SHAC is monitoring several federal actions and initiatives that could have enormous impact on Rhode Island's families.

Senator Reed introduces homeless legislation

Last week, Senator Jack Reed introduced S.1801, the Community Partnership to End Homelessness Act of 2005. The legislation would reauthorize the McKinney-Vento Homeless Assistance Programs and make a number of significant changes.

S.1801 was introduced with 13 co-sponsors, including Senator Lincoln Chafee. It would:

Federal budget watch

Continuing Resolution Passed: Since Hurricane Katrina delayed the FY06 budget reconciliation process, Congress passed a continuing resolution (CR) to keep the federal government running when its new fiscal year began on October 1. CRs usually fund programs at the previous year's levels, but in this case, all federal programs will be funded at the lower of the House-passed funding level, Senate-passed level, or FY05-enacted level.

The Senate has not yet passed its FY06 Housing and Urban Development (HUD) appropriations bill, so HUD programs are subject to the lower of the House-passed bill or FY05 funding levels. The House passed significant cuts to the Community Development Block Grant (CDBG), HOPE VI, and Resident Opportunity and Self-Sufficiency (ROSS) programs. 

The House and Senate are expected to take up budget reconciliation the week of October 24. Eight Rhode Island organizations have signed on to a letter coordinated by the Coalition on Human Needs urging Congress to abandon the proposed tax cuts and cuts to mandatory programs.

The reconciliation process demands mandatory spending cuts in entitlement program -- including Medicaid and food stamps -- and $70 billion in tax cuts. 

The National Low Income Housing Coalition has prepared a chart comparing the budgets passed by the Senate Appropriations Committee, House, and administration with the budgets enacted in FY04 and FY05.

Effect of budget on Section 8: According to a new report by the Center on Budget and Policy Priorities, 227 Rhode Island households would lose the federal subsidies that help them pay the rent under the appropriations bill passed by the House of Representatives. The Center estimates that if the House bill were to be enacted, the Providence Housing Authority would need to cut 156 families from its Section 8 Housing Choice Voucher Program. East Providence and West Warwick housing authorities would need to reduce their programs by 10 families each.

Under the bill passed by the Senate Appropriations Committee, Rhode Island would lose 119 Section 8 vouchers. However, the Center argues that the Senate's bill distributes funding more efficiently and provides greater stability than the House version. The House bill would continue to utilize the funding formula implemented in 2004, which bases an agency's voucher renewal funding on the number and cost of vouchers used during a single three-month snapshot (May-June 2004). The Senate Appropriations Committee's bill would base voucher renewal funding on the agency's actual leasing rates and costs over the most recent 12-month period.

The funding formula imposed in 2004 has had a dramatic impact in Rhode Island. Public housing agencies across the state have been forced to undertake cost-cutting measures, such as not re-issuing vouchers upon turnover, increasing minimum rents, and shortening the amount of time voucher-holders have to find apartments.

Hope for new federal housing fund 

Background: Last year, Senator Jack Reed (D-RI) introduced an amendment that would create affordable housing funds at Fannie Mae and Freddie Mac. The committee unanimously approved the Reed amendment, but the bill died in the Senate. 

As endorsers of the National Housing Trust Fund campaign, SHAC has been working towards the creation of an ongoing, sufficient source of revenue for the production and preservation of affordable homes.

In the House: The Federal Housing Finance Reform Act of 2005 (H.R.1461) -- intended to improve oversight and regulation of the housing government sponsored entities (GSEs) -- would establish Affordable Housing Funds at Fannie Mae and Freddie Mac. These funds would be permanent and dedicated resources for local housing production.

Fannie Mae and Freddie Mac would each dedicate 5% of after-tax profits to their funds. The money could be used for the production, preservation, and rehabilitation of rental housing for extremely low and very low income families; homeownership opportunities for extremely low and very low income families; and grants to meet community and economic development needs in economically underserved areas.

Affordable housing opponents in the House are mobilizing against the Affordable Housing Fund component of H.R.1461. Representative Mike Pence (R-NC) and 33 members of the House have signed a letter to House Majority Leader Tom DeLay asking that H.R.1461 not be considered by the full House if the Affordable Housing Funds provision is included. They claim that "while we support efforts to improve access to affordable housing," the funds "work against the free market principles that have made our nation's housing market one of the most accessible in the world." The representatives also contend that the funds could be used to finance advocacy groups with "agendas far beyond simply increasing affordable housing for low income Americans -- agendas that are antagonistic to the free market principles that we value."

H.R.1461 was voted out of committee. Contact Representative Patrick Kennedy and Representative Jim Langevin to ask for their support of the Affordable Housing Funds when H.R.1461 comes to the House floor.

In the Senate: Last week, the Senate Banking, Housing, & Urban Affairs Committee approved legislation strengthening oversight and regulation of the government sponsored entities (GSEs). As reported out of committee, S.190 does not provide for an affordable housing fund. 

During the mark-up session, Senator Sarbanes (D-MD) offered an amendment that included Senator Jack Reed's affordable housing amendment. The Reed amendment would require Fannie Mae and Freddie Mac to establish funds for the production, preservation, and rehabilitation of housing affordable primarily to extremely low income households. The Affordable Housing Funds would be capitalized with a portion of the GSE's unpaid principal balance of their total new business purchases. Language was added to explicitly restrict the use of funds to bricks and mortar projects.

Senator Sarbane's amendment -- including the Reed affordable housing amendment -- was defeated along party lines. While a number of senators indicated their support for the Affordable Housing Funds, Senator Shelby (R-AL) objected to letting Fannie Mae and Freddie Mac control the funds. Senator Allard (R-CO) indicated that, in his opinion, the private sector has responded to the affordable housing problem, so the government does not need to do more.

Advocates remain hopeful an affordable housing fund provision will be included when the GSE reform legislation is debated on the Senate floor or during the conference between the House and Senate.

Congress rejects harmful changes to federal housing policy

The short life of the State and Local Housing Flexibility Act of 2005 (SLHFA) has thankfully ended. SLHFA ( H.R.1999 and S.771), which proposed a number of drastic and harmful changes to the public housing and Section 8 programs, was strongly opposed by people across the country. In Rhode Island, more than 50 individuals and organizations signed SHAC's petition calling on Congress to defeat SLHFA. 

However, there is a possibility that components of SLHFA could be revived through other means. Members of Congress might try to make regulatory changes during the final stages of the appropriations process, as they have done in recent years. The most likely areas to be revisited are rent determination and the controversial Moving to Work program. The House Financial Services Committee has also indicated its desire to make changes to the Section 8 program.