[Congressional Record Volume 142, Number 141 (Thursday, October 3, 1996)]
[Senate]
[Pages S12286-S12287]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       LOW INCOME HOUSING CREDIT

  Mr. WELLSTONE. Mr. President, Senators Moseley-Braun and Baucus and I 
want to call attention to a matter that is very important to the small 
group affected. At the end of my remarks I will ask that a letter to 
HUD Secretary Henry Cisneros, signed by myself and Senators Baucus and 
Moseley-Braun, be included in the Record. We are asking the Secretary 
to review the criteria for income determination for the low-income 
housing tax credit and consider using the criteria and standards 
already in effect under the low-income guidelines for section 8 of the 
U.S. Housing Act as income guidelines for the low-income housing tax 
credit.
  Senators Baucus and Moseley-Braun have seen situations in Montana and 
Illinois similar to one facing the community of Hibbing, MN. Several 
years ago, the city of Hibbing organized a development program to 
purchase and restore the historic Androy Hotel in downtown Hibbing. The 
hotel was run down and had been abandoned. The rehabilitation was 
important to the city of Hibbing not only because of the history of the 
Androy Hotel, but because it symbolically dominates the downtown area.
  The rehabilitated hotel has been constructed for much needed senior 
citizen housing and there has been historic restoration of the hotel 
ballroom and lobby on the first floor. The low-income housing tax 
credit program made some of the funding provided by the city of Hibbing 
and a local bank possible.
  The low-income housing tax credit restricts the use of housing units 
to seniors of a certain income level. Unfortunately, because of a 
unique situation, many Hibbing seniors are just above the prescribed 
income level. This is because in Hibbing there is a long history of 
saving for retirement due to the commitment by the iron mining industry 
to solid pension programs and Social Security income for both

[[Page S12287]]

spouses. Thus, almost all low-income seniors in Hibbing who would like 
to move to the Androy are not eligible to do so.
  If the Secretary were to apply different income guidelines such as 
section 8 low-income housing guidelines to the low-income housing tax 
credit, the Androy Hotel and other buildings rehabilitated for low-
income elderly residents could be occupied. There is a great need for 
more affordable housing in many communities, particularly for those on 
fixed incomes. Many senior citizens welcome the opportunity to move to 
facilities for seniors that are in their own communities.
  I ask unanimous consent that our letter to Secretary of Housing and 
Urban Development Henry Cisneros be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                  October 2, 1996.
     Hon. Henry G. Cisneros,
     Secretary, U.S. Department of Housing and Urban Development, 
         Washington, DC.
       Dear Mr. Secretary: We are writing to bring to your 
     personal attention some unique situations in Illinois, 
     Montana, and Minnesota relating to the use of the low income 
     housing tax credit. Some serious problems have developed with 
     certain facilities during the ``rent up'' phase in projects 
     designed for senior citizens.
       Senior citizens were supposed to live in these housing 
     projects, but the income limits for the elderly populations 
     are the problem. Senior citizens are uniquely over income in 
     these areas in which the projects are located.
       The Department of the Treasury has issued a notice 
     explaining that, for purposes of determining qualifications 
     as a low income housing project, the income of individuals 
     and area gross income will be determined in a manner 
     consistent with the determination of annual income and the 
     estimates for median family income under Section 8 of the 
     U.S. Housing Act of 1937.
       Therefore, because of the authority which has been 
     delegated to HUD regarding income determination for the low 
     income tax credit, we would ask that you consider and review 
     existing criteria and standards already in effect under 
     Section 8 of the U.S. Housing Act of 1937 to determine if 
     these guidelines provide any relief for these situations. 
     There are special factors that create these situations in our 
     states and probably others as well.
       We would appreciate your review of this issue and look 
     forward to hearing from you.
           Sincerely,
     Carol Moseley-Braun,
     Paul Wellstone,
     Max Baucus,
       U.S. Senators.

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