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Increased housing funding moves ahead in House.

Congress is heading toward approving legislation that will provide incresed funding for housing and community development programs, as well as relief for fiscally distressed communities. However, while municipalities secured victory in opposing federal preemption of local land use and zoning policies, municipalities will be required to assess and test for hazardous levels of lead based paint in federally subsidized housing units.

In the House, the Banking and Urban Affairs Committee approved a bill, The Housing and Community Development Act of 1992, H.R. 5334, that calls for $29.7 billion in authorization for housing and community development programs. The House version is a one year authorization.

The bill originally called for an authorization level of $35.6 billion for 1993 but an amendment introduced by Rep. Marge Roukema (R-N.J.), reducing the authorization level was, approved on a 27-22 vote. Most of the reduced funds would come from public housing, new construction and modernization funds.

H.R. 5334 calls for $2.1 billion for the HOME state and local block grant and $3.4 billion for the Community Development Block Grant (CDBG) programs. This represents a $600 million increase for HOME from last year and no increase for CDBG.

The Senate Banking, Housing and Urban Affairs Committee marked up its version of a two-year reauthorization bill that called for $22 billion in authorization for 1993 and $22.8 billion for 1994.

The Senate bill calls for $2.1 billion for the HOME program in 1993 and 1994, a $600 million increase over the 1992 funding level. The Senate bill also calls for a $500 million increase in funding for CDBG for 1993 totaling $3.9 billion. In 1994 the Senate calls for $4 billion in CDBG funds.

The Senate version includes $855 million for the Homeownership for People Everyone (HOPE) program in 1993 and $880 million in 1994. HOPE would allow public housing tenants to purchase their units from the federal government. The House bill provides $400 million for HOPE.

The House committee, chaired by Rep. Henry B. Gonzalez (D-Tex), overwhelmingly defeated an amendment that would give the Department of Housing and Urban Development (HUD) the authority to condition federal housing and community development funds on federal approval of local zoning and land use policies.

The amendment, introduced by Rep. Barney Frank (D-Mass.), would have required communities to include a barrier removal strategy in their Comprehensive Housing Affordability Strategies (CHAS). The CHAS is the planning document that identifies the housing and community development needs of each community. An approved CHAS is necessary to receiving federal housing and community development funds.

The Senate bill contains a provision that will require municipalities to assess and test for hazardous levels of lead based paint. It would require municipalities to include in their CHAS a strategy for testing and abating this hazard. Failure to incude this provision could lead to the denial of a CHAS.

The lead provision would apply to all federally subsidized housing. It includes a $500 million grant program that would be available only to cities that have a CHAS containing a cities strategy for removing lead based paint. The program includes a 10 percent match requirement, a maintenance of effort provision and allows communities to use HOME and CDBG funds for lead abatement efforts.

Both bills call for a uniform match to participate in the HOME program, however, they differ in the percentage of match that is required. The House calls for a uniform 10 percent match while the Senate calls for a 25 percent uniform match.

Under current law communities are required to provide a match to participate in the program. The match amount varies according to the activity undertaken. For example, for a three tiered match based on the activity undertaken, i.e., 50 percent for new construction, substantial rehabilitation 33 percent, and for tenant-based rental assistance and moderate rehabilitation 25 percent.

Each bill contains distress factors to relieve communities experiencing extreme fiscal distress from meeting the entire match requirement. The House would require communities to meet any three of five factors to be granted a complete waiver from the match requirement. They are: uneumployment, the growth in labor force, tax revenue collected, poverty rate and average per capita income. Each of these factors must exceed the national average for a community to be granted a waiver.

The Senate bill will reduce the match requirement to 15 and five percent based on the degree of fiscal distress experienced by a city. The Senate provision would authorize the Secretary to review a community's per capita income, number of households in poverty, the unemployment rate and growth lag in the labor force.

The House allows communities to use 100 percent of debt financing as an eligible match while the Senate will only allow 25 percent of the debt issued. The Senate version states that the debt that is used as a match may not exceed 25 percent of the match required.

The House bill also allows communities to use 10 percent of their HOME funds for administrative expenses while the Senate allows for use of seven percent of the funds. The Senate allows distressed communities to use up to ten percent of their funds for that purpose if necessary.
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Author:Barreto, Julio
Publication:Nation's Cities Weekly
Date:Jun 22, 1992
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