Legislative Update
(Taken from the Online NACCED Alert dated July 26, 2007)

House Passes FY 2008 HUD Appropriations Bill

By a vote of 268-153 the Housed passed H.R. 3074, the FY 2008 Transportation, Housing and Urban Development and Independent Agencies appropriations bill. The bill rejects the administration's proposed $700 million cut in the CDBG program. Instead it proposes a $219 million increase in formula grants to $3.929 billion, compared to this year's $3.71 billion. It also provides $160 million in project-specific Economic Development Initiative (EDI) grants. Other set-asides under the CDBG appropriation include $62 million for the Native American Housing and Economic Development program, $7 million for insular areas, $1.6 million for information technology, and $20 million for the project-specific Neighborhood Initiatives program. The bill provides $137.5 million in authority for the Section 108 loan guarantee program.

HOME formula grants would get a $130 million increase under the House bill, while the Senate bill provides a $110 million increase to $1.81 billion. Set-asides in HOME apart from formula grants include $9.9 million in HOME technical assistance, $41.6 million in housing counseling, and $990,000 for information technology. The bill provides no funding for the American Dream Downpayment Initiative, despite a request of $50 million from the Bush Administration.

Homeless housing programs would get roughly a $145 million increase, which includes funding to restore all Shelter Plus Care and Supportive Housing rent subsidy contracts. As has been the case for many years 30% of the funds must support permanent housing for the homeless and funds used for services must be matched by non-federal dollars in an amount of 25%.

The Public Housing Operating Fund gets a significant boost to $4.2 billion, a $340 million increase over FY 2007. The Public Housing Capital Fund would be essentially level funded at $2.44 billion. The HOPE VI demolition and replacement of severely distressed public housing program would get $120 million under the House bill compared with this year's funding level of $99 million. The Bush administration requested no funding for the program, a position it has taken for the last 6 years.

The Brownfields Redevelopment program is funded at $15 million under the House bill, while the Rural Housing and Economic Development program is essentially level funded at $16.8 million in the House bill. The Self-Help Home Ownership Program (SHOP) that funds Habitat for Humanity and other national nonprofit groups is funded at $31.9 million in the House bill, up from this year's $20 million. The Non-profit Capacity Development Initiative (NCDI) for such national nonprofit intermediaries as LISC and Enterprise Community Partners gets a slight boost under the House bill to $27.7 million from this year's $26.5 million.

Housing Opportunities for Persons With AIDS (HOPWA) gets a $14 million increase under the bill to $300.1 million, the same amount requested by the president. The Section 202 elderly and Section 811 handicapped housing are both level-funded at $734.6 million and $236.6 million. The Bush Administration had proposed deep cuts in both programs.

The lead-based paint abatement program takes a $20 million hit in the House bill to $130 million.

Finally, the bill provides increased funding for the renewal of Section 8 project-based and tenant-based rent subsidy contracts for a total of $22.81 billion. This is compared to the Administration's request of $21.8 billion. Within these amounts the House bill provides $30 million for 4,000 new incremental vouchers for the non-elderly disabled population and homeless veterans.

The lead-based paint abatement program takes a $20 million hit in the House bill to $130 million, while the Senate bill maintains funding at $151 million.

During floor debate the House rejected by a wide margin three amendments offered by republicans to cut funding across-the-board by 0.5%, 1% and $6.3 million. Also defeated, by a vote of 148-278, was an amendment by Rep. Steve King (R-Iowa) to exempt projects funded under the bill from the Davis-Bacon wage rates, and an amendment by Rep. Barney Frank that would have prohibited HUD from using funding appropriated by the bill to require residents of public housing to perform eight hours of community service a month.

NACCED, NACo and a number of other national housing organizations had been pressing the House and Senate Appropriations Committees for $4.1 billion in CDBG formula grants and $2 billion in HOME formula grants. These efforts will continue as the process moves forward.

The House bill provides a $2.8 billion increase in funding over the president's request and $4 billion over FY 2007. Earlier this week a Statement of Administration Policy noted that the president would veto the bill in its current form. The Statement criticized the bill for an irresponsible and excessive level of spending.

The Senate version of the bill, reported on in last week's Alert is not expected to reach the Senate floor until after Labor Day. To view a chart comparing the House and Senate bills with the FY 2007 funding levels and the president's request, go here.

Alexandria, VA Mayor Euille Voices Support for a National Affordable Housing Trust Fund

Last week Alexandria, VA Mayor Bill Euille expressed the strong support of several national organizations, including NACCED, on H.R. 2859, the National Affordable Housing Trust Fund in an appearance before the House Financial Services Committee. He was testifying on behalf of the U.S. Conference of Mayors, the National Association of Counties (NACo) the National Community Development Association (NCDA), the National Association of Local Housing Finance Agencies (NALHFA), and the National Association of County Community and Economic Development (NACCED).

"We strongly support H.R. 2895, the National Affordable Housing Trust Fund, and urge the Financial Services Committee to adopt our recommendations and approve the legislation and the U.S. House of Representatives to pass it.

"Over the last several years, mayors have called on Congress to adopt a National Housing Trust Fund. In 2002, Boston Mayor Thomas Menino, who was then President of the Conference of Mayors asked the Administration and Congress to "create a National Housing Trust Fund to meet the needs of low income individuals and families through the production and preservation of rental housing and that cities receive a direct allocation of funds." This policy statement was developed following a National Housing Forum, convened by Mayor Menino, and attended by most of the organizations supporting H.R. 2895. The Conference of Mayors also adopted policy in 2003 calling for passage of a National Housing Trust Fund, and most recently (June, 2007) the organization adopted policy reaffirming its support of a National Housing Trust Fund "primarily, but not exclusively, designed to meet the needs of the very low income, i.e. 30 percent of the AMI or below, through the preservation and production of housing." The policy also asked that 60 percent of the National Housing Trust Fund … be allocated to localities." Similar policy statements have been adopted by the organizations that I testify on behalf today.

"Local government interest and support for the National Housing Trust Fund is based on several reasons. Mr. Chairman, some of these are exactly the same as those you state in purposes for the legislation. Local officials know first hand that there is a lack of affordable housing for low-income families. The U.S. Conference of Mayors annual hunger and homelessness survey has repeatedly listed the shortage of affordable housing as the major cause of homelessness in America. We believe that you have chosen a laudable goal to construct, rehabilitate, and preserve at least 1.5 million affordable housing units over the next 10 years.

"There are other studies and data which will be cited by others during this hearing which will leave no doubt that more affordable housing is needed. Most can cite the staggering number of unmet housing needs in our nation, the difficulty that people with jobs have in finding affordable housing, the fact that millions of low-income families must pay more than half of their income for housing - all of these offer substantial proof of the need for a National Housing Trust Fund.

"As you know Mr. Chairman, many localities have created their own housing trust funds. There is a great deal of experience across the nation in cities and counties. The growing number of local housing trust funds most certainly will provide support for H.R. 2895. With this growth, there is a strong need for dedicated funds. My city of Alexandria has formally had a Housing Trust Fund since 1993; our funding is based on developer contributions to address affordable housing. Beginning in 2006, the City of Alexandria has also dedicated one cent of the real property tax rate and authorized General Obligation Bonds to support affordable housing. As pleased as we are about these accomplishments, we realize that much more funding is needed in Alexandria to provide affordable housing for our citizens. And this is true of cities and counties across the nation.

"More specifically, Mr. Chairman, and members of the Committee, provisions of the legislation that we support, and those where we recommend additions or changes are as follows:

·  We support the National Affordable Housing Trust fund because it builds upon, and has many of the same features as, the extremely successful HOME Investment Partnership program. The HOME infrastructure (regulations, policies etc.) is already in place and should be utilized. Grantees should not have to learn yet another set of program rules.

·  We support the emphasis on rental housing production/preservation, while at the same time also having the ability to undertake homeownership with the funds

·  We support the way the program will be funded, i.e. with the GSE affordable housing fund and the FHA surplus, but we believe it will also require appropriations to secure significant funding for a truly national program, possibly reaching $2 billion.

·  We strongly support the allocation of funds at 60% local/40% state, Indian tribes, and insular areas

·  We generally support the formula factors for allocating funds among grantees set forth in the bill. As with the original HOME formula we recommend that HUD be required to consult with (perhaps through negotiated rulemaking) stakeholders in developing the formula.

·  We strongly suggest that the individual formula allocations for local participating jurisdictions be calculated the same way they are under the HOME program, i.e. a threshold of $750,000, with the ability to supplement a minimum allocation of $500,000 with $250,000 contributed from the local participating jurisdiction or the state to achieve the minimum threshold.

·  We do not support the provision requiring that whenever the appropriation is less than $2 million, local participating jurisdictions must achieve a minimum formula allocation of $1 million. We need to build political support for the program, and the more localities that are funded directly will help do that.

·  With respect to match we generally support the provisions in the bill, particularly the ability to use other federal funds as well as the match reduction for fiscal distress. There should be added to this section a mandatory reduction of match for disaster areas designated by the President. We also support the provisions that allow services to be counted as match and the discretion given to the Secretary to reduce or waive the match for communities that provide zoning waivers and/or reduction of regulatory requirements.

·  We strongly believe that the allocation plan should be included in the Comprehensive Housing Affordability Strategy (also known as the Consolidated Plan) and considered by HUD in that context, rather than as a separate plan with its own approval/disapproval process. The allocation plan should be simplified as it is too prescriptive and we would welcome the opportunity to work with the Committee to this end.

·  The legislation needs to be clarified to explicitly permit grantees to use the funds themselves as appropriate, rather than having to allocate all of them to other for profit and non profit entities.

·  We support the targeting requirements in the bill, i.e. at least 75% of the funds made available to households at or below 30% of area median. However, the only way such households can be served is with a rent subsidy either through additional incremental Section 8 vouchers or through "thrifty production vouchers" as recommended by the Millennial Housing Commission. These vouchers would equal the project's operating costs, rather than being based on the Fair Market Rent.

·  We support the utilization of HOME's cost limits for the new programs well as the use of HOME's definition of rental housing. We also support the provisions related to the forms of assistance and the coordination of trust fund with other federal housing programs. The HOME program should be included among those programs to be coordinated. We further recommend an exception in the section that prohibits use of trust fund dollars for travel. Funds should be permitted to be used to fund travel for training/technical assistance in connection with program administration.

·  We urge an increase in the program administration allowance to 20%, the same as we recently recommended for the regular HOME program. Ten percent will be insufficient once grantees undertake the extensive monitoring that will be needed to insure compliance with the new program's requirements.

·  We support the emphasis on mixed-income projects that the legislation would encourage. This is positive national housing policy.

·  The accountability and tracking of funds requirements should be consistent with HUD's other community planning and development projects.

·  Finally we recommend that Section 300 "Inapplicability of HOME Provisions" be deleted from the bill.

"Mr. Chairman, and members of the Committee, we want to thank-you once again for H.R. 2895, the National Housing Trust Fund. We look forward to working with you for its passage."

HUD Says CDBG Accomplishment Data Down in FY 2007

In a "Request to CDBG Grantees," HUD has disclosed that accomplishment data reported in IDIS as of June 30, is significantly less than what was reported in FY 2006 at this time. Accomplishments have been reported on 51,607 owner-occupied activities (46% of the total goal) this year, compared to 71,521 activities (62% of goal) in FY 2006. 13,924 rental activities (44% of goal) have accomplishment data this year, compared to 23,015 (103% of goal) in FY 2006. 2,728 homeownership activities (40% of goal) have accomplishment data this year, compared to 7,644 (67% of goal) in FY 2006. And, 24,351 jobs activities (32% of goal) have accomplishment data reported, compared to 34,310 (47% of goal) in FY 2006. Based on these numbers, it appears that HUD's FY 2007 goals are roughly 3,000 activities lower in the area of owner-occupied, 9,000 activities higher in the area of rental, 4,500 activities lower in the area of homeownership, and 3,000 activities higher in the area of jobs. In spite of this, reported accomplishments are down in all areas. HUD adds that part of the shortfall could be due to more aggressive data clean-up efforts that eliminate data entered in error.

At the end of each Federal Fiscal Year, HUD uses accomplishment data reported in IDIS to complete its Annual Performance Report, which goes to Congress and OMB. HUD is asking grantees to enter all available accomplishment data for the period of October 1, 2006 and September 30, 2007.

2007 John C. Murphy Scholarship Award Program Accepting Applications

The John C. Murphy Scholarship Award Program, which annually awards $2,000 to a graduate or undergraduate student in a housing and community development program, is accepting applications from qualified applicants. To download the application criteria and form from the NACCED website, go here.

All applications must include a nomination letter from a NACCED member in good standing. The deadline is COB, August 1, 2007.