[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                         HUD SECTION 8 PROGRAM

  Mr. BRYAN. Mr. President, I rise to address the Senate on some of the 
problems with the Department of Housing and Urban Development's Section 
8 project-based assisted housing program.
  The section 8 program was established in 1974 to help low-income 
families obtain safe, decent, and sanitary housing. The program has two 
components: tenant-based rental assistance and project-based rental 
assistance. Section 8 certificates and vouchers are referred to as 
``tenant-based'' assistance; the other types of assistance such as new 
construction and substantial rehabilitation are known as ``project-
based'' assistance.
  According to HUD's inspector general, over 20,000 properties are 
currently receiving section 8 project-based assistance. These 
properties serve approximately 1.5 million low-income families. HUD has 
provided approximately $131 billion budget authority to support its 
section 8 project-based subsidy programs over the past 20 years. Many 
section 8 projects are also FHA insured.
  HUD's inspector general issued a report in April 1993 on the results 
of an audit conducted from 1991-1993 on 28 troubled multifamily housing 
projects under the jurisdiction of six HUD field offices. The audit 
determined that the physical condition of 23 projects, or 82 percent, 
was unsatisfactory or below average. It is inexcusable that a 
disturbing number of projects are experiencing deterioration and 
neglect by their owners. Tenants, with their rent subsidies tied to 
these projects, are essentially trapped in deplorable living 
conditions.
  Unfortunately, two of these troubled projects are in southern Nevada. 
Sierra Nevada Arms Apartments in Las Vegas and Carey Arms Apartments in 
North Las Vegas received about $2.8 million in Federal subsidies last 
year. In particular, Sierra Nevada Arms received about 86 percent of 
rental income from the Federal Government. To say that the Federal 
Government should be concerned about the investment in this property is 
an understatement.
  Sierra Nevada Arms Apartments is a 353-unit complex consisting of 82 
two-story buildings. Currently, 113 units are vacant. A two-bedroom 
unit in this apartment complex rents for $468 a month. The rent for a 
two-bedroom unit in a well-maintained unsubsidized property in the same 
neighborhood is $600 a month.
  According to a General Accounting Office [GAO] report released in 
July, HUD's Las Vegas field office considers Sierra Nevada Arms to be 
the worst project the office manages. GAO reports that field office 
inspections have revealed many vacant units stripped of kitchen 
appliances, bathroom fixtures, air conditioning and heating units, and 
electrical fixtures.
  GAO's own site inspection revealed interior units with soiled, 
stained, and torn carpet and linoleum; inoperative appliances, smoke 
alarms, air conditioning and heating systems; damaged kitchen cabinets 
with loose and missing drawers; severely damaged bathroom vanity tops 
and commodes; missing closet doors; torn and missing window screens; 
filthy walls; leaking toilets, bathtubs and sinks; and roach, rat and 
mice infestation. GAO's inspection of the project's exterior revealed 
faulty sprinkler systems with numerous leaks causing flooding 
throughout the grounds. They also found that many vacant units were 
missing door, windows, and screens. The laundry room was filthy and in 
poor condition, with extensive graffiti and garbage strewn throughout.
  In June, the Senate Banking, Housing, and Urban Affairs Committee 
favorably reported the Housing Choice and Community Investment Act of 
1994. This bill included significant reforms of the section 8 problem.
  The bill would have allowed HUD to reuse section 8 project-based 
assistance, recaptured when housing assistance payments contracts are 
terminated, to relocate tenants currently living in distressed 
properties. The bill provided HUD with the choice of relocating tenants 
using either certificates or vouchers or providing alternative section 
8 project-based housing. This protects tenants who might be displaced 
if HUD terminates the section 8 housing assistance payments contract 
for a property.
  The bill would have authorized the Secretary of Housing and Urban 
Development to levy civil money penalties against owners--including 
general partners of a partnership owner--and managing agents who 
violate provisions of a section 8 project-based contract. Violations 
include failing to provide decent, safe, and sanitary housing and 
knowingly submitting false statements for housing assistance. Payments 
of the penalty were prohibited from coming out of project income. 
Unfortunately, in the crush of the end of the legislative session, this 
bill did not reach the Senate floor.
  These reforms are so important that I pledge to work vigorously in 
the next Congress, to introduce and pass legislation to compel owners 
of troubled section 8 projects to improve conditions and to give HUD 
the tools to ensure that its subsidized housing is maintained according 
to housing quality standards.
  However, this is just one step in a process to deal with troubled 
projects. Much more needs to be done. In addition to providing HUD with 
the tools to discipline owners of troubled projects, HUD must carry out 
its monitoring responsibilities so that projects do not advance to this 
level of deterioration. HUD's inspector general said in July that HUD 
suffers from some major systemic weaknesses that significantly impact 
its ability to turn around these troubled projects and improve its 
management and oversight of section 8-assisted miltifamly housing 
stock. Prior inspector general reports have questioned HUD's capacity 
to manage and monitor its huge portfolio of insured and assisted 
multifamily properties. This must be corrected so that tenants can live 
in safe and decent housing and the Federal Government recovers misspent 
funds.
  We need to reverse this trend in the section 8 program of piecemeal 
response to deplorable conditions and waste. We need a comprehensive 
plan to improve the section 8 program and I will continue to work 
toward that end.

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