COMMUNITY DEVELOPMENT AND HOUSING 

PRESERVING THE SECTION 8 PROGRAM

WHEREAS, in 1997, the USCM adopted the Section 8 Portfolio Restructuring resolution which urged the President, the Secretary of HUD, and the U.S. Senate and House of Representatives to adopt a portfolio restructuring program that preserves and improves the existing project-based system in accordance with recommendations and principles developed by the Conference’s Standing Committee on Community Development and Housing and the Section 8 Funding Requirements resolution which urged Congress and the President to provide necessary increases in budget authority and sufficient budget outlay levels to renew all expiring project-based and tenant-based Section 8 contracts and to ensure that the necessary funding for the Section 8 program does not divert resources from other important federal housing and community development programs; and

WHEREAS, The Multifamily Assisted Housing Reform and Affordability Act (MAHRAA) signed into law in October, 1997 establishes permanent provisions covering Section 8 contract renewals and portfolio restructuring for a portion of the nation’s project-based Section 8 portfolio with HUD insured mortgages and Section 8 rents above true market value; and

WHEREAS, MAHRAA presents few incentives for owners of properties whose Section 8 contract rents are below market levels to stay in the program and allows a significant number of these properties to leave the Section 8 program, thus reducing the nation’s critically needed affordable housing stock and potentially displacing many low income tenants; and

WHEREAS, the Congress and the Administration in 1997 concluded a Balanced Budget Agreement that provides sufficient budget authority over the five-year period from FYs 1998-2002 to renew all expiring Section 8 tenant-based and project-based contracts and units, and provided Congress provided sufficient appropriations for that purpose in FY98; and

WHEREAS, the Administration’s FY99 budget projects a need for approximately $11 billion in budget authority for renewing all expiring contracts, with $7.1 billion to come from new budget authority and the remainder of about $3.6 billion from the "Section 8 Preservation Reserve Account" established by Congress last year; and

WHEREAS, Congress has recently passed, and the President has signed, Emergency Supplemental Appropriations legislation (H.R.3579) that uses approximately $2.35 billion of the Section 8 Preservation Reserve to offset the emergency costs of peacekeeping and disaster relief, thus requiring these funds to be restored as part of the FY99 appropriations process,

NOW, THEREFORE, BE IT RESOLVED that The U.S. Conference of Mayors strongly urges:

• the President and the U.S. Senate and House of Representatives to provide full funding in FY99 of the estimated $11 billion in budget authority needed for Section 8 contract renewals, whether in new budget authority or by using the existing Section 8 Preservation Reserve account, without diverting any resources from the CDBG, HOME, public housing or other important housing and community development programs;

• the U.S. Department of Housing and Urban Development to preserve existing below-market affordable housing in tight markets by exercising the discretion granted by existing law (Pub L.No. 105-65, Sec.524(a)(1) to provide Section 8 project-based contract renewal offers at increased market rent levels in exchange for an owner’s or purchaser’s commitment to appropriate continuing affordability restrictions;

• the President and the U.S. Senate and House of Representatives to prevent tenant displacement by providing "enhanced vouchers" to residents of below-market buildings where owners elect not to renew their Section 8 contracts; and
  
• the President and the U.S. Senate and House of Representatives to preserve affordable housing stock by adopting tax policies that specifically encourage the transfer of properties to qualified community-based nonprofit organizations and public agencies, or other purchasers to commit to equivalent long-term affordability restrictions, which demonstrate resident support and commitment to meeting the needs of residents.