Section 1. rental assistance Demonstration.
(a) Purpose AND AUTHORIZATION.—To demonstrate the potential for preserving and improving low-income housing through conversion of assistance for public housing and moderate rehabilitation properties to long-term rental assistance under section 8 of the U. S. Housing Act of 1937, (hereinafter, “the Act”), the Secretary may undertake a demonstration of conversion of assistance under section 9 of the Act or the moderate rehabilitation program under section 8(e)(2) of the Act (except for funds allocated under such section for single room occupancy dwellings as authorized by title IV of the McKinney-Vento Homeless Assistance Act) to assistance under a project-based subsidy contract under section 8 of the Act that shall be eligible for renewal under section 524 of the Multifamily Assisted Housing Reform and Affordability of 1997 (42 U.S.C. 1437f note) or under section 8(o)(13) of the Act.
(b) Selection AND TERMS.—
(1) The Secretary shall select properties for conversion of assistance and award funds for assistance, including administrative fees, through a competitive process or such other means as the Secretary determines to be fair and necessary to promote the purposes of the demonstration.
(2) The demonstration—
(A) shall provide for the conversion of assistance for properties with varying characteristics, assisted by public housing agencies of various sizes in a broad range of locations and markets;
(B) may provide for application of various policies covering contract rents and terms and resident choices to move with tenant-based rental assistance under section 8 of the Act; and
(C) shall, with respect to at least 90 percent of the total number of assisted units in all properties participating in the demonstration, test options to provide all assisted residents the choice, in accordance with policies established under such options, to move with tenant-based continuing rental assistance under section 8 of the Act within a reasonable time.
(3) The Secretary may provide for the conversion of assistance through the contracts and transactional infrastructure of the authorized programs administered by the Office of Affordable Housing Preservation of the Department of Housing and Urban Development.
(4) The Secretary shall provide an opportunity for public comment on draft eligibility and selection criteria and procedures that will apply to the selection of properties that will participate in the demonstration, including reasonable requirements for consultation with the residents of properties to be proposed for participation in the demonstration and with the resident advisory boards of public housing agencies responsible for such properties.
(5) The demonstration may proceed after the Secretary publishes notice of its terms in the Federal Register.
(c) Requirements for properties CONVERTING ASSISTANCE.—
(1) In the case of a property with assistance converted under the demonstration from assistance under section 9 of the Act—
(A) the assistance made available under the demonstration shall not be terminated, including in instances of foreclosure or bankruptcy, except for termination and transfer by the Secretary for a material violation or a substantial default, or due to the unavailability of funds; and
(B) the Secretary—
(i) shall require ownership or control of assisted units by a public or non-profit entity, except as determined by the Secretary to be necessary pursuant to foreclosure, bankruptcy, or termination and transfer of assistance for material violations or substantial default, in which cases the priority for ownership or control shall be provided to a capable public entity, then a capable nonprofit entity, and if such entities are not available, to a capable other entity;
(ii) shall require long-term renewable use and affordability restrictions for assisted units;
(iii) may permit transfer of assistance at or after conversion under the demonstration to replacement units subject to the requirements in clauses (i) and (ii);
(iv) shall offer, subject to the requirements in clauses (i) and (ii) and the availability of sufficient amounts, and the owner shall accept, a renewal of each expiring contract of assistance;
(v) shall require that applicants for, and tenants of, assisted units in such properties shall have procedural rights that are equivalent to the rights provided under section 6 of the Act; and
(vi) may allow ownership to be transferred to a for-profit entity to facilitate the use of tax credits only if the public housing agency preserves its interest in the property in a manner approved by the Secretary.
(2) Notwithstanding sections 3 and 16 of the Act, the conversion of assistance under the demonstration shall not be the basis for re-screening or termination of assistance or eviction of any tenant family in a property participating in the demonstration, and such a family shall not be considered a new admission for any purpose, including compliance with income targeting requirements.
(3) The Secretary shall ensure that assisted residents of all properties with converted assistance have the right to participate in a legitimate tenant organization if one is formed or exists that represents tenants at the property, which shall be recognized by the owner of the property.
(4) The Secretary may provide the requirements for converted assistance under the demonstration through contracts, use agreements, regulations, or other means.
(d) Demonstration flexibility.—
(1) The Secretary may waive, or specify alternative requirements for, any provision of section 8(o)(13) of the Act (but not in a manner that adversely would affect requirements related to fair housing, nondiscrimination, labor standards, and the environment), or any provision in any appropriations act that governs the type of assistance that is converted under the demonstration or funds made available under the headings of “Public Housing Capital Fund,” “Public Housing Operating Fund,” and “Project-Based Rental Assistance,” or equivalent headings, for properties with assistance converted under the demonstration, upon a finding by the Secretary that any such waivers or alternative requirements are necessary for the effective conversion of assistance under the demonstration and not inconsistent with the requirements of this section, provided that the Secretary shall publish by notice in the Federal Register any waivers or alternative requirements pursuant to this subsection no later than 10 days before the effective date of such notice.
(2) Section 18 of the Act shall not apply to a project converting assistance under the demonstration for all or substantially all of its units.
(e) Evaluation.—The Secretary shall assess, and publish findings regarding, the impact of the conversion of assistance under this demonstration on the properties’ physical and financial sustainability, including the amount of private funding leveraged; the cost of preserving the properties; the financial and programmatic impact of providing the choice to move, with continuing rental assistance, from properties with assistance converted under the demonstration; the impact of conversion on residents’ continuing receipt of rental assistance; the access of eligible families to diverse communities of their choice; and such other aspects of the demonstration as the Secretary deems appropriate.
(f) Authorization of appropriations.—There are authorized to be appropriated such sums as are necessary to carry out the demonstration, including for supplemental costs of the first year of assistance, evaluation, technical assistance to public housing agencies and legitimate tenant organizations and other appropriate purposes.
Sec. 2. Rent Supplement and Rental Assistance Program Contract CONVERSIONS.
(a) Rent Supplement and Rental Assistance Program Contract Renewals.—At the request of owners of properties assisted under the rent supplement program under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) or the rental assistance program under section 236(f)(2) of the National Housing Act (12 U.S.C. 1715z-1(f)(2) and with the approval of the Secretary, rent supplement or rental assistance program assistance may be converted to project-based subsidy contracts under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) under the terms of section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) and such contracts shall be considered renewal contracts. There are authorized to be appropriated such funds as may be necessary for the costs associated with conversions under this subsection, and the Secretary is further authorized to use recaptured assisted housing program funds for the costs of such conversions.
(b) Property-based preservation contracts.—Owners of properties assisted by the Secretary other than under section 9 of the United States Housing Act of 1937 (42 U.S.C. 1437g), for which an event causing the cessation of rental assistance has resulted or will result in eligibility for tenant protection vouchers under section 8(o) of such Act, shall be eligible for, subject to requirements established by the Secretary and in lieu of issuance or continuation of such vouchers, conversion of assistance available for such vouchers to assistance under section 8(o)(13) of such Act, except that, only with respect to such conversions, the Secretary may alter or waive the provisions of subsections 8(o)(13)(B), (C), and (D).