Disposition in Revised U.S. Housing Act of 1937 (Section numbers refer to revised Act in section 201 of the 1971 proposal except where otherwise indicated) Deletes the 20% gap requirement. No change in requirements for local cooperation. (Sec. 5(e)) Deletes provision public housing relocation payments to be funded in accordance with section 211 of Uniform Relocaof 1970. tion Assistance and Real Property Acquisition Policies Act Provides new homeownership program for tenant and low-income income contribution to "monthly homeownership expense' (Sec. 10) Same (Sec. 6(a)) Description Secretary to encourage congregate housing for displaced, - Labor standards requires that contracts include a Sec. 20 Authority of the Secretary to borrow up to $1.5 billion for the program. Sec. 21 Federal Reserve banks directed to act as depositories, custodians, and fiscal agents for HUD. Disposition in Revised U.S. Housing Act of 1937 (Section numbers refer to revised Act in section 201 of the 1971 proposal except where otherwise indicated)___ Substantially the same except makes it clear that obligations of a public housing agency which are secured by both a pledge of a loan and by a pledge of annual contributions, and which are accompanied by a certificate of the Secretary that the obligations are so secured, are incontestable in the hands of the bearer and backed by the full faith and credit of the United States. In addition, section 206 of the 1971 bill amends section 5136 of National Bank Act to authorize national banks to invest in obligations of public housing agencies secured by a combination pledge of both annual contributions and a loan and loans would not be subject to the present 18 months limitation. (Secs. 6(f), 12(a)) Substantially the same except that sale of leased units to tenants would be under terms and conditions authorized for the purpose of reselling them under the new homeownership program [section 10]. (Sec. 8) Sec. 31 Short title. Secretary ROMNEY. I will discuss briefly, however, the three major changes we are proposing with respect to our private subsidy programs to enable them to function more efficiently, more rationally, and more equitably: (1) The establishment of income limits for initial occupancy, which are based on median family income levels of the area; (2) The establishment of maximum mortgage limits by the Secretary, based on prototype costs for each housing market area; and (3) The replacement of a separate rent supplement program by an integral component of the basic rental assistance program. Our proposal to base income limits in the private programs on the median income in the area, with adjustments upward or downward if unusual local conditions warrant a variation, should provide the needed flexibility to serve all geographic areas equitably. Our proposal to replace the statutory dollar limits on mortgage amounts with administratively determined limits based on prototype cost estimates seeks a more equitable operation of FHA programs. This procedure would permit the establishment of mortgage limits by geographic areas on the basis of prevailing cost levels in each area. It would also permit the timely updating of the limits on the basis of changes in land or construction costs. With this flexibility, we could not only accommodate the very high-cost areas where nationwide statutory limits have tended to be too low, but we could assure that cost limits are not unnecessarily and wastefully high in other areas-a situation that prevails in the country today. Finally, we propose to fold in the rent supplement program as a component of each project assisted under the rental assistance program. At least as much subsidy could be provided in up to 20 percent of the units in any project as can now be provided in rent supplemented units in a current section 236 project. This consolidation would permit us to provide a wider variety of economically integrated and sound projects than we can achieve at present in the face of varying and sometimes conflicting requirements of the two separate programs. Naturally, we do not consider this housing consolidation legislation the last word on our subsidized housing programs. The President's Third Annual Housing Goals Report discusses several problems that go to the heart of our present programs. These include their longrun costs, as well as the inequity involved in giving housing assistance to some low- and moderate-income families and not giving it to others in the same circumstances. We must continue to give these issues very serious study. Meanwhile, we should improve and make more workable the programs we have through prompt enactment of the consolidation package we have proposed. Now, I understand that the committee is interested in a brief discussion of the annual report on housing goals, and I think this is the appropriate point in the testimony for it. First, I want to say that in my opinion the annual report on housing goals serves a very useful purpose. So long as we have a national housing goal of a decent home and a suitable living environment for every American family, we need to have some targets by which we hope to achieve this goal and some means of measuring our progress from year to year. This year's report indicates that housing production is about on schedule as we move toward meeting the goal of 26 million housing units over the decade 1969-78, including about 6 million subsidized units for low- and moderate-income families. In fact, by the end of fiscal 1972, total production, and production of units for low- and moderate-income families, may well be ahead of schedule. More specifically, we concluded: Total production-including starts, mobile home shipments, and subsidized rehabilitations-amounted to 1.9 million units in calendar 1970. Initial estimate for calendar 1971 suggested an increase in total production of at least 171⁄2 percent to more than 2.2 million units, including at least 1.75 million onsite starts. An even larger increase now seems likely. Total production this calendar year could reach nearly 2.4 million housing units, including 1.9 million onsite starts; and the fiscal 1972 total could be over 2.6 million units. This would push the total production in the first 4 years of the goals decade slightly ahead of the goals schedule. While we can take considerable satisfaction from progress to date, the goals report makes clear that a simplistic numeral production approach does not automatically guarantee that housing needs will be met. The report states: While housing production goals must necessarily be an important component of any housing strategy, production is not the sole measure of progress, and may not even be the most important. What really counts is whether there is a sufficient total supply of decent housing available in the tight places, and whether all Americans have the basic opportunity and wherewithal to get decent housing. And as a matter of fact, it is perfectly clear from experience that housing management is as important if not more important than housing production in terms of providing decent housing. And the housing management problem is proving much more difficult to handle than housing production, because of the great deficiencies in the whole national picture, private and public, in the management field. In discussing the need for an improved housing strategy, the goals report also calls for: A greater effort than in the past to focus on the Nation's existing housing stock: Its condition, its maintenance and improvement, its rehabilitation, its management, and its market dynamics. The rapid deterioration and abandonment of many existing housing units, if unchecked, could turn our new production efforts into a treadmill. This concern for the existing stock is reflected throughout the work of your committee's panels, as well as in the specific amendment proposed in H.R. 9688, which would broaden the housing goal analysis to include the existing stock. Unfortunately, the tools available today to measure changing housing conditions and needs are still very crude. The 1790 census will be helpful toward filling data gaps over the next several months, and we have plans to initiate an annual housing survey in subsequent years in cooperation with the Bureau of the Census. |