Affordable CO-OP (Collective Opportunities for Owning Property) Act
Bill: H.R.7697 | Sponsor: Rep. Bowman, Jamaal (D-NY)
Policy area: Housing and Community Development

Summary:
Affordable CO-OP (Collective Opportunities for Owning Property) Act
This bill expands access to financing through zero-interest loans and federally backed mortgages for, and otherwise supports, limited equity cooperatives. These are models of affordable homeownership in which residents purchase a share in a residential development and commit to resell their share at a price that maintains affordability.

To support the development of limited equity cooperatives in the United 
                    States, 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 ``Affordable CO-OP (Collective 
Opportunities for Owning Property) Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Limited equity cooperative housing stems from the 
        premise that housing should provide shelter, not a speculative 
        opportunity. Residents purchase a below market-rate ``equity'' 
        share of the cooperative corporation that owns the property of 
        the cooperative and residents are charged affordable monthly 
        carrying charges. The amount the share price increases over 
        time is limited by the cooperative by-laws, creating an 
        affordable entry point into housing that stays affordable over 
        time. Members can sell their equity share at a specific rate to 
        maintain affordability over a longer time period. In this way, 
        limited equity cooperatives provide an important form of 
        affordable homeownership and foster community among 
        shareholders.
            (2) Over 1.5 million families and seniors benefit from 
        cooperative housing models in the United States. There are over 
        200,000 units of limited equity housing units across the 
        Nation. Limited equity cooperatives range in size, from single 
        family detached cooperative structures to dense, mixed-use, 
        multi-family models.
            (3) The largest limited equity housing cooperative in North 
        America is Co-op City, located in the Bronx, New York. Co-op 
        City provides over 44,000 residents with affordable, 
        democratically controlled housing in an increasingly expensive 
        region. This community can serve as a model for the nation on 
        how to build and sustain decommodified housing and 
        homeownership opportunities for those who are 
        disproportionately exploited by the traditional housing market, 
        banking, and credit system, including Black and brown 
        households, low-income households, seniors, and people with 
        disabilities.
            (4) Limited equity cooperatives do not enjoy strong Federal 
        support relative to other forms of homeownership.

SEC. 3. INCREASED PRODUCTION OF NEW LIMITED EQUITY COOPERATIVES.

    (a) In General.--The Secretary of Housing and Urban Development 
shall, not later than 1 year after the date of the enactment of this 
Act, establish a program to provide zero interest loans to nonprofit 
and public sector entities for the pre-development, acquisition, 
development, rehabilitation, or conversion of buildings into limited 
equity cooperatives.
    (b) Use of Loaned Amounts.--Each entity provided a loan under this 
section may use such amounts to make loans to intermediaries, including 
community development financial institutions, credit unions, minority 
depository institutions and cooperative financial institutions to 
support the ability of residents ability to afford downpayments and 
monthly carrying charges.
    (c) Loan Amount.--Loans provided under this section shall be in an 
amount equal to not more than 95 percent of the total cost of a project 
undertaken by an entity.
    (d) Reserve.--The Secretary of Housing and Urban Development shall 
use not less than 20 percent of any amounts appropriated under this 
section to provide financial support to limited equity cooperatives for 
which not less than 50 percent of the households have an annual income 
that is less than 60 percent of the area median income.
    (e) Conditions.--The Secretary of Housing and Urban Development 
shall require entities participating in the program established 
pursuant to subsection (a) to--
            (1) minimize evictions of--
                    (A) tenants residing in properties undergoing 
                conversions to limited equity cooperatives using 
                amounts provided under this section; and
                    (B) residents that will reside in limited equity 
                cooperatives developed using amounts provided under 
                this section;
            (2) ensure that unit and building design supports the needs 
        of older residents and residents with disabilities;
            (3) ensure that unit and building design, to the greatest 
        extent practicable, rely on renewable energy and sustainable 
        building models that support a just transition from fossil 
        fuels;
            (4) comply with all requirements of the Fair Housing Act of 
        1968;
            (5) to the greatest extent possible, not limit access to 
        limited equity housing cooperatives based on the eviction 
        history or credit report of a prospective resident;
            (6) ensure that units built with amounts provided under 
        this section are, to the greatest extent possible--
                    (A) permanently affordable;
                    (B) available to households with an annual income 
                that is less than 120 percent of the area median 
                income; and
                    (C) available to households with an income that is 
                above the Federal poverty line but below the estimated 
                cost of living in a geographic area;
            (7) use community land trust models to ensure permanent 
        affordability of the land underlying the property;
            (8) in the case of an entity developing or rehabilitating 
        mixed-use limited equity housing cooperatives, the entity shall 
        to the degree possible, colocate cooperative businesses, 
        especially those owned and democratically controlled by 
        employees, on the site of the limited equity cooperative; and
            (9) to the greatest extent applicable, ensure that all 
        laborers and mechanics employed by the entity in the 
        performance of construction, alteration, repair, or maintenance 
        work financed in whole or in part with assistance under this 
        section be paid wages at rates not less than those prevailing 
        on similar construction in the locality, as determined by the 
        Secretary of Labor, in accordance with subchapter IV of chapter 
        31 of title 40, United States Code (commonly known as the 
        ``Davis Bacon Act'').
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated, in fiscal years 2023 to 2033 to the Secretary of Housing 
and Urban Development such sums necessary to carry out this section.

SEC. 4. INSURANCE OF LIMITED EQUITY COOPERATIVE MORTGAGES.

    (a) Insurance of Mortgages.--Section 213 of the National Housing 
Act (12 U.S.C. 1715e) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``or'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting ``or;''; and
                    (C) by inserting after paragraph (3) the following:
            ``(4) a limited equity cooperative.''; and
            (2) by adding at the end the following:
    ``(q) Notwithstanding any other provision of this section the 
Secretary may waive or specify alternative requirements for limited 
equity cooperatives if the Secretary determines that such waiver or 
alternative requirement would advances the needs of the development, 
rehabilitation, or preservation of limited equity cooperatives.
    ``(r) Limited Equity Cooperative Defined.--The term `limited equity 
cooperative' has the meaning given the term in the `Affordable CO-OP 
(Collective Opportunities for Owning Property) Act'.''.

SEC. 5. AFFORDABLE HOUSING COOPERATIVE COMMUNITY FUND GRANT PROGRAM.

    (a) In General.--The Secretary of Housing and Urban Development 
shall, not later than 1 year after the date of the enactment of this 
Act, establish a Affordable Cooperative Community Fund Grant Program to 
provide discretionary grants to States with limited or zero equity 
cooperative housing to be used to finance community development 
activities for limited equity cooperative residents, including--
            (1) improving the physical condition of limited equity 
        cooperative property, including upgrades to affordable 
        cooperative housing structures that support accessibility, 
        visitability of common areas, retrofits to improve climate 
        resiliency or reduce household energy burdens, efforts to 
        include or improve broadband, and to support community and 
        wellness programming;
            (2) activities to further promote democratic, transparent 
        governance;
            (3) coordinating programming for individuals living in 
        permanently affordable limited or zero-equity cooperative 
        housing, including support for older adults to age in 
        community; and
            (4) activities to support the co-location of cooperative 
        businesses, including child care centers and elder care 
        centers.
    (b) Subgrants.--Any State that receives an amount under this 
section may make subgrants of such amount to--
            (1) limited equity cooperatives;
            (2) community organizations that support the health, 
        financial stability, and well-being of the residents of limited 
        equity cooperativesor improve the physical condition, including 
        accessibility features, of limited equity cooperatives;
            (3) Housing Development Finance Corporations; and
            (4) nonprofit housing developers that provide development 
        services designed to create and preserve limited equity housing 
        cooperatives.
    (c) Requirement.--Any amounts provided to a State under this 
section that are used for improving the physical condition of limited 
cooperative housing properties should be used, to the greatest extent 
practicable, in a manner that supports a just transition away from 
fossil fuel energy consumption and protects households residing in 
limited equity cooperatives from the threats of climate change.
    (d) Authorization of Appropriation.--There are authorized to be 
appropriated to the Secretary of Housing and Urban Development 
$1,000,000,000 to carry out this section in each of fiscal years 2023 
through 2033.

SEC. 6. WEATHERIZATION.

    (a) In General.--The Secretary of Housing and Urban Development and 
the Secretary of Energy shall jointly identify limited equity 
cooperatives that are eligible for the weatherization assistance 
program and issue guidance to States with respect to how to support 
weatherization efforts within these limited equity cooperatives.
    (b) Guidance.--When developing guidance pursuant to subsection (a), 
Secretary of Housing and Urban Development and the Secretary of Energy 
shall, to the greatest extent practicable, ensure that guidelines do 
not further restrict weatherization assistance program eligibility.

SEC. 7. DISASTER RELIEF.

    (a) In General.--Section 408(c)(2)(A) of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174(c)(2)(A)) 
is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                            ``(iii) the repair and rehabilitation of 
                        shared elements of the home or apartment 
                        structure in limited equity cooperatives, as 
                        such term is defined in the `Affordable CO-OP 
                        (Collective Opportunities for Owning Property) 
                        Act'.''.
    (b) Prohibition.--If a major disaster or emergency is declared 
under section 401 or 501 or a public health emergency is declared under 
section 319 of the Public Health Service Act residents living in 
cooperative housing may not be barred from receiving assistance 
exclusively due to their residence in a cooperative housing structure.

SEC. 8. OFFICE OF SHARED EQUITY HOUSING.

    (a) Establishment.--
            (1) In general.--The Secretary of Housing and Urban 
        Development shall, not later than 180 days after the date of 
        the enactment of this Act, establish an Office of Shared Equity 
        Housing to be headed by a Special Assistant for Cooperatives.
            (2) Responsibilities.--The Office of Shared Equity Housing 
        shall--
                    (A) support Federal policies and programs related 
                to the development and sustainment of permanently 
                affordable shared equity housing models, including 
                limited equity cooperatives, zero-equity cooperatives, 
                and community land trusts;
                    (B) provide technical assistance to States and 
                units of local government with respect to shared equity 
                housing models, including limited equity cooperatives 
                and community land trusts and Mutual Housing 
                Associations;
                    (C) participate in the Interagency Working Group on 
                Cooperative Development, and work with other members of 
                the Interagency Working Group on Cooperative 
                Development to explore how, to the greatest extent 
                possible, the Federal Government can support robust 
                financial support for schools located in school 
                districts with limited equity cooperatives; and
                    (D) not later than 1 year after the date of the 
                enactment of this section, and each year there after, 
                publish on the website of the Office, the number of 
                limited equity cooperatives in the United States.
    (b) Guidance.--The Secretary of Housing and Urban Development, 
acting through the Special Assistant for Cooperatives, shall, not later 
that 1 year after the date of the enactment of this Act, issue guidance 
to States and units of local government that encourages the elimination 
of barriers to financing, developing, maintaining, and sustaining 
limited equity cooperatives.
    (c) Report.--The Secretary of Housing and Urban Development, acting 
through the Special Assistant for Cooperatives, shall, not later than 3 
years after the date of the enactment of this Act, issue a report to 
Congress that includes--
            (1) an analysis of the impact on the loan program 
        established under section 3;
            (2) an analysis of current and historical Federal programs 
        administered by the Secretary of Housing and Urban Development 
        and the Secretary of the Treasury that support or have 
        supported the production or preservation of limited equity 
        cooperatives, including a review of the role of project based 
        rental assistance in funding limited equity cooperatives;
            (3) an identification of barriers to using existing Federal 
        funding to support for limited equity cooperatives; and
            (4) recommendations for the Congress with respect to how to 
        further support Federal funding for limited equity 
        cooperatives.
    (d) Contracting.--The Assistance Secretary for Cooperatives may 
enter contracts with nonprofit organizations to provide technical 
assistance services.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary, such sums necessary to carry out the 
administrative activities of the Office of Cooperatives.

SEC. 9. DEFINITIONS.

    In this Act:
            (1) Limited equity cooperative.--The term ``limited equity 
        cooperative'' means a shared equity affordable homeownership 
        model in which--
                    (A) residents purchase a share in a residential 
                development and commit to resell their share at a price 
                that maintains affordability at purchase and over the 
                long term;
                    (B) residents control the operation and management 
                of a residential development on a one-member-resident, 
                one-vote basis;
                    (C) membership is offered without discrimination to 
                the general public; and
                    (D) a commitment is made to a shareshare or 
                membership price that maintains affordability at 
                purchase and over the long term.
            (2) Older resident.--The term ``older resident'' means a 
        household composed of one or more persons at least one of whom 
        is 62 years of age or more at the time of occupancy.
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