II

106TH CONGRESS

1ST SESSION S. 1319

To authorize the Secretary of Housing and Urban Development to renew

project-based contracts for assistance under section 8 of the United

States Housing Act of 1937 at up to market rent levels, in order

to preserve these projects as affordable low-income housing, and for

other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 1, 1999

Mr. BOND introduced the following bill; which was read twice and referred to

the Committee on Banking, Housing, and Urban Affairs

A BILL

To authorize the Secretary of Housing and Urban Development to renew project-based contracts for assistance

under section 8 of the United States Housing Act of

1937 at up to market rent levels, in order to preserve

these projects as affordable low-income housing, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Save My Home Act

5 of 1999’’.
2

•S 1319 IS

1 SEC. 2. FINDINGS AND PURPOSE.

2 (a) FINDINGS.—Congress finds that—

3 (1) there exists a need for decent, safe, and af4 fordable housing throughout the United States for

5 low-income families;

6 (2) affordable housing is critical to the physical

7 and emotional well-being of low-income families, es8 pecially vulnerable populations such as the elderly

9 and persons with disabilities;

10 (3) an unprecedented number of contracts for

11 section 8 contracts are expiring over the next few

12 years, including contracts covering 2,384,000 units

13 in fiscal year 2000 alone;

14 (4) a substantial number of housing units re15 ceiving project-based assistance have rents that are

16 lower than the rents of comparable, unassisted rent17 al units in the same housing rental market;

18 (5) many of the residents in federally assisted

19 housing are elderly or persons with disabilities;

20 (6) the elderly are especially vulnerable to dis21 placement trauma, which can lead to emotional

22 problems and death;

23 (7) due to the down sizing of the Department

24 of Housing and Urban Development and diminished

25 administrative capacity, the Department lacks the
3

•S 1319 IS

1 ability to effectively appraise the market value of

2 properties;

3 (8) during 1998 alone, some 219 properties

4 with over 25,000 units opted out of renewing their

5 section 8 contracts, resulting in the loss of this

6 housing as affordable, low-income housing;

7 (9) currently some 3,000 section 8 project8 based units are being lost each month as affordable

9 housing because owners of section 8 project-based

10 housing choosing to prepay or opt-out upon the expi11 ration of their section 8 contracts;

12 (10) a significant number of these section 8

13 project-based housing projects for which owners have

14 elected to opt-out and not renew their section 8 con15 tracts are located in areas where the availability of

16 affordable housing is scarce;

17 (11) in many of the cases where residents have

18 been provided vouchers because the owners of sec19 tion 8 project-based housing elected not to renew

20 their section 8 contracts, the residents have not been

21 able to adequately use their vouchers to obtain hous22 ing because of the lack of available, affordable hous23 ing;

24 (12) it is expected that—
4

•S 1319 IS

1 (A) if no changes in the terms and condi2 tions of the section 8 contracts for project3 based assistance are made before the contracts

4 expire, more private owners will elect to not

5 renew their contracts; and

6 (B) of those properties with respect to

7 which the owners do not renew their section 8

8 contracts, many of the properties will no longer

9 be affordable to its current assisted residents

10 due to significant rent increases and, since

11 many of the residents have little or no means

12 to pay the additional rent for these units from

13 personal income, these residents will be effec14 tively forced to move from their homes;

15 (13) the Department of Housing and Urban

16 Development has had the authority to renew expir17 ing section 8 project-based contracts up to com18 parable market rent levels since October 27, 1997,

19 and has failed to implement any policy for renewing

20 these contracts, resulting in the unnecessary loss of

21 many of these housing units as affordable, low-in22 come housing and the displacement of many vulner23 able low-income families, including the elderly and

24 persons with disabilities;
5

•S 1319 IS

1 (14) the Department of Housing and Urban

2 Development has adequate funds in the Housing

3 Certificate account to renew all expiring section 8

4 project-based contracts at market rental rates but

5 has failed to make these funds available to preserve

6 this housing as affordable, low-income housing; and

7 (15) the Department of Housing and Urban

8 Development should use all appropriate means to

9 preserve housing assisted with section 8 project10 based contracts as affordable, low-income housing.

11 (b) PURPOSE.—The purpose of this Act is to protect

12 vulnerable residents of affordable housing, especially the

13 elderly, persons with disabilities, and those with large

14 families—

15 (1) to the extent feasible and appropriate, by

16 ensuring that the Department of Housing and

17 Urban Development renew expiring section 8

18 project-based contracts, and allowing low-income

19 families to live in their homes without fear of unrea20 sonable displacement;

21 (2) by ensuring that the Department of Hous22 ing and Urban Development has done everything in

23 its power to ensure that housing with expiring sec24 tion 8 project-based contracts are renewed, espe-
6

•S 1319 IS

1 cially those in rural areas and in other areas with

2 low vacancy rates; and

3 (3) after the Department of Housing and

4 Urban Development has exhausted all means to en5 sure that housing with expiring section 8 contracts

6 are renewed, by providing flexible rental assistance,

7 including enhanced vouchers, to ensure that vulner8 able populations are not forced to move from their

9 homes when rent levels rise to unaffordable levels

10 due to the opt-out of owners who elect to not renew

11 their expiring section 8 project-based contracts.

12 SEC. 3. DEFINITIONS.

13 For purposes of this Act, the following definitions

14 shall apply:

15 (1) ASSISTED DWELLING UNIT.—The term ‘‘as16 sisted dwelling unit’’ means a dwelling unit that—

17 (A) is in a covered project; and

18 (B) is covered by rental assistance pro19 vided under the contract for project-based as20 sistance for the covered project.

21 (2) COVERED PROJECT.—The term ‘‘covered

22 project’’ means any housing that—

23 (A) consists of more than 4 dwelling units;

24 (B) is covered in whole or in part by a con25 tract for project-based assistance under—
7

•S 1319 IS

1 (i) the new construction or substantial

2 rehabilitation program under section

3 8(b)(2) of the United States Housing Act

4 of 1937 (42 U.S.C. 1437f(b)) (as in effect

5 before October 1, 1983);

6 (ii) the property disposition program

7 under section 8(b) of the United States

8 Housing Act of 1937 (42 U.S.C.

9 1437f(b));

10 (iii) the moderate rehabilitation pro11 gram under section 8(e)(2) of the United

12 States Housing Act of 1937 (42 U.S.C.

13 1437f(e)(2)) (as in effect before October 1,

14 1991);

15 (iv) the loan management assistance

16 program under section 8 of the United

17 States Housing Act of 1937 (42 U.S.C.

18 1437f);

19 (v) section 23 of the United States

20 Housing Act of 1937 (42 U.S.C. 1437u)

21 (as in effect before January 1, 1975);

22 (vi) the rent supplement program

23 under section 101 of the Housing and

24 Urban Development Act of 1965; or
8

•S 1319 IS

1 (vii) section 8 of the United States

2 Housing Act of 1937 (42 U.S.C. 1437f),

3 following conversion from assistance under

4 section 101 of the Housing and Urban De5 velopment Act of 1965,

6 which contract will (under its own terms) expire

7 during the period consisting of fiscal years

8 2000 through 2004; and

9 (C) is not housing for which residents are

10 eligible for enhanced voucher assistance as pro11 vided under the ‘‘Preserving Existing Housing

12 Investment’’ account in the Departments of

13 Veterans Affairs and Housing and Urban De14 velopment, and Independent Agencies Appro15 priations Act, 1997 (Public Law 104–204; 110

16 Stat. 2884), pursuant to such provision or any

17 other subsequently enacted provision of law.

18 (3) COVERED RESIDENT.—The term ‘‘covered

19 resident’’ means a family who—

20 (A) is a low-income family as provided

21 under section 3(b)(2) of the United States

22 Housing Act of 1937 (42 U.S.C. 1437a(b)(2));

23 and

24 (B) upon the date of the expiration of the

25 contract for project-based assistance for a cov-
9

•S 1319 IS

1 ered project, is residing in an assisted dwelling

2 unit in the covered project.

3 (4) LOW-VACANCY AREA.—The term ‘‘low-va4 cancy area’’ means an area that, in the determina5 tion of the Secretary, is not adequate available and

6 affordable housing or that the tenants of the covered

7 project would not be able to locate suitable units or

8 that the tenants of the covered project would not be

9 able to use tenant-based assistance successfully.

10 (5) PROJECT-BASED ASSISTANCE.—The term

11 ‘‘project-based assistance’’ has the same meaning as

12 in section 8(f) of the United States Housing Act of

13 1937 (42 U.S.C. 1437f(f)).

14 (6) TENANT-BASED ASSISTANCE.—The term

15 ‘‘tenant-based assistance’’ has the same meaning as

16 in section 8(f) of the United States Housing Act of

17 1937 (42 U.S.C. 1437f(f)).

18 (7) SECRETARY.—The term ‘‘Secretary’’ means

19 the Secretary of Housing and Urban Development.

20 SEC. 4. RENEWAL OF SECTION 8 PROJECT-BASED CON21 TRACTS.

22 (a) IN GENERAL.—Notwithstanding any other provi23 sion of law and except as provided in subsection (b) of

24 this section, the Secretary may use amounts available for

25 the renewal of assistance under section 8 of the United
10

•S 1319 IS

1 States Housing Act of 1937 (42 U.S.C. 1437f), upon the

2 termination or expiration of a contract for assistance

3 under section 8 of the United States Housing Act of 1937

4 (42 U.S.C. 1437f) (other than a contract for tenant-based

5 assistance and, notwithstanding section 8(v) of such Act,

6 for loan management assistance), to provide assistance

7 under section 8 of such Act for a covered project under

8 this Act at rent levels that do not exceed comparable mar9 ket rents for the market area.

10 (b) MANDATORY RENEWALS.—The Secretary shall

11 offer to renew, at up to rent levels that do not exceed com12 parable market rents for the market area, any contract

13 for assistance under section 8 of the United States Hous14 ing Act of 1937 (42 U.S.C. 1437f) (other than a contract

15 for tenant-based assistance and, notwithstanding section

16 8(v) of such Act, for loan management assistance) that

17 has expired for any covered project—

18 (1) in a low-vacancy area; or

19 (2) where a predominant number of units are

20 occupied by elderly families, disabled families, or el21 derly and disabled families.

22 (c) ESTABLISHMENT OF MARKET RENTS.—The Sec23 retary shall establish, for units assisted with project-based

24 assistance in a covered project, adjusted rent levels that

25 are equivalent to rents based on appraisals that are de-
11

•S 1319 IS

1 rived from comparable properties, if the market rent de2 termination is based on not less than 2 comparable prop3 erties, including, if there are no comparable properties in

4 the same market area, 2 properties that have been cer5 tified by the Secretary as similar to the covered properties

6 as to neighborhood (including risk of crime), type of loca7 tion, access, street appeal, age, property size, apartment

8 mix, physical configuration, property and unit amenities,

9 utilities, and other relevant characteristics, provided that

10 the comparable projects are not receiving project-based as11 sistance.

12 (d) SUBSIDY LAYERING REQUIREMENTS.—For pur13 poses of this Act, in determining the market rent for re14 newing any contract for assistance under section 8 of the

15 United States Housing Act of 1937 (42 U.S.C. 1437f)

16 (other than a contract for tenant-based assistance and,

17 notwithstanding section 8(v) of such Act, for loan manage18 ment assistance), the Secretary shall ensure that any as19 sistance provided within the jurisdiction of the Housing

20 and Urban Development shall not be greater than is nec21 essary to provide affordable housing.

22 (e) 10-YEAR CONTRACTS.—Notwithstanding any

23 other provision of law, the Secretary and owner of any

24 covered project may agree to up to a 10-year renewal of

25 a contract for assistance under section 8 of the United
12

•S 1319 IS

1 States Housing Act of 1937 (42 U.S.C. 1437f) (other than

2 a contract for tenant-based assistance and, notwith3 standing section 8(v) of such Act, for loan management

4 assistance) under which payments shall be subject to the

5 annual availability of appropriations.

6 SEC. 5. ENHANCED VOUCHERS FOR RESIDENTS OF

7 PROJECTS WITH EXPIRING SECTION 8 CON8 TRACTS.

9 (a) IN GENERAL.—Upon the date of expiration of a

10 contract for assistance under section 8 of the United

11 States Housing Act of 1937 (42 U.S.C. 1437f) (other than

12 a contract for tenant-based assistance and, notwith13 standing section 8(v) of such Act, for loan management

14 assistance) for a covered project that is not renewed under

15 section 4, the Secretary—

16 (1) shall make enhanced voucher assistance

17 under this section available on behalf of each covered

18 resident of a covered project that is located in a low19 vacancy area; and

20 (2) may make enhanced voucher assistance

21 available on behalf of any other low-income family

22 who, upon the date of such expiration, is residing in

23 an assisted dwelling unit in a covered project.

24 (b) ENHANCED ASSISTANCE.—Enhanced voucher as25 sistance under this section for a family shall be voucher
13

•S 1319 IS

1 assistance under section 8(o) of the United States Hous2 ing Act of 1937 (42 U.S.C. 1437f(o)) (42 U.S.C.

3 1437f(o)), except that under such enhanced voucher

4 assistance—

5 (1) if the assisted family elects to remain in the

6 covered project in which the family was residing on

7 the date of the expiration of such contract and the

8 rent for such unit exceeds the applicable payment

9 standard established pursuant to section 8(o) for the

10 unit, the amount of the rental assistance provided on

11 behalf of family shall be determined using the pay12 ment standard that is equal to the rent for the

13 dwelling unit, subject to paragraph (10)(A) of such

14 section 8(o); and

15 (2) if the assisted family elects to move from

16 such covered project, subparagraph (A) of this para17 graph shall not apply and the payment standard for

18 the dwelling unit occupied by the family shall be de19 termined in accordance with section 8(o).

20 (c) AUTHORIZATION OF APPROPRIATIONS.—There is

21 authorized to be appropriated for each of fiscal years

22 2000, 2001, 2002, 2003, and 2004 such sums as may be

23 necessary to carry out this section.
14

•S 1319 IS

1 SEC. 6. APPRAISALS.

2 (a) USE OF APPRAISALS.—The appraisals used to es3 tablish market rents under section 4(c) shall—

4 (1) meet the standards and procedures of the

5 Uniform Standards of Professional Appraisal Prac6 tice as published by the Appraisal Standards Board

7 of the Appraisal Standards Foundation, as modified

8 by the Secretary of Housing and Urban Develop9 ment; and

10 (2) be performed by individuals who have dem11 onstrated competence and whose professional con12 duct is subject to effective supervision.

13 (b) APPRAISAL CLEARINGHOUSE.—In conjunction

14 with the Appraisal Standards Foundation, the Secretary

15 shall establish an Appraisal Clearinghouse, which shall be

16 used to collect appraisal data and to develop model ap17 praisal standards for use to establish the market value of

18 multifamily housing, including covered projects, through19 out the United States, including rural areas with multi20 family housing that have no comparable housing in the

21 same area.

22 SEC. 7. STAFFING REQUIREMENTS.

23 The Secretary shall assign not less than 1 staff per24 son to each Department of Housing and Urban Develop25 ment Field Office that shall be responsible for evaluating

26 the appraisals for the covered projects within the State.
15

•S 1319 IS

1 Each staff person shall have demonstrated competence to

2 make appraisals and shall meet all licensing and certifi3 cation requirements, as provided under applicable Federal

4 or State law.

5 SEC. 8. HOUSING FINANCE AGENCIES.

6 The Secretary may contract with State or local hous7 ing finance agencies that have been selected as a Partici8 pating Administrative Entity under the Multifamily As9 sisted Housing Reform and Affordability Act of 1997 for

10 determining the market rental rates of a covered project.

11 SEC. 9. TECHNICAL ASSISTANCE.

12 Section 514(f)(3) of the Multifamily Assisted Hous13 ing Reform and Affordability Act of 1997 is amended by

14 inserting after ‘‘the capacity of tenant organizations’’, the

15 following: ‘‘for technical assistance for preserving prop16 erties whose owners may not renew their section 8 project17 based contracts where the rental assistance is below mar18 ket (including transfer of developments to tenant groups,

19 nonprofit organizations, and public entities)’’.

20 SEC. 10. TRANSFER OF COVERED PROJECTS TO NON21 PROFIT ORGANIZATIONS.

22 For covered projects with contracts for assistance

23 under section 8 of the United States Housing Act of 1937

24 (42 U.S.C. 1437f) (other than a contract for tenant-based

25 assistance and, notwithstanding section 8(v) of such Act,
16

•S 1319 IS

1 for loan management assistance) that are not renewed

2 under section 4, the Secretary shall establish procedures

3 to facilitate the voluntary sale or transfer of those covered

4 projects, with a preference for tenant organizations, for

5 tenant-endorsed, community-based nonprofit organiza6 tions, and for public agency purchasers meeting such rea7 sonable qualifications as may be established by the Sec8 retary.

9 SEC. 11. REPORTS TO CONGRESS.

10 Not later than 1 year after the date of enactment

11 of this Act and semiannually thereafter, the Secretary

12 shall report, by State, to Congress on the number of sec13 tion 8 assisted units that have renewed, the number of

14 section 8 assisted units that have not been renewed, and

15 the costs associated with these activities.

16 SEC. 12. REGULATIONS.

17 Not later than 6 months after the date of enactment

18 of this Act, the Secretary shall issue regulations to carry

19 out this Act.

Æ