[Congressional Record Volume 145, Number 96 (Thursday, July 1, 1999)]
[Senate]
[Page S8093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BOND:
  S. 1319. A bill to authorize the Secretary of Housing and Urban 
Development to renew project-based contracts for assistance under 
section 8 of the United States Housing Act of 1937 at up to market rent 
levels, in order to preserve these projects as affordable low-income 
housing, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.


                        save my home act of 1999

 Mr. BOND. Mr. President, I stand before you today to introduce 
the Save My Home Act of 1999. This legislation is intended to provide a 
blueprint for HUD to address the problem of owners opting out of the 
section 8 program by not renewing their section 8 project-based 
contracts. This is a housing crisis. In my state of Missouri alone, 
section 8 contracts on over 23,000 units will expire over the next 5 
years. Nationwide, section 8 contracts on over 14,000 multifamily 
housing projects with over 1 million units will expire over the same 
period of time.
  The ``Save My Home Act of 1999'' will restate and reemphasize the 
need for HUD to use its best efforts to renew all expiring section 8 
project-based contracts. The bill also provides new authority for 
section 8 enhanced or ``sticky'' vouchers to ensure that families in 
housing for which owners do not renew their section 8 contracts will be 
able to continue to live in their housing with the Federal government 
picking up the additional rental costs of the unit. The use of sticky 
vouchers is intended as a last resort. HUD must push for the renewal of 
the section 8 project-based contracts first. The bill also focuses on 
appraisals so that the cost of this housing reflects the true market 
value of the rental units. This has been a huge problem and will 
continue to be a problem until HUD develops the capacity and expertise 
to appraise adequately these multifamily housing projects.
  This legislation is needed because HUD has, until recently, refused 
to renew section 8 project-based contracts at market levels. In 
response to this policy, many owners of this housing have refused to 
renew their section 8 contracts and the housing has been converted to 
market rate housing and lost as affordable, low-income housing 
inventory. This means that the assisted low-income families in this 
housing often have to move because the new rents will be too high for 
the section 8 rental subsidies. This is a huge problem, especially for 
the elderly and for persons with disabilities who have come to see this 
housing as their homes.

  And this has become a crisis. For example, according to the National 
Housing Trust, during 1998 alone, owners of 219 properties with some 
25,488 units section 8 units voluntarily opted out of receiving federal 
rental subsidies under the section 8 project-based program. Moreover, 
it has been estimated that we are losing another 3,000 section 8 units 
a month because of HUD's inaction. I wish we had better numbers but HUD 
is not providing us or the housing advocates with this information, and 
it is not clear that HUD even has this information.
  However, I do want to be clear about the parameters of section 8 opt-
out crisis. HUD currently has the legal authority to renew expiring 
section 8 contracts at the market rent, but has failed to implement 
this authority. Congress in the Multifamily Assisted Housing Reform and 
Affordability Act of 1997, as enacted on October 27, 1997 in the VA/HUD 
FY 1998 Appropriations bill, provided HUD with the authority to renew 
section 8 contracts up to the rental market level. This was almost 2 
years ago, and HUD has only announced recently a renewal policy that it 
has not yet been able to implement. And despite press releases to the 
contrary, I am not convinced that HUD intends to renew these contracts 
except with an additional push from the Congress.
  I also want to be clear about funding. HUD has enough funds to pay 
for section 8 contract renewals, even though HUD would have you believe 
otherwise. In particular, HUD has at least $2 billion in the Housing 
Certificate fund in excess of what is needed for renewing all expiring 
section 8 contracts this year. Instead of committing any of these funds 
for the renewal of section 8 project-based contracts, HUD has dedicated 
these funds as part of its FY 2000 budget for general section 8 
contract renewals. Nevertheless, this money is available now and can be 
used to renew these expiring section 8 contracts. The real problem is 
that HUD does not have the ``will'' or ``commitment'' to fund these 
contracts. In fact, the biggest problem is commitment because you 
cannot legislate commitment. We need to find a way to make HUD renew 
these section 8 project-based contracts.
  HUD's lack of commitment to section 8 project-based housing has been 
a problem through this Administration. From the start, both HUD and the 
Administration have had a stated policy of opposing section 8 project-
based assistance in favor of vouchers. And this is true whether we are 
talking about elderly housing, housing for persons with disabilities, 
or housing that is located in very low vacancy areas, such as rural 
areas where there is no available housing or high-cost urban areas like 
Boston and San Francisco. This has been a problem in the past with the 
Section 202 program and with the Mark-to-Market inventory.
  One final point is that I know there is interest in both the House 
and Senate in funding a grant program to assist in the sale of section 
8 projects to nonprofits and tenant groups. While I support the concept 
of selling section 8 projects to nonprofits and tenant groups, I am 
troubled by the thought of buying projects that the Federal Government 
has already paid for several times over. This program sounds like 
another reiteration of the preservation program which we misguidedly 
funded over several years through the VA/HUD Appropriations 
Subcommittee, resulting in fraud and abuse as we vastly overpaid the 
value of these projects when we could have been using those funds for 
more fiscally responsible, affordable housing purposes.
  I look forward to working with interested Members of Congress on 
these very important issues.
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