Housing Issues in the 110th Congress

Publication Date: February 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

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Abstract:

Two overarching issues can be expected to frame the housing debate in the 110th Congress. The first is the current budget environment, within which Congress and the Administration have attempted to reduce discretionary spending in recent years. The President's budget request for FY2008 proposes to hold the growth in nondefense discretionary spending to 1%, less than the rate of inflation. However, the new Congress, controlled by Democrats, might not be as likely as previous Congresses to use the President's budget as a starting point in crafting its own budget. The second overarching issue is housing affordability for both homeowners and renters. The new Democratic majority has expressed an intention to address issues of affordable housing in the 110th Congress.

The 110th Congress can be expected to both carry forward housing legislation considered in the 109th Congress and to introduce new initiatives. On February 6, 2007, the House Financial Services Committee held a hearing to discuss federal housing efforts in response to Hurricane Katrina. Based on statements made at the hearing, it is possible that legislation could be introduced in the 110th Congress that would provide funds for construction of affordable rental housing. In addition, there could be congressional oversight of the Department of Housing and Urban Development (HUD) activities and states' use of funds.

Another agenda item the 110th Congress could address is the governmentsponsored enterprises -- Fannie Mae and Freddie Mac -- and Federal Home Loan Banks (GSEs and FHLBs). The 109th Congress considered two bills to strengthen oversight of GSEs and FHLBs under one regulator. The legislation also included a provision to create an affordable housing fund, an issue that could be a subject of debate in the 110th Congress. Another issue that was considered in the 109th Congress and can be expected to arise in the 110th Congress is potential revisions to the Federal Housing Administration (FHA) loan insurance program.

Based on statements of Members and issues raised in the 109th Congress, a number of programs within the area of assisted housing will likely receive attention in the 110th Congress. Congress could consider Section 8 voucher changes, as well as the implementation of the new public housing operating fund rule, both of which arose in the 109th Congress. Another potential issue could be the preservation of existing affordable housing, which involves efforts to ensure that assisted properties funded through HUD and the Low Income Housing Tax Credit (LIHTC) program remain available to low-income households after their initial commitments end. The 109th Congress considered legislation to reauthorize the Mark-to-Market program (a preservation tool); two bills (S. 131 and H.R. 647) have been introduced in the 110th Congress that would reauthorize the program.

Additional issues that the 110th Congress may consider include the ability of assisted housing developers to combine the LIHTC program with HUD programs to create affordable housing, new initiatives to help the homeless, and efforts to curb certain subprime lending practices, sometimes characterized as predatory lending.