[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1877 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 1877

   To remove barriers to the provision of affordable housing for all 
                               Americans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 27, 1998

Mr. Wyden (for himself and Mr. Bennett) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To remove barriers to the provision of affordable housing for all 
                               Americans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Housing Barrier Removal 
Act of 1998''.

SEC. 2. CONGRESSIONAL FINDINGS.

    Congress finds that--
            (1) homeownership has become a challenge for Americans of 
        moderate and low income levels;
            (2) decent housing has become unaffordable for many working 
        families, and according to the Department of Housing and Urban 
        Development, the median family income nationwide is $43,500 and 
        the median price of a single family home is $124,000, leading 
        to an ``affordability gap'' that makes it virtually impossible 
        for many people, especially young families, to obtain all the 
        benefits of home ownership;
            (3) housing comprises 12 percent of the economy of the 
        United States;
            (4) housing construction and remodeling employ 
        approximately 2,000,000 people each year;
            (5) new housing construction accounts for a third of the 
        growth of the Nation's economy during recovery periods;
            (6) homeowners have more than $4,500,000,000,000 in equity 
        in their homes, and this equity is the single largest source of 
        savings and wealth for most families;
            (7) the lack of a broad, effective, local dialog among 
        interested parties about the possible tradeoffs between housing 
        costs and other valued priorities and policies can be a 
        significant factor in raising housing costs;
            (8) in fact, an increase of $1,000 in the purchase price of 
        a median-priced home can force more than 21,000 potential 
        buyers out of the market; and
            (9) removing barriers to affordable housing is an important 
        public policy goal.

SEC. 3. CONFERENCE ON BARRIERS TO AFFORDABLE HOUSING.

    (a) Authority To Call Conference.--Beginning not later than 1 year 
after the date of enactment of this Act, the Department of Housing and 
Urban Development shall sponsor a conference on barriers to affordable 
housing (referred to in this section as the ``Conference'') to be held 
biennially to discuss and develop strategies and programs to eliminate 
barriers to affordable housing.
    (b) Planning and Direction.--The Conference shall be planned and 
conducted under the direction of the Secretary of Housing and Urban 
Development (referred to in this section as the ``Secretary'') in 
cooperation with the heads of such other Federal departments and 
agencies as are appropriate. The Secretary shall provide such 
assistance from the Department of Housing and Urban Development as may 
be necessary to conduct the Conference, which may include the 
assignment of personnel.
    (c) Purposes.--The purposes of the Conference shall be--
            (1) to increase public awareness of the existence of 
        barriers to affordable housing;
            (2) to identify existing and potential barriers to 
        affordable housing;
            (3) to develop such specific and comprehensive 
        recommendations for executive and legislative action at all 
        levels of government as may be appropriate to achieving the 
        removal of barriers to affordable housing;
            (4) to develop and implement recommendations for the 
        coordination of Federal, State, and local policies on 
        eliminating barriers to affordable housing; and
            (5) to review the status of the recommendations of past 
        Conferences, if any.
    (d) Participants.--In order to carry out the purposes of this 
title, the Conference shall bring together representatives of--
            (1) persons living or to be living in low-income housing;
            (2) the Federal Government;
            (3) State and local governments;
            (4) public interest groups;
            (5) builders and other persons active in the field of 
        housing; and
            (6) the general public.
    (e) Cooperation With State and Local Agencies.--The Secretary shall 
furnish all reasonable assistance to State and local agencies to enable 
them to organize and conduct conferences and other activities in 
conjunction with the Conference, including activities in advance of the 
Conference, as part of the process of planning for the Conference, and 
subsequent to the Conference in connection with the dissemination, 
discussion, and implementation of the recommendations of the 
Conference.
    (f) Report.--Not later than 90 days after the completion of the 
Conference, the Secretary shall submit a report to the Congress 
describing the results of the Conference and setting forth any 
recommendations of the Conference for statutory or regulatory reform.
    (g) Definition.--For purposes of this section, the term ``barriers 
to affordable housing'' means public policies (including policies of 
State and local governments and policies embodied in statutes, 
ordinances, regulations, and administrative procedures and processes) 
that increase the cost of housing or adversely affect incentives to 
developing, maintaining, or improving affordable housing.

SEC. 4. HOUSING IMPACT ANALYSIS.

    (a) Applicability.--
            (1) In general.--The requirements of this section shall 
        apply with respect to--
                    (A) any proposed rule, unless the head of the 
                agency promulgating the rule--
                            (i) has certified that the proposed rule 
                        will not, if given force or effect as a final 
                        rule, have a significant deleterious impact on 
                        the availability of affordable housing; and
                            (ii) has caused such certification to be 
                        published in the Federal Register at the time 
                        of publication of general notice of proposed 
                        rulemaking for the rule, together with a 
                        statement providing the factual basis for the 
                        certification; and
                    (B) any final rule, unless the head of the agency 
                promulgating the rule--
                            (i) has certified that the rule will not, 
                        if given force or effect, have a significant 
                        deleterious impact on the availability of 
                        affordable housing; and
                            (ii) has caused such certification to be 
                        published in the Federal Register at the time 
                        of publication of the final rule, together with 
                        a statement providing the factual basis for the 
                        certification.
            (2) Copy of certification to secretary.--Any agency making 
        a certification under this subsection shall provide a copy of 
        such certification and the statement providing the factual 
        basis for the certification to the Secretary of Housing and 
        Urban Development.
    (b) Statement of Proposed Rulemaking.--Whenever an agency publishes 
general notice of proposed rulemaking for any proposed rule, the agency 
shall--
            (1) in the notice of proposed rulemaking--
                    (A) state with particularity the text of the 
                proposed rule; and
                    (B) request any interested persons to submit to the 
                agency any written data, views, and arguments, and any 
                specific alternatives to the proposed rule that--
                            (i) accomplish the stated objectives of the 
                        applicable statutes;
                            (ii) result in costs to the Federal 
                        Government that are not more than 5 percent 
                        higher than such costs resulting from the 
                        proposed rule; and
                            (iii) result in a quantity of affordable 
                        housing that is 5 or more percent greater than 
                        the quantity resulting from the proposed rule;
            (2) provide an opportunity for interested persons to take 
        the actions specified under paragraph (1)(B) before 
        promulgation of the final rule; and
            (3) prepare and make available for public comment an 
        initial housing impact analysis in accordance with the 
        requirements of subsection (c).
    (c) Initial Housing Impact Analysis.--
            (1) Requirements.--Each initial housing impact analysis 
        shall describe the impact of the proposed rule on the 
        availability of affordable housing. The initial housing impact 
        analysis, or a summary thereof, shall be published in the 
        Federal Register at the same time as, and together with, the 
        publication of the general notice of proposed rulemaking for 
        the rule. The agency shall transmit a copy of the initial 
        housing impact analysis to the Secretary of Housing and Urban 
        Development.
            (2) Contents.--Each initial housing impact analysis 
        required under this subsection shall contain--
                    (A) a description of the reasons why action by the 
                agency is being considered;
                    (B) a succinct statement of the objectives of, and 
                legal basis for, the proposed rule;
                    (C) a description of and, where feasible, an 
                estimate of the extent to which the proposed rule would 
                impact the cost or supply of housing or land;
                    (D) an evaluation regarding whether the proposed 
                rule would eliminate or create barriers to affordable 
                housing; and
                    (E) an identification, to the extent practicable, 
                of all relevant Federal rules which may duplicate, 
                overlap, or conflict with the proposed rule.
    (d) Proposal of Less Deleterious Alternative Rule.--
            (1) Analysis.--The agency publishing a general notice of 
        proposed rulemaking shall analyze any specific alternatives to 
        the proposed rule which have been submitted to the agency 
        pursuant to subsection (b)(2) to determine whether any 
        alternative to the proposed rule--
                    (A) accomplishes the stated objectives of the 
                applicable statutes;
                    (B) results in costs to the Federal Government that 
                are not more than 5 percent higher than such costs 
                resulting from the proposed rule; and
                    (C) results in a quantity of affordable housing 
                that is 5 or more percent greater than the quantity 
                resulting from the proposed rule.
            (2) New notice of proposed rulemaking.--If the agency 
        determines that an alternative to the proposed rule meets the 
        requirements under subparagraphs (A) through (C) of paragraph 
        (1), the agency shall publish a general notice of proposed 
        rulemaking for a proposed rule that accomplishes the stated 
        objectives of the applicable statutes, the text of which is 
        based upon such alternative to the original proposed rule. In 
        any case in which the agency determines that more than 1 
        alternative to the proposed rule meet such requirements, the 
        new proposed rule contained in the general notice of proposed 
        rulemaking shall be based upon the alternative that the agency 
        determines is most appropriate after considering the costs, 
        effects on affordable housing, and effectiveness in 
        accomplishing the objective of the rule of such alternatives. 
        The rulemaking for the new proposed rule shall be subject to 
the requirements under subsection (b).
    (e) Final Housing Impact Analysis.--
            (1) Requirement.--Whenever an agency promulgates a final 
        rule after publication of a general notice of proposed 
        rulemaking, the agency shall prepare a final housing impact 
        analysis.
            (2) Contents.--Each final housing impact analysis required 
        by paragraph (1) shall contain--
                    (A) a succinct statement of the need for, and 
                objectives of, the rule;
                    (B) a summary of the significant issues raised by 
                the public comments in response to the initial housing 
                impact analysis, a summary of the assessment of the 
                agency of such issues, and a statement of any changes 
                made in the proposed rule as a result of such comments; 
                and
                    (C) a description of and an estimate of the extent 
                to which the rule will impact the availability of 
                affordable housing or an explanation of why no such 
                estimate is available.
            (3) Availability.--The agency shall make copies of the 
        final housing impact analysis required by this subsection 
        available to members of the public, and shall publish in the 
        Federal Register such analysis or a summary thereof.
    (f) Avoidance of Duplicative or Unnecessary Analyses.--
            (1) Duplication.--Any Federal agency may perform the 
        analyses required by subsections (c) and (e) in conjunction 
        with or as a part of any other agenda or analysis required by 
        any other law if such other analysis satisfies the provisions 
        of such subsections.
            (2) Joinder.--In order to avoid duplicative action, an 
        agency may consider a series of closely related rules as one 
        rule for the purposes of subsections (c) and (e).
    (g) Preparation of Analyses.--In complying with the provisions of 
subsections (c) and (e), an agency may provide either a quantifiable or 
numerical description of the effects of a proposed rule or alternatives 
to the proposed rule, or more general descriptive statements, if 
quantification is not practicable or reliable.
    (h) Effect on Other Law.--The requirements of subsections (c) and 
(e) do not alter in any manner standards otherwise applicable by law to 
agency action.
    (i) Procedure for Waiver or Delay of Completion.--
            (1) Initial housing impact analysis.--An agency head may 
        waive or delay the completion of some or all of the 
        requirements of subsection (c) by publishing in the Federal 
        Register, not later than the date of publication of the final 
        rule at issue, a written finding, with reasons therefor, that 
        the final rule is being promulgated in response to an emergency 
        that makes compliance or timely compliance with the provisions 
        of subsection (a) impracticable.
            (2) Final housing impact analysis.--An agency head may not 
        waive the requirements of subsection (e). An agency head may 
        delay the completion of the requirements of subsection (e) for 
        a period of not more than 180 days after the date of 
        publication in the Federal Register of a final rule by 
        publishing in the Federal Register, not later than such date of 
        publication, a written finding, with reasons therefor, that the 
        final rule is being promulgated in response to an emergency 
        that makes timely compliance with the provisions of subsection 
        (e) impracticable. If the agency has not prepared a final 
        housing impact analysis pursuant to subsection (e) within 180 
        days after the date of publication of the final rule, such rule 
        shall lapse and have no force or effect. Such rule shall not be 
        repromulgated until a final housing impact analysis has been 
        completed by the agency.
    (j) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Affordable housing.--The term ``affordable housing'' 
        means housing that is affordable to any family having an income 
        that does not exceed 150 percent of the median income of 
        families in the area in which the housing is located, with 
        adjustments for smaller and larger families. For purposes of 
        this paragraph, area, median family income for an area, and 
        adjustments for family size shall be determined in the same 
        manner as such factors are determined for purposes of section 
        3(b)(2) of the United States Housing Act of 1937.
            (2) Agency.--The term ``agency'' means each authority of 
        the Government of the United States, whether or not it is 
        within or subject to review by another agency, but does not 
        include--
                    (A) the Congress;
                    (B) the courts of the United States;
                    (C) the governments of the territories or 
                possessions of the United States;
                    (D) the government of the District of Columbia;
                    (E) agencies composed of representatives of the 
                parties or of representatives of organizations of the 
                parties to the disputes determined by them;
                    (F) courts-martial and military commissions;
                    (G) military authority exercised in the field in 
                time of war or in occupied territory; or
                    (H) functions conferred by--
                            (i) sections 603, 604, 608, and 609 of the 
                        National Housing Act;
                            (ii) the Contract Settlement Act of 1944; 
                        or
                            (iii) subchapter II of chapter 471 of title 
                        49, United States Code;
            (3) Families.--The term ``families'' has the meaning given 
        such term in section 3 of the United States Housing Act of 
        1937.
            (4) Rule.--The term ``rule''--
                    (A) means any rule for which the agency publishes a 
                general notice of proposed rulemaking pursuant to 
                section 553(b) of title 5, United States Code, or any 
                other law, including any rule of general applicability 
                governing grants by an agency to State and local 
                governments for which the agency provides an 
                opportunity for notice and public comment; and
                    (B) does not include a rule of particular 
                applicability relating to rates, wages, corporate or 
                financial structures or reorganizations thereof, 
                prices, facilities, appliances, services, or allowances 
                therefor or to valuations, costs or accounting, or 
                practices relating to such rates, wages, structures, 
                prices, appliances, services, or allowances.
            (5) Significant.--The term ``significant'' means, with 
        respect to an impact on the availability of affordable housing, 
        a difference in quantity of 5 percent or more.
    (k) Development.--Not later than 120 days after the date of 
enactment of this Act, the Secretary of Housing and Urban Development 
shall develop model initial and final housing impact analyses under 
this section and shall cause such model analyses to be published in the 
Federal Register. The model analyses shall be designed to provide 
examples to other agencies of how to carry out and develop the analyses 
required under subsections (a) and (c).

SEC. 5. GRANTS FOR REGULATORY BARRIER REMOVAL STRATEGIES.

    (a) Authorization of Appropriations.--Section 1204(a) of the 
Housing and Community Development Act of 1992 (42 U.S.C. 12705c(a)) is 
amended to read as follows:
    ``(a) Funding.--There is authorized to be appropriated for grants 
under subsections (b) and (c) $15,000,000 for fiscal year 1999, and 
each fiscal year thereafter through fiscal year 2003.''.
    (b) Application and Selection.--Section 1204(e) of the Housing and 
Community Development Act of 1992 (42 U.S.C. 12705c(e)) is amended in 
the last sentence by inserting before the period at the end the 
following: ``, and such criteria shall require that grant amounts be 
used in a manner consistent with the strategy contained in the 
comprehensive housing affordability strategy for the jurisdiction 
pursuant to section 105(b)(4) of the Cranston-Gonzalez National 
Affordable Housing Act''.
    (c) Technical Amendments.--Section 107(a)(1) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5307(a)(1)) is amended--
            (1) in subparagraph (G), by inserting ``and'' after the 
        semicolon at the end;
            (2) by striking subparagraph (H); and
            (3) by redesignating subparagraph (I) as subparagraph (H).

SEC. 6. ELIGIBILITY FOR COMMUNITY DEVELOPMENT BLOCK GRANTS; BARRIERS TO 
              HOMEOWNERSHIP AND HOUSING AFFORDABILITY.

    (a) Eligibility for CDBG.--Section 104(c)(1) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5304(c)(1)) is amended by 
inserting after the comma the following: ``which shall include making a 
good faith effort to carry out the strategy established under 
subsection (b)(4) of that section (which may be shown by the 
establishment of a Council of the type described in section 6(b) of the 
Affordable Housing Barrier Removal Act of 1998) by the unit of general 
local government to remove barriers to affordable housing;''.
    (b) Barriers to Homeownership and Housing Affordability Councils.--
            (1) Sense of congress on establishment of councils.--It is 
        the sense of the Congress that each recipient of a community 
        development block grant under the Housing and Community 
        Development Act of 1974, should establish a Barriers to 
        Homeownership and Housing Affordability Council (hereafter in 
        this section referred to as a ``Council'') in accordance with 
        this section.
            (2) Membership.--A Council should be comprised of 10 
        members, of whom--
                    (A) 1 member should be an individual who is 
                actively engaged in the residential single family 
                homebuilding industry;
                    (B) 1 member should be an individual who is 
                actively engaged in the residential multifamily 
                homebuilding industry;
                    (C) 1 member should be an individual who is 
                actively engaged in the lending industry;
                    (D) 1 member should be an individual who is a 
                representative of those areas of labor engaged in 
                homebuilding;
                    (E) 2 members should be individuals with experience 
                in housing issues who are designated as advocates for 
                underserved populations;
                    (F) 1 member should be an individual who is a real 
                estate professional; and
                    (G) 3 members should be appointed, as determined by 
                the local government.
            (3) Functions of council.--Each Council should analyze the 
        local housing situation and make recommendations to the local 
        government on incentives for the production of affordable 
        housing.

SEC. 7. REGULATORY BARRIERS CLEARINGHOUSE.

    Section 1205 of the Housing and Community Development Act of 1992 
(42 U.S.C. 12705d) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``receive, collect, process, and assemble'' 
                and inserting ``serve as a national repository to 
                receive, collect, process, assemble, and disseminate'';
                    (B) in paragraph (1)--
                            (i) by striking ``, including'' and 
                        inserting ``(including''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``), and the prevalence 
                        and effects on affordable housing of such laws, 
                        regulations, and policies'';
                    (C) in paragraph (2), by inserting before the 
                semicolon the following: ``, including particularly 
                innovative or successful activities, strategies, and 
                plans''; and
                    (D) in paragraph (3), by inserting before the 
                period at the end the following: ``, including 
                particularly innovative or successful strategies, 
                activities, and plans'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(3) provide, to each housing agency of a unit of general 
        local government that serves an area having a population 
        greater than 100,000, an index of all State and local 
        strategies and plans submitted under subsection (a) to the 
        clearinghouse (which shall be updated to include any new 
        strategy or plan submitted not later than 30 days after such 
        submission), which shall describe the types of barriers to 
        affordable housing that the strategy or plan was designed to 
        ameliorate or remove.''; and
            (3) by adding at the end the following new subsections:
    ``(c) Organization.--The clearinghouse under this section shall be 
established within the Office of Policy Development of the Department 
of Housing and Urban Development, and shall be under the direction of 
the Assistant Secretary for Policy Development and Research.
    ``(d) Timing.--The clearinghouse under this section shall be 
established and commence carrying out the functions of the 
clearinghouse under this section not later than 1 year after the date 
of enactment of the Affordable Housing Barrier Removal Act of 1998. The 
Secretary of Housing and Urban Development may comply with the 
requirements of this section by reestablishing the clearinghouse that 
was established before the date of enactment of the Affordable Housing 
Barrier Removal Act of 1998 to comply with this section and updating 
and improving such clearinghouse to the extent necessary to comply with 
the requirements of this section as in effect pursuant to the enactment 
of that Act.''.

SEC. 8. REMOVING BARRIERS TO USE OF FHA SINGLE FAMILY HOUSING MORTGAGE 
              INSURANCE PROGRAM.

    (a) Repeal of Owner-Occupancy Requirement.--Section 203(g) of the 
National Housing Act (12 U.S.C. 1709(g)) is amended to read as follows:
    ``(g) [Reserved.]
    (b) Repeal of Requirements for Approval for Insurance Prior to 
Start of Construction.--The National Housing Act is amended--
            (1) in section 203 (12 U.S.C. 1709)--
                    (A) in subsection (b)(2), in the first undesignated 
                paragraph following subparagraph (B), by striking the 
                fourth sentence; and
                    (B) in subsection (i), by striking ``(or, in any 
                case'' and all that follows through ``90 per centum)''; 
                and
            (2) in section 220(d)(3)(A)(i) (12 U.S.C. 
        1715k(d)(3)(A)(i)), by striking ``(but, in any case'' and all 
        that follows through ``90 per centum)''.
    (c) Definition of Area.--Section 203(b)(2) of the National Housing 
Act (12 U.S.C. 1709(b)(2)) is amended by striking the first sentence 
that follows subparagraph (B) and inserting the following: ``For 
purposes of the preceding sentence, the term `area' means a 
geographical area, as the Secretary considers appropriate to maximize 
the availability of housing finance and carry out the purposes of this 
title.''.
    (d) Simplification of Downpayment Procedures.--Section 203(b)(2) of 
the National Housing Act (12 U.S.C. 1709(b)(2)) is amended--
            (1) by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) except as otherwise provided in this 
                paragraph, not to exceed--
                            ``(i) in the case of a mortgage for a 
                        property with an appraised value equal to or 
                        less than $50,000, 98.75 percent of the 
                        appraised value of the property;
                            ``(ii) in the case of a mortgage for a 
                        property with an appraised value in excess of 
                        $50,000 but not in excess of $125,000, 97.65 
                        percent of the appraised value of the property;
                            ``(iii) in the case of a mortgage for a 
                        property with an appraised value in excess of 
                        $125,000, 97.15 percent of the appraised value 
                        of the property; or
                            ``(iv) notwithstanding clauses (ii) and 
                        (iii), in the case of a mortgage for a property 
                        with an appraised value in excess of $50,000 
                        and which is located in a State for which the 
                        average closing cost exceeds 2.10 percent of 
                        the average, for the State, of the sale price 
                        of properties located in the State for which 
                        mortgages have been executed, 97.75 percent of 
                        the appraised value of the property,
                plus the amount of the mortgage insurance premium paid 
                at the time the mortgage is insured.'';
            (2) in the first sentence of the matter following 
        subparagraph (B), as amended by subsection (c) of this section, 
        by inserting before the period at the end the following: ``, 
        and the term `average closing cost' means, with respect to a 
        State, the average, for mortgages executed for properties that 
        are located within the State, of the total amounts (as 
        determined by the Secretary) of initial service charges, 
        appraisal, inspection, and other fees (as the Secretary shall 
        approve) that are paid in connection with such mortgages'';
            (3) by striking the second sentence of the matter following 
        subparagraph (B); and
            (4) in the penultimate undesignated paragraph--
                    (A) in the second sentence, by striking ``the 
                preceding sentence'' and inserting ``this subsection''; 
                and
                    (B) by striking the first sentence.
                                 <all>