[Congressional Record Volume 161, Number 109 (Tuesday, July 14, 2015)]
[House]
[Pages H5135-H5137]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PRIVATE INVESTMENT IN HOUSING ACT OF 2015
Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 2997) to authorize the Secretary of Housing and Urban
Development to carry out a demonstration program to enter into budget-
neutral, performance-based contracts for energy and water conservation
improvements for multifamily residential units.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2997
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Private Investment in
Housing Act of 2015''.
[[Page H5136]]
SEC. 2. BUDGET-NEUTRAL DEMONSTRATION PROGRAM FOR ENERGY AND
WATER CONSERVATION IMPROVEMENTS AT MULTIFAMILY
RESIDENTIAL UNITS.
(a) Establishment.--The Secretary of Housing and Urban
Development (in this section referred to as the
``Secretary'') shall establish a demonstration program under
which the Secretary may execute budget-neutral, performance-
based agreements in fiscal years 2016 through 2019 that
result in a reduction in energy or water costs with such
entities as the Secretary determines to be appropriate under
which the entities shall carry out projects for energy or
water conservation improvements at not more than 20,000
residential units in multifamily buildings participating in--
(1) the project-based rental assistance program under
section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f), other than assistance provided under section 8(o) of
that Act;
(2) the supportive housing for the elderly program under
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q); or
(3) the supportive housing for persons with disabilities
program under section 811(d)(2) of the Cranston-Gonzalez
National Affordable Housing Act (42 U.S.C. 8013(d)(2)).
(b) Requirements.--
(1) Payments contingent on savings.--
(A) In general.--The Secretary shall provide to an entity a
payment under an agreement under this section only during
applicable years for which an energy or water cost savings is
achieved with respect to the applicable multifamily portfolio
of properties, as determined by the Secretary, in accordance
with subparagraph (B).
(B) Payment methodology.--
(i) In general.--Each agreement under this section shall
include a pay-for-success provision that--
(I) shall serve as a payment threshold for the term of the
agreement; and
(II) requires that payments shall be contingent on realized
cost savings associated with reduced utility consumption in
the participating properties.
(ii) Limitations.--A payment made by the Secretary under an
agreement under this section--
(I) shall be contingent on documented utility savings; and
(II) shall not exceed the utility savings achieved by the
date of the payment, and not previously paid, as a result of
the improvements made under the agreement.
(C) Third-party verification.--Savings payments made by the
Secretary under this section shall be based on a measurement
and verification protocol that includes at least--
(i) establishment of a weather-normalized and occupancy-
normalized utility consumption baseline established pre-
retrofit;
(ii) annual third-party confirmation of actual utility
consumption and cost for utilities;
(iii) annual third-party validation of the tenant utility
allowances in effect during the applicable year and vacancy
rates for each unit type; and
(iv) annual third-party determination of savings to the
Secretary.
An agreement under this section with an entity shall provide
that the entity shall cover costs associated with third-party
verification under this subparagraph.
(2) Terms of performance-based agreements.--A performance-
based agreement under this section shall include--
(A) the period that the agreement will be in effect and
during which payments may be made, which may not be longer
than 12 years;
(B) the performance measures that will serve as payment
thresholds during the term of the agreement;
(C) an audit protocol for the properties covered by the
agreement;
(D) a requirement that payments shall be contingent on
realized cost savings associated with reduced utility
consumption in the participating properties; and
(E) such other requirements and terms as determined to be
appropriate by the Secretary.
(3) Entity eligibility.--The Secretary shall--
(A) establish a competitive process for entering into
agreements under this section; and
(B) enter into such agreements only with entities that,
either jointly or individually, demonstrate significant
experience relating to--
(i) financing or operating properties receiving assistance
under a program identified in subsection (a);
(ii) oversight of energy or water conservation programs,
including oversight of contractors; and
(iii) raising capital for energy or water conservation
improvements from charitable organizations or private
investors.
(4) Geographical diversity.--Each agreement entered into
under this section shall provide for the inclusion of
properties with the greatest feasible regional and State
variance.
(5) Properties.--A property may only be included in the
demonstration under this section only if the property is
subject to affordability restrictions for at least 15 years
after the date of the completion of any conservation
improvements made to the property under the demonstration
program. Such restrictions may be made through an extended
affordability agreement for the property under a new housing
assistance payments contract with the Secretary of Housing
and Urban Development or through an enforceable covenant with
the owner of the property.
(c) Plan and Reports.--
(1) Plan.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall submit to the
Committees on Appropriations and Financial Services of the
House of Representatives and the Committees on Appropriations
and Banking, Housing, and Urban Affairs of the Senate a
detailed plan for the implementation of this section.
(2) Reports.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter, the Secretary
shall--
(A) conduct an evaluation of the program under this
section; and
(B) submit to Congress a report describing each evaluation
conducted under subparagraph (A).
(d) Funding.--For each fiscal year during which an
agreement under this section is in effect, the Secretary may
use to carry out this section any funds appropriated to the
Secretary for the renewal of contracts under a program
described in subsection (a).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Luetkemeyer) and the gentlewoman from California (Ms.
Maxine Waters) each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
General Leave
Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may
consume.
Today, I rise in support of H.R. 2997, the Private Investment in
Housing Act of 2015. This bill, introduced by my colleague, the
gentleman from Florida (Mr. Ross), would authorize the Secretary of
Housing and Urban Development to establish a demonstration program to
make assisted multifamily properties more energy and water efficient at
no cost to U.S. taxpayers.
Currently, HUD spends in excess of $7 billion in annual energy and
water costs for HUD-assisted properties. These properties are generally
older, with inefficient energy and water usage. In most cases, owners
of these older assisted properties lack the capital to modernize their
buildings to perform energy and water efficiency.
H.R. 2997 would create a demonstration for no more than 20,000
assisted units where HUD would enter into agreements with
intermediaries--most likely, nonprofit entities--to produce energy and
water efficiency in exchange for a share of the savings.
This demonstration and the subsequent contract with the intermediary
would allow these entities to raise capital from private investors and
foundations. HUD would not provide upfront capital investments for any
energy retrofits and there would be no risk to the Federal Government.
Savings due to the retrofits, verified by an independent third party,
would then result in HUD remitting a portion of the savings back to the
intermediaries. If savings are not realized, the loss is absorbed by
the private investors or foundations.
Mr. Speaker, H.R. 2997 is an example of the public-private
partnership innovation needed to attract capital investment to our
public- and assisted-housing stock. This demonstration, in addition to
the Rental Assistance Demonstration program, is the beginning of
bipartisan legislative initiatives to bring private sector resources
and management to affordable housing for low- and very low-income
families.
As chairman of the Housing and Insurance Subcommittee of the
Financial Services Committee, I am working with Members on both sides
of the aisle to develop legislation similar to H.R. 2997, which would
make the operations of HUD and its programs more efficient. Today's
bill is a step in that direction.
In addition to the sponsor, Representative Ross, I want to thank the
ranking member of the Housing and Insurance Subcommittee, Mr. Cleaver,
along with Representatives Himes of Connecticut and Delaney of
Maryland, for their hard work on this legislation.
I urge all Members to support H.R. 2997, and I reserve the balance of
my time.
[[Page H5137]]
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, this bill would create a pilot program within HUD which
would allow for energy and water efficiency upgrades to be made to
certain private multifamily HUD properties at no cost to the
government.
Under this innovative pilot program, investors would provide all of
the upfront capital to make the improvements, and they would only get
paid based on a portion of the cost savings that result from the
improvements. If there are no cost savings, the losses would be
completely on the investors, not HUD or the taxpayers.
This is a rare win-win situation. HUD and taxpayers benefit from cost
savings; tenants benefit from the improvements made to their homes;
investors benefit from the profits, and of course, the environment
benefits from the more responsible use of natural resources.
This bill also ensures accountability by requiring a third-party
evaluation to verify any cost savings and also by requiring the
Secretary to report on the outcomes of the pilot within a year of
enactment.
There is simply no reason for bipartisan bickering on a bill like
this. I urge my colleagues to support this bill, and I reserve the
balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I yield such time as he may consume to
the gentleman from Florida (Mr. Ross), a distinguished member of the
Housing and Insurance Subcommittee.
Mr. ROSS. Mr. Speaker, I thank the chairman and Ranking Member Waters
for their support.
As the chairman pointed out, currently, HUD spends more than $7
billion annually in energy and water costs. In our current fiscal
environment, we must look to new technology and for innovative
solutions to generate savings for both taxpayers and the Federal
Government.
Today, I am proud to ask my colleagues to join me in supporting
bipartisan H.R. 2997, the Private Investment and Housing Act. This
legislation will establish a demonstration project that will encourage
private sector entities to retrofit and modernize a limited number of
HUD multifamily housing units at absolutely no cost to taxpayers.
This legislation is necessary because nonprofits and other entities
that focus on financing for affordable housing are unable to enter into
contractual agreements to retrofit HUD multifamily housing units.
Imagine leveraging private capital to enhance the livability and
inhabitability of affordable housing at no cost to the taxpayers or the
Federal Government.
It doesn't involve any risk to the Federal Government or the
taxpayer. In fact, investors take the first loss position on energy
upgrades. If energy savings from these projects are not realized after
private entities enter these contracts, the Federal Government does not
pay anything, period.
If savings through these projects are achieved, they would lower
HUD's energy expenditures by as much as 20 percent, creating tremendous
savings for the taxpayer. Private entities who take on the risk to
retrofit these units will receive a $1 return for every $1 in cost
savings that are verified by a third party.
The demonstration program created by this legislation would help
improve up to 20,000 HUD-assisted apartments receiving project-based
rental assistance, supportive housing for the elderly, or supportive
housing for persons with disabilities.
The demonstration projects will help a limited number of people at
first in Florida and across the country. However, over time, once it is
a proven success, more than 48,000 eligible properties in the State of
Florida and the 900 units in my district alone may be able to benefit,
again, at no expense to the taxpayer.
In addition to the direct economic benefits to taxpayers, these
upgrades will bring meaningful health and other benefits to the
families living in the buildings, creating a healthier and safer
environment for residents.
I want to thank my colleagues, Representative Jim Himes;
Representative Emanuel Cleaver, ranking member of the subcommittee; and
Representative John Delaney, for their support on this legislation.
I also want to thank Enterprise Community Partners for their support
of this legislation and for the support of projects that encourage a
public-private partnership in affordable housing.
I ask you join me in supporting this legislation to engage the
private sector to help HUD reduce their annual $7 billion in energy and
water spending.
Ms. MAXINE WATERS of California. Mr. Speaker, I urge support, and I
yield back the balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I encourage support for H.R. 2997. I
think it is a great idea to, again, go into a public-private
partnership and utilize that as an opportunity, again, at no cost to
the taxpayers.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the
rules and pass the bill, H.R. 2997.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. LUETKEMEYER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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