Housing Legislative News

House Committee Slashes HUD Funding

“Death by a thousand cuts” is how some have described the House VA-HUD-IA Appropriations Subcommittee’s mark-up on July 26. The proposed bill cuts nearly every HUD program. According to an analysis by subcommittee minority staff members, the current budget is $945 million below the FY 1999 enacted level of $27.076 billion.

Advocates are urging subcommittee members to vote no on any HUD appropriations bill that cuts program funding from FY99 levels and are asking for increased funding and new, incremental vouchers in FY 2000.

The mark-up includes no new vouchers; cuts public housing capital funds from their FY99 level and operating funds from President Clinton’s requested level; cuts homeless assistance grants by $5 million; cuts CDBG and HOME by $250 million and $20 million, respectively; cuts fair housing program funding; eliminates the regional opportunity counseling program (arguably the only HUD program expressly dedicated to income mixing, one of the main goals of the 1998 housing reform bill); cuts the rural housing and community development program; cuts housing for people with AIDS; cuts lead prevention; cuts housing counseling; etc. A few programs – elderly housing, housing for disabled people, Native American housing – remain at FY99 levels. A detailed chart of the subcommittee’s mark-up is available at www.nlihc.org/news/chart72899.htm.

The subcommittee deferred considering whether to include funds for preservation of project-based subsidized housing. Also, in deference to the House Banking and Financial Services Committee, which has jurisdiction over housing policy bills, the subcommittee stated its support for homeless assistance block granting legislation (H.R. 1073) and reserved inclusion of homeless program policy decisions from the appropriations bill for now.

The Senate is not expected to take up its VA-HUD-IA appropriations bill until after August recess, and the House floor vote has also been postponed until after members return on September 7.

– From the National Low Income Housing Coalition, 202-662-1530; www.nlihc.org; and the National Housing Conference, 202-393-5772; www.nhc.org.

CRA Update

A House and Senate conference committee will take up financial reform legislation after the August recess. The Senate version (S. 900) still includes provisions that undermine the Community Reinvestment Act (CRA). While the House version (H.R. 10) does not weaken current CRA provisions and contains some helpful new provisions, it does not require that CRA provisions apply to banking and lending services offered by insurance and securities firms, some of which are bank affiliates. President Clinton continues to promise to veto any legislation that weakens CRA.

– From the National Housing Conference, 202-466-2121; www.nhc.org.

HUD To Raise GSE’s Affordable Housing Goals

HUD proposes to raise affordable housing goals for Fannie Mae and Freddie Mac, the two government sponsored enterprises (GSEs) that dominate the secondary mortgage market. Fannie Mae has indicated support for the proposed goals, while HUD is still in discussions with Freddie Mac.

HUD’s proposal would require that 48 percent of the mortgages purchased by Fannie Mae and Freddie Mac next year be affordable for low- and moderate-income families. From the current goal of 42, that figure would rise to 50 percent in the year 2001.

Fannie and Freddie also have goals for purchasing “special affordable mortgages” for very low- and low-income families. The current goal is 14 percent. HUD proposes to raise that figure to 18 percent next year and 20 percent thereafter. Current goals also require the two GSEs to purchase 24 percent of their mortgages in underserved areas. The proposal would increase that to 29 percent next year and 31 percent in 2001.

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 mandates the affordable housing goals and gives the HUD Secretary authority to revise them in 1999. The proposed new goals would remain in place for four years, or until HUD acts to revise them. HUD estimates that, over 10 years, the new goals would result in $2.4 trillion dollars of affordable mortgages for 28 million low- and moderate-income households – $488.3 billion more mortgage dollars and 7 million more low- and moderate-income households than under current goals.

The Office of Management and Budget must review the proposed rule, which will then go to Congress for a two-week review period. HUD will publish a notice seeking public comment shortly after Labor Day. HUD also plans to hold several regional forums on the proposed goals.

– From the Center for Community Change, 202-342-0567; www.communitychange.org.

Preservation Update

The House subcommittee on Housing and Community Opportunity has delayed marking up H.R. 202, the Preserving Affordable Housing for Senior Citizens and Families into the 21st Century Act. The mark-up will blend H.R. 202 with other bills containing solutions to the problem of expiring project-based contracts, also known as “at-risk properties.” The committee will likely mark up in September. Meanwhile, the appropriations bill (see above) authorizes enhanced vouchers – vouchers with a greater subsidy level than standard to provide rent assistance up to market levels – for all tenants in units where the owner has opted-out of Section 8. Housing advocates maintain that while enhanced vouchers solve individual problems, the security may be short lived and enhanced vouchers should be a last resort. The danger of funding enhanced vouchers is that no real effort to mark-up-to-market expiring Section 8 contracts would occur.

– From the National Low Income Housing Coalition, 202-662-1530; www.nlihc.org.

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