CONGRESS PASSES HOUSING REFORM LEGISLATION.

Includes Occupancy Standards, Resident-Based Section 8 Reforms, and Pet Policies

After three years of political stalemate, President Clinton signed comprehensive housing reform (P.L. 105-769) into law on October 21. The reform measure (H.R. 2) was attached to the FY99 appropriations bill (H.R. 4194) for the U.S. Department of Housing and Urban Development (HUD) and represents a major legislative victory for the National Apartment Association (NAA)/National Multi Housing Council (NMHC) Joint Legislative Program and the apartment industry in the areas of occupancy standards, resident-based Section 8 reforms, and pet policies.

At the urging of an industry coalition led by NAA/NMHC, the legislation clarifies the family occupancy standards to be used by HUD for complaints of familial status discrimination under the Fair Housing Act. HUD is directed to issue, without modification, the "Keating Memorandum" as the policy of HUD in the Federal Register not more than 60 days after the passage of the bill. The Keating Memorandum outlines a two-person per-bedroom occupancy standard as presumptively reasonable, subject to modification for large or unusually configured apartment homes. HUD is also expressly forbidden from issuing any national occupancy standard.

The bill also makes the repeal of onerous provisions in the resident-based Section 8 program permanent. NAA/NMHC representatives have testified before Congress several times urging the elimination of the program's "take-one, take-all," "endless lease," and "90-day notice" provisions. A controversial provision that would have required owners of privately owned, federally assisted housing to allow residents to own pets was eliminated. As passed, the Act will allow public housing residents to own and keep pets, but it does not extend the right to residents in assisted or insured housing. Finally, NAA/NMHC successfully lobbied to reduce the advance notice to residents required from owners who wish to prepay Section 236 and 221(d)(3) mortgages from 12 months to five.

For the first time in four years, new Section 8 vouchers were funded, as H.R. 4194 authorizes 90,000 additional vouchers in FY99. The landmark legislation also seeks to eliminate the geographic concentration of poverty in federally assisted housing by encouraging mixed-income communities. Public housing managers will now be able to admit households with annual incomes of up to $35,000. At least 75 percent of Section 8 vouchers and 40 percent of public housing, however, will continue to be reserved for households whose incomes are below 30 percent of the area median income.

Information compiled by NAA/NMHC Joint Legislative Staff. Senior Vice President Clarine Nardi Riddle; Vice President of Tax Jim Arbury; Vice President of Property Management Jay Harris; Vice President of Environment Eileen Lee; Vice President of Housing and Finance Stephen Leftkovits; and Vice President of Building Codes Ron Nickson.

RELATED ARTICLE: ROMEX WIRE RULING CHALLENGED

NAA/NMHC and the American Association of Seniors Housing (ASHA) continue to appeal the decision by the National Fire Protection Association (NFPA) to retain the restriction in the National Electrical Code (NEC) on the use of non-metallic sheath electrical wiring in multifamily buildings four or more stories high; NAA/NMHC/ASHA's engagement on this issue began three years ago when the organizations submitted a proposal to revise the NEC to allow the use of non-metallic sheath electrical wiring in sprinklered buildings. This proposal, initially approved in concept by the NFPA Technical Committee, was later rejected by the same committee and finally disapproved by the full NFPA membership at its 1998 annual meeting in May.

NAA/NMHC/ASHA and Avalon Bay Communities, Inc. challenged the May action with an appeal to the NFPA Standards Council. That appeal was rejected in August. NAA/NMHC/ASHA and Avalon Bay filed a second appeal to the NFPA board of directors, which remains unresolved. An additional appeal has also been filed with the American National Standards Institute (ANSI) requesting ANSI to withdraw its accreditation of the NEC based on NAA/NMHC/ASHA's technical and procedural concerns about action taken by the NFPA Technical Committee, Technical Correlating Committee, and Standards Committee. The appeal also claims that the multifamily industry has been directly and materially affected, raising concerns about restraint of trade. The NEC restriction on the use of nonmetallic sheathed cable, which forces the use of Romex cable in garden and mid- and high-rise apartments, is a costly one. In non-union areas, the use of Romex cable adds approximately $895 to a new garden apartment and $1,400 to a mid-or high-rise unit. In union areas those costs increase to $2,500 per garden unit and $3,750 for mid-and high-rise units.