MAJOR RECONSTRUCTION OF OBSOLETE PROJECTS.

SEC. 111. MAJOR RECONSTRUCTION OF OBSOLETE PROJECTS. (a) In General.—Section 5(j)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437c(j)(2)) is amended to read as follows: “(2) (A) Notwithstanding any other provision of law, the Secretary may reserve not more than 20 percent of any amounts appropriated for development of public housing in each fiscal year for the substantial redesign, reconstruction, or redevelopment of existing obsolete public housing projects or buildings and for the costs of improving the management and operation of projects under-going redesign, reconstruction, or redevelopment under this paragraph (to the extent that such improvement is necessary to maintain the physical improvements resulting from such redesign, reconstruction, or redevelopment). “(B) For purposes of this paragraph, the term ‘obsolete public housing project or building’ means a public housing project or building (i) having design or marketability problems resulting in vacancy in more than 25 percent of the units, or (ii)(I) for which the costs for redesign, reconstruction, or redevelopment (including any costs for lead-based paint abatement activities) exceed 70 per-cent of the total development cost limits for new construction of similar units in the area, and (II) which has an occupancy density or a building height that is significantly in excess of that which prevails in the neighborhood m which the project is located, a bedroom configuration that could be altered to better serve the needs of families seeking occupancy to dwellings of the public housing agency, significant security problems in and around the project, or significant physical deterioration or inefficient energy and utility systems. “(C) The Secretary shall allocate amounts reserved under this section to public housing agencies on the basis of a competition among public housing agencies applying for such amounts. The competition shall be based on— “(i) the management capability of the public housing agency to carry out the redesign, reconstruction, or redevelopment; “(ii) the expected term of the useful life of the project or building after redesign, reconstruction or redevelopment; and “(iii) the likelihood of achieving full occupancy within the projects or buildings of the agency that are to be assisted under this paragraph. “(D) The Secretary shall establish limitations on the total costs of any project or building receiving amounts under this paragraph for redesign, reconstruction, and redevelopment. The cost limitations shall not be related to the total development cost system for new development or to the cost limits for modernization and shall recognize the higher direct costs of such work. 106 STAT. 3688 “(E) Assistance may not be provided under this paragraph for any project or building assisted under section 14. “(F) (i) For each fiscal year for which amounts are reserved or appropriated for the purposes of this paragraph, the Secretary shall establish performance goals to evaluate the effectiveness of the use of such amounts. The goals shall— “(I) be designed to maximize the effectiveness of the expenditures in a quantifiable manner; and “(II) describe the number of units to be redesigned, redeveloped, and reconstructed with such amounts and improvements in the management of projects so assisted to be accomplished with such amounts. “(ii) Not later than 60 days after the end of each such fiscal year, the Secretary shall submit a report to the Congress, which shall describe the performance goals established for the fiscal year, the activities carried out with such amounts, and a statement of whether the performance goals were met. If the performance goals were not met, the report shall contain— “(I) an explanation of why the goals were not met and a description of any managerial deficiencies or legal problems that contributed to not meeting such goals; “(II) plans and a schedule for achieving the level of performance under such performance goals; “(III) recommendations for legislative or regulatory changes necessary to achieve the performance goals or improve performance; and “(IV) a statement of whether the performance goals established for the fiscal year were impractical or infeasible, and, if so, the factors that contributed and resulted in establishing such impractical or infeasible goals and recommendations of actions to meet such goals, which may include changing the goals or altering or eliminating the program under this paragraph for major reconstruction of projects.”. (b) Modernization and Disposition Requirements.— (1) Modernizations.— Section 14(c) of the United States Housing Act of 1937 (42 U.S.C. 14371(c)) is amended— (A) in the matter preceding paragraph (1)— (i) by inserting “buildings of” after “for”; and (ii) by striking “which”; (B) in each of paragraphs (1), (2), (3), and (4), by inserting “which projects” after the paragraph designation; (C) in paragraph (3), by striking “and” at the end; (D) by redesignating paragraph (4) as paragraph (5); and (E) by inserting after paragraph (3) the following new paragraph: “(4) which buildings are not assisted under section 5(j)(2); and”. (2) Demolition and disposition.— Section 18(a) of the United States Housing Act of 1937 (42 U.S.C. 1437q(a)) is amended— (A) in paragraph (1), by striking “or” at the end; (B) in paragraph (2), by striking the period at the end and inserting “; or”; and (C) by adding at the end the following new paragraph: 106 STAT. 3689 “(3) in the case of an application proposing demolition or disposition of any portion of a public housing project, assisted at any time under section 5(j)(2)— “(A) such assistance has not been provided for the portion of the project to be demolished or disposed within the 10-year period ending upon submission of the application; or “(B) the property’s retention is not in the best interest of the tenants or the public housing agency because of extraordinary changes in the area surrounding the project or other extraordinary circumstances of the project.”. (c) Regulations.—The Secretary shall issue regulations necessary to carry out the amendments made by this section as provided under section 191 of this Act.