[Congressional Record Volume 151, Number 89 (Wednesday, June 29, 2005)]
[Senate]
[Pages S7617-S7619]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. CLINTON (for herself, Mr. Smith, Mr. Martinez, Mr. Reed, 
        and Mr. Durbin):
  S. 1330. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives for employer-provided employee housing assistance, and for 
other purposes; to the Committee on Finance.
  Mrs. CLINTON. Mr. President, I rise today during National Home 
Ownership Month to introduce the Housing America's Workforce Act.
  Affordable and safe housing plays a vital role in creating and 
sustaining healthy communities and a vibrant workforce. The Housing 
America's Workforce Act creates incentives to expand employer-assisted 
housing initiatives across the Nation. I thank Senators Smith, 
Martinez, Reed, and Durbin for their co-sponsorship of this important 
legislation. I would also like to thank Congresswoman Nydia Velazquez 
for her leadership in introducing the companion bill in the House of 
Representatives.
  The sad truth is that across our Nation, working full-time no longer 
guarantees that a family will be able to afford a secure and 
comfortable home. The shortage of workforce housing has become a 
national crisis as housing costs have far outgrown the rate of 
inflation in many markets and as the gap between wages and housing 
costs widens. The result is that affordable housing is out of reach for 
a growing number of working families. As a result,

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people who provide the backbone services for our communities--teachers, 
firefighters, police officers, and nurses--often cannot afford to live 
in the communities in which they serve. A recent workforce housing 
study released by the National Association of Home Builders found that 
for the most part, workers who provide these vital community services 
can only find housing they can afford in less than half of the nation's 
top 25 metropolitan areas.
  Across the Nation, the number of working families with critical 
housing problems (defined as those paying more than half of their 
income for housing and/or living in dilapidated conditions) has 
increased by 67 percent between 1997 and 2003 to approximately 5 
million families. Families that spend more than half of their income on 
housing have little income left over for other essentials such as food, 
healthcare, and transportation.
  And despite overall improvements in home-ownership trends since 1978, 
working families--employed households with children earning less than 
120 percent of Area Median Income--have actually experienced a decrease 
in homeownership rates. A 2004 Center for Housing Policy study shows 
that the homeownership rate for working families with children was at 
62.5 percent in 1978, and only 56.6 percent through 2001.
  Employer-assisted housing, EAH, is a local, innovative solution that 
a growing number of employers are using to meet the housing needs of 
their employees while increasing the competitiveness of their 
businesses. There are several types of EAH products, including 
homebuyer education, down payment assistance, rental assistance and 
loan guarantee programs. Employers often combine these products to meet 
their employees' specific needs in the most effective ways.
  The benefits for employees and employers are impressive. The 
employee, in addition to receiving financial support from an employer 
to buy or rent a home closer to work, also regains extra time--formerly 
spent in traffic--for family or community life. The employer likewise 
benefits from a more stable workforce when employees live near work. 
They enjoy the advantages from the improved employee morale, lower 
turnover rate and reduced recruitment costs result in bottom line 
savings that the increased proximity brings. Furthermore, EAH programs 
benefit not only the workers and employers, but also the entire 
community. As former commuters buy homes near the jobsite, the 
surrounding community which previously suffered from traffic 
congestion, now enjoys new investment and property tax revenues.
  The Housing America's Workforce Act is inspired in great part by 
lessons learned in States and local communities across the Nation, 
where EAH has proven to be an effective tool to promote housing 
affordability for working families and community revitalization. 
Through EAH programs, the private sector becomes part of the solution, 
investing in housing assistance for employees while experiencing bottom 
line benefits. This is clearly a public-private partnership that is 
proven and makes sense.
  The Housing America's Workforce Act provides incentives to increase 
private sector investment in housing in three important ways. First, it 
offers a tax credit of 50 cents for every dollar that an employer 
provides to eligible employees up to $10,000 or six percent of the 
employee's home purchase price, whichever is less, or up to $2,000 for 
rental assistance. Second, to ensure that employees receive the full 
value of employers' contributions, the Act defines housing assistance 
as a ``nontaxable benefit,'' similar to health, dental and life 
insurance. Third, the act establishes a competitive grant program 
available to nonprofit housing organizations that provide technical 
assistance, program administration, and outreach support to employers 
undertaking EAH initiatives.
  In New York and in other parts of the country, EAH has caught on with 
the local business community, elected and appointed officials, and the 
broader housing arena. Its expansion indicates a growing understanding 
among the private sector that it pays to invest in workforce housing. I 
have worked with employers across my State to launch county employer-
assisted housing programs in places such as Long Island, Rochester and 
Westchester.
  I have met many of the families that have already benefited from Long 
Island's EAH program, which I helped launch in 2002. People like the 
Isaacs family, who were able to buy their first home in North 
Amityville in 2002 thanks to their employer's participation in the 
program. Pamela Isaac, like so many employees on Long Island, works as 
a Dietician at Our Lady of Consolation, part of the Catholic Health 
Services Network. Catholic Health Services' participation in the 
employer assisted housing program enabled Pamela and her husband 
Bartholomew to stay on Long Island and raise their three children in 
their own home.
  I also worked in collaboration with Mayor William A. Johnson of 
Rochester to jumpstart the City of Rochester's EAH initiative. The City 
provides $3,000 for its own employees and also encourages other 
employers to provide a home purchase benefit by offering to match that 
benefit dollar for dollar up to a maximum of $3,000. Therefore, if an 
employer offered the maximum benefit of $3,000, he or she would produce 
a $6,000 benefit for his or her employees with the city's matching 
funds.

  The Westchester County EAH, which was spEAHheaded by the Business 
Council and Fannie Mae, brings together the following Westchester 
County nonprofit organizations: Housing Action Council, Westchester 
Residential Opportunities, Westchester Housing Fund and Community 
Housing Innovations. Each of these nonprofits provides standardized, 
comprehensive education and counseling support to participating 
employers. The initiative also provides matching funds of up to $3,000 
from Westchester County or from the cities of Yonkers, New Rochelle, 
White Plains or Mount Vernon. In addition, the nonprofit collaborative 
offers down payment and closing cost assistance programs that can match 
employer contributions.
  The creation of Federal incentives to expand employer-assisted 
housing has been a consistent recommendation of experts in the broader 
housing arena, including the Millennial Housing Commission. In 
addition, former HUD Secretaries Henry Cisneros and Jack Kemp, along 
with Nic Retsinas and Kent Colton of the Harvard Joint Center for 
Housing Studies recently released a bipartisan platform for national 
housing policy, which includes EAH as one of its recommendations.
  According to the Society for Human Resources Management's 2004 
Benefits Survey, 12 percent of employers offered home ownership 
assistance in 2004, up from 7 percent in 2002. Since 1991, Fannie Mae 
has offered a nationwide EAH program through participating lending 
institutions and employers. Fannie Mae has helped about 750 employers 
of various sizes implement EAH programs and nearly 570 have been 
launched since 2000. Freddie Mac launched a similar national program in 
1999, which it expanded in 2004. Several states have enacted EAH tax 
incentive programs, including Illinois, Connecticut, Missouri, and New 
Jersey.
  Employer-assisted housing programs offer a fresh approach to 
addressing our Nation's housing challenge by allowing the private 
sector to play a direct role in promoting housing affordability. I hope 
every Senator will recognize that the Housing America's Workforce Act 
will create opportunities for us as a Nation to expand these public-
private partnerships and will make a profound impact in the lives of 
our workforce, and I hope that you will support this important piece of 
legislation.
  Mr. SMITH. Mr. President, I rise today to join Senators Clinton, 
Martinez, Reed, and Durbin to introduce the Housing America's Workforce 
Act.
  Across the country, low- and moderate-income families face difficulty 
finding affordable housing. Homebuilding has not kept pace with job 
growth, and the cost of housing has skyrocketed. In the last 5 years, 
the number of working U.S. families paying more than half their income 
to put a roof over their heads has jumped to 4.2 million in 2003 from 
2.4 million in 1997, a 76-percent increase in 5 years.
  Our bill tries to address the issue of affordable housing from a new 
perspective, one that allows the private sector to play a direct role 
in promoting housing affordability. Specifically, our bill would create 
a Federal tax credit for

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businesses that offer housing assistance programs to their low- to 
moderate-income employees.
  Employer assisted housing, EAH, programs have been used successfully 
for more than 100 years and have proven effective in helping to 
revitalize neighborhoods and to recruit and retain employees. In my 
home State of Oregon, EAH programs have been used by employers such as 
Legacy Emanuel Hospital & Health Center, Housing Authority of Portland, 
Multnomah County, and Wacker Siltronic.
  In 1990, Legacy Emanuel developed an EAH program to encourage 
employees to purchase homes in the neighborhood near the hospital. The 
program shortened employee commute time, reduced traffic congestion, 
and helped spur a dramatic revitalization of the surrounding area. 
Similar programs have succeeded around the country and have helped to 
ease the spatial mismatch between where job growth is taking place and 
where people can afford to live.
  Under our bill, housing assistance can be used for either 
homeownership or rental assistance. Homeownership assistance could be 
used for down payments, closing costs, financing costs, or 
contributions to an employee homeownership savings plan, such as an 
Individual Development Accounts. Rental assistance could be used for 
security deposits and rental payments.
  Employer assisted housing programs are innovative ways to leverage 
public and private funds to make housing affordable for working 
families. As such, our proposal has been endorsed by National Housing 
Conference, National Association of Home Builders, National Association 
of Realtors, National Association of Housing and Redevelopment 
Officials, National League of Cities, National Association of Counties, 
Mortgage Bankers Association, National NeighborWorks Association, 
AmeriDream, and the National Association of Local Housing Finance 
Agencies.
  I look forward to continuing to work with my colleagues to address 
the affordable housing shortfall.
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