Bill Text: IL HB4784 | 2021-2022 | 102nd General Assembly | Engrossed

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Bill Title: Reinserts the provisions of the introduced bill with the following changes: Provides that commencing State Fiscal Year 2023 (rather than no later than July 1, 2022), the Illinois Housing Development Authority shall establish and administer the Rehab Program to help reclaim vacant and abandoned properties in communities of concentrated poverty. Removes from the definition of "community of concentrated poverty" a community that is designated as or qualifies as a blighted or slum area under any federal, State, or local governmental authority or agency law, rule, regulation, or ordinance. Expands the definition of "project costs" to provide that the Authority shall issue regulations from time-to-time identifying what may be included within the rubric of reasonable costs for purposes of the amendatory Act, as well as the form and content of expense reporting a qualified developer must utilize. Makes a change to the definition of "qualified developer". In a provision concerning the administration of the Rehab Program, provides that within 45 days of the satisfactory completion of a qualified project, the Authority shall pay to the qualified developer responsible for such project a Rehab Program incentive fee in a dollar amount that is equal to: (i) the difference between the approved project costs for the qualified project in question and the fair market value of such completed qualified project; plus (ii) an amount equal to 5% of such approved project costs (rather than 5% of such fair market value). Removes a provision permitting the Authority to authorize qualified projects in any given calendar year in an amount not to exceed more than $250,000,000 in aggregate bond indebtedness then outstanding for all such bonds. Provides that the amount of Rehab Program incentive fees the Authority may issue during the pilot period shall be $30,000,000 (rather than $20,000,000). Removes a provision requiring the Authority to fund such incentive fees by issuing bonds if there are inadequate appropriations to cover the full fee amount during the pilot period. Instead provides that, to the extent authorized by the General Assembly and the Governor, the $30,000,000 appropriation for the pilot program shall be funded with proceeds the State receives under the federal American Rescue Plan Act of 2021. Removes a provision permitting the Authority to issue bonds for the payment of Rehab Program incentive fees to qualified developers. Effective immediately.

Spectrum: Moderate Partisan Bill (Democrat 8-1)

Status: (Engrossed - Dead) 2022-03-16 - Referred to Assignments [HB4784 Detail]

Download: Illinois-2021-HB4784-Engrossed.html

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AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Housing Development Act is amended
by changing Section 14 and by adding Section 7.33 as follows:
(20 ILCS 3805/7.33 new)
Sec. 7.33. The Rehab Program.
(a) Findings.
(1) The General Assembly finds that vacant and
abandoned properties located in communities of
concentrated poverty across the State frequently become
crime centers, reduce the value of adjacent properties,
increase risks to general health and safety, and make it
exceedingly difficult to reverse long term cycles of
concentrated poverty.
(2) The General Assembly finds that, while
economically struggling communities across Illinois have
to deal with this issue, due to the legacy of historical,
overt racism under redlining policies, which systemically
denied African Americans access to the level of mortgage
financing needed to purchase homes in middle-income and
upper-income communities, a disproportionately large
percentage of African Americans have been forced to live

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in areas that suffer the negative consequences generated
by vacant and abandoned property.
(3) The General Assembly finds that private developers
frequently are not willing to acquire and rehab vacant and
abandoned properties located in communities of
concentrated poverty, because complying with federal,
State and local laws, rules, and ordinances covering
everything from prevailing wage and environmental
requisites, to building code standards, frequently pushes
the total acquisition and rehab cost to a level well in
excess of what could be charged for selling, renting, or
otherwise commercially utilizing the rehabbed property at
the depressed fair market rates that are generally
prevailing in these communities.
(4) The General Assembly finds that the stain of
historic discrimination against African Americans cannot
be erased, but a thoughtful approach to reclaiming vacant
and abandoned property through a strategic program that
leverages public and private investments can help break
the cycle of concentrated poverty in historically
low-income communities generally, as well as begin to
redress some of the legacy of overt racism in housing and
mortgage finance policies specifically. To further those
goals, the State is creating a new public financing
program (hereafter the "Rehab Program"), as provided in
this Act.

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(b) Establishment of the Rehab Program. No later than July
1, 2022, the Authority shall establish and administer the
Rehab Program to help reclaim vacant and abandoned properties
in communities of concentrated poverty.
(c) Purposes of the Rehab Program. The purposes of the
Rehab Program are to:
(1) encourage private sector investment in acquiring,
rehabbing, and placing on the market, vacant and abandoned
properties located in communities of concentrated poverty;
(2) provide low-income families with more affordable
housing options in modern, safe buildings while redressing
historic discrimination against African Americans in
housing;
(3) reduce various commercial deserts that
traditionally plague communities of concentrated poverty;
(4) reduce both the taxpayer costs generally
associated with constructing and maintaining public units
of affordable housing over a duration of multiple years,
as well as the long-term revenue losses generated by
ongoing tax expenditures intended to promote business
activity in low-income communities, by replacing both
long-term, ongoing expenses with a significantly less
expensive, one-time public investment;
(5) leverage public taxpayer investments with private
sector dollars and land bank resources;
(6) begin creating or stimulating private markets in

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housing and commercial ventures in areas that are
struggling to do so;
(7) help reduce the crime associated with vacant and
abandoned property that frequently afflicts communities of
concentrated poverty, thereby enhancing both the health
and safety of residents;
(8) create jobs and an economic stimulus, initially
through construction and related jobs, and after the new
housing is occupied and new retail is open, generating
ongoing economic benefits that should create a positive
economic multiplier over time; and
(9) increase local property values, making future
development more likely while enhancing tax revenues for
local governmental authorities.
(d) Definitions. As used in this Section:
(1) "Community of concentrated poverty" means each of
the following: (i) a census tract, or a set of contiguous
census tracts, that has a poverty rate of 25% or greater,
as determined using the American Community Survey's 5-year
data most recently published by the U.S. Department of
Labor; (ii) a census tract or a set of contiguous census
tracts that has a poverty rate of 20% or greater, using the
American Community Survey's 5-year data most recently
published by the U.S. Department of Labor, provided that
such community is also either majority minority in
composition, or is located in a non-metro area; or (iii) a

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community that is designated as or qualifies as a blighted
or slum area under any federal, State, or local
governmental authority or agency law, rule, regulation, or
ordinance.
(2) "Fair market value of a qualified project" means
that dollar amount that is equal to the average of 3
appraisals thereof conducted by 3 different certified
Member, Appraisal Institute (MAI) appraisers qualified to
work in Illinois with expertise in both residential and
commercial properties, one of whom shall be selected by
the Authority, one of whom shall be selected by the
qualified developer, and one of whom shall be selected by
the 2 aforesaid MAI appraisers. The fair market value of a
qualified project shall be determined within 30 days of
the completion of a qualified project.
(3) "Project costs" means the reasonable out-of-pocket
expenses a qualified developer actually incurs to acquire
a piece of vacant and abandoned property in a community of
concentrated poverty, and to complete a qualified project
thereon in full compliance with all applicable laws,
rules, ordinances, and regulations, provided however that
all such expenses are reasonably documented and approved
in writing from time to time during project construction
by the Authority. The Authority shall adopt rules from
time to time identifying the form and content of expense
reporting a qualified developer must utilize.

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(4) "Qualified developer" means each of the following:
(i) a private, for profit corporation, limited or general
partnership, or limited liability company; (ii) a
non-profit corporation organized for the purpose of
constructing, managing, and operating housing projects and
for the improvement of housing conditions, including the
rental or sale of housing units to persons in need
thereof, as well as a neighborhood redevelopment
corporation; or (iii) an Illinois Land Bank. In each
instance the Authority has the right but not the
obligation to request that any such entity acquire one or
more construction or performance bonds concerning the
qualified project in question, and obtain all applicable
permits as well as titles and easements necessary to
complete the qualified project in question, before
recognizing that entity as a qualified developer under
this Section.
(5) "Qualified project" means the acquisition of
vacant and abandoned property in a community of
concentrated poverty, and the development of such property
to become either affordable housing (single or
multi-family residences), or a mix of affordable housing
units and commercial units. In either case, the qualified
developer in question shall first submit a plan of
development to the Authority, and the Authority must
approve of the proposed development in writing and in

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advance. The Authority from time to time shall adopt rules
identifying the type of affordable housing and mixed use
projects that it will approve, as well as the specific
communities of concentrated poverty in which qualified
projects may be sited.
(6) "Vacant and abandoned property" means: (i)
property that has been empty for at least 6 months, and has
had no construction done on it during that period, has had
no attempt by the owner to occupy, lease, or otherwise
commercially exploit such property during said period, and
is delinquent in tax or mortgage payments during such
period; or (ii) property that has been vacant for 6 or more
months and that has become derelict, unsafe,
uninhabitable, environmentally contaminated, a public
nuisance, or a center for criminal activity, or otherwise
has lost its value as an economic or social good.
(e) Administration of the Rehab Program. Within 45 days of
the satisfactory completion of a qualified project, the
Authority shall pay to the qualified developer responsible for
such project a Rehab Program incentive fee, in a dollar amount
that is equal to: (i) the difference between the approved
project costs for the qualified project in question and the
fair market value of such completed qualified project; plus
(ii) an amount equal to 5% of such fair market value. As used
in this Section, the "satisfactory completion" of a qualified
project means all construction thereof has been done in

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accordance with all applicable laws, rules, regulations, and
ordinances, and the qualified project is being marketed for
its intended uses. After the initial pilot of the Rehab
Program identified in subsection (f) ends, and continuing
thereafter, the Authority may authorize qualified projects in
any given calendar year in an amount not to exceed either
$50,000,000 for the year in question, or if the Authority is
then utilizing bond proceeds to pay Rehab Program incentive
fees as permitted under Section 14 of this Act, more than
$250,000,000 in aggregate bond indebtedness then outstanding
for all such bonds. The Authority may from time to time adopt
rules requiring qualified developers to hire a certain
percentage of workers for the qualified project in question
from the community in which such qualified project is located,
or set aside a specific percentage of Rehab Program incentive
fees for minority-owned or woman-owned developers.
(f) Initial pilot. Initially, the Rehab Program shall be
piloted out in 10 communities identified by the Authority that
span the State, to ensure the program generates economic
benefits equitably across Illinois. Those 10 communities shall
at a minimum include the Chicago metropolitan area, the south
suburbs of Chicago, central Illinois, northwest Illinois, and
southern Illinois. This pilot program shall commence on July
1, 2022, and continue through and including December 31, 2023.
The maximum amount of Rehab Program incentive fees the
Authority may issue during the pilot period shall be

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$20,000,000. The Authority shall fund such incentive fees
either with appropriations from the State, or by issuing bonds
as permitted under Section 14 of this Act, if there are
inadequate appropriations to cover the full $20,000,000 during
the pilot period.
(20 ILCS 3805/14) (from Ch. 67 1/2, par. 314)
Sec. 14. The Authority may from time to time issue its
negotiable bonds and notes in such principal amount, as, in
the opinion of the Authority, shall be necessary to provide
sufficient funds for achieving its corporate purposes,
including the making of mortgage or other loans for the
acquisition, construction and rehabilitation of housing to be
occupied by low and moderate income persons, for the
acquisition, construction and rehabilitation of community
facilities as provided in this Act and for the acquisition,
construction and rehabilitation of housing related commercial
facilities; the acquisition of land and land development; the
purchase of residential mortgages from lending institutions;
the making of loans to lending institutions; the payment of
Rehab Program incentive fees to qualified developers; the
payment of interest on bonds and notes of the Authority; the
establishment of reserves to secure such bonds and notes; and
all other expenditures of the Authority incidental to and
necessary or convenient to carrying out its corporate purposes
and powers, including the reimbursement of the Authority for

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expenditures made by it from other funds for achieving its
corporate purposes set forth in this Section. The bonds and
notes of the Authority may be issued as general obligations of
the Authority payable from such revenues, funds and
obligations of the Authority as the resolution authorizing
issuance of the bonds or notes shall provide, or may be issued
as limited obligations with a claim for payment solely from
such revenues, funds and obligations as the resolution
authorizing issuance of the bonds or notes shall provide. The
Authority is specifically granted the power and authority to
issue Affordable Housing Program Trust Fund Bonds or Notes,
provided that the use of the proceeds thereof is subject to the
limitation provided in the Illinois Affordable Housing Act.
Except for such limitation and the dedication and pledge of
Trust Fund Moneys provided for in that Act, Affordable Housing
Program Trust Fund Bonds or Notes shall be treated in all
respects as, and shall be entitled to all the benefits,
rights, grants and authorizations in respect of, bonds and
notes issued pursuant and subject to the provisions of this
Act. The Authority shall have no taxing power.
(Source: P.A. 88-93.)
Section 99. Effective date. This Act takes effect upon
becoming law.