[Congressional Record Volume 144, Number 151 (Wednesday, October 21, 1998)]
[Extensions of Remarks]
[Pages E2283-E2284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       H.R. 4838, THE HOUSING PRESERVATION MATCHING GRANT OF 1998

                                 ______
                                 

                          HON. BRUCE F. VENTO

                              of minnesota

                    in the house of representatives

                       Tuesday, October 20, 1998

  Mr. VENTO. Mr. Speaker, on October 14, 1998, I introduced, H.R. 4838, 
the Housing Preservation Matching Grant of 1998, which would authorize 
the Secretary of HUD to make grants to States to supplement State 
assistance for the preservation of affordable housing for low income 
families.
  I consider this bill advance notice for the agenda of the 106th 
Congress which should begin in allocating resources to match the 
efforts of some States in preserving affordable housing units across 
this nation. During the consideration of the FY 1999 VA, HUD and 
Independent Agencies Appropriations bill, I attempted to offer an 
amendment that would expand the notification a tenant receives from 60 
days to 12 months that a building's mortgage will be prepaid, ending 
its lower income affordability. In the end, we succeeded in achieving a 
five-month notification requirement. A greater victory, however, would 
be to achieve the long-term preservation of those housing units as 
affordable housing.
  We are facing a dire situation with regard to affordable housing 
needs in this country. Low- to moderate-income residents receiving 
housing assistance are on the cusp of a crisis and Congress must act to 
attempt to avert the breakdown and loss of the national public and 
assisted housing stock. Without preservation, the best of the worst 
case scenarios is a ``vouchering out'' of what little affordable 
housing remains.
  Some states are allocating resources to save federally subsidized 
housing for the future. In my home state of Minnesota, where 10% of the 
roughly 50,000 units of assisted housing are at risk, $10 million was 
appropriated in 1999 for an Affordable Rental Investment Fund to 
finance the acquisition, rehabilitation and debt restructuring of 
federally assisted rental property and for making equity take-out 
loans. This laudable effort, however, is only one state and even there, 
the resources allocated cannot match the great need for affordable 
housing, especially for seniors and those with special needs, other 
states and local governments must step forward with funding to help, 
Federal housing policy should encourage and facilitate such action.
  H.R. 4838 recognizes these kinds of commitments and matches them with 
two federal dollars for every State dollar. If there is not funding for 
the federal Low Income Housing Preservation and Resident Homeownership 
Act (LIHPRHA) perhaps this new Housing Preservation Matching Grant can 
encourage a forestallment of prepayment, which places low-income 
families at risk of losing their homes. With action and enactment of 
this bill in the next Congress we could provide a benchmark for states 
and local communities to work from and with as they produce their own 
initiatives to avert this pending national crisis in affordable 
housing.
  A section-by-section of H.R. 4838 follows:

     Section 1. Short title
       The short title of the Act is the ``Housing Preservation 
     Matching Grant Act of 1998''.
     Section 2. Findings and purpose
       (a) Findings.--The Congress finds that--
       (1) more than 55,300 affordable housing dwelling units in 
     the United States have been lost through termination of low 
     income affordability requirements, which usually involves the 
     prepayment of the outstanding principal balance under the 
     mortgage on the project in which such units are located;
       (2) more than 265,000 affordable housing dwelling units in 
     the United States are currently at risk of prepayment;
       (3) the loss of the privately owned, federally assisted 
     affordable housing, which is occurring during a period when 
     rents for unassisted housing are increasing and few units of 
     additional affordable housing are being developed, will cause 
     unacceptable harm on current tenants of affordable housing 
     and will precipitate a national crisis in the supply of 
     housing for low-income households;
       (4) the demand for affordable housing far exceeds the 
     supply of such housing, as evidenced by studies in 1998 that 
     found that (A) 5,300,000 households (one-seventh of all 
     renters in the Nation) have worst-case housing needs; and 
     (B) the number of families with at least one full-time 
     worker and having worst-case housing needs from 1991 to 
     1995 by 265,000 (24 percent) to almost 1,400,000;
       (5) the shortage of affordable housing in the United States 
     reached a record high in 1995, when the number of low-income 
     households exceeded the number of low-cost rental dwelling 
     units by 4,400,000;

[[Page E2284]]

       (6) between 1990 and 1995, the shortage of affordable 
     housing in the United States increased by 1,000,000 dwelling 
     units, as the supply of low-cost units decreased by 100,000 
     and the number of low-income renter households increased by 
     900,000;
       (7) there are nearly 2 low-income renters in the United 
     States for every low-cost rental dwelling unit;
       (8) 2 of every 3 low-income renters receive no housing 
     assistance and about 2,000,000 low-income households remain 
     on waiting lists for affordable housing;
       (9) the shortage of affordable housing dwelling units 
     results in low-income households that are not able to acquire 
     low-cost rental units paying large proportions of their 
     incomes for rent; and
       (10) in 1995, 82 percent of low-income renter households 
     were paying more than 30 percent of their incomes for rent 
     and utilities.
       (b) Purpose.--It is the purpose of this Act--
       (1) to promote the preservation of affordable housing units 
     by providing matching grants to States that have developed 
     and funded programs for the preservation of privately owned 
     housing that is affordable to low-income families and persons 
     and was produced for such purpose with Federal assistance;
       (2) to minimize the involuntary displacement of tenants who 
     are currently residing in such housing, many of whom are 
     elderly or disabled persons; and
       (3) to continue the partnerships among the Federal 
     Government, State and local governments, and the private 
     sector in operating and assisting housing that is affordable 
     to low-income Americans.
     Section 3. Authority
       Provides the Secretary of HUD with the authority to make 
     grants to the States for low-income housing preservation.
     Section 4. Use of Grants
       (a) In general. --Grants can only be used for assistance 
     for acquisition, preservation incentives, operating cost, and 
     capital expenditures for the housing projects that meet the 
     requirements in (b), (c) or (d) below.
       (b) Projects with HUD-insured mortgages.--
       (1) The project is financed by a loan or mortgage that is--
     (A) insured or held by the Secretary under 221(d)(3) of the 
     National Housing Act and receiving loan management assistance 
     under Section 8 of the U.S. Housing Act of 1937 due to a 
     conversions for section 101 of the Housing and Urban 
     Development Act of 1965; (B) insured or held by the Secretary 
     and bears interest at a rate determined under 221(d)(5) of 
     the National Housing Act; (c) insured, assisted, or held by 
     the Secretary or a State or State Agency under Section 236 of 
     the National Housing Act; or (D) held by the Secretary and 
     formerly insured under a program referred to in (A), (B) or 
     (C);
       (2) the project is subject to an unconditional waiver of, 
     with respect to the mortgage referred to in paragraph (1)--
       (A) all rights to any prepayment of the mortgage; and (B) 
     all rights to any voluntary termination of the mortgage 
     insurance contract for the mortgage; and
       (3) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner) to extend 
     all low-income affordability restrictions imposed because of 
     any contract for project-based assistance for the project.
       (c) Projects with section 8 project-based assistance.--A 
     project meets the requirements under this subsection only 
     if--
       (1) the project is subject to a contract for project-based 
     assistance; and (2) the owner has entered into binding 
     commitments (applicable to any subsequent owner) to extend 
     such assistance for a maximum period under law and to extend 
     any low-income affordability restrictions applicable to the 
     project.
       (d) Projects purchased by residents.--A project meets the 
     requirements under this subsection only if the project--
       (1) is or was eligible housing under LIHPRHA of 1990; and 
     (2) has been purchased by a resident council for the housing 
     or is approved by HUD for such purchase, for conversion to 
     homeownership housing as under LIHPRHA of 1990.
       (e) Combination of assistance.--Notwithstanding subsection 
     (a), any project that is otherwise eligible for assistance 
     with grant amounts under (b) or (c) and also meets the 
     requirements of the (1) in either of the other subsections--
     that is, it is a 221(d)(3), 221(d)(5), or a 236 building, or, 
     is subject to a contract for project-based assistance--will 
     be eligible for such assistance only if it complies with all 
     the requirements under the other subsection.
     Section 5. Grant amount limitation
       The Secretary can limit grants to States based upon the 
     proportion of such State's need compared to the aggregate 
     need among all States approved for such assistance for such a 
     fiscal year.
     Section 6. Matching requirement
       (a) In general.--The Secretary of HUD cannot make a grant 
     that exceeds twice the amount the State certifies that the 
     State will contribute for a fiscal year, or has contributed 
     since January 1, 1998, from non-Federal sources for 
     preservation of affordable housing as described in Section 
     4(a).
       (b) Treatment of previous contributions.--Any portion of 
     amounts contributed after 1.1.98, that are counted for a 
     fiscal year, may not be counted for any subsequent fiscal 
     year.
       (c) Treatment of tax credits.--Low Income Housing Tax 
     Credits (LIHTC) and proceeds from the sale of tax-exempt 
     bonds shall not be considered non-federal sources for 
     purposes of this section.
     Section 7. Treatment of subsidy layering requirements
       Neither section 6 or any other provision of this Act should 
     prevent using the Low Income Housing Tax Credit in connection 
     with housing assisted under this Act, subject to following 
     Section 102(d) of the HUD Reform of 1989 and section 911 of 
     the Housing and Community Development Act of 1992.
     Section 8. Applications
       The Secretary shall provide for States to submit 
     applications for grants under this Act with such information 
     and certifications that are necessary.
     Section 9. Definitions
       For this Act, the following definitions apply:
       (1) Low-income affordability restrictions.--With respect to 
     a housing project, any limitations imposed by regulation or 
     agreement on rents for tenants of the project, rent 
     contributions for tenants of the project, or income-
     eligibility for occupancy in the project.
       (2) Project-based assistance.--Is as defined in section 
     16(c) of the U.S. Housing Act in 1937, except that such term 
     includes assistance under any successor programs to the 
     programs referred to in that section.
       (3) Secretary.--Means the Secretary of the Department of 
     Housing and Urban Development.
       (4) State.--Means the States of the U.S., DC, Puerto Rico, 
     the Northern Mariana Islands, Guam, the Virgin Islands, 
     American Samoa, and any other territory or possession of the 
     U.S.
       Section 10. Gives the Secretary authority to issue any 
     necessary regulations.
       Section 11. Authorizes $500,000,000 from 1999 through 2003 
     for grants under this Act.

     

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