Hearings of Interest
“Strengthening America’s Communities Initiative”
On Wednesday, April 6, the House Committee on Financial Services held a hearing to review the Administration’s FY 2006 budget initiative to consolidate 18 community development programs, including the Community Development Block Grant program and six others currently administered by HUD, and move them to the Department of Commerce. Carlos Gutierrez, Secretary of Commerce, and Alphonso Jackson, Secretary of HUD, testified before the committee, whose questioning centered on the Administration’s proposed funding cuts to CDBG and Commerce’s lack of experience in administering housing programs. In response to pointed inquiry from Rep. Joseph Crowley (D-NY), Secretary Jackson said he agreed with the cuts to CDBG and Secretary Gutierrez added that the consolidation of the 18 programs would save on administrative costs. Secretary Gutierrez also pointed out that under the proposed Strengthening America’s Communities Initiative, areas with concentrated poverty would be better targeted and that the consolidated programs would be held more accountable than they currently are. Rep. Gary Miller (R-CA) expressed concern with the consolidation proposal, citing the differences between community development and economic development, and stated his belief that these concepts might be better handled by both HUD and Commerce, respectively.
Legislation containing the full details of the SACI proposal will be sent to Congress by the end of April, according to Secretary Gutierrez, whose Commerce department will be drafting new rules and regulations.
Reform of Fannie Mae and Freddie Mac
On Wednesday, April 6, and Thursday, April 7, the Senate Committee on Banking, Housing, and Urban Affairs held hearings to examine the role of housing-related government-sponsored enterprises (GSEs, namely, Fannie Mae and Freddie Mac) in the U.S. economy. On Wednesday, Alan Greenspan, chairman of the Federal Reserve, suggested that Fannie Mae and Freddie Mac dramatically reduce their mortgage portfolios to between $100 and $200 billion, a sharp decrease from their current combined portfolio of $1.5 trillion. On Thursday, John Snow, Secretary of the Treasury, and Alphonso Jackson, Secretary of HUD presented the Administration’s view that tighter federal oversight of Fannie Mae and Freddie Mac is needed. During the hearing, both Secretaries Snow and Jackson said they favor creating a new, independent regulator of the two companies, replacing OFHEO, a division of HUD.
Details of More Accounting Failures at Fannie and Freddie
On Wednesday, April 6, the House Committee on Financial Services’ Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, held a hearing to uncover the full extent of accounting and management failures at Fannie Mae. The Subcommittee heard testimony from Armando Falcon, Director of Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO is the “safety and soundness” regulator for the GSEs, while HUD sets their affordable housing goals. The day before the hearing, Subcommittee chairman Rep. Richard Baker (R-LA) introduced H.R. 1461 to reform the regulation of housing-related GSEs.
Senate to Hold Hearing to Discuss FY 2006 HUD Budget Next Week
On April 14, the Senate Appropriations Subcommittee on Transportation, Treasury, the Judiciary, and Housing and Urban Development will hold a hearing to examine HUD’s proposed budget estimates for fiscal year 2006.
Legislation
New Section 8 Voucher Reform Bill Expected to be Proposed Next Week
HUD is expected to send a bill to Congress next week aimed at reforming the Section 8 Housing Choice Voucher program. Following are key provisions of the bill:
- Enhanced Vouchers appear to end 12 months after enactment for all properties;
- Voucher rent setting authority will be given to local PHAs under 5 different rent models;
- Voucher rents will be detached from the Fair Market Rents;
- Housing Authorities will have the right to time limit vouchers for non-elderly families to no less than 5 years;
- High-performing Housing Authorities with more than 500 units will be allowed to reprogram voucher funds for other Moving To Work programs;
- 90% of vouchers must go to those below 60% of AMI;
- The recertification period for elderly households will change to once every 3 years and families will recertify every other year; and
- HUD will increase Section 8 Voucher funding by $1 billion to allow PHAs to get these changes off to a fast start.
Two Bills of Interest Introduced This Week
On April 5, Rep. Nancy Johnson (R-CT) introduced H.R. 1468 to amend the Internal Revenue Code to replace the recapture bond provisions of the low income housing tax credit program. Also, on April 5, Sen. Paul Sarbanes (D-MD) introduced S. 705 to establish the Interagency Council on Meeting the Housing and Service Needs of Seniors.
More information will be provided as NAHMA considers its public policy positions on these bills.
