News Alerts!
Updated June 28, 2000

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HUD Releases Final Rule on Tenants' Right to Organize

June 7 -- HUD released its final rule on "Tenant Participation in Multifamily Housing Projects." There are a number of changes from the proposed rule, mostly in favor of tenants' organizing rights.

The Final Rule, also known as FR-4403-F-02, can be obtained online at www.hudclips.org in .html format or in .pdf format.

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House Passes HUD Budget With Almost No Improvements

June 21 -- The Full House of Representatives passed the FY2001 VA-HUD-IA bill (H.R. 4635) by a vote of 256-169. The bill fails to increase spending levels for virtually every HUD program, and even cuts a number of them. None of the funding levels match the Clinton Administration's request, and the President has indicated the bill unless funding levels are increased.

A number of proposed amendments to increase funding levels failed, but two small increases were approved. Housing Opportunities for People With AIDS (HOPWA) saw their budget allocation rise $18 million, and $1 million of HUD's salaries and expenses were transfered to the public housing operating fund.

HUD Secretary Andrew Cuomo criticized the huge cuts which come at same time "the nation's economy continues to soar." (Read more about Cuomo's reaction...) Some of the cuts include no new Section 8 Vouchers and a reduction of Community Development Block Grants (even below the FY2000 level).

Included in the cuts to the Clinton Administration's proposal were more than $122 million for New York City. This includes almost 1,700 Section 8 Vouchers we will not be receiving, the losing out on 539 new jobs, 596 households who will not be assisted by CDBG funds, and 1,300 homeless persons with AIDS that won't receive assistance under the HOPWA program.

The Senate will likely wait until after the July 4 recess to take up the spending bill. The anticipated budget surplus increase of $60 million may have a positive affect on the outcome.

Please contact your congressional delegation and the leadership in the House and Senate to explain how important HUD programs are to meeting critical housing goals and that reduced funding for these programs has real consequences. Tell your Senators and Representatives that the House's HUD Appropriation bill (H.R. 4635) is 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 email them at www.congress.org/elecmail

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  • CRA "Sunshine" Provision Proposal Released

Believing that community groups use tactics such as extortion to force banks into promising grants and loans while going through the merger application process, Senator Phil Gramm (R-TX) managed to include what the National Community Reinvestment Coalition calls an "onerous reporting requirement" in last year's Financial Modernization Legislation. This requirement, known for some reason as the "Sunshine Provision", is now coming into some sort of official form.

The federal banking agencies released their proposal for implementing the provision last month, and unless changes are made, both community organizations and banks will run into problems with the difficult and confusing requirements. In fact, NCRC claims that the proposed regulation could even violate the First Amendment, as banks and community groups would have to disclose their private contracts when community groups use their First Amendment rights to testify before a federal agency or talk to a bank about CRA issues.

Unfortunately, the overall impact of "Sunshine" may very well be a reduction in the amount of CRA-related lending and investing by making things much more complicated and difficult for nonprofits, banks and for-profits to partner in investing in and making loans to low- and moderate-income neigborhoods.

Some of the major issues the coalition has with the Sunshine Provision include the actual level at which an agreement is an offical CRA agreement and when disclosure in required, the previously mentioned First Amendment Violations, whether the regulations are retroactive to an agreements already begun, the unreasonable penalites, and the overall chilling effect on dialogue between banks and community groups. Read more about the "Sunshine" regulations.

Community groups, banks and the public have until July 21 to comment on the proposed rule, and NCRC is urging them to do so. They will be generating comment letters to Federal banking agencies in the coming days, and can be reached at (202) 628-8866 for questions.

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  • New Low Income Housing Tax Credit Legislation Unveiled

June 22 -- A new Community Renewal bill introduced in the House by Rep. J.C. Watts Jr. (R-OK) contains a provision that would raise the low income tax credit from $1.25 to $1.75 per capita, and then index it to inflation. The bill, H.R. 815, came out of an agreement between President Clinton and Speaker of the House Dennis Hastert. The tax credits encourage developers to create more low income housing by offering them tax incentives. However, many of the elements in this initiative have been underfunded by the House Appropriation Subcommittee's HUD FY2001 Budget.

The bill is part of a larger anti-poverty plan aggreed to by Clinton and Hastert. Other components of the plan include the establishment of nine new empowerment zones, a "new Markets Tax Credit" for $15 billion in equity investments in community development groups providing loans and grants to businesses, and the creation of 40 "Renewal Communities" that would be eligible for a number of business tax incentives.

Meanwhile, Senators Rick Santorum (R-PA) and Joe Lieberman (D-CT) have unveiled a similar piece of legislation in the Senate. The Santorum/Lieberman bill would increase the LIHTC from $1.25 to $1.75 per person and adjusts it to inflation. The bill would also increase state limits on private activity bonds to $75 per resident in 2001 and indexes subsequent increases to inflation.

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New Section 8 Study Released

The Urban Institue, along with assistance from HUD and the MacArthur Foundation, has recently released a study entitled Section 8 Mobility & Neighborhood Health. The study analyzes both project- and tenant-based Section 8 vouchers. The nonpartisan Urban Institute presents a point/counterpoint type of format in the report.

The report is available online in both .html or .pdf formats.

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  • HUD's New Lead Regulations May Be Delayed

The U.S. Conference of Mayors, as well as a number of housing groups, has called on Congress to delay the implementation of HUD's new lead poisoning prevention regulations (read about in Notes). The groups oppose the regulations because they consider them an "unfunded mandate". Scheduled to take effect on September 15 of this year, the regulations require most repairs in certain building to pass a clearance examination before work commences.

No action has been taken by Congress yet, and the issue may not be dealt with until September.

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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 4250) 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.

A number of other anti-predatory lending bills have been introduced in both the House and the Senate, including S 2405 by Senator Charles Schumer (D-NY).

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.

According to this report, 51% of all home loans in predominately black neighborhoods last year were subprime (up from 8% in 1993), and 9% in predominately white neighborhoods (up from 1%), equally a total increase of $130 billion ($20 billion in '93 to $150 in '99).

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