Illinois General Assembly - Full Text of HB4784
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Full Text of HB4784  102nd General Assembly

HB4784ham001 102ND GENERAL ASSEMBLY

Rep. William Davis

Filed: 3/1/2022

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 4784

2    AMENDMENT NO. ______. Amend House Bill 4784 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Housing Development Act is
5amended 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

 

 

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1    economically struggling communities across Illinois have
2    to deal with this issue, due to the legacy of historical,
3    overt racism under redlining policies, which systemically
4    denied African Americans access to the level of mortgage
5    financing needed to purchase homes in middle-income and
6    upper-income communities, a disproportionately large
7    percentage of African Americans have been forced to live
8    in areas that suffer the negative consequences generated
9    by vacant and abandoned property.
10        (3) The General Assembly finds that private developers
11    frequently are not willing to acquire and rehab vacant and
12    abandoned properties located in communities of
13    concentrated poverty, because complying with federal,
14    State and local laws, rules, and ordinances covering
15    everything from prevailing wage and environmental
16    requisites, to building code standards, frequently pushes
17    the total acquisition and rehab cost to a level well in
18    excess of what could be charged for selling, renting, or
19    otherwise commercially utilizing the rehabbed property at
20    the depressed fair market rates that are generally
21    prevailing in these communities.
22        (4) The General Assembly finds that the stain of
23    historic discrimination against African Americans cannot
24    be erased, but a thoughtful approach to reclaiming vacant
25    and abandoned property through a strategic program that
26    leverages public and private investments can help break

 

 

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1    the cycle of concentrated poverty in historically
2    low-income communities generally, as well as begin to
3    redress some of the legacy of overt racism in housing and
4    mortgage finance policies specifically. To further those
5    goals, the State is creating a new public financing
6    program (hereafter the "Rehab Program"), as provided in
7    this Act.
8    (b) Establishment of the Rehab Program. Commencing in
9State Fiscal Year 2023, the Authority shall establish and
10administer the Rehab Program to help reclaim vacant and
11abandoned properties in communities of concentrated poverty.
12    (c) Purposes of the Rehab Program. The purposes of the
13Rehab Program are to:
14        (1) encourage private sector investment in acquiring,
15    rehabbing, and placing on the market, vacant and abandoned
16    properties located in communities of concentrated poverty;
17        (2) provide low-income families with more affordable
18    housing options in modern, safe buildings while redressing
19    historic discrimination against African Americans in
20    housing;
21        (3) reduce various commercial deserts that
22    traditionally plague communities of concentrated poverty;
23        (4) reduce both the taxpayer costs generally
24    associated with constructing and maintaining public units
25    of affordable housing over a duration of multiple years,
26    as well as the long-term revenue losses generated by

 

 

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1    ongoing tax expenditures intended to promote business
2    activity in low-income communities, by replacing both
3    long-term, ongoing expenses with a significantly less
4    expensive, one-time public investment;
5        (5) leverage public taxpayer investments with private
6    sector dollars and land bank resources;
7        (6) begin creating or stimulating private markets in
8    housing and commercial ventures in areas that are
9    struggling to do so;
10        (7) help reduce the crime associated with vacant and
11    abandoned property that frequently afflicts communities of
12    concentrated poverty, thereby enhancing both the health
13    and safety of residents;
14        (8) create jobs and an economic stimulus, initially
15    through construction and related jobs, and after the new
16    housing is occupied and new retail is open, generating
17    ongoing economic benefits that should create a positive
18    economic multiplier over time; and
19        (9) increase local property values, making future
20    development more likely while enhancing tax revenues for
21    local governmental authorities.
22    (d) Definitions. As used in this Section:
23        (1) "Community of concentrated poverty" means each of
24    the following: (i) a census tract, or a set of contiguous
25    census tracts, that has a poverty rate of 25% or greater,
26    as determined using the American Community Survey's 5-year

 

 

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1    data most recently published by the U.S. Department of
2    Labor; or (ii) a census tract or a set of contiguous census
3    tracts that has a poverty rate of 20% or greater, using the
4    American Community Survey's 5-year data most recently
5    published by the U.S. Department of Labor, provided that
6    such community is also either majority minority in
7    composition, or is located in a non-metro area.
8        (2) "Fair market value of a qualified project" means
9    that dollar amount that is equal to the average of 3
10    appraisals thereof conducted by 3 different certified
11    Member, Appraisal Institute (MAI) appraisers qualified to
12    work in Illinois with expertise in both residential and
13    commercial properties, one of whom shall be selected by
14    the Authority, one of whom shall be selected by the
15    qualified developer, and one of whom shall be selected by
16    the 2 aforesaid MAI appraisers. The fair market value of a
17    qualified project shall be determined within 30 days of
18    the completion of a qualified project.
19        (3) "Project costs" means the reasonable out-of-pocket
20    expenses a qualified developer actually incurs to acquire
21    a piece of vacant and abandoned property in a community of
22    concentrated poverty, and to complete a qualified project
23    thereon in full compliance with all applicable laws,
24    rules, ordinances, and regulations, provided however that
25    all such expenses are reasonably documented and approved
26    in writing from time to time during project construction

 

 

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1    by the Authority. The Authority shall adopt rules from
2    time to time identifying what may be included within the
3    rubric of reasonable costs for purposes of this Section,
4    as well as the form and content of expense reporting a
5    qualified developer must utilize.
6        (4) "Qualified developer" means each of the following:
7    (i) a private, for profit corporation, limited or general
8    partnership, or limited liability company; (ii) a
9    non-profit corporation organized for the purpose of
10    constructing, managing, and operating housing projects and
11    for the improvement of housing conditions, including the
12    rental or sale of housing units to persons in need
13    thereof, as well as a neighborhood redevelopment
14    corporation; or (iii) an Illinois Land Bank. In each
15    instance the Authority has the right to request that any
16    such entity acquire one or more construction or
17    performance bonds concerning the qualified project in
18    question, and obtain all applicable permits as well as
19    titles and easements necessary to complete the qualified
20    project in question, before recognizing that entity as a
21    qualified developer under this Section.
22        (5) "Qualified project" means the acquisition of
23    vacant and abandoned property in a community of
24    concentrated poverty, and the development of such property
25    to become either affordable housing (single or
26    multi-family residences), or a mix of affordable housing

 

 

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1    units and commercial units. In either case, the qualified
2    developer in question shall first submit a plan of
3    development to the Authority, and the Authority must
4    approve of the proposed development in writing and in
5    advance. The Authority from time to time shall adopt rules
6    identifying the type of affordable housing and mixed use
7    projects that it will approve, as well as the specific
8    communities of concentrated poverty in which qualified
9    projects may be sited.
10        (6) "Vacant and abandoned property" means: (i)
11    property that has been empty for at least 6 months, and has
12    had no construction done on it during that period, has had
13    no attempt by the owner to occupy, lease, or otherwise
14    commercially exploit such property during said period, and
15    is delinquent in tax or mortgage payments during such
16    period; or (ii) property that has been vacant for 6 or more
17    months and that has become derelict, unsafe,
18    uninhabitable, environmentally contaminated, a public
19    nuisance, or a center for criminal activity, or otherwise
20    has lost its value as an economic or social good.
21    (e) Administration of the Rehab Program. Within 45 days of
22the satisfactory completion of a qualified project, the
23Authority shall pay to the qualified developer responsible for
24such project a Rehab Program incentive fee in a dollar amount
25that is equal to: (i) the difference between the approved
26project costs for the qualified project in question and the

 

 

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1fair market value of such completed qualified project; plus
2(ii) an amount equal to 5% of such approved project costs. As
3used in this Section, the "satisfactory completion" of a
4qualified project means all construction thereof has been done
5in accordance with all applicable laws, rules, regulations,
6and ordinances, and the qualified project is being marketed
7for its intended uses. After the initial pilot of the Rehab
8Program identified in subsection (f) ends, and continuing
9thereafter, the Authority may authorize qualified projects in
10any given calendar year in an amount not to exceed either
11$50,000,000 for the year in question. The Authority may from
12time to time adopt rules requiring qualified developers to
13hire a certain percentage of workers for the qualified project
14in question from the community in which such qualified project
15is located, or set aside a specific percentage of Rehab
16Program incentive fees for minority-owned or woman-owned
17developers.
18    (f) Initial pilot. Initially, the Rehab Program shall be
19piloted out in 10 communities identified by the Authority that
20span the State, to ensure the program generates economic
21benefits equitably across Illinois. Those 10 communities shall
22at a minimum include the Chicago metropolitan area, the south
23suburbs of Chicago, central Illinois, northwest Illinois, and
24southern Illinois. This pilot program shall commence on July
251, 2022, and continue through and including December 31, 2023.
26The maximum amount of Rehab Program incentive fees the

 

 

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1Authority may issue during the pilot period shall be
2$30,000,000. The Authority shall fund such incentive fees with
3appropriations from the State, if there are inadequate
4appropriations to cover the full $30,000,000 during the pilot
5period. To the extent authorized by the General Assembly and
6the Governor, the $30,000,000 appropriation for the pilot
7program shall be funded with proceeds the State receives under
8the federal American Rescue Plan Act of 2021.
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.".