COMMUNITY DEVELOPMENT AND HOUSING COMMITTEE

WHEREAS, the U.S. Conference of Mayors has been at the forefront on pressing the U.S. Department of Housing and Urban Development (HUD) and Congress for the preservation and expansion of Section 8 and other affordable housing; and

WHEREAS, despite experiencing the greatest economic expansion in history, worst case housing needs have reached an all-time high of 5.4 million families in 1997; and

WHEREAS, HUD funding for affordable housing production has been drastically reduced and the 1986 tax reform law greatly slowed the production of market rate multi-unit housing; and

WHEREAS, during 1999, HUD announced an emergency policy initiative (Notice HUD H99-15) to provide higher contract rent renewal offers to owners of certain below-market properties with expiring contracts; and

WHEREAS, Congress ultimately codified this "mark up" policy in law, along with new authority for HUD to preserve other expiring properties ineligible for funding under the law’s specific criteria and for HUD to provide "enhanced vouchers" that protect tenants facing market-rate conversions through prepayments and opt-outs; and

WHEREAS, Congress is still considering proposed legislation that would provide additional federal funds on a matching basis to state and local government to preserve existing federally subsidized or assisted housing; 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 FY 1998-2002 to renew all expiring Section 8 tenant-based and project-based contracts and units, and Congress has provided sufficient annual appropriations for that purpose; and

WHEREAS, the Administration’s FY 2001 budget projects a need for approximately $13 billion in new budget authority to renew all expiring Section 8 project-based and tenant-based contracts on approximately 2.6 million units and provide tenant protections where contracts are terminated, including sufficient to preserve some below-market properties by "marking up" rents to market levels and to protect tenants with "enhanced vouchers";

WHEREAS, the Administration’s FY 2001 budget also requests Congress to fund 120,000 incremental vouchers to meet growing affordable housing needs, 10,000 of which are proposed to be allocated to States for distribution with Low-Income Housing Tax Credits to secure units for very low-income tenants; and

WHEREAS, the Administration announced in March a unanticipated $5 billion surplus of FHA insurance funds, and the President request that HUD develop recommendations on how to use these funds to strengthen federal housing programs and expand affordable opportunities,

NOW, THEREFORE, BE IT RESOLVED, that the U.S. Conference of Mayors commends HUD and Congress’ leadership for working together with USCM and the housing community in taking recent steps to preserve existing affordable housing, and strongly urges:

• The Congress to provide full funding in FY 2001 of the Administration’s estimated $13 billion in budget authority needed for Section 8 contract renewals, plus any additional funds required to carry out any other policies adopted by Congress to preserve affordable housing and protect tenants, without diverting any resources from the CDBG, HOME, public housing or other important housing and community development programs;

• The President, the Congress, and HUD to enact "matching grant" authority and funding, and any additional policies that are necessary to implement and supplement these new policies to preserve existing affordable housing;

• The President, the Congress, and HUD to adopt a Section 8 production program that provides at least 10,000 units of project-based assistance to any eligible state or local allocation agency for distribution with Low- Income Housing Tax Credits, targeted to extremely low-income families in areas of high need for such affordable housing;

• The President, the Congress, and HUD to adopt a preservation priority in developing policies for using the $5 billion FHA fund surplus, fully addressing the preservation needs of the existing and former FHA multifamily portfolio at risk of loss from market forces, foreclosure or capital deterioration, using tools such as mortgage write-downs, additional credit enhancement, up-front grants and operating subsides for rehabilitation or acquisition by qualified preservation purchasers;

• The President and the Congress to identify additional federal resources to stimulate affordable housing production, including the development of a national housing trust fund; and

The President and the Congress 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 residents support and commitment to meeting the needs of residents and make changes to the tax code which would encourage production of multi-unit development.