Choice Neighborhoods Initiative Act of 2021

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, and for other purposes. 1. Short title This Act may be cited as the Choice Neighborhoods Initiative Act of 2021 2. Definitions In this Act: (1) Affordable housing The term affordable housing (A) public housing assisted under section 9 of the United States Housing Act of 1937 ( 42 U.S.C. 1437g (B) assisted housing; (C) housing assisted under an affordable housing program administered by the Secretary of Agriculture through Rural Housing Service; (D) rental housing that utilizes tax credits under section 42 (E) affordable rental housing owned, developed, or assisted through a State or local government or State housing finance agency, including State-assisted public housing, which is subject to a long-term affordability restriction requiring occupancy by low-income households; and (F) private housing for low- and moderate-income households and for which the Secretary requires the owner or purchaser of the project to maintain affordability for not less than 20 years in accordance with use restrictions under regulations issued 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) Applicant The term applicant (3) Assisted housing The term assisted housing (A) section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f (B) section 221(d)(3) or 236 of the National Housing Act ( 12 U.S.C. 1715l (C) section 202 of the Housing Act of 1959 ( 12 U.S.C. 1701q (D) section 811 of Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 8013 (4) Community development corporation The term community development corporation (5) Critical community improvements The term critical community improvements (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; or (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. (6) Elementary school; secondary school The terms elementary school secondary school 20 U.S.C. 7801 (7) Extreme poverty The term extreme poverty (A) has a high percentage of residents who are— (i) estimated to be in poverty; or (ii) have extremely low incomes based on the most recent data collected by the Bureau of the Census; and (B) is experiencing distress related to— (i) per capita crime rates over 3 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; or (iv) other such factors as determined by the Secretary that further the purposes of this Act. (8) Families; public housing; public housing agency The terms families public housing public housing agency 42 U.S.C. 1437a(b) (9) Grantee The term grantee (10) Institution of higher education The term institution of higher education 20 U.S.C. 1002 (11) Local government The term local government unit of general local government 42 U.S.C. 5302(a)(1) (12) Long-term viability The term long-term viability (13) Neighborhood The term neighborhood (A) has distinguishing characteristics; (B) represents the geographical distribution of targeted populations; and (C) is not exclusive of areas that are integrally related to the composition of the community. (14) Secretary The term Secretary (15) Severely distressed housing The term severely distressed housing (A) (i) has been certified, by an engineer or architect licensed by a State licensing board, as meeting criteria for physical distress that indicate that the project 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, as documented by evidence of non-physical distress, such as extreme poverty, including census data and past surveys of neighborhood stability conducted by an applicant or co-applicant or their qualified designee; 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. (16) Significant The term significant (A) changes the use of 20 percent or more of the total amount of the grant provided under this Act from use for 1 activity to use for another; (B) eliminates an activity that is a required activity that, notwithstanding the change, would otherwise be carried out under the plan; or (C) significantly changes the scope, location, or beneficiaries of the project carried out under the plan. (17) Supportive services The term supportive services (A) such activities as literacy training, remedial and continuing education, job training, financial literacy instruction, daycare, youth services, aging-in-place, physical and mental health services, and other programs for which such residents demonstrate need; (B) case management and service coordination services, including providing coordinators for the Family Self-Sufficiency program under section 23 of the United States Housing Act of 1937 ( 42 U.S.C. 1437u 42 U.S.C. 1437z–6 (C) technical assistance to enable residents to access programs from other key agencies and local service providers in order to help residents be stably housed, improve outcomes for children, and enhance adults’ capacity for self-sufficiency and economic security, and services for the elderly and persons with disabilities to maintain independence. 3. Grant authority The Secretary may make competitive grants to eligible entities that submit transformation plans for eligible neighborhoods that will further the purposes of this Act in eligible neighborhoods. 4. Eligible entities (a) Primary applicants (1) In general A grant under this Act may be made only to a local government, a public housing agency, or a nonprofit entity that owns a major housing project that is proposed to be assisted under a grant under this Act, either as a sole applicant or as a co-applicant with another local government or public housing agency or with an entity specified in subsection (b). (2) Nonprofit entities A nonprofit entity may be a sole applicant under paragraph (1) only if the application has the support of a local government. (b) Co-Applicants (1) Community development corporations A community development corporation may, at the request of an entity specified in subsection (a), be a co-applicant for a grant under this Act. (2) For-profit entities A for-profit entity that owns a major housing project that is proposed to be assisted under a grant under this Act made in fiscal year 2022 or thereafter and that has an established presence in the community may be a co-applicant for a grant under this Act. (3) Required co-applicants A grant under this Act may not be made for an application that will involve transformation of a major public housing project unless the public housing agency having jurisdiction with respect to the project is the sole applicant or a co-applicant for the application. (c) Partners Nothing in this section may be construed to limit the ability of an applicant to partner with any entity in carrying out activities with a grant under this Act. 5. Eligible neighborhoods A grant under this Act may be made only for activities to be conducted in neighborhoods that have— (1) a concentration of extreme poverty; and (2) housing that is severely distressed housing. 6. Authorized activities (a) In general Amounts from a grant under this Act may be used only for transformational programs and activities in accordance with a transformation plan approved under section 7 that will further the purposes of this Act. (b) Required activities Each transformation plan submitted pursuant to section 7 and implemented by a grantee under this Act shall include the following activities: (1) The transformation of housing through rehabilitation, preservation, or demolition and replacement of severely distressed housing projects, expansion of affordable housing opportunities, or any combination thereof, which may incorporate energy-efficient design principles. (2) The one-for-one replacement of any public and assisted housing units demolished or disposed of in accordance with the requirements under section 9. (3) Activities that promote economic self-sufficiency of residents of the revitalized housing and of the surrounding neighborhood. (4) Activities that preserve affordable housing in the neighborhood and other activities necessary to ensure that existing public and assisted housing residents have access to the benefits of the neighborhood transformation. (5) Activities that demonstrate that each resident of housing assisted by the grant who is displaced by the transformation plan and 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 under section 8. (6) Activities that meet the program requirements for replacement of housing units under section 9. (7) Activities that meet the fair housing program requirements under section 10(a) and the accessibility requirements under section 10(b). (8) Appropriate service coordination and supportive services. (9) Resident involvement, as described in section 8, 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 language proficiency. (10) Monitoring, under section 8(g), of residents relocated during redevelopment throughout the term of the grant or until full occupancy of replacement housing, whichever is completed later. (11) Relocation assistance, including tenant-based rental assistance renewable under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f (12) Establishment of links to local education efforts, as described in subsection (c)(3). (13) Activities to comply with section 3 of the Housing and Urban Development Act of 1968 ( 12 U.S.C. 1701u (c) Eligible activities Amounts from a grant under this Act may be used for the following activities: (1) Construction, acquisition, or rehabilitation of affordable housing, which may include energy efficiency improvements and sustainable design features for that housing. (2) Acquisition or disposition of residential properties, including properties subject to a mortgage previously insured, and foreclosed upon, by the Federal Housing Administration, and demolition. (3) Outreach to local educators, and engaging in local community planning, to help increase access to educational opportunities, a continuum of effective community services, and strong family supports, and to improve the educational and life outcomes that have a significant benefit to residents of housing assisted under this Act, including children and youth and, as appropriate, for adult residents, including the elderly or persons with disabilities. (4) Providing supportive services that have a significant benefit to residents of housing assisted under this Act, primarily focused on services described in subparagraphs (B) and (C) of section 2(17). (5) Rehabilitation and physical improvement of community facilities that are primarily intended to facilitate the delivery of community and supportive services that have a significant benefit to residents of housing assisted by the grant and residents of off-site replacement housing. (6) Work incentives designed to help low-income residents assisted by the housing under this Act access jobs and move toward self-sufficiency. (7) Partnering with employers and for-profit and nonprofit organizations to create jobs and job training opportunities that have a significant benefit to residents of housing assisted under this Act. (8) Activities that promote sustainable housing by incorporating principles of sustainable design and development, including energy efficiency. (9) Critical community improvements undertaken at sites that are adjacent to, or in the immediate vicinity of, housing assisted under this Act. (10) Loss reserves to protect residents of housing assisted by the grant and continue the project in the case of default, foreclosure, or any other adverse financial event. (d) Additional plan The Secretary shall require any grantee under this Act that will provide benefits under paragraph (3), (4), (5), or (7) of subsection (c) to any residents who are not living in housing assisted with a grant under this Act to submit to the Secretary a plan identifying how such services will be provided. (e) Eligible methods of support Activities carried out with amounts from a grant under this Act may be carried out through— (1) endowments or revolving loan funds; or (2) land assembly, land banking, and other activities, except that no amounts made available for use under this Act may be used to acquire any property by means of the exercise of the power of eminent domain. (f) Funding limitations (1) School buildings No amounts from grant under this Act may be used for construction or rehabilitation of an elementary school or secondary school or an institution of higher education, except that such amounts may be used to construct common infrastructure that is shared by such a school or institution and by housing assisted under this Act, or community facilities authorized under subsection (c)(5), but only if costs are shared on a pro rata basis and the grantee certifies, and the Secretary determines, that such use of funds will not promote or further segregation. (2) Non-housing activities and supportive services For each grant under this Act, the grantee shall comply with each of the following requirements: (A) Of the amount of the grant, not more than 25 percent may be used for eligible activities under paragraphs (3) through (9) of subsection (c). (B) Of the amount of the grant, not more than 5 percent may be used for eligible activities under paragraphs (8) and (9) of subsection (c). (3) Consultation With respect to activities assisted pursuant to paragraph (2), the Secretary shall consult with the Secretary of Labor, the Secretary of Health and Human Services, the Secretary of Energy, the Secretary of Transportation, the Secretary of Education, and the Attorney General in identifying funding resources that may be provided to supplement amounts from grants under this Act. 7. Submission and selection of transformation plans (a) Transformation plan requirements To be eligible for a grant under this Act, an eligible entity shall submit to the Secretary, at such time in accordance with procedures as the Secretary shall prescribe, an application 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, and affordable housing (including the one-for-one replacement of any public or assisted housing units demolished or disposed of under the transformation plan), 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) demonstrates how the required activities under section 6(b) will be carried out, including a detailed description of the housing transformation activities under paragraphs (1) and (2) of such section; (3) describes the other eligible activities under section 6(c) that will be carried out in support of the housing transformation; (4) defines desired outcomes of the strategy, how residents of housing assisted under this Act 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; (5) includes a long-term affordability plan, developed in collaboration with residents of the public and assisted housing assisted under this Act, that describes how the grantee will maintain affordable housing in the neighborhood over the next 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 the plan every 5 years during such period; and (6) includes such other information as the Secretary shall, by regulation, prescribe. (b) Selection criteria The Secretary shall establish criteria for the award of grants under this Act, with the greatest consideration given to applicant and neighborhood need as identified in section 5, and which shall include the extent to which the transformation plan— (1) demonstrates the ability of the plan to further the purposes of this Act; (2) demonstrates inclusive local planning with input from local governments, housing owners and providers, educators, residents of housing assisted under this Act, local community organizations, public schools, early learning in programs, health service organizations, and community stakeholders in the development and implementation of a sustainable revitalization program; (3) includes efforts to coordinate multiple funding resources, including public, private, and philanthropic funding, and emphasizes collaboration between local governments, early learning programs and public schools, or a public housing agency, or all 3; (4) includes current data showing that the neighborhood targeted for revitalization is in need of and can benefit from the authorized activities described in section 6 and proposed in the transformation plan; (5) demonstrates the capability and record of the applicant and the partners of the applicant for managing housing redevelopment or modernization projects, successfully working with public and assisted housing residents during the planning and redesign process, and meeting performance benchmarks; (6) demonstrates that sustainable building and energy efficient design principles are incorporated or will be incorporated in the activities conducted pursuant to the plan; (7) demonstrates that the applicant has plans to have, within a reasonable time, improved access to public transportation in the neighborhood that provides access to economic opportunities and commercial and public services; (8) demonstrates that the residents of revitalized housing developments will have, to the extent possible, improved access to high-quality educational opportunities, including early learning and effective elementary and secondary public schools, in or outside of the neighborhood; (9) demonstrates that the transformation plan includes the provision of appropriate supportive services and activities that promote economic self-sufficiency of residents of housing assisted under the grant, and a plan to sustain those services; (10) 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 in a manner that does not increase racial segregation; (11) demonstrates that sufficient housing opportunities are available in the neighborhood to be revitalized and in low-poverty areas to accommodate displaced residents, in a manner that does not increase racial segregation; (12) includes a well-documented assessment of the number of households with special needs for ongoing supportive services residing in the public or assisted housing properties that are the target of the grant and an effective plan to address those needs; (13) demonstrates the compliance with the requirements of section 9, regarding one-for-one replacement of public and assisted housing units; (14) 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; (15) demonstrates, if feasible, phased redevelopment that provides for demolition and construction of dwelling units in phases, to limit disruptions to residents; (16) demonstrates that the neighborhood will improve its long-term viability through the revitalization of severely distressed housing, improved access to economic opportunities, improved investment and leveraging in well-functioning services, and improved education programs, public assets, public transportation and access to jobs; and (17) demonstrates compliance with any other factors and priorities that further the purposes of this Act, as the Secretary may, by regulation, prescribe. 8. Right of residents to return; relocation (a) Determination of resident preferences An applicant shall, not later than 30 days before submitting an application to the Secretary for a grant under this Act— (1) hold a community meeting and provide information to all residents who occupy a dwelling unit in public housing or assisted housing subject to the transformation plan of— (A) the intent of the applicant to submit an application for a grant under this Act; (B) their right to return and relocation housing options; and (C) all planned replacement housing units; and (2) solicit from each resident information regarding the desire of the resident to return to the replacement housing units constructed upon the original public or assisted housing location, interest in moving to other neighborhoods or communities, or interest in retaining a voucher for rental assistance. (b) Resident involvement (1) In general Each transformation plan assisted under this Act shall provide opportunities for the active involvement and participation of, and consultation with, residents of the public and assisted housing that is subject to the transformation plan during the planning process for the transformation plan, including prior to submission of the application, and during all phases of the planning and implementation, which opportunities— (A) may include participation of members of any resident council or tenant organization, but may not be limited to those members; and (B) shall include— (i) all segments of the population of residents of the public and assisted housing that is subject to the revitalization plan, including single parent-headed households, the elderly, young employed and unemployed adults, teenage youth, and disabled persons; and (ii) a process that provides opportunity for comment on specific proposals for redevelopment, any demolition and disposition involved, and any proposed significant amendments or changes to the transformation plan. (2) Public meeting The Secretary may not make a grant under this Act to an applicant unless the applicant has convened and conducted a public meeting regarding the transformation plan, including the one-for-one replacement to occur under the plan, not later than 30 days before submission of the application for the grant under this section for the plan, at a time and location that is convenient for residents of the public and assisted housing subject to the plan. (3) Significant amendments or changes to plan An applicant may not carry out any significant amendment or change to a transformation plan unless— (A) the applicant has convened and conducted a public meeting regarding the significant amendment or change at a time and location that is convenient for residents of the public and assisted housing subject to the plan and has provided each household occupying a dwelling unit in the public and assisted housing with written notice of the meeting not less than 10 days before such meeting; (B) after the meeting held under subparagraph (A), the applicant consults with the households occupying dwelling units in the public and assisted housing that are subject to, or to be subject to the plan, and the agency submits a report to the Secretary describing the results of the consultation; and (C) the Secretary approves the significant amendment or change. (c) Right To return The Secretary may not approve a transformation plan under this Act unless the plan provides that each resident of public or assisted housing displaced by activities under the transformation plan who wishes to return to the on-site or off-site replacement housing provided under the plan may return if the resident— (1) was in compliance with the lease at the time of departure from the housing subject to rehabilitation or demolition; and (2) would be eligible, as of the time of the 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 the time of displacement. (d) Relocation, notice, application for vouchers, and data 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: (1) Uniform relocation and real property acquisition act The Uniform Relocation and Real Property Acquisition Policies Act of 1970 ( 42 U.S.C. 4601 et seq. (2) Relocation plan The applicant shall submit to the Secretary, together with the application for a grant under this Act, a relocation plan providing for the relocation of residents occupying the public or assisted housing for which the demolition or disposition is proposed, which shall include— (A) a statement of the estimated number of vouchers for rental assistance under section 8 that will be needed for such relocation; (B) identification of the location of the replacement dwelling units that will be made available for permanent occupancy; and (C) a statement of whether any temporary, off-site relocation of any residents is necessary and a description of the plans for such relocation. (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 set forth in section 10 have been met; (C) provides information regarding relocation options; and (D) advises residents of the availability of relocation counseling as required in paragraph (7). (4) Notice before relocation Except in 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 notifications, that— (A) the public or assisted housing project will be demolished or disposed of; (B) the demolition of the building in which the family resides will not commence until each resident of the building is relocated; and (C) if temporary, off-site relocation is necessary, each family displaced by the action shall be offered comparable housing— (i) that meets housing quality standards; (ii) that is located in an area that is generally not less desirable than the location of the housing of the displaced family, which shall include not less than 1 unit located in an area of low poverty or 1 unit located within the neighborhood of the original public or assisted housing site; (iii) that is identified and available to the family; and (iv) which shall include— (I) tenant-based assistance, except that the requirement under this subparagraph regarding offering of comparable housing shall be fulfilled by use of tenant-based assistance only upon the relocation of the family into such housing; (II) project-based assistance; (III) occupancy in a unit operated or assisted by the public housing agency or the owner of the assisted project demolished or disposed of under this section, at a rental rate paid by the family that is comparable to the rental rate applicable to the unit from which the family is relocated; or (IV) other comparable housing. (5) Search period (A) In general Notwithstanding any other provision of law, in the case of a household that is provided tenant-based assistance for relocation of the household under this section, the period during which the household may lease a dwelling unit using that assistance shall not be shorter in duration than the 150-day period that begins at the time a comparable replacement unit is made available to the family. (B) Extension If a household is unable to lease a dwelling unit using the assistance described in subparagraph (A) during the period described in that subparagraph, the grantee shall— (i) extend the period during which the household may lease a dwelling unit using the assistance; or (ii) at the request of the resident, provide the resident with the next available comparable public housing unit or comparable housing unit for which project-based assistance is provided. (6) Payment of relocation expenses The grantee shall provide for the payment of the actual and reasonable relocation expenses, including security deposits, of each resident to be displaced and any other relocation expenses as are required by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 ( 42 U.S.C. 4601 et seq. (7) Comprehensive relocation counseling The grantee shall provide all advisory programs and services as required by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 ( 42 U.S.C. 4601 et seq. (A) fully inform residents to be displaced of all relocation options, which may include relocating to housing in a neighborhood with a lower concentration of poverty than their current residence, a neighborhood where relocation will not increase racial segregation, or remaining in the current neighborhood; and (B) include providing school options for children and comprehensive housing search assistance for households that receive a voucher for tenant-based assistance. (8) Timing of demolition or disposition The grantee shall not commence demolition or complete disposition of a building subject to the approved transformation plan until all residents residing in the building are relocated. (9) Timing of relocation The applicant shall not commence relocation before approval by the Secretary of the transformation plan providing for the demolition or disposition, unless the applicant generally relocates residents in accordance with this section, as determined by the Secretary, except in the case of a substantial and imminent threat to health or safety. (e) Monitoring of displaced households (1) Grantee responsibilities To facilitate compliance with the requirement under subsection (a) (relating to right of residents to return), the Secretary shall, by regulation, require each grantee of a grant under this section, during the period of the transformation plan assisted with the grant and until all funding under the grant has been expended— (A) to maintain a current address of residence and contact information for each household affected by the transformation plan who was occupying a dwelling unit in the housing that is subject to the plan; and (B) to provide such updated information to the Secretary on at least a quarterly basis. (2) Certification The Secretary may not close out any grant made under this section before the grantee has certified to the Secretary that the agency has complied with subsection (a) (relating to right of residents to return) with respect to each resident displaced as a result of the transformation plan, including providing occupancy in a replacement dwelling unit for each resident who requested such a unit in accordance with such subsection. (f) Preference A returning resident shall be provided a preference for occupancy of on-site or off-site replacement units before those units are made available for occupancy by any other eligible households, or the resident may choose to retain tenant-based voucher assistance provided under section 8(o) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(o) (g) Prohibition on re-Screening A public housing agency or any other manager of on-site or off-site replacement housing shall not, through the application of any additional eligibility, screening, occupancy, or other policy or practice, prevent any person otherwise eligible under subsection (a) from occupying a replacement housing unit. 9. One-for-one replacement of public and assisted housing dwelling units (a) One-for-One replacement of public or assisted housing units The Secretary may not approve a transformation plan that provides for dwelling units to be demolished or disposed of unless the plan provides as follows: (1) Requirement to replace each unit One hundred percent of the public and assisted housing dwelling units and units described in section 2(1)(E) that are demolished or disposed of pursuant to the transformation plan shall be replaced with a newly constructed, rehabilitated, or purchased public or assisted housing unit or with a newly constructed, rehabilitated, or purchased unit (including through project-based assistance) that is subject to requirements regarding eligibility for occupancy, tenant contribution toward rent, and long-term affordability restrictions that are consistent with such requirements for public and assisted housing dwelling units or for State units, as applicable, except that subparagraphs (B) and (D) of section 8(o)(13) of the United States Housing Act of 1936 (relating to percentage limitation and income mixing requirement of project-based assistance) shall not apply with respect to vouchers used to comply with the requirements of this paragraph. (2) Other requirements Admission to, administration of, and eviction from replacement housing units that replaced public housing units, but that are not public housing dwelling units, shall be subject to the following provisions to the same extent as public housing dwelling units: (A) Section 578 of the Quality Housing and Work Responsibility Act of 1998 ( 42 U.S.C. 13663 (B) Section 16(f) of the United States Housing Act of 1937 ( 42 U.S.C. 1437n(f) (C) Sections 20 and 21 of the United States Housing Act of 1937 ( 42 U.S.C. 1437r (D) Section 25 of the United States Housing Act of 1937 ( 42 U.S.C. 1437w (E) Section 6(k) of the United States Housing Act of 1937 ( 42 U.S.C. 1437d(k) (F) Section 6(f) of the United States Housing Act of 1937 ( 42 U.S.C. 1437d(f) (G) Part 964 of title 24, Code of Federal Regulations (relating to tenant participation and opportunities). (3) Retention of rights Tenants occupying a replacement housing unit shall have all rights provided to tenants of the housing from which the tenants were relocated. (4) Size (A) In general Replacement units shall be of comparable size, unless a market analysis shows a need for other-sized units, in which case such need shall be addressed. (B) Bedrooms The number of bedrooms within each replacement unit shall be sufficient to serve families displaced as a result of the demolition or disposition. (5) Location on site At least one-third of all replacement units for public and assisted housing units demolished shall be public or assisted housing units constructed within the immediate area of the original public or assisted housing location, unless the Secretary determines that— (A) construction on the location would result in the violation of a consent decree; or (B) the land on which the public and assisted housing is located is environmentally unsafe or geologically unstable. (6) Location in the neighborhood Any replacement housing units provided in addition to dwelling units provided pursuant to paragraph (5) shall— (A) be provided in areas within the neighborhood, except that if rebuilding the units within the neighborhood is not feasible, units shall be provided within the jurisdiction of the public housing agency— (i) in a manner that furthers the economic and educational opportunities for residents; and (ii) in areas offering access to public transportation; and (B) have access to social, recreational, educational, commercial, and health facilities and services, including municipal services and facilities, that are comparable to services provided to the revitalized neighborhood from which residents were displaced. (7) Location outside of jurisdiction If rebuilding replacement housing units within the jurisdiction, in a manner that complies with the requirements of clauses (i) through (iv) of subparagraph (A) and subparagraph (B) of paragraph (6) is not feasible, units may be provided outside of the jurisdiction of the public housing agency, but within the metropolitan area of such jurisdiction, provided— (A) the grantee requests, and the public housing agency or local government in which such units shall be located, agrees to such transfer of units; and (B) the units shall comply with the requirements of clauses (i) through (iv) of subparagraph (A) and subparagraph (B) of paragraph (6). (b) Waiver (1) Authority Upon the written request of an applicant for a grant under this Act submitted as part of the transformation plan pursuant to section 7, the Secretary may reduce the percentage applicable under subsection (a)(1) to the transformation plan of the applicant to not less than 90 percent, but only if— (A) a judgment, consent decree, or other order of a court limits the ability of the applicant to comply with such requirements; or (B) the applicant demonstrates that there is an excess supply of affordable rental housing in areas of low poverty and provides data showing that, in the area surrounding the revitalized neighborhood— (i) not less than 90 percent of vouchers issued under section 8(o) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(o) (ii) existing voucher holders are widely dispersed geographically in areas of low poverty with access to public transportation, education, and other amenities, as determined by the Secretary, among the available private rental housing stock; and (iii) the applicant provides a market analysis demonstrating that— (I) there is a relatively high vacancy rate among units that would meet or exceed housing quality standards, 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) (II) the high vacancy rate within the market area is expected to continue for the next 5 years or longer. 10. Other program requirements (a) Fair housing (1) In general The demolition or disposition, relocation, replacement, and re-occupancy of housing units in connection with a grant under this Act shall be carried out in a manner that affirmatively furthers fair housing, as required by section 808(e) of the Civil Rights Act of 1968 ( 42 U.S.C. 3608(e) (2) Marketing and outreach Grantees shall adopt affirmative marketing procedures, and require affirmative marketing activities of project owners and managers, which 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 with a grant under this Act. (b) Accessibility requirements All new construction and alterations of existing buildings carried out in connection with a grant under this Act shall comply with the requirements of the section 504 of Rehabilitation Act of 1973 ( 29 U.S.C. 794 42 U.S.C. 3601 et seq. (c) Affordability requirement Amounts from a grant under this Act may not be used for assistance for any housing property unless the owner of the property assisted agrees to a period of affordability for the property which shall be not shorter than the period of affordability to which the property is already subject and remains subject, or 20 years, whichever is longer. (d) 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. (e) Environmental review For purposes of environmental review, assistance and projects under this Act shall be— (1) 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) (2) subject to the regulations issued by the Secretary to implement such section. (f) 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. 11. Demolition and disposition (a) Inapplicability of public housing demolition and disposition requirements to transformation plan The demolition or disposition of severely distressed public housing pursuant to a transformation plan approved under this Act shall be exempt from the provisions of section 18 of the United States Housing Act of 1937 ( 42 U.S.C. 1437p (b) Applicability of public housing demolition and disposition requirements to replacement public housing Nothing in this Act may be construed to exempt any replacement public housing dwelling units provided under a transformation plan in accordance with the requirements under section 8 (relating to one-for-one replacement of public housing dwelling units) from the provisions of section 18 of the United States Housing Act of 1937 ( 42 U.S.C. 1437p 12. Phase-specific underwriting To the extent that a transformation plan provides for different phases of activities, the Secretary may allow for the various phases of the plan to be underwritten on a separate basis. 13. 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 of the grantee, if— (1) the original grantee has failed to meet performance benchmarks relating to implementation of the transformation plan; and (2) the Secretary determines that the action will help to effectuate the purposes of this Act. 14. Withdrawal of funding If a grantee under this Act does not proceed within a reasonable timeframe in implementing the transformation plan of the grantee or does not otherwise comply with the requirements of this Act and the grant agreement, as determined by the Secretary, the Secretary may— (1) withdraw any grant amounts under this Act that have not been obligated by the grantee; and (2) redistribute any withdrawn amounts to 1 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 1 or more other applicants that have already received assistance under this Act. 15. Annual report; public availability of grant information (a) Annual report Not less than 90 days before the conclusion of each fiscal year, the Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the implementation and status of grants awarded under this Act, which shall include— (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; (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; (4) all information submitted to the Secretary pursuant to section 8(e)(1) by all grantees and summaries of the extent of compliance by grantees with the requirements under subsections (a) and (g) of section 8; and (5) any information related to grantees implementation of the requirements under section 9 (relating to one-for-one replacement of public housing dwelling units) and the efforts of the Secretary to coordinate funding pursuant to section 6(e)(3). (b) Public availability of grant information (1) In general To the extent not inconsistent with any other provisions of law, the Secretary shall make publicly available through a website of the Department of Housing and Urban Development all documents of, or filed with, the Department relating to the program under this Act, including applications, grant agreements, plans, budgets, reports, and amendments to those documents. (2) Privacy In carrying out this subsection, the Secretary shall take such actions as may be necessary to protect the privacy of any residents and households displaced from public or assisted housing as a result of a transformation plan assisted under a grant under this Act. 16. Funding There are authorized to be appropriated the following amounts: (1) Grants $1,000,000,000 for fiscal year 2022 and such sums as may be necessary in each subsequent fiscal year, for grants under this Act, of which, in any fiscal year— (A) up to 10 percent of such amount authorized may be used for planning grants, except that in awarding planning grants, the Secretary may elect to base selection on a subset of the required provisions of this Act; (B) up to 5 percent of the amount authorized may be used for technical assistance and program evaluation efforts related to grants awarded under this Act, or under predecessor programs; and (C) not less than 80 percent shall be used for, or 80 percent 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. (2) Rental assistance Such sums as may be necessary for fiscal year 2022 and each subsequent fiscal year 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 17. Regulations Not later than 180 days after the date of enactment of this Act, the Secretary shall issue regulations to carry out the following provisions of this Act: (1) Paragraphs (5), (7), (12), (13), and (15) of section 2. (2) Subsections (c) and (f) of section 6. (3) Section 9(b).

Summary: Choice Neighborhoods Initiative Act of 2021 This bill allows the Department of Housing and Urban Development to make competitive grants to local governments, public housing agencies, or nonprofit entities owning a major housing project to implement transformational housing programs in eligible neighborhoods with a concentration of extreme poverty and severely distressed housing. A program must, among other requirements, allow residents of public or assisted housing displaced by such a program to return to the replacement housing provided under the program.