[Congressional Record Volume 150, Number 101 (Tuesday, July 20, 2004)]
[Senate]
[Pages S8477-S8479]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Mr. Sarbanes, and Mrs. Feinstein):
  S. 2692. A bill to authorize the Secretary of the Department of 
Housing and Urban Development to make grants to States for affordable 
housing for low-income persons, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. JEFFORDS. Mr. President, I am pleased today to introduce the 
Affordable Housing Preservation Act of 2004, along with my colleagues, 
Senators Sarbanes and Feinstein. This bill provides matching Federal 
funds to States and localities seeking help to acquire and rehabilitate 
affordable housing that would otherwise be lost from the affordable 
housing inventory.
  Affordable housing is facing a funding crisis. Across the country, 
the administration's proposed $1.6 billion budget cuts for Section 8, 
which serves nearly 3.5 million low-income households nationwide, would 
seriously undermine the availability of quality affordable housing. In 
Vermont, there are 6,080 authorized vouchers available this year. But 
with the proposed budget cut, Vermont could lose more than 700 vouchers 
next year alone. That's a loss of $4 million for housing assistance 
just in my small State. Over the next five years, it is estimated that 
Vermont could lose as many as 1,770 housing vouchers.
  Affordable housing is a basic and critical need in every town and 
city, and these cuts are as indefensible as they are damaging. Cutting 
affordable housing is not about apartments and houses. It is about 
individuals and families, including our seniors, not having a safe and 
affordable place to call home. I have joined with many of my colleagues 
to protest these cuts.
  The bill I am introducing today, the Affordable Housing Preservation 
Act of 2004, represents an effort to complement the good work being 
done throughout the country on Section 8 initiatives, and it strives to 
preserve existing affordable housing. Specifically, this bill would 
conserve federally subsidized housing units by providing matching 
grants to States and localities, seeking to preserve privately owned, 
affordable housing.
  The Secretary of Housing and Urban Development (HUD) would make 
determinations for the grants based on a number of factors, including 
the number of affordable housing units at risk at being lost and the 
local market conditions in which displaced residents would have to find 
comparable new housing options. These funds would make a great deal of 
difference in keeping affordable housing affordable. States and 
localities could use the funds to acquire or rehabilitate affordable 
housing. They could use the funds, in part, for administrative and 
operating expenses. Properties with mortgages insured by HUD, Section 8 
project-based assisted housing, and properties that are being purchased 
by residents would all be eligible for the matching grant funds. I 
believe that flexibility with the funding would make this program more 
efficient and cost effective, and, most importantly, more helpful to 
the recipients themselves.

[[Page S8478]]

  Over the past several months, I have heard from many of my 
constituents who are genuinely concerned about Vermonters who are 
threatened with the loss of housing. This bill would give State and 
local housing authorities another tool to keep people in their homes. I 
believe we must act now to preserve our existing stock of affordable 
housing.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2692

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       This Act may be cited as the ``Affordable Housing 
     Preservation Act of 2004''.

     SEC. 2. MATCHING GRANT PROGRAM FOR AFFORDABLE HOUSING 
                   PRESERVATION.

       (a) Findings and Purposes.--
       (1) Findings.--Congress finds that--
       (A) the availability of low-income housing rental units has 
     declined nationwide in the last several years;
       (B) as rents for low-income housing increase and the 
     development of new units of affordable housing decreases, 
     there are fewer privately owned, federally assisted 
     affordable housing units available to low-income individuals 
     in need;
       (C) the demand for affordable housing far exceeds the 
     supply of affordable housing, as evidenced by recent studies;
       (D) the efforts of nonprofit organizations have 
     significantly preserved and expanded access to low-income 
     housing;
       (E) a substantial number of existing federally assisted or 
     federally insured multifamily properties are at risk of being 
     lost from the affordable housing inventory of the Nation 
     through market rate conversion, deterioration, or demolition;
       (F) it is in the interest of the Nation to encourage 
     transfer of control of such properties to competent national, 
     regional, and local nonprofit entities and intermediaries, 
     the missions of which involve maintaining the affordability 
     of such properties;
       (G) such transfers may be inhibited by a shortage of such 
     entities that are appropriately capitalized; and
       (H) the Nation would be well served by providing assistance 
     to such entities to aid in accomplishing this purpose.
       (2) Purposes.--The purposes of this section are--
       (A) to continue the partnerships among the Federal 
     Government, State and local governments, nonprofit 
     organizations, and the private sector in operating and 
     assisting housing that is affordable to low-income persons 
     and families;
       (B) to promote the preservation of affordable housing units 
     by providing matching grants to States and localities that 
     have developed and funded programs for the preservation of 
     privately owned housing that is affordable to low-income 
     families and persons; and
       (C) to minimize the involuntary displacement of tenants who 
     are currently residing in such housing, many of whom are 
     elderly or disabled persons and families with children.
       (b) Definitions.--In this section:
       (1) Capital expenditures.--The term ``capital 
     expenditures'' includes expenditures for acquisition and 
     rehabilitation.
       (2) Consortium.--The term ``consortium'' means a group of 
     geographically contiguous localities that jointly submit an 
     application under subsection (d).
       (3) Eligible affordable housing.--The term ``eligible 
     affordable housing'' means housing that--
       (A) consists of more than 4 dwelling units;
       (B) is insured or assisted under a program of the 
     Department of Housing and Urban Development or the Department 
     of Agriculture under which the property is subject to 
     limitations on tenant rents, rent contributions, or incomes; 
     and
       (C) is at risk, as determined by the Secretary, of 
     termination of any of the limitations referred to in 
     subparagraph (B).
       (4) Eligible entities.--The term ``eligible entities'' 
     means any entity that meets the requirements of subsection 
     (e)(6) and the rules issued under that subsection.
       (5) Locality.--The term ``locality'' means a city, town, 
     township, county, parish, village, or other general purpose 
     political subdivision of a State, or a consortium thereof.
       (6) Low-income affordability restriction.--The term ``low-
     income affordability restriction'' means, with respect to a 
     housing project, any limitation imposed by law, regulation, 
     or regulatory agreement on rents for tenants of the project, 
     rent contributions for tenants of the project, or income-
     eligibility for occupancy in the project.
       (7) Low-income families; very low-income families.--The 
     terms ``low-income families'' and ``very low-income 
     families'' have the meanings given such terms in section 3(b) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)).
       (8) Project-based assistance.--The term ``project-based 
     assistance'' has the same meaning as in section 16(c) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437n(c)), 
     except that the term includes assistance under any successor 
     programs to the programs referred to in that section.
       (9) Qualified limited liability company.--The term 
     ``qualified limited liability company'' means a limited 
     liability company with respect to which a credit is allowed 
     under section 42 of the Internal Revenue Code of 1986 with 
     respect to the company's qualified basis (as defined in 
     section 42 (c)(1) of such Code), in a qualified low-income 
     building (as defined in section 42(c)(2) of such Code) for 
     which grant funds received under this section shall be used.
       (10) Qualified partnership.--The term ``qualified 
     partnership'' means a limited partnership with respect to 
     which a credit is allowed under section 42 of the Internal 
     Revenue Code of 1986 with respect to the partnership's 
     qualified basis (as defined in section 42(c)(1) of such Code) 
     in a qualified low-income building (as defined in section 
     42(c)(2) of such Code) for which grant funds received under 
     this section shall be used.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of the Department of Housing and Urban Development.
       (12) State.--The term ``State'' means each of the several 
     States of the United States and the District of Columbia.
       (c) Authority To Make Grants.--The Secretary shall, to the 
     extent that amounts are made available in advance under 
     subsection (k), award grants under this section to States and 
     localities for low-income housing preservation and promotion.
       (d) Applications.--
       (1) In general.--Any State or locality that seeks a grant 
     under this section shall submit an application (through 
     appropriate State and local agencies) to the Secretary.
       (2) Contents.--Each application submitted pursuant to 
     paragraph (1) shall contain any information and 
     certifications necessary for the Secretary to determine who 
     is eligible to receive a grant under this section.
       (e) Use of Grants.--
       (1) Eligible uses.--
       (A) In general.--Grants awarded under this section may be 
     used by States and localities only for the purposes of 
     providing assistance--
       (i) for acquisition, rehabilitation, capital expenditures, 
     and related development costs for a housing project that 
     meets the requirements of paragraph (2), (3), (4), or (5); or
       (ii) to eligible entities under paragraph (6) for--

       (I) operational, working capital, and organizational 
     expenses; and
       (II) predevelopment activities to acquire eligible 
     affordable housing for the purpose of ensuring that the 
     housing will remain affordable, as the Secretary considers 
     appropriate, for low-income or very low-income families.

       (B) Use agreement.--A project receiving assistance under 
     this paragraph shall be subject to an agreement (binding on 
     any subsequent owner of such project) that ensures that the 
     project will continue to operate, for a period of not less 
     than 50 years after the date on which any assistance is made 
     available under this paragraph, in a manner that will provide 
     rental housing on terms at least as advantageous to existing 
     and future tenants as the terms required by any program under 
     which the project, if offered, was eligible for assistance, 
     subject to available appropriations.
       (C) Service of under-served and rural areas.--States 
     receiving funds under this section shall ensure that, to the 
     maximum extent practicable, that projects in under-served and 
     rural areas in that State receive assistance.
       (2) Projects with hud-insured mortgages.--A project meets 
     the requirements of this paragraph if the project is financed 
     by a loan or mortgage that is--
       (A) insured or held by the Secretary under section 
     221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3)) 
     and receiving loan management assistance under section 8 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437f) due 
     to a conversion from section 101 of the Housing and Urban 
     Development Act of 1965 (12 U.S.C. 1701s);
       (B) insured or held by the Secretary and bears interest at 
     a rate determined under the proviso of section 221(d)(5) of 
     the National Housing Act (12 U.S.C. 1715l(d)(5)); or
       (C) insured, assisted, or held by the Secretary or a State 
     or State agency under section 236 of the National Housing Act 
     (12 U.S.C. 1715z-1).
       (3) Projects with section 8 project-based assistance.--A 
     project meets the requirements of this paragraph if the 
     project is subject to a contract for project-based 
     assistance.
       (4) Projects purchased by residents.--A project meets the 
     requirements of this paragraph if--
       (A) the project is or was eligible low-income housing (as 
     defined in section 229 of the Low-Income Housing Preservation 
     and Resident Homeownership Act of 1990 (12 U.S.C. 4119)) or 
     is or was a project assisted under section 613(b) of the 
     Cranston-Gonzalez National Affordable Housing Act (12 U.S.C. 
     4125);
       (B) the project has been purchased by a resident council or 
     resident-approved nonprofit organization for the housing, or 
     is approved by the Secretary for such purchase, for 
     conversion to homeownership housing under a resident 
     homeownership program meeting the requirements of section 226 
     of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 (12 U.S.C. 4116); and

[[Page S8479]]

       (C) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner) to extend--
       (i) project-based assistance for not less than 15 years 
     (beginning on the date on which assistance is made available 
     for the project by the State or locality under this section); 
     and
       (ii) any low-income affordability restrictions applicable 
     to the project in connection with that assistance.
       (5) Rural rental assistance projects.--A project meets the 
     requirements of this paragraph if--
       (A) the project is a rural rental housing project financed 
     under section 515 of the Housing Act of 1949 (42 U.S.C. 
     1485), or a farm labor housing development financed under 
     section 514 of the United States Housing Act of 1949 (42 
     U.S.C. 1484); and
       (B) the restriction on the use of the project (as required 
     under section 502 of the Housing Act of 1949 (42 U.S.C. 
     1472)) will expire not later than 12 months after the date on 
     which assistance is made available for the project by the 
     State or locality under this subsection.
       (6) Eligible Entities.--
       (A) In general.--The Secretary shall establish, by 
     regulation, standards for eligible entities under this 
     subsection.
       (B) Requirements.--An eligible entity shall--
       (i) be a nonprofit organization (as defined in section 104 
     of the Cranston-Gonzalez National Affordable Housing Act (42 
     U.S.C. 12704)), or a qualified limited liability company or a 
     qualified partnership whose managing member or general 
     partner, respectively, is--

       (I) a nonprofit organization; or
       (II) a for-profit entity that is wholly owned by an 
     eligible non-profit organization;

       (ii) have among its purposes, maintaining the affordability 
     to low-income or very low-income families of multifamily 
     properties that are at risk of loss from the inventory of 
     housing that is affordable to low-income or very low-income 
     families; and
       (iii) demonstrate to the Secretary--

       (I) the need for the types of assistance described under 
     paragraph (1)(A)(ii);
       (II) experience in providing assistance described under 
     that paragraph; and
       (III) its ability to provide the assistance described under 
     that paragraph.

       (7) Funding requirements.--
       (A) Operating support.--Each State and locality awarded a 
     grant under this section shall transfer at least 5 percent, 
     but no more than 10 percent, of such grant to eligible 
     entities for the purposes described under paragraph 
     (1)(A)(ii)(I).
       (B) Nonprofit purchases.--Each State and locality awarded a 
     grant under this section shall transfer at least 15 percent 
     of such grant to eligible entities for the purposes described 
     under paragraph (1)(A)(ii)(II).
       (8) Return of unused funds.--If any amount of a grant 
     awarded to a State or locality under this section has not 
     been obligated 3 years after the grant is awarded, such 
     amount shall be returned to the Secretary to be redistributed 
     in accordance with this section the following fiscal year.
       (9) Administrative costs.--A State or locality that is 
     awarded a grant under this section may use no more than 10 
     percent of such grant for costs associated with the 
     administration of the grant.
       (f) Amount of State and Local Grants.--
       (1) In general.--Subject to paragraph (3) and subsection 
     (g), in each fiscal year, the Secretary shall award to each 
     State and locality approved for a grant under this section a 
     grant in an amount based upon the proportion of the need for 
     assistance of that State or locality under this section (as 
     determined by the Secretary in accordance with paragraph (2)) 
     to the aggregate need among all States and localities 
     approved for assistance under this section for that fiscal 
     year.
       (2) Determination of need.--In determining the proportion 
     of the need of a State or locality under paragraph (1), the 
     Secretary shall consider--
       (A) the number of units in projects in the State or 
     locality that are eligible for assistance under subsection 
     (e)(1)(A)(i) that are, due to market conditions or other 
     factors, at risk for prepayment, opt-out, or otherwise at 
     risk of being lost to the inventory of affordable housing; 
     and
       (B) the difficulty that residents of projects in the State 
     or locality that are eligible for assistance under subsection 
     (e)(1)(A)(i) would face in finding adequate, available, 
     decent, comparable, and affordable housing in neighborhoods 
     of comparable quality in the local market, if those projects 
     were not assisted by the State or locality under subsection 
     (e)(1)(A)(i).
       (3) Limitations.--
       (A) Mandatory allocation.--In any fiscal year, of the total 
     amount appropriated under subsection (k)--
       (i) 40 percent shall be allocated for grants to States; and
       (ii) 60 percent shall be allocated for grants to 
     localities.
       (B) Minimum grant amount.--Notwithstanding subsection (g), 
     a State receiving a grant under this section shall receive no 
     less than .4 percent of the total amount appropriated under 
     subsection (k) in any fiscal year.
       (g) Matching Requirement.--
       (1) In general.--Except as provided under paragraph (2), a 
     grant under this section to a State or locality for any 
     fiscal year may not exceed an amount that is twice the amount 
     that the State or locality certifies, as the Secretary shall 
     require, that the State or locality will contribute for such 
     fiscal year, or has contributed since January 1, 2003, from 
     non-Federal sources for the purposes described in subsection 
     (e)(1).
       (2) Limitations.--Paragraph (1) shall not apply to any 
     amounts to be used by a State or locality for--
       (A) administrative costs under subsection (e)(9); and
       (B) operating support and working capital of nonprofit 
     organizations under subsection (e)(7)(A).
       (3) Treatment of previous contributions.--Any portion of 
     amounts contributed after January 1, 2003, that are counted 
     for the purpose of meeting the requirement under paragraph 
     (1) for a fiscal year may not be counted for that purpose for 
     any subsequent fiscal year.
       (4) Tax credits and private activity bonds.--Fifty percent 
     of the annual amount of tax credits allocated to the project 
     under section 42 of the Internal Revenue Code of 1986, or 
     proceeds from private activity bonds issued for qualified 
     residential rental projects under section 142 of that Code, 
     shall be considered funds from non-Federal sources for 
     purposes of paragraph (1).
       (h) Treatment of Subsidy Layering Requirements.--Neither 
     subsection (g) nor any other provision of this section may be 
     construed to prevent the use of tax credits allocated under 
     section 42 of the Internal Revenue Code of 1986, in 
     connection with housing assisted with amounts from a grant 
     awarded under this section, to the extent that such use is in 
     accordance with section 102(d) of the Department of Housing 
     and Urban Development Reform Act of 1989 (42 U.S.C. 3545(d)) 
     and section 911 of the Housing and Community Development Act 
     of 1992 (42 U.S.C. 3545 note).
       (i) Reports.--
       (1) Reports to secretary.--Not later than 90 days after the 
     last day of each fiscal year, each State and locality that 
     receives a grant under this section during that fiscal year 
     shall submit to the Secretary a report on the housing 
     projects and eligible entities assisted with amounts made 
     available under the grant.
       (2) Reports to congress.--Based on the reports submitted 
     under paragraph (1), the Secretary shall annually submit to 
     Congress a report on the grants awarded under this section 
     during the preceding fiscal year and the housing projects 
     assisted and eligible entities with amounts made available 
     under those grants.
       (j) Regulations.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary shall issue regulations 
     to carry out this section.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated for grants under this section such sums as 
     may be necessary for each of fiscal years 2005, 2006, 2007, 
     2008, and 2009.

     SEC. 3. PRESERVATION PROJECTS.

       Section 524(e)(1) of the Multifamily Assisted Housing 
     Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) 
     is amended by striking ``amounts are specifically'' and 
     inserting ``sufficient amounts are''.
                                 ______