42 U.S.C. § 1437r — Public housing resident management

Page 4677 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437r conveyance of units in a public housing project for the purpose of providing homeownership opportunities for lower income families capable of assuming the respon- sibilities of homeownership.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–276, title V, § 531(c), Oct. 21, 1998, 112 Stat. 2574, provided that: ‘‘This section [amending this sec- tion and section 1437aaa–3 of this title and enacting provisions set out as a note under section 1437aaa–3 of this title] shall take effect on, and the amendments made by this section are made on, and shall apply be- ginning upon, the date of the enactment of this Act [Oct. 21, 1998].’’ EFFECTIVE DATE OF 1995 AMENDMENT Amendment by Pub. L. 104–19 effective for applica- tions for demolition, disposition, or conversion to homeownership of public housing approved by the Sec- retary, and other consolidation and relocation activi- ties of public housing agencies undertaken on, before, or after Sept. 30, 1995 and on or before Sept. 30, 1998, see section 1002(d) of Pub. L. 104–19, as amended, set out as a note under section 1437c of this title. EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–625, title V, § 512(b), Nov. 28, 1990, 104 Stat. 4195, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to any scat- tered-site public housing project or portion of such project disposed of after the date of the enactment of this Act [Nov. 28, 1990].’’ REPLACEMENT HOUSING DEMONSTRATION PROGRAM Pub. L. 101–625, title V, § 513(a), Nov. 28, 1990, 104 Stat. 4195, directed Secretary of Housing and Urban Develop- ment to carry out a program to demonstrate the effec- tiveness of replacing public housing dwelling units eli- gible for demolition or disposition with 5-year certifi- cate assistance provided under 42 U.S.C. 1437f, with Sec- retary to carry out the demonstration only with re- spect to public housing dwelling units owned or oper- ated by the public housing authority for Saint Louis, Missouri, that before the termination of the dem- onstration program under this subsection are approved for demolition or disposition, and with the demonstra- tion program to terminate at end of Sept. 30, 1992. § 1437q. Financing limitations On and after October 1, 1983, the Secretary— (1) may only enter into contracts for annual contributions regarding obligations financing public housing projects authorized by section 1437c(c) of this title if such obligations are ex- empt from taxation under section 1437i(b) of this title, or if such obligations are issued under section 1437b of this title and such obli- gations are exempt from taxation; and (2) may not enter into contracts for periodic payments to the Federal Financing Bank to offset the costs to the Bank of purchasing ob- ligations (as described in the first sentence of section 2294(b) of title 12) issued by local pub- lic housing agencies for purposes of financing public housing projects authorized by section 1437c(c) of this title. (Sept. 1, 1937, ch. 896, title I, § 19, as added Pub. L. 98–181, title I [title II, § 215], Nov. 30, 1983, 97 Stat. 1185; renumbered title I, Pub. L. 100–358, § 5, June 29, 1988, 102 Stat. 681.) § 1437r. Public housing resident management (a) Purpose The purpose of this section is to encourage in- creased resident management of public housing projects, as a means of improving existing living conditions in public housing projects, by pro- viding increased flexibility for public housing projects that are managed by residents by— (1) permitting the retention, and use for cer- tain purposes, of any revenues exceeding oper- ating and project costs; and (2) providing funding, from amounts other- wise available, for technical assistance to pro- mote formation and development of resident management entities. For purposes of this section, the term ‘‘public housing project’’ includes one or more contig- uous buildings or an area of contiguous row houses the elected resident councils of which ap- prove the establishment of a resident manage- ment corporation and otherwise meet the re- quirements of this section. (b) Program requirements (1) Resident council As a condition of entering into a resident management program, the elected resident council of a public housing project shall ap- prove the establishment of a resident manage- ment corporation. When such approval is made by the elected resident council of a building or row house area, the resident management pro- gram shall not interfere with the rights of other families residing in the project or harm the efficient operation of the project. The resi- dent management corporation and the resi- dent council may be the same organization, if the organization complies with the require- ments applicable to both the corporation and council. The corporation shall be a nonprofit corporation organized under the laws of the State in which the project is located, and the tenants of the project shall be the sole voting members of the corporation. If there is no elected resident council, a majority of the households of the public housing project shall approve the establishment of a resident coun- cil to determine the feasibility of establishing a resident management corporation to manage the project. (2) Public housing management specialist The resident council of a public housing project, in cooperation with the public hous- ing agency, shall select a qualified public housing management specialist to assist in de- termining the feasibility of, and to help estab- lish, a resident management corporation and to provide training and other duties agreed to in the daily operations of the project. (3) Bonding and insurance Before assuming any management responsi- bility for a public housing project, the resi- dent management corporation shall provide fi- delity bonding and insurance, or equivalent protection, in accordance with regulations and requirements of the Secretary and the public housing agency. Such bonding and insurance, or its equivalent, shall be adequate to protect Page 4678 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437r 1 So in original. the Secretary and the public housing agency against loss, theft, embezzlement, or fraudu- lent acts on the part of the resident manage- ment corporation or its employees. (4) Management responsibilities A resident management corporation that qualifies under this section, and that supplies insurance and bonding or equivalent protec- tion sufficient to the Secretary and the public housing agency, shall enter into a contract with the public housing agency establishing the respective management rights and respon- sibilities of the corporation and the public housing agency. Such contract shall be con- sistent with the requirements of this chapter applicable to public housing projects and may include specific terms governing management personnel and compensation, access to public housing project records, submission of and ad- herence to budgets, rent collection procedures, tenant income verification, tenant eligibility determinations, tenant eviction, the acquisi- tion of supplies and materials, rent determina- tion, community service requirements,,1 and such other matters as may be appropriate. The contract shall be treated as a contracting out of services and shall be subject to any provi- sion of a collective bargaining agreement re- garding contracting out to which the public housing agency is subject. (5) Annual audit The books and records of a resident manage- ment corporation operating a public housing project shall be audited annually by a certified public accountant. A written report of each audit shall be forwarded to the public housing agency and the Secretary. (c) Assistance amounts A contract under this section for management of a public housing project by a resident man- agement corporation shall provide for— (1) the public housing agency to provide a portion of the assistance to agency from the Capital and Operating Funds to the resident management corporation in accordance with subsection (e) for purposes of operating the public housing project covered by the contract and performing such other eligible activities with respect to the project as may be provided under the contract; (2) the amount of income expected to be de- rived from the project itself (from sources such as rents and charges); (3) the amount of income to be provided to the project from the other sources of income of the public housing agency (such as interest income, administrative fees, and rents); and (4) any income generated by a resident man- agement corporation of a public housing project that exceeds the income estimated under the contract shall be used for eligible activities under subsections (d)(1) and (e)(1) of section 1437g of this title. (d) Waiver of Federal requirements (1) Waiver of regulatory requirements Upon the request of any resident manage- ment corporation and public housing agency, and after notice and an opportunity to com- ment is afforded to the affected tenants, the Secretary may waive (for both the resident management corporation and the public hous- ing agency) any requirement established by the Secretary (and not specified in any stat- ute) that the Secretary determines to unnec- essarily increase the costs or restrict the in- come of a public housing project. (2) Waiver to permit employment Upon the request of any resident manage- ment corporation, the Secretary may, subject to applicable collective bargaining agree- ments, permit residents of such project to vol- unteer a portion of their labor. (3) Exceptions The Secretary may not waive under this sub- section any requirement with respect to in- come eligibility for purposes of section 1437n of this title, rental payments under section 1437a(a) of this title, tenant or applicant pro- tections, employee organizing rights, or rights of employees under collective bargaining agreements. (e) Direct provision of operating and capital as- sistance (1) In general The Secretary shall directly provide assist- ance from the Operating and Capital Funds to a resident management corporation managing a public housing development pursuant to a contract under this section, but only if— (A) the resident management corporation petitions the Secretary for the release of the funds; (B) the contract provides for the resident management corporation to assume the pri- mary management responsibilities of the public housing agency; and (C) the Secretary determines that the cor- poration has the capability to effectively discharge such responsibilities. (2) Use of assistance Any assistance from the Operating and Cap- ital Funds provided to a resident management corporation pursuant to this subsection shall be used for purposes of operating the public housing developments of the agency and per- forming such other eligible activities with re- spect to public housing as may be provided under the contract. (3) Responsibility of public housing agency If the Secretary provides direct funding to a resident management corporation under this subsection, the public housing agency shall not be responsible for the actions of the resi- dent management corporation. (4) Calculation of Operating Fund allocation Notwithstanding any provision of section 1437g of this title or any regulation under such section, and subject to the exception provided in paragraph (3), the portion of the amount re- ceived by a public housing agency under sec- tion 1437g of this title that is due to an alloca- tion from the Operating Fund and that is allo- cated to a public housing project managed by a resident management corporation shall not Page 4679 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437r be less than the public housing agency per unit monthly amount provided in the previous year as determined on an individual project basis. (5) Calculation of total income (A) Subject to subparagraph (B), the amount of funds provided by a public housing agency to a public housing project managed by a resi- dent management corporation may not be re- duced during the 3-year period beginning on February 5, 1988, or on any later date on which a resident management corporation is first es- tablished for the project. (B) If the total income of a public housing agency (including any amounts from the Cap- ital or Operating Funds provided to the public housing agency under section 1437g of this title) is reduced or increased, the income pro- vided by the public housing agency to a public housing project managed by a resident man- agement corporation shall be reduced or in- creased in proportion to the reduction or in- crease in the total income of the public hous- ing agency, except that any reduction in amounts from the Operating Fund that occurs as a result of fraud, waste, or mismanagement by the public housing agency shall not affect the funds provided to the resident manage- ment corporation. (6) Retention of excess revenues (A) Any income generated by a resident management corporation of a public housing project that exceeds the income estimated for purposes of this subsection shall be excluded in subsequent years in calculating (i) the allo- cations from the Operating Fund for the pub- lic housing agency under section 1437g of this title; and (ii) the funds provided by the public housing agency to the resident management corporation. (B) Any revenues retained by a resident management corporation under subparagraph (A) shall be used for purposes of improving the maintenance and operation of the public hous- ing project, for establishing business enter- prises that employ residents of public housing, or for acquiring additional dwelling units for low-income families. (f), (g) Repealed. Pub. L. 105–276, title V, § 532(a)(5), Oct. 21, 1998, 112 Stat. 2575 (h) Applicability Any management contract between a public housing agency and a resident management cor- poration that is entered into after November 7, 1988, shall be subject to this section and the reg- ulations issued to carry out this section. (Sept. 1, 1937, ch. 896, title I, § 20, as added Pub. L. 100–242, title I, § 122, Feb. 5, 1988, 101 Stat. 1839; renumbered title I, Pub. L. 100–358, § 5, June 29, 1988, 102 Stat. 681; amended Pub. L. 100–628, title X, § 1003, Nov. 7, 1988, 102 Stat. 3263; Pub. L. 101–625, title IV, § 415, title V, §§ 514, 572(1), Nov. 28, 1990, 104 Stat. 4160, 4196, 4236; Pub. L. 102–550, title I, § 117, Oct. 28, 1992, 106 Stat. 3695; Pub. L. 105–276, title V, § 532(a), Oct. 21, 1998, 112 Stat. 2574.) Editorial Notes PRIOR PROVISIONS A prior section 1437r, act Sept. 1, 1937, ch. 896, § 20, as added Nov. 6, 1986, Pub. L. 99–603, title I, § 121(b)(6), 100 Stat. 3391, related to payment for implementation of immigration status verification system, prior to repeal by Pub. L. 100–242, § 164(f)(2). AMENDMENTS 1998—Subsec. (b)(4). Pub. L. 105–276, § 532(a)(1), in- serted ‘‘, rent determination, community service re- quirements,’’ after ‘‘materials’’. Subsec. (c). Pub. L. 105–276, § 532(a)(2), added subsec. (c) and struck out heading and text of former subsec. (c). Text read as follows: ‘‘Public housing projects man- aged by resident management corporations may be pro- vided with comprehensive improvement assistance under section 1437l of this title for purposes of ren- ovating such projects in accordance with such section. If such renovation activities (including the planning and architectural design of the rehabilitation) are ad- ministered by a resident management corporation, the public housing agency involved may not retain, for any administrative or other reason, any portion of the as- sistance provided pursuant to this subsection unless otherwise provided by contract.’’ Subsec. (d)(3), (4). Pub. L. 105–276, § 532(a)(3), redesig- nated par. (4) as (3) and struck out heading and text of former par. (3). Text read as follows: ‘‘Not later than 6 months after February 5, 1988, the Secretary shall sub- mit to the Congress a report setting forth any addi- tional waivers of Federal law that the Secretary deter- mines are necessary or appropriate to carry out the provisions of this section. In preparing the report, the Secretary shall consult with resident management cor- porations and public housing agencies.’’ Subsec. (e)(1) to (3). Pub. L. 105–276, § 532(a)(4)(B), added subsec. heading and pars. (1) to (3) and struck out former subsec. heading and former pars. (1) to (3), which in par. (1), specified amount of operating subsidy to be allocated to a public housing project managed by a resident management corporation; in par. (2), set forth requirements for any contract for management of a project entered into by a public housing agency and a resident management corporation; and in par. (3), prohibited reduction of funds provided by an agency to a project during 3-year period beginning on date on which resident management corporation is first estab- lished for the project, and provided for proportional re- duction or increase if total income of agency is reduced or increased. Subsec. (e)(4), (5). Pub. L. 105–276, § 532(a)(4)(B), added pars. (4) and (5). Former par. (4) redesignated (6). Subsec. (e)(6). Pub. L. 105–276, § 532(a)(4)(A), redesig- nated par. (4) as (6). Subsec. (e)(6)(A)(i). Pub. L. 105–276, § 532(a)(4)(C), sub- stituted ‘‘the allocations from the Operating Fund for’’ for ‘‘the operating subsidies provided to’’. Subsec. (f). Pub. L. 105–276, § 532(a)(5), struck out heading and text of subsec. (f) which required Secretary to provide financial assistance to resident management corporations or resident councils that obtain technical assistance for the development of resident management entities, limited assistance to $100,000 with respect to any public housing project, authorized appropriations for fiscal years 1993 and 1994, and limited assistance to corporations or councils where assistance was provided under subchapter II–A of this chapter. Subsec. (g). Pub. L. 105–276, § 532(a)(5), struck out heading and text of subsec. (g). Text read as follows: ‘‘Not later than 3 years after February 5, 1988, the Sec- retary shall— ‘‘(1) conduct an evaluation and assessment of resi- dent management, and particularly of the effect of resident management on living conditions in public housing; and ‘‘(2) submit to the Congress a report setting forth the findings of the Secretary as a result of the eval- Page 4680 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437s uation and assessment and including any rec- ommendations the Secretary determines to be appro- priate.’’ 1992—Subsec. (f)(3). Pub. L. 102–550 amended par. (3) generally. Prior to amendment, par. (3) read as follows: ‘‘(3) FUNDING.—Of amounts made available for financial assistance under section 1437l of this title, the Sec- retary may use to carry out this subsection not more than $5,000,000 for each of fiscal years 1991 and 1992.’’ 1990—Subsec. (e)(4)(B). Pub. L. 101–625, § 572(1), sub- stituted ‘‘low-income families’’ for ‘‘lower income fami- lies’’. Subsec. (f)(3). Pub. L. 101–625, § 514, amended par. (3) generally. Prior to amendment, par. (3) read as follows: ‘‘Of the amounts available for financial assistance under section 1437l of this title, the Secretary may use to carry out this subsection not more than $2,500,000 for fiscal year 1988 and not more than $2,500,000 for fiscal year 1989.’’ Subsec. (f)(4). Pub. L. 101–625, § 415, added par. (4). 1988—Subsec. (h). Pub. L. 100–628 added subsec. (h). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Amendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as other- wise provided, with provision that Secretary may im- plement amendment before such date, except to extent that such amendment provides otherwise, and with sav- ings provision, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of this title. § 1437s. Public housing homeownership and man- agement opportunities (a) Homeownership opportunities in general Low-income families residing in a public hous- ing project shall be provided with the oppor- tunity to purchase the dwelling units in the project through a qualifying resident manage- ment corporation as follows: (1) Formation of resident management cor- poration As a condition for public housing home- ownership— (A) the adult residents of a public housing project shall have formed a resident manage- ment corporation in accordance with regula- tions and requirements of the Secretary pre- scribed under this section and section 1437r of this title; (B) the resident management corporation shall have entered into a contract with the public housing agency establishing the re- spective management rights and responsibil- ities of the resident management corpora- tion and the public housing agency; and (C) the resident management corporation shall have demonstrated its ability to man- age public housing effectively and efficiently for a period of not less than 3 years. (2) Homeownership assistance (A) The Secretary may provide assistance from the Capital Fund to a public housing project in which homeownership activities under this section are conducted. (B) The Secretary may provide financial as- sistance to public housing agencies, resident management corporations, or resident coun- cils that obtain, by contract or otherwise, training, technical assistance, and educational assistance as the Secretary determines to be necessary to promote homeownership opportu- nities under this section. (C) This paragraph shall not have effect after February 4, 1991. The Secretary may not provide financial assistance under subpara- graph (B), after such date, unless the Sec- retary determines that such assistance is nec- essary for the development of a homeowner- ship program that was initiated, as deter- mined by the Secretary, before November 28, 1990. (3) Conditions of purchase by a resident man- agement corporation (A) A resident management corporation may purchase from a public housing agency one or more multifamily buildings in a public hous- ing project following a determination by the Secretary that— (i) the resident management corporation has met the conditions of paragraph (1); (ii) the resident management corporation has applied for and is prepared to undertake the ownership, management, and mainte- nance of the building or buildings with con- tinued assistance from the Secretary; (iii) the public housing agency has held one or more public hearings to obtain the views of citizens regarding the proposed pur- chase and, in consultation with the Sec- retary, has certified that the purchase will not interfere with the rights of other fami- lies residing in public housing, will not harm the efficient operation of other public hous- ing, and is in the interest of the community; (iv) the public housing agency has certified that it has and will implement a plan to re- place public housing units sold under this section within 30 months of the sale, which plan shall provide for replacement of 100 per- cent of the units sold under this section by— (I) production, acquisition, or rehabilita- tion of vacant public housing units by the public housing agency; and (II) acquisition by the resident manage- ment corporation of nonpublicly owned, decent, and affordable housing units, which the resident management corpora- tion shall operate as rental housing sub- ject to tenant income and rent limitations comparable to the limitations applicable to public housing; and (v) the building or buildings meet the housing quality standards applicable under section 1437d(f) of this title, and the physical condition, management, and operation of the building or buildings are sufficient to permit affordable homeownership by the families residing in the project. (B) The price of a building purchased under the preceding sentence shall be approved by the Secretary, in consultation with the public housing agency and resident management cor- poration, taking into account the fair market value of the property, the ability of resident families to afford and maintain the property, and such other factors as the Secretary deter- mines to be consistent with increasing the supply of dwelling units affordable to very low income families.