PETITION OF:

Whereas, the deferred operation of this act would tend to defeat its purpose, which is to authorize municipalities to prevent the loss of publicly assisted housing by providing them with the opportunity to preserve such housing, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

SECTION 1. The general laws, as appearing in the 2004 Official Edition, are hereby amended by adding after chapter 40S the following chapter:-

CHAPTER 40T
PRESERVATION OF PUBLICLY ASSISTED HOUSING.

Section 1. As used in this chapter, the following words shall have the following meanings:-

“Affected municipality”, any city or town in which publicly assisted housing or a publicly assisted housing development is located.

“Affordability restrictions”, limits on rents that owners may charge for occupancy of a rental unit in publicly assisted housing and limits on tenant income for persons or families seeking to qualify as tenants in publicly assisted housing.

“Government program”, a program or combination of programs described in the definition of publicly assisted housing.

“Owner”, a person, firm, partnership, corporation, trust, organization or other entity that holds title to a publicly assisted housing development.

“Prepayment”, the payment in full or refinancing of the federally insured or federally held mortgage indebtedness prior to its original maturity date, or the voluntary cancellation of mortgage insurance, on a publicly assisted housing development that would have the effect of removing the affordability restrictions applicable to the assisted housing development under the programs described thereunder.

“Publicly assisted housing” or “publicly assisted housing development”, housing that receives government assistance under any of the following programs:-

(1) Section 8 of the United States Housing Act of 1937, as amended, 42 U.S.C. Section 1437f; as it applies to new construction, substantial rehabilitation, moderate rehabilitation, property disposition and loan management set-aside programs, or any other program providing project-based rental assistance;

(2) Section 42 of the Internal Revenue Code, as amended, 26 U.S.C. Section 42, the federal Low-Income Housing Tax Credit Program;

(3) Section 101 of the Housing and Urban Development Act of 1965, as amended, 12 U.S.C. Section 1701s as it applies to programs for rent supplement assistance thereunder;

(4) Section 202 of the Housing Act of 1959, as amended, 12 U.S.C. Section 1701q;

(5) Section 221(d)(3) of the National Housing Act of 1934, as amended, 12 U.S.C. Section 17151(d)(3) or (5), the below market interest rate program;

(6) Section 221(d)(4) of the National Housing Act, as amended, 12 U.S.C. Section 17151 (d)(4), to the extent the project’s rents are regulated pursuant to a government agreement;

(7) Section 236 of the National Housing Act, as amended, 12 U.S.C. Section 1715z-l;

(8) Section 515 of the Housing Act of 1949, as amended, 42 U.S.C. Section 1485;

(9) Section 521 of the Housing Act of 1949, as amended, 42 U.S.C. Section 1490a;

(10) The federal Urban Development Action Grant, “UDAG”, as amended, 42 U.S.C. Section 5318, to the extent project’s rents are regulated pursuant to a government agreement;

(11) The federal Housing Development Action Grant, “HODAG”, as amended, 42 U.S.C. Section 1437o, to the extent project’s rents are regulated pursuant to a government agreement;

(12) Chapter 121A of the general laws, to the extent project’s affordability of dwelling units is regulated; or

(13) Section 13A of Chapter 708 of the Acts of 1966.

(14) Section 61 of Chapter 62 of the General Laws.

“Tenant”, a tenant, subtenant, lessee, sub-lessee or other person entitled to possession, occupancy or benefits of a rental unit within the assisted housing.

“Termination”, any one or more of the following conditions that would have the effect of removing any affordability restrictions:-

(1) non renewal of a government program contract;

(2) termination of a government program contract;

(3) non renewal of a government program mortgage contract;

(4) termination of a government program mortgage contract;

(5) termination of an affordability restriction under a government program;

(6) payment in full of a government program mortgage;

(7) expiration of an affordability restriction under a government program;

(8) any action that may result in the full or partial termination of a government program’s regulatory or financial assistance agreement; or

(9) any action that may result in the full or partial termination of a government program’s affordability restrictions.

Section 2.

(a) An owner of publicly assisted housing may not complete prepayment, or complete a termination unless, not less than 12 months before the prepayment or termination, the owner submits to all tenants of the publicly assisted housing to the mayor or board of selectmen of any affected municipality, to the Community Economic Development Assistance Corporation, and to the department of housing and community development, a notice of intent to complete prepayment, or complete termination. Every such required notice shall:- (1) include the address of any publicly assisted housing, characteristics of the property including the number of units, and the names and addresses of the owners; (2) include the date on which the owner intends to complete prepayment, or complete termination; (3) include a detailed list of any and all affordability restrictions applicable to the property; and (4) include a statement that the affected municipality has the right to purchase the property.

(b) Notwithstanding any provision of law to the contrary, within 60 days after the date of the owner's notice pursuant to subsection (a), the affected municipality may notify the owner that it has chosen a designee to act for and on behalf of the affected municipality or that the affected municipality will act without a designee. The affected municipality, in selecting a designee, shall enter into an agreement with a nonprofit corporation, local or regional housing authority, or private purchaser in which the nonprofit corporation, local or regional housing authority, or private purchaser agrees to maintain the development in a manner that preserves the housing development's existing affordability restrictions. The agreement shall set forth the minimum length of time that the affordability restrictions shall be in effect, which shall be no less than 99 years. The affected municipality shall have the right to bring an action for specific performance or other injunctive relief for enforcement of the agreement, and the agreement must contain provisions to this effect along with such other remedies for breach as the affected municipality and the nonprofit corporation, local or regional housing authority, or private purchaser may agree. Once such an agreement is entered into, the nonprofit corporation, local or regional housing authority or private purchaser shall assume all rights and responsibilities attributed to the affected municipality under this chapter. An affected municipality purchasing publicly assisted housing or a publicly assisted housing development without choosing a designee under this chapter shall maintain the development in a manner that preserves the publicly assisted housing or housing development's existing affordability restrictions for not less than 99 years from the date of purchase of such development.

(c) Within 60 days after the affected municipality has notified the owner of its election to proceed with or without a designee, the owner shall, before completing prepayment or completing termination, provide to the affected municipality or its selected designee, a bona fide offer for sale of the property which shall contain the essential terms of the sale, including at a minimum, the following:-

(1) the sales price; (2) the terms of seller financing, if any, including the amount, the interest rate, and amortization rate thereof; (3) the terms of assumable financing, if any, including the amount, the interest rate, and the amortization rate thereof; (4) proposed improvements, if any, to the property to be made by the owner in connection with the sale; and (5) physical access to the property so that representatives of the affected municipality or its selected designee may conduct an inspection of the premises.

(d) The affected municipality or its designee, shall notify the owner in writing, within 60 days after the receipt of the bona fide offer of sale, of its intent to purchase the assisted housing.

(e) The owner shall, after receiving a notice pursuant to subsection (d), comply with any reasonable request to make documents available to the affected municipality or its designee, during normal business hours at the owner's principal place of business within 15 days of receiving such a request, including but not limited to:- (1) a floor plan of the development; (2) itemized lists of monthly operating expenses, capital expenditures in each of the 2 preceding calendar years and deferred maintenance costs; (3) the amount of project reserves; (4) utility consumption rates; (5) copies of financial and physical inspection reports filed with federal, state or local agencies; (6) the most recent rent roll; (7) a list of tenants; (8) a list of vacant units; and (9) a statement of the vacancy rate at the development for each of the 2 preceding calendar years.

(f) The municipality or its designee shall, within 90 days after it notifies the owner of its intent to purchase, provide the owner with a bona fide offer to purchase evidenced by a purchase and sale contract reflecting a sales price and terms agreed to by the parties or the sales price and terms determined pursuant to subsection (g) of this section and an earnest money deposit equal to 3 percent of the sales price in the bona fide offer to purchase, or 500,000 dollars, whichever is less. Such an earnest money deposit shall be held by an escrow agent, who is mutually acceptable to the owner and the municipality or its designee. This earnest money deposit shall be non-refundable upon execution of the purchase and sale contract by both parties, except for non-performance by the seller of the terms of the contract.

(g) If the parties are unable to agree to a sales price within the first 60 days of the 90 day period specified in subsection (f), the sale price of the assisted housing shall be based upon its fair market value, based on its highest and best use, without affordability restrictions, as determined by 2 independent appraisers qualified to perform multi‑family housing appraisals. One appraiser shall be selected and paid by the owner and the other shall be selected and paid by the municipality or its designee. If the appraisers fail to agree upon a fair market value, the owner and the municipality or its designee shall either jointly select and pay a third appraiser whose appraisal shall be binding, or agree to take an average of the 2 appraisals. All appraisers shall be certified Members of Appraisal Institute. The determination of the sales price pursuant to this subsection shall be completed within the 90 day period specified in subsection (f) of this section.

(h) The affected municipality or its designee shall agree to close on the sale within 90 days from the date the parties sign the purchase and sale agreement.

(i) If the affected municipality or its designee fails to provide notice to the owner pursuant to subsections (b), (c), or (d) or fails to meet the requirements of subsections (f), (g) or (h), the owner is released from any and all requirements and obligations under this section.

(j) Any notice provided for in this chapter shall be deemed given when a written notice is delivered in person or mailed by certified or registered mail, return receipt requested, to the party to whom notice is given.

(k) The Community Economic Development Assistance Corporation shall provide assistance to affected municipalities or its designee concerning the content, format, delivery and publication of notices referred to in this section.

(l) For the purposes of this chapter, the affected municipality or its designee, shall not be subject to the provisions of section 16 of chapter 30B.

Section 3. The provisions of this chapter shall not apply to any of the following:- a government taking by eminent domain or negotiated purchase; a forced sale pursuant to a foreclosure; or a deed-in-lieu-of foreclosure or an agreed upon renegotiation, restructuring or repayment of past due debt between a lender and an owner; -a transfer by gift, devise or operation of law; any housing development with respect to which the owner has received a written commitment from the federal Department of Housing and Urban Development, the Massachusetts Department of Housing and Community Development, the Massachusetts Housing Partnership Fund, the Massachusetts Housing Finance Agency, the Massachusetts Development Finance Agency, or other similar government or quasi-public agency in connection with a proposed sale, transfer, other disposition, or refinancing of such development, for any one or more of the following: (1) mortgage financing; (2) an allocation of low-income housing tax credits; (3) an extension or renewal of a government program contract providing affordability for the development; or (4) funding or financing directed to preserving affordability, resulting in no less than 80 percent of the development’s current affordable units; or any other disposition of publicly assisted housing in a manner pursuant to which the property after such disposition continues to be publicly assisted housing as defined in this section. Provided, if any development shall be subject to financing by any of the public agencies specifically named above, the provisions of subsection (b) of section 2 shall not take effect unless and until any public agency expressly named above shall fail to provide a commitment as set forth in this section, in (1) to (4) inclusive, within 180 days of the proposed prepayment or termination.

Section 4. If any tenant in good standing under the terms of his lease in any affordable unit, with affordability restrictions, involuntarily vacates such unit or is forced to pay market rate, so long as the tenant remains income eligible for subsidized housing the owner shall: - (a) locate, and pay the cost of relocating to, a comparable affordable unit or (b) pay the tenant the difference between the market rent and affordable rent for which the tenant qualifies for a period of 5 years.

Section 5. The attorney general of the commonwealth, the affected municipality or its designee, or one or more tenants in the publicly assisted housing, may bring a civil action against an owner who has violated this chapter. An owner found to have violated any provision of this chapter shall, in addition to any other damages, pay a civil penalty to each tenant in the publicly assisted housing in the amount of $500 per tenant, and shall also pay the attorney's fees and costs incurred in bringing the action.

Section 6. The Massachusetts Department of Housing and Economic Development shall promulgate regulations to implement the provisions of this chapter within forty-five days of the effective date of this act.