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September 27, 1999
(House)
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H.R. 202 - Preserving Affordable Housing for Senior Citizens
and Families into the 21st Century Act
(Lazio (R) NY and 29 cosponsors)
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The Administration supports the goals of H.R. 202 -- to strengthen and
preserve housing assistance to low-income households and to support new
forms of housing and health facilities for the elderly - and has no
objection to House passage of the bill. The Administration, however, has
concerns about certain provisions of the bill that are unnecessary, costly,
or unclear and will work in the Senate to amend the bill to address these
concerns. In particular, the bill needs to be amended to:
- Delete subsidized housing provisions that would: (1) allow property
owners to demand renewal of moderate rehabilitation contracts six
months after they lapse; and (2) unreasonably restrict HUD's
discretion in deciding when to permit an owner to retain excess
income, thereby impeding HUD's ability to enforce fully its
responsibility for ensuring the condition of the properties. In
addition, the provision renewing rental assistance contracts at
marked-up levels should be clarified to be subject to annual
appropriations.
- Delete or modify provisions that would weaken underwriting standards
for hospital-based health care facilities currently eligible for FHA
loan guarantees as well as those made newly eligible under the bill.
The Administration does not object to giving FHA certain additional
authority to guarantee loans for a broader range of health care
facilities, but objects to increasing the risk and cost to FHA's
General and Special Risk Insurance Fund.
- Modify the bill's enhanced voucher provisions to allow HUD to set the
payment standard at a reasonable rent level instead of being required
to match market rents in all cases. Without this provision, property
owners may have an incentive to opt out of project-based contracts,
and HUD may be forced to pay unreasonably high rent levels. In
addition, the bill needs to be modified to clarify that the
requirement that the enhanced voucher payment standard increase as
rents increase applies prospectively, not retroactively, for
preservation project vouchers.
- Modify the provisions of the bill that would authorize use of Section
811 funds for tenant-based assistance. The Administration generally
supports this authorization; however, in order to provide the best mix
of housing for the disabled, the Administration believes that at least
25 percent and up to 50 percent of funds for Section 811 housing
assistance should be used for tenant-based rental assistance.
- Delete the provision authorizing the forgiveness of debt of pre-1990
Section 202 elderly housing projects financed with direct Government
loans. This provision would do nothing to address the needs of this
aging housing stock and would require significant increases in
appropriations to implement. Similarly, the provision authorizing the
prepayment of these loans would be a significant drain on
discretionary resources.
- Modify the bill's provisions that would authorize conversion of HUD
assisted housing units to assisted living facilities to meet many
communities' needs for this new form of low-income housing. Although
the Administration supports the authorization of such conversions, it
objects to the bill's provisions allowing the use of scarce Federal
resources for capital needs, unless it is related to the conversion of
a project to an assisted living facility. In addition, the bill
should specify an authorization of appropriations of $100 million
annually during FYs 2000-2004, rather than authorize "such sums"
appropriations.
- Delete the provision establishing a Commission on Affordable Housing
and Health Care Facility Needs in the 21st Century. This Commission
is unnecessary in light of HUD's recently completed study on elderly
housing and will divert limited research funding from more worthy
projects.
- Clarify provisions that could be construed as requiring implementation
of this bill before important policy considerations and rulemaking
procedures are completed.
Pay-As-You-Go-Scoring
H.R. 202 would affect direct spending and receipts; therefore, it is
subject to the pay-as-you-go (PAYGO) requirements of the Omnibus Budget
Reconciliation Act of 1999. The Office of Management and Budget's
preliminary PAYGO estimates are under development.
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