[Congressional Record Volume 148, Number 93 (Thursday, July 11, 2002)]
[Senate]
[Pages S6651-S6655]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SARBANES (for himself, Mr. Reed, Mr. Schumer, Mr. Carper, 
        Ms. Stabenow, Mr. Corzine, and Mr. Akaka):
  S. 2721. A bill to improve the voucher rental assistance program 
under the United States Housing Act of 1937, and for other purposes; to 
the Committee on Banking, Housing, and Urban Affairs.
  Mr. SARBANES. Madam President, I come to the floor today to introduce 
the Housing Voucher Improvement Act of 2002. I am pleased that this 
legislation is being co-sponsored by a number of my colleagues on the 
Committee on Banking, Housing, and Urban Affairs: Senators Reed, 
Schumer, Carper, Stabenow, Corzine, and Akaka. This legislation will 
make important changes to the housing voucher program, a program that 
serves over 1.5 million low-income American families. These 1.5 million 
families are part of a growing number of people in this country who are 
unable to afford rising housing costs. As we learned in hearings before 
the Committee earlier this year, for too many people, the paycheck they 
bring home is too small to cover housing and other expenses. Low-income 
families are forced to live in crowded, unsafe conditions or forgo 
other necessities to make ends meet.
  In order to ensure that families have decent, safe and affordable 
housing, the government provides assistance in a variety of ways 
including public housing, section 8 vouchers, FHA mortgage insurance, 
and homeless assistance programs. While we have provided funding for 
these programs over the years, more must be done. It is estimated that 
over 14 million working families in this country pay more than they can 
afford for housing. In addition, 1.7 million families live in 
substandard housing--housing that is unsafe or overcrowded. 
Homelessness continues to be a major problem, with approximately 2 
million people experiencing homelessness at some point this year. These 
statistics show that millions of Americans are unable to afford the 
most basic of needs, housing.
  The solution to the affordable housing crisis is not found in any one 
program or in any one policy. We must

[[Page S6652]]

work on a variety of fronts to combat this crisis. We must preserve the 
affordable housing that already exists; we must build new affordable 
housing; and, we must ensure that the housing programs we have in place 
work effectively to house families in need. The Housing Voucher 
Improvement Act is not intended to address all of these needs, but it 
is an important step forward in making sure that the voucher program 
works to provide the greatest range of housing opportunities to the 
lowest income Americans.
  The bill I am introducing today is intended to work towards three 
objectives: ensuring that the voucher program works effectively and 
that all families receiving vouchers are able to find adequate housing; 
providing families with vouchers the widest range of possibilities as 
to where to live; and assisting families receiving housing assistance 
in attaining self-sufficiency.
  The voucher program has provided millions of Americans with the 
opportunity to live in safe and decent homes. However, as housing 
markets tighten, families are finding it more difficult to use housing 
vouchers. This difficulty may result from a lack of rental housing, 
available housing being too expensive, or too few landlords who accept 
tenants with housing vouchers. The Housing Voucher Improvement Act will 
give local public housing authorities a number of tools to assist 
voucher holders in finding housing and to make the voucher program 
attractive to private market landlords.
  To help people find decent and safe housing, this bill will give 
public housing agencies the flexibility to use a limited amount of 
their funds to provide search assistance to voucher holders. For many 
people who receive vouchers, additional assistance, such as housing 
counseling, transportation services, or security deposit funds may make 
the difference in finding a place to live. This bill will also increase 
housing opportunities for voucher holders by allowing public housing 
agencies to increase the amount that the voucher is worth where a 
significant number of families given vouchers are unable to find 
adequate housing. Provisions are also included in the bill to make it 
easier to use vouchers in housing developed with HOME funds or Low 
Income Housing Tax Credits. Ensuring that vouchers can be used in these 
developments will greatly expand housing opportunities for extremely 
low-income families.
  In order to operate a successful program, enough apartments must be 
available for people with vouchers. Therefore, vouchers must be an 
attractive option for landlords. Towards that end, the Housing Voucher 
Improvement Act allows public housing agencies to use their funds to 
reach out to local property owners to increase landlord participation 
in the vouchers program. It also scales penalties for inspection 
violations to the magnitude of the violation and helps guarantee timely 
payments to apartment owners by creating an incentive for housing 
authorities to use automatic payment systems for interested owners. 
This bill will also allow public housing authorities to streamline 
inspections while still ensuring that housing is decent, safe and 
sanitary. All of these provisions will make vouchers easier to use for 
private-market apartment owners.
  This bill also creates a new use for vouchers, allowing housing 
authorities to couple a limited number of vouchers with housing being 
constructed with HOME dollars, tax credits, or other funds. These 
``thrifty vouchers'' will cost less than regular vouchers, allowing 
more families to be served.
  While most of this bill will help to expand housing opportunities for 
people searching for housing, one critical component of housing policy 
is self-sufficiency. Housing assistance is key in moving people from 
welfare to work. A stable home is needed for job stability. While this 
seems intuitive, I do not rely on intuition alone in making this 
assertion. Recent studies, including one done by the Manpower Research 
Demonstration Corporation, show that people receiving housing 
assistance are more successful in moving from welfare to work. They had 
higher wages and retained employment for longer periods of time. This 
bill strengthens the role that housing plays in self-sufficiency by 
providing greater opportunities for voucher holders to become involved 
in educational and employment programs. We also authorize welfare to 
work vouchers, which will strengthen relations between housing and 
welfare agencies. Given the role that housing assistance can play in 
promoting self-sufficiency, greater confidence between housing and 
welfare agencies makes good common sense.
  I introduce this bill today with the hope that it will strengthen one 
of the most important federal housing programs. People given vouchers 
should be able to find adequate housing, and should have greater 
choices in where to live. And those families already receiving housing 
assistance should be able to access programs that will assist them in 
meeting their educational and employment goals. There is widespread 
consensus that the changes made in this bill will assist in these 
efforts. This bill is supported by a wide range of organizations 
including public housing agencies, industry groups, and advocacy 
organizations. The bill is strongly supported by the National 
Association of Housing and Redevelopment Officials, the Center on 
Budget and Policy Priorities, the Local Initiatives Support 
Corporation, the Enterprise Foundation, the National Low Income Housing 
Coalition, the National Apartment Association, the National Affordable 
Housing Management Association and others.

  I want to take a moment to thank my staff for their hard work on this 
bill, and I want to specifically thank Mary Grace Folwell, a fellow 
from the American Planning Association, who has been crucial in working 
on this legislation.
  I urge my colleagues to support this critical legislation and to 
recognize the important role that housing assistance plays in the lives 
of millions of Americans.
  Madam President, I ask unanimous that letters of support and a 
section-by-section analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                    July 11, 2002.
     Senator Paul S. Sarbanes,
     Chairman, Senate Banking Housing and Urban Affairs, 
         Washington, DC.
       Dear Senator Sarbanes: We, the organizations signed below, 
     are writing in support of the Housing Voucher Improvement Act 
     of 2002. The Section 8 housing voucher program provides many 
     low-income families with the means to find affordable 
     housing. However, in many cities, suburbs, and rural housing 
     markets around the country, vouchers are very difficult to 
     use. In some markets, there is just not a lot of rental 
     housing available, the available housing is too expensive, or 
     there are too few landlords who accept tenants with Section 8 
     vouchers. This legislation is narrowly tailored to make 
     vouchers more effective by giving PHAs various tools to 
     assist voucher holders in finding housing and by making 
     vouchers easier for private properly owners to use.
       To make vouchers easier to use for private-market apartment 
     owners, the Housing Voucher Improvement Act changes the unit 
     inspection requirement to make it more time-efficient; scales 
     penalties for inspection violations to the magnitude of the 
     violation; and, to guarantee timely payments by the PHA, 
     creates an incentive for PHAs to use automatic payment 
     systems for interested owners.
       To help PHAs deal with high-cost rental markets, the bill 
     increases local flexibility in setting maximum rents. The 
     legislation grants PHAs limited authority to increase their 
     Fair Market Rents to a maximum of 120% of the area's fair 
     market rent. Current law allows PHAs to use this maximum only 
     after the waiver is granted by HUD. The bill also adds 
     provisions to facilitate the use of vouchers in units in 
     lower-poverty neighborhoods that are developed with HOME 
     funds or Low Income Housing Tax Credits.
       To help voucher-holders find housing, the bill authorizes 
     PHAs to use existing funding to provide landlord outreach and 
     education and apartment-search assistance to voucher-holders 
     as well as assistance with security deposits, application 
     fees and credit checks.
       The bill gives local public housing authorities the option 
     of turning a limited portion of its available vouchers into 
     lower cost ``thrifty vouchers,'' which can be attached to a 
     new housing development or to a development this 
     rehabilitated or preserved. Because the vouchers cost less 
     than regular vouchers, a larger number of families can be 
     served by the same level of funding. The bill also makes it 
     easier to administer the project-based component on the 
     vouchers program and to attach vouchers to buildings in a 
     range of neighborhoods.
       Appropriately in this year of welfare reauthorization, the 
     bill contains several provisions to promote employment among 
     tenants of HUD's major rental assistance programs, including 
     a 5-year authorization of Welfare-to-Work vouchers.
       We thank you for your leadership on this issue and for your 
     continued support of affordable housing programs.

[[Page S6653]]

       Consortium for Citizens with Disabilities Housing Task 
     Force, Center on Budget and Policy Priorities, Local 
     Initiatives Support Corporation (LISC), National Apartment 
     Association, National Association of Housing and 
     Redevelopment Officials (NAHRO), National Coalition for the 
     Homeless, National Housing Conference, National Housing Law 
     Project, National Low Income Housing Coalition, National 
     Multi Housing Council, The Enterprise Foundation, and 
     Volunteers of America.
                                  ____

                                       National Affordable Housing


                                       Management Association,

                                    Alexandria, VA, July 11, 2002.
     Hon. Paul S. Sarbanes,
     Chairman, Senate Committee on Banking, Housing, and Urban 
         Affairs, Washington, DC.
       Dear Chairman Sarbanes, The National Affordable Housing 
     Management Association (NAHMA) is pleased to support 
     provisions in the Housing Voucher Improvement Act which make 
     the Section 8 voucher program more user-friendly for both 
     tenants and landlords, improve administration, and address 
     many problems which inhibit voucher utilization.
       In recent years, the difficulty of satisfying the Section 8 
     regulatory burdens has created a strong disincentive for 
     private landlords to accept the vouchers. The Housing Voucher 
     Improvement Act makes several constructive reforms to the 
     voucher program which address this reality. First, it makes 
     the unit inspection requirement more time efficient. 
     Likewise, it makes penalties for inspection violations 
     commensurate with the severity of the violation. Furthermore, 
     it will improve the timeliness of payments to landlords by 
     creating an incentive for public housing authorities (PHAs) 
     to use automatic payment systems.
       This bill also addresses voucher utilization problems in 
     high-cost areas by offering PHAs flexibility to establish 
     maximum rents in high cost areas. By allowing PHAs to set the 
     voucher payment standard at 120 percent of fair market rent 
     (FMR), housing authorities will be able to automatically 
     increase their payment standard to address market changes.
       In short, NAHMA is pleased that you have offered 
     legislation to improve Section 8 voucher utilization and 
     increase housing opportunities for extremely low income 
     families.
           Sincerely,
                                                    George Caruso,
     Executive Director.
                                  ____

                      Council of Large Public Housing Authorities,


                              1250 Eye Street NW, Suite 901 A,

                                    Washington, DC, June 27, 2002.
     Hon. Paul Sarbanes,
     Chair, Committee on Banking, Housing and Urban Affairs, 
         Washington, DC.
       Dear Chairman Sarbanes: We write in support of your efforts 
     to make Section 8 vouchers easier to use through the 
     ``Housing Voucher Improvement Act of 2002.'' In light of the 
     great need for more affordable housing opportunities and the 
     difficulty many low-income families have encountered in 
     utilizing the program due largely to rising costs in many 
     markets, we agree that legislative changes are needed so that 
     the program can be more effective in providing housing 
     subsidy to low-income families. We very much appreciate the 
     attention this legislation will bring to this important 
     issue.
       As a November 2001, HUD study shows, tight market 
     conditions brought about by extremely low vacancy rates in 
     many communities is biggest impediment to voucher holders 
     succeeding in utilizing their subsidy. We support several 
     provisions in the bill that would help address this problem, 
     particularly the proposal to enable PHAs to increase payments 
     to 120% of the payment standard without prior HUD approval, 
     In addition, the sections which authorize a $50 million 
     Voucher Improvement Fund and provide some flexibility for 
     PHAs to use voucher resources to pay for housing counseling, 
     search assistance, and incentives to landlords will help 
     voucher holders become more competitive in the market place. 
     The proposed revisions to the current project-based Section 8 
     program will also assist PHAs that can better serve low-
     income families by increasing the supply of assisted units, 
     instead of relying on exclusively on private market.
       While we understand that this bill is designed to make only 
     modest changes to the Section 8 program, it highlights the 
     need for a more dramatic reform. Legislative changes over the 
     years have addressed particular issues to help Section 8 keep 
     pace with changing market conditions, however, some of these 
     piecemeal modifications have added significantly to the 
     program's complexity. Ultimately, we believe that local 
     authorities need even more flexibility to make the most 
     efficient use of Federal funding for housing in an ever-
     changing market place. Your bill is a step in that direction.
       Again, we very much appreciate your staunch support of 
     affordable housing programs and your efforts to increase 
     Federal investment in this area. We look forward to our 
     continued work with you and your dedicated staff to continue 
     to make the Section 8 program work better for needy families.
           Sincerely,
                                                   Sunia Zaterman,
     Executive Director.
                                  ____


         Summary of the Housing Voucher Improvement Act of 2002

       Section 1. Short Title.
       Section 2. Purposes--(1) to ensure that the Section 8 
     program works effectively and all families receiving vouchers 
     are able to find adequate housing; (2) to provide families 
     with vouchers the widest range of possibilities as to where 
     to live; and (3) to assist families receiving housing 
     assistance in attaining self sufficiency through encouraging 
     partnerships between housing authorities and welfare 
     agencies.
       Section 3. Authorize ``Thrifty Vouchers'' designed to make 
     additional housing affordable to extremely low-income 
     families.
       Thrifty Vouchers (TVs) are intended to encourage the 
     production or preservation of housing affordable to extremely 
     low-income families. PHAs would be authorized to issue TVs 
     out of their existing allocation of vouchers. In addition, 
     Congress could appropriate additional incremental assistance 
     for use as TVs.
       TVs would cost less than regular vouchers because there 
     would be no debt service included in the rent calculation for 
     a TV unit. Rents would be based on the operating costs of a 
     development and would be capped at 75% of the FMR (unlike 
     regular vouchers which are set between 90 and 110% of the 
     FMR). Data indicate that 75% of FMR should be adequate in 
     most places to cover the costs of operation of multifamily 
     housing. The bill provides an exception to the 75% cap for 
     PHAs that can demonstrate both that this cap could not 
     support a reasonable operating cost of rental housing and a 
     need for the production or preservation of affordable housing 
     in the PHA's service area. Since these vouchers cost less 
     than regular vouchers, PHAs could serve more families with 
     the same amount of funding.
       At the beginning of the development of a project, 
     developers receiving tax credits, HOME funds, or other 
     capital subsidies could link TVs to not more than 25% of the 
     units in a development. The 25% cap is intended to prevent 
     concentration of poverty. While tax credits and HOME are 
     producing new rental housing, such housing is not affordable 
     to extremely low income families without additional operating 
     subsidies. A recent study done by HUD found that extremely 
     low-income families living in HOME units who do not also 
     receive vouchers, pay 69% of their income for rent. In some 
     cases, residents use tenant-based vouchers to afford such 
     units. However, linking TVs to a project would ensure that 
     some of the units in a given project would be affordable to 
     those most in need of housing.
       This section makes TVs a subparagraph of the project-based 
     voucher statute. This is in response to a concern expressed 
     by HUD that they do not want to administer two separate 
     programs. Thus, TVs would be counted against a PHA's 20% cap 
     on project-based vouchers; however, new incremental 
     assistance appropriated by Congress for use as TVs would not 
     be counted against the 20% cap.
       Several changes were made to the project-based voucher 
     statute to make it easier for PHAs and private owners to 
     administer these vouchers. The most significant include the 
     expansion of the purpose of project-based vouchers to include 
     the revitalization of low-income communities and the 
     prevention of the displacement of extremely low-income 
     families, and changes to the waiting list provisions to 
     allow for separate project-based lists and to permit PHAs 
     to allow owners to maintain their own waiting lists, 
     subject to certain requirements.
       Section 4. Providing assistance to voucher holders in their 
     search for decent, safe and affordable housing.
       1. Allow PHAs with unutilized Section 8 funds to use those 
     funds on activities designed to assist families in finding 
     housing. PHAs that have low utilization rates (they do not 
     use all of their Section 8 funds to house families) will have 
     unused Section 8 funds that could be made available to assist 
     families in finding housing. This legislative change would 
     allow PHAs to use 2% of the funds they receive under the 
     voucher program to provide additional services to families 
     searching for housing if they have a low voucher success rate 
     and/or problems with concentration of voucher holders in 
     high-poverty neighborhoods. PHAs could use funds for 
     counseling, security deposits, application and credit check 
     fees, and search assistance such as transportation services.
       2. Allow PHAs that use all of their Section 8 funds to use 
     up to one week of reserves on activities designed to assist 
     families in finding housing. For PHAs that use all of their 
     funds and whose families still face difficulties in funding 
     adequate housing (a success rate less than 80%), the bill 
     allows PHAs to use up to one week of reserves to provide 
     additional service to families searching for houring.
       3. Create a Voucher Success Fund of $50 million for PHAs 
     that do not have unused funds, but still need additional 
     resources to assist families in finding housing. These PHAs 
     use almost all of their Section 8 funds, but families that 
     receive vouchers still face difficulties in finding adequate 
     housing. PHAs that use almost all of their Section 8 funds 
     but have a success rate lower than 80% would apply to HUD for 
     funds to help families find housing through counseling, 
     security deposits, application and credit check fees, and 
     search assistance such as transportation services.
       Section 5. Expanding housing opportunities for voucher 
     holders
       1. All PHAs to set their voucher payment standard at 120% 
     of FMR if they have had their payment standard set at 110% or 
     above

[[Page S6654]]

     for the previous 6 months AND continue to have problems with 
     utilization, success rates, or concentration of Section 8 
     units. Currently, PHAs may set their payment standard (which 
     determines the amount the voucher is worth) between 90% and 
     110% of the Fair Market Rent. HUD can approve higher payment 
     standards on a case by case basis. This change will allow 
     housing authorities to automatically increase their payment 
     standard to address market changes. Raising the payment 
     standard will help ensure that more vouchers could be used in 
     high cost Areas.
       2. Allow PHAs to pay 120% of FMR as the payment standard in 
     individual cases for people with disabilities. People with 
     disabilities may be limited in their housing opportunities, 
     and their choices may be restricted based on special needs. 
     This provision will allow housing authorities to pay up to 
     120% of the FMR as a reasonable accommodation for voucher 
     holders with disabilities without prior HUD approval, and 
     would authorize HUD approval for payment standards above 
     120%.
       3. Allow PHAs to set higher payment standard for voucher 
     used in Low Income Housing Tax Credit (LIHTC) developments. 
     The LIHTC program provides substantial funding for low-income 
     housing development. Though tax credit housing serves low-
     income people, these properties are not usually affordable to 
     extremely low-income households (with incomes below 30% of 
     the Area Median Income). One way to serve the poorest 
     families in tax credit developments is to house families with 
     vouchers. The recent increase in tax credits presents an 
     opportunity to expand housing choice for even the lowest 
     income families. In some areas, the tax credit units will 
     have higher rents than are normally covered by a voucher. In 
     2000, Congress changed the project-based statute to allow 
     project-based assistance to cover these higher rents so long 
     as the LIHTC building was not in a high poverty census tract. 
     This provision would make a similar change for vouchers.
       4. Allow PHAs to pay up to their full payment standard for 
     units in HOME developments. Currently, HOME units may only be 
     rented up to the Fair Market Rent to voucher holders. This 
     provision will allow a PHA to pay a rent at their regular 
     payment standard, where above the FMR, in order to provide an 
     incentive to HOME developments to seek out voucher holders as 
     renters, only where the units are located outside of high-
     poverty areas.
       5. Addressing Housing in the Consolidated Plan. Cities, 
     counties and states that receive Community Development Block 
     Grant (CDBG) funds (known as ``participating jurisdictions'') 
     are required to complete Consolidated Plans detailing the 
     housing and community development needs in their 
     jurisdictions. This provision of the bill makes the following 
     changes to the Consolidated Plan requirements:
       a. Include a requirement that the jurisdiction identify 
     barriers to voucher utilization and potential solutions. This 
     would ensure that entities other than the PHA (such as cities 
     and counties) are aware of issues with voucher recipients and 
     their ability to find housing. While no direct action would 
     be required from the city or participating jurisdiction, they 
     would be acknowledging the difficulties in using vouchers, 
     and identifying the causes. This would hopefully lead to the 
     jurisdiction deciding to take actions to alleviate the 
     barriers where possible.
       b. Include a requirement that the jurisdiction consider 
     employment opportunities in determining the location of 
     housing development. Housing opportunities close to 
     employment opportunities and/or transportation are important 
     to ensuring the success of low-income people in finding and 
     retaining employment. This provision would ensure that 
     jurisdictions are looking at location in determining where 
     housing resources should be allocated.
       c. Include a requirement that a participating jurisdiction 
     must consult with social service agencies in certain aspects 
     of planning for housing opportunities. When determining how 
     to address affordable housing problems, housing planners and 
     welfare administrators should be working together to help 
     plan for people moving from welfare to work, and to help link 
     people receiving housing assistance with welfare agencies and 
     resources (and vice versa).
       Section 6. Access to HOME and LIHTC developments
       Require that HUD ensure that PHAs have a list of LIHTC and 
     HOME developments to give to voucher holders. While LIHTC 
     developments could provide housing opportunities to very poor 
     families, and while LIHTC developments may not discriminate 
     against voucher holders, there is almost no communication or 
     coordination between PHAs and state HFAs, which operate the 
     LIHTC program. This provision will require HUD to compile 
     information on where tax credit and HOME developments are 
     located and ensure that this information is readily available 
     to PHAs. PHAs will be responsible to access such information 
     and provide it to families searching for housing assistance 
     with vouchers.
       Section 7. Reallocation of vouchers. Currently, HUD allows 
     PHAs to return unused vouchers to HUD. HUD published a notice 
     (which has not yet been fully implemented) which requires 
     that unused budget authority be recaptured from PHAs with low 
     utilization rates (under 95% utilization). While HUD's notice 
     describes how they will reallocate these vouchers, the 
     reallocation is not structured in a way that ensures that 
     communities do not lose needed vouchers. This provision will 
     require that vouchers to be reallocated be distributed to one 
     or more administrators in the region. HUD would, through a 
     competition, designate such an administrator with Section 8 
     experience, which could be a PHA, a state or local agency, a 
     non-profit, or a private entity. The administrator would 
     receive all vouchers available for reallocation in its region 
     and would be able to operate the vouchers on a regional 
     basis, allowing and encouraging families to live anywhere in 
     the metropolitan area while still serving people on the 
     original PHA's waiting list. The new administrator would have 
     to reach certain levels of performance--in both success rates 
     and utilization in order to retain the vouchers.
       Section 8. Promoting Self-Sufficiency
       1. Allow people who live in a project-based Section 8 
     housing to be eligible for Family Self Sufficiency 
     activities. The Family Self Sufficiency (FSS) program 
     provides services to assist families in public housing or 
     those who receive vouchers in attaining educational and 
     employment goals. This provision would also make residents of 
     project-based Section 8 housing eligible for the FSS program. 
     Under this provision, owners of project-based section 8 
     housing would be able to choose to operate their own FSS 
     program, and if they opted not to provide such services, the 
     PHA, at its discretion, could choose to serve such families 
     in its FSS program. While this change will have some cost, it 
     will be small, given that only a small percentage of families 
     currently participate in FSS programs.
       2. Allow Resident Opportunities and Self-Sufficiency (ROSS) 
     funds to be used to serve Section 8 families. ROSS grants are 
     given to PHAs and resident organizations to fund self-
     sufficiency activities. Currently, PHAs can only serve public 
     housing residents with these funds, though the predecessor to 
     ROSS allowed PHAs to serve Section 8 residents as well. This 
     provision would permit PHAs to serve Section 8 tenants with 
     ROSS funds, though it would leave the decision to each PHA to 
     determine where funds are best used.
       3. Incentives to Families to Increase Earnings. State and 
     local welfare agencies have an enormous amount of flexibility 
     in using their funds to help low-income families. In some 
     cases, welfare agencies and housing authorities have worked 
     together to use some of these funds to assist people 
     receiving federal housing assistance. This section would 
     ensure that payments made by welfare agencies (or other 
     agencies) to help families with rental payments that have 
     increased because of increased earnings, are deducted from 
     the family's income when the PHA determines that family's 
     share of rent. These provisions will create incentives for 
     families to increase earnings and retain employment by 
     allowing them to retain more of their income.
       4. Authorize Welfare to Work Vouchers. In FY 1999, Congress 
     authorized 50,000 Welfare to Work vouchers in an 
     appropriations bill. The program has never been authorized 
     and new vouchers have not been allocated beyond the initial 
     50,000. However, given that welfare will be reauthorized this 
     year, the timing seems perfect to authorize this program, 
     giving housing authorities additional incentives to 
     collaborate with welfare agencies. In authorizing this 
     program, we strengthen the requirements that PHAs work with 
     welfare agencies in administering these vouchers. Recent 
     studies show that housing assistance is critical in allowing 
     people to retain employment, and these vouchers will help in 
     this effort.
       Section 9. Inspection of Units under Section 8. Currently, 
     when a voucher holder wants to rent a unit, prior to the 
     voucher holder moving in, and payments being made to an 
     owner, the PHA must inspect that individual unit and any 
     deficiencies must be repaired. Owners and PHAs agree that 
     this is disincentive to owners participating in the program 
     because of the amount of time it takes to lease-up the unit 
     and receive payment. This provision will allow a PHA to begin 
     payments to an owner prior to inspection of that particular 
     unit so long as: (1) a building inspection has been conducted 
     by the PHA in the last 6 months; (2) a unit inspection is 
     completed within 30 days; and (3) the PHA and the owner have 
     an agreement that any repairs on the unit must be made within 
     30 days of the unit inspection. This section will also allow 
     PHAs to annually inspect units within 3 months of the 
     anniversary date of that unit entering the Section 8 program 
     if they are conducting inspections on a geographical basis.
       Current regulation allows PHAs to withhold their entire 
     portion of a rent payment for an inspection violation, 
     regardless of the magnitude of the violation. This provision 
     would scale penalties for inspection violations to the 
     severity of the violation--if a garbage disposal needs to be 
     fixed the PHA payment will only be withheld to the extend 
     that the garage disposal would merit.
       These changes will help to bring owners into the program 
     while still ensuring that units meet HUD standards for being 
     safe and decent.
       Section 10. Automatic Payment Systems. Currently, some, but 
     not all, PHAs use electronic fund transfers to pay Section 8 
     dwelling unit owners. This section would allow PHAs to use 
     technical assistance funds and other means to establish 
     electronic fund transfer systems for rental payments. 
     Landlord participation is optional. Automatic

[[Page S6655]]

     payment systems would assist PHAs in making timely rent 
     payments and thereby encourage owner participation in the 
     Section 8 program.
       Section 11. Enhanced Workers. To protect tenants from 
     displacement, in 1999 Congress passed legislation creating 
     ``enhanced vouchers'' for all tenants facing conversion of a 
     project from project-based Section 8 to market-rate housing. 
     In several respects, the law as passed and interpreted by HUD 
     fails to clearly protect tenants as Congress intended. Some 
     PHAs require existing tenants to go through an application 
     process for enhanced vouchers, which occasionally results in 
     a tenant being denied voucher benefits. To protect tenants, 
     this section amends the existing statute to clarify that 
     tenants cannot be required to go through the application 
     process again to receive an enhanced voucher.
       ``Empty nesters,'' elderly tenants whose household members 
     have either moved or died, sometimes reside in units that are 
     too large for their current family size under normal program 
     and occupancy requirements. Likewise, growing families may 
     reside in units that are too small under normal program and 
     occupancy requirements. In both situations, these tenants 
     could be displaced due to family/unit size mismatches. This 
     section clarifies the current enhanced voucher statute to 
     allow tenants with family size/unit mismatches to remain in 
     the unit until an appropriately sized unit becomes available 
     in the property.
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