Sec. 7. Requirements for social housing providers

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In this section, the term social housing provider means— the Authority acting pursuant to section 6(b)(2); and an eligible entity, with respect to real property acquired under section 6(c)(1)(A). A social housing provider that makes social housing available for rent shall comply with the requirements of this section. The Authority shall establish affordability and accessibility standards for social housing, which shall— ensure that units of social housing, in the aggregate, are truly financially accessible to families at a range of income levels, including— families who are homeless or at risk-of homelessness; and extremely low-income families, low-income families, and moderate-income families; ensure that not less than 40 percent of dwelling units are set aside for extremely low-income families in newly constructed units of permanently affordable social housing or other housing units preserved or rehabilitated as permanently affordable social housing; ensure that not less than 70 percent of dwelling units are set aside for low-income families and extremely low-income families; and take into consideration— requirements for affordable housing under other programs for assistance for affordable housing;

Federal income thresholds in section 215(a) of the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 12745(a) ); neighborhood-scale rental markets, which may include Small Area Fair Market Rent standards published by the Department; and household financial expenditures, burdens, or costs, and historical legacies of exclusion, due to which the Secretary may establish new, comprehensive income thresholds, more generous than the thresholds described in subclause

(II)as reasonably feasible and in accordance with financial sustainability. A social housing provider shall set the initial annual rent plus the sum of fees charged to a household living in permanently affordable social housing at 25 percent of the adjusted gross income of the household. An increase in rent for a property described in paragraph

(1)may not exceed the lesser of— 3 percent per year; or the percentage increase (if any) in the Consumer Price Index since the previous rent increase. Rent for a property described in paragraph

(1)shall be recalibrated to 25 percent of the household’s adjusted gross income— not less frequently than once every 5 years; when the household’s adjusted gross income, as defined by the Secretary, changes by 10 percent or more; and when the household requests a recalibration due to economic hardship under a process established by the Authority. The rental guidelines and formula described in section 3(a) of the United States Housing Act of 1937 ( 42 U.S.C. 1437a(a) ) shall supersede paragraphs (1), (2), and

(3)of this subsection with respect to rent for a real property conveyed to a public housing agency under section 7(c) for use and operation as public housing. A social housing provider shall comply with the resident, applicant, and tenant protections under this subsection. A social housing provider may not terminate or refuse to renew a tenancy except for just cause and only pursuant to advance written notice to the tenant and evidence of such just cause, in accordance with this subparagraph. For the purposes of this paragraph, the term just cause means— at-fault just case, as described in subparagraph (C); or no-fault just cause, as described in subparagraph (D). For purposes of this paragraph, at-fault just cause grounds for eviction are any of the following: The tenant’s failure to pay rent. The tenant’s engagement in serious criminal activity on the premises that poses an imminent and direct threat to the health or safety of other tenants. The tenant causing substantial damage to the premises after being issued a written notice to correct the violation. The tenant maintaining, committing, or permitting the maintenance or commission of a nuisance at the property. The tenant permitting the premises to be used for a criminal purpose. The tenant's refusal to execute the social housing provider’s request for a written extension or renewal of a lease based on terms similar to the terms of the tenant’s prior lease without an unreasonable rent increase. The tenant's refusal to deliver possession of the premises after providing written notice to the social housing provider of the intent to terminate the tenancy and after the social housing provider’s acceptance of that notice. Before a social housing provider issues a notice to terminate a tenancy for at-fault just cause based on a curable lease violation, as defined by the Authority, the social housing provider shall first give the tenant written notice of the violation and the opportunity to cure the violation within a reasonable period of time, subject to the time periods specified in paragraph (10)(A). If a tenant does not cure a violation within the reasonable period of time set forth in a notice under subclause (I), the social housing provider may serve the tenant with a notice of termination of tenancy without a further opportunity to cure the violation. Nothing in this clause shall be construed to require notice in the case of an uncurable lease violation, as defined by the Authority. For purposes of this subparagraph, the term unreasonable rent increase means an increase in rent that exceeds the lesser of— 3 percent per year; or the percentage increase (if any) in the Consumer Price Index since the previous rent increase. Notwithstanding clauses (i), (ii), and (iii), a social housing provider may not unfairly penalize an individual or an individual’s household based on the individual’s criminal history or minor legal infractions. To carry out subclause (I), the Authority, acting through the Board by rulemaking after notice and an opportunity for public comment— may define what activities, crimes, and convictions, if any, may result in termination of a lease or exclusion of a resident from social housing; and shall establish inclusive procedures, policies, and regulations to support the reintegration of individuals with criminal records into communities to ensure they have access to stable housing. For purposes of this paragraph, no-fault just cause grounds for eviction are the following: The social housing provider intends to remove the dwelling unit from the rental market or substantially remodel or demolish the dwelling unit. The social housing provider is required to comply with a local ordinance or an order from a court or other governmental entity which requires the tenant to vacate the property. In the case of a no-fault just cause termination of tenancy, the evicting social housing provider shall assist the tenant with relocation costs regardless of the tenant’s income by providing— a direct payment of 1 month’s rent; or a written waiver of the tenant’s last month of rent. Any waiver of rights provided by this paragraph shall be void. The Authority shall ensure that with respect to any unit of permanently affordable social housing, no person may engage in any conduct because of the source of income of a person that would be unlawful under the Fair Housing Act ( 42 U.S.C. 3601 et seq. ) if the conduct were engaged in because of a protected characteristic under that Act. For purposes of this subparagraph, the term source of income includes— a housing voucher under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ) and any form of Federal, State, or local housing assistance provided to a family or provided to a housing owner on behalf of a family, including rental vouchers, rental assistance, and rental subsidies from nongovernmental organizations; any amount received by an individual (including any amount to which an individual is entitled for which payment is made to a representative payee) by reason of entitlement to— a monthly benefit under title II or XVI of the Social Security Act ( 42 U.S.C. 401 et seq. , 1381 et seq.); or a benefit under the Railroad Retirement Act of 1974 ( 45 U.S.C. 231 et seq. ); income received by court order, including spousal support and child support; any payment from a trust, guardian, or conservator; and any other lawful source of income. A social housing provider may screen applicants for permanently affordable social housing solely for the purpose of determining their ability to pay rent or otherwise comply with the material terms of the lease, provided the screening process and criteria comply with subparagraph (B). A social housing provider may not discriminate in a manner prohibited by— section 804 of the Fair Housing Act ( 42 U.S.C. 3604 ); or section 701(a) of the Equal Credit Opportunity Act ( 15 U.S.C. 1691(a) ). A social housing provider may not implement any rules or procedures that deny or discriminate against an eligible applicant for permanently affordable social housing solely on the basis of— irrelevant criminal history, in accordance with the final rule of the Department entitled Reducing Barriers to HUD-Assisted Housing , published in the Federal Register on April 10, 2024 (89 Fed. Reg. 25332); credit history; or any other information that is not directly related to, or directly predictive of, an applicant’s ability to pay rent or otherwise comply with the material terms of the lease. In the case of social housing that is a multifamily rental property, tenants shall have control of living and operating conditions in the property through a democratically elected resident organization, board, or council. Residents of permanently affordable social housing shall have the right to organize to form resident associations and tenant organizations with automatic bargaining rights to address issues related to their living environment. A household that must relocate from a dwelling unit in a property temporarily due to the Authority’s acquisition, rehabilitation, or demolition of the property shall have a right to return to the property and shall not be excluded from occupancy based on any re-screening, income eligibility, or income targeting. In the case of a household occupying a dwelling unit in a property that initially is not social housing and has a rent lower the maximum rental allowed under subsection (d), upon conversion of the property to permanently affordable social housing, the social housing provider shall phase in any potential rent increase at a rate that does not exceed, over any 5-year period, 10 percent each year. A lease for occupancy of a dwelling unit in permanently affordable social housing shall incorporate each item under this paragraph. The social housing provider shall provide adequate written notice of termination of the lease, which— except as provided in clause (ii), may not be fewer than 30 days; or if a tenant is engaging in serious criminal activity on the premises that poses an imminent and direct threat to the health and safety of other tenants, may not exceed 30 days. For any dispute, termination of assistance, eviction, or other adverse determinations related to a resident’s tenancy, welfare, or status, the social housing provider shall provide the resident an opportunity for an informal hearing. A social housing provider shall provide residents notice of the opportunity to request an informal hearing described in clause (i). This subparagraph shall not provide any right to an informal hearing for a class grievance or to settle a dispute between residents not involving the social housing provider. The Authority shall establish— a waiting list for all social housing; or a waiting list for each social housing site. The Authority shall establish a resident selection and transfer policy under which individuals on an existing waiting list maintained by a public housing agency may be transferred to a waiting list established under subclause (I). In the case of an occupied property that is converted to social housing, existing tenants shall receive priority to live in the social housing. The Authority shall determine the best policies and procedures to transition applicants from any public housing waiting list to a social housing waiting list established under clause (i)(I), and shall consider— transferring applicants from an existing site-based public housing waiting list to a new site-based social housing waiting list; transferring applicants from an existing site-based public housing waiting list to a waiting list for all social housing; transferring an existing community-wide public housing waiting list to a different community-wide social housing waiting list; and informing applicants on a community-wide public housing waiting list how to transfer their application to 1 or more newly created site-based social housing waiting lists. The owner of a real property being converted to permanently affordable social housing and the social housing provider may determine the most appropriate means of informing applicants on any public housing or social housing community-wide waiting list in the community in which the property is located about the opportunity to apply for, or be transferred to a waiting list for, the new social housing, given the number of applicants, available resources, and the admissions requirements of the property, including— contacting each applicant on the waiting list by direct mail or email; advertising the availability of housing to the population that is less likely to apply, both minority and non-minority groups, through various forms of media within the marketing area, such as radio stations, posters, and newspapers; informing local nonprofit entities and advocacy groups, such as disability rights groups; and conducting other outreach as appropriate. Any activity by a social housing provider to contact applicants on a public housing waiting list or social housing waiting list shall be conducted in a manner that ensures— effective communication with persons with disabilities; and meaningful access for persons with limited English proficiency (which may include communications in languages other than English). When using a site-based waiting list, a social housing provider shall consider waiting list and transfer policies that expand opportunities for tenants seeking an emergency transfer under, or consistent with, the owner’s emergency transfer plan, and allowing for easier moves between assisted properties. After the initial waiting list has been established for a social housing property, the social housing provider shall administer the waiting list in a manner that facilitates the fair and uniform treatment of applicants for, residents of, and units at the property, in accordance with all applicable civil rights and fair housing laws and regulations. A social housing provider shall cooperate with any reasonable requests for information made by the Authority (if applicable), an applicant, or a resident, including to support the permanently affordable social housing program evaluation, and including project financial statements, operating data, and rehabilitation work. A social housing provider that is an eligible entity shall— submit to the Authority annually an operating budget for the permanently affordable social housing and such other information as the Authority considers necessary to assess the financial health of the permanently affordable social housing; and determine annually whether the permanently affordable social housing— is generating excess cash that shall be reinvested or returned to the Authority; or is in need of operating assistance, including adequate capitalization of reserves for replacement, from the Authority. A social housing provider shall prioritize any reinvestment of surplus operating funds for social housing dwelling units for families whose household incomes are at or below 30 percent of area median income. The operation of permanently affordable social housing shall be considered a program that provides housing and community development assistance for purposes of section 3 of the Housing and Urban Development Act of 1968 ( 12 U.S.C. 1701u ). A tenant of a permanently affordable social housing who is charged a rent that exceeds the amount permitted under subsection

(d)or who is evicted in violation of subsection

(e)may bring in an appropriate district court of the United States a civil action to obtain injunctive relief, compensatory damages and punitive damages, or such other relief as the court may consider to be appropriate.

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