By Eugene T. Lowe
February 12, 2007

Along with its regular business of legislative and issue briefings, the Community Development and Housing Committee, chaired by Columbus (OH) Mayor Michael B. Coleman, approved a resolution opposing cuts to public housing subsidies, Section 8 Housing Choice Vouchers, public housing capital funding, HOPE VI, and Homeless Assistance Grants. The emergency resolution was offered by Philadelphia Mayor John Street and amended by Green Bay (WI) Mayor James Schmitt.

In addition to the resolution, the committee heard presentations from Scott Olson, Professional Staff Member to the House Financial Services Committee (chaired by Representative Barney Frank- MA), and Jonathan Miller, Professional Staff Member to the Senate Committee on Banking, Housing and Urban Affairs (chaired by Senator Christopher Dodd — CT). Olson and Miller presented overviews of the housing agenda for the 110th Congress. Josh Silver and Steve O’Connor made presentations on the issue of predatory lending. Silver is Vice President of Research and Policy of the National Community Reinvestment Coalition (NCRC), and O’Connor is Senior Vice President for Public Policy of the Mortgage Bankers Association (MBA).

In presenting the resolution to the committee, Street explained that in late December, HUD sent a letter informing public housing authorities that they would only have 76 percent of the money needed for public housing subsidies. The issue was serious enough to be added to the Conference of Mayors 10-Point Plan developed in a special leadership meeting and presented to House Speaker Nancy Pelosi before the Winter Meeting. In addition to public housing subsidies, there were other housing programs that would be cut in a FY2007 Joint Continuing Resolution (CR) being considered by Congress; the CR proposed funding the programs at FY2006 funding levels. Schmitt amended the resolution to call for funding public housing authorities to perform criminal background investigations. The resolution was unanimously approved by the committee and referred to the Conference of Mayors’ Executive Committee for adoption as organizational policy, which it did January 25.

Miller told the mayors that, “We are facing a real crisis in funding housing and community development programs.” He spoke of the proposed cuts in CDBG and in public housing. Miller also cited the cut in HOPE VI, the severely distressed public housing program, which has been cut close to six hundred million dollars. He focused much of his remarks on predatory lending, which Dodd had talked about in some detail in an address to the mayors at the National Building Museum the previous night. Miller said that predatory lending will be “an area of significant concentration to the committee.” He said that Dodd also has “a real interest in reforming the Federal Housing Administration (FHA), with important protections for people who face foreclosure. The state of Pennsylvania has a good foreclosure emergency loan program. That’s something we want to give a look at as an addition to FHA.” In closing his remarks, Miller returned to the funding of housing and community development programs. He said, “The really big fights happen at the 30,000 feet level. What’s the budget going to look like? What’s the tax policy going to be? That’s where the fights are really won or lost.”

Olson also opened his comments about the administration’s effort “to dismantle most of the critical housing and community development programs, especially the effort to eliminate the CDBG program.” Olson said, “For the most part, we have saved CDBG, but the program has suffered funding cuts.” He said that a hearing will be held by the House Financial Services Committee on hurricane Katrina and the effort to rebuild affordable housing. Another priority for the committee will be the passage of a bill to regulate the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. That bill, Olson said, will include an affordable housing fund that will provide housing assistance for affordable rental and homeownership across the nation. The committee will also look at the issue of the preservation of federally assisted housing. With respect to preservation, Olson said, “One of the cost-efficient ways to make housing available is to hang on to what we have. We will be pursuing a vigorous agenda on that front.” Another project we’ll be working on, Olson said, is how best to coordinate all housing production programs with the housing tax credit program. Olson, like Miller, also returned to the funding of programs to close his remarks. He said, “Why it’s true that there’s limited resources in Washington, when things have strong political support they tend to get funded. The more key legislators, especially on the spending committee, hear from mayors and their local communities that certain programs are priority, there will be funding.”

In the predatory lending briefing, Silver said that there were about seven to eight strong state laws on predatory lending that cover about 20 percent of the American population, leaving 80 percent of the nation without adequate protection. While calling for a strong uniform regulatory framework, Silver said that mayors should not wait for Washington to act. He said, “While we are waiting for Washington to act, there are things mayors can do now.” Mayors can take a close look at what banks are doing in their cities. For example, Dallas has done a study on the number of bank branches in minority neighborhoods. Cincinnati has specifically looked at prime home loans and subprime home loans by income level of census tract. Philadelphia has looked at minority lending of banks that hold the deposits of the city government. All of these studies were done for the cities by the National Community Reinvestment Coalition that could lead to specific city actions to address the problems.

O’Connor said that the Mortgage Bankers Association supports a uniform national standard against predatory lending. There exists now more than 30 state and local anti-predatory lending laws. “For national and regional lenders who are trying to comply with these requirements, costs, legal risks, and regulatory burdens increased costs that are passed on to consumers. Or in some cases, lenders choose not to be in certain markets.” O’Connor said further that, “Markets need economic and legal certainty, uniformity, standardization and predictability to be efficient. If you have one uniform national standard with strong protection, it is one standard for borrowers to be educated, one standard for regulators to enforce, and one standard for the industry to comply with.” O’Connor cautioned against overreaction to the problem of predatory lending. He said several states and localities have had to go back and fix anti-predatory lending laws that have had unintended impacts.

WHEREAS, Mayors are committed to ensuring affordable housing opportunities for low-income families and individuals, including the elderly and disabled, in our nation’s cities; and

WHEREAS, there are a number of programs funded through the Department of Housing and Urban Development that provide a continuum of housing assistance to our nation’s most vulnerable citizens, including public housing assistance, Section 8 housing choice voucher assistance, Section 8 project-based contracts, and Homeless Assistance Grants; and

WHEREAS, the public housing program provides homes for 1.1 million low-income families, over half of whom are elderly or disabled; and

WHEREAS, public housing is a national asset worth over $100 billion; and

WHEREAS, the Public Housing Operating Fund supports the operation of public housing, including maintenance, security, and social services for residents; and

WHEREAS, since 2003, public housing residents have been shorted $1.16 billion in funding for the Public Housing Operating Fund; and

WHEREAS, on December 28, 2006, HUD notified housing authorities that the operating fund would be funded at 76% of the need to run safe, decent housing in calendar year 2007 — a $1.0 billion shortfall; and

WHEREAS, HUD is attempting to implement a new and inflexible Public Housing Operating Fund Rule that will require housing authorities to spend significantly more to operate than under the existing system; and

WHEREAS, the Moving to Work Program has been proven to be successful and enables housing authorities to operate more cost effectively and in accordance with needs of their residents and communities; and

WHEREAS, the Public Housing Capital Fund supports the capital needs of public housing; and

WHEREAS, there is an estimated backlog of capital improvements needs for public housing estimated between $18 and 20 billion; and

WHEREAS, funding allocated by Congress for the Capital Fund has decreased 24% since 2001 despite the burgeoning backlog of capital needs; and

WHEREAS, the HOPE VI program provides grants to local housing authorities to redevelop severely distressed public housing developments by leveraging public and private funds; and

WHEREAS, the proposed fiscal year 2007 HUD budget seeks to eliminate funding for the HOPE VI program; and

WHEREAS, in addition to public housing, the Section 8 HCV Program provides assistance for almost two million families to rent apartments in the private market; and

WHEREAS, ending chronic homelessness requires coordination at all levels of government, together with community institutions to determine how best to provide a continuum of housing opportunities, many of which are provided by the public housing and Section 8 programs, that will enable families and individuals to transition out of homelessness to independence; and

WHEREAS, Congress should include in its Continuing Resolution additional funding and flexibility in fiscal year 2007 for these housing programs to ensure low-income households have the housing assistance they need.

NOW THEREFORE, BE IT RESOLVED The U.S. Conference of Mayors supports full funding of the Operating Fund in fiscal year 2007 at $4.536 billion; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports a delay in the implementation of the Public Housing Operating Fund Rule until the new rule can be tested and proven to be effective; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports full funding of the Capital Fund at $3.5 billion; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports funding the HOPE VI program at $600 million; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports the extension and expansion of the Moving to Work Program under the same terms and conditions to enable housing authorities to respond flexibly to the needs of their residents and local communities and operate more cost-effectively in today’s tight fiscal environment; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports an additional $487 million to the Section 8 housing choice voucher account over the renewal of the fiscal year 2006 funding level to in order to enable housing authorities to maintain existing vouchers; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports an additional $636 million to the Section 8 project-based contracts account over the renewal of the fiscal year 2006 funding level to in order to prevent the termination of more than 107,000 project-based section 8 units; and

BE IT FURTHER RESOLVED The U.S. Conference of Mayors supports an additional $185 million to the Homeless Assistance Grants account over the renewal of the fiscal year 2006 funding level to alleviate the plight of more than 14,000 homeless individuals.

BE IT FURTHER RESOLVED The U.S. Conference Mayors supports funding for housing authorities to perform criminal background investigations for public housing and the Section 8 Housing Choice Voucher program.