Full Text of HB4784 102nd General Assembly
HB4784eng 102ND GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Housing Development Act is amended | 5 | | by adding Section 7.33 as follows: | 6 | | (20 ILCS 3805/7.33 new) | 7 | | Sec. 7.33. The Rehab Program. | 8 | | (a) Findings. | 9 | | (1) The General Assembly finds that vacant and | 10 | | abandoned properties located in communities of | 11 | | concentrated poverty across the State frequently become | 12 | | crime centers, reduce the value of adjacent properties, | 13 | | increase risks to general health and safety, and make it | 14 | | exceedingly difficult to reverse long term cycles of | 15 | | concentrated poverty. | 16 | | (2) The General Assembly finds that, while | 17 | | economically struggling communities across Illinois have | 18 | | to deal with this issue, due to the legacy of historical, | 19 | | overt racism under redlining policies, which systemically | 20 | | denied African Americans access to the level of mortgage | 21 | | financing needed to purchase homes in middle-income and | 22 | | upper-income communities, a disproportionately large | 23 | | percentage of African Americans have been forced to live |
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| 1 | | in areas that suffer the negative consequences generated | 2 | | by vacant and abandoned property. | 3 | | (3) The General Assembly finds that private developers | 4 | | frequently are not willing to acquire and rehab vacant and | 5 | | abandoned properties located in communities of | 6 | | concentrated poverty, because complying with federal, | 7 | | State and local laws, rules, and ordinances covering | 8 | | everything from prevailing wage and environmental | 9 | | requisites, to building code standards, frequently pushes | 10 | | the total acquisition and rehab cost to a level well in | 11 | | excess of what could be charged for selling, renting, or | 12 | | otherwise commercially utilizing the rehabbed property at | 13 | | the depressed fair market rates that are generally | 14 | | prevailing in these communities. | 15 | | (4) The General Assembly finds that the stain of | 16 | | historic discrimination against African Americans cannot | 17 | | be erased, but a thoughtful approach to reclaiming vacant | 18 | | and abandoned property through a strategic program that | 19 | | leverages public and private investments can help break | 20 | | the cycle of concentrated poverty in historically | 21 | | low-income communities generally, as well as begin to | 22 | | redress some of the legacy of overt racism in housing and | 23 | | mortgage finance policies specifically. To further those | 24 | | goals, the State is creating a new public financing | 25 | | program (hereafter the "Rehab Program"), as provided in | 26 | | this Act. |
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| 1 | | (b) Establishment of the Rehab Program. Commencing in | 2 | | State Fiscal Year 2023, the Authority shall establish and | 3 | | administer the Rehab Program to help reclaim vacant and | 4 | | abandoned properties in communities of concentrated poverty. | 5 | | (c) Purposes of the Rehab Program. The purposes of the | 6 | | Rehab Program are to: | 7 | | (1) encourage private sector investment in acquiring, | 8 | | rehabbing, and placing on the market, vacant and abandoned | 9 | | properties located in communities of concentrated poverty; | 10 | | (2) provide low-income families with more affordable | 11 | | housing options in modern, safe buildings while redressing | 12 | | historic discrimination against African Americans in | 13 | | housing; | 14 | | (3) reduce various commercial deserts that | 15 | | traditionally plague communities of concentrated poverty; | 16 | | (4) reduce both the taxpayer costs generally | 17 | | associated with constructing and maintaining public units | 18 | | of affordable housing over a duration of multiple years, | 19 | | as well as the long-term revenue losses generated by | 20 | | ongoing tax expenditures intended to promote business | 21 | | activity in low-income communities, by replacing both | 22 | | long-term, ongoing expenses with a significantly less | 23 | | expensive, one-time public investment; | 24 | | (5) leverage public taxpayer investments with private | 25 | | sector dollars and land bank resources; | 26 | | (6) begin creating or stimulating private markets in |
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| 1 | | housing and commercial ventures in areas that are | 2 | | struggling to do so; | 3 | | (7) help reduce the crime associated with vacant and | 4 | | abandoned property that frequently afflicts communities of | 5 | | concentrated poverty, thereby enhancing both the health | 6 | | and safety of residents; | 7 | | (8) create jobs and an economic stimulus, initially | 8 | | through construction and related jobs, and after the new | 9 | | housing is occupied and new retail is open, generating | 10 | | ongoing economic benefits that should create a positive | 11 | | economic multiplier over time; and | 12 | | (9) increase local property values, making future | 13 | | development more likely while enhancing tax revenues for | 14 | | local governmental authorities. | 15 | | (d) Definitions. As used in this Section: | 16 | | (1) "Community of concentrated poverty" means each of | 17 | | the following: (i) a census tract, or a set of contiguous | 18 | | census tracts, that has a poverty rate of 25% or greater, | 19 | | as determined using the American Community Survey's 5-year | 20 | | data most recently published by the U.S. Department of | 21 | | Labor; or (ii) a census tract or a set of contiguous census | 22 | | tracts that has a poverty rate of 20% or greater, using the | 23 | | American Community Survey's 5-year data most recently | 24 | | published by the U.S. Department of Labor, provided that | 25 | | such community is also either majority minority in | 26 | | composition, or is located in a non-metro area. |
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| 1 | | (2) "Fair market value of a qualified project" means | 2 | | that dollar amount that is equal to the average of 3 | 3 | | appraisals thereof conducted by 3 different certified | 4 | | Member, Appraisal Institute (MAI) appraisers qualified to | 5 | | work in Illinois with expertise in both residential and | 6 | | commercial properties, one of whom shall be selected by | 7 | | the Authority, one of whom shall be selected by the | 8 | | qualified developer, and one of whom shall be selected by | 9 | | the 2 aforesaid MAI appraisers. The fair market value of a | 10 | | qualified project shall be determined within 30 days of | 11 | | the completion of a qualified project. | 12 | | (3) "Project costs" means the reasonable out-of-pocket | 13 | | expenses a qualified developer actually incurs to acquire | 14 | | a piece of vacant and abandoned property in a community of | 15 | | concentrated poverty, and to complete a qualified project | 16 | | thereon in full compliance with all applicable laws, | 17 | | rules, ordinances, and regulations, provided however that | 18 | | all such expenses are reasonably documented and approved | 19 | | in writing from time to time during project construction | 20 | | by the Authority. The Authority shall adopt rules from | 21 | | time to time identifying what may be included within the | 22 | | rubric of reasonable costs for purposes of this Section, | 23 | | as well as the form and content of expense reporting a | 24 | | qualified developer must utilize. | 25 | | (4) "Qualified developer" means each of the following: | 26 | | (i) a private, for profit corporation, limited or general |
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| 1 | | partnership, or limited liability company; (ii) a | 2 | | non-profit corporation organized for the purpose of | 3 | | constructing, managing, and operating housing projects and | 4 | | for the improvement of housing conditions, including the | 5 | | rental or sale of housing units to persons in need | 6 | | thereof, as well as a neighborhood redevelopment | 7 | | corporation; or (iii) an Illinois Land Bank. In each | 8 | | instance the Authority has the right to request that any | 9 | | such entity acquire one or more construction or | 10 | | performance bonds concerning the qualified project in | 11 | | question, and obtain all applicable permits as well as | 12 | | titles and easements necessary to complete the qualified | 13 | | project in question, before recognizing that entity as a | 14 | | qualified developer under this Section. | 15 | | (5) "Qualified project" means the acquisition of | 16 | | vacant and abandoned property in a community of | 17 | | concentrated poverty, and the development of such property | 18 | | to become either affordable housing (single or | 19 | | multi-family residences), or a mix of affordable housing | 20 | | units and commercial units. In either case, the qualified | 21 | | developer in question shall first submit a plan of | 22 | | development to the Authority, and the Authority must | 23 | | approve of the proposed development in writing and in | 24 | | advance. The Authority from time to time shall adopt rules | 25 | | identifying the type of affordable housing and mixed use | 26 | | projects that it will approve, as well as the specific |
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| 1 | | communities of concentrated poverty in which qualified | 2 | | projects may be sited. | 3 | | (6) "Vacant and abandoned property" means: (i) | 4 | | property that has been empty for at least 6 months, and has | 5 | | had no construction done on it during that period, has had | 6 | | no attempt by the owner to occupy, lease, or otherwise | 7 | | commercially exploit such property during said period, and | 8 | | is delinquent in tax or mortgage payments during such | 9 | | period; or (ii) property that has been vacant for 6 or more | 10 | | months and that has become derelict, unsafe, | 11 | | uninhabitable, environmentally contaminated, a public | 12 | | nuisance, or a center for criminal activity, or otherwise | 13 | | has lost its value as an economic or social good. | 14 | | (e) Administration of the Rehab Program. Within 45 days of | 15 | | the satisfactory completion of a qualified project, the | 16 | | Authority shall pay to the qualified developer responsible for | 17 | | such project a Rehab Program incentive fee in a dollar amount | 18 | | that is equal to: (i) the difference between the approved | 19 | | project costs for the qualified project in question and the | 20 | | fair market value of such completed qualified project; plus | 21 | | (ii) an amount equal to 5% of such approved project costs. As | 22 | | used in this Section, the "satisfactory completion" of a | 23 | | qualified project means all construction thereof has been done | 24 | | in accordance with all applicable laws, rules, regulations, | 25 | | and ordinances, and the qualified project is being marketed | 26 | | for its intended uses. After the initial pilot of the Rehab |
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| 1 | | Program identified in subsection (f) ends, and continuing | 2 | | thereafter, the Authority may authorize qualified projects in | 3 | | any given calendar year in an amount not to exceed either | 4 | | $50,000,000 for the year in question. The Authority may from | 5 | | time to time adopt rules requiring qualified developers to | 6 | | hire a certain percentage of workers for the qualified project | 7 | | in question from the community in which such qualified project | 8 | | is located, or set aside a specific percentage of Rehab | 9 | | Program incentive fees for minority-owned or woman-owned | 10 | | developers. | 11 | | (f) Initial pilot. Initially, the Rehab Program shall be | 12 | | piloted out in 10 communities identified by the Authority that | 13 | | span the State, to ensure the program generates economic | 14 | | benefits equitably across Illinois. Those 10 communities shall | 15 | | at a minimum include the Chicago metropolitan area, the south | 16 | | suburbs of Chicago, central Illinois, northwest Illinois, and | 17 | | southern Illinois. This pilot program shall commence on July | 18 | | 1, 2022, and continue through and including December 31, 2023. | 19 | | The maximum amount of Rehab Program incentive fees the | 20 | | Authority may issue during the pilot period shall be | 21 | | $30,000,000. The Authority shall fund such incentive fees with | 22 | | appropriations from the State, if there are inadequate | 23 | | appropriations to cover the full $30,000,000 during the pilot | 24 | | period. To the extent authorized by the General Assembly and | 25 | | the Governor, the $30,000,000 appropriation for the pilot | 26 | | program shall be funded with proceeds the State receives under |
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| 1 | | the federal American Rescue Plan Act of 2021.
| 2 | | Section 99. Effective date. This Act takes effect upon | 3 | | becoming law. |
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