[Federal Register Volume 84, Number 74 (Wednesday, April 17, 2019)]
[Notices]
[Pages 16029-16032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07682]
[[Page 16029]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6155-N-01]
Review of HUD Policy in Opportunity Zones
AGENCY: Office of the Assistant Secretary for Policy Development and
Research (PD&R), Department of Housing and Urban Development (HUD).
ACTION: Request for information.
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SUMMARY: Consistent with Executive Order 13853, ``Establishing the
White House Opportunity and Revitalization Council,'' this document
informs the public that HUD intends to maximize the beneficial impact
of investment in Opportunity Zones. HUD is reviewing its existing
policies, practices, planned actions, regulations, and guidance
regarding HUD-administered programs and laws to identify actions HUD
can take to encourage beneficial investment, both public and private,
in urban and economically distressed communities, including qualified
Opportunity Zones. HUD seeks input and recommendations from the public
regarding potential agency actions.
DATES: Comment Due Date: June 17, 2019.
ADDRESSES: Interested parties are invited to submit comments regarding
this request for information. There are two methods for submitting
public comments. All submissions must refer to the above docket number
and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Public Finance and Regulatory Analysis Division, Office of
Policy Development and Research, Department of Housing and Urban
Development, 451 7th Street SW, Room 8216, Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages the public to submit ideas
electronically. Electronic submission of ideas allows the submitter
maximum time to formulate and present the suggestion, ensures timely
receipt by HUD, and enables HUD to make the ideas received immediately
available to the public. Suggestions submitted electronically through
the www.regulations.gov website can be viewed by interested members of
the public. Members of the public should follow the instructions
provided on that site to submit suggestions electronically.
Note: To receive consideration, ideas must be submitted through one
of the two methods specified above. Again, all submissions must refer
to the docket number and title of the request for information.
No Facsimile Submissions: Facsimile (fax) submissions are not
acceptable.
Public review of information received: All information properly
submitted for consideration by HUD will be available for inspection and
downloading at www.regulations.gov. Members of the public without ready
access to the internet may request an appointment to review the
information submitted by calling the Public Finance and Regulatory
Analysis Division at 202-402-2967 (this is not a toll-free number).
Individuals with speech or hearing impairments may access this number
via TTY by calling the Federal Relay Service at 1-800-877-8339 (this is
a toll-free number). An appointment for public inspection and copying
of the information must be scheduled in advance and will occur between
8 a.m. and 5 p.m. weekdays at the above address.
FOR FURTHER INFORMATION CONTACT: Daniel Marcin, Economist, Public
Finance and Regulatory Analysis Division, Office of Policy Development
and Research, Department of Housing and Urban Development, 451 7th
Street SW, Room 8216, Washington, DC 20410-0500; telephone number 202-
402-2967 (this is not a toll-free number). Persons with hearing or
speech impairments may access this number through TTY by calling the
toll-free Federal Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Context: Opportunity Zones and the White House Opportunity and
Revitalization Council
The 2017 Tax Cuts and Jobs Act (Pub. L. 115-97) created new tax
incentives for investments made in Opportunity Zones to spur economic
development and job creation by encouraging long-term investment in
low-income communities nationwide. Opportunity Zones are designated
census tracts that provide incentives for long-term private sector
investment in economically distressed communities. State executives
nominated census tracts of communities most in need of private
investment to the U.S. Department of the Treasury, which then certified
the tracts as Opportunity Zones. The Opportunity Zone designation
encourages investment in these certified census tracts by granting
investors extensive Federal tax advantages for using their capital
gains to finance new projects and enterprises (or substantially improve
existing projects and enterprises) located within Opportunity Zones.
Executive Order 13853 created the White House Opportunity and
Revitalization Council with the HUD Secretary (or the Secretary's
designee) as the Chair. This Executive Order directs the Council to:
(a) Assess the actions each Federal agency can take under existing
authorities to prioritize or focus Federal investments and programs on
urban and economically distressed communities, including qualified
opportunity zones;
(b) Assess the actions each agency can take under existing
authorities to minimize all regulatory and administrative costs and
burdens that discourage public and private investment in urban and
economically distressed communities, including qualified opportunity
zones;
(c) Regularly consult with officials from State, local, and tribal
governments and individuals from the private sector to solicit feedback
on how best to stimulate the economic development of urban and
economically distressed areas, including qualified opportunity zones;
(d) Coordinate Federal interagency efforts to help ensure that
private and public stakeholders--such as investors; business owners;
institutions of higher education (including Historically Black Colleges
and Universities, as defined by 50 U.S.C. 3224(g)(2), and tribally
controlled colleges and universities, as defined by 25 U.S.C.
1801(a)(4)); K-12 education providers; early care and education
providers; human services agencies; State, local, and tribal leaders;
public housing agencies; non-profit organizations; and economic
development organizations--can successfully develop strategies for
economic growth and revitalization;
(e) Recommend policies that would:
(i) Reduce and streamline regulatory and administrative burdens,
including burdens on applicants applying for multiple Federal
assistance awards;
(ii) Help community-based applicants, including recipients of
investments from qualified opportunity funds, identify and apply for
relevant Federal resources; and
(iii) Make it easier for recipients to receive and manage multiple
types of public and private investments, including by aligning certain
program requirements;
(f) Evaluate the following:
(i) Whether and how agencies can prioritize support for urban and
economically distressed areas, including
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qualified opportunity zones, in their grants, financing, and other
assistance;
(ii) Appropriate methods for Federal cooperation with and support
for States, localities, and tribes that are innovatively and
strategically facilitating economic growth and inclusion in urban and
economically distressed communities, including qualified opportunity
zones, consistent with preserving State, local, and tribal control;
(iii) Whether and how to develop an integrated web-based tool
through which entrepreneurs, investors, and other stakeholders can see
the full range of applicable Federal financing programs and incentives
available to projects located in urban and economically distressed
areas, including qualified opportunity zones;
(iv) Whether and how to consider urban and economically distressed
areas, including qualified opportunity zones, as possible locations for
Federal buildings, through consultation with the General Services
Administration;
(v) Whether and how Federal technical assistance, planning,
financing tools, and implementation strategies can be coordinated
across agencies to assist communities in addressing economic problems,
engaging in comprehensive planning, and advancing regional
collaboration; and
(vi) What data, metrics, and methodologies can be used to measure
the effectiveness of public and private investments in urban and
economically distressed communities, including qualified opportunity
zones.
II. Overview of Opportunity Zones
There are more than 8,700 Census tracts designated by a Governor or
other chief administrative official as Opportunity Zones across all 50
States, the District of Columbia, and five U.S. territories. The
following are relevant data and characteristics of the Opportunity
Zones and those who reside within Opportunity Zones:
Nearly 35 million Americans live in communities designated
as Opportunity Zones.
On average, the median family income in an Opportunity
Zone is 37 percent below the State median.
More than one-in-five of all Opportunity Zones have a
poverty rate over 40 percent, compared to just over one-in-eight ``low-
income communities'' (LICs) and one-in-20 Census tracts nationwide.
71 percent of Opportunity Zones meet the U.S. Treasury
Department's definition of ``severely distressed.'' \1\
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\1\ ``Severely distressed'' generally means a poverty rate of 30
percent or a median family income no greater than 60 percent of the
area benchmark. See The State of Socioeconomic Need and Community
Change in Opportunity Zones, Economic Innovation Group (Dec. 2018).
https://eig.org/opportunityzones/communitychange.
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Life expectancy is on average three years shorter for
Opportunity Zone residents than it is nationally.
Approximately 22 percent of Opportunity Zone adult
residents have not attained a high school diploma, compared to 13
percent nationally.
III. HUD-Supported Programs and Initiatives Within Opportunity Zones
Below is a snapshot of HUD's programs and initiatives within
Opportunity Zones.\2\ These statistics are being provided in order to
facilitate the public's thought process--as well as generate ideas and
answers to the questions asked later in this request for information--
regarding HUD's existing program presence within Opportunity Zones.
Most numbers are rounded to the nearest thousand. Where percentages of
the total are given, those percentages exclude data for which location
is unreliable or misleading.
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\2\ These statistics are current as of December 17, 2018.
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General
[cir] 2,394,000 persons living in HUD-assisted housing within
Opportunity Zones, representing about 27 percent of residents of HUD-
assisted housing.
[cir] 14 proposed EnVision Center sites inside or within 1 mile of
an Opportunity Zone.
Office of Public and Indian Housing (PIH)
[cir] 371,000 public housing units within Opportunity Zones,
representing about 38 percent of the total.
[cir] 738,000 persons living in public housing within Opportunity
Zones, representing about 39 percent of the total.
[cir] 2,254 public housing developments within Opportunity Zones,
or about 33 percent of the national total.
[cir] 465,000 housing choice voucher (HCV) units within Opportunity
Zones, 22 percent of the total.
[cir] 992,000 persons with HCVs, or 21 percent of the national
total, living within Opportunity Zones.
[cir] 62,000 project-based voucher (PBV) units within Opportunity
Zones, which is 32 percent of the total.
[cir] 116,000 persons living in PBV units within Opportunity Zones,
representing 32 percent of the total.
[cir] 65 Choice Neighborhood Grants--with a total of approximately
$571,643,000 in grant funding--from 2010-2016 within Opportunity
Zones.\3\ These are 68 percent of all Choice Neighborhood Grants and 86
percent of national Choice Neighborhood Grant spending. 46 of these
grants were Planning Grants, and the other 19 were Implementation
Grants.
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\3\ Grant is counted if the target area contains the center of
one or more Opportunity Zone Census tracts.
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Office of Housing
[cir] 337,000 project-based rental assistance (PBRA) units within
Opportunity Zones, or 27 percent of the national total.
[cir] 548,000 persons living in PBRA units within Opportunity
Zones, or 27 percent of the total.
[cir] 2,400 Multi-Family (MF) housing properties with Federal
Housing Administration (FHA) mortgage insurance within Opportunity
Zones, representing 21 percent of multifamily housing properties with
FHA mortgage insurance.
[cir] $14,755,260,000 in unpaid principal balance for MF properties
with FHA mortgage insurance within Opportunity Zones, for 17 percent of
the national total.
[cir] 617,000 FHA-insured Single-Family properties within
Opportunity Zones, or 8 percent of the total.
[cir] $75,353,474,000 in unpaid principal balance for Single-Family
properties with FHA mortgage insurance within Opportunity Zones, or 6
percent of all Single-Family unpaid principal balance.
[cir] 536 healthcare facilities with FHA mortgage insurance in
Opportunity Zones, representing 12 percent of all such facilities.
[cir] $4,017,448,000 in unpaid principal balance for healthcare
facilities with FHA insurance in Opportunity Zones, representing 12
percent of the total unpaid principal balance on FHA-insured mortgages
on healthcare facilities.
[cir] Almost one-third of Rental Assistance Demonstration (RAD)
Component 1 conversions fall within Opportunity Zones.
Office of Community Planning and Development (CPD)
[cir] Over 1,200 cities, urban counties, States, Puerto Rico, and
U.S. Territories received over $3,000,000,000 in Community Development
Block Grant (CDBG) funding each year between fiscal years 2014 and
2019. Since all communities can potentially receive CDBG funding,
either directly from HUD or through their respective State government,
funds could be used to
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assist activities and projects in Opportunity Zones nationwide.
[cir] There are 600 outstanding Section 108 guaranteed loans with
an outstanding loan balance of $1,250,000,000 for community and
economic development projects nationwide. Under the Section 108 Loan
Guarantee Program, CBDG grantees nationwide have approximately $14
billion in available borrowing capacity that could potentially be
deployed in Opportunity Zones.
[cir] Approximately $84,000,000,000 in Community Development Block
Grant--Disaster Recovery (CDBG-DR) funds has been awarded since 2001 to
help cities, counties, and States recover from Presidentially-declared
disasters. Nearly half of this amount has been awarded in response to
disasters occurring between 2015 and 2017. Since CDBG-DR assistance may
fund a broad range of recovery activities, these funds could be used in
eligible disaster-impacted Opportunity Zones.
[cir] 256,000 HOME Investment Partnerships Program (HOME) housing
projects completed--with a total of approximately $2,853,095,000 in
grant funds expended--from 1996-2018 within Opportunity Zones.
Office of Field Policy and Management (FPM)
[cir] There are 186 Opportunity Zones within HUD's 14 Urban Promise
Zones.
[cir] An approximate numerical breakdown of Opportunity Zones
throughout HUD's 10 regions:
Region I: 344
Region II: 683
Region III: 741
Region IV: 2,529
Region V: 1,339
Region VI: 1,043
Region VII: 341
Region VIII: 272
Region IX: 1,194
Region X: 278
IV. Purpose of This Request for Information
HUD has determined that it should undertake a substantive review of
existing policies, practices, planned actions, regulations and guidance
regarding HUD-administered programs to identify actions HUD can take to
encourage beneficial investment in urban and economically distressed
communities, including Opportunity Zones, while continuing to fulfill
its mission to create strong, sustainable, inclusive communities and
quality affordable homes for all. In conducting this review, HUD
believes that it would benefit from the information and perspectives of
State, local and tribal officials, experts in relevant disciplines,
affected stakeholders in the private sector, and the public as a whole.
HUD is, therefore, requesting information to guide and enhance this
review.
VI. Specific Information Requested
To assist in HUD's approach to Opportunity Zones, HUD invites ideas
and information on the following questions:
(1) How should HUD use its existing authorities to maximize the
beneficial impact of public and private investments in urban and
economically distressed communities, including Opportunity Zones? For
example:
a. What actions can HUD take under existing authorities to
prioritize or focus Federal investments and programs on urban and
economically distressed communities, including Opportunity Zones?
b. What actions can HUD take under existing authorities to minimize
all of the regulatory and administrative costs and burdens that
discourage public and private investment in urban and economically
distressed communities, including Opportunity Zones?
c. What tools can HUD provide to make local communities, investors
and other stakeholders more aware of the full range of applicable
Federal financing programs and incentives available to projects located
in urban and economically distressed areas, including Opportunity
Zones?
d. What polices could HUD implement that would help community-based
applicants, including recipients of investments from Qualified
Opportunity Funds, identify and apply for relevant Federal resources?
e. What policies could HUD implement that would make it easier for
recipients to receive and manage multiple types of public and private
investments, including by aligning certain program requirements?
(2) HUD is considering creating an information portal on
Opportunity Zones. What types of information should HUD include in such
a tool? How can it be made accessible to and most usable by HUD's
various stakeholders and customers? If the portal includes information
on Federal financing programs and incentives beyond those offered by
HUD, what types of information would be most useful to include?
(3) In what ways could HUD structure preference points for
Opportunity Zones and incorporate policy objectives in the rating
factors for applications in discretionary grant competitions to
increase the incentive to invest in Opportunity Zones? In addition, how
should HUD prioritize support for urban and economically distressed
areas, including Opportunity Zones, in its grants, financing, and other
assistance?
(4) What types of technical assistance should be offered through
HUD?
(5) What role can HUD play in helping to ensure that existing
residents, businesses, and community organizations in Opportunity Zones
benefit from the influx of investment and remain the focus of their
community's growth moving forward?
(6) How can HUD properly evaluate the impact of Opportunity Zones
on communities?
(7) How should HUD interact with other stakeholders to maximize the
success of the Opportunity Zone incentive? For example:
a. How should HUD interact with officials from State, local, and
tribal governments, institutions, local and regional agencies,
businesses, and individuals from the private sector to most effectively
encourage beneficial investment in urban and economically distressed
areas?
b. How should HUD participate in Federal interagency efforts to
help ensure that private and public stakeholders can successfully
develop strategies for economic growth and revitalization in urban and
economically distressed areas? Stakeholders might include investors;
business owners; institutions of higher education (including
Historically Black Colleges and Universities, as defined by 50 U.S.C.
3224(g)(2), and tribally controlled colleges and universities, as
defined by 25 U.S.C. 1801(a)(4)); K-12 education providers; early care
and education providers; human services agencies; State, local, and
tribal leaders; public housing agencies; non-profit organizations; and
economic development organizations.
c. How should Federal technical assistance, planning, financing
tools, and implementation strategies be coordinated across agencies to
assist communities in addressing economic problems, engaging in
comprehensive planning, and advancing regional collaboration?
(8) How might Qualified Opportunity Fund investments support the
goal of ending homelessness?
(9) Are there other aspects of Opportunity Zones that should be
considered and are not addressed in this request for information?
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Dated: April 11, 2019.
Todd M. Richardson,
General Deputy Assistant Secretary for Policy Development and Research.
[FR Doc. 2019-07682 Filed 4-16-19; 8:45 am]
BILLING CODE 4210-67-P