[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7697 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 7697
To support the development of limited equity cooperatives in the United
States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 10, 2022
Mr. Bowman (for himself, Ms. Ocasio-Cortez, Ms. Clarke of New York, Mr.
Jones, Ms. Tlaib, Mrs. Watson Coleman, and Ms. Omar) introduced the
following bill; which was referred to the Committee on Financial
Services, and in addition to the Committees on Transportation and
Infrastructure, and Energy and Commerce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To support the development of limited equity cooperatives in the United
States, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Affordable CO-OP (Collective
Opportunities for Owning Property) Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Limited equity cooperative housing stems from the
premise that housing should provide shelter, not a speculative
opportunity. Residents purchase a below market-rate ``equity''
share of the cooperative corporation that owns the property of
the cooperative and residents are charged affordable monthly
carrying charges. The amount the share price increases over
time is limited by the cooperative by-laws, creating an
affordable entry point into housing that stays affordable over
time. Members can sell their equity share at a specific rate to
maintain affordability over a longer time period. In this way,
limited equity cooperatives provide an important form of
affordable homeownership and foster community among
shareholders.
(2) Over 1.5 million families and seniors benefit from
cooperative housing models in the United States. There are over
200,000 units of limited equity housing units across the
Nation. Limited equity cooperatives range in size, from single
family detached cooperative structures to dense, mixed-use,
multi-family models.
(3) The largest limited equity housing cooperative in North
America is Co-op City, located in the Bronx, New York. Co-op
City provides over 44,000 residents with affordable,
democratically controlled housing in an increasingly expensive
region. This community can serve as a model for the nation on
how to build and sustain decommodified housing and
homeownership opportunities for those who are
disproportionately exploited by the traditional housing market,
banking, and credit system, including Black and brown
households, low-income households, seniors, and people with
disabilities.
(4) Limited equity cooperatives do not enjoy strong Federal
support relative to other forms of homeownership.
SEC. 3. INCREASED PRODUCTION OF NEW LIMITED EQUITY COOPERATIVES.
(a) In General.--The Secretary of Housing and Urban Development
shall, not later than 1 year after the date of the enactment of this
Act, establish a program to provide zero interest loans to nonprofit
and public sector entities for the pre-development, acquisition,
development, rehabilitation, or conversion of buildings into limited
equity cooperatives.
(b) Use of Loaned Amounts.--Each entity provided a loan under this
section may use such amounts to make loans to intermediaries, including
community development financial institutions, credit unions, minority
depository institutions and cooperative financial institutions to
support the ability of residents ability to afford downpayments and
monthly carrying charges.
(c) Loan Amount.--Loans provided under this section shall be in an
amount equal to not more than 95 percent of the total cost of a project
undertaken by an entity.
(d) Reserve.--The Secretary of Housing and Urban Development shall
use not less than 20 percent of any amounts appropriated under this
section to provide financial support to limited equity cooperatives for
which not less than 50 percent of the households have an annual income
that is less than 60 percent of the area median income.
(e) Conditions.--The Secretary of Housing and Urban Development
shall require entities participating in the program established
pursuant to subsection (a) to--
(1) minimize evictions of--
(A) tenants residing in properties undergoing
conversions to limited equity cooperatives using
amounts provided under this section; and
(B) residents that will reside in limited equity
cooperatives developed using amounts provided under
this section;
(2) ensure that unit and building design supports the needs
of older residents and residents with disabilities;
(3) ensure that unit and building design, to the greatest
extent practicable, rely on renewable energy and sustainable
building models that support a just transition from fossil
fuels;
(4) comply with all requirements of the Fair Housing Act of
1968;
(5) to the greatest extent possible, not limit access to
limited equity housing cooperatives based on the eviction
history or credit report of a prospective resident;
(6) ensure that units built with amounts provided under
this section are, to the greatest extent possible--
(A) permanently affordable;
(B) available to households with an annual income
that is less than 120 percent of the area median
income; and
(C) available to households with an income that is
above the Federal poverty line but below the estimated
cost of living in a geographic area;
(7) use community land trust models to ensure permanent
affordability of the land underlying the property;
(8) in the case of an entity developing or rehabilitating
mixed-use limited equity housing cooperatives, the entity shall
to the degree possible, colocate cooperative businesses,
especially those owned and democratically controlled by
employees, on the site of the limited equity cooperative; and
(9) to the greatest extent applicable, ensure that all
laborers and mechanics employed by the entity in the
performance of construction, alteration, repair, or maintenance
work financed in whole or in part with assistance under this
section be paid wages at rates not less than those prevailing
on similar construction in the locality, as determined by the
Secretary of Labor, in accordance with subchapter IV of chapter
31 of title 40, United States Code (commonly known as the
``Davis Bacon Act'').
(f) Authorization of Appropriations.--There are authorized to be
appropriated, in fiscal years 2023 to 2033 to the Secretary of Housing
and Urban Development such sums necessary to carry out this section.
SEC. 4. INSURANCE OF LIMITED EQUITY COOPERATIVE MORTGAGES.
(a) Insurance of Mortgages.--Section 213 of the National Housing
Act (12 U.S.C. 1715e) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``or'' at the
end;
(B) in paragraph (3), by striking the period at the
end and inserting ``or;''; and
(C) by inserting after paragraph (3) the following:
``(4) a limited equity cooperative.''; and
(2) by adding at the end the following:
``(q) Notwithstanding any other provision of this section the
Secretary may waive or specify alternative requirements for limited
equity cooperatives if the Secretary determines that such waiver or
alternative requirement would advances the needs of the development,
rehabilitation, or preservation of limited equity cooperatives.
``(r) Limited Equity Cooperative Defined.--The term `limited equity
cooperative' has the meaning given the term in the `Affordable CO-OP
(Collective Opportunities for Owning Property) Act'.''.
SEC. 5. AFFORDABLE HOUSING COOPERATIVE COMMUNITY FUND GRANT PROGRAM.
(a) In General.--The Secretary of Housing and Urban Development
shall, not later than 1 year after the date of the enactment of this
Act, establish a Affordable Cooperative Community Fund Grant Program to
provide discretionary grants to States with limited or zero equity
cooperative housing to be used to finance community development
activities for limited equity cooperative residents, including--
(1) improving the physical condition of limited equity
cooperative property, including upgrades to affordable
cooperative housing structures that support accessibility,
visitability of common areas, retrofits to improve climate
resiliency or reduce household energy burdens, efforts to
include or improve broadband, and to support community and
wellness programming;
(2) activities to further promote democratic, transparent
governance;
(3) coordinating programming for individuals living in
permanently affordable limited or zero-equity cooperative
housing, including support for older adults to age in
community; and
(4) activities to support the co-location of cooperative
businesses, including child care centers and elder care
centers.
(b) Subgrants.--Any State that receives an amount under this
section may make subgrants of such amount to--
(1) limited equity cooperatives;
(2) community organizations that support the health,
financial stability, and well-being of the residents of limited
equity cooperativesor improve the physical condition, including
accessibility features, of limited equity cooperatives;
(3) Housing Development Finance Corporations; and
(4) nonprofit housing developers that provide development
services designed to create and preserve limited equity housing
cooperatives.
(c) Requirement.--Any amounts provided to a State under this
section that are used for improving the physical condition of limited
cooperative housing properties should be used, to the greatest extent
practicable, in a manner that supports a just transition away from
fossil fuel energy consumption and protects households residing in
limited equity cooperatives from the threats of climate change.
(d) Authorization of Appropriation.--There are authorized to be
appropriated to the Secretary of Housing and Urban Development
$1,000,000,000 to carry out this section in each of fiscal years 2023
through 2033.
SEC. 6. WEATHERIZATION.
(a) In General.--The Secretary of Housing and Urban Development and
the Secretary of Energy shall jointly identify limited equity
cooperatives that are eligible for the weatherization assistance
program and issue guidance to States with respect to how to support
weatherization efforts within these limited equity cooperatives.
(b) Guidance.--When developing guidance pursuant to subsection (a),
Secretary of Housing and Urban Development and the Secretary of Energy
shall, to the greatest extent practicable, ensure that guidelines do
not further restrict weatherization assistance program eligibility.
SEC. 7. DISASTER RELIEF.
(a) In General.--Section 408(c)(2)(A) of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174(c)(2)(A))
is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(iii) the repair and rehabilitation of
shared elements of the home or apartment
structure in limited equity cooperatives, as
such term is defined in the `Affordable CO-OP
(Collective Opportunities for Owning Property)
Act'.''.
(b) Prohibition.--If a major disaster or emergency is declared
under section 401 or 501 or a public health emergency is declared under
section 319 of the Public Health Service Act residents living in
cooperative housing may not be barred from receiving assistance
exclusively due to their residence in a cooperative housing structure.
SEC. 8. OFFICE OF SHARED EQUITY HOUSING.
(a) Establishment.--
(1) In general.--The Secretary of Housing and Urban
Development shall, not later than 180 days after the date of
the enactment of this Act, establish an Office of Shared Equity
Housing to be headed by a Special Assistant for Cooperatives.
(2) Responsibilities.--The Office of Shared Equity Housing
shall--
(A) support Federal policies and programs related
to the development and sustainment of permanently
affordable shared equity housing models, including
limited equity cooperatives, zero-equity cooperatives,
and community land trusts;
(B) provide technical assistance to States and
units of local government with respect to shared equity
housing models, including limited equity cooperatives
and community land trusts and Mutual Housing
Associations;
(C) participate in the Interagency Working Group on
Cooperative Development, and work with other members of
the Interagency Working Group on Cooperative
Development to explore how, to the greatest extent
possible, the Federal Government can support robust
financial support for schools located in school
districts with limited equity cooperatives; and
(D) not later than 1 year after the date of the
enactment of this section, and each year there after,
publish on the website of the Office, the number of
limited equity cooperatives in the United States.
(b) Guidance.--The Secretary of Housing and Urban Development,
acting through the Special Assistant for Cooperatives, shall, not later
that 1 year after the date of the enactment of this Act, issue guidance
to States and units of local government that encourages the elimination
of barriers to financing, developing, maintaining, and sustaining
limited equity cooperatives.
(c) Report.--The Secretary of Housing and Urban Development, acting
through the Special Assistant for Cooperatives, shall, not later than 3
years after the date of the enactment of this Act, issue a report to
Congress that includes--
(1) an analysis of the impact on the loan program
established under section 3;
(2) an analysis of current and historical Federal programs
administered by the Secretary of Housing and Urban Development
and the Secretary of the Treasury that support or have
supported the production or preservation of limited equity
cooperatives, including a review of the role of project based
rental assistance in funding limited equity cooperatives;
(3) an identification of barriers to using existing Federal
funding to support for limited equity cooperatives; and
(4) recommendations for the Congress with respect to how to
further support Federal funding for limited equity
cooperatives.
(d) Contracting.--The Assistance Secretary for Cooperatives may
enter contracts with nonprofit organizations to provide technical
assistance services.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary, such sums necessary to carry out the
administrative activities of the Office of Cooperatives.
SEC. 9. DEFINITIONS.
In this Act:
(1) Limited equity cooperative.--The term ``limited equity
cooperative'' means a shared equity affordable homeownership
model in which--
(A) residents purchase a share in a residential
development and commit to resell their share at a price
that maintains affordability at purchase and over the
long term;
(B) residents control the operation and management
of a residential development on a one-member-resident,
one-vote basis;
(C) membership is offered without discrimination to
the general public; and
(D) a commitment is made to a shareshare or
membership price that maintains affordability at
purchase and over the long term.
(2) Older resident.--The term ``older resident'' means a
household composed of one or more persons at least one of whom
is 62 years of age or more at the time of occupancy.
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