Housing Issues in the 107th Congress

Publication Date: July 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

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Abstract:

The Administration presented its FY2003 budget for the Department of Housing and Urban Development (HUD) on February 4, 2002 requesting $31.45 billion of budget authority, up by $1.3 billion from FY2002. Most programs are proposed at or near last year's funding levels, but several proposed cuts are controversial. The Public Housing Capital Fund would be reduced by $417 million and the Community Development Block Grant program would be cut by $285 million.

S. 1248 and H.R. 2349, which call for the creation of a National Affordable Housing Trust Fund to subsidize the production of affordable rental housing, have more than 200 largely Democratic co-sponsors. The Administration favors more market-based assistance, requesting 33,400 additional housing vouchers in FY2003. Critics say that this is insignificant when compared with HUD data showing 4.9 million very low-income renters who pay more than 50% of their income for shelter or live in substandard housing, but who receive no assistance. HUD Secretary Martinez said in early May 2002 that he has learned from his travels that the shortage of affordable housing ranges from a "serious problem to a horrible crisis" in many communities (National Low Income Housing Coalition newsletter, 5/13/02).

H.R. 3995, the Housing Affordability for America Act of 2002, is an omnibus housing bill that would make "mid-course corrections" to some duplicative and underused programs, reauthorize programs, and make changes to the Section 8, public housing, and FHA programs. The House Financial Services Committee completed their mark-up of the bill on July 10, after voting narrowly to delete authority for a National Housing Trust Fund, which had been approved earlier in the mark-up. The national trust fund language was based on H.R. 2349, and was subsequently replaced with a program of matching grants to state and local housing trust funds, subject to appropriations.

The congressionally-mandated Millennial Housing Commission released its report, Meeting Our Nation's Housing Challenges, on May 30, 2002, saying that "there simply is not enough affordable housing," particularly for the very poor. Its recommendations include capital subsidies for rental production for extremely lowincome households, restructuring the Federal Housing Administration (FHA), an immediate end to the Mortgage Revenue Bond program's "10-year rule," a homeownership tax credit, and work requirements for public housing residents.

Senator Sarbanes introduced the Predatory Lending Consumer Protection Act of 2002, S. 2438, and more hearings were held. Senator Sarbanes also introduced S. 2721, the Housing Voucher Improvement Act of 2002. The "Ten Year Rule" that limits the use of tax-exempt bonds used to help first-time homebuyers would be removed by S. 677 / H.R. 951 (with 411cosponsors). Welfare reauthorization bills that incorporate housing assistance, include S. 2116, S. 2524, H.R. 4090, H.R. 4700, and H.R. 4737 (which passed the House May 16, 2002). House and Senate FY2002 supplemental appropriation bills (H.R. 4775/S. 2551) propose substantial rescissions in several HUD programs and make an additional $750 million of Community Development Block Grant funds available for New York City recovery efforts.