Date: 1982-05-11
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. today. more than 1 million carpenters. plumbers. electricians. bricklayers. and other construction workers are without jobs19.4 percent of this important segment of our economy. H.R. 6294 is much more than a housing bill. It is clearly a jobs bill for an industry that has all but been wiped off the books by high interest rates. We are talking about an industry not in a recession. but in the depths of a prolonged depression. This bill will provide thousands of American families with decent housing. something that the Government has almost forgotten how to do in recent months. No industry in American surpasses housing as a multiplier of Jobs. Housing construction triggers activity in the woods of Oregon. Washington. Maine. Georgia. and other timber areas and sweeps across the panorama of industries which manufacture products that go into houses. All this is in addition to the jobs created for the building trades at the construction site. Housing starts have been below 1 million units on an annual basis for 8 straight months. The sales of new singlefamily units fell in March to the lowest level334.000 units on an annual basissince the Government started keeping housing numbers. If we are to mount an attack on unemployment. clearly the front lines are manned by the building industry and its workers. They have been in the trenches longer and they have taken most of the heavy shelling of the recessiondepression. This legislation is an important congressional initiative on the road to recovery in the housing industry. Not only will it provide direct and immediate assistance. but the activity that it will generate is certain to be contagious. It will help convince America that it can build again. If even the outer fringes of the administrations economic projections are correct. the $1 billion provided in this legislation will stretch beyond the 74.000 units we have calculated. The subsidy can be reduced if the administration can get its economic act together and lower interest rates. We have estimated that the $1 billion in budget authority being provided for in this bill would assist in the creation of 140.000 new jobs in housingrelated industries. would increase Federal. State. and local tax revenues by $1.2 billion. and would have the effect of increasing the gross national product by $11 billion. H.R. 6294 would assist home buyers whose income is below 130 percent of the area median income. with a priority given to the firsttime home buyers. For families with incomes of 115 percent of area median income or below. assistance would be provided to reduce the mortgage interest rate by up to 6 percentage points below the market rate for a period of 7 years. but in no case would the interest rate be subsidized below 9% percent. For families with incomes above 115 percent of. the area median. assistance would be provided to reduce the mortgage interest rate by up to 4 percentage points below the market rate for a period of 5 years. but in no case would the interest rate be subsidized below 10 percent. A downpayment of at least 3 percent would be required. In all cases. a family would be required to contribute at least 25 percent of its monthly income toward the mortgage payment. The mortgage assistance could be continued beyond the 5- or 7year period if the Secretary determines such assistance is necessary and if appropriations are made from a fund created from recaptured assistance paym .nts of unused authority. Whenever property is sold or in the event it is rented for more than 1 year. the owner would be required to repay the lesser of the assistance received or 50 percent of the net appreciation of the property. Mortgages assisted under this program could be FHA insured. VA guaranteed. FmHA guaranteed. conventional. privately insured or guaranteed. The maximum mortgage amount could not exceed the maximum amount which may be insured under the FHA 203(b) program. $67.500 generally. but up to $90.000 in highcost areas. The mortgage must involve a residence on which construction has begun no earlier than 1 year prior to enactment of this bill. and which meets or exceeds FHA minimum property standards for energy conservation. The assistance funds would be allocated to assure a reasonable distribution among the various regions of the country. taking into account population. relative decline in building permits and the need for increased housing production. Allocations and commitments of funds must begin not later than 30 days after funds are appropriated. The need for this legislation is clear. It is recognized by key Members on both sides of the aisle. This is a national need of the highest priority. Mr. Speaker. I would be remiss if I were not to commend the Speaker of the House. the gentleman from Massachusetts . the majority leader. the gentleman from Texas . the gentleman from Texas