093_SB0569

                                     LRB093 10705 DRJ 11085 b

 1        AN ACT in relation to housing.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  1.  Short  title.  This  Act may be cited as the
 5    Rental Housing Support Program Act.

 6        Section 5.  Legislative findings and purpose. The General
 7    Assembly finds that  in  many  parts  of  this  State,  large
 8    numbers  of  citizens  are faced with the inability to secure
 9    affordable rental housing. Due to either  insufficient  wages
10    or  a  shortage  of affordable rental housing stock, or both,
11    many families have difficulty securing  decent  housing,  are
12    subjected  to  overcrowding, pay too large a portion of their
13    total monthly income for housing and consequently suffer  the
14    lack  of  other basic needs, live in substandard or unhealthy
15    housing,   or   experience   chronic   housing   instability.
16    Instability   and   inadequacy   in   housing   limits    the
17    employability  and  productivity  of many citizens, adversely
18    affects family health and stress levels,  impedes  children's
19    ability to learn, and produces corresponding drains on public
20    resources.  It  is  the purpose of this Act to create a State
21    program to  help  localities  address  the  need  for  decent
22    affordable permanent rental housing.

23        Section 7.  Definitions. In this Act:
24        "Authority"   means   the  Illinois  Housing  Development
25    Authority.
26        "Program" means the Rental Housing Support Program.
27        "Unit" means a rental apartment unit receiving a  subsidy
28    by  means  of a grant under this Act. "Unit" does not include
29    housing units intended as transitional or temporary housing.
 
                            -2-      LRB093 10705 DRJ 11085 b
 1        Section 10.  Creation  of  program.  The  Rental  Housing
 2    Support  Program  is  created  within  the  Illinois  Housing
 3    Development  Authority.  The  Authority  shall administer the
 4    program.

 5        Section 15.  Grants to local administering agencies.
 6        (a)  Under the program, the Authority shall  make  grants
 7    to  local  administering  agencies  to  provide  subsidies to
 8    landlords to enable the landlords to charge  rent  affordable
 9    for  low-income  tenants. Grants shall also include an amount
10    for the operating expenses of local administering agencies.
11        (b)  The Authority shall develop a  request-for-proposals
12    process  for  soliciting  proposals  from local administering
13    agencies and for awarding grants.  The  request-for-proposals
14    process  and  the funded projects must be consistent with the
15    criteria set forth in Section 25 and with additional criteria
16    set forth by the Authority in rules implementing this Act.
17        (c)  Local   administering   agencies   may   be    local
18    governmental    bodies,   local   housing   authorities,   or
19    not-for-profit organizations. The Authority shall  set  forth
20    in  rules  the  financial and capacity requirements necessary
21    for an organization  to  qualify  as  a  local  administering
22    agency.
23        (d)  The  Authority  shall  distribute  grants  to  local
24    administering  agencies according to the following geographic
25    distribution  formula:  of  funds  received  to  support  the
26    program, 50% must go to Chicago; 20% must go to  the  Chicago
27    suburban  counties of Cook (excluding Chicago), DuPage, Lake,
28    Kane, Will, and McHenry; 15% must go  to  small  metropolitan
29    areas   ("small   metropolitan   areas"   are   defined   as:
30    Springfield,  Rockford,  Peoria,  Decatur,  Champaign-Urbana,
31    Bloomington-Normal,  Rock  Island,  DeKalb,  Madison  County,
32    Moline,  Pekin,  Rantoul, and St. Clair County); and 15% must
33    go to rural areas.
 
                            -3-      LRB093 10705 DRJ 11085 b
 1        (e)  In order to ensure applications from all  geographic
 2    areas  of  the  State,  the  Authority shall create a plan to
 3    ensure that potential local administering agencies have ample
 4    time and support to consider making  an  application  and  to
 5    prepare  an application. Such a plan must include, but is not
 6    limited to: an outreach  and  education  plan  regarding  the
 7    program  and  the  requirements  for  a  local  administering
 8    agency;  ample  time  between  the  initial notice of funding
 9    ability and the deadline  to  submit  an  application,  which
10    shall  not  be  less  than 9 months; and access to assistance
11    from the Authority  or  another  agency  in  considering  and
12    preparing the application.
13        (f)  The  Chicago  Low-Income  Housing  Trust Fund has an
14    existing program that matches the function and purpose of the
15    program described in this Act and meets the specific criteria
16    set forth in Section 25. Therefore,  the  Chicago  Low-Income
17    Housing Trust Fund shall be the local administering agency of
18    the   program   for  Chicago  and  shall  receive  the  funds
19    designated for  Chicago  under  the  geographic  distribution
20    formula set forth in subsection (d).

21        Section 20.  Grants to developers.
22        (a)  The  Authority  may  award  grants under the program
23    directly to developers of new affordable rental  housing  for
24    long-term  operating support to enable the rent on such units
25    to be affordable. Developers of such new housing shall  apply
26    directly  to  the  Authority for this type of grant under the
27    program.
28        (b)  The  Authority   shall   prescribe   by   rule   the
29    application requirements and the qualifications necessary for
30    a  developer  and  a development to qualify for a grant under
31    the program. In any event, however, to qualify for  a  grant,
32    the  development  must  satisfy  the  criteria  set  forth in
33    Section 25, unless waived by the Authority based  on  special
 
                            -4-      LRB093 10705 DRJ 11085 b
 1    circumstances  and  in  furtherance  of  the  purpose  of the
 2    program to increase the supply of affordable rental housing.
 3        (c)  The Authority must use 10% of its funds in any given
 4    year on grants under this Section. In  any  given  year,  the
 5    Authority  is not required to spend the 10% of its funds that
 6    accrues in that year but may add all or part of that  10%  to
 7    the  10%  allocation  for subsequent years for the purpose of
 8    funding grants under this Section.

 9        Section 25.  Criteria for awarding grants. The  Authority
10    shall  adopt  rules  to govern the awarding of grants and the
11    continuing eligibility for grants under Sections 15  and  20.
12    Requests  for  proposals  under  Section 20 must specify that
13    proposals must satisfy these rules. The  rules  must  contain
14    and  be  consistent  with,  but  need  not be limited to, the
15    following criteria:
16             (1)  Eligibility for tenancy in the units  supported
17        by grants must be limited to households with gross income
18        at  or below 30% of the area median income, determined by
19        the Authority using  statistical  data  it  deems  to  be
20        reliable  and  as  specific  as  possible for the area in
21        which the grant will be made. Fifty percent of the  units
22        that  are  supported  by  any grant must be set aside for
23        households whose income is at or below 15%  of  the  area
24        median  income,  provided  that localities and developers
25        may negotiate flexibility  in  this  set-aside  with  the
26        Authority  if they demonstrate that they have been unable
27        to locate sufficient tenants in this lower income  range.
28        Tenants  must have sufficient income to be able to afford
29        the tenant's share of the rent.
30             (2)  Local administering  authorities  must  include
31        2-bedroom,  3-bedroom,  and  4-bedroom  units among those
32        intended to be supported by grants under the program.  In
33        grants  under  Section  15,  the  precise number of these
 
                            -5-      LRB093 10705 DRJ 11085 b
 1        units among all the units intended to be supported  by  a
 2        grant  must  be based on need in the community for larger
 3        units and other factors that the Authority  specifies  in
 4        rules.  The  local  administering agency must specify the
 5        basis for the numbers of these units  that  are  proposed
 6        for  support  under a grant. Local administering agencies
 7        must make  a  good  faith  effort  to  comply  with  this
 8        allocation of unit sizes. In grants awarded under Section
 9        20,  developers  and  the  Authority  shall negotiate the
10        numbers and sizes of units to be built in a  project  and
11        supported by the grant.
12             (3)  Under  grants  awarded  under Section 15, local
13        administering authorities must pay subsidies to landlords
14        on a quarterly basis and in advance of the  quarter  paid
15        for.
16             (4)  Local  administering  agencies  and  developers
17        must  specify how vacancies in units supported by a grant
18        must be advertised, and with respect to each vacancy they
19        must include provisions for outreach  to  local  homeless
20        shelters,   organizations  that  work  with  people  with
21        disabilities,  and  others   interested   in   affordable
22        housing.
23             (5)  The  local  administering  agency  or developer
24        must  establish  a  schedule  for  the  tenant's   rental
25        obligation  for  units supported by a grant. The tenant's
26        share of the rent must be a flat amount based on the size
27        of the unit  and  the  household's  income  category.  In
28        establishing   the   schedule  for  the  tenant's  rental
29        obligation, the local administering agency  or  developer
30        must  use 30% of gross income within an income range as a
31        guide, and it may charge an additional or  lesser  amount
32        depending on the size of the unit.
33             (6)  The  amount  of  the  subsidy  provided under a
34        grant for a unit  must  be  the  difference  between  the
 
                            -6-      LRB093 10705 DRJ 11085 b
 1        amount of the tenant's obligation and the total amount of
 2        rent  for the unit. The total amount of rent for the unit
 3        must  be  negotiated  between  the  local   administering
 4        authority  and  the landlord under Section 15, or between
 5        the Authority and the developer under Section  20,  based
 6        on  the  operating  expenses  for the unit and using fair
 7        market rent as a guideline.
 8             (7)  Local administering authorities and developers,
 9        pursuant to criteria the  Authority  develops  in  rules,
10        must  ensure  that  there  are  procedures  in  place  to
11        maintain  the  safety and habitability of units supported
12        under  grants  according  to   local   standards.   Local
13        administering   agencies   must   inspect   units  before
14        supporting them under a grant awarded under Section 15.
15             (8)  Local administering agencies  must  provide  or
16        ensure  that tenants are provided with a "bill of rights"
17        with their lease setting forth local landlord-tenant laws
18        and procedures and  contact  information  for  the  local
19        administering agency.
20             (9)  A local administering agency must create a plan
21        detailing  a  process  for helping to provide information
22        and referrals when necessary for education, training, and
23        other supportive services  to  tenants  living  in  units
24        supported  under the grant. The plan must be submitted as
25        a part of the  administering  agency's  proposal  to  the
26        Authority required under Section 15.
27             (10)  Local  administering  agencies  and developers
28        may not use funding under the grant to develop or support
29        housing that segregates tenants according to presence  of
30        or type of disability.

31        Section  30.  Funding  stream  reserve.  If  the  program
32    receives  funding from a source that fluctuates (such as user
33    fees), the Authority must each year place 10% of the  revenue
 
                            -7-      LRB093 10705 DRJ 11085 b
 1    from  that source in an operating reserve. The Authority must
 2    continue to add to the reserve until the reserve contains  an
 3    amount  equal  to the annual rental subsidy commitment of the
 4    program. The Authority shall draw on  this  reserve  whenever
 5    the  revenue falls below commitments for rental subsidies. If
 6    funds are withdrawn from the reserve, payments to the reserve
 7    must recommence when revenue is sufficient and must  continue
 8    until  the  reserve  reaches  an  amount  equal to the annual
 9    rental subsidy commitments.