Legislative News

May/June 1998

Washington News and Views
Legislative News

Congress Raids Section 8 to Fund Emergency Aid

The President signed the 1998 Emergency Supplemental Appropriations bill on May 1, and with it took $2.35 Billion of Section 8 Tenant Based Reserves to fund domestic disaster aid as part of a package which also funds an ongoing US military presence in Bosnia and the Persian Gulf. While the funds cut are from the fiscal year 1998 budget, they are from the reserve fund and will not immediately affect the housing program. HUD estimates that if the funds are not restored, though, the cut will mean the loss of about 420,000 subsidized units housing 969,000 people.

Representative Livingston (R-LA), Chair of the House Appropriations Committee, assured his Democratic colleagues who spoke out against raiding the HUD budget for the supplemental spending bill that the funds would be restored in the next appropriations process. “We’re robbing from a pot that is going to have to be replenished,” said Sen. Christopher Bond (R-MO), who chairs the Senate subcommittee on HUD appropriations, which did not recommend using the Section 8 funds. Raising replacement funds, however, would require an increase in the budget cap, or would mean cutting other programs in the HUD/VA/Independent Agencies appropriations to fund the Section 8 contract renewals for the next fiscal year.

HUD officials opposed the cut. “A rescission of this magnitude could tear apart the social safety net for some of the most vulnerable Americans,” said HUD Secretary Andrew Cuomo. Despite an early statement from President Clinton promising to veto the bill, he ultimately signed it when the Pentagon indicated that military furloughs would be required without the release of the emergency funds.

The appropriations subcommittee meetings to mark up the proposed 1999 HUD budget are expected to begin in early June. For more information contact Lisa Ranghelli, Center for Community Change, 202-342-0567; ranghellil@commchange.org

Fair Housing 30 Years Later

To mark the 30th Anniversary of the Fair Housing Act in April, HUD Secretary Andrew Cuomo and President Clinton pledged to double the number of enforcement actions HUD takes against violations of the Fair Housing Act by the year 2000. Clinton’s proposed 1999 federal budget seeks a 73 percent increase for HUD’s Office of Fair Housing and Equal Opportunity. If approved, it would be the largest single budget increase in civil rights law enforcement in two decades.

The Fair Housing Act makes it illegal to discriminate in the sale, rental, financing and advertising of almost all housing in the nation based on race, color, religion, national origin, sex, family status or disability.

In enforcing the Fair Housing Act, HUD plans to step up testing, in which a black person and a white person with nearly identical credit reports and references apply for a loan from the same lending institution and the same time, or apply for an apartment with a property manager. Such testing allows regulators to uncover more subtle forms of discrimination, Cuomo said during a speech at the National Low-Income Housing Coalition annual conference in April.

An example of this type of test conducted recently by The Fair Housing Council of Greater Washington found that in 41 percent of 150 tests, minority group members shopping for a loan were treated differently than white potential borrowers, according to an article in American Banker (3/25/98). Of the 70 lenders tested, the group found 26 instances in which minority group members got a lower level of service, 20 in which they had greater difficulty scheduling appointments, and 15 in which lenders tried to discourage the loan application. The council also found 24 other instances of bias, such as a lender requiring a black tester to consent to having a credit report pulled before a meeting but not making a similar demand of a white tester.

Cuomo announced that HUD’s crackdown on discrimination netted $9.6 million in relief for individuals in housing discrimination settlements in the past fiscal year, more than double the year before. Settlements during the year also included several billion dollars in commitments to loans for low-income and minority homebuyers, including a record high $2.1 billion commitment from AccuBanc Mortgage corporation to settle discrimination allegations. Cuomo estimates that thousands of minority and low-income families will receive mortgage loans and become homeowners as a result of these agreements.

People who believe they have been harmed by housing discrimination can file complaints with HUD by calling 800-669-9777, or visiting the HUD homepage (www.hud.gov/hdiscrim.html) to file a complaint online, or print and mail a complaint form.

 

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