[Congressional Record Volume 153, Number 1 (Thursday, January 4, 2007)]
[Senate]
[Page S127]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD (for himself and Mr. Reed):
  S. 131. A bill to extend for 5 years the Mark-to-Market program of 
the Department of Housing and Urban Development; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. ALLARD. Mr. President, I turn now to the issue of housing. 
Congress created the Mark-to-Market Program in 1997 to reduce Section 8 
costs while preserving the affordability and availability of low-income 
rental housing. The purpose of the program is to reduce the property 
rents to market level while simultaneously restructuring property debt 
to prevent FHA defaults.
  Studies seem to show that the program has been an overwhelming 
success. Nearly 250,000 units of affordable housing have been preserved 
due to the Mark-to-Market Program. This is affordable housing that 
would have been permanently lost as affordable otherwise. According to 
HUD, the program has also saved taxpayers more than $2 billion.
  The original legislation authorized the Mark-to-Market Program for 4 
years, which was subsequently extended for 5 additional years. 
Therefore, the Mark-to-Market program authority was scheduled to expire 
on September 30, 2006. Fortunately, the program authority was 
temporarily extended under the continuing resolutions.
  When the program was extended in 2001, it appeared that 5 additional 
years would be sufficient time for nearly all eligible properties to 
complete the Mark-to-Market process. However, more recent projections 
show that nearly 78,000 properties will face rent reductions over the 
next 5 years.
  It is important to note that even though the program will expire, 
these Section 8 properties with above market rates will still be 
required to have their rents reduced to market levels. Without the 
proper tools to also restructure the debt, many owners will lack 
sufficient funds for property maintenance or mortgage payments. Because 
many Section 8 properties are also FHA insured, this will result in a 
significant number of claims against FHA, in addition to many tenant 
displacements.
  Clearly, no one finds this a desirable scenario. Failure to extend 
the Mark-to-Market Program would be bad for tenants and bad for 
taxpayers. Thus, I am pleased to join with Senator Reed of Rhode Island 
in reintroducing the Mark-to-Market Extension Act of 2007. Our bill 
would extend the program for 5 additional years to allow the remaining 
properties to go through the Mark-to-Market process. Frankly, I can see 
no downside to extending the program; It maintains affordable housing 
for less money.
  I am pleased to work with industry groups and with my colleagues to 
see that this very worthwhile program is extended for an additional 5 
years.
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