[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3033 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 3033

    To Delegate the Primary Responsibility for the Preservation and 
  Expansion of Affordable Low-Income Housing to States and Localities.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 12, 2000

   Mr. Bond introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
    To Delegate the Primary Responsibility for the Preservation and 
  Expansion of Affordable Low-Income Housing to States and Localities.

    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 ``Housing Needs Act of 2000''.

SEC. 2. TABLE OF CONTENTS.

    The table of Contents for this Act is as follows:

SEC. 3. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) the Nation has not made adequate progress in 
        maintaining and expanding the inventory of affordable housing 
        for low and very low-income families, including persons with 
        disabilities and seniors;
            (2) despite continued economic expansion, worst case 
        housing needs have reached an all-time high of 5.4 million 
        families, increasing by 4 percent between 1995 and 1997;
            (3) the number of rental units which are affordable to 
        extremely low-income families has decreased by 5 percent since 
        1991, a loss of over 37,000 units;
            (4) the Administration and the Department of Housing and 
        Urban Development has proposed increased funding for 
        incremental rental vouchers as the primary solution to making 
        additional housing available for low-income and very low-income 
        families;
            (5) while section 8 vouchers represent housing choice as a 
        matter of philosophy, in many cases families using vouchers 
        have a difficult time finding housing, especially in low 
        vacancy market areas;
            (6) in many cases, where section 8 vouchers are used, the 
        result is de facto redlining where low-income families are 
        relegated to the poorest and most distressed neighborhoods with 
        limited opportunities for transportation, employment and 
        quality schools;
            (7) section 8 vouchers do not produce additional new units 
        of affordable low-income housing since banks will not finance 
        new construction with one year termed portable assistance;
            (8) the Department of Housing and Urban Development has not 
        provided the necessary leadership to assist in the development 
        of needed affordable housing;
            (9) a large number of States and local government have been 
        successful in developing new tools and opportunities for the 
        development of additional affordable housing for low-income 
        families, including the development of affordable mixed income 
        housing as part of State and local redevelopment strategies for 
        distressed communities; and
            (10) State housing finance agencies have the local 
        experience and knowledge to maximize the development of 
        additional units of affordable low-income housing and to 
        preserve the existing stock of low-income affordable housing.
    (b) The purpose of this Act is to redirect the primary 
responsibility for the preservation of existing affordable low-income 
housing and the expansion of the inventory of affordable rental housing 
for very low-income and low-income families from the Federal Government 
to State and local governments through State housing finance agencies.

SEC. 4. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) The term ``low-income families'' shall have the same 
        meaning as provided under section 3(b)(2) of the United States 
        Housing Act of 1937.
            (2) The term ``project-based assistance'' shall have the 
        meaning given such term in section 16(c)(6) of the United 
        States Housing Act of 1937, except that such term includes 
        assistance under any successor programs to the programs 
        referred to in such section.
            (3) The term ``public housing agency'' shall have the 
        meaning given such term in section 3(b) of the United States 
        Housing Act of 1937.
            (4) The term ``Secretary'' shall mean the Secretary of 
        Housing and Urban Development.
            (5) The term ``section 8 assistance'' or ``voucher'' shall 
        have the meaning given such term in section 8(f) of the United 
        States Housing Act of 1937.
            (6) The term ``State'' shall mean the United States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, America Samoa, and any other 
        territory of possession of the United States.
            (7) The term ``State housing finance agency'' shall mean 
        any State or local housing finance agency that has been 
        designated by a State to administer this program.
            (8) The term ``very low-income families'' shall have the 
        same meaning as provided under section 3(b) of the United 
        States Housing Act of 1937.

TITLE I--PRODUCTION OF NEW HOUSING FOR LOW AND VERY LOW-INCOME FAMILIES

SEC. 101. AUTHORITY.

    The Secretary of Housing and Urban Development shall make funds 
available to State housing finance agencies as provided under section 
102 for the rehabilitation of existing low-income housing, for the 
development of new affordable low-income housing units, and for the 
preservation of existing low-income housing units that are at risk of 
becoming unavailable for low-income families.

SEC. 102. ALLOCATION OF RESOURCES.

    (a) In General.--The Secretary shall allocate funds approved in 
appropriations Acts to State housing finance agencies to carry out this 
Title. Subject to the requirements of subsection (b) and as otherwise 
provided in this subsection, each State housing finance agency shall be 
eligible to receive an amount of funds equal to the proportion of the 
per capita population of the State in relation to the population of the 
United States which shall be determined on the basis of the most recent 
decennial census for which data are available. For each fiscal year, 
the Secretary shall reserve for grants to Indian tribes 1 percent of 
the amount appropriated under the applicable appropriations Act. The 
Secretary shall provide for distribution of amounts under this 
subsection to Indian tribes on the basis of a competition conducted 
pursuant to specific criteria developed after notice and public 
comment.
    (b) Minimum State Allocation.--If the allocation under subsection 
(a), when applied to the funds approved under this section in 
appropriations Acts for a fiscal year, would result in funding of less 
than $5,000,000 to any State housing finance agency, the allocation for 
such State housing finance agency shall be $5,000,000 and the increase 
shall be deducted pro rata from the allocation of all other State 
housing finance agencies.
    (c) Criteria for Reallocation.--The Secretary shall reallocate any 
funds previously allocated to a State housing finance agency for any 
fiscal year in which the State housing finance agency fails to provide 
its match requirements or fails to submit an affordable housing 
expansion plan that is approved by the Secretary. All such funds shall 
be reallocated pursuant to the formula provided under subsection (a).

SEC. 103. AFFORDABLE HOUSING EXPANSION PLAN.

    (a) Submission of Affordable Housing Expansion Plan.--The Secretary 
shall allocate funds under section 102 to a State housing finance 
agency only if the State housing finance agency has submitted an 
affordable housing expansion plan, with annual updates, approved by the 
Secretary and designed to meet the overall very low- and low-income 
housing needs of both the rural and urban areas of the State in which 
the State housing finance agency is located. This plan shall be 
developed in conjunction with the housing strategies developed for the 
applicable States and localities under section 105 of Cranston-Gonzalez 
National Affordable Housing Act.
    (b) Citizen Participation.--Before submitting an affordable housing 
expansion plan to the Secretary, a State housing finance agency shall--
            (1) make available to citizens of the State, public 
        agencies and other interested parties information regarding the 
        amount of assistance expected to be made available under this 
        Title and the range of investment or other uses of such 
        assistance that the State housing finance agency may undertake;
            (2) publish the proposed plan in a manner that, in the 
        determination of the Secretary, affords affected citizens, 
        public agencies, and other interested parties a reasonable 
        opportunity to review its contents and to submit comments on 
        the proposed plan;
            (3) hold one or more public hearings to obtain the views of 
        citizens, public agencies, and other interested parties on the 
        housing needs of the State; and
            (4) provide citizens, public agencies, and other interested 
        parties with reasonable access to records regarding the uses of 
        any assistance that the State housing finance agency may have 
        received under this Title during the preceding 5 years.

SEC. 104. ELIGIBLE USE OF FUNDS.

    Funds made available under this title shall be used for--
            (1) the acquisition, new construction, reconstruction, or 
        moderate or substantial rehabilitation of affordable housing 
        for mixed income rental housing where the assistance provided 
        under section 102 shall be used to assist units targeted to low 
        and very low-income families, including the elderly and persons 
        with disabilities;
            (2) the moderate and substantial rehabilitation of rental 
        housing units that are currently assisted under State or 
        Federal low-income housing programs;
            (3) the preservation of Federal and State low-income 
        housing units that are at risk of being no longer affordable to 
        low-income families;
            (4) the purchase and creation of land trusts to allow low- 
        and moderate-income families an opportunity to rent homes in 
        areas of low-vacancy;
            (5) conversion of public housing to assisted living 
        facilities for the elderly;
            (6) conversion of section 202 elderly housing to assisted 
        living facilities for the elderly;
            (7) conversion of HUD-owned or HUD-held multifamily 
        properties upon disposition to housing for the elderly, housing 
        for persons with disabilities and to assisted living facilities 
        for the elderly;
            (8) creation of sinking funds to maintain reserves held by 
        State housing finance agencies to preserve the low-income 
        character of the housing; and
            (9) the creation of public/private partnerships in which 
        corporations and nonprofits are encouraged to develop 
        partnerships for the creation of affordable low-income housing.

SEC. 105. MATCHING REQUIREMENTS.

    (a) In General.--Each State housing finance agency shall make 
contributions for activities under this title that total, throughout a 
fiscal year, not less than 75 percent of the funds made available under 
this title.
    (b) Allowable Amounts.--
            (1) Application to housing.--A contribution shall be 
        recognized for purposes of a match under subsection (a) only 
        if--
                    (A) made with respect to housing that qualifies as 
                affordable housing under section 107; or
                    (B) made with respect to any portion of a project 
                for which not less than 50 percent of the units qualify 
                as affordable housing under section 107.
            (2) Form.--A contribution may be in the form of--
                    (A) cash contributions from non-Federal sources, 
                which may not include funds from a grant under section 
                106(b) or section 106(d) of the Housing and Community 
                Development Act of 1974 or from the value of low income 
                tax credits allocated pursuant to the Internal Revenue 
                Code;
                    (B) the value of taxes, fees or other charges that 
                are normally and customarily imposed but are waived, 
                forgone, or deferred in a manner that achieves 
                affordability of housing assisted under this title;
                    (C) the value of land or other real property as 
                appraised according to procedures acceptable to the 
                Secretary;
                    (D) the value of investment in on-site and off-site 
                infrastructure directly required for affordable housing 
                assisted under this title;
                    (E) the reasonable value of any site-preparation 
                and construction materials and any donated or voluntary 
                labor in connection with the site-preparation for, 
                construction or rehabilitation of affordable housing; 
                and
                    (F) such other contributions to affordable housing 
                as the Secretary considers appropriate.
            (3) Administrative expenses.--Contributions for 
        administrative expenses may not be recognized for purposes of 
        this section.

SEC. 106. DISTRIBUTION OF ASSISTANCE.

    Each State housing finance agency shall ensure that the development 
of new housing under this section is designed to meet both urban and 
rural needs, and prioritize funding, to the extent practicable, in 
conjunction with the economic redevelopment of an area.

SEC. 107. ELIGIBLE AFFORDABLE HOUSING.

    (a) Production of Affordable Housing.--In the case of new 
construction, housing shall qualify for assistance under this title 
only if the housing--
            (1) has not less than 30 percent of the units assisted 
        under this title occupied by very low-income families who pay 
        as a contribution towards rent (not including any Federal or 
        State rental subsidy provided on behalf of the family) not more 
        than 20 percent of the adjusted income of a family whose income 
        equals 50 percent of the median income for the area, as 
        determined by the Secretary, with adjustments for the number of 
        bedrooms in the unit, except that the Secretary may establish 
        income ceilings higher or lower than 50 percent of the median 
        income for the area on the basis of the Secretary's findings 
        that variations are necessary because of the prevailing levels 
        of construction costs or fair market rents, or unusually high 
        or low family incomes;
            (2) except as provided under paragraph (1), requires all 
        units assisted under this title to be occupied by households 
        that are low-income families and who pay no more than 30 
        percent of 100 percent of the median income for an area; and
            (3) will remain affordable under the requirements provided 
        in paragraphs (1) and (2), according to legally binding 
        commitments satisfactory to the Secretary, for not less than 40 
        years, without regard to the term of the mortgage or to the 
        transfer of ownership, or for such period that the Secretary 
        determines is the longest feasible period of time consistent 
        with sound economics and the purposes of this Act, including 
        foreclosure where the responsibility for maintaining the low-
        income character of the property will be the responsibility of 
        the State housing finance agency.

SEC. 108. TENANT SELECTION.

    An owner of any housing assisted under this Title shall establish 
tenant selection procedures consistent with the affordable housing 
expansion plan of the State housing finance agency.

SEC. 109. PROHIBITION ON USE OF FUNDS FOR SERVICE COORDINATORS OR 
              SUPPORTIVE SERVICES.

    No funds under this Act may be used for service coordinators or 
supportive services.

SEC. 110. PENALTIES FOR MISUSE OF FUNDS.

    The Secretary shall recapture any assistance awarded under this 
Title to the extent the assistance has been used for impermissible 
purposes. To the extent the Secretary identifies a pattern and practice 
regarding the misuse of funds awarded under this Title, the Secretary 
shall deny assistance to that State for up to 5 years, subject to 
notice and an opportunity for judicial review.

SEC. 111. SUBSIDY LAYERING REQUIREMENTS.

    The requirements of section 102(d) of the Department of Housing and 
Urban Development Reform Act of 1989 may be satisfied in connection 
with assistance, including a commitment to insure a mortgage, provided 
under this Title by a certification of a State housing finance agency 
to the Secretary that the combination of assistance within the 
jurisdiction of the Secretary and other government assistance provided 
in connection with a property assisted under this Title shall not be 
any greater than is necessary to provide affordable housing.

SEC. 112. MULTIFAMILY RISK-SHARING MORTGAGE INSURANCE PROGRAM.

    The Secretary shall carry out a mortgage insurance program through 
the Federal Housing Administration in conjunction with State housing 
finance agencies to insure multifamily mortgages for housing that 
qualifies under this Title. This program shall be consistent with the 
requirements established under section 542 of the Housing and Community 
Development Act of 1992, except that housing that meet the requirements 
of this Title shall be eligible for mortgage insurance.

SEC. 113. REGULATIONS.

    The Secretary shall issue notice and comment rulemaking with final 
regulations issued no later than 6 months after the date of enactment 
of this Act.

SEC. 114. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $1,000,000,000 for fiscal 
year 2000, of which no more than 20 percent of such funds may be used 
for rehabilitation needs and to preserve existing housing for low-
income uses.

           TITLE II--SECTION 8 VOUCHER SUCCESS DEMONSTRATION

SEC. 201. AUTHORITY.

    The Secretary shall establish a voucher success demonstration to 
permit public housing agencies to increase the payment standard for 
section 8 vouchers for an area in excess of the payment standard 
established under section 8(o)(B) of the United States Housing Act of 
1937 to assist in helping low-income and very low-income families 
obtain housing in tight rental markets. Except as otherwise provided 
herein, all assistance provided under this Title shall be subject to 
the requirements of the United States Housing Act of 1937.

SEC. 202. ELIGIBILITY.

    (a) Voucher Success Plan.--Not less than annually, each public 
housing agency that seeks to participate in the voucher success 
demonstration under section 201 shall submit to the Secretary a voucher 
success plan that--
            (1) demonstrates that the market area for which the public 
        housing agency is responsible is an area, based on housing 
        market indicators, such as low vacancy rates or high absorption 
        rates, where there is not adequate available and affordable 
        housing or where families with vouchers will not be able to 
        locate suitable units or use tenant-based assistance 
        successfully;
            (2) identifies a payment standard in excess of the payment 
        standard established under section 8(o)(B) that will ensure 
        that not less than 97 percent of families with vouchers will be 
        able to obtain suitable housing in that market area within 120 
        days;
            (3) describes actions that the public housing agency will 
        take that will assist families with vouchers, including seniors 
        and persons with disabilities, to identify and obtain suitable 
        and available affordable housing that is close to 
        transportation, employment opportunities, quality schools and 
        appropriate services; and
            (4) shall include such other information and commitments as 
        deemed appropriate by the Secretary.
    (b) Increased Payment Standard.--The Secretary shall approve a 
payment standard for a market area under this demonstration to no more 
than 150 percent of the payment standard established under section 
8(o)(B) of the United States Housing Act of 1937. This payment standard 
shall be published annually in the Federal Register and adjusted 
annually to reflect changes in each market area.
    (c) Procedures.--The Secretary shall establish requirements and 
procedures for the submission and review of voucher success plans, 
including requirements for timing and form of submission, and for the 
contents and approval of such plans.
    (d) Regulations.--The Secretary shall issue interim regulations no 
later than 3 months after the date of enactment of this Act with final 
notice and public comment regulations issued no later than 12 months 
after the date of enactment of this Act.
    (e) Savings Clause.--A family using a voucher approved as part of a 
demonstration under this Title shall be eligible for an approved 
payment standard in excess of the payment standard established under 
section 8(o)(d) of the United States Housing Act of 1937 to the extent 
the assisted family continues to reside in the same housing in which 
the family was residing on the date in which the housing was determined 
eligible for the increased payment standard under this Title.

SEC. 203. LIMITATION ON FUNDING.

    Except to the extent additional incremental vouchers are provided 
in appropriations Acts, for purposes of this section, each public 
housing agency shall be limited to the section 8 funds allocated to 
that public housing agency as of October 1, 2000, including appropriate 
amounts for reserves, for purposes of implementing the voucher success 
plan.

    TITLE III--PRESERVATION OF LOW-INCOME HOUSING AND MISCELLANEOUS 
                               PROVISIONS

SEC. 301. SECTION 8 PROJECT-BASED FLEXIBILITY.

    Section 8(o)(13) of the United States Housing Act of 1937 is 
amended by--
            (1) in paragraph (A)(ii), striking ``15 percent'' and 
        inserting in lieu thereof ``25 percent''; and
            (2) adding the following new paragraph (E) to the end:
                    ``(E) The Secretary shall establish expedited 
                procedures to allow public housing agencies to enter 
                into housing assistance payment contracts with respect 
                to existing structures.''.

SEC. 302. DISPOSITION OF HUD-HELD AND HUD-OWNED MULTIFAMILY PROJECTS.

    Notwithstanding any other provision of law, the Secretary of 
Housing and Urban Development shall maintain any rental assistance 
payments attached to any dwelling units under section 8 of the United 
States Housing Act of 1937 for all multifamily properties owned by the 
Secretary and multifamily properties held by the Secretary for purposes 
of management and disposition of such properties. To the extent, the 
Secretary determines that a multifamily property owned by the Secretary 
or held by the Secretary is not feasible for continued rental 
assistance payments under section 8, the Secretary may, in consultation 
with the tenants of that property, contract for project-based rental 
assistance payments with an owner or owners of other existing housing 
properties.

SEC. 303. FAMILY UNIFICATION PROGRAM.

    Section 8(x)(2) of the United States Housing Act of 1937 is amended 
by--
            (1) striking ``any family (A) who is otherwise eligible for 
        such assistance, and (B)'' and inserting in lieu thereof: ``(A) 
        any family (i) who is otherwise eligible for such assistance, 
        and (ii)''; and
            (2) inserting before the period at the end: ``(B) for a 
        period not to exceed 18 months, youths who have attained at 
        least 18 years of age and not more than 21 years of age and who 
        have left foster care at age 16 or older''.

SEC. 304. PERMANENT EXTENSION OF FHA MULTIFAMILY MORTGAGE CREDIT 
              DEMONSTRATIONS.

    Section 542 of the Housing and Community Development Act of 1992 is 
amended--
            (1) by revising subsection (b)(5) to read as follows:
            ``(5) Insurance authority.--Using any authority provided in 
        appropriation Acts to insure mortgages under the National 
        Housing Act, the Secretary may enter into commitments under 
        this subsection for risk-sharing units.'';
            (2) by revising subsection (c)(4) to read as follows:
            ``(4) Insurance authority.--Using any authority provided in 
        appropriation Acts to insure mortgages under the National 
        Housing Act, the Secretary may enter into commitments under 
        this subsection for risk-sharing units.'';
            (3) in the heading, by striking ``Demonstrations'' and 
        inserting ``Programs'';
            (4) in the first sentence of subsection (a), by striking 
        ``demonstrate the effectiveness of providing'' and inserting 
        ``provide'';
            (5) in the second sentence of subsection (a), by striking 
        ``demonstration'';
            (6) in subsection (b)(1), by striking ``determine the 
        effectiveness of'' and inserting ``provide'';
            (7) in subsection (c)(1), by striking ``test the 
        effectiveness of'' and inserting ``provide'';
            (8) by striking subsection (d); and
            (9) by striking ``pilot'' and ``PILOT'' each place it 
        appears.
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