Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB295 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 295
5	5	May 15, 2023 - Introduced by Senators FEYEN, QUINN, JACQUE, JAGLER and NASS,
6	6	cosponsored by Representatives SUMMERFIELD, BROOKS, EMERSON, STEFFEN, C.
7	7	ANDERSON, BEHNKE, BRANDTJEN, DITTRICH, DOYLE, DUCHOW, EDMING, GREEN,
8	8	JOERS, KITCHENS, MOSES, MURPHY, ORTIZ-VELEZ, PENTERMAN, PETRYK, PLUMER,
9	9	RETTINGER, SCHRAA, SHANKLAND, SINICKI, SNYDER, SWEARINGEN and WICHGERS.
10	10	Referred to Committee on Housing, Rural Issues and Forestry.
11	11	AN ACT to create 234.662 of the statutes; relating to: commercial-to-housing
12	12	conversion revolving loan fund and loan program.
13	13	Analysis by the Legislative Reference Bureau
14	14	This bill establishes a commercial-to-housing conversion revolving loan fund
15	15	under the jurisdiction and control of the Wisconsin Housing and Economic
16	16	Development Authority. The purpose of the fund is for WHEDA to award loans as
17	17	provided in the bill to developers for the conversion of vacant commercial buildings
18	18	to new residential developments consisting of workforce or senior housing and
19	19	containing at least 16 dwelling units. The bill requires WHEDA, for a period of four
20	20	years, to set aside 25 percent of any moneys appropriated to the fund in the 2023-25
21	21	fiscal biennium for commercial-to-housing conversion projects supporting senior
22	22	housing.
23	23	The bill includes definitions of both workforce housing and senior housing.
24	24	Workforce housing is defined for both rental and owner-occupied housing based on
25	25	the ratio of housing costs and the ratio of household income to the area median
26	26	income of the county in which the housing is located, adjusted for family size, as
27	27	published annually by the federal Department of Housing and Urban Development.
28	28	Under the bill, senior housing is housing that satisfies the definition of workforce
29	29	housing but is intended and operated primarily for occupancy by at least one person
30	30	55 years of age or older per dwelling unit.
31	31	In accordance with a semiannual application process established by WHEDA,
32	32	a residential housing developer may apply to WHEDA for a loan under the program,
33	33	but WHEDA may not award the loan unless the developer and the political
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38	38	subdivision having jurisdiction of the commercial-to-housing conversion project
39	39	demonstrate to the satisfaction of WHEDA in one or more forms prescribed by
40	40	WHEDA that all of the following apply:
41	41	1. The developer has secured the necessary financial resources for the total cost
42	42	of development of the residential housing supported by the eligible project.
43	43	2. The developer has secured all applicable federal, state, and local government
44	44	permits or other approvals for the eligible project and the residential housing
45	45	supported by the eligible project.
46	46	3. The eligible political subdivision has reduced the cost of residential housing
47	47	in connection with the specific commercial-to-housing conversion project to be
48	48	funded by the loan by voluntarily revising zoning ordinances, subdivision
49	49	regulations, or other land development regulations to increase development density,
50	50	expedite approvals, reduce impact fees, or reduce parking, building, or other
51	51	development costs with respect to the construction of residential housing supported
52	52	by the project.
53	53	4. The eligible political subdivision is in compliance with certain statutory
54	54	housing planning and reporting requirements.
55	55	5. The eligible political subdivision has updated the housing element of its
56	56	comprehensive plan required by statute within the immediately preceding five
57	57	years.
58	58	If in any application cycle there are insufficient moneys available in the
59	59	commercial-to-housing conversion revolving loan fund to fund all applications that
60	60	meet the requirements of the bill and are otherwise acceptable to WHEDA, WHEDA
61	61	is required to prioritize funding loans for eligible projects in eligible political
62	62	subdivisions that have reduced the cost of residential housing as described in item
63	63	3 above with respect to the political subdivision as a whole.
64	64	The bill prohibits WHEDA from charging any interest on a loan awarded to a
65	65	developer under the bill and limits the amount of each loan to the lesser of $1,000,000
66	66	per eligible project or 20 percent of the total project costs.
67	67	The bill requires that WHEDA enter into an agreement with each developer
68	68	receiving a loan under the bill that establishes the term and other conditions of the
69	69	loan. The agreement is required to include certain provisions, some of which are to
70	70	be recorded with the applicable register of deeds and to run with the land, that are
71	71	designed to ensure that the residential housing constructed in connection with a loan
72	72	remains workforce or senior housing for at least 10 years, whether rental or
73	73	owner-occupied, that require owner-occupied residential housing constructed in
74	74	connection with a loan to remain owner-occupied for at least 10 years, and that limit
75	75	for a 10-year period the sales price of such owner-occupied residential housing,
76	76	adjusted annually by the average compounded annual percentage increase in the
77	77	sale price of all residential housing in the county in which the housing is located, as
78	78	determined by WHEDA.
79	79	In addition to the requirement described above that WHEDA set aside for
80	80	senior housing 25 percent of any moneys appropriated to the fund in the 2023-25
81	81	fiscal biennium, the bill provides that WHEDA must, for a period of four years, set - 3 -2023 - 2024 Legislature
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85	85	aside 30 percent of such moneys for commercial-to-housing conversion projects in
86	86	cities, villages, and towns with a population of 10,000 or less.
87	87	Finally, the bill requires that WHEDA take actions to market the availability
88	88	of loans under the bill and to submit annual reports to the Joint Committee on
89	89	Finance and legislative committees having jurisdiction over housing relating to the
90	90	loan program and the commercial-to-housing conversion revolving loan fund
91	91	created under the bill.
92	92	Because this bill may increase or decrease, directly or indirectly, the cost of the
93	93	development, construction, financing, purchasing, sale, ownership, or availability of
94	94	housing in this state, the Department of Administration, as required by law, will
95	95	prepare a report to be printed as an appendix to this bill.
96	96	For further information see the state fiscal estimate, which will be printed as
97	97	an appendix to this bill.
98	98	The people of the state of Wisconsin, represented in senate and assembly, do
99	99	enact as follows:
100	100	SECTION 1. 234.662 of the statutes is created to read:
101	101	234.662 Commercial-to-housing conversion revolving loan fund and
102	102	loan program. (1) DEFINITIONS. In this section:
103	103	(a) “Area median income" means the area median family income in the county
104	104	in which the housing is located, adjusted for family size, as published annually by
105	105	the federal department of housing and urban development.
106	106	(b) “Commercial” means nonresidential.
107	107	(c) “Developer” means a person other than a city, village, town, or county, that
108	108	converts a vacant commercial building to residential use.
109	109	(d) “Eligible political subdivision” means the city, village, town, or county
110	110	having jurisdiction of an eligible project, as determined by the authority.
111	111	(e) “Eligible project” means a construction project for the conversion of a vacant
112	112	commercial building to a new residential housing development that consists of
113	113	workforce housing or senior housing if all of the following apply:
114	114	1. The building has been vacant for at least one year.
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132	132	2. The building is zoned for residential use.
133	133	(f) “Residential housing” means single-family or multifamily housing for rent
134	134	or sale that is subject to taxation under ch. 70.
135	135	(g) “Residential housing development” means residential housing that consists
136	136	of 16 or more dwelling units.
137	137	(h) “Senior housing” means residential housing that satisfies par. (i) 1. to 4. that
138	138	is intended and operated primarily for occupancy by at least one person 55 years of
139	139	age or older per dwelling unit, as determined by the authority.
140	140	(i) “Workforce housing” means residential housing that satisfies all of the
141	141	following, as determined by the authority.
142	142	1. For housing intended to be rented, the estimated annual housing costs, as
143	143	defined under s. 16.301 (3), do not exceed, or are not expected to exceed, 30 percent
144	144	of 100 percent of the area median income, with family size determined using the
145	145	federal imputed income limitation, as defined in 26 USC 42 (g) (2) (C), and the
146	146	utility-related costs if not included in the rent equal the utility allowance
147	147	determined by the federal department of housing and urban development.
148	148	2. For housing intended to be occupied by the owner, the estimated annual
149	149	housing costs, as defined under s. 16.301 (3), do not exceed, or are not expected to
150	150	exceed, 30 percent of 140 percent of the area median income, with family size
151	151	determined using the federal imputed income limitation, as defined in 26 USC 42 (g)
152	152	(2) (C).
153	153	3. For housing intended to be rented, the housing is for occupancy by
154	154	individuals whose annual household income does not exceed 100 percent of the area
155	155	median income.
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182	182	SECTION 1
183	183	SENATE BILL 295
184	184	4. For housing intended to be occupied by the owner, the housing is for purchase
185	185	by individuals whose annual household income is not more than 140 percent of the
186	186	area median income.
187	187	(2) ESTABLISHMENT OF FUND. (a) There is established under the jurisdiction and
188	188	control of the authority a commercial-to-housing conversion revolving loan fund, for
189	189	the purpose of providing loans under sub. (3). The authority may use moneys in the
190	190	fund to cover actual and necessary expenses incurred to accomplish the purposes of
191	191	this section, including marketing expenses under sub. (4), and administer the fund.
192	192	The fund shall consist of all of the following:
193	193	1. All moneys appropriated to the authority for the fund.
194	194	2. All moneys received from the repayment of loans under sub. (3).
195	195	(b) Of the amounts deposited in the fund under par. (a) 1. in the 2023-25 fiscal
196	196	biennium, the authority shall return to the secretary of administration for deposit
197	197	in the general fund all such amounts not encumbered or expended for an eligible
198	198	project as of the first day of the 8th year beginning after the effective date of this
199	199	paragraph .... [LRB inserts date].
200	200	(c) No moneys in the fund may be invested under s. 234.03 (18).
201	201	(3) ESTABLISHMENT AND ADMINISTRATION OF REVOLVING LOAN PROGRAM. (a) The
202	202	authority shall establish and administer a commercial-to-housing conversion
203	203	revolving loan program for the purpose of awarding loans under this subsection.
204	204	(b) From the commercial-to-housing conversion revolving loan fund, the
205	205	authority may award loans to developers to cover construction costs for an eligible
206	206	project, including demolition. Any developer may apply to the authority for a loan
207	207	in accordance with the application process established by the authority under par.
208	208	(c), but the authority may not award the loan unless the developer and the eligible
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235	235	SECTION 1 SENATE BILL 295
236	236	political subdivision demonstrate to the satisfaction of the authority in one or more
237	237	forms prescribed by the authority that all of the following apply:
238	238	1. The developer has secured the necessary financial resources for the total cost
239	239	of the eligible project not to be covered by a loan from the authority under this
240	240	subsection.
241	241	2. The developer has secured all applicable federal, state, and local government
242	242	permits or other approvals for the eligible project.
243	243	3. The eligible political subdivision has reduced the cost of residential housing
244	244	in connection with the eligible project by voluntarily revising zoning ordinances,
245	245	subdivision regulations, or other land development regulations to increase
246	246	development density, expedite approvals, reduce impact, water connection, and
247	247	inspection fees, or reduce parking, building, or other development costs with respect
248	248	to the development of residential housing supported by the project. For purposes of
249	249	this subdivision, the political subdivision in cooperation with the developer shall
250	250	submit to the authority a cost reduction analysis in a form prescribed by the
251	251	authority and signed by the developer and the head of the political subdivision's
252	252	governing body that shows the cost reduction measures, including time saving
253	253	measures, undertaken by the political subdivision on or after January 1, 2023, that
254	254	have reduced the cost of residential housing in connection with the eligible project.
255	255	The signed analysis shall clearly show for each time saving or cost reduction measure
256	256	the estimated time or dollar amount saved by the developer and the estimated
257	257	percentage reduction in housing costs.
258	258	4. The eligible political subdivision is in compliance with the requirements
259	259	under ss. 66.1001, 66.10013, and 66.10014, to the extent those requirements apply
260	260	to the political subdivision.
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288	288	SECTION 1
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290	290	5. The eligible political subdivision has updated the housing element of its
291	291	comprehensive plan under s. 66.1001 (2) (b) within the 5 years immediately
292	292	preceding the date of the loan application.
293	293	(c) The authority shall establish a semiannual application process for the
294	294	award of loans under this subsection. If in any application cycle there are insufficient
295	295	moneys available in the commercial-to-housing conversion revolving loan fund to
296	296	fund all applications that meet the requirements under par. (b) and are otherwise
297	297	acceptable to the authority, the authority shall prioritize funding loans for eligible
298	298	projects in eligible political subdivisions that have reduced the cost of residential
299	299	housing as described in par. (b) 3. but with respect to the political subdivision as a
300	300	whole.
301	301	(d) 1. The authority shall charge no interest on a loan awarded under this
302	302	subsection.
303	303	2. No loan awarded under this subsection may exceed $1,000,000 per eligible
304	304	project or 20 percent of the total project costs, including any land purchase,
305	305	whichever is less.
306	306	(e) The authority shall set aside 25 percent of all moneys deposited in the fund
307	307	under sub. (2) (a) 1. in the 2023-25 fiscal biennium for a period of not less than 4 years
308	308	following the effective date of this paragraph .... [LRB inserts date], for loans under
309	309	this subsection for eligible projects for senior housing. For purposes of this
310	310	paragraph, if a loan supports both workforce housing and senior housing, the
311	311	amount of such loan supporting senior housing shall be calculated by prorating the
312	312	loan amount between the 2 uses based on the number of residential housing units
313	313	supported by the loan.
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339	339	SECTION 1 SENATE BILL 295
340	340	(f) The authority shall set aside 30 percent of all moneys deposited in the fund
341	341	under sub. (2) (a) 1. in the 2023-25 fiscal biennium, including 30 percent of all
342	342	moneys set aside under par. (e), for a period of not less than 4 years following the
343	343	effective date of this paragraph .... [LRB inserts date], for loans under this subsection
344	344	to developers for eligible projects in cities, villages, and towns with a population of
345	345	10,000 or less. For purposes of this paragraph, if a single loan supports eligible
346	346	projects in more than one city, village, or town, the amount of such loan attributable
347	347	to any one city, village, or town shall be calculated by prorating the loan amount
348	348	between the cities, villages, and towns based on the number of residential housing
349	349	units supported by the loan.
350	350	(g) 1. The authority and each developer receiving a loan under this subsection
351	351	shall enter into an agreement establishing the term and other conditions of the loan.
352	352	The agreement shall include, and give the authority the power to enforce, all of the
353	353	following requirements:
354	354	a. That the full amount of the loan shall become due upon the developer's sale
355	355	or transfer of all residential housing constructed in connection with the loan.
356	356	b. That all residential housing constructed in connection with the loan shall
357	357	remain workforce housing or senior housing, as applicable, for a period commencing
358	358	on the date of the loan and concluding 10 years following initial occupancy of the
359	359	residential housing constructed in connection with the loan. This restriction shall
360	360	be recorded against the residential property with the applicable register of deeds and
361	361	shall run with the land.
362	362	c. With respect to each loan under this subsection for workforce housing or
363	363	senior housing intended for rent, that the owner of the rental housing, for a period
364	364	commencing on the date of the loan and concluding 10 years following initial
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392	392	SECTION 1
393	393	SENATE BILL 295
394	394	occupancy of all of the rental units constructed in connection with the loan, shall
395	395	annually submit to the authority a certified rent roll for the housing that sets forth
396	396	for each rental unit the monthly rent required under the lease, the actual monthly
397	397	rent received for the preceding year, and an identification of the utilities and their
398	398	amounts included in the rent. This restriction shall be recorded against the
399	399	residential property with the applicable register of deeds and shall run with the land.
400	400	The authority shall use the information provided under this subd. 1. c. to confirm
401	401	that the rental housing continues to meet the housing costs limitation for purposes
402	402	of sub. (1) (h) and (i) 1. The authority shall calculate the applicable monthly
403	403	limitation on housing costs for each year by dividing the area median income for the
404	404	year by 12, with family size determined using the federal imputed income limitation,
405	405	as defined in 26 USC 42 (g) (2) (C). If in any year the area median income has
406	406	decreased compared to the prior year, the applicable housing cost limitation shall be
407	407	calculated based on the most recent area median income information prior to such
408	408	decrease.
409	409	d. With respect to each loan under this subsection for workforce housing or
410	410	senior housing intended to be owner-occupied, that for the 10-year period
411	411	commencing immediately after the developer closes on the sale of the housing to the
412	412	initial owner-occupier, the housing shall remain owner-occupied and may not be
413	413	sold for a price that exceeds the price charged by the developer to the initial
414	414	owner-occupier, adjusted annually by the average compounded annual percentage
415	415	increase in the sale price of all residential housing in the county in which the housing
416	416	is located, as determined by the authority. These restrictions shall be recorded
417	417	against the residential property with the applicable register of deeds and shall run
418	418	with the land.
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445	445	SECTION 1 SENATE BILL 295
446	446	2. Any restriction recorded against the property under subd. 1. shall terminate
447	447	on the date the property is acquired by foreclosure, or by an instrument in lieu of
448	448	foreclosure, unless the authority determines that the acquisition is part of an
449	449	arrangement a purpose of which is to terminate the restriction.
450	450	(h) In addition to other criteria explicitly provided for under this subsection,
451	451	in awarding each loan under this subsection, the authority shall take into account
452	452	only the following in descending order of priority:
453	453	1. Credit risk, collateral, and the need for a loan guarantee.
454	454	2. The estimated reduction in housing costs.
455	455	3. The need for workforce housing or senior housing in the area.
456	456	(4) MARKETING. The authority shall establish and administer a marketing
457	457	program to advertise the loans available under this section.
458	458	(5) ANNUAL REPORTS. Beginning in 2024, no later than August 1 of each year,
459	459	the authority shall submit to the joint committee on finance and under s. 13.172 (3)
460	460	to the standing committees of the legislature having jurisdiction over matters
461	461	related to housing a report that includes all of the following:
462	462	(a) A statement of the condition and balance of the commercial-to-housing
463	463	conversion revolving loan fund.
464	464	(b) Information concerning each loan awarded under sub. (3), including all of
465	465	the following:
466	466	1. The date, amount, amortization period, and current status of the loan.
467	467	2. An identification of the developer receiving the loan.
468	468	3. A description of the eligible project funded with the loan, including whether
469	469	the project is for workforce housing or senior housing.
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496	496	SECTION 1
497	497	SENATE BILL 295
498	498	4. An identification of the eligible political subdivision with respect to which
499	499	the loan was awarded.
500	500	(c) The number of dwelling units created to date as a result of the loan program,
501	501	the locations and sale or rental prices of the dwelling units, and whether the dwelling
502	502	units constitute workforce housing or senior housing.
503	503	(END)
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