Affordable HOME Act

II 116TH CONGRESS 2D SESSION S. 3452 To make housing affordable, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 12, 2020 Mr. MERKLEY introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To make housing affordable, 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; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Affordable Housing Opportunities Made Equitable Act’’ 5 or the ‘‘Affordable HOME Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 Sec. 1. Short title; table of contents. Sec. 2. Findings. Sec. 3. Definitions. TITLE I—HOMEOWNERSHIP Sec. 101. Direct down payment assistance. Sec. 102. Mortgage interest tax credit. VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3452 IS Sec. 103. Positive rental history credit enhancement. Sec. 104. Individual development accounts. Sec. 105. Shared equity homeownership initiative. Sec. 106. National right of first refusal. Sec. 107. No cause evictions. Sec. 108. Right to Counsel. Sec. 109. Landlord guarantee program. Sec. 110. Including all forms of housing in HUD consolidated plan. Sec. 111. Prohibiting discrimination against voucher holders. Sec. 112. Fair market rent appeal. Sec. 113. Office of restorative housing justice. TITLE II—CONSTRUCTION AND PRESERVATION Sec. 201. Housing Trust Fund. Sec. 202. Rural housing trust fund construction of USDA multifamily housing for low-income families. Sec. 203. Strategy and investment in rural housing. Sec. 204. Manufactured housing preservation strategy and investment. Sec. 205. Community energy savings program. TITLE III—HOUSING ASSISTANCE FOR HOMELESS AND LOW- INCOME FAMILIES Sec. 301. Increasing direct rental assistance. Sec. 302. Supportive tiny housing village innovation pilot program. Sec. 303. Permanent supportive housing. Sec. 304. Navigation center pilot program. TITLE IV—HOUSING AND HOMELESSNESS INNOVATION Sec. 401. Housing and homelessness innovation research centers. SEC. 2. FINDINGS. 1 Congress finds the following: 2 (1) The United States is experiencing an ongo- 3 ing affordable housing crisis that the Federal Gov- 4 ernment has failed to adequately or proportionately 5 address. The Harvard Housing Center found that 6 about half of all renters in the United States spent 7 more than 30 percent of their incomes on rent and 8 utilities, while 1 in 4 renters spent more than half 9 their incomes on housing in 2018. Although devel- 10 opers have increased new home construction in re- 11 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3452 IS cent years, the impacts of increased supply have not 1 alleviated pricing pressures evenly across income dis- 2 tributions. Often, housing developers focus new de- 3 velopment on the most profitable sectors, increasing 4 construction in the luxury housing market and leav- 5 ing a void in affordable home construction. The most 6 disadvantaged populations are left defenseless, with- 7 out affordable housing options and at risk of eviction 8 and displacement due to rising rents. 9 (2) In 2019, an average of 568,000 people ex- 10 perienced homelessness at a single point in time. De- 11 spite this large number of unhoused people in the 12 United States, the housing choice voucher program, 13 one of our most essential housing safety nets, had 14 multi-year wait lists in many areas. The public hous- 15 ing agencies that administer these vouchers continue 16 to experience serious underfunding since Congress 17 has only provided funding for administrative ex- 18 penses prorated at 80 percent. 19 (3) The current housing affordability crisis does 20 not impact all Americans equally—it is felt most 21 acutely by people of color, and in particular African 22 Americans, a testament to the lingering impacts of 23 discriminatory housing policies. African Americans 24 represent 40 percent of all people experiencing 25 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3452 IS homelessness in the United States, while only ac- 1 counting for 13 percent of the United States popu- 2 lation. 3 (4) In 1933, the Federal Government created 4 the Home Owners’ Loan Corporation, which played 5 a pivotal role in the development and racial segrega- 6 tion of the United States housing market, also 7 known as redlining. By deeming certain neighbor- 8 hoods as hazardous and limiting investment in oth- 9 ers, the Federal Government firmly established ra- 10 cially segregated neighborhoods throughout the 11 United States. 12 (5) Predatory use of eminent domain in pre- 13 dominantly African-American neighborhoods was 14 coupled by Federal urban renewal projects in the 15 latter half of the 20th century, which cleared out 16 homes and businesses throughout many of these 17 communities. 18 (6) Several areas of the United States saw an 19 influx of African Americans migrating from the 20 Deep South in pursuit of better economic opportuni- 21 ties. The Federal Government and State and local 22 municipalities and their policies heavily influenced 23 where this population settled. 24 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3452 IS (7) Historical restrictions on homeownership 1 have driven disparate impacts for Black Americans, 2 indigenous people, and people of color across most 3 sectors of social existence. In the fourth quarter of 4 2018, the homeownership rate among Black Ameri- 5 cans was 43.6 percent, while the Hispanic homeown- 6 ership rate was 46.9 percent. In comparison, the 7 White (non-Hispanic) homeownership rate was 73.6 8 percent in the fourth quarter of 2018, more than the 9 all-minority homeownership rate. Creating policies 10 and programs that encourage homeownership for the 11 most disadvantaged is necessary to achieve equitable 12 outcomes for all people in the United States. 13 (8) Generations of African Americans have been 14 systematically displaced and that legacy is still felt 15 by descendants today. 16 (9) Despite these clear and documented pat- 17 terns, the Federal Government has not dedicated 18 significant attention and resources to remedy the 19 historical legacies of redlining, urban renewal, and 20 other explicitly and intentionally racist housing poli- 21 cies. 22 (10) Housing impacts education policy and out- 23 comes. Low-income students who lack a quality edu- 24 cation are less likely to pursue education or training 25 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 3452 IS beyond high school, and thus more likely to live in 1 low-income neighborhoods. Schools with a large con- 2 centration of low-income students are classified as 3 title I schools, and in 2016, the largest racial demo- 4 graphic in those schools were African-American chil- 5 dren, followed by White children. Generally, school 6 districts are largely funded by local property taxes, 7 and low-income neighborhoods have lower home val- 8 ues. School districts are therefore unable to provide 9 a high quality education to their students. The prop- 10 erty value funding mechanism perpetuates a system- 11 atic cycle that keeps low-income African-American 12 people in poverty, with very little opportunity for up- 13 ward mobility. Some States have tried to wrestle 14 with this systematic cycle by redesigning the funding 15 formula, yet the lasting implications of inequitable 16 funding structures remain. 17 (11) Data demonstrates that communities of 18 color and low-income families experience the adverse 19 consequence of displacement the most due to Fed- 20 eral, State, and local inequitable housing policies. As 21 a result, disparities have occurred, diminishing or 22 outright denying opportunities to obtain homeowner- 23 ship and access to generational wealth within these 24 means. As living preferences change, current trends 25 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 3452 IS demonstrate that urban areas once comprised of 1 higher concentrations of low income people and peo- 2 ple of color have become more desirable and sought 3 after by affluent people with different identities of 4 those displaced—this is also known as gentrification. 5 (12) Congress should address and continue to 6 study the ramifications of structural racism and so- 7 cial class disparities within Federal housing policies. 8 This can be done by targeting displacement, home- 9 lessness, housing affordability, enforcing tenant pro- 10 tections, providing landlords with incentives to par- 11 ticipate in affordable housing programs, and facili- 12 tating access to resources that lead to homeowner- 13 ship. 14 (13) This Act aims to address the shortcomings 15 of our current housing policies and funding levels by 16 holistically addressing disparities and systematic ob- 17 stacles and ensuring an equitable outcome for the 18 most vulnerable Americans. 19 SEC. 3. DEFINITIONS. 20 In this Act: 21 (1) INDIAN COUNTRY.—The term ‘‘Indian coun- 22 try’’ has the meaning given the term in section 1151 23 of title 18, United States Code. 24 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 3452 IS (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 1 has the meaning given the term in section 102 of the 2 Federally Recognized Indian Tribe List Act of 1994 3 (25 U.S.C. 5130). 4 (3) MANUFACTURED HOME.—The term ‘‘manu- 5 factured home’’— 6 (A) has the meaning given the term in sec- 7 tion 603 of the National Manufactured Housing 8 Construction and Safety Standards Act of 1974 9 (42 U.S.C. 5402); 10 (B) includes a home described in subpara- 11 graph (A) without regard to whether the home 12 was built before, on, or after the date on which 13 the construction and safety standards estab- 14 lished under section 604 of that Act (42 U.S.C. 15 5403) became effective; and 16 (C) shall not include any self-propelled rec- 17 reational vehicle. 18 (4) MANUFACTURED HOUSING COMMUNITY.— 19 The term ‘‘manufactured housing community’’ 20 means a community comprised primarily of manu- 21 factured homes used primarily for residential pur- 22 poses. 23 (5) PUBLIC HOUSING AGENCY.—The term 24 ‘‘public housing agency’’ has the meaning given the 25 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 3452 IS term in section 3(b) of the United States Housing 1 Act of 1937 (42 U.S.C. 1437a(b)). 2 (6) SECRETARY.—The term ‘‘Secretary’’ means 3 the Secretary of Housing and Urban Development. 4 (7) STATE.—The term ‘‘State’’ means— 5 (A) a State; 6 (B) the District of Columbia; 7 (C) the Commonwealth of Puerto Rico; 8 and 9 (D) any other territory or possession of the 10 United States. 11 TITLE I—HOMEOWNERSHIP 12 SEC. 101. DIRECT DOWN PAYMENT ASSISTANCE. 13 (a) DEFINITIONS.—In this section: 14 (1) ELIGIBLE HOUSEHOLD.—The term ‘‘eligible 15 household’’ means a household with an income that 16 is less than 140 percent of the area median income. 17 (2) SHARE EQUITY HOME; SHARED EQUITY 18 HOMEOWNERSHIP PROGRAM.—The terms ‘‘shared 19 equity home’’ and ‘‘shared equity homeownership 20 program’’ have the meanings given those terms in 21 section 105(a). 22 (b) ESTABLISHMENT.—The Secretary shall establish 23 a program to provide grants to State housing finance 24 agencies to establish new or supplement existing down 25 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 3452 IS payment assistance programs for eligible households lo- 1 cated within the State. 2 (c) REQUIREMENTS FOR ELIGIBLE HOUSEHOLDS.— 3 An eligible household receiving assistance from a grant 4 provided under this section shall— 5 (1) participate in housing counseling provided 6 by— 7 (A) an organization approved by the De- 8 partment of Housing and Urban Development; 9 or 10 (B) a culturally specific nonprofit organi- 11 zation; and 12 (2) use the assistance for a down payment on 13 a property to be used by the eligible household as a 14 primary residence for a period of not less than 10 15 years. 16 (d) NO RESTRICTION ON HOUSING.—An eligible 17 household may use assistance received from a grant pro- 18 vided under this section for a down payment on any type 19 of dwelling that shall be used as a primary residence, in- 20 cluding a manufactured housing unit, residential property 21 under 400 square feet, a condominium, or a cooperative. 22 (e) UNRESTRICTED CO-BORROWERS PILOT.—There 23 shall be reserved 2 percent of the funds made available 24 under this section for grantees to carry out a pilot down 25 VerDate Sep 11 2014 02:16 Mar 25, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3452.IS S3452 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 3452 IS payment assistance program serving more than 2 co-bor- 1 rowers receiving assistance from a grant provided under 2 this section. 3 (f) SUPPLEMENT FOR SHARED EQUITY HOME PUR- 4 CHASES.—A grantee shall establish a 25 percent supple- 5 mental bonus down payment for eligible households that 6 are seeking to purchase an existing shared equity home 7 or cooperative or bring a property into a shared equity 8 homeownership program or cooperative with funds made 9 available under this section. 10 (g) LIMITATION.—The aggregate amount treated as 11 acquisition indebtedness for purposes of this section for 12 any period shall not exceed the limitation governing the 13 maximum original principal obligation for a mortgage se- 14 cured by a single-family residence, as determined and ad- 15 justed annually under section 302(b)(2) of the Federal 16 National Mortgage Association Charter Act (12 U.S.C. 17 1717(b)(2)) and section 305(a)(2) of the Federal Home 18 Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)). 19 (h) AUTHORIZATION OF APPROPRIATIONS.— 20 (1) IN GENERAL.—There is authorized to be 21 appropriated to carry out this section 22 $1,000,000,000 for each of fiscal years 2021 23 th [Text truncated for display. 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