Homestead Housing PreservationAmendment Act of 1998Bill 12-846

Chairman Linda W. Cropp at the request of the
Mayor

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