Congress addresses urgent housing issues

Legislation under consideration to reform voucher program, establish National Housing Trust Fund

WASHINGTON, DC—July 19, 2007—A flurry of summer activity in Washington, D.C. has resulted in renewed focused on housing issues that affect low-income people. Whether this signals a turnaround in the recent steady erosion of funding for housing is not yet clear, but lawmakers have acted in three significant areas.

According to SHA’s Executive Director Tom Tierney, “It is encouraging to see the new Congress paying significant attention to the housing needs of low-income people. It will be a real challenge, however, for Congress to overcome the funding difficulties inherited from six years of tax cuts and war. We are especially grateful to Senator Patty Murray and her steadfast work on the Senate side in supporting these changes.”

Committees in both the House and the Senate have passed appropriations for HUD for funding Section 8 Vouchers and Low-Income Public Housing. The full House of Representatives and Senate will take up these funding issues later this summer and in the fall.

On July 12, the U.S. House of Representatives passed H.R. 1851, the Section Eight Voucher Reform Act (called SEVRA) by a wide majority, 333-83, with 110 Republicans joining all but 2 Democrats in voting for the bill.

And on July 19, the House Financial Services Committee, chaired by Rep. Barney Frank, D-Mass., took up debate on a new Housing Trust Fund. The proposed legislation would initially allocate $800 million to $1 billion annually, with three-quarters of the funds marked to serve extremely low-income families.

Appropriations up slightly

Both of the appropriations bills passed by House and Senate committees reject the cuts in housing programs proposed by the president's budget and provide for modest increases in some programs. Overall, the appropriation total for housing and transportation is at $104.6 billion, $5.3 billion more than FY 2007 and $4.4 billion more than the president's request.

Funding for Housing Choice Vouchers is suggested at $300 to $500 million more than the levels suggested in the president’s original budget.

The Public Housing Operating Fund, which provides ongoing subsidy for SHA’s 5,200 units of public housing, is funded at $4.2 billion, $336 million above 2007 and $200 million above the president’s request. Both HUD and the nation’s public housing authorities have determined that $5 billion is needed in 2008, and acknowledge that these programs continue to be under-funded.

The Public Housing Capital Fund would be funded at $2.4 billion, the same as 2007 and $415 million above the president’s request. This funding is used for major maintenance and rehabilitation of buildings.

Programs that fund housing for the elderly and disabled would be funded at the same level as 2007, but still above the president’s request.

Voucher Reform Act would add 100,000 vouchers over five years

The Section 8 Voucher Reform Act is the most comprehensive reform package considered in nearly ten years, and is a complex piece of legislation spanning 128 pages. It affects many aspects of the Housing Choice Voucher program, from inspections to administrative costs to how “fair market rents” are established.

The legislation reforms the Section 8 voucher program in order to increase the number of families receiving vouchers. It strives to eliminate inefficiencies that have resulted in $1.4 billion in unused funds and provides incentives for agencies to assist more families.

One of the most significant changes would be authorization for an additional 20,000 new vouchers every year for the next five years. This would expand the program to serve additional households across the country at a time when housing affordability is becoming an issue for more and more households. Since this is an authorizing bill (not an appropriations bill) there is no guarantee that this provision will be funded, but it at least establishes Congress’ intention.

One troubling part of the bill, as written, is that it could require every household member to provide standard identification in order for the household to receive housing voucher assistance.  This provision likely would require the termination of assistance for many current "mixed households" that include citizens and legal residents. Currently, if some members of a household cannot provide proof of citizenship, the household receives proportionately less subsidy, but is still able to receive a voucher.

Part of the bill that would likely affect Seattle Housing extends the current “Moving to Work” program for ten years, and re-names it the Housing Innovation Program. Designed to allow high-performing housing authorities to tailor their programs to local needs, SHA has used the program to try different rent policies and use vouchers in new ways. SHA staff will be watching the legislation closely to understand its effects.

Housing Trust Fund addresses affordable housing gap

According to Rep. Barney Frank, D-Mass, "The growing shortage of affordable housing is one of the most serious social and economic problems facing our country."  There's a shortage of 2.8 million homes renting at prices that would be affordable to the more than 9 million low-income renter households throughout the nation, according to the National Housing Trust Fund Campaign, a Washington-based advocacy group.

Legislation creating a new national Housing Trust Fund would initially allocate $800 million to $1 billion annually, with three-quarters of the funds marked to serve extremely low-income families. The housing trust fund would be funded in part from the profits of mortgage-finance companies Fannie Mae and Freddie Mac, as well as revenue from the Federal Housing Administration.  President Bush does not support the creation of this new source of funding for low-income housing, in spite of broad support by both parties and the housing construction industry.

Sources for this article included:
- Council of Large Public Housing Authorities
- National Association of Housing and Redevelopment Agencies
- Center for Budget and Policy Priorities.