1.This Act may be cited as the
Affordable Housing Preservation Act of
2005
.
2.Matching grant
program for affordable housing preservation
(a)
(1)Congress
finds that—
(A)the availability
of low-income housing rental units has declined nationwide in the last several
years;
(B)as rents for
low-income housing increase and the development of new units of affordable
housing decreases, there are fewer privately owned, federally assisted
affordable housing units available to low-income individuals in need;
(C)the demand for
affordable housing far exceeds the supply of affordable housing, as evidenced
by recent studies;
(D)the efforts of
nonprofit organizations have significantly preserved and expanded access to
low-income housing;
(E)a substantial
number of existing federally assisted or federally insured multifamily
properties are at risk of being lost from the affordable housing inventory of
the Nation through market rate conversion, deterioration, or demolition;
(F)it is in the
interest of the Nation to encourage transfer of control of such properties to
competent national, regional, and local nonprofit entities and intermediaries,
the missions of which involve maintaining the affordability of such
properties;
(G)such transfers
may be inhibited by a shortage of such entities that are appropriately
capitalized; and
(H)the Nation would
be well served by providing assistance to such entities to aid in accomplishing
this purpose.
(2)The
purposes of this Act are—
(A)to continue the
partnerships among the Federal Government, State and local governments,
nonprofit organizations, and the private sector in operating and assisting
housing that is affordable to low-income persons and families;
(B)to promote the
preservation of affordable housing units by providing matching grants to States
and localities that have developed and funded programs for the preservation of
privately owned housing that is affordable to low-income families and persons;
and
(C)to minimize the
involuntary displacement of tenants who are currently residing in such housing,
many of whom are elderly or disabled persons and families with children.
(b)In
this Act:
(1)The term capital expenditures includes
expenditures for acquisition and rehabilitation.
(2)The
term consortium means a group of geographically contiguous
localities that jointly submit an application under subsection (d).
(3)Eligible
affordable housingThe term eligible affordable
housing means housing that—
(A)consists of more
than 4 dwelling units;
(B)is insured or
assisted under a program of the Department of Housing and Urban Development or
the Department of Agriculture under which the property is subject to
limitations on tenant rents, rent contributions, or incomes; and
(C)is at risk, as
determined by the Secretary, of termination of any of the limitations referred
to in subparagraph (B).
(4)The term eligible entities means any entity
that meets the requirements of subsection (e)(6) and the rules issued under
that subsection.
(5)The
term locality means a city, town, township, county, parish,
village, or other general purpose political subdivision of a State, or a
consortium thereof.
(6)Low-Income
affordability restrictionThe term low-income affordability
restriction means, with respect to a housing project, any limitation
imposed by law, regulation, or regulatory agreement on—
(A)rents for tenants
of the project;
(B)rent
contributions for tenants of the project; or
(C)income-eligibility
for occupancy in the project.
(7)Low-Income
families; very Low-Income familiesThe terms low-income
families and very low-income families have the same
meanings as in section 3(b) of the United States
Housing Act of 1937 (42 U.S.C. 1437a(b)).
(8)The term project-based assistance has the
same meaning as in section 16(c) of the United
States Housing Act of 1937 (42 U.S.C. 1437n(c)), except that the
term includes assistance under any successor programs to the programs referred
to in that section.
(9)Qualified
limited liability companyThe term qualified limited
liability company means a limited liability company with respect to
which a credit is allowed under section 42 of the Internal Revenue Code of 1986
with respect to the company’s qualified basis (as defined in section 42 (c)(1)
of such Code), in a qualified low-income building (as defined in section
42(c)(2) of such Code) for which grant funds received under this section shall
be used.
(10)The term qualified partnership means a
limited partnership with respect to which a credit is allowed under section 42
of the Internal Revenue Code of 1986 with respect to the partnership’s
qualified basis (as defined in section 42(c)(1) of such Code) in a qualified
low-income building (as defined in section 42(c)(2) of such Code) for which
grant funds received under this section shall be used.
(11)The
term Secretary means the Secretary of Housing and Urban
Development.
(12)The
term State means each of the several States of the United States
and the District of Columbia.
(c)The
Secretary shall, to the extent that amounts are made available in advance under
an appropriations Act, award grants under this section to States and localities
for low-income housing preservation and promotion.
(d)
(1)Any State or locality that seeks a grant under this
section shall submit an application (through appropriate State and local
agencies) to the Secretary.
(2)Each
application submitted pursuant to paragraph (1) shall contain any information
and certifications necessary for the Secretary to determine who is eligible to
receive a grant under this section.
(e)
(1)
(A)Grants awarded under this section may be used by States
and localities only for the purposes of providing assistance—
(i)for
acquisition, rehabilitation, capital expenditures, and related development
costs for a housing project that meets the requirements of paragraph (2), (3),
(4), or (5); or
(ii)to
eligible entities under paragraph (6) for—
(I)operational,
working capital, and organizational expenses; and
(II)predevelopment
activities to acquire eligible affordable housing for the purpose of ensuring
that the housing will remain affordable, as the Secretary considers
appropriate, for low-income or very low-income families.
(B)A project receiving assistance under this paragraph
shall be subject to an agreement (binding on any subsequent owner of such
project) that ensures that the project will continue to operate, for a period
of not less than 50 years after the date on which any assistance is made
available under this paragraph, in a manner that will provide rental housing on
terms at least as advantageous to existing and future tenants as the terms
required by any program under which the project, if offered, was eligible for
assistance, subject to available appropriations.
(C)Service of
under-served and rural areasStates receiving funds under this
section shall ensure that, to the maximum extent practicable, that projects in
under-served and rural areas in that State receive assistance.
(2)Projects with
hud-insured mortgagesA project meets the requirements of this
paragraph if the project is financed by a loan or mortgage—
(A)that is—
(i)insured or held
by the Secretary under section 221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3));
and
(ii)receiving loan
management assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f) due to a conversion from section 101 of the
Housing and Urban Development Act of
1965 (12 U.S.C. 1701s);
(B)that is insured
or held by the Secretary and bears interest at a rate determined under the
proviso of section 221(d)(5) of the National
Housing Act (12 U.S.C. 1715l(d)(5)); or
(C)that is insured,
assisted, or held by the Secretary or a State or State agency under section 236
of the National Housing Act (12 U.S.C.
1715z–1).
(3)Projects with
Section 8 project-based
assistanceA project meets the requirements of this paragraph if
the project is subject to a contract for project-based assistance.
(4)Projects
purchased by residentsA project meets the requirements of this
paragraph—
(A)if—
(i)the
project is or was eligible low-income housing (as defined in section 229 of the
Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12
U.S.C. 4119)); or
(ii)the project is
or was a project assisted under section 613(b) of the
Cranston-Gonzalez National Affordable Housing
Act (12 U.S.C. 4125);
(B)if the project
has been purchased by a resident council or resident-approved nonprofit
organization for the housing, or is approved by the Secretary for such
purchase, for conversion to homeownership housing under a resident
homeownership program meeting the requirements of section 226 of the Low-Income
Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4116);
and
(C)if the owner of
the project has entered into binding commitments (applicable to any subsequent
owner) to extend—
(i)project-based
assistance for not less than 15 years (beginning on the date on which
assistance is made available for the project by the State or locality under
this section); and
(ii)any low-income
affordability restrictions applicable to the project in connection with that
assistance.
(5)Rural rental
assistance projectsA project meets the requirements of this
paragraph—
(A)if—
(i)the
project is a rural rental housing project financed under section 515 of the
Housing Act of 1949 (42 U.S.C. 1485);
or
(ii)the project is a
farm labor housing development financed under section 514 of the United States
Housing Act of 1949 (42 U.S.C. 1484);
and
(B)if the
restriction on the use of the project (as required under section 502 of the
Housing Act of 1949 (42 U.S.C. 1472))
will expire not later than 12 months after the date on which assistance is made
available for the project by the State or locality under this
subsection.
(6)
(A)The Secretary shall establish, by regulation, standards
for eligible entities under this subsection.
(B)An
eligible entity shall—
(i)be
a nonprofit organization (as defined in section 104 of the
Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12704)), or a qualified limited liability company or
a qualified partnership the managing member or general partner of which,
respectively, is—
(I)a nonprofit
organization; or
(II)a for-profit
entity that is wholly owned by an eligible non-profit organization;
(ii)have among its
purposes, maintaining the affordability to low-income or very low-income
families of multifamily properties that are at risk of loss from the inventory
of housing that is affordable to low-income or very low-income families;
and
(iii)demonstrate to
the Secretary—
(I)the need for the
types of assistance described under paragraph (1)(A)(ii);
(II)experience in
providing assistance described under that paragraph; and
(III)its ability to
provide the assistance described under that paragraph.
(7)
(A)Each State and locality awarded a grant under this
section shall transfer at least 5 percent, but not more than 10 percent, of
such grant to eligible entities for the purposes described under paragraph
(1)(A)(ii)(I).
(B)Each State and locality awarded a grant under this
section shall transfer at least 15 percent of such grant to eligible entities
for the purposes described under paragraph (1)(A)(ii)(II).
(8)If any amount of a grant awarded to a State or
locality under this section has not been obligated 3 years after the grant is
awarded, such amount shall be returned to the Secretary to be redistributed in
accordance with this section the following fiscal year.
(9)A State or locality that is awarded a grant under this
section may use not more than 10 percent of such grant for costs associated
with the administration of the grant.
(f)Amount of State
and local grants
(1)Subject to paragraph (3) and subsection (g), in each
fiscal year, the Secretary shall award to each State and locality approved for
a grant under this section a grant in an amount based upon the proportion of
the need for assistance of that State or locality under this section (as
determined by the Secretary in accordance with paragraph (2)) to the aggregate
need among all States and localities approved for assistance under this section
for that fiscal year.
(2)In determining the proportion of the need of a State or
locality under paragraph (1), the Secretary shall consider—
(A)the number of
units in projects in the State or locality that are eligible for assistance
under subsection (e)(1)(A)(i) that are, due to market conditions or other
factors, at risk for—
(i)prepayment;
(ii)opt-out;
or
(iii)otherwise at
risk of being lost to the inventory of affordable housing; and
(B)the difficulty
that residents of projects in the State or locality that are eligible for
assistance under subsection (e)(1)(A)(i) would face in finding adequate,
available, decent, comparable, and affordable housing in neighborhoods of
comparable quality in the local market, if those projects were not assisted by
the State or locality under subsection (e)(1)(A)(i).
(3)
(A)In any fiscal year, of the total amount appropriated
to carry out this section—
(i)40
percent shall be allocated for grants to States; and
(ii)60
percent shall be allocated for grants to localities.
(B)Notwithstanding subsection (g), a State receiving a grant
under this section shall receive no less than .4 percent of the total amount
appropriated under subsection (k) in any fiscal year.
(g)
(1)Except as provided under paragraph (2), a grant under
this section to a State or locality for any fiscal year may not exceed an
amount that is twice the amount that the State or locality certifies, as the
Secretary shall require, that the State or locality will contribute for such
fiscal year, or has contributed since January 1, 2004, from non-Federal sources
for the purposes described in subsection (e)(1).
(2)Paragraph
(1) shall not apply to any amounts to be used by a State or locality
for—
(A)administrative
costs under subsection (e)(9); and
(B)operating support
and working capital of nonprofit organizations under subsection
(e)(7)(A).
(3)Treatment of
previous contributionsAny portion of amounts contributed after
January 1, 2004, that are counted for the purpose of meeting the requirement
under paragraph (1) for a fiscal year may not be counted for that purpose for
any subsequent fiscal year.
(4)Tax credits and
private activity bondsFifty percent of the annual amount of tax
credits allocated to the project under section 42 of the Internal Revenue Code
of 1986, or proceeds from private activity bonds issued for qualified
residential rental projects under section 142 of that Code, shall be considered
funds from non-Federal sources for purposes of paragraph (1).
(h)Treatment of
subsidy layering requirementsNeither subsection (g) nor any
other provision of this section may be construed to prevent the use of tax
credits allocated under section 42 of the Internal Revenue Code of 1986, in
connection with housing assisted with amounts from a grant awarded under this
section, to the extent that such use is in accordance with section 102(d) of
the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C.
3545(d)) and section 911 of the Housing and
Community Development Act of 1992 (42 U.S.C. 3545 note).
(i)
(1)Not later than 90 days after the last day of each
fiscal year, each State and locality that receives a grant under this section
during that fiscal year shall submit to the Secretary a report on the housing
projects and eligible entities assisted with amounts made available under the
grant.
(2)Based on the reports submitted under paragraph (1), the
Secretary shall annually submit to Congress a report on the grants awarded
under this section during the preceding fiscal year and the housing projects
assisted and eligible entities with amounts made available under those
grants.
(j)Not
later than 6 months after the date of enactment of this Act, the Secretary
shall issue regulations to carry out this section.
(k)Authorization
of appropriationsThere are authorized to be appropriated for
grants under this section, such sums as may be necessary for each of fiscal
years 2006 through 2010.
3.Section 524(e)(1) of
the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note) is amended by striking amounts are
specifically
and inserting sufficient amounts
are
.