Homestead Housing Preservation Amendment Act of 1998
Bill 12-846

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A PROPOSED BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

Chairman Linda W. Cropp, at the Request of the Mayor, introduced the following bill, which was referred to the Committee on Economic Development.

To amend the Homestead Housing Preservation Act of 1986 to authorize the development of certain properties as condominiums or for commercial use, to expand the definition of Homesteader to include non-profit organizations and developers as commercial homesteaders; and to amend Title 47, Section 47-848 of the District of Columbia Code, as enacted, to authorize the transfer of Homestead Administration property to non-profit organizations or developers in exchange for providing needed community services in the District.

BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, that this act may be cited as the "Homestead Housing Preservation Amendment Act of 1998".

Sec. 2. The Homestead Housing Preservation Act of 1986, effective August 9, 1986, D.C. Law 6-135, D.C. Code §45-2701 (1996 Repl.) is amended as follows:

(a) Section 3 (D.C. Code §45-2702) is amended by adding new subsections (4) and (5) to read as follows:

"(4) To facilitate community development that would create jobs for low and moderate income District of Columbia residents, as well as enhance the quality of life in residential areas by establishing businesses and other community services designed to meet the needs of the neighborhood."

"(5) To provide non-profit organizations and developers the opportunity to purchase property in the program in exchange for providing needed community service to District residents."

(b) Section 4 (D.C. Code §45-2703) is amended by adding new subsections (la), (lb), (1c), and (4a) to read as follows:

"(la) "Commercial property" means income producing property identified under zoning classifications, which would allow for such uses as office buildings, retail stores, restaurants, and service facilities pursuant to 11 DCMR Chapter 7 (Commercial Districts) (1995)."

"(lb) "Community service" means reasonable and needed services to District residents for at least ten (10) years. Examples of reasonable and needed services include, but are not limited to, providing free food and clothing to the community; providing free shelter to the homeless on a temporary or long term basis; providing low or no-cost educational programs; providing vocational training programs for District residents with mental or physical handicaps; or providing housing for transition programs for District residents with mental of physical handicaps."

"(1c) "Condominium or unit owners association'' means an association of owners of individual units organized and incorporated in accordance with Chapter 11 of Title 29 for the purpose of self government of the condominium in accordance with D.C. Law 1-89, Title III, 301, 23 DCR 95326; March 8, 1991, D.C. Law 8-233, 38 DCR 261; D.C. Code §45-1841 et seq. (1996)."

"(4a) "Homesteader (Commercial)" means a non-profit organization or developer entitled to purchase both commercial and multi-family residential property included in the program established under §45-2704 in exchange for providing community service to the District and maintaining ownership of that property for at least 10 years under terms of an abatement agreement entered into between the Administrator and the nonprofit organization or developer."

(c) Section 4(3) (D.C. Code §45-2703(4)) is amended by striking the word "Homesteader" and inserting the words "Homesteader (Residential)" in its place.

(d) Section 4(11) (D.C. Code §45-2703(12)) is amended by adding the words "condominium or" after the phrase ""Tenant association" means a" and before the phrase "cooperative housing association".

(e) Section 6(a) (D.C. Code §45-2705(a) is amended by striking the phrase "a semi-" after the phrase "D.C. Register on" and before the phrase "annual basis"; and inserting the word "an" in lieu thereof.

(f) Section 7 (D.C. Code §45-2706) is amended as follows:

(1) Subsection 2 (D.C. Code §45-2706 (a)(2)) is amended by adding the phrase "condominium and" after the phrase "act, proposals from" and before the phrase "cooperative housing associations".

(2) Subsection 3 (D.C. Code §45-2706 (a)(3)) is amended by adding the phrase "condominium and" after the phrase "no proposals from" and before the phrase "cooperative housing associations", and adding the phrase "condominium and" after the phrase "for the development of" and before the phrase "cooperative housing opportunities".

(3) A new subsection (4) is added to read as follows:

"(4) Proposals for commercial property shall be considered on a competitive basis in accordance with the following rules of priority:

(1) A proposal from a tenant or tenant association which demonstrates the ability to obtain financing shall be considered first.

(2) If there is no proposal from a qualified tenant or tenant association, or if the proposal does not meet criteria set forth in the RFP and rules promulgated pursuant to this act, proposals from condominium or cooperative associations and nonprofit developers which demonstrate the ability to obtain financing shall be considered next.

(3) If there is no proposal from a condominium or cooperative association or non-profit developer, or if the proposal does not meet criteria set forth in the RFP and rules promulgated pursuant to this act, proposals from proprietary developers shall be considered next."

(g) Section 8 (a) (D.C. Code §45-2707 (a)) is amended by adding the word "residential" into the first sentence after the phrase "shall sell each" and before the phrase "building in the program''; by adding the phrase "and each commercial building for up to $5,000 per unit" at the end of that sentence; by adding the word "Commercial" at the beginning of the second sentence before the phrase "Single-family and small"; and by deleting the following sentence "At least 1 dwelling unit in small multifamily dwellings of 2 to 4 dwelling units shall be transferred to a low-or moderate-income person".

(h) Section 8 (b) (D.C. Code §45-2707 (b)) is amended by adding the phrase "renting commercial space or" in the first sentence after the word "Individuals" and before the phrase "residing in buildings in which"; and by adding the phrase "condominium association," after the phrase "agrees to join a" and before the phrase "tenant association or".

(i) Section 8(c) (D.C. Code §45-2707(c)) is amended by adding a comma after the phrase "nonprofit developer"; by adding the word "condominium association," after the phrase "nonprofit developer" and before the phrase "or cooperative housing association".

(j) Section 8 (d) (D.C. Code §45-2707 (d)) is amended by adding the phrase "and commercial properties shall be offered to developers through a competitive bidding process" after the phrase "first-time home buyers," and before the phrase "as defined in rules promulgated".

(k) Section 9(a) (D.C. Code §45-2708 (a)) is amended as follows:

(1) Subsection 1, (D.C. Code §45-2708 (a)(1)) is amended by adding the word "(residential)" after the word "homesteader" and before the word "shall".

(2) New subsections (la) and (lb) are added to read as follows:

"(la) The homesteader (Commercial) shall maintain title and ownership of the property for a period commencing with the date of property settlement and ending on the 10th anniversary of the settlement date. If the property cannot be lawfully occupied on the settlement date, the homesteader (Commercial") shall be considered in compliance with this ownership provision if the non-profit organization or developer takes physical possession of the property within a reasonable period of time after the property has been brought into compliance with the Building Code for the District of Columbia, effective September 21, 1977 (D.C. Law 2-18, 12 DCMR) ("Building Code"), and the District of Columbia Housing Code (14 DCMR Chapters 1-14) ("Housing Code")."

"(lb) The homesteader (Commercial) shall provide needed community services for at least ten (10) years to the residents of the District."

(3) Subsection 4 (D.C. Code §45-2708(a)(4)) is amended by adding the word "(Residential)" after the word "homesteader" and before the word "shall".

(4) A new subsection (4a) is added to read as follows:

"(4a) The homesteader (Commercial) shall not sell, convey, or otherwise alienate the property, or place liens or encumbrances on it, for at least 10 years from the date of property settlement without written approval of the District."

(5) Subsection 5 (D.C. Code §45-2708 (a)(5)) is amended by adding the phrase "or 10" after the number "5" and before the phrase "year period".

(6) Subsection 6 (D.C. Code §45-2708 (a)(6)) is amended by adding the phrase "or 10" after the number "5" and before the phrase "year period".

(l) Section 9(b) (D.C. Code §45-2708(b)) is amended by adding the word "residential" in the first sentence after the phrase "Organizations to which" and before the phrase "buildings have been transferred"; and by adding a second sentence to read as follows: "Organizations to which commercial properties have been transferred shall certify that they will meet the terms of an abatement agreement that would require the rehabilitation of the property."

Sec. 3 D.C. Code §47-848 (199 ), as enacted, is amended to read as follows:

§47-848 Same — Transference of Ownership

The Council is hereby authorized to establish a program whereby title to properties acquired by tax sale pursuant to §47-847 may, for whatever consideration or sum it deems appropriate, be transferred to persons, non-profit organizations or non-profit developers, meeting criteria which shall be established by the Council, and who:

(l) guarantee to pay taxes on the property;

(2) live in the property for at least five (5) years, (for residential property owners) or maintain active ownership and legal possession of the property for at least 10 years and provide needed community services in the District for at least 10 years (for non-profit organizations or developers); and

(3) give assurance of bringing the property into reasonable compliance with the building code in the District.

Sec. 4 Effective date.

This act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council of the District of Columbia to override the veto), approval by the Financial Responsibility and Management Assistance Act as provided in section 203(a) of the District of Columbia Financial Responsibility and Management Assistance Authority Act of 1995, approval April 17, 1995 (109 Stat. 116; D.C. Code §47-392.3(a)), and a 30-day Congressional review period as provided in section 602(c)(1) of the District of Columbia Self-Government and Governmental Reorganization Act, approved December 24, 1973 (87 Stat. 813; (D.C. Code, sec 1-233(c)(1)) and publication in the District of Columbia Register.

OFFICE OF THE CHIEF FINANCIAL OFFICER
OFFICE OF BUDGET AND PLANNING

1. SPONSOR: Department of Housing and Community Development

2. BILL NUMBER:

3. TITLE: "Homestead Housing Preservation Amendment Act of 1998".

4. OVERVIEW:

The legislation facilitates the city's ability to reclaim tax delinquent commercial properties.

What does the proposed legislation expect to accomplish or change and which agency(s) is affected?

The proposed legislation extends the reach of DHCD's Homestead Housing Preservation Program to include commercial properties. It also allows program participants to f finance multi-family properties as condominiums.

5. ANALYSIS:

The District's homeownership and development efforts would be complimented and accelerated by simultaneous development along neighborhood commercial corridors.

We are in the acquisitive stage of our FY '99 process and plans include at least two commercial properties. The ability to develop condominiums would not affect our process; it would be an option to be exercised by entities developing our multi-family properties. Neither option would change our costs.

5. FISCAL IMPACT:

By broadening the range of properties that could be developed by the Homestead, it would increase our income. Owners of 8 of very 10 properties we pursue pay off delinquent taxes to avoid loss of property.

5.a. COSTS:

5.b. Revenue:

Section 2. Fiscal Estimates of the Bill to the District ($000s)

Assumption Concerns:

COUNCIL OF THE DISTRICT OF COLUMBIA
OFFICE OF THE BUDGET
FISCAL ESTIMATE WORKSHEET

NO IMPACT

COUNCIL OF THE DISTRICT OF COLUMBIA
OFFICE OF THE BUDGET
FISCAL IMPACT STATEMENT

Bill Number: Type: Emergency ( ) Temporary ( ) Permanent ( ) Date Reported:

Subject/Short Title: Homestead Housing Preservation Amendment of 1998

Part 1. Summary of the Fiscal Estimates of the Bill

1. It will impact spending. (If "Yes," complete Section 1 in the Fiscal Estimate Worksheet). Yes
a) It will affect local expenditure. Yes
b) It will affect federal expenditures. No
c) It will affect private/other expenditures. No
d) It will affect intra-District expenditures. No

2. It will impact revenue. (If "Yes," complete Section 2 in the Fiscal Estimate Worksheet). Yes
a) It will impact local revenue. Yes
b) It will impact federal revenue. No
c) It will impact private/other revenue. No
d) It will impact intra-District revenue. No

3. The bill will have NO or little fiscal impact on spending or revenue. (If "Yes," explain below).

Explanation for NO fiscal impact. The proposed legislation will have no fiscal impact on spending as it merely broadens the range of properties which can be acquired. The program will operate under current budget with no additional staff.

Part II. Other Impact of the Bill

If you check "Yes" for each question, please explain on separate sheet.

I. It will affect an agency and/or agencies in the District. No
2. Will there be performance measures/output for this bill? Yes
3. Will it have results/outcome, i.e., what would happen if this bill is enacted or not enacted?
4. Will the Budget and Financial Plan be affected by this bill? Yes
5. The bill have NO performance or outcome impact. No