Affordable Housing Preservation Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2851 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. IN THE HOUSE OF REPRESENTATIVES APRIL 26, 2021 Ms. OMAR (for herself and Mrs. CAROLYN B. MALONEY of New York) intro- duced the following bill; which was referred to the Committee on Finan- cial 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 orga- nizations to develop, acquire, rehabilitate, convert, or pre- serve affordable housing that is governed by the residents of such housing, 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 ‘‘Affordable Housing 4 Preservation Act of 2021’’. 5 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2851 IH SEC. 2. RESIDENT-CONTROLLED HOUSING DEMONSTRA- 1 TION PROGRAM. 2 (a) PURPOSE.—The purposes of this section are— 3 (1) to establish a demonstration program to 4 evaluate the effectiveness of assisting nonprofit orga- 5 nizations, that may have nonprofit, for-profit, gov- 6 ernment, or intergovernmental partners, to acquire, 7 rehabilitate, construct, convert, or preserve limited- 8 or zero-equity resident-controlled corporations, in- 9 cluding manufactured home communities, as afford- 10 able housing that is governed by a majority of the 11 residents of such housing; 12 (2) to provide alternative homeownership oppor- 13 tunities to those in the private market, which in- 14 crease access to homeownership for households at 15 lower income levels; 16 (3) to prevent displacement of existing residents 17 through converting to limited- or zero-equity resi- 18 dent-controlled corporations or through preserving 19 existing limited- or zero-equity resident-controlled 20 corporations; 21 (4) to create or preserve mixed-income housing 22 corporations to advance economic and racial diver- 23 sity and inclusion; and 24 (5) to evaluate the efficacy and promote the ex- 25 pansion of limited- or zero-equity resident-controlled 26 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2851 IH corporations throughout the Nation that are 1 stewarded and monitored by nonprofit organizations 2 to ensure compliance, sustainability of corporations, 3 resident governance, and that the affordability of the 4 resident-controlled housing lasts over time to serve 5 current and future income-eligible households. 6 (b) ELIGIBLE ENTITIES.— 7 (1) IN GENERAL.—Eligibility to participate in 8 the program under this section and for financial as- 9 sistance under such program shall be limited to only 10 nonprofit organizations that— 11 (A) have such experience as the Secretary 12 shall require in developing, preserving, man- 13 aging, financing, or monitoring limited- or zero- 14 equity resident-controlled corporations; and 15 (B) have submitted to the Secretary such 16 information and assurances as the Secretary 17 shall require to ensure that the organization 18 will comply with the purposes and requirements 19 of this section and will use assistance to ad- 20 dress the local needs of communities. 21 (2) PARTNERSHIPS.—Eligible entities may 22 partner with, and seek consultation from, for-profit, 23 nonprofit, public, or quasi-governmental entities on 24 projects under the program. 25 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2851 IH (c) FINANCIAL ASSISTANCE.— 1 (1) MORTGAGE INSURANCE.—Under the pro- 2 gram under this section, the Secretary of Housing 3 and Urban Development may insure, pursuant to 4 section 213, 223(f), or 232 of the National Housing 5 Act (12 U.S.C. 1715e, 1715n(f), 1715w), a mort- 6 gage for the development, acquisition, rehabilitation, 7 or preservation of eligible housing held by an eligible 8 entity, except that the Secretary may for purposes of 9 the demonstration program under this section waive, 10 or specify alternative requirements for, any provision 11 of any statute or regulation that the Secretary ad- 12 ministers in connection with the mortgage insurance 13 programs under such sections if the Secretary deter- 14 mines that such waiver or alternative requirement 15 advances the demonstration program. 16 (2) GRANTS.—Under the program under this 17 section, the Secretary may provide a grant to an eli- 18 gible entity participating in the program for use for 19 the following purposes: 20 (A) PRE-DEVELOPMENT AND OTHER 21 COSTS.—For up-front and pre-development 22 costs, including fees and expenses to obtain fi- 23 nancing, or for other costs during development, 24 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2851 IH such as capital required before shares to resi- 1 dents are sold. 2 (B) STEWARD MONITORING FEE RE- 3 SERVE.—For pre-funding a monitoring fee re- 4 serve under the program that is paid by the 5 limited- or zero-equity resident-controlled cor- 6 porations to the nonprofit organization to fund 7 costs of compliance monitoring, which shall be 8 held in reserve in an amount sufficient to cover 9 at least three years of such monitoring costs. 10 (C) TECHNICAL ASSISTANCE.—For non- 11 profit organizations to provide technical assist- 12 ance and training to— 13 (i) nonprofit organizations developing 14 the capacity to develop, convert, or pre- 15 serve limited- or zero-equity resident-con- 16 trolled corporations; and 17 (ii) limited- or zero-equity resident- 18 controlled corporations that are forming or 19 already established. 20 (D) GAP FUNDING.—For covering gap 21 funding to ensure limited- or zero-equity resi- 22 dent-controlled corporations are affordable to 23 below the targeted income level. 24 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2851 IH (E) INTERMEDIARY FINANCING.—For 1 community development financial institutions 2 that are certified by the Secretary of the Treas- 3 ury, have demonstrated expertise in financing 4 limited- or zero-equity resident-controlled cor- 5 porations, and are qualified to finance, provide 6 training and technical assistance, and ensure 7 compliance with the program under this section, 8 for providing below market-rate loans and re- 9 coverable grants to projects under the program. 10 (d) APPLICABILITY OF CDBG PROGRAM REQUIRE- 11 MENTS.— 12 (1) IN GENERAL.—Except as provided in para- 13 graph (2), any housing developed, acquired, con- 14 verted, or preserve with assistance under subsection 15 (c) shall comply with the requirements applicable 16 under the community development block grant pro- 17 gram under title I of the Housing and Community 18 Development Act of 1974 (42 U.S.C. 5301 et seq.) 19 to housing that is assisted under such title. 20 (2) WAIVERS.—In administering the program 21 under this section, the Secretary may waive, or 22 specify alternative requirements for, any provision of 23 the community development block grant program 24 (except for requirements related to fair housing, 25 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2851 IH nondiscrimination, labor standards, and the environ- 1 ment), if the Secretary finds that good cause exists 2 for the waiver or alternative requirement and such 3 waiver or alternative requirement would not be in- 4 consistent with the overall purpose of this section. 5 (e) GOVERNANCE.—Except in cases of noncompliance 6 with any requirements under the demonstration program 7 under this section, any housing developed, acquired, con- 8 structed, or preserved with assistance under subsection (c) 9 shall be governed by a board of directors elected by the 10 members of the limited- or zero-equity resident-controlled 11 corporation with voting structured equitably among all 12 members and as the eligible entity shall establish. 13 (f) ROLE OF ELIGIBLE ENTITY.—During a period 14 not shorter than 30 years that begins upon initial occu- 15 pancy of any housing developed, acquired, constructed, 16 converted, or preserved under the program under this sec- 17 tion, the eligible entity that developed, acquired, con- 18 structed, or preserved such housing, or its consulting part- 19 ner, shall take such actions as the Secretary shall re- 20 quire— 21 (1) to ensure compliance with this section and 22 the regulations issued under this section; 23 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2851 IH (2) to assist with elections of board of directors 1 of the limited- or zero-equity resident-controlled cor- 2 poration; 3 (3) to assist in preparing annual budgets for 4 the housing and other financial planning; 5 (4) to establish a regulatory process for unit or 6 share sales and resales to ensure compliance; and 7 (5) to perform such other functions as the Sec- 8 retary shall provide. 9 (g) SALE.—A limited- or zero-equity resident-con- 10 trolled corporation may sell corporate shares in housing 11 assisted under the program under this section to an eligi- 12 ble household only for a purchase price that ensures dwell- 13 ing units in the housing will remain affordable for at least 14 30 years to households having incomes that are less than 15 the maximum income eligibility. 16 (h) APPLICATIONS; PRIORITY.— 17 (1) APPLICATIONS.—To apply to participate in 18 the program under this section, an eligible entity 19 shall submit to the Secretary an application at such 20 time, in such manner, and containing such informa- 21 tion as the Secretary may require. 22 (2) PRIORITY.—In selecting eligible entities to 23 participate in the program under this section and re- 24 ceive financial assistance under such program, the 25 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2851 IH Secretary give priority based on the extent to which 1 an eligible entity— 2 (A) will promote mixed-income develop- 3 ment to prevent the displacement of existing 4 residents or enable renters to become share- 5 holders or members of the limited-equity or 6 zero-equity resident-controlled housing corpora- 7 tion; 8 (B) will maximize the number of shares or 9 membership in the limited-equity or zero-equity 10 resident-controlled housing corporation that are 11 affordable to households whose initial incomes 12 do not exceed 80 percent of the median income 13 of the area in which the housing is located; 14 (C) demonstrates that the entity and any 15 partners, if applicable, have the capacity to de- 16 velop, preserve, manage, finance, and monitor 17 limited- or zero-equity resident-controlled hous- 18 ing corporations; and 19 (D) demonstrates the feasibility of the 20 projects to be assisted under the program given 21 local market conditions. 22 (i) RESTRICTIONS ON SCREENING.— 23 (1) PROHIBITION.—A household applying to 24 purchase a share or membership in a limited- or 25 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2851 IH zero-equity resident-controlled housing corporation, 1 which conveys a right to occupy a specific dwelling 2 unit assisted under the program under this section, 3 may not be denied such purchase or admission based 4 on veteran status of any member of the household 5 or any status as any other protected class under the 6 Fair Housing Act. 7 (2) CONSIDERATION OF CRIMINAL AND EVIC- 8 TION HISTORY.—A resident-controlled housing cor- 9 poration shall not unreasonably exclude applicants 10 having a criminal history or eviction history from oc- 11 cupancy in dwelling units assisted under the pro- 12 gram under this section. 13 (j) REPORTING.—The Secretary shall submit a report 14 annually to the Congress regarding the activities con- 15 ducted and the populations being served under the dem- 16 onstration program under this section, disaggregated by 17 race/ethnicity and income, and shall make each such re- 18 port publicly available on a website of the Department. 19 (k) EVALUATIONS.— 20 (1) IN GENERAL.—The Secretary shall conduct 21 evaluations of the demonstration program under this 22 section and report to the Congress regarding such 23 evaluations, as follows: 24 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2851 IH (A) INTERIM.—Not later than the expira- 1 tion of the 4-year period beginning on the date 2 of the enactment of this Act, the Secretary shall 3 complete an interim evaluation of the program 4 and submit a report regarding such evaluation 5 to the Congress. 6 (B) FINAL.—Not later than the expiration 7 of the 8-year period beginning on the date of 8 the enactment of this Act, the Secretary shall 9 complete a final evaluation of the program and 10 submit a report regarding such evaluation to 11 the Congress. 12 (2) REQUIREMENTS.—Each evaluation con- 13 ducted pursuant to this subsection shall be con- 14 ducted in a robust manner and involve rigorous re- 15 search, shall identify the populations served by the 16 demonstration, and shall assess the effects of the 17 demonstration on such populations, including how 18 affordable housing was maintained in moderate- to 19 low-income areas. The final evaluation under para- 20 graph (1)(B) shall include an independent analysis 21 and recommendations by the Department of Hous- 22 ing and Urban Development regarding whether the 23 program could and should be expanded and estab- 24 lished as a permanent program and, if so, shall iden- 25 VerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 2851 IH tify any actions, including statutory and administra- 1 tive actions, necessary to do so [Text truncated for display. Full text available on Congress.gov.]