Date: 1982-03-04
Speaker: ST GERMAIN (democrat)
Chamber: S

the chairman of the Housing and Community Development Subcommittee. Mr. GoNZALEz. and other members of the committee. including the cosponsor of the proposal I offered last session. the gentleman from New York. Mr. ScHUMER. This program Is intended to serve as a replacement for the section 8 rehabilitation and construction programs. This housing strategy not only will provide greater fiscal control. but will allow us to better target our assistance to individuals and areas most in need. Given the continuing. severe housing crisis facing this Nation and the significant budget reductions made in these activities during the previous session. I believe that alternatives must be considered expeditiously. I do not believe that we can reduce these resources further without calling into question this Nations commitment to affordable housing and a decent living environment for its citizens. Although this bill is being introduced in the House in the context of an omnibus housing initiative being offered by the committee majority. It is my intention to pursue and refine this initiative with both majority and minority members of the Senate Committee on Banking. Housing. and Urban Affairs. I believe that we can come up with a balanced housing package which is both fiscally respon:ible and yet responds to the various dimensions of a national problem of Increasing proportions. Any housing policy which places sole reliance on income support measures will not represent a comprehensive approach to current needs and. In fact. will prove counterproductive in supply constrained areas. Mr. President. this action is essential if we are to begin to reverse the conditions contributing to a national hous. Ing shortage reaching crisis dimensions. This crisis is especially severe with respect to the availability of rental housing. Today. Americans who want to rent housing cannot find decent. affordable housing opportunities. The vacancy rate for rental housing shows no signs of improving from the recent record low levels. Demographic trends. as well as the continuing prohibitive costs of homeownership. will increase the already high demand for rental housing. As the baby boom generation comes of age. and Individuals choose to live in smaller households. more and more people will need rental housing. In my State of Connecticut. the production of multifamily housing units fell by 30.8 percent from 1978 to 1981. Last year. only 9.000 total housing starts were recorded for the entire State against a projected annual demand of 25.000 units. In the housing plan released last year by the Connecticut Department of Housing. It was estimated that 175.000 households were either living in substandard housing or paying excessive portions of their income for rent. The rental vacancy rate in the State is below 2 percent. and lower than that in most major cities. In Stamford. for example. the vacancy rate is zero and. with the exception of several federally sponsored projects. virtually no rental units were constructed over the past decade despite unprecendented demand. The supply of rental housing has been exacerbated further by the loss of existing units as the Inventory ages and is not replaced. Anthony Downs. in the "Future of Rental Housing in America." estimated that the gap between rental needs and production in the decade of the 1980s will range from 1.1 to 4.6 million units. The study. "Housing Needs In the Eighties." published by ICF Inc.. predicts a shortage of 3.5 million rental units over the course of the decade. The crisis in the rental housing Industry is real. and the outlook is not encouraging. A 1979 GAO report states that the rental housing market could be likened to "an endangered species." Dangerously low vacancy rates aggravate already inflationary rents. thereby threatening the ability of moderate- and lowincome Americans to afford decent housing. The legislation I am proposing embodies certain important principles for the future of Federal housing policy. This initiative overcomes the budgetary criticism of the section 8 prgram. The Congress will regain annual control over these activities and will not incur the longterm obligations inherent in the current programs. Resources will be delivered more efficiently as a result of the separation of affordability and availability concerns. In addition. State and local officials will become an equal partner in the development process. This will insure better coordination and leverage of resources as well as highlight the Importance of local support in the planning and location of housing developments so as to spur neighborhood development and mitigate displacement. Most importantly. this proposal reaffirms the premise that the Government has an obligation to respond to the housing needs of all our citizens who are not being served or provided with decent. affordable housing opportunities by the private sector. This will be accomplished at the lowest possible cost in a manner which anticipates maximum participation by other governmental entities and the private sector. Mr. President. the purpose of this bill is to increase the Nations stock of affordable rental and cooperative housing. State and local governments would make application for assistance to encourage the construction or rehabilitation of multifamily developments in areas found to be experiencing severe shortages of decent rental housing opportunities. as determined by objectively measurable Indices. In conjunction with the private sector. these governmental entities would have broad flexibility in designing the type of program assistance necessary to respond to prevailing local housing market conditions. For example. the assistance could be utilized as a capital grant or loan. annual interest reduction payments or other comparable means to reduce project debt service and thereby create affordable. market. able housing. In accordance with locally identified needs. funds could be directed for either new construction. substantial rehabilitation or moderate rehabilitation. The amount of assistance would be the least amount required to provide modestly designed housing in an area for families or Individuals without other reasonable and affordable alternatives in the private market. In addltion. the amount of assistance would be sufficient to provide affordable rents in at least 20 percent of the units in any assisted development to families with Incomes below 30 percent of area median income. A project selection priority is established for proposals which exceed this later requirement in terms of either the percentage or length of commitment to our lower income citizens. The bill contains other selection criteria designed to assure that only feasible proposals which maximize the necessary Federal Assistance will be selected. including the degree to which such assistance will be eventually repaid to the Federal Government. Although this is a highly targeted program. the Secretary of HUD is directed to make resources available in different geographic regions and in nonmetropolitan as well as urban areas. If any conditions of this assistance are breached or the owner sells or converts the development during the term of assistance. the amount of Federal contribution must be repaid in full with accumulated interest. While the Secretary will continue to regulate rent levels as is the case in current assisted housing programs. a new feature has been added to expedite consideration of rent requests from private owners. In conclusion. this proposal attempts to c.ercome the criticisms of current programs and incorporates. both in terms of philosophy and program design. many elements of other pending initiative .. such as housing block grants and the administrations recent request for a rental rehabilitation grant program. In conjunction with other ongoing and emergency initiatives. it is my hope that we can reaffirm a national housing policy during this session which is a comprehensive response to the shelter needs confronting the American people. Mr. President. I ask unanimous consent that the Bill be printed in the RECORD following my remarks.