[Congressional Record Volume 144, Number 16 (Thursday, February 26, 1998)]
[Extensions of Remarks]
[Page E237]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   AFFORDABLE HOUSING IMPROVEMENT ACT

                                 ______
                                 

                         HON. NANCY L. JOHNSON

                             of connecticut

                    in the house of representatives

                      Thursday, February 26, 1998

  Mrs. JOHNSON of Connecticut. Mr. Speaker, today the gentleman from 
Washington [Mr. Metcalf] and I are introducing the Affordable Housing 
Improvement Act, a measure that would: Increase the cap on the low-
income housing tax credit, which has not been adjusted for inflation 
since it was originally enacted in 1986; index the cap for inflation; 
implement several administrative reforms recommended by the U.S. 
General Accounting Office and the Ways and Means Subcommittee on 
Oversight; allow the use of the credit for developing community service 
areas for programs such as child care, Head Start, and job training, 
designed to serve individuals in the community who may not live in the 
credit-financed housing but who meet the income requirements of the 
housing credit program; and encourage the use of the credit to 
revitalize existing communities.
  Last year, the Oversight Subcommittee held two hearings on the 
administration of the low-income housing tax credit program. We learned 
that:
  The need for low income housing is greater than ever. Census data 
showed an unmet demand for affordable housing of more than 5 million 
units in 1996. The Census Bureau projects that this number will climb 
to 8 million units by the year 2000.
  The program provides better housing than traditional public housing 
programs because private investors have a stake in making sure the 
structures are well-built and maintained--a condition of receiving the 
credit.
  Investor demand for the credit has increased since its enactment in 
1986. This greater demand has stimulated more competition, resulting in 
an increase in private equity raised per credit dollar. Nationwide, 
developer demand for housing credits now exceeds supply by more than 
200 percent. This means States have a wider variety of proposals from 
which to choose.
  Mr. Speaker, this is a good program. It enjoys strong support on both 
sides of the aisle. It combines good public policy with private sector 
innovation and efficiency. But it can be improved.
  In our hearings, we learned that 43 percent of the households in 
properties placed in service between 1992 and 1994 were one-person 
households and 24 percent were two-person households. Only one-third of 
the units were occupied by three or more people. To encourage the 
States to allocate credits for developments for families with children, 
the bill will require allocating agencies to include ``tenant 
populations of individuals with children'' in criteria they use in 
allocating credits.
  The bill would also encourage the use of the credit to revitalize 
existing communities. In our hearings, we learned that most of the 
buildings--an estimated 73 percent--placed in service between 1992 and 
1994 were newly constructed; the rest were existing and rehabilitated 
buildings. Many older neighborhoods have extensive stocks of housing 
that could be rehabilitated and converted to low-income rental use or 
improved for continued low-income rental use. However, these projects 
are often more expensive and more difficult to develop. The bill would 
create a preference for projects which contribute to ``a concerted 
community revitalization plan,'' and it would require States to include 
``whether the project includes the use of existing housing as a part of 
a community revitalization plan'' in the selection criteria.
  The measure would allow combining the housing credit with HOME funds 
in high cost areas, and it would allow the use of the credit for 
community service areas for programs such as child care, Head Start, 
and job training.
  We also learned of several opportunities to improve the 
administration of the credit and they are included in this bill. The 
bill would: require the submission of a timely and comprehensive market 
study to the allocating agency for a proposed development, prepared by 
a neutral party commissioned by the developer and approved by the 
allocating agency; require that a written explanation be available to 
the general public for any allocation of credits which is not made in 
accordance with established priorities and collection criteria; require 
allocating agencies to include in their qualified allocation plans 
requirements for regular site visits and enforcement of habitability 
requirements; require that State agency fees be limited to no more than 
the costs incurred by an allocating agency in administering the tax 
credit program; and provide that States that over-allocate their share 
of credits will experience a reduction in the following year's tax 
credits.
  Mr. Speaker, the Clinton administration has proposed increasing the 
per capita cap, and the gentleman from Nevada [Mr. Ensign] has 
introduced a bill to increase the per capital cap and index it for 
inflation as well. I support their efforts. But we must improve the 
credit. I would encourage my colleagues to join the gentleman from 
Washington and me in sponsoring the Affordable Housing Improvement Act 
of 1998.

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