Restoring Communities Left Behind Act

To direct the Secretary of Housing and Urban Development to establish a grant program to help revitalize certain localities, and for other purposes. 1. Short title This Act may be cited as the Restoring Communities Left Behind Act 2. Findings Congress finds the following: (1) As the Nation continues to feel the devastating economic impacts of Coronavirus Disease 2019 (COVID-19), many urban and rural communities are still suffering from the effects of underwater mortgages, vacancy, abandoned properties, blight, aging housing stock, properties with deferred maintenance and harmful materials such as lead, asbestos, and mold, unemployment, and population loss. (2) While some cities and counties struggle with disinvestment and population loss, there are also pockets of economic distress in otherwise prosperous, growing areas. (3) Investments targeted to these communities left behind will be critical to ensure equitable economic recovery, job creation, and housing and neighborhood infrastructure revitalization. (4) The need to revitalize neighborhoods is greater than what can be supported with existing local tax bases. (5) Communities continue to suffer from the impact of governmental policies and private sector practices that forbade or discouraged mortgage lending in neighborhoods having significant minority populations. (6) Many State and local governments, land banks, and nonprofit organizations across the United States have responded to the housing crisis by creating cost-effective strategies to revitalize neighborhoods. (7) 2016 data from the United States Census Bureau shows that non-Hispanic, White households have an average net worth of $143,600, while Black households have an average net worth of $12,920, and Hispanic households have an average net worth of $21,420. (8) Housing equity is a significant portion of Black and Hispanic households’ net worth, making up nearly 57 percent of Black households’ net worth, 66.5 percent of Hispanic households’ net worth, and 40.8 percent of White households’ net worth, according to the Urban Institute’s calculations from the 2016 Survey of Consumer Finances. (9) The 2008 Great Recession and the COVID-19 Recession have exacerbated the racial wealth gap. (10) Funding innovative local neighborhood strategies will allow the United States to close the racial wealth gap, ensure equitable access to housing and economic mobility, and counter the lasting legacy of redlining policies. (11) Despite the strong requirement to affirmatively furthering fair housing under the Fair Housing Act, the lack of accountability measures implemented by the Department of Housing and Urban Development to ensure equitable use of housing and community development dollars in Federal programs has allowed for the perpetuation of the legacy of redlining and neighborhood disinvestment. (12) It is imperative that the Federal Government make funding available for the best local strategies to increase homeownership and preserve home equity in impacted areas, access to safe and affordable rental housing, economic growth, job creation, and to build on local assets to improve communities in ways that affirmatively further fair housing. 3. Competitive grant program (a) Establishment Not later than the expiration of the 120-day period beginning on the date of the enactment of this Act, the Secretary of Housing and Urban Development shall establish a program to award competitive grants to eligible local partnerships to carry out more than one neighborhood revitalization support activity in an eligible locality. (b) Criteria (1) Eligible local partnership A local partnership is eligible to receive a grant under the program established under this section if it meets the following requirements: (A) The local partnership includes a national or local nonprofit organization with expertise in community planning, engagement, organizing, development, or neighborhood revitalization and at least one of the following entities: (i) A city or county government. (ii) A land bank. (iii) A fair housing enforcement organization (as such term is defined in section 561 of the Housing and Community Development Act of 1987 ( 42 U.S.C. 3616a (iv) An anchor institution. (v) A nonprofit organization. (vi) A State housing finance agency (as such term is defined in section 106(h) of the Housing and Urban Development Act of 1968 ( 12 U.S.C. 1701x(h) (vii) A community development financial institution (as such term is defined in section 103(5) of the Community Development Banking and Financial Institutions Act of 1994 ( 12 U.S.C. 4702(5) (viii) A public housing agency (as such term is defined in section 3(b) of the United States Housing Act of 1937 ( 42 U.S.C. 1437a(b) (B) Such local partnership will use a grant awarded under this section to carry out neighborhood revitalization support activities in furtherance of a neighborhood revitalization strategy for eligible localities. (2) Eligible locality For the purposes of this section, an eligible locality is a geographic area or areas at the neighborhood or county level that meet at least four of the following objective criteria of economic distress: (A) Dwelling unit sales prices are lower than the cost to acquire and rehabilitate, or build, a new dwelling unit. (B) High proportions of residential and commercial properties are vacant due to foreclosure, eviction, abandonment, or other causes. (C) Low rates of homeownership. (D) Racial disparities in homeownership rates. (E) High rates of poverty. (F) High rates of unemployment and underemployment. (G) Population loss. (H) Lack of private sector lending on fair and competitive terms for individuals to purchase homes or start small businesses. (I) Other indicators of economic distress, such as the lack of housing affordability, stemming from long-standing government policies and private sector practices that prevented mortgage lending in some communities, such as redlining. The Secretary shall establish thresholds for the criteria of economic distress under this paragraph. (3) Neighborhood revitalization support activities For purposes of this section, neighborhood revitalization support activities are the following: (A) Providing assistance to existing residents experiencing economic distress or at risk of displacement with homeowner rehabilitation assistance, weatherization, improved housing accessibility and livability for seniors and persons with disabilities, energy efficiency improvements, refinancing, housing counseling certified by the Secretary, including loss mitigation counseling, property tax relief, clearing and obtaining formal title, addressing outstanding housing-related expenses, or other activities that the Secretary determines are appropriate. (B) Purchasing non-performing mortgages to assist existing homeowners and advance neighborhood stability. (C) Supporting the purchase and redevelopment of vacant, abandoned, or distressed properties to create affordable rental housing, homeownership or shared equity homeownership opportunities, mixed-use properties, or commercial properties. Properties supported with assistance under this subparagraph may be converted between rental and homeownership, including shared equity homeownership, upon termination of the lease or transfer of the property during the relevant period of affordability to ensure local community needs are met, properties do not sit vacant, and affordability is preserved. (D) Providing pre-purchase counseling through housing counselors certified by the Secretary for neighborhood revitalization support activities that provide homeownership opportunities. (E) Providing down payment assistance to prospective homebuyers. (F) Establishing and operating community land trusts to provide affordable rental and homeownership opportunities, including shared equity homeownership opportunities. (G) Demolishing abandoned or distressed structures, but only if such activity is part of a strategy that incorporates rehabilitation or new construction and efforts to increase affordable housing and homeownership, except that not more than 10 percent of any grant made under this section may be used for activities under this subparagraph unless the Secretary determines that such use is to replace units in an effort to increase affordable housing or homeownership. (H) Establishing or operating land banks to maintain acquire, redevelop, or sell properties that are abandoned or distressed. Preference among applications proposing activities under this subparagraph shall be given to applications that promote distribution of properties for affordable housing and small businesses. (I) Improving parks, sidewalks, street lighting, and other neighborhood improvements that impact quality of life in the targeted neighborhoods, except that not more than 5 percent of any grant made under this section may be used for activities under this subparagraph. (J) In connection with any other eligible activity under this paragraph, working with resident leaders and community groups to undertake community planning, outreach, and neighborhood engagement, consistent with the goals of increasing homeownership, stabilizing neighborhoods, reducing vacancy rates, creating jobs, increasing or stabilizing residential and commercial property values, and meeting other neighborhood needs, except that not more than 10 percent of any grant made under this section may be used for activities under this subparagraph. (4) Affordability terms (A) Rental units In the case of property assisted pursuant to paragraph (3) containing any dwelling units that are made available for rental— (i) such units shall be available for rental only by a household having an income that does not exceed 60 percent of the median income for the area in which such unit is located; (ii) such units shall remain affordable for at least 30 years; (iii) such property may be a mixed-use property; and (iv) such unit shall be maintained in habitable condition, as defined by the locality in which the property is located. (B) Homeownership units In the case of property assisted pursuant to paragraph (3) consisting of a dwelling unit, or containing any dwelling units, made available for homeownership, such unit or units— (i) shall be available for purchase only to by a household having an income that does not exceed 120 percent of the median income for the area in which such unit is located; (ii) if made available through a shared equity homeownership program, shall remain affordable for at least 30 years; and (iii) if not made available through a shared equity homeownership program— (I) shall remain affordable for a period of years as determined by the partnership, which shall not be shorter than 5 years from the sale of the unit; and (II) shall be subject to resale or recapture provisions that— (aa) are established by the partnership to ensure that the affordability term may be met or funds may be redeployed for neighborhood revitalization support activities; (bb) may be waived in cases of hardship or market depreciation; and (cc) provide that, in the case of a resale, the partnership may maintain preemptive purchase options in order to sell the property to another income qualified purchaser. If a property converts between rental and homeownership or shared equity homeownership, the affordability terms of the new tenure type shall be utilized upon occupancy. (c) Applications (1) In general To apply to receive a grant under this section, an eligible local partnership shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. (2) Grant recipient priority selection criteria The Secretary shall prioritize awarding grants based on the following criteria: (A) The severity of the locality’s indicators of distress under subsection (b)(2). (B) The extent to which the activities proposed will— (i) in the case of rental housing, benefit households having incomes not exceeding 30 percent of the median income for the area; and (ii) in the case of homeownership housing, including shared equity homeownership, benefit households having incomes not exceeding 80 percent of the median income for the area. (C) Whether the activities proposed will promote affordable homeownership and the extent to which such affordability terms will be preserved. (D) The extent to which an eligible partnership that includes a public housing agency will use housing choice vouchers to support homeownership for households at or below 60 percent of area median income. (E) The demonstrated capacity of an eligible local partnership to execute the proposed eligible neighborhood revitalization support activities. (F) The demonstrated community planning, outreach, and engagement practices of an eligible local partnership. (G) The depth and breadth of the community partnership supporting the application. (H) The extent to which existing residents are assisted to prevent displacement. (I) The extent to which the proposed neighborhood revitalization support activities would help close the racial wealth gap by increasing minority homeownership, ensuring equitable access to housing and economic opportunity, and countering the ongoing legacy of redlining policies. (J) The extent to which development of new units are water and energy efficient. (K) The feasibility of the proposed neighborhood revitalization support activities considering local market conditions. (L) The extent to which an application demonstrates comprehensive community planning efforts and additional funds in hand or committed for activities in the geographic area that are not directly related to the provision of affordable housing, such as support for small, minority, and women-owned business activity in commercial zones in the targeted neighborhoods. (3) Geographical diversity The Secretary shall seek to make grants under this section for local partnerships serving geographically diverse areas of economic distress as defined in subsection (b)(2), including metropolitan and underserved rural areas. (d) Operation costs Up to 15 percent of the amount of each grant under this section may be used by the recipient for administrative and organizational support costs. (e) Technical assistance and capacity building The Secretary may reserve up to 1 percent of any funds appropriated to carry out this section for technical assistance activities which support grantees under this program and 1 percent of funds from each grant awarded shall be used to develop grantee capacity to meet the requirements under paragraphs (1) and (2) of subsection (g). (f) Fair housing protections Funds provided under the program under this section may not be used to deny housing opportunities based on the criminal or eviction history, source of income, or veteran status of any member of a household. (g) Accountability of recipients (1) Requirements The Secretary shall— (A) require each grantee under this section to develop and maintain a system to ensure that each recipient of assistance uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and (B) establish minimum requirements for agreements between the grantee and the Secretary, regarding assistance from grants under this section, which shall include— (i) appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the grant to the recipient to ensure compliance with the limitations and requirements of this section and the regulations under this section; and (ii) any other requirements that the Secretary determines are necessary to ensure appropriate grant administration and compliance. (2) Publicly available information The Secretary shall make information regarding the results of assistance provided with amounts from grants under this section publicly available, which shall include at least the following information: (A) A list of recipients of grants awarded under this section and the amount of each such grant. (B) A description of each neighborhood revitalization support activity carried out by each such recipient and the impacts associated with each such activity, including the change in the rate of minority and first-time homeownership. (C) The total number of housing units acquired, redeveloped, or produced using grant amounts under this section. (D) The total number of housing units for rent, ownership, and shared equity homeownership assisted with grant amounts under this section and the number of bedrooms in each such unit. (E) The percentage of housing units assisted with grant amounts under this section that are affordable to low-, very low-, and extremely low-income households. (F) The number of such housing units located in areas where the percentage of households in a racial or ethnic minority group— (i) is at least 20 percentage points higher than the percentage of the population of that minority group for the Metropolitan Statistical Area; (ii) is at least 20 percentage points higher than the percentage of the population of all minorities for the Metropolitan Statistical Area; and (iii) exceeds 50 percent of the population. (G) Any other information that the Secretary of Housing and Urban Development determines necessary to ensure that housing outcomes and grant administration and compliance align with the purposes of this Act. (h) In general Not later than 2 years after grants under this section are first awarded and again 3 years thereafter, the Secretary shall submit to the appropriate Congressional Committees, and make publicly available online, a report that— (1) evaluates the impact of the program established under this section; (2) describes demographic changes in the eligible localities served by grantees of grants under this section, including changes in income, race, and ethnicity, property values, and unemployment rates; (3) identifies the number of housing units assisted with grant amounts under this section located in high- and low-poverty census tracts; (4) identifies the number of accessible units created and modified with grant amounts under this section and where such units are located using the most granular location measurement that is feasible such as at the Census block group level; and (5) identifies where housing units assisted with grant amounts are located in relation to community assets, including high performing schools and public transportation options. (i) Definitions In this section: (1) Anchor institution The term anchor institution (2) Appropriate Congressional Committees The term appropriate Congressional Committees (A) The Committees on Financial Services and Appropriations of the House of Representatives. (B) The Committees on Banking, Housing, and Urban Affairs and Appropriations of the Senate. (3) Community land trust The term community land trust (A) use a ground lease or deed covenant with an affordability period of at least 30 years or more to— (i) make rental and homeownership units affordable to households; and (ii) stipulate a preemptive option to purchase the affordable rentals or homeownership units so that the affordability of the units is preserved for successive income-eligible households; and (B) monitor properties to ensure affordability is preserved. (4) Land bank The term land bank (5) Neighborhood revitalization support activity The term neighborhood revitalization support activity (6) Non-performing mortgage The term non-performing (7) Nonprofit organization The term nonprofit organization section 501(c)(3) 26 U.S.C. 501(c)(3) (8) Shared equity homeownership program (A) In general The term shared equity homeownership program (B) Affordability requirements Any such program under subparagraph (A) shall— (i) provide affordable homeownership opportunities to households; and (ii) utilize a ground lease, deed restriction, subordinate loan, or similar legal mechanism that includes provisions ensuring that the program shall— (I) maintain the home as affordable for subsequent very low-, low-, or moderate-income families for an affordability term of at least 30 years after recordation; (II) apply a resale formula that limits the homeowner’s proceeds upon resale; and (III) provide the program administrator or such administrator’s assignee a preemptive option to purchase the homeownership unit from the homeowner at resale. (j) Authorization of appropriations (1) In general There is authorized to be appropriated to carry out this section $5,000,000,000 for each of fiscal years 2021 through 2031. (2) Set aside The Secretary shall award at least $500,000,000 of any amounts appropriated pursuant to this subsection to eligible local partnerships that will provide neighborhood revitalization support activities to localities outside of a Metropolitan Statistical Area, as designated by the Office of Management and Budget. The priority under subsection (c)(2)(I) (relating to matching funds) shall not apply to amounts awarded under this paragraph. (3) NOFA The Secretary shall issue a Notice of Funding Availability for grants under this section not later than the expiration of the 180-day period beginning upon the date of the enactment of this Act. 4. Self-Help Homeownership Opportunity Program There is authorized to be appropriated for grants under section 11 of the Housing Opportunity Program Extension Act of 1996 ( 42 U.S.C. 12805

Summary: Restoring Communities Left Behind Act This bill directs the Department of Housing and Urban Development to establish a grant program for local partnerships to carry out neighborhood revitalization support activities in economically distressed areas. Eligible activities include weatherization and energy efficiency improvements; housing accessibility improvements for seniors and persons with disabilities; purchasing delinquent mortgages; purchasing and developing vacant or distressed properties to create affordable rental housing and for other purposes; and improving parks, sidewalks, and street lighting.