December 16, 2005

Hearings

The most noteworthy housing-related news this week pertains to Hurricane Katrina hearings in the Housing Financial Services Subcommittee on Housing and Community Opportunity. The Subcommittee held two hearings on the subject, “Housing Options in the Aftermath of Hurricanes Katrina and Rita.” HUD declined to send a witness to the first hearing, which made the second necessary. David E. Garratt, Acting Director, Recovery Division, FEMA, Department of Homeland Security was the only witness at the first hearing. His testimony is available at: http://financialservices.house.gov/hearings.asp?formmode=detail&hearing=433.

After receiving considerable negative publicity for dodging the Subcommittee’s invitation, HUD did send two witnesses to a subsequent hearing. Brian D. Montgomery, Assistant Secretary, Housing/Federal Housing Commissioner; and Orlando J. Cabrera, Assistant Secretary, Public and Indian Housing testified on behalf of HUD. Their written statements are available at: http://financialservices.house.gov/hearings.asp?formmode=detail&hearing=434.

Katrina Tax Bill

Also, the House overwhelmingly passed legislation amending the Internal Revenue Code of 1986 to provide tax benefits for the Gulf Opportunity Zone and certain areas affected by Hurricanes Rita and Wilma (HR 4440). According to a summary of the bill provided by the Congressional Research Service, there are noteworthy housing provisions. For instance, HR 4440,

"Allows the issuance of mortgage revenue bonds and qualified veterans' mortgage bonds in the GO Zone on a preferential basis and increases limits for home improvement loans to $150,000.

Allows one additional advance refunding of existing bond obligations for states in the GO Zone.

Increases amounts and allocations of the low-income tax credit for 2006-2008 in the GO Zone. Designates the GO Zone as a difficult development area for purposes of increasing such credit.”

November 18, 2005

Recess

Congress has left town for Thanksgiving. They will come back to DC on December 12 to wrap up unfinished legislative business.

LEP Updates

On Nov. 17, NAHMA sent a letter signed by eight national trade associations (including ourselves) to the Chairs and Ranking Members of House Financial Services Subcommittees on Housing and Opportunity and Oversight and Investigations. The letter expressed our concerns about HUD's plans to implement its final Limited English Proficiency (LEP) Guidance and asked the Subcommittees to seek a staff briefing from HUD before the Department releases the final guidance.

Reaction to our request has been favorable. The Housing Subcommittee Majority staff indicated they would put together the requested briefing.

Also this week, 18 members of the Congressional Hispanic Caucus (CHC) sent a letter to Secretary Jackson raising concerns about HUD’s LEP. The letter was a joint effort by Rep. Bob Menendez and Rep. Nydia Velazquez (Chair of the CHC Housing Committee). It commends HUD for attention to LEP, but says HUD should produce standard translations. It notes HUD’s current plans will be burdensome for owners and result in poor quality translations.

Appropriations

House and Senate negotiators filed the conference report on HR 3058, the FY 06 Transportation, Treasury, HUD appropriations bill. According to a press release issued by the House Appropriations Committee, funding for HUD programs is as follows:

"The Department of Housing and Urban Development (HUD) is funded at $34.0 billion, $2.1 billion above last year's level and $4.9 billion above the President's Request.

* Tenant-Based Rental Assistance (Section 8 vouchers) is funded at $15.57 billion, $807 million over last year and $272 million below the request. Funding for the renewal of vouchers is significantly increased by $735 million to restore the reduction mandated last year and fund anticipated increases in the costs. The costs of this program alone, is now approaching 50% of HUD’s total budget.

* Project-Based Rental Assistance (project-based contracts) is funded at $5.10 billion, $210 million below last year and $16 million above the request. Along with recaptures from expiring contracts this fully funds all contracts and expands the use of inspectors to ensure that tenants live in decent affordable housing.

* Provides $4.2 billion for the Community Development Block Grant of which $3.75 billion in the formula funds to entitlement communities and states. The Committee did not agree to the proposal to eliminate this program, consolidate its functions and transfer the implementation to the Department of Commerce.

* HOME Investments Partnership is level funded at $1.78 billion, $124 million below the request, but only reduces the amount for the formula to participating jurisdictions by $39 million compared to the requested amount.

* Includes $1.35 billion for Homeless programs, an increase of $110 million over last year, $285 million for Housing Opportunities for Persons with AIDS (HOPWA), $742 million for Elderly Housing, and $239 million for Housing for Persons with Disabilities. The Committee did not agree to cut funding for assistance to victims of HIV/AIDs or eliminate funding for the construction of facilities for low-income persons with disabilities, as requested."

The House of Representatives passed this legislation today by a vote of 392 – 31. The Senate passed the bill by unanimous consent, clearing the measure for the President’s signature.

Also, Congress has passed a second continuing resolution (H.J. Res. 72) which runs through December 17. The first CR expired Nov. 18.

Taxes and Spending

Congress continues to struggle with its budget reconciliation bills. By a mere two votes (217-215), the House passed the Deficit Reduction Act (HR 4241). This bill includes about $50 billion in spending cuts over 5 years to mandatory spending programs which are not subject to the appropriations process.

The Senate passed its Tax Relief Act (S. 2020), which includes about $60 billion in tax cuts. An amendment offered by Senator Landrieu and cosponsored by Senator Vitter was accepted which provides a temporary tax credit for employers to offer housing assistance to employees affected by Hurricane Katrina.

Seniors Legislation

The Senate approved the Meeting the Housing and Service Needs of Seniors Act (S 705) to create an Interagency Council which will focus on the housing and supportive service needs of senior citizens. NAHMA has been supportive of this legislation.

Terrorism Insurance

The Senate passed S. 467 to extend the applicability of the Terrorism Risk Insurance Act of 2002. The House Financial Services Committee approved its version of the Terrorism Risk Insurance Revision Act (HR 4314).

More Hurricane Relief Efforts

The House passed HR 4337, the Gulf Opportunity Zone Public Finance Relief Act. The bill provides for Gulf tax credit bonds, advance refundings of certain tax-exempt bonds, and a Federal guarantee of certain State bonds.

Domestic Violence

The House Committee on Financial Services reported the Safe Housing Identity Exception for the Lives of Domestic Violence Victims (SHIELD) Act (HR 2695). This bill amends the McKinney-Vento Homeless Assistance Act to protect the personally identifying information of victims of domestic violence, dating violence, sexual assault, and stalking.

November 11, 2005

Appropriations

The conference committee continues to work toward finalization of the Transportation, Treasury, HUD Appropriations bill.

At last report, the remaining hang-up on Section 8 vouchers was whether to use a budget-based funding formula based on actual leasing and costs over the most recent 12 month period (the Senate proposal), or a budget-based formula based on leasing and costs from the summer of 2004 (the House proposal). NAHMA has joined other colleagues on an industry letter which supports the Senate language.

Once finished, the bill could be called up for votes in the House and Senate next week.

The current continuing resolution expires on November 18.

LEP

At NAHMA’s request, Rep. Bob Menendez (D-NJ) has been reaching out to the Congressional Hispanic Caucus (CHC) about HUD’s flawed approach to the LEP issue. Rep. Menendez and Rep. Nydia Velasquez (D-NY), Chair of the CHC’s Housing Committee are drafting a letter to Secretary Jackson which they will invite CHC members to sign. The letter will NOT urge repeal of the underlying executive order, but it is expected to advocate that HUD (rather than owners) produce the standard translations of vital documents and assume responsibility for the associated costs, accuracy, etc.

NAHMA is also inviting our housing industry partners to sign onto a letter we drafted asking the House Financial Services Housing & Oversight Subcommittee leadership to treat the LEP issue as a matter for congressional oversight. We will ask the Subcommittee leaders to request a staff briefing from HUD explaining their LEP policies. We believe this could be a very important way to educate Congress about the unrealistic expectations called for in the guidance. We are hoping to finalize the letter next week.

October 28 and November 4, 2005

Nominations

The Senate confirmed Orlando J. Cabrera, of Florida, as HUD’s Assistant Secretary of Public and Indian Housing.

Appropriations

Both the House and Senate passed the FY 2006 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act conference bill (H.R. 2744), clearing the measure for the President. It is worth noting the appropriators have given USDA-RHS a green light to begin a loan restructuring preservation program for Section 515 properties. Highlights of the bill include:

1) $100 million for section 515 rental housing, for repair, rehab, or new construction;

2) $100 million for section 538 guaranteed multi-family housing loans;

3) $653.1 million for Section 521 rental assistance

4) $9 million for a Section 515 preservation demonstration program “to restructure existing section 515 loans” --
-- Funds can be used for: reducing or eliminating interest; deferring loan payments, subordinating, reducing or reamortizing loan debt; and other financial assistance including advances and incentives required by the Secretary.”
-- Conferees intend that RHS revitalize and preserve the portfolio “consistent with recommendations provided in the Comprehensive Property Assessment report released by the Department in 2004” and
“owners assisted under this demonstration program shall be required to maintain the housing assisted under this demonstration as affordable…for the remaining term of the original loan or the term of a restructured loan, whichever is longer.”

5) $16 million for the rural housing voucher program
-- Available to any low-income household (including those not receiving rental assistance) residing in a property financed with a section 515 loan which has been prepaid after September 30, 2005
-- Amount of the voucher shall be the difference between comparable market rent for the section 515 unit and the tenant paid rent for such unit
-- Funds are subject to appropriations
-- USDA is directed “to the maximum extent practicable, administer such vouchers with current regulations and administrative guidance applicable for section 8 housing vouchers administered by the Secretary of the Department of Housing and Urban Development (including the ability to pay administrative costs related to delivery of the voucher funds).”

Budget Reconciliation

By a vote of 52 yeas to 47 nays, the Senate passed Deficit Reduction Omnibus Reconciliation Act (S. 1932). This legislation is a “budget reconciliation bill” which includes roughly $39 billion in spending cuts to entitlement and mandatory accounts identified by eight Senate authorizing committees. “Budget reconciliation” procedures provide a legislative fast-track process for tax, spending, and debt limit bills. Debate time is limited (making the bills filibuster-proof in the Senate), and amendments are restricted (for example, they must be germane).

Noteworthy housing-related cost savings switches funding for the FHA Upfront Grant and Below Market Sales Programs from mandatory funds (through the FHA General Insurance fund) to annual appropriations. These programs are intended to help local governments purchase FHA foreclosed multifamily properties in order to preserve and rehabilitate these units into affordable housing. According to Banking Committee Chairman Richard Shelby, these changes will save $270 million. Senator Jack Reed, Ranking Member of the Housing Subcommittee, offered an amendment to strike these provisions from the bill. Unfortunately, the Reed amendment was rejected 48-51.

GSE Reform

The House approved the Federal Housing Finance Reform Act (H.R.1461) by a vote of 331-90.

The inclusion of an Affordable Housing Fund (AFH) financed by a portion of after-tax profits from the GSEs to support new production of affordable housing should have been excellent news. The AHF could yield between $450 to $650 million annually. Unfortunately, the manager’s amendment changed this part of the bill to prohibit nonprofit grantees from engaging in lobbying, election-related activity or affiliating with organizations that conduct such activities. This prohibition is arguably retroactive, since the grantee must not have engaged in or affiliated with an organization involved in political activity or lobbying for 12 months prior to submitting an application for funding. Although a carve-out is provided for 501c3 nonprofits, there is no similar exemption for 501c6 trade associations. The definition of “affiliation” is disturbingly vague. The bill specifies a grant recipient is “affiliated” with another entity “if such recipient entity controls, is controlled by, or is under common control with such other entity.” “Control” is defined by the existence of any of the following relationships between a recipient and another entity: overlapping board membership, shared resources, recipient entity receives more than 20% of funding from or provides more than 20% of funding to the other entity, or other “indicia of substantial overlap or common control as may be set forth in regulation by the Director.” And just for good measure, the amendment lists among the prohibited uses of the AFH: political activities; advocacy; and lobbying, whether directly or through other parties (emphasis added).

During debate on this amendment, Rep. Deborah Pryce received an assurance from House Financial Services Committee Chairman Mike Oxley to work on two concerns she identified as the bill moves toward conference. Specifically, Rep. Pryce is seeking clarifying language in the amendment so it does not disqualify nonprofits from participating in the Affordable Housing Fund if they transport their own senior housing residents to the polls. Likewise, she wants to clarify that the intention of the prohibition on ``overlapping board membership'' was not to disallow single individuals from serving on the board of two organizations, but instead, to disqualify affiliated organizations from participating in the fund where clear control of one organization is maintained by another which is participating in election activities.

The manager’s amendment was narrowly adopted by the House by 5 votes (210 – 205). A less offensive part of this amendment would have prioritized AHF for hurricane-affected areas in the Gulf Coast for the first 2 years.

October 21, 2005

Appropriations

Yesterday, the Senate passed HR 3058, the FY 2006 Transportation/Treasury/HUD/District of Columbia Appropriations bill by vote of 93-1. The Senate Appropriations Committee issued a press release yesterday highlighting spending for the following programs:

“HUD is funded at $38.9 billion, an increase of about $2.9 billion over the FY05 level.

Section 8 tenant-based assistance is funded at $15.6 billion, a decrease of $209 million from the budget request and $870 million over the FY05 level. Section 8 project-based assistance is funded at $5.1 billion, about $226 million below the FY05 level and the same as the budget request.

Revitalization of Distressed Public Housing (HOPE VI) – The bill includes $150 million for HOPE VI, approximately the same as the FY05 level and an increase of $150 million over the budget request which recommended elimination of the program. The bill also rejects the Administration’s proposal to rescind $143 million from the program.

Community Development Fund (CDF) – The bill includes $4.3 billion for the CDF, a reduction of $347 million below the FY05 level and $4.3 billion over the budget request. The bill includes $3.8 billion for the Community Development Block Grant (CDBG) program and rejects the Administration’s proposal to eliminate CDBG and most set-asides within CDF.

HOME Program – The bill includes $1.9 billion for HOME, about the same as the FY05 level and a decrease of $41 million below the budget request. The account includes $50 million for the American Dream Downpayment program. The account also includes $42 million for housing counseling.

Housing for the Elderly (Section 202 Housing) – The bill includes $742 million (including $53 million for service coordinators) for Section 202 Elderly Housing, approximately the same as the FY05 level and the budget request.

Section 811 Disabled Housing – The bill includes $240 million for Section 811 Disabled Housing, about the same as the FY05 level and $120 million above the budget request.”

Spending for these programs under the House version of the bill was:

Section 8 tenant-based assistance: $15.63 billion

Section 8 project-based assistance: $5.09 billion

Community Development Fund (including CDBG): $4.24 billion

HOME: $1.9 billion

Section 202 Elderly: $741 million

Section 811 Disabled: $238.1 million

The Senate took action on some amendments of interest during consideration of the bill:

* Accepted Bond Amendment No. 2061, to clarify the ability of HUD to recover assets used in violation of a regulatory agreement. This amendment revises section 421 of the Housing and Community Act of 1987 to clarify HUD's authority to recover any assets or income of a multifamily project where those funds are used in violation of the project's regulatory agreement. According to Senator Bond,

“This provision is intended to ensure that HUD and the Federal Government can recover losses from owners of multifamily housing who have intentionally and fraudulently skimmed equity from an FHA-insured project for their own benefit. Without this technical correction, HUD ends up paying the lender the value of a defaulted FHA-insured mortgage that should have been paid off by the owner of a multihousing project out of rent receipts. Too often, the FHA or, more specifically, the pockets of the taxpayers of the United States fund the loss.”

* Accepted Harkin Amendment No. 2076, to provide that no funds may be used to provide assistance under section 8 of the United States Housing Act of 1937, to certain students at institutions of higher education. Senator Harkin issued a press release which described his amendment as follows:

“Harkin’s amendment will take into account parental income to determine Section 8 housing eligibility for students unless they are over 24, married, veterans, or have dependents. This is the same criteria students must meet to be declared “independent” for federal financial aid purposes. Additionally, any financial aid received over tuition will be counted as income. In a recent letter to the U.S. Department of Housing and Urban Development (HUD), the University of Iowa called for the same changes in HUD’s Section 8 guidelines.

Harkin first introduced this legislation last year, after the Des Moines Register reported that a Section 8 loophole allows students, regardless of financial need, to live free of charge or at a greatly reduced price in government housing. Since learning about this loophole, Harkin has repeatedly called on the Bush Administration to take action against abuses in the public housing system which has allowed student-athletes receiving scholarships and housing stipends to displace needy Iowans in an Iowa City public housing facility. According to Harkin,

"Although HUD issued revised Section guidelines in August 2005, the changes did little to close the loophole. Subsequently, abuses in the system have continued even though the average waiting period is two years for Iowans who truly need Section 8 housing.”

NAHMA expects to have a substantive conversation about this measure in the Federal Government Affairs Committee. We also have scheduled a meeting with Senator Harkin’s staff on Tuesday to discuss the implications and implementation of the amendment.

* Accepted the Coburn Amendment No. 2087, to limit the Department of Housing and Urban Development's funding for conferences to $3 million in FY06. This limitation includes conference programs, staff time, travel costs, and related expenses. During consideration of this amendment, Senator Coburn noted,

“In the history of HUD, in 2001 they spent $3 million on conferencing. Last year they spent $13.9 million on conferences around the country.

"I also note, with the advent of modern technology and video conferencing, 90 percent of these conferences could have occurred without travel costs, without hotel costs, without face-to-face meetings. In fact, we didn't use the technology available. We spent tons of money traveling around the country holding conferences, not necessarily that were bad in their content or their intent but which were wasteful in the way they were arranged. Also, I suggest that a 400-percent increase in conferences in one area, one agency of the Federal Government, shows that either they were doing a very poor job in 2001, or it is out of control.”

* Accepted Bond Amendment No. 2079 to ensure that PHAs will receive adequate funding for Section 8 project-based vouchers. This addresses PHAs’ ability to use future Section 8 vouchers on project-based assistance needs. It clarifies that for the purposes of distributing funding from Section 8 housing assistance, PHAs would not be penalized for shelving vouchers temporarily to develop a longer term project.

* Accepted Stabenow Amendment No. 2140, to provide additional funds to support programs established under the LEGACY Act of 2003. Sets aside $10 million out of the Section 202 program for the legacy housing program -- which provides for intergenerational housing units to assist low-income grandparents who are heads of households.

* Accepted Schumer Amendment No. 2122, to allow disabled and non-disabled tenants to keep their section 8 contracts on their properties occupied primarily by elderly or disabled families post foreclosure.

* LEP Amendment: On a very disappointing note, the Coburn Amendment 2088 was not considered, and it did not receive a vote. This amendment would have prohibited using funds appropriated under the bill to enforce Executive Order 13166 (the LEP executive order).

NAHMA actively engaged members in writing, emailing & faxing senators to support this amendment. Additionally, NAHMA, NAA, NMHC, and NLHA sent a coalition letter to senators in support of this amendment. Coburn’s staff explained the amendment was not called up because the senator “ran out of time.” However, the issue “continues to be a priority for the Senator and he will continue to look for other opportunities for passage of this important bill.”

A special thanks goes out to the many NAHMA members who joined the grassroots action on this issue. At the very least, we raised awareness of the problems associated with implementation of the LEP initiative.

Committee Activity

The Senate Banking Committee agreed on recommendations it will make to the Budget Committee for spending reductions and revenue increases to meet reconciliation expenditures as imposed by the FY 2006 Budget Resolution, H Con Res 95. Additionally, the Committee held a hearing on the future of the National Flood Insurance Program which focused on reducing losses to the program resulting from policy subsidies and repetitive loss properties, and developing accurate digital flood maps. Witness included representatives from FEMA and GAO, and others.

October 7, 2005

Appropriations

The government is operating under a continuing resolution, H.J. Res. 68, which provides funding through November 18 or until the applicable appropriations bill is enacted. Unlike previous continuing resolutions, programs and activities funded under H.J. Res. 68 will receive the lower of the House-passed level, the Senate-passed level, or the FY 05 current rate. Agencies for which the Senate has not passed a bill by October 1, 2005, will receive the lower of the House-passed level or the FY 05 current rate.

Hurricane Relief

House and Senate Committees continued holding various oversight hearings on FEMA and use of the emergency supplemental appropriations for hurricane relief efforts.

Additionally, the House overwhelmingly approved three bills endorsed by NAHMA to meet housing needs of hurricane victims.

Hurricane Katrina Emergency Housing Act of 2005 (HR 3894)

This bill authorizes temporary rental housing assistance to Hurricane Katrina and Hurricane Rita victims. It directs HUD to waive requirements under the Section 8 voucher and project-based Section 8 programs, including: tenant contributions towards rent, eligibility of individuals to receive assistance, income verification, one-year lease requirement, initial inspection of housing units by a PHA, and portability restrictions (vouchers). Also waived are “any regulation, notice, or order requiring prior approval by the Secretary for the use of any lease provision that modifies, amends, or waives, or differs from, any provision in a model lease” HUD issues for these programs and “any regulation or Executive Order providing for access to Federally funded programs by eligible persons having limited English proficiency.” The waiver authority is valid for six months and can be renewed for an additional six months. HUD may directly administer the vouchers when PHAs are unable to do so.

The bill also includes an important provision which preserves project-based Section 8 HAP contracts units damaged or destroyed by Hurricane Katrina and Hurricane Rita, and establishes the HAP expiration date as the later of the contract date or three months after the units are habitable.

Rural Housing Hurricane Relief Act of 2005 (HR 3895)

HR 3895 provides rural housing assistance to families affected by Hurricane Katrina or Hurricane Rita. It provides for conversion of Section 521 rental assistance to Section 8 housing voucher assistance or Section 542 rural housing vouchers. Waiver of “rural area requirements” is also authorized. This authority is effective for six months. It also permits loan and refinancing guarantees for home repair or rehabilitation under the Section 502 single family housing loan guarantee program.

Hurricane Katrina Emergency Relief CDBG Flexibility Act (HR 3896)

HR 3896 temporarily suspends the CDBG public services cap for FY2005-FY 2008 for communities affected by Hurricane Katrina and Hurricane Rita and allows HUD to waive or find alternative public hearing requirements in FY2006 for a directly affected community.

Violence Against Women Act

The Senate passed legislation to reauthorize the Violence Against Women Act of 1994 (S. 1197). Title VI of this legislation creates new protection for victims of domestic violence, dating violence and stalking. The bill prohibits owners, agents, and PHAs from refusing to rent to an individual who is a victim of domestic violence and from evicting of domestic violence victims. These provisions are applicable to the public housing and Section 8 programs. Similar language was included in HR 2876 sponsored by Rep. Mark Green (R-WI) and HR 3171 sponsored by Rep. Zoe Lofgren (D-CA).

However, S 1197 was amended by the Senate Judiciary Committee to include a compromise reached by affordable housing industry representatives and victims’ advocates. Language was added which allows owners, agents, and PHAs to request that victims certify their status using a HUD-approved certification form. The certification requirement can be met by producing a police/court record. It can also be satisfied by having a statement from a professional (victim service provider, attorney, clergy, medical professional, or other professional from whom the victim sought assistance in addressing the violence) that, under penalty of perjury, the professional believes the incident was bona fide abuse and the victim has signed or attested to the documentation. Leases could also be bifurcated to evict only the abuser. Also, individuals could be evicted for lease violations unrelated to the domestic violence, provided they are not held to a higher standard than other tenants when making decisions to evict or terminate assistance. Evictions may also proceed if the owner/agent can demonstrate an actual and imminent threat to other tenants or employees if the tenant is not evicted or terminated from assistance.

HUD Nominations

On Thursday, September 29, the Senate Banking Committee approved the nominations of:

Kim Kendrick, of the District of Columbia, to be an Assistant Secretary of FH&EO;

Keith A. Nelson, of Texas, to be an Assistant Secretary of Administration;

Darlene F. Williams, of Texas, to be an Assistant Secretary of Policy Development and Research; and

Keith E. Gottfried, of California, to be General Counsel of HUD

These individuals were confirmed by the Senate the next day, Friday Sept 30.

September 30, 2005

Hurricane Relief

Funding: Two emergency spending bills were approved for Hurricane Katrina relief efforts, totaling over $60 billion. This money was not offset by spending cuts or revenue increases, and was added to the federal deficit. This is likely to put the squeeze on the regular appropriations process, as discussion is ongoing about whether across-the-board spending cuts should be adopted to help offset the disaster recovery costs. Other ideas proposed have included rescinding earmarks for roads and transportation projects in the highway bill, delaying the medicare prescription benefit for one year, or seeking spending cuts in entitlement programs. Thus far, the House and Senate leadership have been unwilling to consider foregoing tax cuts to increase revenue.

Hearings: Throughout this month, there have been numerous hearings related to Hurricane Katrina. Among the most noteworthy hearings related to victims’ housing needs were:

-- September 15, House Financial Services: Subcommittee on Housing and Community Opportunity: "Emergency Housing Needs in the Aftermath of Hurricane Katrina.'' Among the witnesses was NAHMA’s President-Elect, Michelle Norris. Michelle offered testimony on behalf of National Church Residences and AASHA. Her written testimony is available at http://financialservices.house.gov/media/pdf/091505mn.pdf.

-- September 27, Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, and International Security: “Housing-Related Programs for the Poor: Can We Be Sure That Federal Assistance Is Getting To Those Who Need It Most?” This hearing examined existing challenges in measuring improper rent subsidy payments in housing assistance programs at HUD, as well as federal oversight of the Low-Income Home Energy Assistance Program. James M. Martin, HUD’s Assistant Chief Financial Officer for Financial Management, testified about improvements in reducing rental subsidy errors. He noted, “The reductions in the dollar impacts of erroneous program administrator subsidy determinations and tenant underreporting of income has been even greater, going from a baseline estimate of gross annual improper payments of $3.2 billion in 2000, to $1.6 billion in 2003, and $1.2 billion in 2004. This represents a total reduction of 62 percent over four years.” Among GAO’s recommendations was that “HUD study the potential impacts of alternatives for simplifying the rent determination process.” Likewise, David G. Wood, GAO’s Director of Financial Markets and Community Investment explained, “HUD has identified three sources of errors contributing to improper rent subsidy payments: (1) incorrect subsidy determinations by program administrators, (2) unreported tenant income, and (3) incorrect billing. HUD has attempted to estimate the amounts of improper subsidies attributable to each source but has developed reliable estimates for only the first—and likely the largest—source. HUD paid an estimated $1.4 billion in gross improper subsidies (consisting of $896 million in overpayments and $519 million in underpayments) in fiscal year 2003 as a result of program administrator errors—a 39 percent decline from HUD’s fiscal year 2000 baseline estimate. GAO estimates that the amount of net overpayments could have subsidized another 56,000 households with vouchers in 2003.”

-- September 27, House Appropriations Subcommittee on Departments of Transportation, Treasury, and Housing and Urban Development, the Judiciary, District of Columbia, and Independent Agencies: “Department of Housing and Urban Development (Hurricane Katrina).” Testimony was heard from HUD Deputy Secretary Roy Bernardi, and FHA Commissioner Brian Montgomery. Mr. Bernardi described HUD’s efforts to provide temporary housing to Katrina evacuees.

-- September 28, Senate Finance Committee, “Hurricane Katrina: Community Assistance.” The hearing examined the economic recovery of certain Gulf Coast States, focusing on community rebuilding needs, including housing, transportation and educational assistance. Effectiveness of prior tax legislative proposals to address recent disasters was also discussed. Witnesses included the governors of Louisiana, Mississippi, and Alabama, and others.

Hurricane Relief Legislation

Congress has already approved several measures to provide tax relief to Katrina victims and provide for the education of the evacuees. Some pending bills to provide housing assistance endorsed by NAHMA include:

HR 3894, the “Hurricane Katrina Emergency Housing Act of 2005” which provides for waivers under certain housing assistance programs of the Department of Housing and Urban Development to assist victims of Hurricane Katrina in obtaining housing.

HR 3895 the “Rural Housing Hurricane Relief Act of 2005” which would amend title V of the Housing Act of 1949 to provide rural housing assistance to families affected by Hurricane Katrina.

HR 3896 the “Hurricane Katrina Emergency Relief CDBG Flexibility Act of 2005.” which would temporarily suspend, for communities affected by Hurricane Katrina, certain requirements under the community development block grant program.

Helping to House the Victims of Hurricane Katrina Act of 2005 (an amendment to the Senate Commerce, Justice, Science appropriations bill, HR 2862). This amendment establishes an emergency $3.5 billion temporary rental assistance program available to any family displaced by Hurricane Katrina. Regular Section 8 program requirements are waived under this program. Assistance lasts for 6 months, with a six month extenuation. The funding is estimated to be enough for one year of assistance to over 350,000 families.

Appropriations

As the end of Fiscal Year 2005 is upon us and most appropriations bills remain unfinished, a continuing resolution has become necessary. H J Res 68 runs through November 18, or until a spending bill is enacted. Programs are funded at the lower of the House-passed level, the Senate-passed level, or the FY 05 current rate. For agencies for which the Senate has not passed a bill by October 1, 2005 (including HUD) the funding rate is at the lower of the House-passed level or the FY 05 current rate.

The Senate passed the FY 2006 Agriculture Appropriations bill (HR 2744). Highlights of the bill include:

$90 million for section 515 rental housing

$100 million for section 538 guaranteed multi-family housing loans

$653.1 million for Rural Rental Assistance

$16.5 million for a Section 515 demonstration program to preserve and revitalize the portfolio. It will be used to restructure existing section 515 loans, to ensure the project has sufficient resources to preserve the project for the purpose of providing safe and affordable housing for low-income residents including reducing or eliminating interest; deferring loan payments, subordinating, reducing or reamortizing loan debt; and other financial assistance including advances and incentives required by the Secretary. Owners shall be required to maintain the housing assisted under this demonstration as affordable, as determined by the Secretary, for the remaining term of the original loan or the term of a restructured loan, whichever is longer.

$16 million for the rural housing voucher program available to any low-income household (including those not receiving rental assistance) residing in a section 515 property which has been prepaid after September 30, 2005. The amount of the voucher shall be the difference between comparable market rent for the section 515 unit and the tenant paid rent for such unit. RHS was instructed to administer such vouchers to the maximum extent practicable with current regulations and administrative guidance applicable for section 8 housing.

Nominations

Committee on Banking, Housing, and Urban Affairs approved the following HUD nominations:

Keith E. Gottfried, of California, to be HUD General Counsel

Kim Kendrick, of the District of Columbia, Assistant Secretary FHEO

Keith A. Nelson, of Texas, Asstistant Secretary for Administration and

Darlene F. Williams, of Texas, to be an Assistant Secretary of Policy Development & Research

At NAHMA’s request, Senate Banking Committee member Rick Santorum submitted several questions to Ms. Kendrick about HUD’s plans for implementing the final LEP guidance. These questions and Kendrick’s answers will be part of the permanent record for her confirmation hearing.

The nominees must now be confirmed by the full Senate.

Exit Tax Relief

NAHMA signed onto an industry letter supporting H.R. 3715, the Affordable Housing Tax Relief Act of 2005, introduced by Rep. Jim Ramstad. The bill provides exit tax relief to owners who sell their properties to entities who will operate them as affordable housing. NAHMA has historically been supportive of exit tax relief.

September 12 , 2005

Hurricane Katrina Relief

Two supplemental emergency appropriations bills have been passed and signed into law to facilitate recovery efforts due to Hurricane Katrina. Funding from the first $10.5 billion has been virtually exhausted. It was enacted last week. This week, $51.8 billion was approved for the hurricane relief.

On Thursday, September 8, NAHMA participated in the invitation-only roundtable discussion convened by Housing and Community Opportunity Subcommittee Chairman Rep. Bob Ney. The discussion focused on ways to expedite assistance to disaster victims and sought both long and short term solutions for redevelopment of affected areas. Members were particularly interested in identifying regulatory barriers that could be temporarily waived to expedite assistance to victims. NAHMA’s contribution to the discussion focused on the barriers to housing disaster victims in tax-credit units. As a follow-up to the roundtable, NAHMA signed onto a consensus industry letter identifying several requirements which should be waived to expedite assistance.

Additional hearings will be held on September 15 to examine the housing needs of disaster victims in the House Financial Services Committee and House Homeland Security Committee.

As the Senate considers the FY 2006 Commerce, Justice, State Appropriations bill (HR 2862), an amendment to provide emergency housing assistance vouchers to Katrina victims is awaiting consideration. Offered by Sen. Paul Sarbanes (D-MD), the “Helping to House the Victims of Hurricane Katrina Act of 2005” proposes a $3.5 billion voucher program, which would provide temporary rental assistance to more than 350,000 displaced families. The vouchers would be 6 months in duration and could be renewed for an additional 6 months—but not to exceed a total of one year. Many of the normal voucher requirements are temporarily suspended for these vouchers—including income eligibility, tenant contributions, one-year lease requirements, initial inspections, and portability restrictions. HUD would administer the vouchers. According to Senator Sarbanes’ September 9 floor statement,

“Any family displaced by the hurricane would be eligible to receive a temporary voucher to pay for renting safe and decent housing, pay for rent, security, utility deposits, relocation expenses, and then eventually, we hope, moving expenses back to their permanent homes. These vouchers could be used anywhere across the country. It would not require a certification of income initially in order to get the voucher, and the families would be relieved of paying the rent, their portion of the rent which is required under the regular voucher program, until family members return to work. Once they return to work, the tenants would have to pay rental payments, as they do in the regular housing voucher program.”

Violence Against Women Act Reauthorization

The Senate Judiciary Committee reported an amended version of the Violence Against Women Act Reauthorization bill (S 1197) on September 8. More information will be provided when the text becomes available.

Nominations

President Bush has nominated Orlando J. Cabrera of Florida to be HUD’s Assistant Secretary for Public and Indian Housing. According to a White House press release, “Mr. Cabrera currently serves as Executive Director of the Florida Housing Finance Corporation. He also serves on the Board of Directors of the National Council of State Housing Agencies. Earlier in his career, Mr. Cabrera was a Partner with Holland & Knight, LLP. He received his bachelor's degree from the University of Michigan and his J.D. from the University of Wisconsin Law School.”

July 29, 2005

Senate Banking Committee Approves Two Housing Bills

On Thursday, July 28, the Senate Banking, Housing and Urban Affairs Committee marked up two housing-related bills: the Federal Housing Enterprise Regulatory Reform Act of 2005 (S. 190, a.k.a. GSE reform bill) and the Meeting the Housing and Service Needs of Seniors Act (S. 705). Both bills were reported favorably by the committee and now await action on the Senate floor.

There are key differences between the Senate and House versions of the GSE reform bills. The Senate Committee bill does not include an Affordable Housing Fund like H.R. 1461. Also unlike H.R. 1461, the Senate bill limits on the size of Fannie Mae and Freddie Mac’s investment portfolio for reasons other than safety and soundness--a provision which the Senate Banking Committee Democrats do not support. Alan Greenspan, Chairman of the Federal Reserve, testifying on July 20 before the House Financial Services Committee, said H.R. 1461 does not do enough to limit Fannie and Freddie’s portfolios, which he argues pose a threat to the financial system. Mr. Greenspan did not cite any concerns with H.R. 1461’s Affordable Housing Fund proposal, however. Additionally, H.R. 1461 sets more aggressive multifamily housing goals for the GSEs.

S.705, introduced by Senator Paul S. Sarbanes (D-MD), would establish a high level executive office to better coordinate housing programs and related services so that senior citizens can age in place and access needed related services. It creates the “Interagency Council on Meeting the Housing and Service Needs of Seniors,” which is modeled on the Interagency Council on Homelessness.

Update on House GSE Reform Bill

House Financial Services Committee Chairman Rep. Michael Oxley (R-OH) is pushing for H.R. 1461, the Federal Housing Finance Reform Act of 2005, to be considered on the House floor at the earliest possible date. Rep. Oxley has proposed several changes to the bill to ensure that money allocated to the Affordable Housing Fund contained in the bill will be used solely for affordable housing production, prohibiting political activity, advocacy, and lobbying. However, full House action on H.R. 1461 has been delayed because of a jurisdiction claim by the House Judiciary Committee, which was granted authority to review the bill until September 16 due to the criminal penalty provisions it would impose.

Also, the Congressional Budget Office (CBO) issued a cost estimate report for H.R. 1461 on June 30. In the report, CBO estimates that between 2006 and 2015 the Affordable Housing Funds’ revenues would increase by about $5.1 billion and direct spending would increase by $5.4 billion, for a net increase to the federal budget deficit of $300 million. To address the CBO cost estimate, Rep. Oxley has been circulating a number of proposed compromises including sunsetting the funds after five years and/or reducing the amount of Fannie and Freddie’s after-tax profits going to the fund.

House Holds Hearing on the Future of Terrorism Insurance

On Wednesday, July 27, the House Financial Services Committee held a hearing to discuss the future of terrorism insurance. Those testifying before the committee included insurance authorities from the city governments of New York City and D.C., insurance industry groups, and consumer groups. Most supported the Terrorism Risk Insurance Act of 2002, which is set to expire on December 31, 2005. However, witnesses were divided in their support for reauthorizing the law, with some wanting private insurers to handle the terrorism insurance market without government support and others wanting the act reauthorized with certain modifications.


July 22, 2005

Senate Appropriations Committee Approves HUD’s FY 2006 Budget

This week, both the Subcommittee on Transportation, Treasury and HUD and the Senate Appropriations Committee approved FY 2006 HUD appropriations. The Appropriations Committee’s figures were much the same as those approved by the House on June 21st. According to the National Low Income Housing Coalition, the specific allocations are as follows:

Section 8 tenant-based assistance: $15.636 billion

$870 million above FY 2005
$209 million below the President’s request
$5 million more than approved by the House

Section 8 project-based assistance: $5.072 billion

$226 million below FY 2005
Same funding as the President’s request
$18 million less than approved by the House

CDBG: $4.324 billion

$347 million below FY 2005
President proposed consolidating CDBG and moving it to the Dept. of Commerce
$107 million more than approved by the House

HOME: $1.9 billion

Same as FY 2005
$41 million below the President’s request
Same as approved by the House

Section 202 Elderly: $742 million

$1 million more than FY 2005
$1 million more than the President’s request
$1 million more than approved by the House

Section 811 Disabled: $240 million

$2 million more than FY 2005
$120 million more than the President’s request
$2 million more than approved by the House

A NAHMAnalysis will be prepared when the official Senate Committee figures are available.

Violence Against Women Act Reauthorization Hearing Held in Senate

On Tuesday, July 19, the Senate Judiciary Committee held a hearing on the reauthorization of the Violence Against Women Act of 1994. In his opening statement, Ranking Member Sen. Patrick Leahy (D-VT) expressed support for the reauthorization bill’s Transitional Housing Assistance Grants for Victims of Domestic Violence by stating, “At a time when the availability of affordable housing has sunk to record lows, transitional housing for victims is especially needed.” The transitional housing grants provide for rehabilitation and construction of transitional housing and related services to women and their families fleeing domestic violence, sexual assault or stalkers. Echoing Sen. Leahy’s remarks about the housing grants, Sen. Russ Feingold (D-WI) stated that the reauthorization bill, “includes important provisions that will address the severe lack of affordable and transitional housing available for victims fleeing an abuser.”

Lynn Rosenthal of the National Network to End Domestic Violence testified before the committee that housing is “a primary need” for victims escaping domestic violence. Rosenthal stated that victims experience major barriers in obtaining and maintaining housing and often return to their abusers because they cannot find long-term housing. Rosenthal also cited discrimination against domestic violence victims by public and subsidized housing programs.

NAHMA continues to voice concern about the current provisions in S 1197 related to leasing, eviction and termination of tenancy protections for domestic violence victims. Industry partners continue to negotiate with advocacy groups such as the National Network to End Domestic Violence and members of congress to create a more workable solution.

Legislation

On Thursday, July 14, Rep. Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee’s Subcommittee on Housing, introduced a bill to put a provision on jurisdictions’ receipt of CDBG funds (H.R. 3315). Specifically, the bill seeks to withhold CDBG funding from states and communities that do not prohibit the use of eminent domain to take private property for commercial or economic development purposes. This legislation is another response to the Supreme Court’s June 23rd decision in the case Kelo v. City of New London. H.R. 3315 has been referred to the House Committee on Financial Services.


July 15, 2005

House GSE Bill Referred to Second Committee

On Thursday, July 14, the House of Representatives referred the Federal Housing Finance Reform Act of 2005, H.R. 1461, to the House Judiciary Committee for a period ending no later than September 16. The Judiciary Committee will consider provisions in the bill, which aims to reform the regulation of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, that fall within their jurisdiction. H.R. 1461 was voted out of the House Financial Services Committee on May 24, and currently includes an amendment that would create an Affordable Housing Fund at both Fannie Mae and Freddie Mac with 5% of their after-tax profits.

HUD Appropriations

Markup is scheduled on the HUD Appropriations bill in both the Subcommittee and full Senate Appropriations Committee next week.

FYI: Senate Holds Hearing on Terrorism Risk Insurance Act

Treasury Secretary John Snow testified before both the Senate and House this week about the Treasury Department’s report to Congress entitled, “Assessment: The Terrorism Risk Insurance Act of 2002.” The Treasury’s TRIA report focuses on assessing the likely capacity of the property and casualty insurance industry to offer insurance for terrorism risk after the termination of the Terrorism Risk Insurance Program, which is scheduled to expire on December 31, 2005. Many legislators and insurers say the private insurance market is not ready to deal with the risk of terrorism without public subsidies and want Congress to extend the program. Secretary Snow testified that the Administration could support TRIA extension if the program were reformed in several key areas.

According to the American Society of Association Executives, Snow said any extension of TRIA should "recognize the temporary nature of the program, the rapid expansion of private market development..., and the need to significantly reduce taxpayer exposure." Secretary Snow pushed for reforms to TRIA that would increase to $500 million the event size that triggers coverage, increase the deductibles and percentage co-payments, and eliminate certain smaller lines of insurance, such as commercial auto, that are less subject to risk.


July 8, 2005

Congress was not in session this week due to the Fourth of July recess. Congress will reconvene on Monday, July 11th.

On July 8th, however, NAHMA met with the GAO and other industry representatives to discuss the ongoing late HAPs situation. We took this opportunity to inform the GAO about the current problem with HAP funding and how late payments put even greater hardship on the properties as regulatory expectations (such as LEP requirements) increase. GAO told us they expect to finish the data collection by the end of July, submit a draft report to Congress by November 15, and are likely to have a report available for us in December.


July 1, 2005

House Passes HUD Appropriations Bill; $100 Million Added for Section 8 Vouchers

On Thursday, June 30, the House of Representatives passed the Transportation, Treasury, HUD, Judiciary, District of Columbia, and Independent Agencies Appropriations Act for FY 2006. Rep. Jerrold Nadler (D-NY), along with Rep. Nydia Velazquez (D-NY) and Rep. Barney Frank (D-MA), proposed an amendment to the appropriations bill restoring $100 million for Section 8 vouchers. The amendment was approved on the House floor by a vote of 225-194. The $100 million will be offset by funds from the Working Capital Fund. Other amendments approved by the House included a proposal by Rep. Joe Knollenberg (R-MI) to increase CDBG funding by $67.5 million and a proposal by Rep. Artur Davis (D-AL) to restore $60 million in HOPE VI funding.

Although the text of the House-passed bill is not yet available, our best information suggests the House recommended the following amounts for key HUD programs:

Section 8 tenant-based assistance: $15.63 billion
$865 million above FY 2005 but $214 million below the President’s request

Section 8 project-based assistance: $5.09 billion
$210 million below FY 2005 but $16 million above the President’s request

CDBG: $4.22 billion
$452.3 million below FY 2005
President proposed consolidating CDBG and moving it to the Dept. of Commerce

HOME: $1.9 billion
Same funding as FY 2005 and $41 million below the President’s request
The bill increased the formula grant $60 million above the request

Section 202 Elderly: $741 million
Same funding as FY 2005 and the President’s request

Section 811 Disabled: $238.1 million
Same funding as FY 2005 and $118 million more than the President’s request

LEP

As discussed at NAHMA’s Summer meeting, Rep. Bob Menendez (D-NJ) and Rep. Barney Frank (D-MA) are sending a joint letter to Secretary Jackson about HUD’s Limited English Proficiency guidance. The letter notes that while the Congressmen strongly support providing assistance for persons with limited English proficiency to help them fully access rental assistance programs, “…we are concerned that the December 19 draft guidance relies too heavily on private sector actions and not enough on HUD's responsibilities to comply with the executive order.” The letter closely follows many of NAHMA’s recommendations for improving the final guidance prior to releasing the final version.

Legislation

Housing America’s Workforce Act

On Wednesday, June 29, Sen. Hillary Clinton (D-NY) introduced the Housing America’s Workforce Act of 2005 (S. 1330), a bill to amend the Internal Revenue Code of 1986 to provide incentives for employer-provided employee housing assistance. According to the National Housing Conference, the bill “offers an innovative local solution for increasing affordable housing opportunities by implementing a Federal tax-based employer assisted housing (EAH) program” that will provide working families in America with benefits such as downpayment assistance and rental assistance.

Co-sponsors of the bill are Sen. Richard Durbin (D-IL), Sen. Jack Reed (D-RI), Sen. Mel Martinez (R-FL), and Sen. Gordon Smith (R-OR). On Thursday, June 30, Nydia Velazquez (D-NY) introduced a companion bill in the House, H.R. 3194. S. 1330 has been referred to the Senate Committee on Finance. H.R. 3194 has been referred to the both the House Committee on Ways and Means and the House Committee on Financial Services.

To read the National Housing Conference’s press release concerning the bill, click here.

Other Bills

On Thursday, June 30, Rep. Phil English (R-PA) introduced H.R. 3159, a bill to amend the Internal Revenue Code of 1986 to modify the rehabilitation credit and the low-income housing credit. The full text of the bill is not yet available. H.R. 3159 has been referred to the House Committee on Ways and Means.

On Thursday, June 30, Rep. Jim Ryun (R-KS) introduced H.R. 3186, a bill to amend the Department of Housing and Urban Development Act to exclude amounts received as a military basic housing allowance from consideration as income for purposes of eligibility for federally assisted low-income housing programs. The full text of the bill is not yet available. H.R. 3186 has been referred to the House Committee on Financial Services.


June 24, 2005

House Appropriations Committee Approves HUD’s FY 2006 Budget

On Tuesday, June 21, the full House Appropriations Committee approved HUD’s budget for FY 2006. The full committee allocations matched the amounts approved by the House Appropriations Committee’s Transportation, Treasury, and HUD subcommittee last week. Both the full committee and subcommittee approved keeping CDBG at HUD and not granting the administration’s request for a 50% cut to Section 811 Disabled Housing. HUD appropriations will now move to the House floor to receive a vote, probably next week. The following are the specific allocation amounts by the full committee:

• Section 8 tenant-based assistance: $15.53 billion
  • $765 million above FY 2005 but $314 million below the President’s request
  • Per the Committee press release, “Funding for the renewal of vouchers is significantly increased by $735 million to restore the reduction mandated last year and fund all anticipated increases in the costs.”
    
    
• Section 8 project-based assistance: $5.1 billion
  • $210 million below FY 2005 but $16 million above the President’s request
  • The Committee press release states, “This fully funds all contracts including inflation and expands the use of inspectors to ensure that tenants live in decent affordable housing.”
    
    
• CDBG: $4.15 billion
  • $519 million below FY 2005
  • President proposed consolidating CDBG and moving it to the Dept. of Commerce
    
    
• HOME: $1.9 billion
  • Same funding as FY 2005 and $41 million below the President’s request
  • The bill increased the formula grant $60 million above the request
    
    
• Section 202 Elderly: $741 million
  • Same funding as FY 2005 and the President’s request
    
    
• Section 811 Disabled: $238 million
  • Same funding as FY 2005 and $118 million more than the President’s request

Senate Appropriations Committee Approves Rural Housing Service’s FY 2006 Budget

The Senate Appropriations Agriculture Subcommittee approved USDA appropriations on Tuesday, June 21, and the full committee approved them on Thursday, June, 23, clearing the way for them to be voted on by the full Senate. The following are the specific allocation amounts by the full committee:

• Section 521 rural rental assistance received $653 million
  • $61 million more than FY 2005
  • $3 million more than requested by the President and approved by the House

• Section 515 rural rental housing loans received $90 million
  • $10 million below both FY 2005 and the amount approved by the House
  • $63 million above the President’s request

• Section 538 multi-family guaranteed loans received $100 million
  • Same funding as FY05 and the amount approved by the House

  • $100 million below the President’s request
    
    

June 17, 2005

House Subcommittee Approves HUD Appropriations

On June 15, the House Appropriations Subcommittee overseeing HUD approved HUD’s FY 2006 budget for full Committee action. According to the National Low Income Housing Coalition, Section 8 tenant-based housing received $15.531 billion, a 5.2% increase from FY 2005's budget of $14.766 billion, but $314 million less than the administration's request. Section 8 project-based housing received $5.1 billion, a 3.9% decrease, but $28 million more than the administration's request. Section 202 Elderly Housing, Section 811 Disabled Housing, and HOME were all frozen at their FY05 funding levels. Section 202 Elderly Housing received $741 million, Section 811 Disabled Housing received $238 million (instead of the administration's request for $120 million, a 50% cut), and HOME received $1.9 billion.

Senate Committee Holds Hearing on the Housing and Service Needs of Seniors

On Thursday, June 16, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing to examine S. 705, which would establish the Interagency Council on Meeting the Housing and Service Needs of Seniors. Secretary Jackson testified before the committee and said the administration supports the initiative. Jackson mentioned HUD’s dedication to the viability of the Section 202 Housing for the Elderly program and pointed out HUD’s current coordination with the Dept. of Health and Human Services (HHS) in informing Section 202 recipients about HHS’s new Medicare drug benefit. Other witnesses who expressed strong support for the proposed Interagency Council were NAHMA’s own Steve Protulis, Nelda Barnett of AARP, and Dr. William Smith of the American Association of Homes and Services for the Aging (AAHSA).


June 10, 2005

House Approves FY 2006 Rural Housing Service Appropriations

On Wednesday, June 8, The House passed H.R. 2744, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act for Fiscal Year 2006. The amounts allocated to Section 515 ($100 million) and 538 rental housing ($100 million) and to Section 521 rental assistance ($650 million) were identical to those passed by the full House Appropriations Committee.

Legislation

On Tuesday, June 7, Rep. Robert Andrews (D-NJ) introduced H.R. 2750, the Rural Housing Opportunity and Enhancement Act of 2005. The act amends section 502(h) of the Housing Act of 1949 to improve the rural housing loan guarantee program. H.R. 2750 has been referred to the House Financial Services Committee.

On Tuesday, June 7, Rep. Robert Andrews (D-NJ) introduced H.R. 2751, the FHA Energy Efficiency Act. The act amends section 526 of the National Housing Act to provide that any certification of a property for meeting energy efficiency requirements for mortgage insurance under the National Housing Act shall be conducted by an individual certified by an accredited home energy rating system provider. H.R. 2751 has been referred to the House Financial Services Committee.

Looking Ahead

HUD Appropriations in the House

On Wednesday, June 15, The House Appropriations Subcommittee on Transportation, Treasury and HUD, the Judiciary, District of Columbia will mark-up its FY06 appropriations bill. The full House Appropriations Committee is scheduled to take action on the bill a week later on June 22, with likely floor consideration on June 30.

Senate Hearing on Seniors’ Housing Needs

On Thursday, June 16, the Senate Banking, Housing and Urban Affairs Committee will hold a hearing on Ranking Member Paul Sarbanes’ (D-MD) legislation, the Meeting the Housing and Service Needs of Seniors Act (S. 705). Scheduled to testify are HUD Secretary Alphonso Jackson, GAO, and others. It is also worth noting that Steve Protulis, Vice Chair of NAHMA’s Preservation Task Force, is a scheduled witness. Steve will testify in his capacity as Executive Director of the Elderly Housing Development & Operations Corporation.

June 3, 2005

Congress was not in session this week due to the Memorial Day recess. Congress will convene again on Monday, June 6.


May 27, 2005

Hearings and Meetings of Interest

House Committee Approves Rural Housing Service Appropriations for FY 2006

On Wednesday, May 25, the House Appropriations Committee approved the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies appropriations for fiscal year 2006. According to information made available by the Housing Assistance Council, the committee rejected the Administration’s proposal to cut $73 million from Section 515 rental housing and restored the program to its FY05 funding level of $100 million. The Administration’s proposal to double funding for the Section 538 rental housing was also turned down and funded at its FY05 level of $100 million. Finally, the committee accepted the budget proposal to increase funding for Section 521 rental assistance by 10%, from $592 million in FY05 to $650 million in FY06. The Administration’s proposal to use $214 million to create a new rural housing voucher program was not funded.

House Committee Amends GSE Regulation Bill

On Wednesday, May 25, the House Financial Services Committee approved the Federal Housing Finance Reform Act (HR 1461). According to the National Council of State Housing Agencies, a provision was added to the bill during the markup session that would require Fannie Mae and Freddie Mac to create an Affordable Housing Fund and set aside 5 percent of their profits annually for housing grants to support primarily affordable housing rental production for very low- and extremely low-income families. Richard Baker (R-LA), the bill’s sponsor, who opposed the creation of the fund, estimates that this 5 percent set-aside will total approximately $600 million annually. The bill must now be approved by the whole House of Representatives.

House Holds Hearing on CDBG Accountability

On Tuesday, May 24, the House Committee on Government Reform’s Subcommittee on Federalism and the Census held a hearing entitled “Bringing Community Development Block Grant Program (CDBG) Spending into the 21st Century: Introducing Accountability and Meaningful Performance Measures into the Decades-Old CDBG Program.'' Roy Benardi, HUD Deputy Secretary, and four other public witnesses testified before the subcommittee.

According to the subcommittee’s press release, the purpose of the hearing was to examine how CDBG funds are spent and whether meaningful performance measures can be introduced as a tool to promote greater accountability within the program and among its grantees. A primary justification citied by the Administration for its Strengthening America's Communities Initiative (SACI) proposal is that CDBG and 17 other programs encompassed by SACI scored very low on OMB's Program Assessment Rating Tool (PART). Many stakeholders argue that CDBG’s low PART score can be attributed to PART’s lack of proper assessment matrix tools to score block grant programs appropriately. Stakeholders also argue that it may be impossible to effectively measure the CDBG program because of its multifaceted nature and because its monies can be spent on a wide variety of "non-tangible" benefits.

Legislation

On Thursday, May 26, Rep. William Jefferson (D-LA) introduced HR 2681, the Affordable Housing Tax Credit Enhancement Act of 2005, in the House. The bill would double the current Low Income Housing Tax Credit (LIHTC) from $1.85 per capita to $3.70 per capita beginning in 2006 and would rename the LIHTC the “Affordable Housing Tax Credit.” HR 2681 has 53 co-sponsors and was referred to the House Ways and Means Committee.

On Wednesday, May 25, Rep. Jerrold Nadler (D-NY) introduced HR 2636, the Housing Preservation Matching Grant Act of 2005, in the House. HR 2636 authorizes matching grants to states, up to a 2:1 federal to state ratio, for preservation of affordable housing. Grants can be used for acquisition, preservation incentives, operating costs, and capital expenditures to preserve FHA insured properties, project-based Section 8 properties, or projects purchased by residents. NAHMA supported this bill in the 108th and 107th Congresses. HR 2636 has 15 co-sponsors and has been referred to the House Committee on Financial Services.

On Thursday, May 26, Rep. Bob Andrews (D-NJ) introduced the following four housing-related bills in the House:

HR 2653 - To ensure that dwelling units assisted under the rental housing voucher program under section 8 of the United States Housing Act of 1937 comply with housing quality standards.

HR 2654 - To provide for renewal of project-based assisted housing contracts at reimbursement levels that are sufficient to sustain operations, and for other purposes.

HR 2655 - To establish neighborhood review committees to advise public housing agencies regarding the enforcement of laws and regulations governing assistance provided under tenant-based rental assistance programs.

HR 2656 - To amend section 502(h) of the Housing Act of 1949 to improve the rural housing loan guarantee program, and for other purposes.

The full text of these four bills is not yet available. NAHMA will provide additional information about these bills as it becomes available.


May 20, 2005

USDA Budget Approved By House Appropriations Subcommittee

On Monday, May 16, the House Appropriations Subcommittee on Agriculture, Rural Development, the FDA, and Related Agencies approved the Agriculture, Rural Development, FDA, and Related Agencies appropriations for fiscal year 2006. Specific details on the Rural Housing Service budget are not currently available, but are expected to surface once the appropriations bill is approved by the full committee.

House Subcommittee Holds Hearing on Flexible Voucher Legislation

On Tuesday, May 17, the House Financial Services Committee’s Subcommittee on Housing and Community Opportunity held a hearing on H.R. 1999, the State and Local Housing Flexibility Act of 2005. Testimony was heard from a diverse, 12-member panel of housing authority directors, advocacy groups, property owners, housing policy researchers, and a current Section 8 voucher recipient.

The biggest topic of the hearing was H.R. 1999’s lack of a stable funding formula for the Section 8 program, despite its proposed administrative flexibility. Reps. Barney Frank (D-MA), Maxine Waters (D-CA), and David Scott (D-GA) brought up this issue, as did all panel members who serve as directors of housing authorities, with Renee Glover of the Atlanta Housing Authority summing up the mood well by expressing her opinion that there cannot “be a trade off between regulatory flexibility and funding.” Rep. Gary Miller (R-CA), the bill’s sponsor, attempted to assuage the fears of the PHA directors by stating that H.R. 1999 will have no effect on appropriated funds for the Section 8 program.

Administrative flexibility was touted during the meeting by Reps. Miller, Randy Neugebauer (R-TX) and Geoff Davis (R-KY), as well as Rudy Monteil of the Los Angeles Housing Authority and Christopher Reilly of the National Multi Housing Council/National Apartment Association, both of whom cited the advantage of the ability to waive inspection requirements on certain units. However, flexibility was not viewed as positively by Jody Geese of Martin’s Ferry, OH, whose surrounding area’s housing stock consists mostly of older buildings that need to be inspected regularly. Many panel members representing PHAs were worried that they would need to decrease their Housing Assistance Payments in the future in order to compensate for anticipated program funding shortfalls.

Voucher portability was a large point of debate, with Rep. Miller stating again that he is open to changing his bill’s language so as not to segregate by race or economic status. Margery Turner of the Urban Institute pointed out some advantages of portability by citing evidence that by avoiding concentrated poverty, voucher recipients can find better jobs, send their children to better schools, and be less involved in crime (both as victims and perpetrators).

Enhanced voucher time limits were questioned by representatives of both advocacy groups and property owners alike. Both groups believe that without the one-year time limit, both tenants and housing owners can make better and smoother transitions from subsidized housing to market-based housing.

Income targeting was another topic discussed, with many panel members coming out against the new formulas, while Daniel Nackerman of the San Bernardino, CA, Housing Authority said the changes were “minimal” and that, given the needs of their districts, PHAs can continue to use the old income targeting formulas.

To read full written testimonies of the panel members, click here.


May 13, 2005

House Holds Hearing on Flexible Voucher Legislation

On Wednesday, May 11, the House Committee on Financial Services held a hearing to discuss H.R. 1999, the State and Local Housing Flexibility Act of 2005, which includes the Bush Administration’s proposed Flexible Voucher Program. Secretary Jackson testified before the full committee.

Ranking Member Rep. Barney Frank (D-MA), in his opening statement, expressed his view that voucher portability restrictions in H.R. 1999 amount to an “invitation for segregation, both racial and economic.” In response, Rep. Gary Miller (R-CA), who introduced H.R. 1999, said that he was willing to work with Rep. Frank on the portability language contained in the bill.

On the subject of the bill’s proposal to limit enhanced vouchers to one year, Secretary Jackson stated that he believes those no longer eligible for enhanced vouchers can afford fair market rents. In response, Rep. Frank asked Jackson if HUD had studied this, to which Jackson replied that HUD had not and that his comment was based on his past experience running PHAs.

Both Housing Subcommittee Chair Rep. Bob Ney (R-OH) and Rep. Ginny Brown-Waite (R-FL) asked about the effect of the proposed one-year time limit on enhanced vouchers on elderly and disabled persons. Jackson responded to both committee members that the proposed one-year limit will not apply to elderly or disabled persons currently on enhanced vouchers.

The bulk of the hearing centered on the bill’s proposal to allow PHAs to target up to 90% of their voucher funds on those making up to 60% of Area Median Income (AMI). Specifically in question were the effects of this proposal on those making below 30% of AMI, who currently receive 75% of voucher funds. Secretary Jackson stressed that those below 30% AMI would not be affected, adding that people at 35% or 40% of AMI who are working hard deserve relief as well. Jackson also stated his belief that this proposal will result in increased voucher turnover and a decrease in the size of voucher waiting lists, consistent with his belief that the Section 8 program is meant to be transitory.

Secretary Jackson’s prepared testimony can be found here.

NAHMA Discusses Interagency Seniors’ Council with Sen. Sarbanes’ Staff

NAHMA and other industry partners met with Sen. Paul Sarbanes’ (D-MD) senior staff about S. 705, which would create an Interagency Council on Meeting the Housing and Service Needs of Seniors. Based on direction received earlier this week from NAHMA’s Board of Directors, we will be supportive of this legislation.


May 6, 2005

There was no multifamily housing-related activity in Congress this week. The Senate was not in session. The House focused on the $82 billion FY 2005 Emergency Supplemental Appropriations conference bill (HR 1268) to fund ongoing military operations, anti-terrorism activities, and tsunami relief efforts.

On May 11, the House Financial Services Committee will hold a hearing on H.R. 1999, the “State and Local Housing Flexibility Act of 2005.” HR 1999 was introduced by Rep. Gary Miller (R-CA) as the companion bill to S. 771, sponsored by Sen. Wayne Allard (R-CO). Each of these bills includes the Bush Administration’s proposed Flexible Voucher Program. An interesting question at this hearing will be whether Secretary Jackson will once again allege that landlords are being overpaid in the voucher program. During an exchange with Senator Jon Corzine (D-NJ) in his recent appearance before the Senate Banking Subcommittee on Housing and Transportation, Secretary Jackson commented, “Prices landlords are getting for these vouchers are exorbitant.”


April 29, 2005

Hearings of Interest

House Holds Hearing on CDBG Need-Targeting Formula

On Tuesday, April 26, the House Committee on Government Reform’s Subcommittee on Federalism and the Census held the first in a series of hearings on reforming the CDBG need-targeting formula. Roy Bernardi, HUD Deputy Secretary, two officials from the Government Accountability Office (GAO) and Saul Ramirez, Jr. from the National Association of Housing and Redevelopment Officials (NAHRO) all testified before the subcommittee.

In his opening statement, Subcommittee Chairman Rep. Michael Turner (R-OH) declared that the purpose of the hearing was to determine if the CDBG formula, last modified in 1981, is still applicable today and if not, “what changes to the formula would be appropriate?” Deputy Secretary Bernardi outlined four alternative formulas to improve need-targeting, to which Mr. Ramirez replied that all four alternative formulas would hit New England communities in particular especially hard, and advocated for keeping the formulas as they currently are.

OMB Budget Hearing Held in Senate

On Thursday, April 21, the Senate Committee on Appropriations’ Subcommittee on Transportation, Treasury, The Judiciary, Housing and Urban Development, and Related Agencies concluded a hearing to examine proposed budget estimates for the Office of Management and Budget (OMB) for fiscal year 2006. Joshua Bolten, Director of OMB, testified before the subcommittee. During the hearing, on the topic of the proposal to eliminate CDBG, Subcommittee Chairman Kit Bond (R-MO) admonished Director Bolton, asserting that “Essentially you are saying you don’t want a Department of Housing and Urban Development.” Chairman Bond also expressed to Director Bolten that, in his view, “community development is very different than economic development.” Director Bolton responded that “the question is how best to use resources.”

Later in the hearing, Director Bolten was asked by Chairman Bond where OMB was expecting to get their proposed $2.5 billion rescission from HUD, stating that there would be no leftover money from past HUD budgets now that the Section 8 program is run on a budget-based system. Mr. Bolten replied that OMB believes there will be “substantial unobligated balances” that “may not be exactly $2.5 billion.” The line of questioning ended when Chairman Bond stated that he didn’t believe the funding from HUD was there, but no methodology was provided by OMB.

House and Senate Agree on 2006 Budget Resolution

On Thursday, April 28, the House and Senate passed a Conference Agreement on the fiscal year 2006 budget resolution. According to the House Budget Committee website, the agreement provides “increases above the President’s request for Community Development Block Grants.” Details on the 2006 budget resolution will be forthcoming from NAHMA.

NAHMA Meets With Rep. Barney Frank

On Thursday, April 21, NAHMA met with House Financial Services Ranking Member Rep. Barney Frank (D-MA). Rep. Frank expressed to NAHMA and other industry representatives that he feels the Administration is giving up on moving CDBG to the Commerce Department but that it is “serious” about Section 8 reform, stating that Secretary Jackson is personally making the rounds to build support. Rep. Frank identified five “poison pills” he urged advocates to fight in the Section 8 reform bill: income targeting, portability restrictions, block granting, time limits, and the limitations on enhanced vouchers.

On the topic of proposed voucher portability restrictions, Rep. Frank asserted that giving PHAs the ability to veto voucher portability amounted to segregation. He felt local jurisdictions could use these provisions to keep poor people out of their neighborhoods. He also stated that once Congress understands that proposed one-year caps for enhanced vouchers will mean tenant evictions, he believes that they will not approve it. Rep. Frank’s stated goal is to have a “socially responsible voucher program.”

Legislation

On Thursday, April 28, Rep. Jim Gerlach (R-PA) introduced a bill (H.R. 1984) to amend the Internal Revenue Code of 1986 to extend the low-income housing credit for certain buildings in high cost areas. The full text of this bill is not yet available from the Government Printing Office. H.R. 1984 has been referred to the House Committee on Ways and Means.

On Thursday, April 28, Rep. Gary Miller (R-CA) introduced a companion bill to Sen. Wayne Allard’s (R-CO) Section 8 reform legislation in the House. The full text of Rep. Miller’s bill (H.R. 1999) is not yet available from the Government Printing Office. H.R. 1999 has been referred to the House Committee on Financial Services.

On Tuesday, April 19, Rep. Carolyn Maloney (D-NY) introduced a bill in the House (H.R. 1694) that seeks to authorize the Secretary of HUD to make grants to nonprofit community organizations for the development of open space on municipally-owned vacant lots in urban areas. Under the act, entitled, “The Revitalizing Cities Through Parks Enhancement Act,” the Secretary of HUD would be able to grant a nonprofit group that demonstrates a history of community improvement in a particular city up to $250,000 per year for development of public space. H.R. 1694 has been referred to the House Committee on Financial Services.


April 22, 2005

Hearings of Interest

HUD Budget Hearing Held in Senate

On Thursday, April 21, the Senate Banking, Housing, and Urban Affairs Subcommittee on Housing and Transportation held a hearing to examine the President's proposed budget request for fiscal year 2006 for the Department of Housing and Urban Development. Secretary Jackson, in his testimony, stressed that cuts to eight HUD programs proposed in President Bush’s 2006 budget are necessary to achieve the President’s goal of sustaining economic prosperity by limiting discretionary and non-defense spending. The focus of Secretary Jackson’s testimony was on homeownership, but he did mention low-income housing assistance when he thanked Banking Committee Member Senator Wayne Allard (R-CO) for introducing legislation last week (S. 771) to reform the Section 8 Housing Choice Voucher program. The legislation aims to allow PHAs the ability to better utilize their budget-based voucher allocation by giving them more flexibility over their rent policies and reducing the paperwork required for program compliance.

NAHMA is in the process of reviewing the proposed legislation through its relevant committees.

Senate Holds Hearings on Reform of Housing Government-Sponsored Entities

On Tuesday, Wednesday and Thursday, April 19-21, the Senate Committee on Banking, Housing, and Urban Affairs held hearings to examine the Administration’s proposal to improve the regulation of Housing Government-Sponsored Enterprises (GSEs), specifically, Fannie Mae and Freddie Mac. The committee heard testimony from housing trade groups, GSE representatives, and current GSE regulators. After the hearings concluded on Thursday, Senate Banking Chairman Richard Shelby (R-AL) told reporters that he plans to draft a strong bill creating a new regulator for Fannie Mae and Freddie Mac that has the authority to limit their portfolio size and approve new activities by the companies, according to the Wall Street Journal. Those who support the new regulatory proposal say that limiting Fannie and Freddie’s mortgage portfolios will greatly reduce the risk incurred by the two companies, while detractors claim that it will hamper their mission by adversely affecting consumers and curtailing foreign investment in the U.S. housing market.

Lending support for the new regulatory proposal at the hearings were representatives for the Office of Federal Housing Enterprise Oversight (Fannie Mae and Freddie Mac’s current main regulator), the Congressional Budget Office, the Government Accountability Office, and the Finance Board. Those opposing the proposal included representatives from Fannie Mae, Freddie Mac, the National Association of Realtors, and the National Association of Home Builders. While he did not set a timetable for the introduction of his legislation, Senator Shelby said his staff will move “with deliberate speed.”

April 15, 2005

Hearings of Interest

HUD Budget Hearing Held in Senate

On April 14, the Senate Appropriations Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies held a hearing to examine HUD’s proposed budget estimates for fiscal year 2006. Secretary Jackson testified before the subcommittee. As expected, focus centered around the Section 8 voucher program and the Community Development Block Grant (CDBG). In her opening statement, Subcommittee Ranking Member Sen. Patty Murray (D-WA) concluded the budget indicates, “Housing is not a priority for this Administration.” Senator Patrick Leahy was more blunt, stating that the Administration has “abandoned HUD,” and he wished housing and community development were treated like the priorities in Iraq. In response to questioning, Secretary Jackson shocked industry representatives when he stated that the “unit-based [Section 8] system lets landlords charge what they want just to get people in.” When asked by Subcommittee Chairman Sen. Kit Bond (R-MO) about the impact a budget-based Section 8 program would have, Jackson replied that Section 8 housing was designed to be transitional housing, but it has become a substitute for public housing. Secretary Jackson went on to state that the budget-based Section 8 system will allow HUD to serve more people and have a higher turnover rate, while holding PHAs accountable. Privately, following the hearing, a key Republican staff member expressed frustration that the Administration is “trying to dismantle this agency piece by piece.”

Senate Holds Hearing on USDA Budget

On April 13, the Senate Appropriations Subcommittee on Agriculture, Rural Development, and Related Agencies held a hearing to examine the USDA’s proposed budget estimates for fiscal year 2006, receiving testimony from Gilbert Gonzalez, Acting Under Secretary for Rural Development, among others. According to National Journal’s CongressDaily PM (“Panel Wary of Bush’s Voucher Plan for Poor Residents” by Jerry Hagstrom, April 14), much debate centered on the Administration’s budget request of $214 million to create a voucher system for residents of RHS housing when owners prepay and opt-out. Both Subcommittee Chairman Sen. Robert Bennett (R-UT) and Ranking Member Sen. Herb Kohl (D-WI) were skeptical of the voucher plan, however, with Kohl stating that it would give developers “a green light” to evict tenants. Sen. Kohl went on to question the Administration’s plan to move some rural development programs to the Department of Commerce, expressing his fears that these programs would be forced into competition for funding with urban programs also slated to be moved to Commerce.

NAHMA believes tenant protection vouchers must be a part of a comprehensive rural housing preservation plan. We will follow-up with Senator Kohl’s office to flesh out his specific concerns about the Administration’s proposal.

House Holds Hearing on GSE Reform

On April 13, the House Committee on Financial Services held a hearing entitled “The Administration Perspective on GSE Regulatory Reform.” John Snow, Secretary of the Treasury, and Secretary Jackson testified before the committee. Secretary Snow recommended a “world-class” financial regulator for the GSEs, to be housed at the Department of Treasury and given independent responsibilities of supervision and enforcement of regulations. He also expressed his support for Federal Reserve Chairman Alan Greenspan’s call for limitations on the size of the GSEs’ mortgage investment portfolios, stating that this would protect against systemic risks. Secretary Jackson added that under the new regulatory proposal, HUD would still set the GSEs’ affordable housing goals. Both Snow and Jackson said the Administration is open to GSE regulatory proposals from Congress.

Legislation

Section 8 Voucher Bill Introduced in Senate

On April 13, Senator Wayne Allard (R-CO), Chairman of the Senate Banking, Housing and Urban Affairs Committee’s Subcommittee on Housing and Transportation introduced the State and Local Housing Flexibility Act (S. 771) in the Senate. The bill contains HUD-requested section 8 voucher legislation and was referred to the Senate Committee on Banking, Housing, and Urban Affairs. For more information on this important bill, please refer to the “E-NAHMAnalysis 2005-0414: State and Local Housing Flexibility Act” email sent Thursday night.

April 8, 2005

Hearings of Interest

“Strengthening America’s Communities Initiative”

On Wednesday, April 6, the House Committee on Financial Services held a hearing to review the Administration's FY 2006 budget initiative to consolidate 18 community development programs, including the Community Development Block Grant program and six others currently administered by HUD, and move them to the Department of Commerce. Carlos Gutierrez, Secretary of Commerce, and Alphonso Jackson, Secretary of HUD, testified before the committee, whose questioning centered on the Administration’s proposed funding cuts to CDBG and Commerce’s lack of experience in administering housing programs. In response to pointed inquiry from Rep. Joseph Crowley (D-NY), Secretary Jackson said he agreed with the cuts to CDBG and Secretary Gutierrez added that the consolidation of the 18 programs would save on administrative costs. Secretary Gutierrez also pointed out that under the proposed Strengthening America’s Communities Initiative, areas with concentrated poverty would be better targeted and that the consolidated programs would be held more accountable than they currently are. Rep. Gary Miller (R-CA) expressed concern with the consolidation proposal, citing the differences between community development and economic development, and stated his belief that these concepts might be better handled by both HUD and Commerce, respectively.

Legislation containing the full details of the SACI proposal will be sent to Congress by the end of April, according to Secretary Gutierrez, whose Commerce department will be drafting new rules and regulations.

Reform of Fannie Mae and Freddie Mac

On Wednesday, April 6, and Thursday, April 7, the Senate Committee on Banking, Housing, and Urban Affairs held hearings to examine the role of housing-related government-sponsored enterprises (GSEs, namely, Fannie Mae and Freddie Mac) in the U.S. economy. On Wednesday, Alan Greenspan, chairman of the Federal Reserve, suggested that Fannie Mae and Freddie Mac dramatically reduce their mortgage portfolios to between $100 and $200 billion, a sharp decrease from their current combined portfolio of $1.5 trillion. On Thursday, John Snow, Secretary of the Treasury, and Alphonso Jackson, Secretary of HUD presented the Administration's view that tighter federal oversight of Fannie Mae and Freddie Mac is needed. During the hearing, both Secretaries Snow and Jackson said they favor creating a new, independent regulator of the two companies, replacing OFHEO, a division of HUD.

Details of More Accounting Failures at Fannie and Freddie

On Wednesday, April 6, the House Committee on Financial Services’ Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, held a hearing to uncover the full extent of accounting and management failures at Fannie Mae. The Subcommittee heard testimony from Armando Falcon, Director of Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO is the “safety and soundness” regulator for the GSEs, while HUD sets their affordable housing goals. The day before the hearing, Subcommittee chairman Rep. Richard Baker (R-LA) introduced H.R. 1461 to reform the regulation of housing-related GSEs.

Senate to Hold Hearing to Discuss FY 2006 HUD Budget Next Week

On April 14, the Senate Appropriations Subcommittee on Transportation, Treasury, the Judiciary, and Housing and Urban Development will hold a hearing to examine HUD’s proposed budget estimates for fiscal year 2006.

Legislation

New Section 8 Voucher Reform Bill Expected to be Proposed Next Week

HUD is expected to send a bill to Congress next week aimed at reforming the Section 8 Housing Choice Voucher program. Following are key provisions of the bill:

* Enhanced Vouchers appear to end 12 months after enactment for all properties;
* Voucher rent setting authority will be given to local PHAs under 5 different rent models;
* Voucher rents will be detached from the Fair Market Rents;
* Housing Authorities will have the right to time limit vouchers for non-elderly families to no less than 5 years;
* High-performing Housing Authorities with more than 500 units will be allowed to reprogram voucher funds for other Moving To Work programs;
* 90% of vouchers must go to those below 60% of AMI;
* The recertification period for elderly households will change to once every 3 years and families will recertify every other year; and
* HUD will increase Section 8 Voucher funding by $1 billion to allow PHAs to get these changes off to a fast start.

Two Bills of Interest Introduced This Week

On April 5, Rep. Nancy Johnson (R-CT) introduced H.R. 1468 to amend the Internal Revenue Code to replace the recapture bond provisions of the low income housing tax credit program. Also, on April 5, Sen. Paul Sarbanes (D-MD) introduced S. 705 to establish the Interagency Council on Meeting the Housing and Service Needs of Seniors.

More information will be provided as NAHMA considers its public policy positions on these bills.

April 1, 2005

Congress was not in session this week due to the Spring recess. Congress will convene again on Monday, April 4.

March 25, 2005

Congress Begins Spring Recess This Week

The Senate and House were not in session the week of March 21, and the recess continues through this week. Therefore, there are no substantive multifamily housing policy matters to report.

March 18, 2005

FY 2006 Budget Resolutions Passed in Senate and House

The House and Senate passed Concurrent Budget Resolutions (H. Con. Res. 95 and S. Con. Res. 18, respectively) for FY 2006 on March 17th. The House's Budget Resolution passed by a vote of 218 to 214; the Senate passed its version by a vote of 51 to 49.

Of particular interest during the Senate debate were two amendments related to the CDBG program. Senator Paul Sarbanes (MD) and 27 co-sponsors proposed an amendment to the House's budget resolution aimed at restoring $1.89 billion in cuts to the Community Development Block Grant (CDBG) program and 17 other community development programs. His amendment proposed offsetting the funding of CDBG and the aforementioned programs at their FY 2005 funding levels by closing certain loopholes in the tax code. Sarbanes's amendment also opposed the House's resolution to move CDBG and the other programs under the Department of Commerce. The amendment received 49 votes for and 51 against. Senator Norm Coleman (MN) proposed a similar amendment, offsetting funding for CDBG and the 17 other community development programs with across-the-board cuts to HUD's budget and, like Sarbanes, including language to keep CDBG under HUD's jurisdiction. Coleman's amendment passed by a vote of 68 to 31 and was included in the Senate's final version of the budget resolution.

Differences between these resolutions must be resolved. Then, the spending parameters established in the final budget resolution will be used to determine the level of total funding each appropriations subcommittee receives.

House Appropriations Subcommittee Holds HUD Budget Hearing

Also on March 17th, The House Appropriations Subcommittee on Transportation, Treasury, HUD, the Judiciary, and D.C. held its first hearing on HUD's proposed FY 2006 budget. Secretary Jackson testified. According to reports issued by the National Low Income Housing Coalition, the hearing focused primarily on the Section 8 and CDBG programs.

NLIHC reported that in response to concerns about the expansion of the Section 8 program, Secretary Jackson discussed a need for "checks and balances" to combat its growth. Chairman Joe Knollenberg (MI) stated that "ineffective and inefficient" programs needed to be "fixed or terminated" and that he was in "full support of reductions." During discussions on the CDBG program, ranking minority member John Oliver (MA) expressed concern over the loss of the housing component of CDBG if consolidated and moved to the Department of Commerce. However, Secretary Jackson argued that "the program was moved to assist industrial cities and those cities with a greater need."

Elderly and Disabled Bill Introduced in House

On March 15th, Representative Barbara Lee (CA) introduced the One Strike and You're Out! Act of 2005 (HR 1309). This bill prohibits eviction of elderly and disabled public housing and Section 8 tenants housing for criminal activity caused by a guest or somebody in the tenant's household if the activity was carried out without the tenant's knowledge. H.R. 1309, was referred to the House Committee on Financial Services.

NAHMA will gather additional information about this legislation and put it through the normal process to determine an official public policy position.

March 11, 2005

Senate Passes Bankruptcy Reform

The Senate passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S 256) by a vote of 74-25. NAHMA supports this legislation because it reforms the automatic stay laws in eviction proceedings.

The Congressional Research Service (CRS) has an online summary of the bill available at http://thomas.loc.gov/cgi-bin/bdquery/z?d109:SN00256:@@@D&summ2=m& . According to CRS, Section 311, "Denies an automatic stay of specified residential real property eviction proceedings by a lessor against a debtor if: (1) the lessor obtained judgment for possession prior to the bankruptcy filing date; or (2) lessor furnishes certification of specified debtor offenses." S 256 specifies these offenses as endangerment of the property or illegal use of controlled substances.

The automatic stay provisions of Section 311 are also included in the House companion bill (HR 685), which was introduced by Rep. James Sensenbrenner.

Rural Housing Service Budget Hearing

The House Financial Services Subcommittee on Housing and Community Opportunity held a hearing on March 10th to examine the RHS' budget request for FY 2006. Testimony was heard from Russell T. Davis, Administrator, Rural Housing Service, USDA and William B. Shear, Director, Government Accountability Office (GAO).

In his opening statement, Rep. Michael Oxley (OH) raised concerns about RHS's definition of "rural." He wrote, "As a result of changing economic and demographic conditions, many of the distinctions between rural and urban life have blurred. Advances in transportation, computer technology, and telecommunications, along with the spread of suburbia, have linked many rural areas to urban areas."

In his prepared testimony, Russell Davis outlined the RHS budget for Multi-Family Housing (MFH). Overall, a 30% increase in funding above FY 2005 is requested. The total FY 2006 budget request for RHS Multifamily programs is just over $1 billion; of this, $650 million is for Rental Assistance (RA) for contract renewals, farm labor housing, and preservation. Also in the MFH budget is $214 million for the launch of a Revitalization Initiative that establishes a tenant protection program with vouchers. Administrator Davis mentioned the Service would submit preservation legislation to Congress later this year. RHS also requests $200 million in Section 538 guaranteed loans to be used for new construction, double the amount provided in FY 2005.

Davis noted some technological improvements at RHS, including an additional internal control in the RA program to verify tenants' income by matching data with the HHS New Hires Directory. RHS also launched the Multi-Family Information System (MFIS) database so the public can search and find information on all MFH properties. Finally, the Management Agent Interactive Network Connection (MAINC) allows MFH properties to submit tenant and property data to RHS through the Internet.

Highlights of the William Shear's GAO testimony were:

"…GAO found that while RHS has significantly improved the housing stock in rural America and has made progress in addressing problems, several issues prevent the agency from making the best use of resources. Specifically:

o Statutory requirements for program eligibility, including those related to metropolitan statistical areas (MSA), "grandfathering" communities, and demonstrating a "serious lack of mortgage credit," are of marginal utility. For example, using density measures rather than MSAs might allow RHS to better differentiate urban and rural areas, and phasing out the "grandfathering" of communities could better ensure that RHS makes more consistent eligibility determinations.
o RHS has consistently overestimated its rental assistance budget needs by using higher inflation rates than recommended by the Office of Management and Budget and incorrectly applying those rates. Also RHS lacked sufficient internal controls to adequately monitor the use of rental assistance funds, particularly for fund transfers and income verifications. RHS has been taking actions that should correct many of the rental assistance shortcomings GAO identified.
o GAO found incorrect, incomplete, and inconsistent entries in RHS's loans and grants databases. Until RHS can demonstrate that its system edit functions or other design features can ensure the accuracy of data in its databases, second-party review is necessary to meet internal control standards."

March 4, 2005

HUD Budget Hearing Held in House

The House Financial Services Committee held a hearing on March 2nd to examine HUD's budget request for FY 2006. HUD Secretary Alphonso Jackson testified before the committee.

Several committee members expressed concerns in their opening statements regarding the new budget-based funding of Section 8 Housing Choice Vouchers, proposed funding cuts to Community Development Block Grants (CDBG), Section 811 housing, and HOME block grants. Concerns were also raised about the President's proposal to move CDBG and other community development programs to the Department of Commerce.

In his prepared testimony, HUD Secretary Jackson addressed some of the Representatives' concerns. In response to the issue of budget-based Section 8 vouchers, he stressed that the Section 8 program currently consumes 60% of HUD's budget, and that that percentage is expected to rise. Jackson believes HUD should give PHAs more flexibility in administering Section 8 programs, including adjusting subsidy levels according to local market rents and eliminating administrative red tape to make the programs more efficient. In response to the proposal to move CDBG to the Department of Commerce, Jackson stated that the move would make the program more "targeted," "unified," and "accountable." He did not mention the Administration's proposed cuts to CDBG, nor did he mention cuts in the Section 811 or HOME programs.

Senate Appropriations Committee Restructures

The Senate Appropriations Committee announced its new structure in a press release issued Wednesday, March 2nd. As a result of the restructuring, HUD will now be overseen in the Senate by the Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies subcommittee. HUD was formerly overseen by the VA-HUD and Independent Agencies subcommittee. Senate Appropriations Committee Chairman Thad Cochran said the changes in the Appropriations Committee structure "will allow for a more orderly approach to the appropriations process." The members of the newly created Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies subcommittee are:

Republicans: Democrats:
Senator Christopher Bond (MO) (Chairman) Senator Patty Murray (WA) (Ranking Member)
Senator Richard Shelby (AL) Senator Robert C. Byrd (WV)
Senator Arlen Specter (PA) Senator Barbara Mikulski (MD)
Senator Robert Bennett (UT) Senator Harry Reid (NV)
Senator Kay Bailey Hutchison (TX) Senator Herb Kohl (WI)
Senator Mike DeWine (OH) Senator Richard Durbin (IL)
Senator Sam Brownback (KS) Senator Byron Dorgan (ND)
Senator Ted Stevens (AK) Senator Patrick Leahy (VT)
Senator Pete Domenici (NM) Senator Tom Harkin (IA)
Senator Conrad Burns (MT)

For more information, see: http://appropriations.senate.gov/releases/record.cfm?id=232718.

February 25, 2005

The Congress was not in session this week.

February 18, 2005

There was no significant multifamily housing-related activity to report this week.

February 11, 2005

Appropriations

A proposal by the new House Appropriations Committee Chair Jerry Lewis to reduce the number of appropriations subcommittees from 13 to 10 continues to cause friction both in the House and across the Capitol in the Senate. Generally, House Democratic Ranking Members and the Senate Subcommittee Chairs are not excited about the prospect of losing their positions. Among the subcommittees which would be eliminated is VA-HUD. HUD funding would be placed on the same bill as Transportation and Treasury programs. The Senate has been cool to the proposal. It is unclear whether the House committee would reorganize if the Senate did not; such a situation would make negotiations on final numbers even more difficult.

A February 9 press release issued by the Chairman Lewis describes his reorganization plan as follows:

Chairman Lewis announced today a bold reorganization of the House Appropriations Committee in order to streamline and expedite the consideration of the annual appropriations bills. The proposal reorganizes the current 13 subcommittees down to 10. The proposal will need to be ratified by the full membership of the Appropriations Committee at the reorganization meeting tentatively scheduled for Tuesday afternoon. The House and Senate could still modify the plan and those modifications could be accommodated in a manager's amendment in full committee.

"This structure will allow us to spend less time on the floor and in committee and more time doing oversight over the expenditure of taxpayer funds. These changes will make it a little easier to get our work done on time and under budget. The greatest impact of this proposal falls on the two subcommittees I formerly chaired, VA-HUD and Defense. My decade of experience with the programs funded by these two subcommittees provided the insight to make some common-sense changes that will improve our stewardship of discretionary spending. I want to commend Chairman Cochran on the respectful and thoughtful manner in which he has worked with me on this proposal," said Chairman Lewis.

Summary of Reorganization Proposal

The functions of the District of Columbia; Legislative; and Veterans, Housing and Independent Agencies will merged into other subcommittees. The House Appropriations Committee will reorganize into 10 subcommittees chaired by the following Members:

Agriculture chaired by U.S. Rep. Henry Bonilla (R-TX)
Defense chaired by U.S. Rep. C.W. Bill Young (R-FL)
Energy and Water chaired by U.S. Rep. David Hobson (R-OH)
Foreign Operations chaired by U.S. Rep. Jim Kolbe (R-AZ)
Interior and Environment chaired by U.S. Rep. Charles Taylor (R-NC)
Homeland Security chaired by U.S. Rep. Harold Rogers (R-KY)
Labor, Health and Human Services and Education chaired by U.S. Rep. Ralph Regula (R-OH)
Military Quality of Life and Veterans Affairs chaired by U.S. Rep. James Walsh (R-NY)
Science, State, Justice and Commerce chaired by U.S. Rep. Frank Wolf (R-VA)
Transportation, Treasury and Housing chaired by U.S. Rep. Joe Knollenberg (R-MI)

Funding for the District of Columbia will transfer to the Transportation and Treasury Subcommittee. Jurisdiction over Legislative Branch programs will assumed by the Full House Appropriations Committee. The programs and activities of the VA-HUD bill will spread to several existing subcommittees…

For additional information, please see: http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=439.

2006 Budget

The President sent his 2006 Budget Request to Congress this week. As noted in a previous e-mail to the membership, there were several cuts to important housing programs, including project-based Section 8 and Section 811 housing for the disabled.

Likewise, the President proposed elimination of the Community Development Block Grant (CDBG), a highly popular program from the perspective of state and local government officials. The Administration feels CDBG is redundant, should be consolidated with several other economic development programs, and moved to the Department of Commerce. Funding for the new program is proposed at $3.71 billion; in 2005, CDBG received more than $4 billion. Aside from whether or not CDBG is effective or deserves to be eliminated, the point is that even popular block grants can be targeted for elimination. The irony is that CDBG may become a victim of its own design, and the very factors which made it popular. Because it has so many eligible uses, so much "flexibility" and minimum federal requirements, it is regarded as lacking clear goals and objectives. This is something to keep in mind in considering any proposed Section 8 block grant.

A review of the key affordable housing accounts follows.

HUD

Section 8: As per the 2005 appropriations bill, the accounts for tenant-based and project-based Section 8 are separate.

Tenant-based Housing Choice Vouchers: The Administration announced it will seek separate legislation to give public housing agencies (PHAs) more "flexibility" so they can live within their dollar-based budgets. Unlike last year, the Administration has not incorporated assumptions about cost savings from Section 8 reform as part of the budget. For contract renewals, $14,090,000,000 is requested-an increase of about $1.1 billion above FY 2005.

Project-based Section 8: Cuts are proposed for this side of Section 8. Only $4,923,000,000 is requested for contract renewals; $5,195,000,000 was appropriated for FY 2005. HUD officials explained that much of this $226 million proposed reduction is explained by the HUD's decision not to seek money its customary 3% cushion above what they think is needed for renewals. HUD claims the RHIPP Initiative has cut subsidy errors by 30%, and combined with the PBCA efforts, HUD expects erroneous payments to be reduced even further, eliminating the need to ask for more money than they believe is necessary.

Section 202: Total funding would be flat-lined at $741 million, same as the 2005 enacted level. HUD believes the same funding level can build more units because they are proposing elimination of the $18 million predevelopment grants. Length of PRACs will be reduced from 5 years to 3.

Section 811: Funding would be cut nearly in half from $238 million to $119 million. No funding for capital advances (i.e. no new construction). Full funding is proposed for the mainstream voucher program. HUD officials mentioned there is controversy within the disabled community about whether project or tenant-based assistance is more appropriate.

HOME: Although total funding through HOME would rise from $1,900,000,000 to 1,941,000,000 under the request, most of this increase is accounted for by raising down payment assistance funds from $50 million to $200 million. Aside from the American Dream Downpayment Act assistance, HOME would be reduced from $1,865,000,000 to $1,741,000,000.

HOPE VI: No new funding is proposed.

FHA Multifamily Mortgage Insurance: Reduced Premiums for Tax Credit properties and ReFis effective in October. All other premiums to remain the same.

CDBG: Will be eliminated & functions consolidated in a new economic development program administered by the Department of Commerce.

RHS

Section 515: $27.027 million, limited to repair and rehab purposes. In 2005, the program received $100 million.

Section 521: $650.026 million is requested for rural rental assistance, a considerable increase above the $592 million provided for FY 2005.

Section 538 Loan Guarantee: Proposed doubling the program to $200 million.

Tenant Protection Vouchers: $214 million is requested to provide tenant-protection vouchers in cases of pre-payment / opt-out.

February 4, 2005

There was no significant multifamily housing-related activity to report this week.

January 28 , 2005

There was no significant multifamily housing-related activity to report this week.

January 21 , 2005

There was no significant multifamily housing-related activity to report this week.

January 14, 2005

Congress was not in session this week. Therefore, there is no specific legislative activity to report.

However, members should be aware that leaked information about the 2006 budget President Bush will send to Congress in early February indicate it will be another miserable year for HUD programs. The Flexible Voucher Program (Section 8 voucher block grant) is rumored to be proposed again in this budget. Also, reports are surfacing that the CDBG program will be slated for drastic cuts and moved to the Commerce Department. All non-defense, non-homeland security discretionary spending will be frozen or cut.

NAHMA will make information available on the grassroots action center website to assist members in writing to Congress about the importance of a strong budget for federal housing programs.

January 7, 2005

109th Congress

The new Congress was sworn in this week. Among the changes in this year’s Congress are new Appropriations Committee Chairmen in both chambers. Rep. Jerry Lewis (R-CA) takes over the House Committee from Rep. Bill Young (R-FL), and Senator Thad Cochran (R-MS) relieves Ted Stevens (R-AK). The Subcommittee Chairs have not officially been named at this time.

Limited English Proficient Guidance

NAHMA is still seeking letters from attorneys regarding the effect HUD’s LEP guidance will have on eviction proceedings and other landlord-tenant issues at the local level. A NAHMAnalysis on the LEP issue is forthcoming, and talking points will soon be available for members who wish to bring this issue to the attention of their legislators.

Also, Rep. Peter King (R-NY) has introduced HR 136, “A bill to provide that Executive Order 13166 shall have no force or effect, and to prohibit the use of funds for certain purposes.” This bill would nullify the executive order that is at the root of the government-wide LEP initiative. It was referred to the Committee on Government Reform.