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Statements on Introduced Bills and Joint Resolutions S. 1411

Location: Washington, DC

By Mr. KERRY (for himself and Mr. CHAFEE):

S. 1411. A bill to establish a National Housing Trust Fund in the Treasury of the United States to provide for the development of decent, safe, and affordable housing for low-income families, and for other purposes; to the Committee on Banking, Housing, and Urban Affairs.

Mr. KERRY. Mr. President, our Nation is facing an affordable housing crisis. Recent changes in the housing market have limited the availability of affordable rental housing across the country and have dramatically increased the cost of those that remain. More families are forced to pay more than 50 percent of their income for housing at a time when Federal spending on housing programs are under attack. That is why, along with Senator Chafee, I am again proposing to address the severe shortage of affordable housing by introducing legislation that will establish a National Affordable Housing Trust Fund and begin a rental housing production program.

The Affordable Housing Trust Fund that is established in this legislation would create a production program that will ensure 1.5 million new rental units are built over the next 10 years for extremely low-income families and working families. The goal is to create long-term affordable, mixed-income developments in areas with the greatest opportunities for low-income families. Seventy-five percent of Trust Fund assistance will be awarded, based on need, through matching grants to States and local jurisdictions. The States and local jurisdictions will allocate funds on a competitive basis to projects that meet Federal requirements, such as mixed-income projects and long-term affordability, and that address local needs. The remainder of the funding will be competitively awarded by the Department of Housing and Urban Development, HUD, to intermediaries, such as the Enterprise Foundation, which will be required to leverage private funds. A portion of the Trust Fund will be used to promote home ownership activities for low-income Americans.

The Trust Fund would be paid for out of surplus revenue generated by the Federal Housing Administration and Government National Mortgage Administration after ensuring their fiscal safety and soundness. These Federal housing programs generate billions of dollars in excess income, which currently goes to the general Treasury for use on other Federal priorities. It is time to stop taking housing money out of housing programs. These excess funds should be used to help alleviate the current housing crisis. According to current projections, approximately $28 billion will be available for the Trust Fund between now and 2008.

The need for affordable housing is severe. Many working families have been unable to keep up with the increase in housing costs. Today, for many low-income families and their children, the cost of privately owned rental housing is simply out of reach. According to the National Housing Conference, more than 14 million families spent over half of their income on housing in 2001. Today, working families in this country increasingly find themselves unable to afford housing. A person trying to live in Boston would have to make more than $35,000 annually, just to afford a two-bedroom apartment. This means teachers, janitors, social workers, police officers and other full-time workers may have trouble affording even a modest two-bedroom apartment.

The cost of rental housing keeps going up. According to the Consumer Price Index, CPI, contract rents began to rise above the rate of inflation in 1997 and have continued every year since. Rental costs have outpaced renter income gains for households across the board. Low wage workers have been hardest hit by the increase in cost of rental housing.

Because of the lack of affordable housing, too many families are forced to live in substandard living conditions putting their children at risk. Children living in substandard housing are more likely to experience violence, hunger, lead poisoning and to suffer from infectious diseases such as asthma. They are more likely to have difficulties learning and more likely to fall behind in school. Our Nation's children depend upon access to affordable rental housing.

At the same time the cost of rental housing has been increasing, there has been a significant decrease in affordable rental housing units. More than 1.8 million affordable housing units have been demolished over the past decade. Making matters worse, many current affordable housing providers are deciding to opt-out of their Section 8 contracts or are prepaying their HUD-insured mortgages. These decisions have further limited the availability of affordable housing across the country. Many more providers will be able to opt-out of their Section 8 contracts in the next few years, further limiting the availability of affordable housing in our nation. The current decline has already forced many working families eligible for Section 8 vouchers in Boston to live outside the city because there are no available rental housing units which accept vouchers.

The loss of affordable housing has exacerbated the housing crisis in this country, and the Federal Government must take action. We have the resources, yet we are not devoting these resources to fix the problem. Despite the fact that more families are unable to afford housing and there are fewer affordable rental housing units, we have decreased Federal spending on critical housing programs. Between 1978 and 1995, the number of households receiving Federal housing assistance was increased by almost 3 million. From 1978 through 1984, an additional 230,000 families received Federal housing assistance each year. This number dropped significantly to 126,000 additional households each year from 1985 through 1995.

[Page S9424]

In 1996, this nation's housing policy went all the way back to square one— not only was there no increase in families receiving housing assistance, but the number of assisted units actually decreased. From 1996 to 1998, the number of HUD assisted households dropped by 51,000.

During this time of rising rents, increased housing costs, and the loss of affordable housing units, it is incomprehensible that we are not doing more to increase the amount of housing assistance available to working families. Yet in the face of these critical housing problems and the effect it has on our children, the Bush
Administration is working to dismantle many federal programs that help Americans find affordable housing. The Bush Administration has proposed to block grant the Section 8 Voucher program, which I believe will reduce the number of families with children eligible for Federal housing assistance and increase housing costs for those families who remain. A recent Center on Budget and Policy Priorities study that shows President Bush's fiscal year 2004 budget request is inadequate to fund all Section 8 housing vouchers needed in fiscal year 2004.
Specifically, the lack of funding in the voucher program request means that approximately 184,000 vouchers now in use serving low-income families will not be funded. In Massachusetts, this would mean a reduction of more than 6,000 vouchers or nearly ten percent of the vouchers projected to be in use in October 2003. If the President's request is enacted into law, the Center on Budget and Policy Priorities believes that it is likely that some families that now rely on vouchers to help pay their rent will lose assistance, placing these families at high risk of eviction and, in some cases, homelessness. President Bush's fiscal year 2004 budget request also proposes cutting an additional $2.45 billion from existing housing programs and eliminating the HOPE VI program, which has helped revitalize neighborhoods around the country. These cuts come on top of an earlier Bush Administration action to abolish the Public Housing Drug Elimination Grant program.

The Bush Administration changes in Federal housing programs mean that the Commonwealth of Massachusetts and many other States will likely receive a reduction in Federal housing funds in fiscal year 2004. Almost every State is facing serious budget deficits and are forced to dramatically increase spending on homeland security.
Additional funds are not available to make up the decline in Federal spending. The future is even bleaker. These reductions at HUD follow the enactment of two separate tax cuts, which primarily benefit the wealthiest in our society, that will make it almost impossible for any significant increases in the HUD's budget over the next decade. We need to bring housing resources back to where they belong. The National Affordable Housing Trust Fund will provide desperately needed funds to begin production of affordable housing in the United States.
Enacting the Housing Trust Fund legislation is an important step in the right direction to add resources to housing and to help begin producing housing again.

We can no longer ignore the shortage of affordable housing in America, and the impact it is having on families and children around the country. It is still unclear to me why this lack of housing has not caused more uproar. How many families are to be pushed out of their homes and into the streets, before action is taken. I believe it is time for our nation to take a new path—one that ensures that all Americans, especially our children, has the opportunity to live in decent, affordable and safe housing. Everyone knows that decent housing, along with neighborhood and living environment, play enormous roles in shaping young lives. Federal housing assistance, has assisted millions of low-income children across the nation and has helped develop stable home environments.
However, too many children still live in families that have substandard housing or are homeless. These children are less likely to do well in school and less likely to be productive citizens. Because of the positive effect that this legislation would have on America's children, the Trust Fund was included in the Act to Leave No Child Behind, a comprehensive proposal by the Children's Defense Fund to assist in the development of our nation's children.

I urge you to support this legislation to restore our commitment to provide affordable housing for all families. We can no longer turn our backs on those who struggle every day just to put a roof over their family's head.

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