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Multifamily Programs Take a Back Seat
Housing advocates are uniting in their opposition to limited funding in HUD's 2003 appropriation bill and HUD's new strategic plan that seems to shift focus from multifamily to single family housing.  Several housing organizations have exhorted their members to contact their representatives concerning the HUD appropriations bill, especially pertaining to provisions in the House version that may be incorporated into the final bill when the 108th Congress gets to the bill in February.  In e-mails, faxes and letters sent to members, housing organizations such as the National Low Income Housing Coalition have warned that the House bill would renew 127,000 fewer vouchers than the president's budget request, which equals a $938 million decrease in funding, and reduces proposed new vouchers by 27,000.  The bill also threatens the Section 8 voucher program by changing the way that determines the amount of funds public housing agencies receive for voucher costs.  Currently, PHAs are using more vouchers now than previously years. Recent statistics show that the percentage of housing vouchers used in the previous year increased eight percent to 97 percent. However, with the current affordable housing shortage that prevents families from using vouchers and unused vouchers would not be counted according to the formula, fewer voucher renewals will be funded each year. PHAs are also currently discouraging the use of vouchers since their use cuts into their costs and their funding continues to be cut.

The Millennial Housing Commission, a bipartisan group chartered by Congress, recently released a report that concluded that the voucher program is flexible, cost-effective, and successful in its mission, and should be a  linchpin of national housing policy. Increased tenant costs are also expected in the form of reduced rental assistance as public housing agencies attempt to cover their costs created by an inadequate central reserve fund that helps PHAs cover budget shortfalls.

Housing organizations are also taking the chance to comment on HUDs recently-released strategic plan. The National Affordable Housing Management Association sent a letter to HUD that stated the association supports HUDs goals and objectives, but questioned the timing, implementation, funding and impact of elements of the plan. We had hoped the Department would take an innovative leadership position in developing programs that address those households with worst-case housing needs, according to the letter, and NAHMA strongly believes that the Strategic Plan should recognize and address affordable housing for households who are not equipped to deal with homeownership.

HUDs disproportionate focus on single family homeownership is the first concern cited by NAHMA.  Although 4.7 million families qualify for rental assistance but cannot find housing because of a critical shortage of units or inadequate assistance, HUD plans to provide funding for 12,000 families to become homeowners through the use of Section 8 rental assistance. The letter states that NAHMA is disappointed that the Department does not address any new program for production of new affordable rental housing. Worst case housing needs, such as households with very low or extremely low incomes, are ignored by HUD.  While the need for elderly and disabled housing increases, funding for these programs has remained at the same levels, and funding for service coordinators has not met the demand, according to the letter.

The new physical inspection program, called the Rental Housing Integrity Improvement Program, does not provide adequate occupancy regulations that will work, according to NAHMA. When the current REAC system was implemented, its policies were developed without industry input, creating a system that did not work.  We are concerned that recent events are repeating this pattern, as the letter states. New procedures for properties with inspection scores under 60 and procedures for assessing the financial condition of properties are mentioned as being problematic.

The National Low-Income Housing Coalition also recently asked its members to respond to HUDs lackluster dealing with affordable housing in the strategic plan and over-emphasis on homeownership. The organization specifically cites a passage that states A Success in helping the homeless achieve housing stability is affected by a variety of factors beyond HUDs control.  The incidence of homelessness is driven by macroeconomic forces such as  the availability of low cost housing.  Although housing production programs are not a factor HUD can control, homeownership seems to be, according to an article from the NLHIC.

While language in the plan promises to only promote (emphasis ours) decent affordable housing and sets forth no goals or specific plan, HUD promises to increase (emphasis ours) homeownership opportunities and mentions specific numbers: 5.5 million more minority homeowners by 2010. According to the plan, this increase reflects a Presidential commitment to significantly increase minority homeownership." Affordable rental housing is a topic best handled by the local and state governments, as shown in the HUD comment  Success in meeting the nations affordable housing needs depends on devolving decision-making."

Lame Ducks Leave Appropriations Bills On Hold At Adjournment
Before adjourning from the lame duck session, Congress passed its fourth continuing resolution to keep the government running, but still had not passed eleven of the thirteen appropriations bills.  The resolution will last until four days into the next Congressional session, when both houses will again pass a resolution and continue working diligently to pass the remaining funding bills, including the HUD appropriations bill. In the press to pass long-overdue bills, the HUD bill may end up bundled into an omnibus appropriations bill. Housing officials have expressed concerns that the omnibus bill may not do justice to housing programs, especially concerning renewal of Section 8 vouchers.

According to the renewal formula in the House version, the funding would not cover the vouchers currently in place and would cause a funding problem for public housing agencies. The House bill would also rescind $100 million in interest reduction payment funds used to rehabilitate affordable multifamily housing. Last year's supplemental appropriations legislation already rescinded $300 million in IRP funds. Housing industry leaders have been contacting members of Congress to voice concern over the House bill.  Rep. C.W. Bill Young (R-FL), chairman of the House Appropriations Committee, and Sen. Ted Stevens (R-AK), current ranking member and future chairman of the Senate Appropriations Committee, are expected to have a meeting with President George W. Bush before Congress convenes to discuss passing the remaining appropriations bills.

Housing To Be Focus of Financial Committee
The change in leadership of the House Financial Services Committee is not expected to drastically alter the policy issues, according to the new ranking member Rep. Barney Frank (D-MA).  Frank, who replaces the retiring John LaFalce (D-NY), said he will keep housing as a focus of his agenda with one of his main priorities being a housing production program to deal with the shortage of affordable housing. Citing affordable housing properties that are nearly forty years old, Frank said a housing production program should take priority over the president's homeownership program, which has been well-funded in the HUD appropriations bill.  Democrats are expected to push for housing production when they debate the bill in January.  The make-up of subcommittees is expected to be announced soon.