Industry Meets with Rep. Barney Frank to Discuss Draft Housing Preservation Bill
During last week's joint Multifamily Finance Subcommittee/Housing Credit Group meeting, Claudia Kedda, NAHB's Director of Multifamily Finance, provided an update on the draft "Housing Preservation and Tenant Protection Act of 2009." This legislation, which House Committee on Financial Services Chairman Barney Frank (D-MA) is planning to introduce, would encourage the preservation of federally assisted affordable housing.
A draft bill is circulating among industry groups and has been the focus of two hearings already; the first hearing’s sole witness was HUD Secretary Shaun Donovan, and the second hearing’s witnesses were mostly nonprofit housing groups. The draft bill would remove some statutory and regulatory barriers to preservation, create incentives for owners to remain in HUD programs and establish incentives for preservation entities to acquire and rehabilitate these properties. Additionally, the bill protects tenants from displacement due to mortgage maturity, prepayments and opt-outs.
A summary of the preservation bill discussion draft is available here.
While the bill would provide some important and needed tools to facilitate the preservation of affordable rental housing, it also contains four specific provisions that would undermine the ability or desire of housing developers to participate in these transactions.
The four provisions are:
- A right of first purchase by a preservation entity if an existing owner does not renew a project-based rental assistance contract; if there is any full payment, expiration, prepayment or termination of a mortgage for the housing; or if there is any termination or expiration of use restrictions of affordability requirements for the housing
- Third party beneficiary status to Housing Assistance Payment Contracts granted to residents
- Limited participation in the new preservation program for certain Section 515 owners, and
- Disclosure of a significant amount of owner financial information, which would be posted on HUD’s web site.
NAHB, along with a coalition of industry groups, has expressed strong opposition to these provisions to Chairman Frank and to HUD Secretary Donovan. The industry groups met with Chairman Frank on Sept. 15 and worked out solutions to the four provisions above. Additional comments on other parts of the draft bill were submitted to the Committee staff subsequently. NAHB staff will continue to work with industry groups, Chairman Frank and the Committee as the bill moves forward.
View the full Multifamily Finance Subcommittee issues update here.
For more information, contact Claudia Kedda at ckedda@nahb.com or x8352.
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