[Congressional Record Volume 142, Number 34 (Wednesday, March 13, 1996)]
[Senate]
[Pages S1997-S1999]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       S. 1494, HOUSING OPPORTUNITY PROGRAM EXTENSION ACT OF 1995

 Mr. BOND. Mr. President, I applaud the Senate for passing S. 
1494, the Housing Opportunity Program Extension Act of 1995. I also 
want to thank my cosponsors, including Senators D'Amato, Mack, and 
Sarbanes. This legislation provides critical authority for a number of 
community development and affordable housing programs and activities 
which are strongly supported by the American public. This bill also is 
an important step in reforming HUD's housing and community development 
programs, and is consistent with a number of significant reforms which 
were initiated in the VA/HUD fiscal year 1996 appropriations bill, 
which was vetoed by the President.
  Most importantly, this legislation adopts the reformed low-income 
housing preservation program which was contained in the VA/HUD fiscal 
year 1996 appropriations bill vetoed by the President. There are 
approximately 75,000 to 100,000 low-income units in the preservation 
pipeline that are eligible for prepayment but also remain eligible 
candidates for preservation funding. These units have been in the 
preservation processing pipeline for some time, often years, and 
include a mix between equity take-out deals for owners which are 
financed through long-term section 8 assistance, and the financing of 
purchases by tenant groups and nonprofits. This reform would replace 
the existing preservation program, with its long-term dependence on 
expensive project-based section 8 assistance, with a capital loan--or 
capital grant in the case of purchasers, that ensures low-income use at 
the minimum cost to the Federal Government.
  S. 1494 also would provide clear statutory guidance to empower PHA's 
and assisted property owners with the tools to screen out and evict 
from public and assisted housing persons who illegally use drugs or 
whose abuse of alcohol is a risk to other tenants. I cannot emphasize 
enough the need to take responsible and meaningful action to preserve 
our low-income housing from criminal and destructive activities.
  In addition, this legislation addresses the problem of mixed housing 
where the elderly and the disabled, including persons with drug and 
alcohol disabilities, are warehoused in the same public housing 
projects. This does not work, and I am particularly troubled by some 
horror stories I have heard where elderly tenants have been harassed 
and frightened by young tenants with significant drug abuse problems. 
This provision would provide PHA's with clear authority to establish 
elderly- and disabled-only housing.
  Moreover, S. 1494 would extend a number of other key housing programs 
which need affirmative legislation to operate: permit the renewal of 
expiring section 8 moderate rehabilitation contracts; permit CDBG 
homeownership assistance; extend the Home Equity Conversion Mortgage 
[HECM] Program; extend the FHA multifamily mortgage risk-sharing 
programs; and reauthorize the National Cities in School Program and the 
National Community Development initiative.
  This bill also would establish a new loan guarantee program for rural 
multifamily housing which terminates after 1 year and is supported by a 
$1-million credit subsidy under the Agriculture fiscal year 1996 
appropriation bill, as enacted. This program is needed in rural areas 
where there is a critical need to develop affordable low-income rental 
housing.
  Finally, the legislation would establish a new Habitat for Humanity 
initiative. Habitat for Humanity is one of the best models in this 
country for the development of affordable low-income housing through 
sweat equity. Since 1976, Habitat has constructed over 40,000 homes 
worldwide, in every U.S. State and in 45 other countries. As a 
consequence, some 250,000 people are living in decent, safe, and 
affordable housing.
  Mr. President, this legislation is bipartisan, simple, 
straightforward and necessary. I look forward to this measure becoming 
law.
 Mr. KERRY. Mr. President, I am pleased to rise in support of 
S. 1494, the Housing Opportunity Program Extension Act of 1996. Mr. 
President, this bill is important to the country and particularly 
important to the Commonwealth of Massachusetts. I thank the other 
Members of the Senate for their support of this legislation.
  S. 1494 extends several housing authorizations that expired at the 
end of the last fiscal year. Among these are the Community Development 
Block Grant direct homeownership assistance provisions which have 
proven useful to the city of Boston and other communities in my home 
State, and the Federal Housing Administration's multifamily risk-
sharing program in which the Massachusetts State Housing Finance Agency 
is an important participant. The bill also extends the Home Equity 
Conversion Mortgage Program, that provides elderly homeowners with the 
ability to use the equity in their home without having to sell the 
house. This bill also extends the section 515 rural rental housing 
program and two important set-asides within the program--a set-aside 
for nonprofit developers and a set-aside for underserved

[[Page S1998]]

areas. Mr. President, the section 515 program is one of the few Federal 
housing programs providing much needed affordable housing assistance in 
rural areas.
  The passage of this bill also sends to the President provisions from 
an amendment that I cosponsored with Senator Grams in the Banking 
Committee. This amendment would limit access to public housing by drug 
abusers and alcohol abusers. We need to make sure that our federally 
assisted housing provides a decent, safe, and peaceful living 
environment for its residents. The final version of this bill addresses 
one of my principal concerns with earlier versions: it makes it clear 
that a public housing authority should look at a person's pattern of 
drug or alcohol abuse--rather than their history of drug or alcohol 
abuse--when screening candidates for admission. S. 1494 also enacts 
provisions that will streamline the process that public housing 
authorities must follow to designate a building as elderly-only or 
disabled-only housing. I would like to thank the managers of this 
legislation for also including language I recommended to authorize 
vouchers for people who may be adversely affected by a PHA's 
designation decision.
  I would like to mention that this bill includes an extremely helpful 
provision that extends the timetables for processing and approving 
sales to nonprofits under the low-income housing preservation program. 
Many residents of HUD-assisted housing around the country--and 
especially in Massachusetts--have been working very hard to purchase 
their buildings under the preservation program. Extending the deadline 
will ensure that these people's efforts will have time to come to 
fruition.
  Finally, Mr. President, S. 1494 allows the HUD Secretary to transfer 
up to $60 million in support of national nonprofit housing and 
community development organizations. The bill authorizes $25 million 
for Habitat for Humanity, $15 million for other similar self-help 
housing programs, $10 million for the National Community Development 
Initiative--which includes the Local Initiatives Support Corporation 
and the Enterprise Foundation--and $10 million for National Cities in 
Schools. These are all excellent organizations and I am pleased to lend 
my support for this authorization.
  Mr. D'AMATO. Mr. President, I rise to express strong support for The 
Housing Opportunity Program Extension Act of 1995 (S. 1494). I wish to 
express my thanks to Senators Mack, Bond, Shelby, Bennett, and Domenici 
for their cosponsorship of this important legislation. In addition, I 
would like to offer thanks to Senator Sarbanes, Senator Kerry, and all 
members of the committee for their dedication to this bill.
  The Housing Opportunity Program Extension Act of 1995 represents a 
bipartisan effort which would: provide short-term extensions of housing 
authority which have expired; preserve assisted housing; protect 
elderly tenants in public and assisted housing; and promote self-help 
housing and community development programs.
  This legislation originally passed the Senate on January 24, 1996. 
The House of Representatives passed a House amendment in the nature of 
a substitute to S. 1494 on February 27, 1996. The House amendment 
represents a bicameral effort to gain consensus on an immediate 
direction for Department of Housing and Urban Development [HUD] housing 
programs.
  To that end, the bill protects the needy recipients of various 
housing programs that have lapsed authority. For instance, S. 1494 
extends the HUD Home Equity Conversion Mortgage Demonstration [HECM] 
Program through September 2000. Last November I introduced legislation, 
S. 1409, to provide a 5-year extension of this successful and much 
needed program. The HECM Program offers elderly homeowners the 
opportunity to borrow against the equity in their homes. Without this 
program, senior citizens with low incomes might be forced to sell their 
homes and spend their golden years elsewhere. In addition, S. 1494 
extends the following programs until September 1996: the HUD community 
development block grant homeownership program; the Rural Housing 
Service section 515 multifamily loan program; and the Federal Housing 
Administration multifamily housing risk-sharing programs.
  The legislation provides authority to the HUD Secretary to operate 
the preservation program as passed in title II of the fiscal year 1996 
VA/HUD appropriations legislation, H.R. 2099, on December 7, 1995. This 
provision is needed to protect existing tenants in HUD insured 
projects, to preserve the existing housing stock, and to recognize the 
rights of owners.
  Further, S. 1494 would provide greater safety and security for our 
Nation's elderly tenants in public and assisted housing. The bill would 
streamline procedures for public housing authorities to designate 
public housing facilities as ``elderly only,'' ``disabled only,'' or 
``elderly and disabled families only.'' Public housing authorities 
would be authorized to evict residents in these designated facilities 
whose pattern of drug or alcohol abuse would jeopardize the safety of 
elderly and disabled residents. In addition, housing authorities would 
be required to provide occupancy standards and an expedited grievance 
procedure for the eviction of tenants who have a pattern of drug or 
alcohol abuse.
  The Housing Opportunity Program Extension Act would encourage self-
help and community development programs which require little or no HUD 
regulation. HUD would be authorized to provide grants to capable 
nonprofit organizations, such as Habitat-for-Humanity. In addition, the 
bill would permit HUD the discretion to utilize reprogrammed funds for 
the Cities in Schools Program. The Cities in Schools Program is our 
country's largest and most successful student dropout prevention 
network. It serves as a model of how effective a public/private 
partnership organization can be in serving our national goals.
  The legislation would also provide an authorization of commitment 
authority to the Government National Mortgage Association of $110 
billion for fiscal year 1996 and increase the HUD section 108 loan 
guarantee aggregate limit from $3.5 billion to $4.5 billion.
  The Banking Committee and its Housing Subcommittee continue to 
analyze proposals for the reorganization and elimination of the 
Department of Housing and Urban Development. After the opportunity for 
further debate and hearings on existing HUD and Department of 
Agriculture housing programs, housing reform legislation will be 
introduced this Spring. Until passage of more comprehensive 
legislation, the Housing Opportunity Program Extension Act of 1995 is 
essential for the continued operation of our Nation's housing delivery 
system. I thank my colleagues for their support for passage of S. 1494.
  Mr. MACK. Mr. President, I rise in strong support of S. 1494, which I 
was pleased to cosponsor with Senators D'Amato and Bond. This 
legislation extends certain critical HUD and USDA housing programs 
whose authorizations have expired. It also makes certain other changes 
in housing policy to reflect priorities of the Congress as well as the 
administration.
  When S. 1494 originally passed the Senate on January 24, 1996, it was 
limited in scope to only those provisions that needed affirmative 
legislative authority to continue to operate, such as the Home Equity 
Conversion Mortgage Demonstration program for the elderly (HECM), the 
CDBG home ownership program, the FHA multifamily risk-sharing 
demonstration, and the Section 515 rural rental housing program.
  The other body passed S. 1494 as amended on February 27, and the 
House-passed version contains changes that were negotiated between the 
House and the Senate. The amended bill we are considering today thus 
contains some positive additions to the bill the Senate initially 
approved.
  Most notably, S. 1494 now includes provisions that make it easier to 
evict from public housing tenants who are engaged in criminal 
activities or who have a pattern of alcohol or drug abuse, and it gives 
public housing authorities access to criminal records for the screening 
and eviction of public housing tenants. These provisions aid in the 
implementation of what the President calls a ``one strike and you're 
out'' policy for public housing, and they were part of S. 1260, the 
Public Housing Reform and Empowerment Act, which this body approved on 
January 10, and which is awaiting action in the other body.

[[Page S1999]]

  The bill also streamlines procedures for public housing authorities 
to designate public housing facilities as ``elderly only,'' ``disabled 
only,'' or ``elderly and disabled families only.'' S. 1494 provides the 
authority to evict from these designated facilities those whose pattern 
of drug or alcohol abuse would jeopardize the safety and security of 
the elderly and disabled residents. These provisions reflect concerns 
raised by advocates for the elderly about the mixing of elderly and 
disabled populations, but they provide a balanced policy that will help 
provide access to affordable housing for both of these special needs 
populations. Again, these provisions are similar to those contained in 
the Public Housing Reform and Empowerment Act.
  S. 1494 also extends the Home Equity Conversion Mortgage 
Demonstration for the elderly through September 30, 2000, instead of 
the 1-year extension originally passed by the Senate.
  The bill provides authority for the HUD Secretary to operate the low-
income housing preservation program passed by Congress in the vetoed 
fiscal year 1996 VA-HUD appropriation bill. These provisions are 
necessary to prevent large-scale mortgage prepayments of FHA-insured 
mortgages and thus preserve the existing supply of affordable low-
income housing.
  In addition, S. 1494 creates a self-help housing program under which 
HUD will provide grants to capable nonprofit organizations, like 
Habitat for Humanity. Grand funds must be used for the payment of land 
acquisition and infrastructure costs. These funds will supplement 
donations and contributions of products, volunteer labor and sweat 
equity, on which groups like Habitat now depend.
  Finally, S. 1494 authorizes only through September 30, 1996, the 
section 515 rural rental housing program administered by USDA's Rural 
Housing Service [RHS]. Before the program is authorized beyond the 
current fiscal year, oversight hearings should be held and reforms 
implemented to guard against waste, abuse, and misuse of funds. The RHS 
has taken significant steps to correct problems in the section 515 
program which have been identified by the USDA IG and the GAO. However, 
legislative action is required to assure that program funds are 
allocated properly and that the program is not abused by developers, 
owners, or tenants. The Banking Subcommittee on Housing Opportunity and 
Community Development, which I chair, will hold hearings on the section 
515 program early this spring.
 Mr. SARBANES. Mr. President, I rise in support of S. 1494, the 
Housing Opportunity Program Extension Act. This bill addresses some 
important and time-sensitive matters in the housing area. S. 1494 
extends program authorities that have expired and makes some other 
needed changes in authorizing statutes. Finally, it provides HUD with 
the authority to support several national nonprofit organizations that 
are making a huge difference in America's communities. I thank the 
other members of the Senate for their support of this legislation.
  S. 1494 extends several housing authorizations that expired October 
1, 1995. Among these are the Community Development Block Grant direct 
homeownership assistance provisions, the Federal Housing Administration 
[FHA] multifamily insurance risk-sharing programs, and the Home Equity 
Conversion Mortgage program. Each of these programs is a valuable tool 
in our efforts to make sure that Americans remain the best-housed 
people in the world.
  The program extensions on this bill also include the section 515 
rural rental housing program and the set-asides within the program for 
nonprofit developers and for funding to underserved areas. This 
authorization is necessary because the Rural Housing Service at the 
Department of Agriculture has been unable to utilize its $150 million 
appropriation until an authorization passed. Section 515 provides 
valuable, low-interest credit to support affordable rental housing in 
rural areas.
  The bill also includes authority for the HUD Secretary to spend up to 
$60 million supporting local nonprofit housing and community 
development activities. I would like to express my enthusiastic support 
for these provisions. The bill authorizes $25 million for Habitat for 
Humanity, $15 million for other similar self-help housing programs, $10 
million for the National Community Development Initiative, and $10 
million for National Cities in Schools. Habitat for Humanity affiliates 
have been operating in my State for years and creating homeowners among 
low-income families. The National Community Development Initiative 
combines Federal funds with funds from foundations to support capacity 
building for community-based nonprofits. Two terrific national 
nonprofit intermediaries--the Enterprise Foundation which is based in 
Columbia, MD, and the Local Initiatives Support Corporation--are key 
participants in the NCDI program and are factors in the NCDI program's 
success. The community-based nonprofit sector is an important and 
growing part of our delivery system of assistance to distressed 
communities. I am pleased with the recognition that this bill provides 
to these efforts.
  Finally, Mr. President, I would like to highlight the language in the 
bill that permits HUD to renew expiring Section 8 moderate 
rehabilitation contracts. This provision overturns language passed on 
the continuing resolution that prohibited HUD from renewing moderate 
rehabilitation contracts. Clearly, HUD should not renew contracts on 
housing that is not decent, safe, and sanitary. Likewise, we are 
working with HUD to identify ways to reduce the cost of Section 8 
contracts where rent levels are excessive. However, HUD needs to take a 
closer look at all of the developments assisted with project-based 
rental assistance and make decisions about their futures on a case-by-
case basis. Before converting project-based assistance to vouchers, HUD 
should consider the future viability of the development, the ability of 
the project to support its existing financing, the availability of 
affordable housing for voucher holders, and the desirability of 
retaining long-term, affordable housing in that location.

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