APPROPRIATIONS UPDATE: HOUSE AND SENATE MOVE UP DATES FOR
SUBCOMMITTEE MARK-UP FOR HUD/VA/IA BILLS
On June 28, 1999—In a surprise move, both the Senate and House Appropriations VA-HUD sub-committees have announced their intentions to speed up the mark-up dates for the fiscal year
2000 VA-HUD appropriations bills. Originally anticipated not to take place until late August or
early September, it was revealed that in the Senate the committee mark-up has been tentatively
scheduled for the week of July 11, 1999. The House VA-HUD sub-committee is planning to hold
it's mark-up hearing on the 19th of July. Both sub-committees hope to report out their VA-HUD
funding bills to their full Appropriations Committees by July 23, 1999. Obviously, this sudden
schedule change leaves precious little time for organizing effectively to protect CDBG, HOME,
and related programs from previously discussed 11-14% across the board budget cuts being
considered for the FY 2000 HUD-VA appropriation. New information suggests that cuts to
HUD programs could go even deeper. Based on information from the leadership of the sub-committee, staff has been directed to increase medical benefits for veterans, and fully fund
Section 8. This leaves other programs for the chopping block. As we have seen in the past, the
bigger the program the larger the cut. This could only be CDBG. According to Senate staff, a 40
% cut would not be out of the realm of possibility. We still don't believe cuts of this magnitude
will materialize.
The House Appropriations Committee is expected to approve slightly revised discretionary
spending allocations to it 13 subcommittees. The committee has found about $3.4 billion to add
to some of the allocations. The money comes from reductions in other subcommittees' spending
allocations and from lawmakers' recent realization that accelerated government sales of broadcast
spectrum will produce an additional $2.6 billion in revenue. The Department of Interior will be
the major beneficiary of these funds. A $2.7 billion increase will help, but not guarantee passage
on the House floor. A $650 million "chunk" will be put in reserve for other spending bills to be
named later. This new allocation is part of the House GOP leadership's strategy to make some of
the spending bills easier to pass by shifting money into them from less contentious spending
measures. Among those that have seen initial allocations reduced are Military construction, at
$299 million; transportation (HR 2084), $300 million; and agriculture (HR 1906), $106 million.
These new allocations will not devote more money to the two spending bills considered least
likely to pass under the initial allocations — Labor/HHS and HUD/VA. Those bills are slated to be
trimmed by $10.7 billion and $5.7 billion, respectively, from fiscal 1999 levels. House leaders
have promised to dramatically increase the pace of action on spending bills after next week's
Fourth of July recess.
During the first week back, five Appropriations subcommittees tentatively are scheduled to mark
up their bills, including Labor/HHS and Defense. The other bill slated for markup that week
cover foreign operations, energy and water development and the District of Columbia. The two
remaining spending bills — HUD/VA and Commerce/Justice/State — are expected to be marked up
by subcommittees during the following week, July 12-16. Only two appropriations bills await full
committee markups in the Senate — HUD/VA and Labor/HHS. Both of these markups could take
place during the week of July 12-16.
NCDA's Strategy to Address Potential Cuts
In the coming weeks NCDA will be working vigorously with allied organizations and advocacy
groups — NAHRO, NACCED, NACO, ALHFA, COSCDA, the National League of Cities, and the
U.S. Conference of Mayors — to make sure members of Congress understand what the kinds of
draconian cuts being bandied about on Capitol Hill will mean to vital CDBG/HOME sponsored
programs and services in the communities they represent. Some of our plans include, coordinating
with the U.S. Conference of Mayors to ensure that CD practitioners from key cities and regions
participate in Hill visits with their mayors in order to rally support for CDBG/HOME funding;
working with the National Priorities Project on the Federal Budget to distribute information kits
to key appropriators detailing exactly what the proposed cuts will do to the health of
CDBG/Home sponsored initiatives in their states and/or congress-ional districts; and joining with
a host of other advocacy groups in attempts to dissuade Congress from using savage cuts in
needed "human infrastructure' programs to finance other budget activities.
At this crucial time in FY 2000 appropriations process it is very important that Senate and House
appropriators and all other members of Congress hear from NCDA members and their respective city governments early and often about why it is essential for Congress not to slash
funding for CDBG, HOME, and related programs. As we all know, the well being of the nation's
most vulnerable families is dependent on the continued strength of these programs.
WHITE HOUSE PROJECTS A $1 TRILLION SURPLUS OVER THE NEXT 15 YEARS;
REPUBLICANS EYEING A TAX CUT MEASURE
President Clinton has announced, based on recent projections developed by the White House, that
the budget surplus over the next 15 years will be $1 trillion. These new numbers have been
released just days prior to the release of the Congressional Budget Office's projections, scheduled
to be released on July 1. For FY 2000, the President projects a $99 billion surplus; a $94 billion
Social Security surplus and a $5 billion non-Social Security surplus (the first such surplus in four
decades). Clinton proposes to use the surplus to pay down the national debt, keep Social Security
solvent through 2053, bolster Medicare, and increase spending on defense and domestic
programs.
This rosier budget scenario is already prompting Republicans to craft a tax bill. House
Republicans have released their framework for a tax measure. The tax cut proposal includes a 15-year phase-out of the marriage penalty tax, gradual elimination of the estate tax, reduction in the
capital gains tax, allowing self-employed persons to deduct all health insurance costs, making
permanent the research and experimentation tax credit, and addressing the growing alternative
minimum tax. Some Democrats have already said that President Clinton will not sign such a
measure. The budget resolution requires the House Ways and Means Committee to move a tax
bill by July 16 and the Senate Finance Committee to move its version by July 23. The House
Ways and Means has tentatively scheduled a July 14 markup.
House and Senate appropriators would like to see the non-Social Security surplus used to ease
the squeeze on spending bills created by the discretionary spending caps. The Labor-HHS-Education bill and the VA-HUD-Independent Agencies bill have been hit especially hard this year
with cuts. Cuts to the VA-HUD-IA appropriations bill range from 8% on House side to 14%
from the Senate. A budget surplus could assist in increasing funding for these two bills and
reducing the chances of a showdown by Congress and the Administration over passage.
CBO BUDGETARY SURPLUS SIGHTLY LESS ROSY THAN THE PRESIDENT'S
The Congressional Budget Office released its end of the fiscal year projections at $996 billion
over the next 15 years. This figure is slightly less optimistic than that of the President however,
the fiscal 1999 surplus is estimated at $120 billion and $161 billion for fiscal 2000. This would
assume approximately $14 billion non-social security surplus for fiscal 2000. Obviously, both
Democrats and Republicans want to use this extra revenue for their own benefits. The
Republicans would like to see an even larger tax cut, and the Democrats would like to use the
surplus to increase the budget caps on domestic spending. Still, with additional resources found
by the budget scrubs and holding newly passed spending bills under the caps, the surplus may
provide the Congress with the means to save itself and get all 13 spending bills passed before the
end of the fiscal year. There is still hope for HUD and HHS programs.
THE FINANCIAL MODERNIZATION BILL (HR 10) GOES TO THE HOUSE FLOOR
JULY 1
H.R. 10, the financial modernization and reform bill which greatly expands the size and function
of banks in the United States without simultaneously expanding the Community Reinvestment
Act, will come to the floor of the House of Representatives for a vote on Thursday, July 1.
Representatives Luis Gutierrez (D-IL) and Thomas Barrett (D-WI), among others, have
amendments ready to be offered which would substantially strengthen H.R. 10. However, it will take much effort to convince the House Rules Committee to allow any pro-consumer and
pro-Community Reinvestment Act amendments to be offered on the House floor during consideration of H.R. 10 on July 1.
The Pro-Community, Pro-CRA Amendments
- An amendment authored by Representatives Gutierrez and Barrett would apply the
Community Reinvestment Act to banking and lending activities of a bank holding
company's non-bank affiliates (such as securities firms and insurance and mortgage
companies). This amendment seeks to expand the CRA to cover the new kinds of
institutions created by H.R. 10.
- An amendment authored by Representatives Barrett, Gutierrez and Engel would require
homeowner, auto and small business insurance companies that are part of financial holding
companies to report various information (including census tract data on the race, national
origin, gender and income level of applicants).
Action Needed
- If your Representative is on the House Rules Committee, contact him or her and urge that
the two Gutierrez-Barrett amendments be offered on the House floor during consideration
of H.R. 10. Members of the House Rules Committee: Republicans: Dreier (CA), Goss
(FL), Linder (GA), Pryce (OH), Diaz-Balart (FL), Hastings (WA), Myrick (NC), Sessions
(TX), and Reynolds (NY); and Democrats: Moakley (MA), Frost (TX), Hall (OH), and
Slaughter (NY).
- Call your Representative. Ask him or her to vote against H.R. 10 if the Gutierrez-Barrett
amendments are not adopted as part of H.R. 10. Also, urge him or her to vote against any
anti-CRA amendments that may be offered on the House floor. (It is possible that the
House Rules Committee will allow votes on anti-CRA amendments and not on pro-CRA
amendments during consideration of H.R. 10.) All U.S. Representatives can be contacted
through the Capitol Switchboard at 202/224-3121.
If passed, the next step for H.R. 10 is a conference committee with the Senate. The Senate bill, S.
900, is far worse than H.R. 10. But, without improvements, H.R. 10 is disastrous for the
Community Reinvestment Act. The CRA provides for federal banking agencies to evaluate
lending institutions on how well they meet the credit and capital needs of all the communities in
which they are chartered and from which they take deposits.
SUPPORT SOUGHT FOR THE LOW-INCOME HOUSING TAX CREDIT AND THE
PRIVATE ACTIVITY BOND
Several bills have been introduced in Congress this year to increase the Low-Income Housing Tax
Credit and the Private Activity Bond. H.R. 175, introduced by Rep. Nancy Johnson (R-CT) and
Rep. Charles Rangel (D-NY), and S. 1017, introduced by Senator Connie Mack (R-FL) and
Senator Bob Graham (D-FL) would amend the Internal Revenue Code of 1986 to increase the
State ceiling on the low-income housing tax credit. H.R. 175 currently has 325 co-sponsors in the
House, while S. 1017 has 62 co-sponsors in the Senate.
H.R. 864, introduced by Rep. Amo Houghton (R-NY) and Rep. Richard Neal (D-MA), and S.
459, introduced by Senator John Breaux (D-LA) and Senator Orrin Hatch (R-UT), would amend
the Internal Revenue Code of 1986 to increase the State ceiling on private activity bonds. The
low-income housing tax credit and the private activity bond have created hundreds of thousands
of affordable housing units since 1986. Yet, neither of these resources have been increased since
their inception. The legislation that is making its way through Congress would increase the cap
on the private activity bond from its current level of $50 million per capita or $150 million per
state to the greater of $75 per capita or $225 million per state and would increase the volume cap
of the low-income housing tax credit from $1.25 per capita to $1.75 per capita per state. The
legislation would index both the private activity bond and the tax credit for inflation.
SENATE HOLDS HEARING ON SECTION 8
The House Subcommittee on Housing and Transportation held an oversight hearing on June 30
on the preservation of expiring Section 8 contracts. Witnesses included Senator Grams (R-MN),
Senator Kerry (D-MA), Senator Jeffords (R-VT), Senator Bond (R-MO), Rep. Lazio (R-NY),
Rep. Frank (D-MA), and William Apgar, FHA Commissioner for HUD. The hearing focused
primarily on the issue of owners opting-out of the Section 8 program. Some owners of federally
assisted housing are choosing not to renew their Section 8 contracts when they expire or are
choosing to prepay their FHA-insured mortgages early in order to place their units on the market
to receive higher rents. Owners who opt-out do so because they are located in markets where
they can charge higher rents for their units or they are located in tight rental markets where the
availability of housing is minimal. HUD estimates that approximately 60,000 units of assisted
housing have been lost since 1996 due to owner opt-out of the program and/or early prepayment
of their mortgages. Some of the witnesses chided HUD for focusing too much on proposing new
programs within its FY 2000 budget, instead of focusing on preserving assisted housing.
Chairman Allard (R-CO) noted in his opening statement that HUD has responded slowly to the
crisis of expiring Section 8 contracts. A full 20 months has passed since Congress passed the
Multifamily Assisted Housing Reform and Affordability Act of 1997 and HUD has been slow to
develop the Mark-to-Market Program to avert the thousands of Section 8 units that are expiring
monthly. This Act included a provision for HUD to raise rents on Section 8 properties in order to
prevent opt-outs by owners.
To respond to this crisis of owners opting-out of their Section 8 contracts, Senators Kerry,
Grams, Sarbanes, and Wellstone will introduce the "Housing Opportunities Preservation and
Promotion Act of 1999" on July 1. The legislation focuses upon three major strategies: (1)
requiring HUD to make matching grants to states to promote partnerships between federal, state
and local governments, and the private sector in the preservation, rehabilitation, or operation of
affordable housing for low-income Americans; (2) requiring owners of assisted housing to waive
their prepayment rights and agree to renew their Section 8 contracts for a minimum of 15 years;
and (3) increasing the opportunity for non-profit groups to acquire these projects from owners.
Senator Kerry noted that although the focus on the preservation of affordable housing, there
should also be a focus on the production of new affordable housing across the country. "We need
to find ways to construct new, affordable, multifamily housing for low-income and working
families, and we need to fund the 100,000 additional vouchers we authorized in last year's public
housing bill," Kerry said. Kerry also called for the restoration of the $350 million taken from the
Section 8 reserve account earlier in the year to fund part of the FY 1999 emergency
appropriations bill. Kerry noted that with the deep cut to the VA-HUD appropriations being
proposed, this and other additional funding will be needed to fund Section 8 this year and in
coming years.
Senator Bond was particularly disappointed with HUD's inability to put in place procedures to
renew expiring Section 8 contracts. Bond noted that over 14,000 assisted housing projects will
expire in the coming years and HUD's lack of capacity to deal with this issue is not acceptable.
An estimated 3,000 assisted units are lost each month because of HUD's inability to implement
and administer the Mark-to-Market Program, Bond noted. Bond also criticized HUD for having
poor data on the number of opt-outs. Bond said that under his leadership, the VA-HUD-IA
Subcommittee will recommend full funding of Section 8 in FY 2000, but additional funds will be
needed in order to protect HUD's remaining programs. Kerry said the discretionary budget caps
will have to be increased because the VA-HUD-IA Subcommittee has a $7.5 billion gap from last
year.
HUD began implementation of an initiative two months ago to prevent opt-out by owners,
William Apgar said. The program focuses upon providing five year Section 8 contracts, instead
of the current one year contracts, to owners of these properties in order to entice them to remain
in the Section 8 program.
HUD has estimated that $100 million is needed for Section 8 opt-outs, while some on the hill
estimate the number at $800 million. Chairman Allard questioned HUD on this discrepancy
during the hearing. William Apgar told the Subcommittee that HUD is focusing upon those
projects most likely to opt-out (i.e., good, quality projects that are located in tight rental markets).
Apgar noted that many of the owners who can opt-out of the program won't because their
projects are either located in soft markets or their properties are in poor condition and will not
rent-up.
HUD NEWS
HUD ANNOUNCES "SWEAT EQUITY" PROGRAM AWARDS
Andrew Cuomo announced $20 million in awards to help low-income families become
homeowners through their direct participation in building and rehabilitating their prospective
home. The Self-Help Homeownership Opportunity Program (SHOP) enables families to become
homeowners with an investment of "sweat equity" — contributing their own labor and receiving a
subsidy to lower the price of their home in return. The grant funds will go to the following
organizations to distribute the funds: (1) Habitat for Humanity — $12.4 million; (2) Housing
Assistance Council of Washington, D.C. — $6 million; (3) Northwest Regional Facilitators of
Spokane, WA — $785,000 — this group will primarily serve people in Washington State, Idaho,
Oregon and Montana; and (4) ACORN Housing Corporation of Chicago — $750,000 — This
group will distribute funds to more than 70 homebuyers in Chicago, Little Rock, New York City;
and Phoenix.
HUD ANNOUNCES GRANTS FOR RURAL HOUSING AND ECONOMIC
DEVELOPMENT
A total of $25 million has been awarded to rural communities in 29 states and Puerto Rico to
create jobs, spark economic development, build and improve housing in rural areas. HUD
received around 700 applications for the funding. The grants awarded through this new program
will go to rural non-profit organizations, Native American tribes, community development
corporations, state housing finance agencies, and state community development agencies. The
grants will go to recipients in the following states: Alabama, Alaska, Arizona, California, Florida,
Idaho, Indiana, Iowa, Louisiana, Maine, Maryland, Michigan, Minnesota, Montana, Nebraska,
Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon,
Puerto Rico, South Carolina, Texas, Virginia, Washington, West Virginia, and Wisconsin.
BEST PRACTICES SYMPOSIUM, JULY 20-24 IN KANSAS CITY, MISSOURI
HUD will be sponsoring its 3rd annual Best Practices Symposium on July 20-24, 1999 in Kansas
City, Missouri. This year the symposium will feature all of HUD program areas for best practice
awards. Accommodations and information are available on the web at
http://www.hud.gov/bestpractices.html or by calling 1-877-747-3861.
NCDA staff will be attending the conference in order to report on successful CDBG initiatives. If
there are any Best Practices topics or issues of special concern that member communities would
like to receive reports on, please contact Chandra Western and Romulus Johnson as soon as
possible so that they might plan their conference panel schedules accordingly.
NCDA NOTES
NCDA CELEBRATES THE 25TH ANNIVERSARY OF THE CDBG PROGRAM
Ten Cities, Laurence Wagner Receive "Excellence in CDBG" Award
On Saturday, June 5, 1999, during its annual meeting in Washington, D.C., NCDA hosted a gala
celebration recognizing the 25th anniversary of the creation of the Community Development Block
Grant program. At the gala, ten cities and Laurence Wagner of L. Wagner and Associates in
Waterbury, CT received "Excellence in CDBG" awards. The municipal awardees were selected
based on their success in administering CDBG at a high level and their participation in 25th
anniversary promotional activities. Laurence Wagner was singled out for special commendation
because of the outstanding effort and firm dedication he has displayed in encouraging towns and
small communities to stage events commemorating CDBG's 25th anniversary.
East coast cities that received awards include Fall River, MA; Perth Amboy, NJ; Pittsburgh, PA;
and Jacksonville, FL. From west of the Mississippi, Rockford, Il; Beaumont, TX; Davenport, IA;
Denver, CO; Tucson, AZ; and Seattle, WA all received honors.
Noteworthy CDBG programmatic accomplishments realized by the gala honorees run the gambit
from programs which consistently and successfully increase home ownership among low income
families to the creation of neighborhood study centers to enhance student performance. In the
spirit of heralding all the good things CDBG has done to improve the lives of millions of
Americans during its 25 years, in this and subsequent issues of the Washington Report some of
the many wonderful CDBG funded activities currently taking place in the communities that were
recognized at the gala will be highlighted. This week's spotlight awardees hail from regions I, II,
and III.
- Fall River, MACDBG funds are being put to work on behalf of needy children in the
city's Child Development Center. To help insure that these children have the opportunity
for quality employment when they grow up, the Fall River Community Development
Agency is also directing CDBG dollars toward the redevelopment of the city's old airport
and defunct Kern Mill into a new commercial business park and research facility.
- Perth Amboy, NJThe Perth Amboy Housing Development Corporation (PAHDC)
achieved its highest rate of affordable housing support ever last year. With CDBG funds,
PAHDC was able to provide $1,171,447.00 worth of funding to 175 units of affordable
housing. Better still, PAHDC has won approval to commit future CDBG dollars toward
the design and construction of the city's first brand new affordable housing units in ten
years. In tandem with its new construction projects, The New Jersey Office of Housing's
Department of Community Affairs has awarded PAHDC a housing scholar. A trained
architect and design specialist, the housing scholar will help PAHDC to develop some of
the highest quality new affordable housing stock in the country.
- Pittsburgh, PAGrants and loans to rehabilitate elderly housing and provide for the
construction of rental units for the disabled are just some of the ways CDBG is making life
better for people in Pittsburgh. On the promotional front, Pittsburgh combines its
shrewd use of CDBG dollars with an educational campaign to raise public awareness
about the positive impact of CDBG in the neighborhood. In addition to distributing
commemorative postcards and posters to every business and community group that
directly benefits from CDBG, Pittsburgh has placed a CDBG 25th anniversary exhibit in
the city/county building.
CDBG 25th ANNIVERSARY/NATIONAL CD WEEK PRODUCTS INFORMATION
CDBG 25th Anniversary products are still available to assist communities with their celebrations.
Please note that 25TH ANNIVERSARY LOGO STICKERS ARE STILL AVAILABLE for
purchase at $100 per roll of 1,000 stickers. NCDA has depleted its supply of CDBG postcards
and posters. T-shirts, hats, mugs, sweat-shirts, tote-bags and puzzles are still available. It will
take approximately 14 days to receive products.
PUBLICATIONS ON THE INTERNET: UPDATE
Enclosed with this newsletter is the new membership dues schedule for the period July 1, 1999
through June 30, 2000. Please note that NCDA members who wish to continue receiving the
NCDA WASHINGTON REPORT via regular mail will incur an additional charge of $250. For
those members who will be accessing the newsletter via the internet and have not established
permanent user IDs and passwords, the NCDA website address is
http://www.ncdaonline.org/members/asplogin/input.asp. The temporary user ID and password is
"temporary" in both fields, after which you will be prompted to another screen to input your
permanent information.
Please complete the enclosed form and return it to NCDA. If you have questions, please contact
Michael Lightfield or Carla Sauls at (202) 587-2772.
NCDA WELCOMES ROMULUS JOHNSON
Romulus Johnson recently joined the NCDA staff as a Legislative Assistant, focusing on
economic development, housing, and technology related concerns. Before coming to NCDA,
Romulus completed a five month internship with CDTI in Newport, Rhode Island. Prior to
entering the world of community development advocacy, Romulus occupied himself with earning
a joint B.A. degree in English Literature and Political Science from Lewis & Clark College in
Portland, Oregon and an Masters Degree in English Literature from Princeton University.
Romulus can be reached directly at 202-887-5536
FEDERAL REGISTER NOTICES
June 23, 1999. Pet Ownership in Public Housing. This proposed rule would establish pet
ownership requirements for residents of public housing other than federally assisted rental housing
for the elderly or persons with disabilities.
June 23, 1999. Public Housing Agency Organization; Required Resident Membership on
Board of Directors or Similar Governing Body. This proposed rule would implement section
2(b) of the U.S. Housing Act of 1937. Section 2(b) requires, with certain exceptions, that the
membership of the board of directors or similar governing body of a public housing agency must
contain not less than one member who is directly assisted by the public housing agency.
June 17, 1999. Tenant Participation in Multifamily Housing Projects. This proposed rule
would amend HUD's regulations for tenant participation in multifamily housing projects. The
proposed rule would expand the number of categories of multifamily housing projects in which
tenants have the right to establish and operate tenant organizations. The rule would also clarify
the requirements for establishing and operating a tenant organization.
NCDA ANNUAL MEMBERSHIP DUES SCHEDULE
Affiliate Members: | $2,500.00 |
|
Alumni Members: | $450.00 |
|
Non-Entitlement Members: | $375.00 |
|
Subscriber Members: | $375.00 |
|
|
Entitlement Members: |
|
POPULATION | ON LINE | HARD COPY |
|
Under 50,000 | $550.00 | $ 550.00 |
|
50,000 - 100,000 | $875.00 | $1,125.00 |
|
101,000 - 250,000 | $1,440.00 | $1,695.00 |
|
251,000 - 500,000 | $1,865.00 | $2,115.00 |
|
Over 500,000 | $3,210.00 | $3,460.00 |
|
|
Subscriber Member: | An additional department within an existing NCDA member community. |
|
Alumni Members: | Individuals previously employed in the community development and/or housing
administrator capacity of an active NCDA member community. |
|
Affiliate Members: | State Community Development Agencies |
|
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NAME:_____________________________________________________________
COMMUNITY:______________________________________________________
______ I wish to receive the NCDA WASHINGTON REPORT online. My permanent user ID and
password is __________________________
______ I do not wish to receive the NCDA WASHINGTON REPORT via online. I understand that an
additional increase in the amount of $250 will be added to my membership dues.
Please print, fill out and fax to 202.887.5546
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JOB OPPORTUNITIES/ATTACHMENTS
