AN ACT RELATIVE TO FINANCING THE PRODUCTION OF AFFORDABLE HOUSING.
Whereas , The deferred operation of this act would tend to defeat its purpose, which is to provide forthwith funding for affordable housing, therefore it is hereby declared to be an emergency law, necessary for the immediate pre of the public convenience.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. To provide 5 year funding for the capitalization of the Affordable Housing Trust Fund, established in chapter 121D of the General Laws, to finance the creation and preservation of affordable housing and for a capital outlay program to support home ownership and rental housing opportunities for low and moderate income citizens and to stem urban blight throu implementation of housing stabilization programs. The sums set forth in section 2, for the purposes of this act and said chapter 121D and subject to the conditions specified in this act, may be expended from the General Capital Projects Fund unless specifically designated otherwise, subject to laws regulating the disbursement of public funds and approval thereof.
SECTION 2.
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT.
7004-0021 For the capitalization of the Affordable Housing Trust Fund, established in chapter 121D of the General Laws .......................................... $100,000,000
7004-0022 For the purpose of state financial assistance in the form of grants or loans for the housing stabilization and investment program established pursuant to section 4 and awarded pursuant only to the criteria therein; provided, that this program shall not be subject to the commonwealth development coordinating council established in section 8B of chapter 6A of the General Laws; provided further, that not less than 25 per cent of the amount appropriated in this item shall be used to fund projects which preserve and produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; and provided further, that if the department has not been able to meet the spending allowable under the bond cap for this program, at the end of each year after the effective date of this act, the department may award the remaining funds to projects that serve households earning more than 30 per cent of the area median income, as defined by said United States Department of Housing and Urban Development ....................................................................................... $100,000,000
SECTION 3. To meet the expenditures necessary in carrying out section 2, the state treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time but not exceeding, in the aggregate, $200,000,000. All bonds issued by the commonwealth, as aforesaid, shall be designated on their face, Affordable Housing Bond Act of 2005, and shall be issued for a maximum term of years, not exceeding 20 years, as the governor may recommend to the general court pursuant to Section 3 of Article LXII of the Constitution; provided, however, that all such bonds shall be payable not later than June 30, 2030. All interest and payments on account of principal on such obligations shall be payable from the General Fund. Bonds and interest thereon issued under this section shall, notwithstanding any other provision of this act, be general obligations of the commonwealth. An amount not to exceed 2 per cent of said authorizations may be expended by the department of housing and community development for administrative costs directly attributable to the purposes of this act, including costs of clerical and support personnel. The director of housing and community development shall file an annual spending plan with the fiscal affairs division and the house and senate committees on ways and means which details, by subsidiary, all personnel costs and administrative costs charged to expenditures made pursuant to this act.
SECTION 4. Subsection (a) of section 2 of chapter 121D of the General Laws, as appearing in the 2004 Official Edition, is hereby amended by adding the following sentence:- The fund shall not be subject to the commonwealth development coordinating council established in created pursuant to section 8B of chapter 6A.
SECTION 5. Subsection (d) of said section 2 of said chapter 121D, as so appearing, is hereby amended, by inserting after the word "fund", in line 21, the following words:- using only the criteria set forth under this chapter.
SECTION 6. Subsection (a) of section 3 of said chapter 121D, as so appearing, is hereby amended by striking out clause (8) and inserting in place thereof the following clause:-
(8) Repair, rehabilitation and modernization of existing public housing units. The fund shall expend for this purpose not less than $5 million per year.
SECTION 7. The department of housing and community development may enter into contracts for state financial assistance in the form of grants or loans by the commonwealth acting by and through the department of housing and community development for projects undertaken for the housing stabilization and investment program. The department shall be the sole administrator of the housing stabilization and investment program and shall ensure that funds are distributed in a balanced fashion in urban, suburban, and rural areas with a particular emphasis on the local and regional need for affordable housing for the purpose of undertaking projects to develop and support affordable housing developments and homeownership affordability, through the acquisition, preservation and rehabilitation of affordable housing; provided, however, that such program may include assistance for projects to stabilize and promote reinvestment in cities and towns including, but not limited to, acquisition, rehabilitation and preservation of foreclosed and distressed properties and any other techniques necessary to achieve such reinvestment; provided further, that not less than $5,000,000 shall be expended for the production or preservation of housing for people age 60 and over. Assistance provided through such program may be made in a manner which qualifies the assistance as a matching contribution under Section 220 of the HOME Investment Partnership Act Title II of the Cranston-Gonzalez National Affordable Housing Act including, in the case of assistance provided in the form of a loan, a commitment to repay such loan to the commonwealth's HOME Investment Trust Fund established pursuant to Section 92.5000(o) of the regulations of the United States Department of Housing and Urban Development. Loans may be provided to any agency, department, board, commission, authority or instrumentality of the commonwealth or any political subdivision thereof, to housing authorities, nonprofit agencies certified by the United States Department of Housing and Urban Development as community housing development organizations, community development corporations and limited equity cooperative housing corporations established pursuant to chapter 157B of the General Laws. Such recipients may enter into subcontracts to carry out the purposes of such contract with other for-profit or not-for-profit organizations. Prior to providing assistance, the department shall find that: (1) the housing would not, by private enterprise alone and without government assistance, be available to lower income families and individuals; (2) the amount of assistance appears to be the minimum amount necessary to make the housing development feasible; (3) with respect to rental housing, the operations of the owner and its articles of organization and by-laws and any changes to either shall be subject to regulation by the department; and (4) the housing shall remain affordable for its useful life as determined by the department. Such housing shall be considered affordable if, during the first 40 years after assistance is first provided, substantially all of the assisted units shall be rented to or owned by families and individuals whose income at initial occupancy is equal to or less than 80 per cent of the median income as determined by the secretary of Housing and Urban Development for the federal housing programs and that thereafter such units shall be rented or sold, subject to such restrictions on appreciation as determined by the department to be reasonable and necessary to maintain long term affordability, to families or individuals at incomes at or below 100 per cent of the median income.
If a property was previously leased or sold to an owner by a city, town or local housing authority, prior to any sale or transfer or other disposition of any such housing assisted under this section, the owner shall offer the city, town or local housing authority or its assignee, who shall be a qualified developer selected pursuant to this section under the guidelines of the department of housing and community development, a first refusal option to meet a bona fide offer to purchase the property. The owner shall provide to the city, town or local housing authority written notice by regular and certified mail, return receipt requested, of the owner's intention to sell, transfer or otherwise dispose of the property. The city, town or local housing authority shall hold such first refusal option for the first 60 days after receipt of the owner's notice of intent to transfer the property. No transfer of the property shall occur during said 60 day-option period and failure to respond to the written notice of the owner's intent to sell, transfer or otherwise dispose of the property within 60 days after the receipt thereof shall constitute a waiver of such right of first refusal by such city, town or local housing authority. No sale, transfer or other disposition of such land shall be consummated until either the first refusal option period has expired or the owner shall have been notified in writing by the city, town or local housing authority or assignee in question that the option will not be exercised. Such option may be exercised only by written notice signed by a designated representative of the city, town or local housing authority or its assignee, mailed to the owner by certified mail at such address as may be specified in his notice of intention and recorded with the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located, within the option period. If the first refusal option has been assigned to a qualified developer selected pursuant to the terms of this section under guidelines issued by the department, such written notice shall state the name and address of such developer and the terms and conditions of such assignment. An affidavit before a notary public that the city, town or local housing authority or its designated representative has mailed such notice of intent on behalf of an owner shall conclusively establish the manner and time of the giving of such notice; and such affidavit, and such notice that the option will not be exercised shall be recorded with the registry of deeds or the registry district of the land court in the county or district in which the affected real property is located. Each notice of intention, notice of exercise of the option and notice that the option will not be exercised shall contain the name of the record owner of the land and description of the premises to be sold or converted adequate for identification thereof; and each such affidavit before a notary public shall have attached to it a copy of the notice of intention to which it relates. Such notices of intention shall be deemed to have been duly mailed to the parties above specified if addressed to them in care of the keeper of records for the party in question. The city, town or local housing authority or its assignee may purchase or acquire the property only for the purposes of preserving or providing affordable housing. No state funds shall be used for the purchase of such property.
If the city, town, or local housing authority shall fail to exercise the option within 60 days, an owner shall thereafter offer the department or its assignee, who shall be a qualified developer selected pursuant to the terms of this section under the guidelines of the department, a first refusal option to meet a bona fide offer to purchase the property. The owner shall provide to the department written notice by regular and certified mail, return receipt requested, of the owner's intention to sell, transfer or otherwise dispose of the property. The department or its assignee shall hold such first refusal option for the first 120 days after receipt of the owner's notice of intent to transfer the property, but in no case shall the 120 days commence before the termination of said 60-day option held by a city, town or local housing authority. Failure to respond to the written notice of the owner's intent to sell, transfer or otherwise dispose of the property within 120 days after the receipt thereof shall constitute a waiver of such right of first refusal by the department. No sale, transfer or other disposition of such land shall be consummated until either the first refusal option period shall have expired or the owner shall have been notified in writing by the department or assignee in question that the option will not be exercised. Such option may be exercised only by written notice signed by a designated representative of the department or its assignee, mailed to the owner by certified mail at such address as may be specified in his notice of intention and recorded with the registry of deeds or the registry district of the land court in the county or district in which the affected real property is located, within the option period. If the first refusal option has been assigned to a qualified developer selected pursuant to this section under guidelines issued by the department, such written notice shall state the name and address of such developer and the terms and conditions of such assignment. An affidavit before a notary public that the department or its designated representative or assignee has mailed such notice of intent on behalf of an owner shall conclusively establish the manner and time of the giving of such notice, and such affidavit, and such notice that the option will not be exercised shall be recorded with the registry of deeds or the registry district of the land court in the county or district in which the affected real property is located. Each notice of intention, notice of exercise of the option and notice that the option will not be exercised shall contain the name of the record owner of the land and a description of the premises to be sold or converted adequate for identification thereof; and each such affidavit before a notary public shall have attached to it a copy of the notice of intention to which it relates. Such notices of intention shall be deemed to have been duly mailed to the parties above specified if addressed to them in care of the keeper of records for the party in question.
If the property was not previously leased or sold to the owner by a city, town or local housing authority, then prior to any sale or transfer or other disposition of any such housing assisted under this section, an owner shall offer the department or its assignee, who shall be a qualified developer selected pursuant to this section under the guidelines of the department, a first refusal option to meet a bona fide offer to purchase the property. The owner shall provide to the department written notice by regular and certified mail, return receipt requested, of the owner's intention to sell, transfer or otherwise dispose of the property. The department or its assignee shall hold such first refusal option for the first 120 days after receipt of the owner's notice of intent to transfer the property. Failure to respond to the written notice of the owner's intent to sell, transfer or otherwise dispose of the property within 120 days after the receipt thereof shall constitute a waiver of such right of first refusal by the department.
Upon notifying the owner in writing of its intention to pursue its first refusal option during such period, the city, town or local housing authority or their assignee, or the department or its assignee shall have an additional 120 days, beginning on the date of the termination of the first refusal option period, to purchase the property. Such time periods may be extended by mutual agreement between the department or its assignee and the owner of the property; provided, however, that any such extension agreed upon shall be recorded in the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located. Within a reasonable time after request, the owner shall make available to the department of housing and community development or its assignee any information which is reasonably necessary for the authority to exercise its rights. The department of housing and community development or its assignee may purchase or acquire the property only for the purposes of preserving or providing affordable housing.
Funds provided for the Housing Stabilization and Investment Program shall give special attention to the preservation of affordable housing developments which are or were subject to prepayment or payment of a state or federally-assisted mortgage or which are receiving project-based rental assistance under section 8 of the United States Housing Act of 1937, 42 U.S.C. section 1437f, and such rental assistance is expiring, or which have received other project-based federal or state subsidies which are terminating or have terminated. Property eligible for assistance shall include housing where the prepayment or payment of a state or federally-assisted mortgage or the expiration of federal low-income housing tax credits or other federal or state subsidies would lead or has led to the termination of a use agreement for low-income housing or in which a project-based rental assistance contract is expiring or has expired. The department, in consultation with nonprofit organizations, the Massachusetts Housing Finance Agency, the Community Economic Development Assistance Corporation and the Massachusetts Housing Partnership Fund shall identify those projects at greatest risk of prepayment, payment, termination of subsidies and use restrictions, or nonrenewal of rental assistance. Funding priority shall be based on at-risk criteria to be determined by the department of housing and community development and set forth in regulations promulgated by the department.
Funds provided herein may be used for grants to cities and towns to assist with the costs of demolishing certain privately-owned vacant and abandoned buildings that have been found to be uninhabitable and not economically feasible to rehabilitate and which the city or town may demolish pursuant to sections 127A and 127B of chapter 111 of the General Laws or sections 6 to 9, inclusive, of chapter 143 of the General Laws and the regulations promulgated thereunder or which have been taken by the city or town for taxes. Any such demolition shall be undertaken in accordance with a neighborhood revitalization plan adopted by the city or town after a public hearing and after approval by the department which provides for the rehabilitation and development of housing in the areas in which such demolition is being undertaken. The department of housing and community development shall promulgate regulations for the purpose of implementing this section including, but not limited to, grants to cities and towns for demolition of certain vacant and abandoned buildings and procedures for neighborhood revitalization plans.
Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program shall be used for a revolving rehabilitation loan program to support the revitalization of certain abandoned or severely-distressed, privately-owned residential housing for which a court-appointed, nonprofit receiver has been selected pursuant to chapter 111 of the General Laws. Such program may include activities necessary to make essential repairs and to pay operating expenses necessary to maintain habitability of such housing units in order to prevent abandonment and deterioration of such housing in primarily low and moderate income neighborhoods. Such loans may be administered by the department of housing and community development through contracts with the Community Economic Development Assistance Corporation, a body politic and corporate entity established in section 3 of chapter 40H of the General Laws, and through contracts with the Massachusetts Housing Partnership Fund, an instrumentality of the commonwealth established in section 35 of chapter 405 of the acts of 1985. The recipients may enter into subcontracts to administer the purposes of such contracts with other for-profit or nonprofit organizations. The department of housing and community development shall promulgate regulations for the purpose of implementing this section.
The department shall provide loans to nonprofit developers for the acquisition of property to provide or preserve affordable housing. Such program of loans may be administered by the department of housing and community development through contracts with the Community Economic Development Assistance Corporation. Such program may include acquisition, financing and other holding costs, interim management and operating costs and may also be used by the Community Economic Development Assistance Corporation to secure, collateralize or reserve against other financing obtained by the Community Economic Development Assistance Corporation to support such costs. Not less than 50 per cent of the beneficiaries of such housing shall be persons of income not more than 80 per cent of the area median income as determined from time to time by the United States Department of Housing and Urban Development and not less than 25 per cent of the beneficiaries of such housing shall be persons whose income is not more than 30 per cent of the area median income as determined from time to time by the United States Department of Housing and Urban Development.
Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program may be used to support the rehabilitation of owner-occupied 1 to 4-family properties and the acquisition and rehabilitation of such properties by persons of low or moderate income. The program may include, but shall not be limited to, direct loans, loan guarantees and loan loss reserves; provided, however, that the objective of such program shall include the following: (1) projects shall rely, to the greatest extent possible, on bank financing and other taxable financing to support the costs of such acquisition and rehabilitation; (2) coordinating the delivery of such financing and related rehabilitation services with cities and towns that provide such assistance utilizing federal community development block grants, federal HOME funds, and other resources; (3) expediting and simplifying the process by which home buyers may obtain financial and technical assistance for such acquisitions and rehabilitation; and (4) ensuring that adequate provisions are in place to assure that rehabilitation is completed in a timely and professional manner and to protect homeowners from excessive acquisition and rehabilitation costs.
Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program may be used for deferred payment second mortgage loans to support the acquisition and rehabilitation or the new construction of small multifamily rental properties pursuant to the Permanent PLUS Program to be administered by the department of housing and community development through contracts with the Massachusetts Housing Partnership Fund. The Massachusetts Housing Partnership Fund shall enter into agreements to ensure that at least 20 per cent of the units are affordable to persons whose income is less than 50 per cent of the area median income, at least 40 per cent of the units are affordable to persons whose income is less than 60 per cent of the area median income, or at least 50 per cent of such units are affordable to persons whose income is less than 80 per cent of the area median income, as such incomes are determined from time to time by the United States Department of Housing and Urban Development.
Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program may be used for the purposes of the Soft Second Mortgage program described in item 3322-8880 of section 2 of chapter 110 of the acts of 1993.
Any money received from loan repayments pursuant to this section shall be deposited in the HOME Investment Trust Fund and may be expended by the department solely for the purposes set forth in this section.
SECTION 8. The department of housing and community development shall file a report with the joint committee on housing and the joint committee on bonding, capital expenditures and state assets not later than March 1, 2006, and annually thereafter, relative to data collection for affordable housing acquired, produced, preserved or otherwise assisted using funds authorized by this act. The report shall also include current, accurate and detailed information on the residents occupying said housing; provided, however, that the department shall gather, compile and distribute data regarding the resources used for and beneficiaries of such housing; provided further, that this data shall include, but not be limited to, location of housing, type of housing, number of bedrooms, accessibility, size of family, age and number of children, income level of households, the household's most recent residence prior to their current residence and race and ethnicity of those occupying the housing; and provided further, that this information shall be collected for comparison of racial composition and income distribution within census tracts.