National Housing Law Project Housing Law Bulletin

The Subcommittee acknowledged its guiding principle in its overview that the drastic program reductions are designed to "send an unmistakable message that [it] takes seriously its responsibility to cut spending. This is the beginning, not the end, of the process of identifying real savings."

What follows are some of the specific recommendations compared with the HUD budget request and the FY 1995 appropriated level. All figures are budget authority, not actual outlays.
 

	Subcommittee Funding Level	HUD Budget Request	FY 1995 Level
Public Housing
Oper. Subsidies	$2.5 b	$3.2 b	$2.9 b
Drug Elimination	-0-	-0-	290 m
Modernization	2.5 b	see note	3.87 b
HOPE 6	-0-	see note	500 m
Development	-0-	see note	598 m
Replacement Asst.	862 m4
Homeless Assistance	576 m5	1.12 b	1.12 b
Housing Counseling	12 m	12 m	50 m
CDBG	4.6 b	4.6 b	4.6 b
HOME	1.4 b	1.4 b	1.12 b
Preservation	200 m6	200 m	175 m
Fair Housing	30 m	45 m	33.38 m

Note: The HUD Budget request for these three categories combined is 4.88 b.

Public Housing Feels Both the Funding Scalpel
and Other Gutting Instruments of Change

• suspending the Brooke Amendment which made tenants third-party beneficiaries of the HUD programs;⁷
• authorizing minimum monthly rents of $50, regardless of the status of the resident;⁸
• permitting PHAs discretion to establish ceiling rents;
• suspending the one-for-one replacement requirement;
• authorizing HUD to tell PHAs which projects to demolish; and
• suspending federal admissions preferences.

Report language was included setting out the need to revise the existing public housing program and recommending authorizing language to use the new Section 8 Replacement Assistance Account as a replacement for operating subsidies and modernization.⁹ In addition, the report set out that future authorizing legislation "may enable HUD to redistribute operating assistance withheld from PHAs as a result of "vouchering out" of all or portions of projects." The Committee suggested the view that such authority, coupled with programmatic reforms set out above, would result in full funding for PHAs for FY 1996. The report also immediately authorized waiting lists for individual PHA projects in order to lower administrative costs and to ease the "transition into a deregulated environment."¹⁰ The Committee stated that it did not intend that this direction interfere with legal obligations or litigation or violate applicable civil rights laws. The report includes language setting out the Committee's support for rent levels that aid the retention of working people in public housing and that provide work incentives for those not currently employed.¹¹

Reductions in Section 8 Tenant-Based Assistance

The Subcommittee merged the account for renewing expiring Section 8 subsidy contracts with annual contributions for assisted housing, in the absence of the Housing Certificate Fund contemplated in HUD's yet-to-be-introduced proposal.¹² The Committee report indicates language is to be added by the authorizing committee mandating HUD to revise Section 8 contracts starting with FY 1996 and giving the Secretary new authority to modify annual adjustment factors and to implement other savings devices.¹³ The expiration of one-sixth of all Section 8 contracts in FY 1996 is viewed as "a significant opportunity to revise future spending obligations." The Committee intends that renewals be funded at the Administration's requested reduced fair market rent (FMR) levels — from the 45th to the 40th percentile — a move designed to permit the authorizing committee to offset mark-to-market legislation.

Among the other Section 8 administrative changes are:

• increasing tenant rent contributions to 32 percent;
• authorizing minimum rents plus utilities;
• authorizing a six-month delay in reissuing certificates and vouchers, for a savings of $178 million in outlays;
• lowering PHA administrative fees to 7 percent;
• suspending federal preferences for one year; and
• disallowing adjustments in rent above FMR.

Most Community Development and Planning Programs Remain Level

The Subcommittee adds to its $576 million funding level for homeless assistance a deferral of $297 million in FY 1995 to support a funding level of $873 million. Another $100 million was added in the Manager's Amendment during floor consideration.

A new "Special Needs Housing" account is established, funded at $1 billion to provide housing for elderly people, persons with disabilities and persons with AIDS.

1. H.R. 2099, FY 1996 Appropriations for VA, HUD and Independent Agencies, 104th Cong., 1st Sess. (1995).
2. See "Flash" box, House Reverses Committee Action Harmful to Public Housing Tenants! immediately preceding this article for late-breaking developments.
3. The FY 1995 rescission, Pub. L. No. 104-19, was signed by the President on July 27, 1995.
4. This a new program devised by the Appropriations Committee.
5. $297 million of FY 1995 Homeless Assistance funds that would be deferred by the rescission bill would be available in FY 1996. Another $100 million was subsequently added in the Manager's Amendment on the House floor, for a total of $676 million.
6. From carryover in FY 1995 Annual Contributions for Assisted Housing account (which covers all public housing and Section 8 programs).
7. But see "Flash" box, supra note 2.
8. But see "Flash" box, supra note 2.
9. H.R. REP. NO. 201, 104th Cong., 1st Sess. (July 21, 1995), at 26.
10. Id. at 29.
11. Id. at 39.
12. See HUD-Proposed Housing Certificate Fund Would Significantly Alter the Current Tenant-Based Programs, elsewhere in this issue.
13. H.R. REP. NO. 201, supra note 9, at 27.