Senate Banking Subcommittee Holds Hearing on Rural Housing Legislation
Senator Tina Smith (D-MN), Chair of the Senate Banking, Housing and Urban Affairs Subcommittee on Housing, Transportation, and Community Development, held a hearing focusing on improvements to the Rural Housing Service (USDA-RHS) programs at the USDA and the Rural Housing Service Reform Act of 2023. This is the third hearing Senator Smith has chaired aimed at improving rural housing programs for many rural towns and communities as they struggle to attract new businesses, residents, and talent. “Without access to housing nothing else in your life works. Not your job, your health, your education or your family….We know that the housing crisis is hurting communities across the country, with many families struggling to find a safe, affordable place to live. I look forward to hearing from our witnesses about ways we can reform Rural Housing Service programs to serve more people and better meet the needs of families.” said Senator Smith.
During the hearing, Senators Smith and Mike Rounds (R-SD) introduced significant bipartisan legislation, the Rural Housing Service Reform Act of 2023 (S.1389), which seeks to improve federal rural housing programs, cut red tape, and strengthen the supply of affordable housing. The Rural Housing Service Reform Act of 2023 is the direct result of these hearings and public input from stakeholders closest to the issue. The legislation would improve and build upon several USDA rural housing programs. Specifically, the bill would:
- Authorizing the Multifamily Preservation and Revitalization (MPR) program and Multifamily Preservation Technical Assistance Program;
- Allowing for the decoupling of a Section 515 mortgage and Section 521 Rental Assistance;
- Allowing Section 542 rural vouchers to be adjusted based on changes in tenant income;
- Streamlining the process for Section 515 nonprofit transfers and increasing the Section 515 nonprofit set aside;
- Authorizing the Rural Community Development Initiative (RCDI) and waiving the matching funds requirement for groups working in areas of persistent poverty;
- Requiring RHS to publish more data on their housing programs;
- Authorizing funding for much needed technology upgrades at RHS
During the hearing members of the committee heard from stakeholders on the need for this critical rural housing reform legislation, including from Natalie Maxwell, Managing Attorney for the National Housing Law Project, Christopher Potterpin, President of the Council for Affordable Housing, David Lipsetz, President and CO of the Housing Assistance Council, Dianne Hunt, President of Syringa Property Management and Anna Mavity, Executive Director of the Minnesota Housing Partnership.
Testifying before the committee, Mr. Lipsetz highlighted the biggest crisis on the horizon, that of maturing mortgages. “An alarming number of multi-family housing mortgages are scheduled to mature in the next few years. As these mortgages mature, projects and units will be removed from USDA’s affordable rural housing program, placing very low-income rural residents in jeopardy of untenable rent increases and possible eviction. HAC identified 921 Section 515 properties that left the portfolio between 2016 and July 2021 – nearly three times more than USDA had projected for maturing mortgages alone during the five-year period.”
Reiterating the need for new approaches for preservation and recapitalization, Mr. Potterpin made the following remarks to the committee, “Over the next decade, as much as three-quarters of all Section 515 mortgages will mature, and with it the end of related Section 521 RA contracts, stranding approximately 250,000 families and elderly persons and leaving them without the ability to house themselves. Under current law, when a Section 515 mortgage expires, Section 521 RA also expires. There is no budget authority to replace these mortgages.”
To view the Senate hearing, click here. To view Sen. Smith’s Press Release on the bill, click here.
House Passes Legislation to Raise Debt Limit
Last week, the U.S. House of Representative passed a bill to raise the nation’s debt limit by making steep funding cuts to federal agencies and programs, including HUD and USDA. House Speaker, Kevin McCarthy (R-CA) introduced the Limit, Save, and Grow Act of 2023 (H.R. 2811) and ensured it passed with partisan support from Republicans, as no Democrats voted for the bill.
As provided in the bill’s summary: This bill increases the federal debt limit and decreases spending. It also repeals several energy tax credits, modifies the permitting process and other requirements for energy projects, expands work requirements for the Supplemental Nutrition Assistance Program (SNAP) and other programs, and nullifies regulations for the cancellation of federal student loan debt.
Specifically, the bill:
- suspends the debt limit through March 31, 2024, or until the debt increases by $1.5 trillion, whichever occurs first;
- establishes discretionary spending limits for FY2024-FY2033 that include decreases in discretionary spending;
- rescinds certain unobligated funds that were provided to address COVID-19 and to the Internal Revenue Service;
- nullifies certain executive actions and regulations for cancelling federal student loan debt and implementing an income-driven repayment plan for student loans;
- repeals or modifies tax credits for renewable and clean energy, energy efficient property, alternative fuels, and electric vehicles;
- establishes new work requirements for Medicaid and expands the work requirements for SNAP and the Temporary Assistance for Needy Families (TANF) program; and
- requires major federal rules (e.g., rules likely to result in an annual economic effect of at least $100 million) to be approved by Congress before they take effect.
The bill will not pass the U.S. Senate, as Senate Democrats oppose funding cuts to federal programs. An urgent compromise is needed, as Secretary of the Treasury Janet Yellen noted in a letter to congressional leaders earlier this week that the U.S. may be at risk of default as early as June 1st, 2023. Congressional leadership is scheduled to meet with President Biden next week to further discuss efforts towards raising the debt limit before the June 1st deadline.