Affordable Housing Preservation Act of 2021

Bill: 117-hr-2851
Sponsor: full_name: Rep. Omar, Ilhan [D-MN-5]
Introduced: 2021-04-26
Policy area: Housing and Community Development
Subjects: Congressional oversight

Cooperative and condominium housing

Housing and community development funding

Housing discrimination

Housing finance and home ownership

Housing supply and affordability
Latest action: action_date: 2021-04-26
text: Referred to the House Committee on Financial Services.

Summaries:
action_date: 2021-04-26
action_desc: Introduced in House
text: <p><strong>Affordable Housing Preservation Act of 2021</strong></p> <p> This bill directs the Department of Housing and Urban Development (HUD) to implement a demonstration program for the establishment or preservation of limited- or zero-equity resident-controlled housing. Limited- or zero-equity resident-controlled housing (e.g., a housing cooperative) restricts the initial and resale price of shares of stock or membership interests in a residence so that the shares or interests remain affordable to families of certain incomes. </p> <p>Specifically, HUD may assist nonprofit organizations to establish or preserve such housing through providing (1) mortgage insurance; and (2) grants for predevelopment costs, monitoring fees, technical assistance, gap funding, and intermediary financing. </p> <p>Housing receiving such assistance must be governed by a board of directors elected by members of a limited- or zero-equity resident-controlled housing corporation with voting structured equitably among all members. </p> <p>A limited- or zero-equity resident-controlled housing corporation may sell corporate shares in such housing to an eligible household for a purchase price that ensures dwelling units in the housing will remain affordable for at least 30 years to households earning less than a certain income. </p>

tv_txt: I 117th CONGRESS 1st Session H. R. 2851 IN THE HOUSE OF REPRESENTATIVES April 26, 2021 Ms. Omar (for herself and Mrs. Carolyn B. Maloney of New York ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the Secretary of Housing and Urban Development to carry out a demonstration program to evaluate the effectiveness of the Department assisting nonprofit organizations to develop, acquire, rehabilitate, convert, or preserve affordable housing that is governed by the residents of such housing, and for other purposes.

1. Short title This Act may be cited as the Affordable Housing Preservation Act of 2021 . 2. Resident-controlled housing demonstration program (a) Purpose The purposes of this section are— (1) to establish a demonstration program to evaluate the effectiveness of assisting nonprofit organizations, that may have nonprofit, for-profit, government, or intergovernmental partners, to acquire, rehabilitate, construct, convert, or preserve limited- or zero-equity resident-controlled corporations, including manufactured home communities, as affordable housing that is governed by a majority of the residents of such housing; (2) to provide alternative homeownership opportunities to those in the private market, which increase access to homeownership for households at lower income levels; (3) to prevent displacement of existing residents through converting to limited- or zero-equity resident-controlled corporations or through preserving existing limited- or zero-equity resident-controlled corporations; (4) to create or preserve mixed-income housing corporations to advance economic and racial diversity and inclusion; and (5) to evaluate the efficacy and promote the expansion of limited- or zero-equity resident-controlled corporations throughout the Nation that are stewarded and monitored by nonprofit organizations to ensure compliance, sustainability of corporations, resident governance, and that the affordability of the resident-controlled housing lasts over time to serve current and future income-eligible households. (b) Eligible entities (1) In general Eligibility to participate in the program under this section and for financial assistance under such program shall be limited to only nonprofit organizations that— (A) have such experience as the Secretary shall require in developing, preserving, managing, financing, or monitoring limited- or zero-equity resident-controlled corporations; and (B) have submitted to the Secretary such information and assurances as the Secretary shall require to ensure that the organization will comply with the purposes and requirements of this section and will use assistance to address the local needs of communities. (2) Partnerships Eligible entities may partner with, and seek consultation from, for-profit, nonprofit, public, or quasi-governmental entities on projects under the program. (c) Financial assistance (1) Mortgage insurance Under the program under this section, the Secretary of Housing and Urban Development may insure, pursuant to section 213, 223(f), or 232 of the National Housing Act ( 12 U.S.C. 1715e , 1715n(f), 1715w), a mortgage for the development, acquisition, rehabilitation, or preservation of eligible housing held by an eligible entity, except that the Secretary may for purposes of the demonstration program under this section waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the mortgage insurance programs under such sections if the Secretary determines that such waiver or alternative requirement advances the demonstration program. (2) Grants Under the program under this section, the Secretary may provide a grant to an eligible entity participating in the program for use for the following purposes: (A) Pre-development and other costs For up-front and pre-development costs, including fees and expenses to obtain financing, or for other costs during development, such as capital required before shares to residents are sold. (B) Steward monitoring fee reserve For pre-funding a monitoring fee reserve under the program that is paid by the limited- or zero-equity resident-controlled corporations to the nonprofit organization to fund costs of compliance monitoring, which shall be held in reserve in an amount sufficient to cover at least three years of such monitoring costs. (C) Technical assistance For nonprofit organizations to provide technical assistance and training to— (i) nonprofit organizations developing the capacity to develop, convert, or preserve limited- or zero-equity resident-controlled corporations; and (ii) limited- or zero-equity resident-controlled corporations that are forming or already established. (D) Gap funding For covering gap funding to ensure limited- or zero-equity resident-controlled corporations are affordable to below the targeted income level. (E) Intermediary financing For community development financial institutions that are certified by the Secretary of the Treasury, have demonstrated expertise in financing limited- or zero-equity resident-controlled corporations, and are qualified to finance, provide training and technical assistance, and ensure compliance with the program under this section, for providing below market-rate loans and recoverable grants to projects under the program. (d) Applicability of CDBG program requirements (1) In general Except as provided in paragraph (2), any housing developed, acquired, converted, or preserve with assistance under subsection (c) shall comply with the requirements applicable under the community development block grant program under title I of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5301 et seq.) to housing that is assisted under such title. (2) Waivers In administering the program under this section, the Secretary may waive, or specify alternative requirements for, any provision of the community development block grant program (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment), if the Secretary finds that good cause exists for the waiver or alternative requirement and such waiver or alternative requirement would not be inconsistent with the overall purpose of this section. (e) Governance Except in cases of noncompliance with any requirements under the demonstration program under this section, any housing developed, acquired, constructed, or preserved with assistance under subsection (c) shall be governed by a board of directors elected by the members of the limited- or zero-equity resident-controlled corporation with voting structured equitably among all members and as the eligible entity shall establish. (f) Role of eligible entity During a period not shorter than 30 years that begins upon initial occupancy of any housing developed, acquired, constructed, converted, or preserved under the program under this section, the eligible entity that developed, acquired, constructed, or preserved such housing, or its consulting partner, shall take such actions as the Secretary shall require— (1) to ensure compliance with this section and the regulations issued under this section; (2) to assist with elections of board of directors of the limited- or zero-equity resident-controlled corporation; (3) to assist in preparing annual budgets for the housing and other financial planning; (4) to establish a regulatory process for unit or share sales and resales to ensure compliance; and (5) to perform such other functions as the Secretary shall provide. (g) Sale A limited- or zero-equity resident-controlled corporation may sell corporate shares in housing assisted under the program under this section to an eligible household only for a purchase price that ensures dwelling units in the housing will remain affordable for at least 30 years to households having incomes that are less than the maximum income eligibility. (h) Applications; priority (1) Applications To apply to participate in the program under this section, an eligible entity shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. (2) Priority In selecting eligible entities to participate in the program under this section and receive financial assistance under such program, the Secretary give priority based on the extent to which an eligible entity— (A) will promote mixed-income development to prevent the displacement of existing residents or enable renters to become shareholders or members of the limited-equity or zero-equity resident-controlled housing corporation; (B) will maximize the number of shares or membership in the limited-equity or zero-equity resident-controlled housing corporation that are affordable to households whose initial incomes do not exceed 80 percent of the median income of the area in which the housing is located; (C) demonstrates that the entity and any partners, if applicable, have the capacity to develop, preserve, manage, finance, and monitor limited- or zero-equity resident-controlled housing corporations; and (D) demonstrates the feasibility of the projects to be assisted under the program given local market conditions. (i) Restrictions on screening (1) Prohibition A household applying to purchase a share or membership in a limited- or zero-equity resident-controlled housing corporation, which conveys a right to occupy a specific dwelling unit assisted under the program under this section, may not be denied such purchase or admission based on veteran status of any member of the household or any status as any other protected class under the Fair Housing Act. (2) Consideration of criminal and eviction history A resident-controlled housing corporation shall not unreasonably exclude applicants having a criminal history or eviction history from occupancy in dwelling units assisted under the program under this section. (j) Reporting The Secretary shall submit a report annually to the Congress regarding the activities conducted and the populations being served under the demonstration program under this section, disaggregated by race/ethnicity and income, and shall make each such report publicly available on a website of the Department. (k) Evaluations (1) In general The Secretary shall conduct evaluations of the demonstration program under this section and report to the Congress regarding such evaluations, as follows: (A) Interim Not later than the expiration of the 4-year period beginning on the date of the enactment of this Act, the Secretary shall complete an interim evaluation of the program and submit a report regarding such evaluation to the Congress. (B) Final Not later than the expiration of the 8-year period beginning on the date of the enactment of this Act, the Secretary shall complete a final evaluation of the program and submit a report regarding such evaluation to the Congress. (2) Requirements Each evaluation conducted pursuant to this subsection shall be conducted in a robust manner and involve rigorous research, shall identify the populations served by the demonstration, and shall assess the effects of the demonstration on such populations, including how affordable housing was maintained in moderate- to low-income areas. The final evaluation under paragraph (1)(B) shall include an independent analysis and recommendations by the Department of Housing and Urban Development regarding whether the program could and should be expanded and established as a permanent program and, if so, shall identify any actions, including statutory and administrative actions, necessary to do so. (3) Public availability The Secretary shall make each report required under paragraph (1) publicly available on a website of the Department. (l) Implementation The Secretary shall, by notice, implement the demonstration program under this section, including its terms, procedures, requirements, and conditions, subject only to the availability of appropriations pursuant to subsection (n). (m) Definitions For purposes of this section, the following definitions shall apply: (1) Eligible entity The term eligible entity means an entity eligible under subsection (b) for participation in the demonstration program under this section. (2) Eligible housing The term eligible housing means housing that complies with the requirements under subsection (d). (3) Limited- or zero-equity resident-controlled corporation The term limited- or zero-equity resident-controlled corporation means a cooperative-like corporation, association, or consumer cooperative that, in a manner acceptable to the Secretary, restricts the initial and resale price of the shares of stock or membership interests in the resident entity, which may include a manufactured home community, so that the shares or interests remain fixed or resale-restricted to remain affordable to families of designated incomes. The corporation may or may not own the land or improvements. (4) Manufactured home community The term ‘manufactured home community’ means a community comprised primarily of manufactured homes (as such term is defined in section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974 ( 42 U.S.C. 5402 )) that are used primarily for residential purposes. (5) Secretary The term Secretary means the Secretary of Housing and Urban Development. (n) Authorization of appropriations for grants There is authorized to be appropriated $200,000,000 for fiscal year 2022 for grants under subsection (c)(2), which shall remain available through the end of fiscal year 2025. (o) Regulations The Secretary may issue any regulations necessary to carry out the program under this section.