Restoring Communities Left Behind Act

I 117TH CONGRESS 1ST SESSION H. R. 816 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 4, 2021 Ms. KAPTUR (for herself, Ms. TLAIB, Ms. JACKSON LEE, Mr. RUSH, Mr. GRI- JALVA, Mr. COOPER, Mr. TAKANO, Mr. CARSON, Ms. NORTON, Mr. RYAN, Mr. TORRES of New York, Mr. JONES, Ms. PRESSLEY, Mr. GARCI´A of Illinois, Mr. LEVIN of Michigan, Mr. MCGOVERN, Ms. BLUNT ROCHESTER, Mrs. BEATTY, Mr. PERLMUTTER, Mrs. HAYES, Ms. MCCOLLUM, Ms. BUSH, Mr. SAN NICOLAS, Ms. VELA´ZQUEZ, Ms. BARRAGA´N, Mr. COHEN, Mr. UPTON, and Mrs. DINGELL) 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 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 816 IH (1) As the Nation continues to feel the dev- 1 astating economic impacts of Coronavirus Disease 2 2019 (COVID-19), many urban and rural commu- 3 nities are still suffering from the effects of under- 4 water mortgages, vacancy, abandoned properties, 5 blight, aging housing stock, properties with deferred 6 maintenance and harmful materials such as lead, as- 7 bestos, and mold, unemployment, and population 8 loss. 9 (2) While some cities and counties struggle with 10 disinvestment and population loss, there are also 11 pockets of economic distress in otherwise prosperous, 12 growing areas. 13 (3) Investments targeted to these communities 14 left behind will be critical to ensure equitable eco- 15 nomic recovery, job creation, and housing and neigh- 16 borhood infrastructure revitalization. 17 (4) The need to revitalize neighborhoods is 18 greater than what can be supported with existing 19 local tax bases. 20 (5) Communities continue to suffer from the 21 impact of governmental policies and private sector 22 practices that forbade or discouraged mortgage lend- 23 ing in neighborhoods having significant minority 24 populations. 25 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 816 IH (6) Many State and local governments, land 1 banks, and nonprofit organizations across the 2 United States have responded to the housing crisis 3 by creating cost-effective strategies to revitalize 4 neighborhoods. 5 (7) 2016 data from the United States Census 6 Bureau shows that non-Hispanic, White households 7 have an average net worth of $143,600, while Black 8 households have an average net worth of $12,920, 9 and Hispanic households have an average net worth 10 of $21,420. 11 (8) Housing equity is a significant portion of 12 Black and Hispanic households’ net worth, making 13 up nearly 57 percent of Black households’ net worth, 14 66.5 percent of Hispanic households’ net worth, and 15 40.8 percent of White households’ net worth, accord- 16 ing to the Urban Institute’s calculations from the 17 2016 Survey of Consumer Finances. 18 (9) The 2008 Great Recession and the COVID- 19 19 Recession have exacerbated the racial wealth gap. 20 (10) Funding innovative local neighborhood 21 strategies will allow the United States to close the 22 racial wealth gap, ensure equitable access to housing 23 and economic mobility, and counter the lasting leg- 24 acy of redlining policies. 25 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 816 IH (11) Despite the strong requirement to affirma- 1 tively furthering fair housing under the Fair Hous- 2 ing Act, the lack of accountability measures imple- 3 mented by the Department of Housing and Urban 4 Development to ensure equitable use of housing and 5 community development dollars in Federal programs 6 has allowed for the perpetuation of the legacy of red- 7 lining and neighborhood disinvestment. 8 (12) It is imperative that the Federal Govern- 9 ment make funding available for the best local strat- 10 egies to increase homeownership and preserve home 11 equity in impacted areas, access to safe and afford- 12 able rental housing, economic growth, job creation, 13 and to build on local assets to improve communities 14 in ways that affirmatively further fair housing. 15 SEC. 3. COMPETITIVE GRANT PROGRAM. 16 (a) ESTABLISHMENT.—Not later than the expiration 17 of the 120-day period beginning on the date of the enact- 18 ment of this Act, the Secretary of Housing and Urban 19 Development shall establish a program to award competi- 20 tive grants to eligible local partnerships to carry out more 21 than one neighborhood revitalization support activity in an 22 eligible locality. 23 (b) CRITERIA.— 24 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 816 IH (1) ELIGIBLE LOCAL PARTNERSHIP.—A local 1 partnership is eligible to receive a grant under the 2 program established under this section if it meets 3 the following requirements: 4 (A) The local partnership includes a na- 5 tional or local nonprofit organization with ex- 6 pertise in community planning, engagement, or- 7 ganizing, development, or neighborhood revital- 8 ization and at least one of the following entities: 9 (i) A city or county government. 10 (ii) A land bank. 11 (iii) A fair housing enforcement orga- 12 nization (as such term is defined in section 13 561 of the Housing and Community Devel- 14 opment Act of 1987 (42 U.S.C. 3616a)). 15 (iv) An anchor institution. 16 (v) A nonprofit organization. 17 (vi) A State housing finance agency 18 (as such term is defined in section 106(h) 19 of the Housing and Urban Development 20 Act of 1968 (12 U.S.C. 1701x(h))). 21 (vii) A community development finan- 22 cial institution (as such term is defined in 23 section 103(5) of the Community Develop- 24 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 816 IH ment Banking and Financial Institutions 1 Act of 1994 (12 U.S.C. 4702(5))). 2 (viii) A public housing agency (as 3 such term is defined in section 3(b) of the 4 United States Housing Act of 1937 (42 5 U.S.C. 1437a(b))). 6 (B) Such local partnership will use a grant 7 awarded under this section to carry out neigh- 8 borhood revitalization support activities in fur- 9 therance of a neighborhood revitalization strat- 10 egy for eligible localities. 11 (2) ELIGIBLE LOCALITY.—For the purposes of 12 this section, an eligible locality is a geographic area 13 or areas at the neighborhood or county level that 14 meet at least four of the following objective criteria 15 of economic distress: 16 (A) Dwelling unit sales prices are lower 17 than the cost to acquire and rehabilitate, or 18 build, a new dwelling unit. 19 (B) High proportions of residential and 20 commercial properties are vacant due to fore- 21 closure, eviction, abandonment, or other causes. 22 (C) Low rates of homeownership. 23 (D) Racial disparities in homeownership 24 rates. 25 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 816 IH (E) High rates of poverty. 1 (F) High rates of unemployment and 2 underemployment. 3 (G) Population loss. 4 (H) Lack of private sector lending on fair 5 and competitive terms for individuals to pur- 6 chase homes or start small businesses. 7 (I) Other indicators of economic distress, 8 such as the lack of housing affordability, stem- 9 ming from long-standing government policies 10 and private sector practices that prevented 11 mortgage lending in some communities, such as 12 redlining. 13 The Secretary shall establish thresholds for the cri- 14 teria of economic distress under this paragraph. 15 (3) NEIGHBORHOOD REVITALIZATION SUPPORT 16 ACTIVITIES.—For purposes of this section, neighbor- 17 hood revitalization support activities are the fol- 18 lowing: 19 (A) Providing assistance to existing resi- 20 dents experiencing economic distress or at risk 21 of displacement with homeowner rehabilitation 22 assistance, weatherization, improved housing 23 accessibility and livability for seniors and per- 24 sons with disabilities, energy efficiency improve- 25 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 816 IH ments, refinancing, housing counseling certified 1 by the Secretary, including loss mitigation 2 counseling, property tax relief, clearing and ob- 3 taining formal title, addressing outstanding 4 housing-related expenses, or other activities 5 that the Secretary determines are appropriate. 6 (B) Purchasing non-performing mortgages 7 to assist existing homeowners and advance 8 neighborhood stability. 9 (C) Supporting the purchase and redevel- 10 opment of vacant, abandoned, or distressed 11 properties to create affordable rental housing, 12 homeownership or shared equity homeownership 13 opportunities, mixed-use properties, or commer- 14 cial properties. Properties supported with as- 15 sistance under this subparagraph may be con- 16 verted between rental and homeownership, in- 17 cluding shared equity homeownership, upon ter- 18 mination of the lease or transfer of the property 19 during the relevant period of affordability to en- 20 sure local community needs are met, properties 21 do not sit vacant, and affordability is preserved. 22 (D) Providing pre-purchase counseling 23 through housing counselors certified by the Sec- 24 retary for neighborhood revitalization support 25 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 816 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 properties 21 that are abandoned or distressed. Preference 22 among applications proposing activities under 23 this subparagraph shall be given to applications 24 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 816 IH that promote distribution of properties for af- 1 fordable 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 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 816 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 to by a household having an income that 21 does not exceed 120 percent of the median 22 income for the area in which such unit is 23 located; 24 VerDate Sep 11 2014 17:38 Feb 24, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H816.IH H816 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 816 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 sel [Text truncated for display. 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