Restoring Communities Left Behind Act
Bill: S.2300 | Sponsor: Sen. Peters, Gary C. (D-MI)
Policy area: Housing and Community Development

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

To direct the Secretary of Housing and Urban Development to establish a 
  grant program to help revitalize certain localities, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Restoring Communities Left Behind 
Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) As the United States 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 Bureau of the Census 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 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 (42 U.S.C. 
        3601 et seq.), 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.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Anchor institution.--The term ``anchor institution'' 
        means a school, a library, a healthcare provider, a community 
        college or other institution of higher education, or another 
        community support organization or entity.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Financial Services and the 
                Committee on Appropriations of the House of 
                Representatives.
                    (B) the Committee on Banking, Housing, and Urban 
                Affairs and the Committee on Appropriations of the 
                Senate.
            (3) Community development financial institution.--The term 
        ``community development financial institution'' has the meaning 
        given the term in section 103 of the Community Development 
        Banking and Financial Institutions Act of 1994 (12 U.S.C. 
        4702)).
            (4) Community land trust.--The term ``community land 
        trust''' means a nonprofit organization or a State or local 
        government or instrumentality that--
                    (A) uses a ground lease or deed covenant with an 
                affordability period of not less than 30 years 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.
            (5) Eligible local partnership.--The term ``eligible local 
        partnership'' means a partnership between--
                    (A) a national or local nonprofit organization with 
                expertise in community planning, engagement, 
                organizing, development, or neighborhood 
                revitalization; and
                    (B)(i) a city or county government;
                    (ii) a land bank;
                    (iii) a fair housing enforcement organization;
                    (iv) an anchor institution;
                    (v) a nonprofit organization;
                    (vi) a State housing finance agency or a related 
                State agency;
                    (vii) a community development financial 
                institution;
                    (viii) a public housing agency; or
                    (ix) a combination of any entities described in 
                clauses (i) through (viii).
            (6) Eligible locality.--The term ``eligible locality'' 
        means one or more geographic areas at the neighborhood or 
        county level that meet not less than four of the following 
        objective criteria of economic distress, with specific 
        thresholds set by the Secretary:
                    (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.
            (7) Fair housing enforcement organization.--The term ``fair 
        housing enforcement organization'' has the meaning given the 
        term in section 561(h) of the Housing and Community Development 
        Act of 1987 (42 U.S.C. 3616a(h)).
            (8) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101 of the Higher Education Act of 1965 (25 
        U.S.C. 1001).
            (9) Land bank.--The term ``land bank'' means a government 
        entity, agency, or program, or a special purpose nonprofit 
        entity formed by one or more units of government in accordance 
        with State or local land bank enabling law, that has been 
        designated by one or more State or local governments to 
        acquire, steward, and dispose of vacant, abandoned, or other 
        problem properties in accordance with locally-determined 
        priorities and goals.
            (10) Neighborhood revitalization support activity.--The 
        term ``neighborhood revitalization support activity'' means an 
        activity described in section 4(b).
            (11) Non-performing mortgage.--The term ``non-performing 
        mortgage'' means a residential mortgage loan that is delinquent 
        for a period of not less than 90 days.
            (12) Nonprofit organization.--The term ``nonprofit 
        organization'' means an organization that is described in 
        section 501(c)(3) of the Internal Revenue Code of 1986 and is 
        exempt from taxation under section 501(a) of such Code.
            (13) Public housing agency.--The term ``public housing 
        agency'' has the meaning given the term in section 3(b) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437a(b)).
            (14) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (15) Shared equity homeownership program.--The term 
        ``shared equity homeownership program'' means affordable 
        homeownership preservation through a resale restriction program 
        administered by a community land trust, other nonprofit 
        organization, or a State or local government or instrumentality 
        that--
                    (A) provides affordable homeownership opportunities 
                to households; and
                    (B) utilizes 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 not less 
                        than 30 years after recordation;
                            (ii) apply a resale formula that limits the 
                        proceeds of the homeowner upon resale; and
                            (iii) provide the program administrator or 
                        an assignee thereof a preemptive option to 
                        purchase the homeownership unit from the 
                        homeowner at resale.
            (16) State housing finance agency.--The term ``State 
        housing finance agency'' has the meaning given the term in 
        section 106(h) of the Housing and Urban Development Act of 1968 
        (12 U.S.C. 1701x(h))).

SEC. 4. COMPETITIVE GRANT PROGRAM.

    (a) Establishment.--Not later than the 120 days after the date of 
enactment of this Act, the Secretary shall establish a program to award 
competitive grants to eligible local partnerships to carry out 
neighborhood revitalization support activities described in subsection 
(b) in furtherance of a neighborhood revitalization strategy in an 
eligible locality.
    (b) Use of Funds.--The neighborhood revitalization support 
activities described in this subsection are--
            (1) 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;
            (2) purchasing non-performing mortgages to assist existing 
        homeowners and advance neighborhood stability;
            (3) 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, 
        which properties 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;
            (4) providing pre-purchase counseling through housing 
        counselors certified by the Secretary for neighborhood 
        revitalization support activities that provide homeownership 
        opportunities;
            (5) providing down payment assistance to prospective 
        homebuyers;
            (6) establishing and operating community land trusts to 
        provide affordable rental and homeownership opportunities, 
        including shared equity homeownership opportunities;
            (7) 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 paragraph unless the Secretary determines 
        that such use is to replace units in an effort to increase 
        affordable housing or homeownership;
            (8) establishing or operating land banks to maintain 
        acquire, redevelop, or sell properties that are abandoned or 
        distressed, with preference among applications proposing 
        activities under this paragraph to be given to applications 
        that promote distribution of properties for affordable housing 
        and small businesses;
            (9) 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 paragraph; and
            (10) in connection with any other eligible activity under 
        this subsection, 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 paragraph.
    (c) Affordability Terms.--
            (1) Rental units.--In the case of property assisted 
        pursuant to subsection (b)(3) containing any dwelling units 
        that are made available for rental--
                    (A) 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;
                    (B) such units shall remain affordable for not less 
                than 30 years;
                    (C) such property may be a mixed-use property; and
                    (D) such unit shall be maintained in habitable 
                condition, as defined by the locality in which the 
                property is located.
            (2) Homeownership units.--In the case of property assisted 
        pursuant to subsection (b)(3) consisting of a dwelling unit, or 
        containing any dwelling units, made available for 
        homeownership, such unit or units--
                    (A) 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;
                    (B) if made available through a shared equity 
                homeownership program, shall remain affordable for not 
                less than 30 years; and
                    (C) 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--
                                    (I) are established by the 
                                partnership to ensure that the 
                                affordability term may be met or funds 
                                may be redeployed for neighborhood 
                                revitalization support activities;
                                    (II) may be waived in cases of 
                                hardship or market depreciation; and
                                    (III) 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.
            (3) New terms.--If a property described in this subsection 
        converts between rental and homeownership or shared equity 
        homeownership, the affordability terms of the new tenure type 
        shall be utilized upon occupancy.
    (d) 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 indicators of distress of 
                the eligible locality described in section 3(6).
                    (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 those 
                affordability terms will be preserved.
                    (D) The extent to which an eligible local 
                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 eligible local partnerships 
        serving geographically diverse areas of economic distress, as 
        described in section 3(6), including metropolitan and 
        underserved rural areas.
    (e) Operation Costs.--Not more than 15 percent of the amount of 
each grant under this section may be used by the recipient for 
administrative and organizational support costs.
    (f) 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 (h).
    (g) 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.
    (h) 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 those 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 not less than 20 percentage points 
                        higher than the percentage of the population of 
                        that minority group for the metropolitan 
                        statistical area;
                            (ii) is not less than 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 
                determines necessary to ensure that housing outcomes 
                and grant administration and compliance align with the 
                purposes of this Act.
    (i) Report.--Not later than 2 years after grants under this section 
are first awarded and 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.
    (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.--
                    (A) In general.--The Secretary shall award not less 
                than $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.
                    (B) Exception.--The priority under subsection 
                (d)(2)(L) (relating to matching funds) shall not apply 
                to amounts awarded under this paragraph.
            (3) NOFA.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary shall issue a Notice of 
        Funding Availability for grants under this section.

SEC. 5. 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 note) $250,000,000 for fiscal year 2021, which shall remain 
available until September 30, 2031.
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