PUBLIC LAW 101-625—NOV. 28, 1990 104 STAT. 4097 served with decent, safe, sanitary, and affordable housing and expand the long-term supply of affordable housing in accordance with provisions of this subtitle. SEC. 212. ELIGIBLE USES OF INVESTMENT. 42 USC 12742. (a) HOUSING USES.— (1) IN GENERAL. —Funds made available under this subtitle may be used by participating jurisdictions to provide incentives to develop and support affordable rental housing and homeownership affordability through the acquisition, new construction, reconstruction, or moderate or substantial rehabilitation of affordable housing, including real property acquisition, site improvement, conversion, demolition, and other expenses, including financing costs, relocation expenses of any displaced persons, families, businesses, or organizations, and to provide tenant-based rental assistance. (2) PREFERENCE TO REHABIUTATION. — A participating jurisdiction shall give preference to rehabilitation of substandard housing unless the jurisdiction determines that— (A) such rehabilitation is not the most cost effective way to meet the jurisdiction's need to expand the supply of affordable housing; and (B) the jurisdiction's housing needs cannot be met through rehabilitation of the available stock. The Secretary shall not restrict a participating jurisdiction's choice of rehabilitation, substantial rehabilitation, new construction, reconstruction, acquisition, or other eligible housing use unless such restriction is explicitly authorized under paragraph (3) of this subsection or under section 223(2). (3) CONDITIONS FOR NEW CONSTRUCTION.— (A) IN GENERAL. —Funds made available under this subtitle may be used (at the discretion of a participating jurisdiction) for new construction of housing only if the housing is to serve a local market area that, in the determination of the Secretary has— (i) an inadequate supply of housing at rentals below the fair market rent established for the area under section 8 of the United States Housing Act of 1937, and (ii) a severe shortage of substandard residential structures in the jurisdiction that are suitable for rehabilitation as affordable rental housing. (B) ESTABLISHMENT OF CRITERIA. —The Secretary shall publish— (i) obiective criteria for determining whether a jurisdiction s housing supply is sufficiently inadequate to permit new construction pursuant to subparagraph (A), and (ii) a list of jurisdictions that in the determination of the Secretary meet those criteria. The Secretary shall give reasonable opportunity for jurisdictions not designated on the published list to demonstrate, on the basis of additional information, that they meet the criteria. Such criteria shall permit new construction by not fewer than 30 percent of the jurisdictions receiving an allocation under section 216(1). Such criteria shall include objective data on housing market conditions such as
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