New Bill to Establish National Affordable Housing Trust Fund
Senator John F. Kerry (D-MA) introduced S. 2997, the National Affordable Housing Trust Fund Act of 2000, on July 27. Stressing the severe lack of affordable housing for extremely low-income people, Senator Kerry stated, “What I am doing today is standing before the nation and saying no more. We have the resources we need to ensure that all Americans have the opportunity to live in decent and safe housing, yet we are not devoting these resources to fixing the problem.”
Senator Kerry proposes that excess revenue from the Mutual Mortgage Insurance Fund of FHA and from Ginnie Mae be dedicated to the trust fund. Eligible activities are construction of new housing, purchase of real property, site preparation and demolition, substantial rehab, and up to three years of rental subsidy. Three quarters of the funds are to be distributed to the states on a formula, matching grant basis and the rest will be distributed to nonprofit intermediaries through a national competition. In both cases, 75 percent of the funds must be used for rental housing that is affordable to extremely low-income people, remains affordable for 40 years, and is in mixed-income developments. If the project is part of a community revitalization plan, this targeting can be relaxed.
Included in the bill is the concept of “continued assistance rental subsidy,” which combines the good features of project-based assistance to underwrite housing production and tenant-based assistance to allow tenants housing choice.
A section-by-section description of S. 2997 can be found on the NLIHC website at www.nlihc.org/news/s2997.htm. Co-sponsors are Senators Bryan (D-NV), Chafee (R-RI), Jeffords (R-VT), Leahy (D-VT), Reed (D-RI) and Sarbanes (D-MD).
As reported in the last issue, the House passed its HUD FY 2001 appropriations bill, H.R. 4635, on June 21, cutting many HUD programs, providing no new rental assistance for families, and keeping many programs at last year’s funding levels. As of press time, it is unclear when the Senate Appropriations Committee and its VA-HUD Subcommittee will take up HUD. For more information, see the budget chart at www.nlihc.org/news/52600chart.htm.
– National Low Income Housing Coalition,
House Passes Tax Subsidies For “Community Renewal”
On July 25, 2000 the House passed H.R. 4923, a tax subsidy bill ostensibly for “renewal of distressed communities.” The bill would amend many parts of the Internal Revenue Code.
A review of H.R. 4923’s table of contents shows that it would:
- Create 40 empowerment zone-like constructs called “Renewal Communities.” (A minimum of eight of these would be in rural areas.) Businesses in Renewal Communities would be able to use several tax subsidies, including avoidance of capital gains taxes on certain investments, deduction of 50-100 percent of expenditures (up to $10 million) on certain building improvements and a 15 percent tax credit on the first $10,000 paid to anyone employed in a Renewal Community.
- Add nine “old fashioned” Empowerment Zones and extend the life of the previous 31 Zones through the year 2009. Also, the old Zones would gain increased tax subsidies.
- Create a “New Market” tax credit. (See Shelterforce #110)
- Accelerate the phase-in of the increase in the volume cap for “private activity bonds.”
- Authorize the creation of America’s Private Investment Companies (APICs).
- Increase the Low Income Housing Tax Credit from $1.25 per capita to $1.75 per capita, as well as index future allocations to inflation.
- Do a host of other things such as transfer unoccupied and substandard HUD-held housing to local governments and community development corporations.
The emphasis seems to be on benefiting places, not people, and it is not clear that there is any targeting of benefits to low-income people.
– Center for Community Change,