Federal

Restoring Communities Left Behind Act

Source: Congress.gov · 4,849 words in original text

What This Bill Does

This bill directs the Secretary of Housing and Urban Development (the federal agency that handles housing policy) to create a grant program giving money to local partnerships. These partnerships would use the grants to revitalize neighborhoods that are economically struggling through activities like helping people buy homes, fixing up abandoned buildings, and improving housing conditions. The bill also authorizes additional money for a separate self-help homeownership program. ##

Who It Affects

- Local partnerships (nonprofits, city/county governments, and other organizations working together) - Residents in economically distressed neighborhoods experiencing poverty, unemployment, and housing problems - Homeowners struggling with mortgages or needing home repairs - Prospective homebuyers with low to moderate incomes - Property owners of vacant or abandoned buildings - The Secretary of Housing and Urban Development - Congress (which receives reports on the program's results) ##

Key Provisions

- The Secretary must establish a competitive grant program within 120 days of the bill becoming law that awards money to eligible local partnerships carrying out multiple neighborhood revitalization activities in economically distressed areas (Sec. 3(a)) - Eligible local partnerships must include a nonprofit organization with community development expertise plus at least one other partner entity like a city or county government, land bank (a government entity that buys and manages abandoned properties), or fair housing organization (Sec. 3(b)(1)) - An eligible locality must show at least four signs of economic distress, such as low home sale prices, high vacancy rates, low homeownership, high poverty, unemployment, population loss, or limited lending from private banks (Sec. 3(b)(2)) - Grants must support multiple activities including helping existing homeowners with repairs and refinancing, buying non-performing mortgages (loans 90 days or more behind on payments), purchasing vacant properties to create affordable housing, providing down payment help to buyers, creating community land trusts (nonprofit organizations that keep housing affordable long-term), and demolishing abandoned buildings as part of neighborhood improvement plans (Sec. 3(b)(3)) - Rental housing created with grant money must remain affordable to households earning no more than 60 percent of the area's median income for at least 30 years (Sec. 3(b)(4)(A)) - Housing for purchase must be affordable to households earning no more than 120 percent of the area's median income, with resale restrictions lasting at least 5 years to maintain affordability (Sec. 3(b)(4)(B)) - The Secretary must prioritize grants based on severity of economic distress, benefits to very low-income renters and low-income homebuyers, promotion of affordable homeownership, community capacity, engagement practices, efforts to prevent displacement, and potential to close the racial wealth gap and counter redlining (historic discriminatory lending practices) (Sec. 3(c)(2)) - Up to 15 percent of each grant may cover administrative costs, and the Secretary may set aside money for technical assistance to help grantees succeed (Sec. 3(d) and (e)) - Funds cannot be used to deny housing based on criminal history, eviction history, income source, or veteran status (Sec. 3(f)) - Grantees must report results publicly, including number of homes helped, affordability levels, minority homeownership rates, and housing location relative to schools and transit (Sec. 3(g)(2)) - The Secretary must report to Congress 2 years after first awarding grants and every 3 years thereafter, evaluating program impact and demographic changes in served neighborhoods (Sec. 3(h)) ##

What Changes

If this bill becomes law, the federal government will establish a new grant program giving billions of dollars to local organizations to fix up struggling neighborhoods and help people become homeowners or access affordable rental housing. Communities with significant economic hardship will be able to apply for these grants to revitalize their areas. The government will have new requirements to track and publicly report how the program works, including whether it helps close gaps in homeownership between racial groups. For the first time, the federal government will have specific accountability measures tied to this type of housing and community development funding focused on equitable outcomes. ##

Important Definitions

- **Anchor institution:** A school, library, healthcare provider, community college, or other community support organization - **Community land trust:** A nonprofit or local government organization that uses long-term leases (at least 30 years) to keep housing affordable and buys back homes when owners sell to preserve affordability for future low-income buyers - **Land bank:** A government entity that buys, manages, and sells vacant or abandoned properties according to community priorities - **Non-performing mortgage:** A residential home loan that is 90 days or more behind on payments - **Shared equity homeownership program:** An affordable home-buying program where a nonprofit or government keeps some ownership stake in the home through a deed restriction to keep it affordable when the owner resells - **Neighborhood revitalization support activity:** Any of the eligible activities listed in the bill for improving neighborhoods and housing ##

Effective Date

Not specified in bill text

I 118TH CONGRESS 1ST SESSION H. R. 837 To direct the Secretary of Housing and Urban Development to establish a grant program to help revitalize certain localities, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 6, 2023 Ms. KAPTUR (for herself, Ms. TLAIB, Ms. NORTON, Ms. MCCOLLUM, Mr. GRI- JALVA, Mrs. BEATTY, Mr. TAKANO, Mrs. DINGELL, Ms. BLUNT ROCH- ESTER, Mr. GARCI´A of Illinois, Ms. ROSS, and Ms. BUSH) introduced the following bill; which was referred to the Committee on Financial Services A BILL 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Restoring Commu- 4 nities Left Behind Act’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 (1) As the Nation continues to feel the dev- 8 astating economic impacts of Coronavirus Disease 9 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 837 IH 2019 (COVID–19), many urban and rural commu- 1 nities are still suffering from the effects of under- 2 water mortgages, vacancy, abandoned properties, 3 blight, aging housing stock, properties with deferred 4 maintenance and harmful materials such as lead, as- 5 bestos, and mold, unemployment, and population 6 loss. 7 (2) While some cities and counties struggle with 8 disinvestment and population loss, there are also 9 pockets of economic distress in otherwise prosperous, 10 growing areas. 11 (3) Investments targeted to these communities 12 left behind will be critical to ensure equitable eco- 13 nomic recovery, job creation, and housing and neigh- 14 borhood infrastructure revitalization. 15 (4) The need to revitalize neighborhoods is 16 greater than what can be supported with existing 17 local tax bases. 18 (5) Communities continue to suffer from the 19 impact of governmental policies and private sector 20 practices that forbade or discouraged mortgage lend- 21 ing in neighborhoods having significant minority 22 populations. 23 (6) Many State and local governments, land 24 banks, and nonprofit organizations across the 25 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 837 IH United States have responded to the housing crisis 1 by creating cost-effective strategies to revitalize 2 neighborhoods. 3 (7) 2019 data from the United States Census 4 Bureau shows that non-Hispanic, White households 5 have an average net worth of $187,300, while Black 6 households have an average net worth of $14,100, 7 and Hispanic households have an average net worth 8 of $31,700. 9 (8) Housing equity is a significant portion of 10 Black and Hispanic households’ net worth, making 11 up nearly 59 percent of Black households’ net worth, 12 58 percent of Hispanic households’ net worth, and 13 43 percent of White households’ net worth, accord- 14 ing to the Urban Institute’s calculations from the 15 2020 Survey of Consumer Finances. 16 (9) The 2008 Great Recession and the COVID– 17 19 Recession have exacerbated the racial wealth gap. 18 (10) Funding innovative local neighborhood 19 strategies will allow the United States to close the 20 racial wealth gap, ensure equitable access to housing 21 and economic mobility, and counter the lasting leg- 22 acy of redlining policies. 23 (11) Despite the strong requirement to affirma- 24 tively furthering fair housing under the Fair Hous- 25 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 837 IH ing Act, the lack of accountability measures imple- 1 mented by the Department of Housing and Urban 2 Development to ensure equitable use of housing and 3 community development dollars in Federal programs 4 has allowed for the perpetuation of the legacy of red- 5 lining and neighborhood disinvestment. 6 (12) It is imperative that the Federal Govern- 7 ment make funding available for the best local strat- 8 egies to increase homeownership and preserve home 9 equity in impacted areas, access to safe and afford- 10 able rental housing, economic growth, job creation, 11 and to build on local assets to improve communities 12 in ways that affirmatively further fair housing. 13 SEC. 3. COMPETITIVE GRANT PROGRAM. 14 (a) ESTABLISHMENT.—Not later than the expiration 15 of the 120-day period beginning on the date of the enact- 16 ment of this Act, the Secretary of Housing and Urban 17 Development shall establish a program to award competi- 18 tive grants to eligible local partnerships to carry out more 19 than one neighborhood revitalization support activity in an 20 eligible locality. 21 (b) CRITERIA.— 22 (1) ELIGIBLE LOCAL PARTNERSHIP.—A local 23 partnership is eligible to receive a grant under the 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 837 IH program established under this section if it meets 1 the following requirements: 2 (A) The local partnership includes a na- 3 tional or local nonprofit organization with ex- 4 pertise in community planning, engagement, or- 5 ganizing, development, or neighborhood revital- 6 ization and at least one of the following entities: 7 (i) A city or county government. 8 (ii) A land bank. 9 (iii) A fair housing enforcement orga- 10 nization (as such term is defined in section 11 561 of the Housing and Community Devel- 12 opment Act of 1987 (42 U.S.C. 3616a)). 13 (iv) An anchor institution. 14 (v) A nonprofit organization. 15 (vi) A State housing finance agency 16 (as such term is defined in section 106(h) 17 of the Housing and Urban Development 18 Act of 1968 (12 U.S.C. 1701x(h))). 19 (vii) A community development finan- 20 cial institution (as such term is defined in 21 section 103(5) of the Community Develop- 22 ment Banking and Financial Institutions 23 Act of 1994 (12 U.S.C. 4702(5))). 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 837 IH (viii) A public housing agency (as 1 such term is defined in section 3(b) of the 2 United States Housing Act of 1937 (42 3 U.S.C. 1437a(b))). 4 (B) Such local partnership will use a grant 5 awarded under this section to carry out neigh- 6 borhood revitalization support activities in fur- 7 therance of a neighborhood revitalization strat- 8 egy for eligible localities. 9 (2) ELIGIBLE LOCALITY.—For the purposes of 10 this section, an eligible locality is a geographic area 11 or areas at the neighborhood or county level that 12 meet at least four of the following objective criteria 13 of economic distress: 14 (A) Dwelling unit sales prices are lower 15 than the cost to acquire and rehabilitate, or 16 build, a new dwelling unit. 17 (B) High proportions of residential and 18 commercial properties are vacant due to fore- 19 closure, eviction, abandonment, or other causes. 20 (C) Low rates of homeownership. 21 (D) Racial disparities in homeownership 22 rates. 23 (E) High rates of poverty. 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 837 IH (F) High rates of unemployment and 1 underemployment. 2 (G) Population loss. 3 (H) Lack of private sector lending on fair 4 and competitive terms for individuals to pur- 5 chase homes or start small businesses. 6 (I) Other indicators of economic distress, 7 such as the lack of housing affordability, stem- 8 ming from long-standing government policies 9 and private sector practices that prevented 10 mortgage lending in some communities, such as 11 redlining. 12 The Secretary shall establish thresholds for the cri- 13 teria of economic distress under this paragraph. 14 (3) NEIGHBORHOOD REVITALIZATION SUPPORT 15 ACTIVITIES.—For purposes of this section, neighbor- 16 hood revitalization support activities are the fol- 17 lowing: 18 (A) Providing assistance to existing resi- 19 dents experiencing economic distress or at risk 20 of displacement with homeowner rehabilitation 21 assistance, weatherization, improved housing 22 accessibility and livability for seniors and per- 23 sons with disabilities, energy efficiency improve- 24 ments, refinancing, housing counseling certified 25 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 837 IH by the Secretary, including loss mitigation 1 counseling, property tax relief, clearing and ob- 2 taining formal title, addressing outstanding 3 housing-related expenses, or other activities 4 that the Secretary determines are appropriate. 5 (B) Purchasing non-performing mortgages 6 to assist existing homeowners and advance 7 neighborhood stability. 8 (C) Supporting the purchase and redevel- 9 opment of vacant, abandoned, or distressed 10 properties to create affordable rental housing, 11 homeownership or shared equity homeownership 12 opportunities, mixed-use properties, or commer- 13 cial properties. Properties supported with as- 14 sistance under this subparagraph may be con- 15 verted between rental and homeownership, in- 16 cluding shared equity homeownership, upon ter- 17 mination of the lease or transfer of the property 18 during the relevant period of affordability to en- 19 sure local community needs are met, properties 20 do not sit vacant, and affordability is preserved. 21 (D) Providing pre-purchase counseling 22 through housing counselors certified by the Sec- 23 retary for neighborhood revitalization support 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 837 IH activities that provide homeownership opportu- 1 nities. 2 (E) Providing down payment assistance to 3 prospective homebuyers. 4 (F) Establishing and operating community 5 land trusts to provide affordable rental and 6 homeownership opportunities, including shared 7 equity homeownership opportunities. 8 (G) Demolishing abandoned or distressed 9 structures, but only if such activity is part of a 10 strategy that incorporates rehabilitation or new 11 construction and efforts to increase affordable 12 housing and homeownership, except that not 13 more than 10 percent of any grant made under 14 this section may be used for activities under 15 this subparagraph unless the Secretary deter- 16 mines that such use is to replace units in an ef- 17 fort to increase affordable housing or homeown- 18 ership. 19 (H) Establishing or operating land banks 20 to maintain, acquire, redevelop, or sell prop- 21 erties that are abandoned or distressed. Pref- 22 erence among applications proposing activities 23 under this subparagraph shall be given to appli- 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 837 IH cations that promote distribution of properties 1 for affordable housing and small businesses. 2 (I) Improving parks, sidewalks, street 3 lighting, and other neighborhood improvements 4 that impact quality of life in the targeted neigh- 5 borhoods, except that not more than 5 percent 6 of any grant made under this section may be 7 used for activities under this subparagraph. 8 (J) In connection with any other eligible 9 activity under this paragraph, working with 10 resident leaders and community groups to un- 11 dertake community planning, outreach, and 12 neighborhood engagement, consistent with the 13 goals of increasing homeownership, stabilizing 14 neighborhoods, reducing vacancy rates, creating 15 jobs, increasing or stabilizing residential and 16 commercial property values, and meeting other 17 neighborhood needs, except that not more than 18 10 percent of any grant made under this sec- 19 tion may be used for activities under this sub- 20 paragraph. 21 (4) AFFORDABILITY TERMS.— 22 (A) RENTAL UNITS.—In the case of prop- 23 erty assisted pursuant to paragraph (3) con- 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 837 IH taining any dwelling units that are made avail- 1 able for rental— 2 (i) such units shall be available for 3 rental only by a household having an in- 4 come that does not exceed 60 percent of 5 the median income for the area in which 6 such unit is located; 7 (ii) such units shall remain affordable 8 for at least 30 years; 9 (iii) such property may be a mixed-use 10 property; and 11 (iv) such unit shall be maintained in 12 habitable condition, as defined by the local- 13 ity in which the property is located. 14 (B) HOMEOWNERSHIP UNITS.—In the case 15 of property assisted pursuant to paragraph (3) 16 consisting of a dwelling unit, or containing any 17 dwelling units, made available for homeowner- 18 ship, such unit or units— 19 (i) shall be available for purchase only 20 by a household having an income that does 21 not exceed 120 percent of the median in- 22 come for the area in which such unit is lo- 23 cated; 24 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 837 IH (ii) if made available through a shared 1 equity homeownership program, shall re- 2 main affordable for at least 30 years; and 3 (iii) if not made available through a 4 shared equity homeownership program— 5 (I) shall remain affordable for a 6 period of years as determined by the 7 partnership, which shall not be short- 8 er than 5 years from the sale of the 9 unit; and 10 (II) shall be subject to resale or 11 recapture provisions that— 12 (aa) are established by the 13 partnership to ensure that the af- 14 fordability term may be met or 15 funds may be redeployed for 16 neighborhood revitalization sup- 17 port activities; 18 (bb) may be waived in cases 19 of hardship or market deprecia- 20 tion; and 21 (cc) provide that, in the case 22 of a resale, the partnership may 23 maintain preemptive purchase 24 options in order to sell the prop- 25 VerDate Sep 11 2014 02:07 Mar 03, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H837.IH H837 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •HR 837 IH erty to another income qualified 1 purchaser. 2 If a property converts be [Text truncated for display. Full text available on Congress.gov.]

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