants under this Act, which shall include the extent to 
which the transformation plan--
            (1) demonstrates the ability of the plan to further the 
        purposes of this Act, as evidenced by, among other factors, a 
        track record of effective partnerships and community 
        engagement;
            (2) demonstrates inclusive local planning with input from 
        local government, housing owners and providers, educators, 
        residents, local community organizations, public schools, early 
        learning programs, health service organizations, and community 
        stakeholders in the development and implementation of a 
        sustainable revitalization program;
            (3) coordinates multiple funding resources, including 
        public, private, and philanthropic funding, and emphasizes 
        collaboration between the local government, early learning 
        programs, and public schools, or a public housing agency, or 
        all three;
            (4) submits current data showing that the neighborhood 
        targeted for revitalization is in need of and can benefit from 
        the authorized activities described in section 7 and proposed 
        in the transformation plan;
            (5) demonstrates that the neighborhood has, or will have, 
        the potential for long-term viability;
            (6) demonstrates the capability and record of the applicant 
        and the partners of the applicant for managing housing 
        redevelopment or modernization projects and meeting performance 
        benchmarks;
            (7) demonstrates that sustainable building and energy 
        efficient design principles are incorporated or will be 
        incorporated in the activities;
            (8) demonstrates that the neighborhood has, or will have 
        within a reasonable time, public transportation that provides 
        effective access to economic opportunities and commercial and 
        public services;
            (9) demonstrates that the residents of revitalized housing 
        developments have or will have access to high-quality 
        educational opportunities, including early learning and 
        effective K-12 public schools, in or outside of the 
        neighborhood;
            (10) demonstrates that the transformation plan includes the 
        provision of appropriate supportive services and activities 
        that promote economic self-sufficiency of residents, and a plan 
        to sustain those services;
            (11) demonstrates that the transformation plan provides 
        support for residents displaced as a result of the 
        revitalization of the project, including assistance in 
        obtaining housing in areas with low concentrations of poverty 
        and minority populations;
            (12) demonstrates that sufficient housing opportunities are 
        available in the neighborhood to be revitalized and in areas 
        with low concentrations of poverty and minority populations to 
        accommodate displaced residents;
            (13) has a well-documented assessment of the number of 
        households with special needs for ongoing supportive services 
        residing in the public or assisted properties that are the 
        target of the grant and an effective plan to address those 
        needs;
            (14) demonstrates the ability to leverage funds from--
                    (A) other programs of the Department of Housing and 
                Urban Development;
                    (B) other Federal, State, or local programs; or
                    (C) the private sector, including donations of land 
                or services;
            (15) replaces the public and assisted housing units in 
        accordance with section 10(5), if targeting a project that 
        meets the definition of section 3(11)(B);
            (16) demonstrates, if feasible, phased redevelopment that 
        provides for demolition and construction of dwelling units in 
        phases, to limit disruptions to residents;
            (17) demonstrates how the applicant will use indicators of 
        housing redevelopment, neighborhood quality, resident well-
        being, and other outcomes to measure success, manage program 
        implementation, and engage stakeholders, consistent with 
        requirements established by the Secretary; and
            (18) demonstrates compliance with any other factors and 
        priorities, as the Secretary may prescribe through a notice of 
        funding availability and that further the purposes of this Act.

SEC. 10. PROGRAM REQUIREMENTS.

    The following requirements shall apply to any grant made under this 
Act:
            (1) Housing choice opportunities for returning tenants.--An 
        approved transformation plan under section 9 shall demonstrate 
        that each former tenant who wishes to return to the on-site or 
        off-site replacement housing may return if the tenant was 
        lease-compliant at the time of departure from the housing 
        subject to rehabilitation or demolition, and would be eligible, 
        as of the time of such return, for occupancy under the 
        eligibility, screening, and occupancy standards, policies, or 
        practices applicable to the housing from which the resident was 
        displaced, as in effect at such time of displacement. A 
        returning tenant shall be provided a preference for occupancy 
        of on-site or off-site replacement units before such units are 
        made available to any other eligible households, or the tenant 
        may choose to retain or obtain tenant-based voucher assistance 
        provided under section 8(o) of the United States Housing Act of 
        1937 (42 U.S.C. 1437f(o)), for relocation from the properties 
        revitalized under this Act.
            (2) Relocation and notice.--All relocation activities 
        resulting from, or that will result from, demolition, 
        disposition, or both demolition and disposition, to be carried 
        out under a transformation plan relating to a grant under this 
        Act shall be subject to the following requirements:
                    (A) The uniform relocation act.--The Uniform 
                Relocation Assistance and Real Property Acquisition 
                Policies Act of 1970 (42 U.S.C. 4601 et seq.) shall 
                apply to all relocation activities pursuant to a 
                transformation plan under this Act, except as otherwise 
                provided in this Act.
                    (B) Relocation plan.--The applicant shall submit to 
                the Secretary, before acquisition or demolition, a 
                relocation plan providing for the relocation of 
                residents occupying the public or assisted housing for 
                which the demolition or disposition is proposed.
            (3) Notice upon approval of application.--Within a 
        reasonable time after notice to the applicant of the approval 
        of an application for a grant under this section, the applicant 
        shall provide notice in writing, in plain and non-technical 
        language, to the residents of the public and assisted housing 
        subject to the approved transformation plan that--
                    (A) states that the application and transformation 
                plan has been approved;
                    (B) describes the process involved to relocate the 
                residents, including a statement that the residents may 
                not be relocated until the conditions in this section 
                have been met;
                    (C) provides information regarding relocation 
                options; and
                    (D) advises residents of the availability of 
                relocation counseling.
            (4) Notice before relocation.--Except in the cases of a 
        substantial and imminent threat to health or safety, not later 
        than 90 days before the date on which residents will be 
        relocated, the grantee shall provide notice in writing, in 
        plain and non-technical language, to each family residing in a 
        public or assisted housing project that is subject to an 
        approved transformation plan, and in accordance with such 
        guidelines as the Secretary may issue governing such 
        notification of the demolition, their rights, and relocation 
        options.
            (5) One-for-one replacement of public or assisted housing 
        units.--Each transformation plan that provides for dwelling 
        units to be demolished or disposed shall provide as follows:
                    (A) Number of units.--For 100 percent of all such 
                dwelling units in existence, as of the date of the 
                application for the grant, that are to be demolished or 
                disposed, the transformation plan shall provide for 
                replacement of the dwelling unit.
                    (B) Number of bedrooms.--Replacement housing for 
                demolished properties shall reflect the number of 
                bedrooms that are needed to adequately serve returning 
                tenants, households currently on the waiting list and 
                that are needed based on other market data, except that 
                in instances where the tenants of the original 
                properties need a different number of bedrooms than 
                households on the waiting list, the plan may enable 
                displaced tenants to exercise their opportunity under 
                paragraph (1), using a tenant-based voucher in the 
                original neighborhood or other neighborhood of the 
                tenants' choice.
                    (C) Location.--
                            (i) Replacement units.--Replacement housing 
                        units shall be developed--
                                    (I) in the neighborhood being 
                                revitalized; and
                                    (II) within the metropolitan area, 
                                up to 25 miles from the original 
                                project site, as necessary to--
                                            (aa) comply with fair 
                                        housing requirements;
                                            (bb) deconcentrate poverty;
                                            (cc) redevelop on site with 
                                        appropriate densities; or
                                            (dd) meet other factors, as 
                                        determined by the Secretary in 
                                        order to further the purposes 
                                        of this Act.
                            (ii) Replacement housing outside immediate 
                        neighborhood.--Replacement housing outside the 
                        immediate neighborhood shall offer access to 
                        economic opportunities and public 
                        transportation and shall 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.
                            (iii) Off-site replacement housing.--Off-
                        site replacement housing, outside the immediate 
                        neighborhood, shall not be located in areas of 
                        minority concentration, defined in relation to 
                        the metropolitan area or rural county in which 
                        the Choice Neighborhoods project is located, or 
                        in areas of extreme poverty.
                    (D) Types of units.--Replacement housing is public 
                housing or other assisted housing units, excluding 
                tenant-based vouchers, unless permitted in this 
                section.
                    (E) Use of project-based vouchers for replacement 
                housing.--The Secretary may require the use of project-
                based voucher assistance under section 8(o)(13) of the 
                United States Housing Act of 1937 (42 U.S.C. 
                1437f(o)(13)) to meet the replacement requirement. 
                Where project-based voucher units are developed as 
                replacement housing, subparagraph (D) of such section 
                8(o)(13), relating to percentage limitation and income-
                mixing requirement for project-based voucher 
                assistance, shall not apply. The Secretary may waive or 
                modify other provisions of such section 8(o)(13) to 
                promote the purposes of this Act.
                    (F) Tenant-based vouchers as replacement housing.--
                A grantee may replace up to 20 percent of the public 
                housing or other assisted housing dwelling units that 
                are demolished or disposed of under the transformation 
                plan with tenant-based vouchers in housing markets 
                where there is an adequate supply of affordable rental 
                housing in areas of low poverty. Such supply shall be 
                demonstrated by data that shows within the housing 
                market or area served by the Choice Neighborhoods 
                project that--
                            (i) a minimum of 80 percent of vouchers 
                        issued over the preceding 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, the Secretary shall design an 
                        alternative measure;
                            (ii) existing voucher holders are widely 
                        dispersed geographically, as determined by the 
                        Secretary, among the available private rental 
                        housing stock, including in areas of low 
                        poverty; and
                            (iii) the grantee provides a market 
                        analysis demonstrating that there is a 
                        relatively high vacancy rate, as determined by 
                        the Secretary, within the market area with rent 
                        and utility costs not exceeding the applicable 
                        payment standard under section 8(o) of the 
                        United States Housing Act of 1937 (42 U.S.C. 
                        1437f(o)).
            (6) Fair housing.--The demolition or disposition, 
        relocation, replacement, and re-occupancy of housing units 
        under this Act shall be carried out in a manner that 
        affirmatively furthers fair housing, as required under section 
        808(e) of the Civil Rights Act of 1968 (42 U.S.C. 3608(e)). 
        Grantees shall adopt affirmative marketing procedures and 
        require affirmative marketing activities of project owners and 
        managers which 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 project funded under this 
        Act.
            (7) Accessibility requirements.--All new construction and 
        substantial alterations of existing buildings receiving 
        assistance under this Act shall comply with the requirements of 
        the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the 
        Uniform Federal Accessibility Standards, the Fair Housing Act 
        (42 U.S.C. 3601 et seq.), and any other requirements, as 
        determined by the Secretary.
            (8) Affordability requirement.--The owner of a property 
        assisted with funding under this Act shall agree to a period of 
        affordability for the property which shall be not less than the 
        period of affordability to which the property is already 
        subject and remains subject, or 30 years, whichever is greater.
            (9) Cost limits.--Subject to the provisions of this Act, 
        the Secretary shall establish cost limits on eligible 
        activities under this Act sufficient to provide for effective 
        transformation programs.
            (10) Environmental review.--For purposes of environmental 
        review, assistance and projects under this Act shall be treated 
        as assistance for special projects that are subject to section 
        305(c) of the Multifamily Housing Property Disposition Reform 
        Act of 1994 (42 U.S.C. 3547(c)), and shall be subject to the 
        regulations issued by the Secretary to implement such section.
            (11) Grantee reporting.--The Secretary shall require 
        grantees under this Act to report the sources and uses of all 
        amounts expended and other information for transformation plans 
        for the annual report of the Secretary to Congress or other 
        purposes, as determined by the Secretary.

SEC. 11. DEMOLITION AND DISPOSITION.

    The demolition or disposition of severely distressed public and 
assisted housing pursuant to a transformation plan is exempt from the 
provisions of section 18 of the United States Housing Act of 1937 (42 
U.S.C. 1437p).

SEC. 12. ADMINISTRATION BY OTHER ENTITIES.

    The Secretary may require a grantee under this Act to make 
arrangements satisfactory to the Secretary for use of an entity other 
than the original grantee to carry out activities assisted under the 
transformation plan, if the Secretary determines that such action will 
help to effectuate the purposes of this Act.

SEC. 13. WITHDRAWAL OF FUNDING.

    If a grantee under this Act does not proceed within a reasonable 
time frame in implementing the transformation plan of the grantee, or 
does not otherwise comply with the requirements of this Act or the 
grant agreement, as determined by the Secretary, the Secretary is 
authorized to withdraw any grant amounts under this Act that have not 
been obligated by the grantee. The Secretary may redistribute any 
withdrawn amounts to one or more other eligible entities capable of 
proceeding expeditiously in the same locality in carrying out the 
transformation plan of the original grantee, or as such plan may be 
modified and approved by the Secretary, or, if that is not feasible, to 
one or more other applicants that has already received assistance under 
this Act.

SEC. 14. ANNUAL REPORT.

    The Secretary shall submit to Congress an annual report setting 
forth--
            (1) the number, type, and cost of affordable housing units 
        revitalized pursuant to this Act;
            (2) the amount and type of financial assistance provided 
        under and in conjunction with this Act, including a 
        specification of the amount and type of assistance provided for 
        educational opportunities, services, public assets, public 
        transportation, and access to jobs; and
            (3) the impact of grants made under this Act on the 
        original residents, the target neighborhoods, and the larger 
        communities within which they are located.

SEC. 15. PROGRAM EVALUATION.

    The Secretary shall conduct, and shall submit a report to Congress 
on, an evaluation of the Choice Neighborhoods program, with respect to 
which--
            (1) the Secretary shall--
                    (A) select an outside expert firm to conduct the 
                evaluation of the Choice Neighborhoods program; and
                    (B) consult with the Secretary of Labor, the 
                Secretary of Education, the Secretary of 
                Transportation, the Secretary of Health and Human 
                Services, the Administrator of the Environmental 
                Protection Agency, the Attorney General, and other 
                appropriate agencies on the evaluation of the program 
                and selection of the evaluation firm;
            (2) the Secretary shall submit to Congress a report of the 
        results of the evaluation 5 years after the initial grant 
        awards, and annually thereafter; and
            (3) the factors to be considered within the evaluation 
        include measures of--
                    (A) resident engagement within and after the 
                transformation process;
                    (B) neighborhood improvement, including changes in 
                property values, demographic changes, access to 
                transportation, and survey data on resident 
                satisfaction;
                    (C) self-sufficiency, including changes in resident 
                and neighborhood income, and changes in neighborhood 
                and resident employment statistics;
                    (D) educational improvement, including student 
                performance data, student mobility and absenteeism, and 
                parental involvement; and
                    (E) other indicators as determined appropriate by 
                the Secretary.

SEC. 16. FUNDING.

    There are authorized to be appropriated the following:
            (1) $350,000,000 for fiscal year 2017, and such sums as may 
        be necessary in each of fiscal years 2018 through 2021, for 
        grants under this Act. Of the funding authorized in any fiscal 
        year, up to 10 percent is authorized for planning grants. In 
        awarding planning grants, the Secretary may elect to base 
        selection on a subset of the required provisions of this Act. 
        In any fiscal year, up to 5 percent is authorized for technical 
        assistance and program evaluation efforts related to grants 
        awarded under this Act, or under predecessor programs.
            (2) Such sums as may be necessary for each of fiscal years 
        2017 through 2021, for providing tenant-based assistance for 
        relocation and for rental assistance under section 8 of the 
        United States Housing Act of 1937 (42 U.S.C. 1437f), for the 
        purposes of complying with section 10(2) of this Act, but not 
        to exceed the amount of assistance for the number of units 
        demolished or disposed of under section 10(2).
            (3) Not less than \2/3\ of amounts made available in any 
        fiscal year under this Act shall be used for, or \2/3\ of the 
        number of housing units assisted under this Act shall be, 
        public housing units, subject to de minimis variations, as may 
        result from the grantee selection process.
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