Illinois General Assembly - Full Text of HB4784
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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,
3represented in the General Assembly:
 
4    Section 5. The Illinois Housing Development Act is amended
5by 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
2State Fiscal Year 2023, the Authority shall establish and
3administer the Rehab Program to help reclaim vacant and
4abandoned properties in communities of concentrated poverty.
5    (c) Purposes of the Rehab Program. The purposes of the
6Rehab 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
15the satisfactory completion of a qualified project, the
16Authority shall pay to the qualified developer responsible for
17such project a Rehab Program incentive fee in a dollar amount
18that is equal to: (i) the difference between the approved
19project costs for the qualified project in question and the
20fair market value of such completed qualified project; plus
21(ii) an amount equal to 5% of such approved project costs. As
22used in this Section, the "satisfactory completion" of a
23qualified project means all construction thereof has been done
24in accordance with all applicable laws, rules, regulations,
25and ordinances, and the qualified project is being marketed
26for its intended uses. After the initial pilot of the Rehab

 

 

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1Program identified in subsection (f) ends, and continuing
2thereafter, the Authority may authorize qualified projects in
3any given calendar year in an amount not to exceed either
4$50,000,000 for the year in question. The Authority may from
5time to time adopt rules requiring qualified developers to
6hire a certain percentage of workers for the qualified project
7in question from the community in which such qualified project
8is located, or set aside a specific percentage of Rehab
9Program incentive fees for minority-owned or woman-owned
10developers.
11    (f) Initial pilot. Initially, the Rehab Program shall be
12piloted out in 10 communities identified by the Authority that
13span the State, to ensure the program generates economic
14benefits equitably across Illinois. Those 10 communities shall
15at a minimum include the Chicago metropolitan area, the south
16suburbs of Chicago, central Illinois, northwest Illinois, and
17southern Illinois. This pilot program shall commence on July
181, 2022, and continue through and including December 31, 2023.
19The maximum amount of Rehab Program incentive fees the
20Authority may issue during the pilot period shall be
21$30,000,000. The Authority shall fund such incentive fees with
22appropriations from the State, if there are inadequate
23appropriations to cover the full $30,000,000 during the pilot
24period. To the extent authorized by the General Assembly and
25the Governor, the $30,000,000 appropriation for the pilot
26program shall be funded with proceeds the State receives under

 

 

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1the federal American Rescue Plan Act of 2021.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.