The New Congress' Effect on the Industry.

Now that the elections are over, NAA/NMHC's legislative analyst will tell you how the new Congress' composition will affect the multifamily housing industry.

Apartment industry professionals are certain to wonder how the composition of the 107th Congress and the introduction of new federal lawmakers may affect our legislative priorities and accomplishments. With Republicans holding bare majorities in the House of Representatives and an evenly divided Senate, there is substantial likelihood of escalating partisanship, compounded by the election of a president who will govern, at least initially, with no clear mandate. Therefore, the quick passage of new initiatives will be extremely difficult.

The NAA/NMHC Joint Legislative Staff expects to continue advocacy on a number of issues that, as of press time, remained unresolved by the 106th Congress. Legislation important to the apartment industry may be even more difficult to pass during the 107th Congress, and will necessitate not only cooperative efforts, but grassroots involvement. NAA/NMHC expect to revisit many issues, including Lead-Based Paint, Bankruptcy Reform, the Low Income Housing Tax Credit, and Forced Access. The Joint Legislative Staff will also be tracking, among others, initiatives proposed late in the second session of the 106th Congress, such as the creation of a housing trust fund from the Mutual Mortgage Insurance Fund surplus and reform of the Housing Choice Voucher Program, previously the tenant-based Section 8 Program. Finally, we need to advocate our goal of a balanced national housing policy before a new administration and restructured Congress. Resolution of this agenda depends largely on the success of an evenly divided Congress working together.

Challenges Ahead

The composition of the 107th Congress presents a challenge to the apartment industry for several reasons. First, the narrow GOP margins in both chambers indicate even more than usual the need for bipartisan coalitions in passing legislation. The key to effective governing invariably now rests in the hands of centrists from both parties. NAA/NMHC have a track record of garnering centrist swing votes on important issues. Most notably, these swing votes enabled the defeat of a Senate Amendment to last session's Bankruptcy Reform bill that was hostile to the industry.

Second, the impact of losing several longtime industry supporters due to retirement and other reasons will certainly alter the environment we work in on Capitol Hill. However, with the 95 percent rate of incumbent re-election, many longtime allies remain in office and there are some potential new allies among the House and Senate freshman classes.

With their slim majority, the GOP will continue to set the legislative agenda in both houses, as well as control committee chairmanships, particularly important in the House where self-imposed term limits have opened the leadership positions on all committees. The following is an analysis of how changes in Congress will affect NAA/NMHC's legislative agenda.

The Senate

In the Senate, moderate Republicans from the Northeast, such as Sens. Olympia Snowe (Maine), Lincoln Chafee (R.I.), and Jim Jeffords (Vt.), will find themselves strongly courted by Democrats. Centrist Democrats, including Sens. Dianne Feinstein (Calif.), John Breaux (La.) and John Edwards (N.C.), all of whom NAA/NMHC have successfully worked with in recent months, will be courted by Republicans.

In addition to Bankruptcy Reform, where NAA/NMHC's posture was preserved by crossover votes, these swing votes will be important to a major initiative advocated by NAA/NMHC: reform of the Section 8 Housing Choice Voucher Program. Section 8 reform was proposed late in the 106th Congress by Sen. Wayne Allard (R-Colo.) and his bill included provisions advocated by NAA/NMHC. It is our belief that these reforms, which improve administration of the program will appeal to centrist, pro-business Democrats. Because these reforms preserve affordable housing while making resident-based programs more palatable to private rental housing providers, there is every reason to believe such support can be harnessed.

Crossover Votes May Change Senate Dynamic

There may also be crossover votes from Senate newcomers. The election of moderate Democratic Delaware Gov. Tom Carper may slightly soften the blow of Sen. William Roth's (R-Del.) defeat. Roth, the chairman of the Senate Finance Committee, was a friend of the industry. Assuming his chairmanship will be Charles Grassley (R-Iowa), who has generally been supportive of tax policy and bankruptcy reform favoring the real estate industry. Meanwhile, a review of Carper's record reveals a Democratic Governor with a conservative leaning who administered generous tax cuts and may be an ally for industry-advocated tax policy.

Other than Grassley's possible chairmanship of the Finance Committee, NAA/NMHC do not expect changes in Senate committee chairmanships. Sen. John McCain will continue as Chair of the Senate Commerce Committee, where telecommunications and other industry issues will be addressed. We expect Sen. Ted Stevens (R-Alaska) will still Chair the Appropriations Committee, where Sen. Christopher Bond (R-Mo.) will hold the Chairmanship of the VA-HUD Subcommittee. Sen. Bond is a longtime industry ally who has supported the industry position on Bankruptcy Reform and the need for assisted housing reform. Sen. Orrin Hatch (R-Utah) will remain Chair of the Senate Judiciary Committee, where Bankruptcy Reform will continue to be debated.

Finally, Sen. Phil Gramm (R-Texas) is expected to retain control of the Banking Committee, continuing to provide a positive environment for the real estate industry. However, Sen. Paul Sarbanes (D-Md.) may leave his position as Ranking Member of the committee for a seat on the Foreign Relations Committee. Replacing Sen. Sarbanes as Ranking Member would likely be Sen. Christopher Dodd (D-Conn.) who would need to be actively lobbied regarding our agenda on Housing Choice Voucher Reform.

Apartment industry professionals should also be aware of two open seats on the Housing Subcommittee of the Senate Banking Committee. The defeat of Rod Grams (R-Minn.) and the retirement of Richard Bryan (D-Nev.) will result in a reconstitution of the Housing Subcommittee which will affect the agenda taken up by its members, the mark up of bills referred to it, and the floor recommendations the subcommittee issues. NAA/NMHC will closely monitor the recomposition of the subcommittee in an effort to have our legislative priorities incorporated in its agenda.

The House of Representatives

Despite the re-election of many Members of Congress who are longtime friends of the industry, the narrow GOP edge in the House will make the passage of legislation extremely difficult. As discussed above, significant control will rest in achieving bipartisan compromise and swinging votes of centrist lawmakers.

Although all House committee chairmanships are open due to self-imposed term limitations, the biggest news for us will be the new chairmen for five committees: Ways and Means, Commerce, Banking, Appropriations and Judiciary. These committees have the strongest impact on real estate legislation. As in the Senate, the slim GOP majority in the House means that party will control the legislative agenda and choose committee chairs.

New Congress

Retirements, Resignations and Unsuccessful Bids Shake up Committees

Now that former chairman Bill Archer (R-Texas, 7th) has retired, it is likely that Rep. Phil Crane (R-Ill., 8th) will assume leadership of the powerful Ways and Means Committee. Rep. Crane cosponsored the brownfield clean-up cost-expensing bill advocated by many real estate associations including NAA/NMHC. Another possible chairman is Rep. Bill Thomas (R-Calif., 21st) who also supported the real estate community's tax agenda and was the primary sponsor of a successful effort to modernize tax laws for Real Estate Investment Trusts (REITs).

Also retiring last year was Rep. Thomas Bliley (R-Va., 7th) who chaired the House Commerce Committee. His most probable replacement is Rep. Billy Tauzin (R-La., 3rd), former chair of the Telecommunications Subcommittee and generally considered a supporter of our posture on forced access. Apartment professionals should be aware, however, that Rep. Mike Oxley (R-Ohio, 4th) is expected to head the Telecommunications Subcommittee, and may pursue full committee chairmanship. Oxley has strongly supported mandating building access for telecommunications providers, which would adversely affect the real estate industry.

When Rep. Jim Leach (R-Iowa, 1st) resigns his Banking Committee Chair, possible replacements include Reps. Marge Roukema (R-N.J., 5th) and Richard Baker (R-La., 6th). Both have generally supported the industry position on credit and capital policy. Also uncertain is Rep. Rick Lazio's (R-N.Y., 2nd) replacement as chair of the Banking Committee's Housing Subcommittee. A total of six seats on the subcommittee have been vacated. Not returning to the subcommittee will be Reps. Tom Campbell (R-Calif., 15th) and Robert Weygand (D-R.I., 2nd) who unsuccessfully ran for the Senate. The death of Bruce Vento (D-Minn., 4th) and the retirements of Rick Hill (R-MT-At Large), and Jack Metcalf (R-WA2nd) guarantee a partial overhaul of the subcommittee membership. The most likely subcommittee chairman is Rep. Bob Ney (R-Ohio, 18th) who cosponsored bills to repeal the estate tax and to reform the U.S. Bankruptcy Code. We anticipate his continued support of bankruptcy reform, as well as support for Section 8 reform.

Furthermore, Rep. Ney may be a point of entry for congressional issues that impact our advocacy for a balanced housing policy. Because our policy reflects freedom of housing choice as well as recognizing the need for responsible land use, livable communities, and housing options that suit an broad economic spectrum, we anticipate that efforts to promote the policy will find necessary bipartisan support from a divided Congress.

Rep. James Sensenbrenner (R-Wisc., 9th) is expected to replace Rep. Henry Hyde as Chairman of the House Judiciary Committee, however few changes are expected in the committee's makeup or agenda. In the House Appropriations Committee, Rep. Ralph Regula (R-Ohio, 16th) is a possibility to assume the Chairmanship now held by Rep. Bill Young (R-Fla., 10th). Most members of the Committee were reelected, most importantly members of the Subcommittee for VA-HUD, including Subcommittee Chair James Walsh (R-N.Y., 25th). However, some Reps. may elect to vacate their seats for a different committee assignment, thus changing the tenor of the committee.

As NAA/NMHC will be relying on grassroots support to accomplish legislative goals in this difficult environment, please refer to the guide to new Members of Congress included in this issue. Anyone with an established relationship with these new lawmakers is encouraged to contact Karen Garland Fructuoso, AIMS Administrator at 202/974-2349, or via e-mail to [e-mail]. Online registration is available in the NAA/NMHC Legislative Action Center at www.nmhc.org/legalert/default.html.

Eric P. Stine is a legislative analyst for the NAA/NMHC. He has a background in legal research, commercial real estate transactions and antitrust litigation, and he holds a J.D. from Boston University Law School.