Washington, DC – July 29, 2010 – (RealEstateRama) — U.S. Rep. Rubén Hinojosa (TX-15) announced the House Financial Services Committee approved H.R. 4868, the Housing Preservation and Tenant Protection Act of 2010, comprehensive affordable housing legislation introduced by Chairman Barney Frank (MA-4) that helps to stem the loss of affordable rental housing units across the country and prevent the displacement of low-income tenants, many of who are elderly or disabled.“I am very optimistic about the Housing Preservation and Tenant Protection Act, because it will have a direct impact on my Congressional District in Deep South Texas”, said Rep. Hinojosa.” “Many of my constituents live in low-cost housing and we want to make sure there are laws that protect them from being unreasonably evicted. At the same time we want to make sure that home owners who rent their properties to low-income families have what they need to keep their properties in good condition so that these homes and apartments will be available for a long time for those in need”.
Since the 1950s, HUD has subsidized about 1.7 million rental units in over 23,000 privately-owned, multi-family properties that are typically affordable to low-income tenants. Many of these units are over forty years old and in need of recapitalization. A 2004 Government Accountability Office (GAO) report found that over 193,000 subsidized units were projected to become market rate housing in the next 10 years when the HUD-subsidized mortgage matures and the mortgage subsidy and low-income affordability restrictions attached to the property terminate. GAO estimated that approximately 200,000 individuals in over 101,000 units with no other subsidy attached to the property would be at risk of paying higher rents because there were no existing tenant protections such as enhanced vouchers to protect the tenants from paying higher rents or being evicted when the mortgage matures. The bill addresses the issues outlined in the GAO report and a host of other issues related to protecting the significant investment made by the federal government in helping construct and maintain housing for low and moderate income tenants, many of whom are elderly or disabled, by doing the following:
KEY PROVISIONS FROM THE HOUSING PRESERVATION AND TENANT PROTECTION ACT OF 2010
• Provide resources and incentives to prevent the further loss of affordable housing units
• Provides grants and loans to for-profit and non-profit housing sponsors to help ensure the property is recapitalized and kept affordable.
• Establishes a voluntary Preservation Exchange Program to encourage owners to sell properties to purchasers who will keep the housing affordable.
• Establishes a first right of refusal that provides state housing agencies with an opportunity to purchase a property from an owner who wishes to sell their property. Significantly, the bill does not require an owner to sell their property or prevent them from obtaining fair market value.
• Allows owners to request project-based assistance in lieu of enhanced vouchers, which serves to help preserve the long-term affordability of the project, assist with capital for rehabilitation, and ensure that tenants are not displaced.
• Allows owners to receive budget based rent increases, thus ensuring that the properties are adequately maintained and encouraging owners to renew Section 8 contracts.
Prevents the Displacement of Disabled, Elderly and Other Low-Income Tenants
• Closes gaps in existing law to ensure that all low and moderate-income tenants are eligible for enhanced vouchers in the event that the assisted housing is converted to market rate housing.
• Gives HUD and affordable housing providers the tools needed to recapitalize the aging Section 202 elderly housing portfolio.
• Enables tenants to be partners with HUD, RHS, and owners to ensure that federally-assisted housing is properly maintained.
• Includes notification requirements to ensure that tenants are given sufficient notice prior to the conversion of the property to market rate housing.
• Makes permanent a rural housing revitalization demonstration program launched in Fiscal Year 2006 that is designed to preserve and recapitalize Section 515 properties.
• Authorizes vouchers for tenants in properties that are converted to market rate housing or foreclosed.
• Extends the same protections afforded to tenants in HUD-assisted housing to tenants in RHS-assisted multifamily properties.
Establish a National Database to Further Preservation
• Directs HUD to establish a nationwide public database of HUD- and RHS-assisted properties to enable policymakers and the public to more effectively monitor and preserve the existing portfolio of affordable housing. Requires the database to contain adequate safeguards to ensure the protection of owners’ privacy rights and proprietary information.