See Comments on Public Housing Legislation Passed by Conference Committee

WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo said public housing legislation approved today by a House-Senate Conference Committee "makes President Clinton's landmark housing reforms a reality and achieves his key reform goals."

"I am pleased that my Administration has agreed with the Congress on a bipartisan housing bill that incorporates all of the essential principles for which we have fought during the long, difficult negotiations that led to this agreement," President Clinton said. "This legislation will put America back in the business of providing new affordable housing, will transform public housing, and will increase homeownership opportunities.... I thank HUD Secretary Andrew Cuomo for his extraordinary work on this legislation. "

"I must note, however, that this legislation is contained within the Fiscal Year 1999 Appropriations bill for VA, HUD and other Independent Agencies - and that I remain concerned about the funding levels provided for certain environmental and economic development programs in that bill," the President said.

Secretary Cuomo said: "The bipartisan legislation approved by the Conference Committee implements President Clinton's visionary plans to transform public housing from segregated ghettos of poverty and despair into economically integrated communities of opportunity. The legislation also creates affordable housing for 90,000 more families and promotes homeownership through higher FHA (Federal Housing Administration) loan limits."

"I would especially like to thank Senator Paul Sarbanes and Congressman Joseph Kennedy for their effective work to win approval of this important legislation," Cuomo said.

The historic legislation would overhaul HUD's policies and programs by:

• Transforming Public Housing: The legislation would transform public housing into a setting that encourages and rewards work, would increase the availability of subsidized housing for very poor families much closer to the targeting limits proposed by HUD, and would tear down the largest failed public housing projects and replaces them with new townhouse-style developments through the HOPE VI program. In public housing, the legislation would change the admissions policies for new families to reduce income and racial concentrations. The bill would enable more moderate-income working families to live in public housing where the poorest residents on welfare are now concentrated, while providing additional Section 8 vouchers for the poorest families.

• Putting America Back in the Housing Business. After a four-year hiatus, the new HUD budget would put America is back in the housing business for 90,000 more families this year through the Section 8 rental assistance program, which helps pay the rent of people with low- and moderate-income in privately owned affordable housing. 50,000 new vouchers would be created for families moving from welfare to work, and 40,000 vouchers would be made available by eliminating a mandatory three-month waiting period to reissue vouchers that go from one family to another. In addition, the Conference Committee bill would authorize another 200,000 vouchers - 100,000 in the year 2000 and an additional 100,000 in the year 2001.

• Increasing Homeownership Opportunities. Building on Clinton Administration policies that have helped America achieve the highest homeownership rate in history, the budget approved by the Conference Committee would help move the nation to an even higher homeownership rate by increasing limits on home mortgage loans insured by the Federal Housing Administration. The change achieves a Clinton Administration goal of enabling more families to qualify for FHA-insured mortgages. In most communities today, FHA mortgages are limited to $86,317. In some high-cost communities, the FHA can insure mortgages up to $170,362. The appropriations bill approved by the Conference Committee raises the limit on FHA-insured mortgages to a range of $109,000 to $197,000. The higher ceiling opens the door of homeownership to middle-class families needing FHA insurance to get mortgages, but locked out now because the current ceilings have not kept pace with rising home prices.

Cuomo said that as important as what the legislation contains are the provisions that were scrapped from inclusion in the bill. He said the legislation does not contain sections of a public housing bill passed earlier by the House that "repeal" the 1937 Housing Act, or harmful income eligibility provisions, or a punitive mandatory work provision for public housing residents that some members of Congress wanted.

Senator Paul Sarbanes of Maryland, Ranking Democrat on the Senate Banking, Housing and Urban Affairs Committee said: "This bipartisan agreement marks a significant milestone in helping to meet the housing needs of this nation. It provides for new solutions, adds needed resources, and gives local agencies greater flexibility in making public housing and homeownership opportunities available to more families throughout the country."

Senator John Kerry of Massachusetts, ranking Democrat on the Housing Subcommittee, said: "This legislation will put public housing on a strong footing for the future. It provides for increased flexibility for housing agencies, demands increased accountability, and encourages important new public-private partnerships. Finally, I am particularly pleased that it continues to target federal housing assistance to the poor and working poor."

Congressman John LaFalce of New York, Ranking Democrat on the House Committee on Banking and Financial Services, said: "I believe the four-year campaign of Congressional Democrats, the Administration and tenant advocates against onerous rent reforms and irresponsible targeting levels has finally brought positive results."

Congressman Joseph Kennedy of Massachusetts, Ranking Democrat on the House Subcommittee on Housing and Community Opportunity, said: "This historic reform bill strikes a balance between protecting our nation's commitment to housing the poorest Americans while opening up units in public housing to middle-income families. This win-win legislation is the result of negotiations led by HUD Secretary Andrew Cuomo, who worked with both sides of the aisle to find a way to uphold Democratic principles and deconcentrate poverty in our urban centers."

Here are more details of the HUD public housing bill approved by the Conference Committee. The legislation would:

• Improve living conditions in public housing, give the poorest families role models of working families, reduce crime, help low-wage working families struggling to make ends meet, and foster more integration in public housing as a result of increased economic integration.

• Promote access by the poorest families to public housing where families with relatively higher incomes live, a key goal of the Clinton Administration. In the area of Section 8 vouchers, the Conference Committee legislation provides that at least 75 percent of Section 8 vouchers go to families with incomes below 30 percent of the area median income - compared with just 40 percent in the bill passed earlier by the House. In public housing, the bill says that at least 40 percent of newly available public housing units would go to the poorest households (with limited exceptions) - compared with only 35 percent (with broad exceptions) under the House bill. Median family income varies from city to city. Nationally, it stands at $45,300. Housing authorities would have to adopt admission plans consistent with these goals of access for the poorest families.

• Enact long-pending public housing reforms that were proposed by the Clinton Administration to require improved public housing management and increased program efficiency. These include: mandatory court-ordered receiverships for housing authorities that perform poorly for two years, requirements that housing authorities spend funds to assist residents more quickly, and consolidation of several programs to make them easier to administer and monitor.

• Allow well-run housing authorities to operate with less HUD oversight and more flexibility, as the Clinton Administration proposed. This will enable housing authorities performing acceptably to devote less time and resources to reporting to HUD and to focus on delivering good housing.

• Limit a House "home rule" provision that would have allowed cities to take over even well-managed public housing authorities and would have allowed the cities to take away significant resident protections. The number of cities chosen, and any waiver of current protections, would be left to HUD. Over five years, cities could take over no more than 100 housing authorities with performance problems.