Tuesday, December 8, 2015

Housing provisions in the highway transportation funding bill

by Kaitlyn Snyder, NHC

Despite its name, the Surface Transportation Reauthorization and Reform Act of 2015 (H.R. 22) includes much more than just transportation funding. The 490-page bill includes several provisions that were originally in the Housing Opportunity through Modernization Act of 2015 (H.R. 3700), including policy changes to help preserve older privately owned rental housing, streamlining of tenant income verification and authorization of a pay-for-success demonstration for utility-saving retrofits.  Details on each provision are below.

Title LXXVII: Preservation Enhancement and Savings Opportunity
This measure was originally a stand-alone bill (H.R. 2482) introduced by Rep. Erik Paulsen (R-N.M.) in May. The bill passed in the House on July 14, 2015, by a voice vote. The text was then added to H.R. 3700 and subsequently added to H.R. 22, passed by both chambers of Congress and signed into law by President Obama on Dec. 4, 2015.

The provision amends the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA) to allow owners of HUD federally subsidized multifamily developments access to remaining profits after all operating expenses and maintenance costs. The bill also makes it easier to recapitalize LIHPRHA properties and strengthens several protections for tenants and the long-term viability of the housing:
  • Owners must be in compliance with the LIHPRHA use agreement;
  • Rent increases for unassisted tenants may not exceed 10 percent per year;
  • The owner must continue to operate the property in accordance with the affordability provisions for the remaining useful life of the property; and
  • The owner must set aside adequate funding for rehabilitation and capital needs.

Title LXXVIII: Tenant Income Verification Relief
This provision permits households with fixed monthly incomes (e.g. Supplemental Security Income, Social Security Disability Insurance) to go through the recertification process every three years instead of annually. The Secretary of Housing and Urban Development has the authority to define what qualifies as a fixed income. This provision would reduce administrative burden for PHAs as they go through the recertification process each year. PHAs have the flexibility to stagger renewal times for individuals with fixed incomes so that agencies are only recertifying one-third of all households with fixed incomes during one year.

Title LXXXI: Private Investment in Housing
This measure was originally a stand-alone bill (H.R. 2997) introduced by Rep. Dennis Ross (R-Fla.) in July. The measure passed the House with a vote of 395-28 on July 14, 2015. The text was then added to H.R. 3700 and subsequently added to H.R. 22, passed by both chambers of Congress and signed into law by President Obama on Dec. 4, 2015. The provision authorizes the HUD secretary to create a pay-for-success (PFS) demonstration program between 2016 and 2019. The demonstration allows for private funding for retrofits of up to 20,000 residential units to achieve savings in energy or water costs.


NHC will continue to track H.R. 3700 as it continues to evolve, since it includes many provisions beyond the three that were added to the transportation bill. The House Financial Services Committee has scheduled a mark-up of H.R. 3700 for Dec. 8 at 2 P.M. EST. 

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