Committee Approves “Housing Opportunity through Modernization Act” Despite Opposition

A broad housing reform bill, the “Housing Opportunity through Modernization Act of 2015” (H.R. 3700), was passed by the House Committee on Financial Services on December 10. Committee Ranking Member Maxine Waters (D-CA) was joined by nine Democrats in opposing the bill due to the bill’s treatment of income deductions for child care, medical, and disability assistance expenses.

H.R. 3700 was introduced on October 7 by House Housing and Insurance Subcommittee Chair Blaine Luetkemeyer (R-MO). The mark-up was held on December 9 and 10.The bill would also streamline inspections, make a number of improvements to the project-basing of Section 8 vouchers, and expand flexibility between public housing operating and capital funds.

Current law allows public and assisted housing residents to deduct certain child care expenses from their incomes before their rents are calculated. H.R. 3700 would limit such expenses to those exceeding 5% of a tenant’s income. The bill would also increase the standard annual income deduction for dependents from the current $480 to $525 and index the value of this deduction to inflation.

Current law also allows heads of households who are elderly or who have a disability to deduct medical expenses and certain disability assistance expenses above 3% of their income from their total income for purposes of determining rent. Each household with a head of household who is elderly or has a disability also currently receives a standard annual income deduction of $400. The bill would increase the threshold over which such households can deduct medical and care expenses from 3% to 10%, increase the standard deduction for such households from $400 to $525, and index the value of the standard deduction to inflation.

At the bill’s mark-up, Representive Member Waters commended Chairman Luetkemeyer for his good intentions to improve HUD programs with his bill. However, she said she could not support the bill because of concerns over how its changes to deductions for child care and medical expense deductions would impact the lowest income households. Representative Waters said that she had just received a preliminary scoring of the bill from the Congressional Budget Office (CBO). The score, which has not been made public, shows that the deduction changes will result in increased rents for households with child care and medical expenses. An amendment by Ms. Waters to remove the bill’s section on deductions failed on a party-line vote.

Chairman Luetkemeyer offered an amendment to augment the bill’s hardship provisions for households negatively affected by the changes to deductions in the bill. The amendment requires the HUD Secretary to develop hardship polices for households that demonstrate are unable to pay their rent due the changes in deductions. The original bill had allowed, but did not require, the HUD Secretary to develop such hardship policies. Mr. Luetkemeyer’s amendment passed by a vote of 43 to 10, with opposition from Ms. Waters and other Democratic members of the Committee.

H.R. 3700 passed out of Committee on a vote of 44 to 10.  Joining Ms. Waters in opposing the bill were Democratic Representatives Stephen Lynch (MA), David Scott (GA), Al Green (TX), Keith Ellison (MN), Dan Kildee (MI), Patrick Murphy (FL), John Delaney (MD), and Juan Vargas (CA).