Status of Legislation in 110th Congress


Capitol Hill
Memo to Members: Vol 13, No. 27, July 4, 2008

When Congress returns from its Independence Day recess, there will be a limited number of legislative days left in 110th Congress and a large unfinished body of work to complete. Congress will again be off from early August through early September for the Summer District Work Period, and is expected to adjourn sometime in late September to focus on the elections.

So far in the 110th Congress, several important housing bills have cleared the House of Representatives, most originating in the House Committee on Financial Services, chaired by Representative Barney Frank (D-MA). While the Senate has been less prolific, the Senate Committee on Banking, Housing and Urban Affairs, chaired by Senator Christopher Dodd (D-CT), has taken up several housing bills as well.

Thus far, no major housing bills, except the FY08 HUD appropriations, have been enacted into law. In addition, the recently enacted supplemental appropriations bill, which primarily funds the wars in Iraq and Afghanistan, includes operating funds for 3,000 units of permanent supportive housing in Louisiana. This is a provision also found in H.R. 1227, which passed the House, and S. 1668, which is stalled in the Senate.

To date in the 110th Congress, the House has passed, among other bills, legislation to:

The Senate has passed legislation to

When Congress returns, the Senate is expected to continue its debate on the major bill that will reform the GSEs, use FHA to prevent foreclosures, provide $3.9 billion to buy foreclosed properties, and establish a National Housing Trust Fund. Once the Senate completes this bill, there will be a conference committee to reconcile the differences between the House and Senate bills (see Memo, 6/27/07.)

The fate of other important legislation is uncertain. If Congress fails to complete work on any currently pending legislation before the end of this session, that legislation dies and will have to be reintroduced and considered anew in the 111th Congress. The 111th Congress will convene in January of 2009 and will run through 2010.

Here is a look at NLIHC priorities and their status in Congress:

National Housing Trust Fund. While Congress has taken significant steps toward establishing a National Housing Trust Fund, additional work is needed before the end of this Congress. On October 10, 2007, in the first session of the 110th Congress, the House passed H.R. 2895, to create a national housing trust fund. A companion bill, S. 2523, was introduced in the Senate by Senator John Kerry (D-MA) in December and now has 23 cosponsors. H.R. 1427, the House-passed bill on regulatory reform for Fannie Mae and Freddie Mac, created an Affordable Housing Fund and directed the funds to the National Housing Trust Fund. S. 2391, a stand-alone bill on the mission of Fannie Mae and Freddie Mac, also created an Affordable Housing Fund funded by the GSEs. This became the basis for inclusion of the Housing Trust Fund in H.R. 3221, the Housing and Economic Recovery Act (see below), now in debate on the Senate floor.

If the Senate passes H.R. 3221, the Senate and House will begin the process of working through their differences. The National Housing Trust Fund Campaign is cautiously optimistic that a permanent Housing Trust can be established in this Congress. 

Foreclosure Legislation. Congress has become increasingly more concerned about the foreclosure crisis during the second session of the 110th Congress. In April, the Senate initially addressed the crisis by adopting an amendment to H.R. 3221, an unrelated bill that would have provided almost $4 billion in Community Development Block Grants for the redevelopment of foreclosed properties; 25% of the funds were targeted to those at 50% of area median income or below.

The House also acted to stem the tide of foreclosures and help communities deal with foreclosed properties in two bills that passed out of the House Committee on Financial Services in May. H.R. 5818, the Neighborhood Stabilization Act of 2008, would establish a $15 billion CDBG program to purchase and rehabilitate foreclosed properties. Of the $15 billion, $7.5 billion of the funds would be for loans and the other $7.5 billion would be for grants; half of the grant funds would be required to support housing for very low income families (families at or below 50% of area median income) and half of that amount--25% of the total--would be for extremely low income families (ELI; families at or below 30% of AMI). The second bill, H.R. 5830, would provide authority for the Federal Housing Administration to insure $300 billion in refinanced troubled mortgages. 

H.R. 5830 was then included by the House in a set of three amendments to H.R. 3221 as passed by the Senate in April. The first set of amendments included H.R. 5830; H.R. 1427, the GSE regulatory reform act; and H.R. 1852, the FHA reform package. The second set of amendments included H.R. 5740, the Housing Assistance Tax Act of 2008, as passed by the Committee on Ways and Means April 4. This portion of the bill would enhance the ability of the Low Income Housing Tax Credit program to address foreclosure crisis and to allow for better coordination of HUD programs with the LIHTC. The third amendment clarified the relationship between state foreclosure laws and federal regulatory preemption.

The action on the foreclosure crisis then returned to the Senate, where the Senate Committee on Banking, Housing and Urban Affairs passed an unnumbered bill, the Housing and Economic Recovery Act, that would reform GSEs' regulatory system, enable the FHA to help homeowners facing foreclosure, and provide $3.9 billion in CDBG funding to address the growing number of foreclosed properties. (This is essentially the same provision that was passed by the Senate in April as part of H.R. 3221 and stripped from the bill by the House in May.) This legislation was also amended in Committee to provide for a permanent Housing Trust Fund initially funded by the GSEs. The bill also took all or part of the GSE funding for three years to pay for any costs to the federal government for FHA portion of the bill. 

On June 19, the full Senate proceeded to consider the Housing and Economic Recovery Act. Due to the arcane requirements of Senate procedure, the Senate was unable to complete work on the package before the July 4th recess. The Senate is expected to wrap up the bill the week of July 7.  The President has threatened to veto the legislation because of the CDBG funds for foreclosed properties. This funding could be dropped from the bill before a final Senate vote.

Protection of Renters in Foreclosure Crisis. As the foreclosure crisis deepens, the rising number of foreclosures involving rental property has created a growing concern about the adverse effects of these foreclosures on tenants. Tenants often receive little or no warning of the property owner's foreclosure and resulting eviction. These summary evictions are particularly hard on lower income tenants who may not have the resources to move, and on Section 8 voucher-assisted tenants who must find a new owner willing to enter into a Section 8 contract. Legislation is now pending in both the House and the Senate that would provide a minimum of 90 days' notice and specific protections for Section 8-assisted tenants. Representatives Keith Ellison (D-MN), Carolyn McCarthy (D-NY) and Michael Capuano (D-MA) introduced the "Protecting Tenants at Foreclosure Act of 2008," H.R. 5963, on May 5, and on May 21 Senator John Kerry (D-MA) introduced a S. 3034, Protecting Tenants at Foreclosure Act of 2008.

In addition, Representative Gwen Moore (D-WI) introduced H.R. 5894, which would authorize $300 million into a special account of the Emergency Food and Shelter Program, a program within the Federal Emergency Management Agency, expressly for preventing homelessness of renters and owners caught in foreclosure crises.

Disaster Recovery. There have been numerous efforts to aid the Gulf Coast states recovering from the devastating effects of hurricanes Katrina, Rita and Wilma. H.R. 1227, a bill to address many remaining low income housing needs, passed the House early in 2007. A similar bill, S. 1668, was introduced by Senators Mary Landrieu (D-LA) and Christopher Dodd (D-CT), but got only as far as a hearing within the Senate Banking Committee. Opposition to some of the provisions from Senator David Vitter (R-LA) has prevented further action.

Both chambers passed H.R. 2642, the Iraq War Supplemental bill that includes $73 million in domestic spending for funding permanent supportive housing vouchers in Louisiana. Although advocates sought additional funding for Mississippi, Alabama, and Louisiana in this bill, both Senate and House Leadership have indicated that a second domestic supplemental bill is likely. President Bush signed H.R. 2642 into law on June 30, 2008.     

On May 2, Senator Mary Landrieu (D-LA) introduced S. 2975, the Gulf Coast Multifamily and Assisted Housing Recovery Act, which would authorize $125 million for additional senior housing and $75 million for disabled housing in affected areas. The legislation would create 1,500 new units for seniors and disabled people. Another $4 million would be authorized to cover gaps in reconstruction costs for damaged senior properties being rebuilt in Louisiana.

Representative Don Cazayoux (D-LA) introduced H.R. 6276, the Public Housing Disaster Relief Act of 2008, which would repeal Section 9(k) of the U.S. Housing Act of 1937. This section authorizes HUD to pay for the repair of disaster-damaged public housing.  The need for this legislation grew out of a dispute between FEMA and HUD over responsibility for the redevelopment of public housing after Hurricane Katrina.  H.R. 6276 passed the House by voice vote on June 18.  A companion bill has yet to be introduced in the Senate.

Budget and Appropriations. In 2008, for the first time in many years, Congress was able to pass a budget resolution during an election year. This resolution, which lays the groundwork for the FY09 appropriations process, provides $436.6 billion in domestic spending for FY09, which is $21.1 billion over FY08 and $22.6 billion over the President's request for domestic spending.

The House Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies (THUD) passed its FY09 spending bill on June 20. Information provided by the subcommittee indicates that the bill would provide increased funding levels for most HUD programs in FY09. The full House Committee on Appropriations is scheduled to consider the bill the first week after Congress returns from the July 4th recess. The Senate Committee on Appropriations is scheduled to take up its FY09 THUD spending bill on July 10. See NLIHC's budget chart at www.nlihc.org/doc/FY09_BudgetChart.pdf for additional information.

House Appropriations THUD Subcommittee Chair John Olver (D-MA) and Senate Appropriations THUD Subcommittee Chair Patty Murray (D-WA) have fought to increase HUD program funding in the 110th Congress. As in all recent years, spending on housing programs in FY09 is expected to be extremely tight.

Timing for floor and conference action on the appropriations bills is unclear. Given the disagreement between Congress and President Bush over the appropriate level of overall domestic spending, and the certainty of a new president next year with different domestic priorities, Congress is unlikely pursue the appropriations process to its legislative conclusion this year. Instead, it is almost certain that at some point before the beginning of FY09 on October 1, 2008, Congress will enact and the President will sign one or a series of continuing resolutions to fund programs at their FY08 levels until some time after the next president is sworn into office. 

Public Housing. Adequate funding for the public housing capital and operating funds remains the largest challenge facing public housing in 2008. The president's FY09 budget request for these two funds is $6.324 billion, and the House THUD appropriations subcommittee adopted funding of $7 billion on June 20 for these accounts.

Other public housing issues are also pending. Efforts to reform the HOPE VI severely distressed public housing revitalization program have not advanced in the Senate. Senator Barbara Mikulski (D-MD) introduced S. 826, the HOPE VI Improvement and Reauthorization Act of 2007, in March 2007. The Senate Committee on Banking, Housing and Urban Affairs held a hearing on the bill in June 2007 but has not taken further action. The Senate bill differs significantly from the House version, H.R. 3524. The House passed this bill in January 2008. Among the major differences are: the Senate bill does not require a one-for-one replacement of lost public housing units, while the House bill does with minor exceptions; the Senate bill does not provide a right to return for residents to the revitalized units, while the House bill does. These and other major policy divides have not been able to be negotiated and the bill holds little chance of further advancement this session.  

The House Committee on Financial Services has also taken up H.R. 6216, the Asset Management Improvement Act of 2008. The bill would provide certain changes in the public housing asset management system including permitting PHAs with fewer than 500 units to be exempt from asset management requirements. There is no similar companion legislation in the Senate.

Both the House and Senate have taken action to exempt small public housing agencies from most of the requirements of the annual Public Housing Agency Plans. On June 25, the Senate adopted an amendment to the massive GSE/foreclosure bill that would exempt PHAs with 550 or fewer units of public housing and vouchers from most annual PHA plan requirements. The House had passed similar legislation last summer H.R. 3067, setting the threshold for exemption at 250 or fewer units. NLIHC estimates that the Senate language would exempt PHA administrators of 75% of all public housing and voucher units from basic annual plan requirements. The House-passed bill would exempt PHA administrators of 6% of all public housing and voucher units from these requirements. The PHA Plan was instituted as a trade-off to the various PHA deregulatory provisions in the 1998 Quality Housing and Work Reform Act. In exchange for more locally-based decision making, PHAs had to involve residents and other community members in annual plans that set local policies on things like minimum rents, waiting list preferences, plans to demolish or sell-off the housing stock, grievance procedures, etc.

Section 8 Housing Choice Vouchers. In March 2008, Senator Dodd introduced a companion bill to the voucher reform bill passed by the House, H.R. 1851. The bill S. 2684, the Section 8 Voucher Reform Act of 2008 (SEVRA), is similar in many respects to the House-passed bill, but importantly, as introduced, it does not contain any expansion or extension of the PHA Moving to Work demonstration program.

The Banking Committee held a hearing on the bill on April 16 but has taken no additional action. As the calendar ticks by, it is increasingly unlikely that this important legislation will be enacted this year. The bill would provide many needed and overdue updates to the voucher program, including a long-term, stable funding distribution system, an updated set of rules for project-basing vouchers, changes to simplify the calculation of rents for administrators and for residents, portability improvements and other voucher program changes.

Project-Based Housing Preservation. Despite strong advocacy and much congressional support for highlighting the $2.5 billion budget shortfall for the project-based Section 8 program for FY08, HUD continues to hold that the program is not in dire circumstances; that owners, many of whom are now on contracts of less than 12 months' duration, will remain in the program; and that tenants are not at risk. Efforts to include the $2.5 billion in FY08 funding in an FY08 supplemental spending bill were unsuccessful. Advocates are currently working to significantly increase FY09 funding and to provide for advance appropriations for FY10 so that owners can rely on the project-based Section 8 account to fund their contract renewals and stay in the program.

While Congress considered some legislation to preserve existing affordable housing in the first session of the 110th Congress, Congress's major preservation legislation is expected to be introduced in this second session of the 110th.  Mr. Frank has circulated a draft preservation bill, and a hearing was held on the draft on June 19. The bill is expected to be introduced sometime in early July. 

Low Income Housing Tax Credit. In February, Senator Maria Cantwell (D-WA) introduced S. 2666, the Affordable Housing Investment Act of 2008, which would update and modernize the low income housing tax credit (LIHTC) program, including improving the coordination between LIHTC and HUD programs; facilitating the construction of child care, primary health care, recreation and other community service facilities; and easing restrictions on rehabilitation of older properties. No companion bill has been introduced in the House.

As noted above, the foreclosure legislation passed by the House included a provision passed by the Ways and Means Committee to permit the expanded use of the LIHTC to address the foreclosure crisis and improve the coordination of LIHTC with HUD programs. The Senate has included in the GSE/foreclosure bill most of the provisions passed by the House. The coordination provisions have not at this point been included in the Senate bill.

McKinney-Vento Reauthorization. In February 2007, Representative Julia Carson (D-IN) introduced H.R. 840, the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act. The legislation would expand the definition of homelessness, and provide more funds to prevent homelessness. Mrs. Carson passed away in December of 2007. Representative Maxine Waters (D-CA), chair of the House Financial Services Subcommittee on Housing and Community Opportunity, intended on offering an amendment that would have revised the original bill, including a provision that could penalize communities that "criminalize" homelessness, at a June 24 mark up. However, the markup has been postponed indefinitely.

Senator Jack Reed (D-RI) introduced his bill, the Community Partnership to End Homelessness Act (S. 1518), in May 2007.  It was reported out of the Banking Committee on November 1, 2007.  Ms. Waters' amendment to H.R. 840 would have made the bill look much more like S. 1518.

The major sticking point with how this bill could progress is a divide over HUD's definition of homelessness. Senator Reed's bill, and Ms. Waters' amendment, would expand HUD's definition of who is considered homeless. But, these proposals would not redefine homelessness as broadly as the original H.R. 840 would.

The Senate bill is stalled in the Senate, as Senator Tom Coburn (R-OK) has placed a hold on the bill due to worries of increased spending.

Section 811. The House Financial Services Subcommittee on Housing and Community Opportunity held a hearing on June 20 on H.R. 5772, "The Frank Melville Supportive Housing Investment Act of 2008." The bill would shift Section 811 vouchers into the regular Section 8 voucher account, establish a demonstration to attach project-based rental assistance to non-Section 811 units to develop more housing for people with disabilities, and make other updates to the Section 811 program. 

 

Section 202. These bills, H.R. 2930 and S. 2736, would, among other provisions, update how Section 202 supportive housing for the elderly properties can be refinanced so that the savings can be used to rehabilitate the units or increase services to residents. The House has passed its bill but the Senate has taken no action on S. 2736.