MARKUP w/Full Committee on

MAJOR LEGISLATION AFFECTING TENANTS

Date: July 27, 2010

Time: 10:00AM

Location: 2128 Rayburn House Office Building

Related Documents:

• H.R. 5814, Public Housing Reinvestment and Tenant Protection Act of 2010;
• H.R. 4868, Housing Preservation and Tenant Protection Act of 2010;
• H.R. 2267, Internet Gambling Regulation, Consumer Protection, and Enforcement Act;
• H.R. 3421, Medical Debt Relief Act of 2009;
• H.R. 4790, Shareholder Protection Act of 2010; and
• H.R. 5823, United States Covered Bond Act of 2010.
• H.R. 476, Veterans, Women, Families with Children, and Persons With Disabilities Housing Fairness Act of 2010 (Committee Print)

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For more information from the perspective of tenants rights & housing justice on these and other issues, these organizations are readily available as national resources:

National Alliance of HUD Tenants (NAHT) -  www.saveourhomes.org

Housing Justice Network  (HJN)  -  www.nhlp.org/housingnetwork

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TO:              All Owners and Management Agents
FROM:       Carole Galante,
                     HUD Deputy Assistant Secretary for Multifamily Housing Programs
DATE:         June 18, 2010

SUBJECT:  Tenant Participation in Multifamily Housing Projects  24 CFR Part 245

[ MEMO: http://portlandtenants.org/hud/tenantparticipation-061810.pdf ] [PDF, 3pp, 132KB]

[ REF: HUD Management Agent’s Handbook 4381.5  &  24 CFR Part 245 ]

[ ... the applicability section of the regulation, below, lists all covered  properties ... a clerical error in the memo resulted in the omission of the  complete list ... ]

Title 24: Housing and Urban Development
PART 245—TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS

§ 245.10   Applicability of part.

(a) Except as otherwise expressly limited in this section, this part applies in its entirety to a mortgagor of any multifamily housing project that meets the following—

(1) Project subject to HUD insured or held mortgage under the National Housing Act. The project has a mortgage that—

(i) Has received final endorsement on behalf of the Secretary and is insured or held by the Secretary under the National Housing Act (12 U.S.C. 1701—1715z–20); and

(ii) Is assisted under:

(A) Section 236 of the National Housing Act (12 U.S.C. 1715z–1);

(B) The Section 221(d)(3) BMIR Program;

(C) The Rent Supplement Program;

(D) The Section 8 Loan Management Set-Aside Program following conversion to such assistance from the Rent Supplement Program assistance;

(2) Formerly HUD-owned project. The project—

(i) Before being acquired by the Secretary, was assisted under:

(A) Section 236 of the National Housing Act (12 U.S.C. 1715z–1);

(B) The Section 221(d)(3) BMIR Program;

(C) The Rent Supplement Program; or

(D) The Section 8 LMSA Program following conversion to such assistance from assistance under the Rent Supplement Program; and

(ii) Was sold by the Secretary subject to a mortgage insured or held by the Secretary and an agreement to maintain the low- and moderate-income character of the project;

(3) State or local housing finance agency project. The project receives assistance under section 236 of the National Housing Act (12 U.S.C. 1715z–1) or the Rent Supplement Program (12 U.S.C. 1701s) administered through a state or local housing finance agency, but does not have a mortgage insured under the National Housing Act or held by the Secretary. Subject to the further limitation in paragraph (b) of this section, only the provisions of subparts A, B and C of this part, and of subpart E of this part for requests for approval of a conversion of a project from project-paid utilities to tenant-paid utilities or of a reduction in tenant utility allowances, apply to a mortgagor of such a project;

(4) The project receives project-based assistance under section 8 of the United States Housing Act of 1937 (this regulation does not cover tenant participation in PHAs that administer such project-based assistance);

(5) The project receives enhanced vouchers under the Low-Income Housing Preservation and Resident Homeownership Act of 1990, the provisions of the Emergency Low Income Housing Preservation Act of 1987, or the Multifamily Assisted Housing Reform and Affordability Act of 1997, as amended;

(6) The project receives assistance under the Section 202 Direct Loan program or the Section 202 Supportive Housing for the Elderly program; or

(7) The project receives assistance under the Section 811 Supportive Housing for Persons with Disabilities program.

(b) Limitation for cooperative mortgagor. Only the provisions of subparts A and C of this part apply to a mortgagor of any multifamily housing project described in paragraph (a) of this section if the mortgagor is a cooperative housing corporation or association.

(c) Definitions.

Rent Supplement Program means the assistance program authorized by section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s).

Section 8 LMSA Program means the Section 8 Loan Management Set-Aside Program implemented under 24 CFR part 886, subpart A.

Section 221(d)(3) BMIR Program means the below-market interest rate mortgage insurance program under section 221(d)(3) and the proviso of section 221(d)(5) of the National Housing Act (12 U.S.C. 1715l(d)(3) and 1715l(d)(5)).

[61 FR 57961, Nov. 8, 1996, as amended at 65 FR 36280, June 7, 2000; 68 FR 20325, Apr. 24, 2003]

It is billed by proponents as a program to both increase administrative efficiency, increase choice & mobility for tenants, and use scarce capital more efficiently.

It is opposed by some tenants rights advocates and others as a corporate welfare bonanza for the housing industry and as a threat to tenants rights.

By still others, it is seen as an opportunity to democratize the housing industry creating housing of the people, by the people, and for the people via development of housing cooperatives.

So, whether the HUD PETRA bill is a CRISIS or an OPPORTUNITY depends on who you ask.

Below, are links to the House Committee on Financial Services as well as a George Lakoff article published on CommonDreams.org.

These are some places to start.  Of course, there are lots of details directly from the HUD website on the PETRA proposal. 

House Committee on Financial Services

Full Committee Hearing

OPPOSING VIEWS and TENANTS PERSPECTIVES & CONCERNS:

Published on Friday, May 21, 2010 by CommonDreams.org

HUD is Trying to Privatize and Mortgage Off All of America’s Public Housing
by George Lakoff

The Obama Administration’s move to the right is about to give conservatives a victory they could not have anticipated, even under Bush. HUD, under Obama, submitted legislation called PETRA to Congress that would result in the privatization of all public housing in America.

The new owners would charge ten percent above market rates to impoverished tenants, money that would be mostly paid by the US government (you and me, the taxpayers). To maintain the property, the new owners would take out a mortgage for building repair and maintenance (like a home equity loan), with no cap on interest rates.

With rents set above market rates, the mortgage risk would be attractive to banks. Either they make a huge profit on the mortgages paid for by the government. Or if the government lowers what it will pay for rents, the property goes into foreclosure. The banks get it and can sell it off to developers.

Sooner or later, the housing budget will be cut back and such foreclosures will happen. The structure of the proposal and the realities of Washington make it a virtual certainty.

The banks and developers make a fortune, with the taxpayers paying for it. The public loses its public housing property. The impoverished tenants lose their apartments, or have their rents go way up if they are forced into the private market. Homelessness increases. Government gets smaller. The banks and developers win. It is a Bank Bonanza! The poor and the public lose.

And a precedent is set. The government can privatize any public property: Schools, libraries, national parks, federal buildings – just as has begun to happen in California, where the right-wing governor has started to auction off state property and has even suggested selling off the Supreme Court building.

The rich will get richer, the poor and public get poorer. And the very idea of the public good withers.

This is central to the conservative dream, in which there is no public good – only private goods. And it is a nightmare for democracy.

The irony is that it is happening under the Obama administration. Barack Obama, running for office, gave perhaps the best and clearest characterization of what democracy is about. Democracy, he has said, is based on empathy – on citizens caring about and for each other. That is why we have principles like freedom and fairness for everyone. It is why social responsibility is necessary. The monstrous alternative is having a society where no one cares about or for anyone else.

HUD, under the Obama administration, is about to take a giant step toward that monstrous society.

Here is a quote from the PETRA bill. It’s intent is to:

provide the opportunity for public housing agencies and private owners to convert from current forms of rental assistance under a variety of programs to long-term, property-based contracts that will enhance market-based discipline and enable owners to sustain operations and leverage private financing to address immediate and long-term capital needs and implement energy-efficiency improvements.

Along the way, tenants’ rights will be trampled, since tenants could not longer seek redress from the government through their public officials – because the government would no longer own the buildings.

Stop PETRA. This is urgent. There is a hearing next Tuesday, May 25, before the House Financial Services Committee and the Subcommittee on Housing, organized by Rep. Maxine Waters.  Phone: 202-225-2201 begin_of_the_skype_highlighting              202-225-2201      end_of_the_skype_highlighting. Fax: 202-225-7854.

To write to the committee:

      http://financialservices.house.gov/contact.html

Write to your Congressperson now.

If you want to sign a petition, go to:

      http://www.gopetition.com/petitions/save-public-housing.html

Here is a letter from the National Association of HUD Tenants:

      http://www.saveourhomes.org/kaymathew/trapositionpaper.pdf

Here is an informational website, with letters, background information, and alternative proposals:

      http://lacehh.wordpress.com/

And do what you can to get the word out.  This requires a national discussion. 
 

George Lakoff is the author of Moral Politics, Don’t Think of an Elephant!, Whose Freedom?, and Thinking Points (with the Rockridge Institute staff). He is Richard and Rhoda Goldman Distinguished Professor of Cognitive Science and Linguistics at the University of California at Berkeley, and a founding senior fellow at the Rockridge Institute.
cooperativeperson May 22nd, 2010 11:23 am

Regarding public housing, go a bit slower and think more clearly. PETRA will give public housing tenants the opportunity to own their own buildings. With available up to `100% insured financing, an investment of one months security deposit or about $50 whichever is less and little public funding (like Sect 8 home purchase funds or grant money) a tenants’ housing cooperative could buy the buildings and then operating without a private investor making a profit off of it.

Can’t be done? We have 4 100% section 8 cooperatives now operating in Chicago. 3 for over 20 years and 1 for over 10 years.

Get real America. The future is in our hands through cooperatives.

Liberals and progressives have been arguing without a real cause. How about privately user owned cooperatives? Haven’t thought it before? Look around you, they are all all over. Belong to a credit union? Or buy Welch’s grape juice or Land O Lake butter? All cooperatives. Owned by their depostor users and their producing farmers. An American economy for the little folks.

…  there are also 75 more reader comments on this article at:

CommonDreams.org  (Friday, May 21, 2010)

HUD is Trying to Privatize and Mortgage Off All of America’s Public Housing
by George Lakoff