[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Pages E58-E60]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE HOUSING OPPORTUNITY AND RESPONSIBILITY ACT OF 1997

                                 ______
                                 

                            HON. RICK LAZIO

                              of new york

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. LAZIO of New York. Mr. Speaker, I come to the floor of the House 
today to introduce the Housing Opportunity and Responsibility Act of 
1997, a bill to bring hope and opportunity to millions of Americans now 
living in public housing across the country.
  It is fitting that I do this today, the first day of the 105th 
Congress, because the first day of a new Congress is about new 
beginnings. This legislation is about new ideas and new models, new 
opportunities for families and neighborhoods that for too long have 
fallen victim to the old way of doing business.
  For 60 years, we have asked local communities to live under one law 
for public housing, the 1937 Housing Act. Cities and neighborhoods, 
struggling with the challenge of providing affordable housing for 
families and individuals, have had to rely on a Depression-era law to 
provide that housing. A single, top-down, cookie-cutter model for 
housing designed to shelter urban factory workers and create jobs for 
out-of-work craftsmen in the 1930's is not the best way to do business 
today.
  We ask a lot of local communities when it comes to building and 
supporting affordable housing. It's time we gave them the tools they 
need to get the job done right, so that families get the housing they 
need in communities that promote opportunity.
  By providing that opportunity and demanding responsibility--at all 
levels, from recipients of assistance to those providing housing 
services--we take those first few steps toward creating the kind of 
communities we can all take pride in. Many of my colleagues have 
complained that the problem is not the programs, but simply how much 
money the Federal Government spends. I disagree. While having 
sufficient funding is something I have fought for, especially for our 
most vulnerable communities, it's wrong for us in Congress to ask the 
American taxpayers to pay for programs that aren't working. We 
Americans are a generous people, we always have been. We understand 
that not everyone has the same opportunities that some of our neighbors 
have been given and we are willing to spend tax dollars to help lower-
income families get their feet under them and get on their way. But we 
are not so generous if we think our money is being wasted.
  In too many cities, public housing has become the kind of waste that 
taxpayers don't want to put their money into.
  We can do better than this. In some communities, housing for low-
income housing is what we've asked it to be--a way to a better life, 
rather than a way of life. We can learn from those success stories, we 
can take the knowledge we have gained and make a better framework for 
change.
  One of the worst examples has been the way residents in public 
housing are discouraged from working, discouraged from getting a better 
job or working overtime. The reason for this perversity? A well-
intentioned but ill-advised policy known as the Brooke amendment, which 
requires tenants in public housing pay exactly 30 percent of their 
income for rent--no more, no less--no matter what income they make. Get 
a better job, your rent goes up. Work overtime to try to build a little 
savings, to move your family out of public housing, your rent goes up.
  When we tried to restructure the intent of the Brooke amendment last 
year, some of my colleagues protested, saying that our only goal was to 
raise rents for low-income families. Nothing could be further from the 
truth. Nevertheless, this bill I am introducing today has a new way to 
eliminate the work-punishing provisions of existing law by simply 
giving tenants a choice. Each year, the housing authority will select a 
rent for each unit. The tenant then can choose whether to pay that rent 
or 30 percent of their income, obviously choosing whichever is less 
expensive. That way, no one is asked to pay more than 30 percent of 
their income for rent, but we don't force them to keep paying higher 
and higher rents based on misguided Federal policies.
  This Work Incentive Rent Reform is one example of the kind of 
compromise we can create that protects families, but still provides the 
type of opportunity we need to instill in Federal programs.
  Last May, members from both sides of the aisle voted for a very 
similar bill, the Housing Act of 1996. The House showed overwhelming 
support for reform by voting 315 to 107 in favor of that bill. As we go 
forward with this similar, but improved bill, I hope that Members on 
both side of the aisle, Republicans and Democrats, will feel free to 
engage in constructive debate, to work with us to make these needed 
changes.
  Sixty years is a long time to wait for reform. We shouldn't ask low-
income families to wait another year.

 Title by Title Summary of The Housing Opportunity and Responsibility 
                              Act of 1997

       The short title of the bill is the Housing Opportunity and 
     Responsibility Act of 1997. The bill repeals the United 
     States Housing

[[Page E59]]

     Act of 1937 (the ``1937 Act''), removes disincentives for 
     residents to work and become self-sufficient, provides rental 
     protections for low-income residents, deregulates the 
     operation of public housing authorities, and gives more power 
     and flexibility to local governments and communities to 
     operate housing programs.
       The Housing Opportunity and Responsibility Act declares 
     that it is the policy of the federal government to, among 
     other things, promote the general welfare of the nation by 
     helping families who seek affordable homes that are safe, 
     clean, and healthy, and in particular, assisting responsible 
     citizens who cannot provide fully for themselves because of 
     temporary circumstances or factors beyond their control. 
     These goals are to be achieved by developing effective 
     partnerships among the federal government, state and local 
     governments, and private entities, which would allow 
     government to accept responsibility for fostering the 
     development of a healthy marketplace, and allow families to 
     prosper and thrive by removing disincentives to work and 
     barriers to self sufficiency. It states that the federal 
     government cannot through its direct action or involvement 
     provide for the housing of every American citizen, but should 
     promote and protect the independent actions of private 
     citizens to develop housing and strengthen their own 
     neighborhoods.


                      Title I--General provisions

       Purpose. States that the purpose of the bill is to provide 
     affordable housing opportunities to low income families by 
     (1) deregulating and decontrolling public housing agencies; 
     (2) providing for more flexible use of Federal assistance to 
     housing authorities, allowing the authorities to leverage and 
     combine assistance amounts with amounts obtained from other 
     sources; (3) facilitating mixed income communities (4) 
     increasing accountability and rewarding effective management 
     of public housing authorities; (5) creating incentives for 
     residents of dwelling units assisted by public housing 
     authorities to work; and (6)-- recreating the existing rental 
     assistance voucher program so that the use of vouchers and 
     relationships between landlords and tenants under the program 
     operate in a manner that more closely resembles the private 
     housing market.
       Income Definitions. Defines ``adjusted income'' for 
     purposes of this Act to mean the difference between the 
     income of the members of the family residing in a dwelling 
     unit or the person on a lease and the amount of any income 
     exclusions--some of which are mandatory--for the family as 
     determined by HUD. Mandatory exclusions are for: (1) elderly 
     and disabled families; (2) reasonable medical expenses; (3) 
     child care expenses; (4) minors residing in the household; 
     and (5) certain child support payments. Discretionary 
     exclusions include, but are not limited to dependents, travel 
     expenses; and earned income.
       Drug/Substance Abuse. Permits a local housing and 
     management authority to prohibit certain individuals with a 
     history of drug or alcohol abuse from admission to units 
     where admission may interfere with the peaceful enjoyment of 
     the premises by other residents.
       Community Work and Family Self-sufficiency Requirement. 
     Requires adult residents of public housing or residents 
     receiving assistance under Title III to enter into an 
     agreement which provides that the resident contribut4e no 
     less than 8 hours of work per month within the community in 
     which the adult resides or participate on an ongoing basis in 
     a program designed to promote economic self-sufficiency, and 
     which sets a target date for when the family intends to 
     graduate out of public or assisted housing. Exceptions 
     include working families, senior citizens, disabled families, 
     persons attending school or vocational training, or 
     physically impaired persons.
       Local Plans and Review. Requires each local housing and 
     management authority to submit to a local elected official or 
     officials that appoint the authority and then to the 
     Secretary an annual Local Housing Management Plan that 
     describes the mission, goals, objectives, and policies of the 
     authority with respect to meeting the housing needs of low-
     income families. Discusses the standards by which the 
     Secretary may review Local Housing Management Plans, notice 
     of approval or disapproval, treatment of existing plans, and 
     authority of a public housing authority to amend plans.


                        Title II--Public Housing

       Block Grant Contracts. Provides general parameters for 
     block grant contracts (capital and operating funds) to be 
     entered into between the Secretary of Housing and Urban 
     Development (the ``Secretary'') and public housing 
     authorities. An authority must agree to provide safe, clean, 
     and healthy housing that is affordable in return for 
     assistance. Requires the Secretary to make a block grant to a 
     local housing and management authority provided, in part, 
     that the authority has submitted a community improvement 
     plan, the plan has been reviewed and complies with the 
     necessary requirements, and the authority is exempt from 
     local taxes or receives a contribution in lieu thereof.
       Uses. Authorizes grant uses for production, operation, 
     modernization, resident programs, homeownership activities, 
     resident management activities, demolition and disposition 
     activities, payments in lieu of taxes, emergency corrections, 
     preparation of Local Housing Management Plans, liability 
     insurance, and payment of obligations issued under the 1937 
     Act.
       Voluntary Voucher Conversion. Permits public housing 
     authorities, in accordance with the Local Housing Management 
     Plans, to move toward a voucher program for certain buildings 
     after a cost-benefit analysis of maintaining and modernizing 
     the building as well as an evaluation of the available 
     affordable housing.
       Formula Determination. Provides for development of a 
     formula, through negotiated rulemaking, for distribution of 
     block grant amounts to public housing authorities. Provides 
     for interim allocations to public housing authorities pending 
     the development of a formula Prescribes that chronically 
     vacant units are ineligible to receive subsidy except to the 
     extent of paying utilities.
       Family Income Eligibility. Limits occupancy of public 
     housing to families who, at the time of the initial 
     occupancy, qualify as low-income. Public housing authorities 
     may create a selection criteria for incoming residents that 
     are aimed at creating an income mix that reflects the 
     eligible population of that jurisdiction provided at least 35 
     percent of the units are occupied by families whose income 
     does not exceed 30 percent of area median income. Certain 
     income and eligibility restrictions may be waived by an 
     authority that provides units to police officers, law 
     enforcement and security personnel.
       Family Choice of Rental Payment. Families residing in 
     public housing will have a choice as to whether they would 
     rather pay a flat rent for a unit, to be established by the 
     public housing authority for each unit in its inventory, or 
     to pay no more than 30% of the family's adjusted income as 
     rent. The purpose is to allow public housing authorities to 
     create rental structures that would reflect the asset value 
     of the unit, similar to the private rental market and which 
     would remove disincentives to families obtaining employment 
     and achieving self-sufficiency, while maintaining income 
     protections for the residents.
       Minimum Rent. Provides that a public housing authority may 
     establish minimum rental contributions between $25 and $50, 
     provided certain hardship exemptions are established.
       Designated housing for elderly and disabled families. 
     Permits local housing and management authority to designate 
     all or part of a development as only elderly, only disabled, 
     or only elderly and disabled as long as the designation is 
     part of the Local Housing Management Plan. The authority must 
     establish that the designation is necessary to meet certain 
     goals and needs and include information the supportive 
     services and other assets that will be provided to serve the 
     residents.
       Resident Management Initiatives. Allows residents or non-
     profit resident management corporations to assume the 
     responsibility of managing or purchasing a development. The 
     corporation must be organized under state law, has as its 
     sole voting members the residents of the development, and 
     have the support of its resident council (if one exists), or 
     alternatively, a majority of the households of the 
     development. Allows a public housing authority to contract 
     with a resident management corporations to manage one or more 
     developments.
       Authorization of Appropriations. Authorizes $2.5 billion as 
     the appropriation level for each fiscal year through 2002 for 
     the capital fund, and $2.9 billion through fiscal year 2002 
     for the operating fund.


                 title iii--choice-based rental housing

       Grants. Authorizes the Secretary to make grants to public 
     housing authorities and authorizes contracts for one fiscal 
     year.
       Formula Allocation. Requires the Secretary to determine a 
     formula for allocating assistance based, in part, on census 
     data, various needs of communities, and the comprehensive 
     housing affordability strategy of a community, pursuant to a 
     negotiated rulemaking process. Up to 50 percent of the funds 
     that are unobligated by a local housing and management 
     authority for a period of 8 months may be recaptured by the 
     Secretary.
       Administrative Fees. Sets administrative fees for public 
     housing authorities at 7.65 percent of grant amount for the 
     first 600 units at fair market rent for a two bedroom and 7.0 
     percent of the grant amount for all units in excess of 600. 
     The Secretary may increase this fee in certain circumstances.
       Authorizations. Authorizes $1,861,668,000 under this title 
     as the appropriation level for each fiscal year through 2002.
       Income Targeting. Not less than 40% of the families 
     assisted with choice-based assistance must be families with 
     incomes at or below 30% of the area median income.
       Portability. Establishes national portability for 
     recipients of choice-based assistance.
       Resident Contribution and Rental Incidators. The resident 
     contribution shall not exceed 30% of the monthly adjusted 
     income of the family. Requires the Secretary to establish and 
     to publish annually rental indicators for a market area that 
     may vary depending on the size and type of the dwelling unit. 
     The rental indicators shall be adjusted annually based on the 
     most recent available data.
       Homeownership Option. Allows public housing authorities to 
     use funds under this title to assist low-income families 
     toward homeownership. Eligible families must have an income 
     from employment or sources other than public assistance, and 
     must meet initial and continuing requirements established by 
     the authority.
       Housing Assistance Payments Contracts. Allows public 
     housing authorities to enter into

[[Page E60]]

     contracts with owners by which owners screen residents, 
     provide units for eligible families, and authorities make 
     payments directly to owners on behalf of the eligible 
     families. The authority may enter into a contract with itself 
     for units it manages or owns.
       Amount of Monthly Assistance Payment, Shopping Incentive 
     and Escrow. States that the monthly payment for assistance 
     under this title is in the case of a unit with gross rent 
     that exceeds the payment standard for the locality, the 
     amount by which the payment standard exceeds the amount of 
     the resident's contribution and, in the case of a unit with 
     gross rent that is less than the payment standard, the amount 
     by which the gross rent exceeds the resident's contribution. 
     Half of any savings under (b) are escrowed into a fund on 
     behalf of the tenant, the remainder to be returned to the 
     federal treasury.


               title iv--home rule flexible grant option

       Allows local governments and jurisdictions to create and 
     propose alternative programs for better delivery of housing 
     services using funds that otherwise would have been provided 
     to these localities through the federal programs. Localities 
     would be able to consolidate public housing and choice-based 
     rental assistance funds. The local plan would have to meet 
     certain federal requirements, and would be subject to 
     approval by the Secretary. HUD would enter into ``performance 
     agreements'' with the jurisdictions setting forth specific 
     performance goals.


            title v--accountability and oversight procedures

       Study of Various Performance Evaluation Systems, 
     Establishment of Accreditation Board. Requires that a study 
     be conducted of alternative methods to evaluate the 
     performance of public housing agencies, the results of which 
     shall be reported to Congress by the Secretary within six 
     months of the date of enactment of this legislation. Six 
     months after completion of the study and receipt by Congress, 
     a twelve-member Housing Foundation and Accreditation Board 
     (the ``Board'') is established with the purpose of developing 
     an alternative evaluation and accreditation system for public 
     housing authorities.
       Annual financial and performance audits. Requires each 
     public housing authority to conduct an annual financial and 
     performance audit. Procedures for the selection of an 
     auditor, access to all relevant records, design of audit are 
     described. The Secretary may withhold the amount of the cost 
     of an audit from an authority that does not comply with this 
     section.
       Classification by performance category. Provides for four 
     classifications for housing authorities, including troubled 
     housing authorities. Requires an authority classified as 
     troubled to enter into an agreement with the Secretary that 
     provides a framework for improving the authority's 
     management.
       Removal of Ineffective PHA's. Authorizes the Secretary to 
     (a) solicit proposals from other entities to manage all or 
     part of the authority's assets, (b) take possession of all or 
     part of the authority's assets, (c) require the authority to 
     make other arrangements to manage its assets, or (d) petition 
     for the appointment of a receiver for the authority, upon a 
     substantial default by a housing authority of certain 
     obligations. The Secretary may provide emergency assistance 
     to a successor entity of an authority. Allows an appointed 
     receiver to abrogate contracts that impede correction of the 
     default or improvement of the authorities classification, 
     demolish and dispose of assets in accordance with this title, 
     create new public housing authorities in consultation with 
     the Secretary.
       Mandatory takeover of chronically troubled PHA's. Requires 
     the Secretary to takeover each chronically troubled public 
     housing agency not later than 180 days after the date of the 
     enactment. The Secretary may either solicit proposals and 
     take the necessary actions to replace management of the 
     agency or take possession of the agency.


              title vi--repeals and conforming amendments

       Provides for repeal of the United States Housing Act of 
     1937. However, the effective date of this act is delayed for 
     six-months after date of enactment to allow HUD time to 
     identify any technical corrections that would be required 
     resulting from such repeal. In addition, the Secretary may 
     delay implementation (until no later than October 1, 1998) of 
     any section in order to avoid undue hardship or if necessary 
     for program administration, provided the Secretary notify 
     Congress.


       title vii--affordable housing and miscellaneous provisions

       Include various miscellaneous provisions, including a 
     prohibition against HUD establishing a national occupancy 
     standards, technical corrections to legislation governing the 
     use of assisted housing by aliens, amendments to HOME and 
     CDBG income eligibility to promote homeownership, and 
     provisions governing the use of surplus government property 
     by homeless providers and self--help housing programs.

                          ____________________