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Home > Policy Advocacy > Federally Subsidized Affordable Housing > Committee Approves Preservation Legislation
Affordable Housing Preservation Bill Approved by House Financial Services Committee
On July 27, 2010, the House Financial Services Committee approved
H.R. 4868, the Housing Preservation and Tenant Protection Act. This is
a very significant victory and a big step forward for affordable
housing preservation reform.
The National
Housing Trust and the Preservation Working Group, a coalition of
nonprofit organizations supporting affordable rental housing, have crafted common sense reforms to make it easier to save and improve
much needed affordable rental housing. We developed a series of
legislative proposals based on some clear principles: - Maintain affordable housing at risk of being converted to market rate housing;
- Restore housing at risk of loss due to deterioration;
- Protect and empower residents; and
- Provide better data to facilitate preservation transactions.
The House Financial Services Committee's action provides an unambiguous endorsement of these principles.
The
bill approved by the committee provides resources and incentives to
help stem the loss of affordable apartments across the country and
prevent the displacement of low-income tenants, many of who are elderly
or disabled. The
reported bill also includes sections to permanently authorize the USDA
multifamily portfolio revitalization program and support the
preservation of rural rental housing and to streamline and simplify the
refinancing and recapitalization of Section 202 elderly housing.
The bill retains a modified Section 107 right of first refusal for
preservation purchasers (with execution by state housing agencies,
rather than HUD). The HUD-led approach was opposed by the
administration and also triggered additional spending projections and
was modified by a manager’s amendment by Chairman Barney Frank. The
manager’s amendment also clearly specified the types of state and local
preservation laws protected from federal pre-emption and helped ward
off a stronger amendment to strike Section 108 in its entirety. The
Committee also rejected an amendment to strike the legal recourse
provided by Section 303 to residents when owners violate their HUD
agreements. The manager’s amendment also delineated the types of
property information to be provided to tenants under Section 304. An
amendment to strike Section 304 was withdrawn after Chairman Frank
agreed to work with Rep. Capito to further refine this language.
However, there were some setbacks for the bill and the provisions
sought by the Preservation Working Group. The Committee adopted
amendments offered by Rep. Tom Price (R-GA) to allow residents to own
guns in Section 8 properties and to require documentation of
citizenship, including a Social Security card or passport. A Waters
modification to require registration of guns with property management
and an Ellison modification to allow HUD discretion on implementation
of citizenship documentation failed by votes of 24-38 and 33-35,
respectively. The Committee also adopted an amendment by Rep. Dennis
Moore (D-KS) requiring HUD to report on the feasibility of establishing
rental escrow accounts in lieu of payments to owners in response to
building violations deficiencies documented by HUD. This eliminated the
provision allowing escrow of tenant rents under Section 302.
Other changes by the Committee would:
- notify residents of building violations under Section 302;
- give special attention to affordable housing near transit in the
allocation of new preservation grant and loan resources under Section
102;
- create a new Section 206 grant and loan program for energy efficiency retrofits;
- authorize service coordinators for USDA rural housing under Sections 514, 515, and 516;
- provide for the use of property resources to pay exit taxes in order to promote sales of properties to preservation owners;
- create a new Section 901 to require the use of efficiency unit
payment standard for one-person household, unless the housing authority
requests exemption and makes a determination that there are an
insufficient number of efficiency units in the area.
The inclusion of the citizenship documentation and the short time left
in the Congressional calendar make it unlikely that the entire bill
will come to a vote before the full House this year. However, we will
be working over the next few months to include key provisions in other
legislation, particularly those provisions that relate to affordable
housing at risk of expiration and loss in the near term. We will also
continue to work toward introduction of similar legislation in the
Senate.
KEY PROVISIONS FROM THE HOUSING PRESERVATION AND TENANT PROTECTION ACT OF 2010
- Provide resources and incentives to prevent the further loss of affordable housing units
- Provides grants and loans to for-profit and non-profit housing sponsors to help ensure the property is recapitalized and kept affordable.
- Establishes a voluntary Preservation Exchange Program to encourage owners to sell properties to purchasers who will keep the housing affordable.
- Establishes a first right of refusal that provides state housing agencies with an opportunity to purchase a property from an owner who wishes to sell their property. Significantly, the bill does not require an owner to sell their property or prevent them from obtaining fair market value.
- Allows owners to request project-based assistance in lieu of enhanced vouchers, which serves to help preserve the long-term affordability of the project, assist with capital for rehabilitation, and ensure that tenants are not displaced.
- Allows owners to receive budget based rent increases, thus ensuring that the properties are adequately maintained and encouraging owners to renew Section 8 contracts.
Prevents the Displacement of Disabled, Elderly and Other Low-Income Tenants
- Closes gaps in existing law to ensure that all low and moderate-income tenants are eligible for enhanced vouchers in the event that the assisted housing is converted to market rate housing.
Elderly Housing
- Gives HUD and affordable housing providers the tools needed to recapitalize the aging Section 202 elderly housing portfolio.
- Enables tenants to be partners with HUD, RHS, and owners to ensure that federally-assisted housing is properly maintained.
- Includes notification requirements to ensure that tenants are given sufficient notice prior to the conversion of the property to market rate housing.
Rural Housing
- Makes permanent a rural housing revitalization demonstration program launched in Fiscal Year 2006 that is designed to preserve and recapitalize Section 515 properties.
- Authorizes vouchers for tenants in properties that are converted to market rate housing or foreclosed.
- Extends the same protections afforded to tenants in HUD-assisted housing to tenants in RHS-assisted multifamily properties.
- Establish a National Database to Further Preservation
- Directs HUD to establish a nationwide public database of HUD- and RHS-assisted properties to enable policymakers and the public to more effectively monitor and preserve the existing portfolio of affordable housing. Requires the database to contain adequate safeguards to ensure the protection of owners’ privacy rights and proprietary information.
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Additional Information
Press Release: NHT Welcomes Legislation to Preserve Affordable Housing >>
H.R. 4868 one pager with list of supporting organizations and co-sponsors >>
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