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Updated May 24, 2000 |
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Support Needed for a
Strong HUD BudgetThe process for passing the FY2001 HUD spending bill is well underway and things are grim at this point. Calls are needed immediately to Representatives and Senators urging them to provide adequate funds for housing and community development programs. The allocations to the House and Senate appropriations subcommittees that fund HUD and a number of other programs are dangerously low. The HUD/VA/Independent Agencies subcommittees are now tasked with passing bills with unacceptably low allocations that fall far short of even maintaining the current level of service. The House subcommittee is scheduled to mark up its FY2001 bill this Tuesday, May 23 and the Senate subcommittee will follow shortly thereafter.
The Senate has allocated $77.8 billion in discretionary budget authority to its HUD/VA/IA Appropriations Subcommittee, while the House has allocated $78 billion to their subcommittee. These allocations are approximately $6.5 billion below the $84.4 billion in budget authority requested by the Administration for FY2001. They are also more than $6 billion below the level needed to maintain the current level of services, according to the Congressional Budget Office.
In light of the growing shortage of affordable housing and the substantial budget surplus, additional investments in affordable housing and community development are both necessary and affordable.Please contact your congressional delegation and the leadership in the House and Senate to explain how important these programs are to meeting critical housing goals and that reduced funding for these programs has real consequences. Tell your Senators and Representatives that the allocations to the HUD/VA subcommittees are unacceptable and that additional funds are needed for housing and community development programs.
You can reach all Senators and Representatives through the Capitol Switchboard at (202) 224-3121 or online at www.congress.org/elecmail
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Water Board Approves 1% Rate Hike
The water and sewer rate increases for Fiscal Year 2001 were approved by vote on Friday, May 12. As of July 1, 2000, metered and unmetered water rates will increase by 1.0%. The wastewater rate will remain at 159% of corresponding water charges.
The 1% increase is much lower than the 4% increase last year, but when people are stretching to make payments now, even a small increase hurts. Even worse, projections for the coming years show rates rising from 5.4% for FY 2002 to 7.3% in FY 2006. The Water Board claims these rate hikes are necessary to cover the costs of providing water and wastewater services.
UNHP testified at the Water Board public hearings on May 2, opposing the proposed rate increase and asking for some sort of relief on water charges.
Also approved by the Water Board was a Multiple Family Conservation Proposal which will replace the existing Transition Program, Retroactive Transition Program and Meter Billing Cap Program for residential buildings with six or more dwelling units. The new program entitles owners of such buildings who replace at least 70% of the toilet, sink and showerhead fixtures in a building with low flow water consuming fixtures to be billed on a fixed charge currently estimated to about $410 per dwelling unit per year, although this amount might be significantly higher than the current frontage rates in some cases. This per unit charge will also be subject to change each year. Implementation will take place over 3 years with July 1, 2001 as the earliest date on which a charge would be effective.
While UNHP supports the creation of a program that encourages water conservation and establishes a fixed charge per apartment, we had hoped for the rate to be lower than $410 and for the rate to be locked in to provide some long time assurance. We are also calling for the program to be easily accessible, as complicated programs can discourage owners from using it, and could also lead to the creation of a new line of business for consultants that will take a piece of the critical savings from other affordable housing needs.
The Multiple Family Conservation Program also excludes 3-, 4-, and 5-family buildings. These buildings have also been excluded from the existing Transition Program, and are subject to immediate metered billing. UNHP had hoped that all buildings with three or more units could have been included in the new program. However, all 1 to 5 unit buildings can still use the Bill Cap program.
We had also hoped to see the resurrection of the Toilet Rebate Program, which many of our buildings utilized when it was open. The buildings that did not use the program were either poorly managed or unaware of the impact metering would have on their bills. These buildings that missed out are the ones that need the Toilet Rebate Program now, as they probably will not be able to afford the capital costs of replacing their toilets without the program. To punish these current building owners by simply saying they missed the program when it was open hurts both the buildings and the City’s goals of conservation.
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Battle Against Predatory Lending Reaches Capitol Hill Two identical bills have been introduced in the House (HR 2450) and the Senate (S 2415) to help stop the growing problem of predatory lending in America. Introduced by Rep. John LaFalce (D-NY) and Sen. Paul Sarbanes (D-MD), they bills would extend the Home Owners Equity Protection Act of 1994 to cover protections against predatory lending. Specifically, the bills would limit the amount of equity that can be lost through unnecessary and excessive fees in a home equity loan.
HUD has also jumped on the bandwagon against the practice of predatory lending, as it recently urged Congress to enact legislation to stop Fannie Mae and Freddie Mac from buying mortgage loans that carry excessive fees and points, high prepayment penalties and borrower's life insurance policies, according to the National Low Income Housing Coalition. HUD has also created a task force on predatory lending to research and combat the practice. "Unequal Burden: Income and Racial Disparities in Subprime Lending in America" is a new report from HUD on the growth of the subprime lending business in low-inomce and minority communities.
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NPA Goes After Predatory Lenders April 5 -- The National People's Action has fought and won some serious battles in its time, including the battle for CRA. A coalition of 302 grassroots organizations from around the nation, NPA gathered to celebrate major reforms at the Federal Housing Authority (FHA) and Fannie Mae's $1.5 billion in reinvestment in just six cities over the last three years. Their new plan of action is to attack "loan shark lenders" a.k.a. the predatory subprime mortgage industry.
According to NPA, FHA has cut off more than 40 lenders whose default rates on goverment-backed home loans reached or surpassed three time the average default rate for similar loans in the lender's region since September. FHA has also increased lender monitoring and on-site lender reviews since 1997. In addition, HUD managed to levy over $1.7 million in civil money penalties against poorly performing lenders.
One NPA affiliate, the National Training and Information Center (whom UNHP has partnered with in an experiment with Fannie Mae the last few years) has recently released a study of foreclosures in the Chicago region. The NTIC study, Preying On Neighborhoods, documents the rise in foreclosures has been paralleled by a large increase in sub-prime lending in the area.
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