Confirmation Hearing
On February 26, the Senate Banking Committee held the confirmation hearing for Alphonso Jackson. Jackson, nominated to be HUD Secretary, faced intense questioning from Committee members about the funding cuts for Section 8 vouchers, the proposed Flexible Voucher Program (FVP), and the Real Estate Settlement Procedures Act (RESPA) regulation. The most shocking moment in the hearing came when the Chairman of the Housing and Transportation Subcommittee, Senator Wayne Allard (R-CO), stated that HUD’s handling of RESPA “demeaned” the Congress, and for that reason he would not support Jackson’s nomination at this time.
Senator Sarbanes (D-MD) and Senator Carper (D-DE) pressed Jackson on Section 8 issues. Senator Sarbanes pressed Jackson on the Administration’s requested cuts to Section 8 voucher funding. Jackson responded that HUD returns between $1.2 – $1.8 billion in unused Section 8 each year. The nominee also stated he does not believe current vouchers are being “denigrated. Senator Carper raised questions about the Flexible Voucher Program, and whether a block grant would meet the needs in program and serve new people, Jackson admitted the FVP is a “block grant” to public housing agencies (PHAs). He believes funding will be adequate because the allocations will be based on what PHAs are receiving now. Jackson admitted there “will not be substantial increases” in the block grant because there was already been a 23 percent increase in Section 8 costs. Finally, Jackson believes the FVP will allow new people to receive assistance, although he admitted there is only 8 to 9 percent annual turnover in the current Section 8 program.
Budget News
On Wednesday, the House Financial Services Committee approved its “Views and Estimates [of the Committee]…On Matters to Be Set Forth in the Concurrent Resolution on the Budget for Fiscal Year 2005” In other words, the report states the Committee’s opinion about what the budget resolution Congress approves should look like, and what the Committee thinks of the President’s budget request.
In a victory for affordable housing advocates, the Committee approved a Section 8 amendment offered by Ranking Member Barney Frank (D-MA). The amendment notes that the Administration’s request for Section 8 funding is $1.633 billion short of the level necessary to renew all current Section 8 assistance, which “could result in the elimination of funding for up to 250,000 vouchers.” With respect to the FVP, the amendment states, “the main feature of this proposal is the elimination of the right housing authorities now have to rent to a specified number of families, and to receive funding to cover the full cost of such assistance.” It notes the program starts out underfunded by $1.633 billion, and because of the block grant, “would let funding spiral downward in future years.” The amendment also details the choices PHAs would to have make to make due with presumably static funds. PHAs would have to serve less people (since there is no maintenance of effort requirement), reduce the subsidy level, or serve more higher-income families.
Unfortunately, extremely disappointing language was included as regards rural housing. The Committee acknowledged the requested cut for Section 515 new construction. It also commended RHS for prioritizing funds for repair and rehab of the existing portfolio and “working to develop better strategies for managing the existing portfolio of projects before adding to future costs by funding new projects.” Equally disappointing was the Committee’s endorsement of the 2004 appropriations language which reduces Rural Rental Assistance contract length from 5 years to 4 years.
Hearings on the HUD budget will begin next week. The House VA-HUD Appropriations Subcommittee will hear testimony from HUD on March 3.
Finally, as regards the professed commitment by various Administration officials and members of Congress to cut the deficit by reducing non-defense discretionary spending, the February 2 statement on the President’s 2005 Budget by House Appropriations Committee Chairman C.W. Bill Young (R-FL) is most interesting:
“…While I am dedicated to developing fiscally conservative budgets, no one should expect significant deficit reduction as a result of austere non-defense discretionary spending limits. The numbers simply do not add up. Non-defense discretionary represents less than one-fifth of the federal budget and freezing this spending reduces the deficit by a marginal amount. With a 1% growth or freeze in non-defense programs, everyone should have realistic expectations and be prepared to make sacrifices. We will be carefully scrutinizing the Administration’s new initiatives and proposed funding increases to see if we can afford them in a lean budget year. They will have to be reconciled with proven programs and traditional Congressional priorities.”
Exit Tax Relief Legislation
The Executive Council’s recommendation to the Board of Directors regarding HR 3485, the Affordable Housing Preservation Tax Relief Act, is “Take no position on the bill itself, support the concept of exit tax relief, and work with industry partners and congressional sponsors to improve the bill.”
As a reminder, HR 3485 creates a federal “Affordable Housing Preservation Credit” which would alleviate the “exit tax” disincentive for owners to sell their properties to buyers who would preserve the property as affordable housing. Unfortunately, the bill in its current form subjects the original owners to a recapture of the credit if the buyer is deemed out of compliance with program requirements.
This Executive Council’s recommendation will now be forwarded to the Board of Directors for concurrence.
With 22 Executive members responded, the votes were as follows:
- Take no position on the bill itself, support the concept of exit tax relief, and work with industry partners and congressional sponsors to improve the bill: 17 votes;
- Strongly Support the bill: 4 votes; and
- Support the bill: 1 vote.
Taking the Lead on Advocacy
Earlier this week, NAHMA launched a new
Grassroots Advocacy Center webpage. Be sure to check this page often!
In our first posting to this site, NAHMA has prepared a draft text for members to send their U.S. Senators and Representatives in support of a strong budget for federal multifamily housing programs. Please help us in this effort! Congress needs to hear from their constituents that these programs are important. Make your opinion count!
