[Congressional Record (Bound Edition), Volume 145 (1999), Part 1]
[Extensions of Remarks]
[Pages 1200-1202]
[From the U.S. Government Publishing Office, www.gpo.gov]



    INTRODUCTION OF THE HOUSING PRESERVATION MATCHING GRANT OF 1999

                                 ______
                                 

                          HON. BRUCE F. VENTO

                              of minnesota

                    in the house of representatives

                       Tuesday, January 19, 1999

  Mr. VENTO. Mr. Speaker, today I am introducing the Housing 
Preservation Matching Grant of 1999, which would authorize the 
Secretary of HUD to make grants to States to

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supplement State assistance for the preservation of affordable housing 
for low-income families. The bill would allocate resources to match the 
efforts of States in preserving affordable housing units across this 
Nation. With this kind of commitment, the Federal Government would be 
able to help States and more importantly, communities to achieve the 
long-term preservation of those housing units as affordable housing.
  We are facing a dire situation with regard to affordable housing 
needs in this country. Low- to moderate-income residents receiving 
housing assistance are on the cusp of a crisis and Congress must act to 
attempt to avert the breakdown and loss of the national public and 
assisted housing stock. Without preservation, the best of the worst 
case scenarios is a ``vouchering out'' of what little affordable 
housing remains.
  Some States are allocating resources to save federally subsidized 
housing for the future. In Minnesota, where 10 percent of the roughly 
50,000 units of assisted housing are at risk, $10 million was 
appropriated for 1999 for an Affordable Rental Investment Fund to 
finance the acquisition, rehabilitation and debt restructuring of 
federally assisted rental property and for making equity take-out 
loans. This laudable effort, however, is only one State and even there, 
the resources allocated cannot match the great need for affordable 
housing, especially for seniors and those with special needs.
  This Vento bill recognizes these kinds of commitments and matches 
them with two Federal dollars for every State dollar. While I support 
funding for the Federal Low Income Housing Preservation and Resident 
Homeownership Act (LIHPRHA), if there is not to be funding, perhaps 
this new Housing Preservation Matching Grant can encourage a 
forestallment of prepayment, which places low-income families at risk 
of losing their homes. With enactment of this bill this year, we could 
provide a benchmark for States and local communities to work from and 
with as they produce their own initiatives to avert this pending 
national crisis in affordable housing.
  A section-by-section of the bill follows:

       Section 1. Short Title.--The short title of the Act is the 
     ``Housing Preservation Matching Grant Act of 1999''
       Section 2. Findings and Purpose--(a) Findings.--The 
     Congress finds that--(1) more than 55,300 affordable housing 
     dwelling units in the United States have been lost through 
     termination of low income affordability requirements, which 
     usually involves the prepayment of the outstanding principal 
     balance under the mortgage on the project in which such units 
     are located;
       (2) more than 265,000 affordable housing dwelling units in 
     the United States are currently at risk of prepayment;
       (3) the loss of the privately owned, federally assisted 
     affordable housing, which is occurring during a period when 
     rents for unassisted housing are increasing and few units of 
     additional affordable housing are being developed, will cause 
     unacceptable harm on current tenants of affordable housing 
     and will precipitate a national crisis in the supply of 
     housing for low-income households;
       (4) the demand for affordable housing far exceeds the 
     supply of such housing, as evidenced by studies in 1998 that 
     found that (A) 5,300,000 households (one-seventh of all 
     renters in the Nation) have worst-case housing needs; and (B) 
     the number of families with at least one full-time worker and 
     having worst-case housing needs increased from 1991 to 1995 
     by 265,000 (24 percent) to almost 1,400,000;
       (5) the shortage of affordable housing in the United States 
     reached a record high in 1995, when the number of low-income 
     households exceeded the number of low-cost rental dwelling 
     units by 4,400,000;
       (6) between 1990 and 1995, the shortage of affordable 
     housing in the United States increased by 1,000,000 dwelling 
     units, as the supply of low-cost units decreased by 100,000 
     and the number of low-income renter households increased by 
     900,000;
       (7) there are nearly 2 low-income renters in the United 
     States for every low-cost rental dwelling unit;
       (8) 2 of every 3 low-income renters receive no housing 
     assistance and about 2,000,000 low-income households remain 
     on waiting lists for affordable housing;
       (9) the shortage of affordable housing dwelling units 
     results in low-income households that are not able to acquire 
     low-cost rental units paying large proportions of their 
     income for rent; and
       (10) in 1995, 82 percent of low-income renter households 
     were paying more than 30 percent of their incomes for rent 
     and utilities.
       (b) Purpose.--It is the purpose of this Act--
       (1) to promote the preservation of affordable housing units 
     by providing matching grants to States that have developed 
     and funded programs for the preservation of privately owned 
     housing that is affordable to low-income families and persons 
     and was produced for such purpose with Federal assistance;
       (2) to minimize the involuntary displacement of tenants who 
     are currently residing in such housing, many of whom are 
     elderly or disabled persons; and
       (3) to continue the partnerships among the Federal 
     Government, State and local governments, and the private 
     sector in operating and assisting housing that is affordable 
     to low-income Americans.
       Section 3. Authority. Provides the Secretary of HUD with 
     the authority to make grants to the States for low-income 
     housing preservation.
       Section 4. Use of Grants. (a) In General.--Grants can only 
     be used for assistance for acquisition, preservation 
     incentives, operating cost, and capital expenditures for the 
     housing projects that meet the requirements in (b), (c) or 
     (d) below.
       (b) Projects With HUD-Insured Mortgages.
       (1) The project is financed by a loan or mortgage that is--
     (A) insured or held by the Secretary under 221(d)(3) of 
     National Housing Act and receiving loan management assistance 
     under Section 8 of the U.S. Housing Act of 1937 due to a 
     conversions for section 101 of the Housing and Urban 
     Development Act of 1965; (B) insured or held by the Secretary 
     and bears interest at a rate determined under 221(d)(5) of 
     the National Housing Act; (C) insured, assisted, or held by 
     the Secretary or a State or State Agency under Section 236 of 
     the National Housing Act; or (D) held by the Secretary and 
     formerly insured under a program referred to in (A), (B) or 
     (C);
       (2) the project is subject to an unconditional waiver of, 
     with respect to the mortgage referred to in paragraph (1)--
       (A) all rights to any prepayment of the mortgage; and (B) 
     all rights to any voluntary termination of the mortage 
     insurance contract for the mortgage; and
       (3) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner) to extend 
     all low-income affordability restrictions imposed because of 
     any contract for project-based assistance for the project.
       (c) Projects With Section 8 Project-Based Assistance. A 
     project meets the requirements under this subsection only 
     if--
       (1) the project is subject to a contract for project-based 
     assistance; and
       (2) the owner has entered into binding commitments 
     (applicable to any subsequent owner) to extend such 
     assistance for a maximum period under law and to extend any 
     low-income affordability restrictions applicable to the 
     project.
       (d) Projects Purchased by Residents.--A project meets the 
     requirements under this subsection only if the project--
       (1) is or was eligible housing under LIHPRHA of 1990; and
       (2) has been purchased by a resident council for the 
     housing or is approved by HUD for such purchase, for 
     conversion to homeownership housing as under LIHPRHA of 1990.
       (e) Combination of Assistance.--Notwithstanding subsection 
     (a), any project that is otherwise eligible for assistance 
     with grant amounts under (b) or (c) and also meets the 
     requirements of the (1) in either of the other subsections--
     that is, it is a 221(d)(3), 221(d)(5), or a 236 building, or, 
     is subject to a contract for project-based assistance--will 
     be eligible for such assistance only if it complies with all 
     the requirements under the other subsection.
       Section 5. Grant Amount Limitation.--The Secretary can 
     limit grants to States based upon the proportion of such 
     State's need compared to the aggregate need among all States 
     approved for such assistance for such a fiscal year.
       Section 6. Matching Requirement.--(a) In General--The 
     Secretary of HUD cannot make a grant that exceeds twice the 
     amount the State certifies that the State will contribute for 
     a fiscal year, or has contributed since January 1, 1999, from 
     non-Federal sources for preservation of affordable housing as 
     described in Section 4(a).
       (b) Treatment of Previous Contributions.--Any portion of 
     amounts contributed after 1.1.99, that are counted for a 
     fiscal year, may not be counted for any subsequent fiscal 
     year.
       (c) Treatment of Tax Credits.--Low Income Housing Tax 
     Credits (LIHTC) and proceeds from the sale of tax-exempt 
     bonds shall not be considered non-federal sources for 
     purposes of this section.
       Section 7. Treatment of Subsidy Layering Requirements.--
     Neither section 6 nor any other provision of this Act should 
     prevent using the Low Income Housing Tax Credit in connection 
     with housing assisted under this Act, subject to following 
     Section 102(d) of the HUD Reform of 1989 and section 911 of 
     the Housing and Community Development Act of 1992.
       Section 8. Applications.--The Secretary shall provide for 
     States to submit applications for grants under this Act with 
     such information and certifications that are necessary.
       Section 9. Definitions.--For this Act, the following 
     definitions apply:
       (1) Low-income affordability restrictions.--With respect to 
     a housing project, any limitations imposed by regulation or 
     agreement on rents for tenants of the project, rent 
     contributions for tenants of the project, or income-
     eligibility for occupany in the project.

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       (2) Project-based assistance.--Is as defined in section 
     16(c) of the U.S. Housing Act of 1937, except that such term 
     includes assistance under any successor programs to the 
     programs referred to in that section.
       (3) Secretary.--Means the Secretary of the Department of 
     Housing and Urban Development.
       (4) State.--Means the States of the U.S., DC, Puerto Rico, 
     the Northern Mariana Islands, Guam, the Virgin Islands, 
     American Samoa, and any other territory or possession of the 
     U.S.
       Section 10. Gives the Secretary authority to issue any 
     necessary regulations.
       Section 11. Authorizes such sums as necessary from 2000 
     through 2004 for grants under this Act.

     

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