Commercial-to-housing conversion revolving loan fund and loan program. (FE)

Workforce housing is defined for both rental and owner-occupied housing based on the ratio of housing costs and the ratio of household income to the area median income of the county in which the housing is located, adjusted for family size, as published annually by the federal Department of Housing and Urban Development.

Under the bill, senior housing is housing that satisfies the definition of workforce housing but is intended and operated primarily for occupancy by at least one person 55 years of age or older per dwelling unit.

In accordance with a semiannual application process established by WHEDA, a residential housing developer may apply to WHEDA for a loan under the program, but WHEDA may not award the loan unless the developer and the political subdivision having jurisdiction of the commercial-to-housing conversion project demonstrate to the satisfaction of WHEDA in one or more forms prescribed by WHEDA that all of the following apply:

1. The developer has secured the necessary financial resources for the total cost of development of the residential housing supported by the eligible project.

2. The developer has secured all applicable federal, state, and local government permits or other approvals for the eligible project and the residential housing supported by the eligible project.

3. The eligible political subdivision has reduced the cost of residential housing in connection with the specific commercial-to-housing conversion project to be funded by the loan by voluntarily revising zoning ordinances, subdivision regulations, or other land development regulations to increase development density, expedite approvals, reduce impact fees, or reduce parking, building, or other development costs with respect to the construction of residential housing supported by the project.

4. The eligible political subdivision is in compliance with certain statutory housing planning and reporting requirements.

5. The eligible political subdivision has updated the housing element of its comprehensive plan required by statute within the immediately preceding five years.

If in any application cycle there are insufficient moneys available in the commercial-to-housing conversion revolving loan fund to fund all applications that meet the requirements of the bill and are otherwise acceptable to WHEDA, WHEDA is required to prioritize funding loans for eligible projects in eligible political subdivisions that have reduced the cost of residential housing as described in item 3 above with respect to the political subdivision as a whole.

The bill prohibits WHEDA from charging any interest on a loan awarded to a developer under the bill and limits the amount of each loan to the lesser of $1,000,000 per eligible project or 20 percent of the total project costs.

The bill requires that WHEDA enter into an agreement with each developer receiving a loan under the bill that establishes the term and other conditions of the loan. The agreement is required to include certain provisions, some of which are to be recorded with the applicable register of deeds and to run with the land, that are designed to ensure that the residential housing constructed in connection with a loan remains workforce or senior housing for at least 10 years, whether rental or owner-occupied, that require owner-occupied residential housing constructed in connection with a loan to remain owner-occupied for at least 10 years, and that limit for a 10-year period the sales price of such owner-occupied residential housing, adjusted annually by the average compounded annual percentage increase in the sale price of all residential housing in the county in which the housing is located, as determined by WHEDA.

In addition to the requirement described above that WHEDA set aside for senior housing 25 percent of any moneys appropriated to the fund in the 2023-25 fiscal biennium, the bill provides that WHEDA must, for a period of four years, set aside 30 percent of such moneys for commercial-to-housing conversion projects in cities, villages, and towns with a population of 10,000 or less.

Finally, the bill requires that WHEDA take actions to market the availability of loans under the bill and to submit annual reports to the Joint Committee on Finance and legislative committees having jurisdiction over housing relating to the loan program and the commercial-to-housing conversion revolving loan fund created under the bill.

Because this bill may increase or decrease, directly or indirectly, the cost of the development, construction, financing, purchasing, sale, ownership, or availability of housing in this state, the Department of Administration, as required by law, will prepare a report to be printed as an appendix to this bill.