Rental Housing Support Program Act.

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  4. Rental Housing Support Program Act.

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(310 ILCS 105/1)

Sec. 1. Short title. This Act may be cited as the Rental Housing Support Program Act.

(Source: P.A. 94-118, eff. 7-5-05.)

 

(310 ILCS 105/5)

Sec. 5. Legislative findings and purpose. The General Assembly finds that in many parts of this State, large numbers of citizens are faced with the inability to secure affordable rental housing. Due to either insufficient wages or a shortage of affordable rental housing stock, or both, many families have difficulty securing decent housing, are subjected to overcrowding, pay too large a portion of their total monthly income for housing and consequently suffer the lack of other basic needs, live in substandard or unhealthy housing, or experience chronic housing instability. Instability and inadequacy in housing limits the employability and productivity of many citizens, adversely affects family health and stress levels, and impedes children's ability to learn; such instability produces corresponding drains on public resources and contributes to an overall decline in real estate values. Unaffordable rental rates lead to frequent tenant turnover and difficulty filling vacancies, resulting in unstable income streams for rental property owners, the limited ability of owners to properly maintain their properties, substandard rental housing, and greater rates of foreclosure. High tenant turnover, poorly maintained properties, vacant and abandoned properties, and overcrowded housing negatively impact the safety and health of communities and the real estate values within such communities. Among others, the program created by this Act benefits (i) all individuals who record real estate related documents by helping to stabilize real estate values in the State, (ii) rental property owners by subsidizing the portion of rent that many of their tenants are unable to pay, (iii) those individuals who own real estate in the State by providing an option for affordable rental housing should they one day face foreclosure, and (iv) tenants who participate in the program by providing them with rental assistance and the ability to achieve financial stability so that they are able to become property owners themselves. It is the purpose of this Act to create a State program to help localities address the need for decent, affordable, permanent rental housing.

(Source: P.A. 97-892, eff. 8-3-12; 98-5, eff. 3-22-13.)

 

(310 ILCS 105/7)

Sec. 7. Definitions. In this Act:

"Annual receipts" means revenue derived from the Rental Housing Support Program State surcharge from July 1 to June 30.

"Authority" means the Illinois Housing Development Authority.

"Developer" means any entity that receives a grant under Section 20.

"Program" means the Rental Housing Support Program.

"Real estate-related document" means any recorded document that affects an interest in real property excluding documents which solely affect or relate to an easement for water, sewer, electricity, gas, telephone or other public service.

"Unit" means a rental apartment unit receiving a subsidy by means of a grant under this Act. "Unit" does not include housing units intended as transitional or temporary housing.

(Source: P.A. 99-97, eff. 7-22-15.)

 

(310 ILCS 105/10)

Sec. 10. Creation of Program and distribution of funds.

(a) The Rental Housing Support Program is created within the Illinois Housing Development Authority. The Authority shall administer the Program and adopt rules for its implementation.

(b) The Authority shall distribute amounts for the Program solely from annual receipts on deposit in the Rental Housing Support Program Fund that are appropriated in each year for distribution by the Authority for the Program, and not from any other source of funds for the Authority, as follows:

  • (1) A proportionate share of annual receipts on deposit appropriated to the Fund each year, as determined under subsection (d) of Section 15 of this Act, shall be distributed to municipalities with a population greater than 2,000,000. Those municipalities shall use at least 10% of those funds in accordance with Section 20 of this Act, and all provisions governing the Authority's actions under Section 20 shall govern the actions of the corporate authorities of a municipality under this Section. As to the balance of the annual distribution, the municipality shall designate a non-profit organization that meets the specific criteria set forth in Section 25 of this Act to serve as the "local administering agency" under Section 15 of this Act.
  • (2) Of the remaining annual receipts on deposit appropriated to the Fund each year after the distribution in paragraph (1) of this subsection, the Authority shall designate at least 10% for the purposes of Section 20 of this Act in areas of the State not covered under paragraph (1) of this subsection.
  • (3) The remaining annual receipts on deposit appropriated to the Fund each year after the distributions in paragraphs (1) and (2) of this subsection shall be distributed according to Section 15 of this Act in areas of the State not covered under paragraph (1) of this subsection.

(Source: P.A. 99-97, eff. 7-22-15.)

 

(310 ILCS 105/15)

Sec. 15. Grants to local administering agencies.

(a) Under the program, the Authority shall make grants to local administering agencies to provide subsidies to landlords to enable the landlords to charge rent affordable for low-income tenants. Grants shall also include an amount for the operating expenses of local administering agencies. On an annual basis, operating expenses for local administering agencies shall not exceed 10% for grants under $500,000 and shall not exceed 7% for grants over $500,000. If a grant to a local administering agency covers more than one year, the Authority shall calculate operating expenses on an annual pro rata share of the grant. If the annual pro rata share is $500,000 or less, then the fee shall be 10%; if the annual pro rata share is greater than $500,000, then the fee shall be 7%.

(b) The Authority shall develop a request-for-proposals process for soliciting proposals from local administering agencies and for awarding grants. The request-for-proposals process and the funded projects must be consistent with the criteria set forth in Section 25 and with additional criteria set forth by the Authority in rules implementing this Act.

(c) Local administering agencies may be local governmental bodies, local housing authorities, or not-for-profit organizations. The Authority shall set forth in rules the financial and capacity requirements necessary for an organization to qualify as a local administering agency and the parameters for administration of the grants by local administering agencies.

(d) The Authority shall distribute grants to local administering agencies according to a formula based on U.S. Census data. The formula shall determine percentages of the funds to be distributed to the following geographic areas: (i) Chicago; (ii) suburban areas: Cook County (excluding Chicago), DuPage County, Lake County, Kane County, Will County, and McHenry County; (iii) small metropolitan areas: Springfield, Rockford, Peoria, Decatur, Champaign-Urbana, Bloomington-Normal, Rock Island, DeKalb, Madison County, Moline, Pekin, Rantoul, and St. Clair County; and (iv) rural areas, defined as all areas of the State not specifically named in items (i), (ii), and (iii) of this subsection. A geographic area's percentage share shall be determined by the total number of households that have an annual income of less than 50% of State median income for a household of 4, as determined by the U.S. Department of Housing and Urban Development, and that are paying more than 30% of their income for rent. The geographic distribution shall be re-determined by the Authority each time new U.S. Census data becomes available. The Authority shall phase in any changes to the geographic formula to prevent a large withdrawal of resources from one area that could negatively impact households receiving rental housing support. Up to 20% of the funds allocated for rural areas, as defined in this subsection, may be set aside and awarded to one administering agency to be distributed throughout the rural areas in the State to localities that desire a number of subsidized units of housing that is too small to justify the establishment of a full local program. In those localities, the administering agency may contract with local agencies to share the administrative tasks of the program, such as inspections of units.

(e) In order to ensure applications from all geographic areas of the State, the Authority shall create a plan to ensure that potential local administering agencies have ample time and support to consider making an application and to prepare an application. Such a plan must include, but is not limited to: an outreach and education plan regarding the program and the requirements for a local administering agency; ample time between the initial notice of funding ability and the deadline to submit an application, which shall not be less than 9 months; and access to assistance from the Authority or another agency in considering and preparing the application.

(f) In order to maintain consistency for households receiving rental housing support, the Authority shall, to the extent possible given funding resources available in the Rental Housing Support Program, continue to fund local administering agencies at the same level on an annual basis, unless the Authority determines that a local administering agency is not meeting the criteria set forth in Section 25 or is not adhering to other standards set forth by rule by the Authority.

(Source: P.A. 97-952, eff. 1-1-13.)

 

(310 ILCS 105/20)

Sec. 20. Grants for affordable housing developments.

(a) The Authority may award grants under the program directly for the development of affordable rental housing for long-term operating support to enable the rent on such units to be affordable. Developers of such new housing shall apply directly to the Authority for this type of grant under the program.

(b) The Authority shall prescribe by rule the application requirements and the qualifications necessary for a developer and a development to qualify for a grant under the program. In any event, however, to qualify for a grant, the development must satisfy the criteria set forth in Section 25, unless waived by the Authority based on special circumstances and in furtherance of the purpose of the program to increase the supply of affordable rental housing. In awarding grants under this Section and in addition to any other requirements and qualifications specified in this Act and by rule, the Authority shall also consider the improvement of the geographic diversity of the developments under this Section among the decision criteria.

(c) The Authority must use at least 10% of the funds generated for the Program in any given year for grants under this Section. In any given year, the Authority is not required to spend the 10% of its funds that accrues in that year but may add all or part of that 10% to the 10% allocation for subsequent years for the purpose of funding grants under this Section.

(Source: P.A. 94-118, eff. 7-5-05.)

 

(310 ILCS 105/25)

Sec. 25. Criteria for awarding grants. The Authority shall adopt rules to govern the awarding of grants and the continuing eligibility for grants under Sections 15 and 20. Requests for proposals under Section 20 must specify that proposals must satisfy these rules. The rules must contain and be consistent with, but need not be limited to, the following criteria:

  • (1) Eligibility for tenancy in the units supported by grants to local administering agencies must be limited to households with gross income at or below 30% of the median family income for the area in which the grant will be made. Fifty percent of the units that are supported by any grant must be set aside for households whose income is at or below 15% of the area median family income for the area in which the grant will be made, provided that local administering agencies may negotiate flexibility in this set-aside with the Authority if they demonstrate that they have been unable to locate sufficient tenants in this lower income range. Income eligibility for units supported by grants to local administering agencies must be verified annually by landlords and submitted to local administering agencies. Tenants must have sufficient income to be able to afford the tenant's share of the rent. For grants awarded under Section 20, eligibility for tenancy in units supported by grants must be limited to households with a gross income at or below 30% of area median family income for the area in which the grant will be made. Fifty percent of the units that are supported by any grant must be set aside for households whose income is at or below 15% of the median family income for the area in which the grant will be made, provided that developers may negotiate flexibility in this set-aside with the Authority or municipality as defined in subsection (b) of Section 10 if it demonstrates that it has been unable to locate sufficient tenants in this lower income range. The Authority shall determine what sources qualify as a tenant's income. Once a tenant has received assistance under the Program, the tenant shall remain eligible for assistance under the Program until the tenant reaches an income level of 35% of area median family income and will then begin the transition out of the Program, as described in the rules governing the Program.
  • (2) Local administering agencies should include 2-bedroom, 3-bedroom, and 4-bedroom units among those intended to be supported by grants under the Program. In grants under Section 15, the precise number of these units among all the units intended to be supported by a grant must be based on need in the community for larger units and other factors that the Authority specifies in rules. The local administering agency must specify the basis for the numbers of these units that are proposed for support under a grant. Local administering agencies must make a good faith effort to comply with this allocation of unit sizes. In grants awarded under Section 20, developers and the Authority or municipality, as defined in subsection (b) of Section 10, shall negotiate the numbers and sizes of units to be built in a project and supported by the grant.
  • (3) Under grants awarded under Section 15, local administering agencies must enter into a payment contract with the landlord that defines the method of payment and must pay subsidies to landlords on a quarterly basis and in advance of the quarter paid for.
  • (4) Local administering agencies and developers must specify how vacancies in units supported by a grant must be advertised and they must include provisions for outreach to local homeless shelters, organizations that work with people with disabilities, and others interested in affordable housing.
  • (5) The local administering agency or developer must establish a schedule for the tenant's rental obligation for units supported by a grant. The tenant's share of the rent must be a flat amount, calculated annually, based on the size of the unit and the household's income category. In establishing the schedule for the tenant's rental obligation, the local administering agency or developer must use 30% of gross income within an income range as a guide, and it may charge an additional or lesser amount.
  • (6) The amount of the subsidy provided under a grant for a unit must be the difference between the amount of the tenant's obligation and the total amount of rent for the unit. The total amount of rent for the unit must be negotiated between the local administering authority and the landlord under Section 15, or between the Authority or municipality, as defined in subsection (b) of Section 10, and the developer under Section 20, using comparable rents for units of comparable size and condition in the surrounding community as a guideline.
  • (7) Local administering agencies and developers, pursuant to criteria the Authority develops in rules, must ensure that there are procedures in place to maintain the safety and habitability of units supported under grants. Local administering agencies must inspect units before supporting them under a grant awarded under Section 15.
  • (8) Local administering agencies must provide or ensure that tenants are provided with a "bill of rights" with their lease setting forth local landlord-tenant laws and procedures and contact information for the local administering agency.
  • (9) A local administering agency must create a plan detailing a process for helping to provide information, when necessary, on how to access education, training, and other supportive services to tenants living in units supported under the grant. The plan must be submitted as a part of the administering agency's proposal to the Authority required under Section 15.
  • (10) Local administering agencies and developers may not use funding under the grant to develop or support housing that requires that a tenant has a particular diagnosis or type of disability as a condition of eligibility for occupancy unless the requirement is mandated by another funding source for the housing. Local administering agencies and developers may use grant funding to develop integrated housing opportunities for persons with disabilities, but not housing restricted to a specific disability type.
  • (11) In order to plan for periodic fluctuations in annual receipts on deposit appropriated to the Fund each year, the Authority shall establish by rule a mechanism for establishing a reserve fund and the level of funding that shall be held in reserve either by the Authority or by local administering agencies.
  • (12) The Authority shall perform annual reconciliations of all distributions made in connection with the Program and may offset future distributions to balance geographic distribution requirements of this Act. (Source: P.A. 102-270, eff. 1-1-22.)

 

(310 ILCS 105/85)

Sec. 85. (Amendatory provisions; text omitted).

(Source: P.A. 94-118, eff. 7-5-05; text omitted.)

 

(310 ILCS 105/90)

Sec. 90. (Amendatory provisions; text omitted).

(Source: P.A. 94-118, eff. 7-5-05; text omitted.)

 

(310 ILCS 105/95)

Sec. 95. Severability. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application.

(Source: P.A. 97-892, eff. 8-3-12.)

 

(310 ILCS 105/99)

(This Act was approved by the Governor on July 5, 2005, so the actual effective date of this Act is July 5, 2005)

Sec. 99. Effective date. This Act takes effect July 1, 2005.

(Source: P.A. 94-118, eff. 7-5-05.)


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