National Affordable Housing Trust Fund Act of 2007

NATIONAL AFFORDABLE HOUSING TRUST FUND ACT OF 2007 -- (House of Representatives - October 10, 2007)

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Ms. WATERS. Mr. Chairman, the Chair of the Financial Services Committee, Chairman Frank, who just spoke, is absolutely correct. This is a very exciting day, a day that so many housing advocates and working people and poor people have been waiting for. They get a chance to see their government responding to one of the most critical needs in our society.

Mr. Chairman, I rise in support of H.R. 2895, the Affordable Housing Trust Fund Act of 2007, and I sincerely thank Chairman Frank for his unrelenting efforts to get the Federal Government back in the affordable housing production business.

I am so proud to be part of this committee, to be a cosponsor of this bill and to work with Chairman Frank in not only producing housing under this National Affordable Housing Trust Fund, but for all the other work that has been coming out of this committee under his leadership.

The need for this bill could not be more urgent. Mr. Chairman, last week you joined me when I chaired a hearing in the Housing and Community Opportunity Subcommittee that demonstrated that when affordable housing is not produced, homelessness is. The stark bottom line that emerged from the hearing, focused narrowly on reauthorizing the McKinney-Vento Homeless Assistance Act of 1987, is that, nationwide, we haven't made demonstrable progress in reducing the number of households experiencing homelessness in the past two decades. While some homeless people face personal challenges that require social services or other support, every homeless individual and family shares one common need: Housing they can afford. And there simply is not enough of it.

For example, there are 9 million renter households who earn less than 30 percent of area median income, but only 6.2 million units affordable to them. This leaves an absolute deficit of 2.8 affordable rental housing units for our poorest families. This kind of math leads inevitably to widespread homelessness. But I want to emphasize that the National Housing Trust Fund addresses the affordable housing crisis as it affects every level of society.

Right now, housing costs are outstripping wages for more households than ever before in recent memory. According to the ``Harvard University Study on the State of the Nation's Housing in 2007,'' 17 million renters and homeowners are paying more than half their incomes in housing costs.

Working is simply no longer a guarantee of being able to afford housing. In Los Angeles, for example, it takes an hourly wage of over $22 an hour to afford a moderately priced two-bedroom apartment, when the minimum wage in California is only $7.50 an hour. Put another way, a two-parent family with both parents working full-time at minimum-wage jobs puts that family less than two-thirds of the way to being able to afford decent housing.

Finally, as a recent Center for Housing Policy study ``Paycheck to Paycheck'' dramatically shows, many of our Nation's essential workers cannot afford to live in or near the communities where they work. In high-cost communities like Los Angeles where the median home price is $523,000, the income needed to afford a home is far higher than that earned by teachers, police, firefighters, nurses and other key occupations studied. The National Affordable Housing Trust Fund addresses this full range of housing crises, providing relief to overburdened renters and homeowners, while targeting funds where the need is greatest.

Mr. Chairman, I want to emphasize that H.R. 2895 does so at no additional cost to taxpayers. It is a trust fund in the truest sense, a dedicated source of revenue, separate and apart from the annual appropriations process, reflecting the need for the Federal Government to make a long overdue commitment to affordable housing production.

We have clearly demonstrated that the fund will be drawn from moneys from the affordable housing fund proposed as part of the GSE reform bill, H.R. 1427, from Federal Housing Administration savings and other existing revenue streams. I am prepared to debate with my colleagues on the other side of the aisle whether such revenues should be diverted to uses other than addressing the housing needs of America's working families and poorest, disabled individuals. I do not think there is any better use for them, particularly since both GSE and FHA revenues derive from housing activities that the Federal Government and government-sponsored enterprises engage in, at significant profit to both, I might add.

In conclusion, Mr. Chairman, it has been 17 years since the Federal Government last enacted a major affordable housing production program, spearheaded in 1990 by, Mr. Chairman, your predecessor, Chairman Gonzalez. The time has long since passed to enact another one.

I am so proud of this legislation. I am so thankful, Chairman Frank, for your leadership. And I am so proud and pleased to have the opportunity at this time in my career not only to work on the committee with you and to chair this subcommittee, but to be able to stand here today and see something about to happen that has been needed for so long.

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Ms. WATERS. Mr. Chairman, I rise in support of this amendment.

Chairman Frank, I applaud you for your willingness to modify the trust fund proposal as it has moved through this Chamber to reflect the realities of the housing market while simultaneously keeping your eye on the prize, a significant increase in the production of affordable housing for the very poorest Americans. This amendment continues to maintain such a balance.

Let me share some simple math with my colleagues. The monthly SSI payment in California is $836. As the Brooke amendment established, the Federal Government considers an affordable rent to be 30 percent of that income, or $250 per month. Nobody can operate housing anywhere in California, much less in high-cost areas like Los Angeles, for $250 per unit monthly. It doesn't matter whether you're a nonprofit or for-profit or whether you have significant debt service on loans for the capital, or if someone has just handed you a brand new building for free. As the green eye shade types in the real estate business say, it just ``doesn't pencil out.''

This need to address the operating cost shortfall in projects targeted to the lowest income folks, especially those at SSI income levels and below, is not news to those of us who have been fighting for a national affordable housing trust fund for over half a decade. Nor, to be clear, does it suggest that there's any shortage of need for plain old low-cost bricks and sticks capital grants which will comprise the vast majority of funding under H.R. 2895, even if this amendment is adopted. What has become clear, though, is that the State and local housing agencies need some flexibility with the trust fund dollars to address the operating shortfall issue in order for the trust fund to generate the greatest number of new units for the poorest, most disabled residents of trust fund projects.

Critically, neither this amendment nor the underlying bill discourages grantees from seeking other sources of operating subsidies or rental assistance. Indeed, it requires as much. Even the full 10 percent of the trust fund in a given year, should States and localities choose to use the maximum permitted to operate accounts, will not come close to providing the total amount of operating subsidy needed to achieve the trust fund's targeting goals. So grantees like my own California Housing Finance Agency or Los

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Angeles City Housing Department will have no choice but to leverage trust funds with section 8, McKinney-Vento subsidies and State or local rental assistance programs.

But this flexibility will ensure that some projects can move forward that otherwise could not in the current environment, where section 8, for example, has been under attack since the moment the trust fund movement began. That is the essence of the trust fund bill that you have championed, Chairman Frank, recognizing and overcoming the obstacles to affordable housing production for the poorest people in this country. This amendment is wholly consistent with that goal, and I urge my colleagues to support that.

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