LAZIO PURSUES FAST PACED HEARING SCHEDULE ON PUBLIC HOUSING REFORM AND HOMELESS CONSOLIDATION LEGISLATION

H.R. 2 - "Housing Opportunity and Responsibility Act of 1997"
On March 6, Representative Rick Lazio (R-NY), Chairman of the House Banking Subcommittee on Housing and Community Opportunities held the second in a series of three hearings on H.R. 2, the "Housing Opportunity and Responsibility Act of 1997", which he introduced on January 7.

Representative Lazio opened the hearing by stating that "tinkering around the edges of [public housing programs] amounts to rearranging the deck chairs on the Titanic." He wants to see comprehensive overhaul of HUD's assisted housing programs and the creation of "communities of opportunity."

HUD Secretary Andrew Cuomo testified before the Committee, calling for the enactment of the "historic legislation" this year. He indicated that he will work "day and night to obtain passage of a constructive and definitive public housing reform bill." Various organizations involved in federal housing programs including public housing authorities, tenant leaders and low-income housing advocates also testified on March 6, following Andrew Cuomo's statement.

While Andrew Cuomo agreed with Representative Lazio that public housing reform was in order, he reiterated that public housing is also a "vital part of many communities" and that "the majority of public housing is a success." He identified many of the areas in which consensus has developed among the interested parties regarding the basic strategy for transforming public housing. However, the Secretary also spent a significant amount of time

discussing elements of the pending HUD bill, which has not yet been introduced, and how it will differ from H.R. 2.

Some of the areas of disagreement between the HUD version of the public housing bill and H.R. 2 are:

• Income targeting - HUD supports an income requirement of 80% or below median, with 40% of new admissions below 30% and 90% below 60% versus H.R. 2's requirements that at all times, a minimum of 35% of a PHA's units be occupied by households of 30% or below;
  
• Rent rules - HUD advocates for minimum rents of $25 per month, with a hardship provision, and the allowance that PHA's be able to charge up to 30% of adjusted income in rent. The Department also supports expansion of the authorized ceiling rent levels paid for under the federal operating subsidy formula. Cuomo commended the House for moving closer to consensus on coverage under the Brooke Amendment's rent limitation, but does not support the bill's proposal to allow tenant's annually to choose between flat rents and 30% of median income;
  
• Title IV - Home Rule - Secretary Cuomo did not make a definitive statement regarding, Title IV, a most noteworthy component of the bill which allows local governments to apply to HUD to receive all of the public housing and tenant-based assistance funds that come into a community. However, he did raise concern that Congress not abandon the need for income targeting and rent protection at the hand of flexibility. The Secretary stated that, "responsible deregulation is imperative." Title IV allows the local jurisdiction to use public housing and assisted housing funds in highly flexible ways, subject only to a handful of requirements, the submission of a local housing plan, and a performance-based contract between the jurisdiction and HUD covering no less than one year and no more than five. It contains many of the same elements of those contained in the 1996 Appropriations bill and the "Moving to Work Demonstration Program." This concept was also contained in the OMB passback of the HUD FY98 budget request, but was ultimately removed in the President's final FY98 Budget Proposal. NCDA is in the process of preparing an organizational position on Title IV;
  
• Accreditation and local housing management plans - HUD finds H.R. 2 unreasonable in the requirement of PHAs to enter into individual personal responsibility contracts and recommends the use of cooperation agreements with welfare agencies charged with facilitating the self-sufficiency programs. Mr. Cuomo also questioned the value behind the creation of a new accreditation system; and,
  
• One-for-One Replacement - Is a concept firmly supported by the Department, however, Cuomo indicated that there needs to be some means of allowing communities the freedom to demolish properties, while still retaining an adequate affordable housing stock.

Secretary Cuomo also called for the scaling back of HUD approvals and submissions required of PHAs and other deregulatory measures.

Although Cuomo did not speak to this issue, H.R. 2 still contains the provision which permits the Secretary of HUD to withhold Community Development Block Grant (CDBG) funds from a local government if the local public housing authority within its jurisdiction is designated by HUD as "troubled" and the Department determines that the local government has contributed to this troubled condition.

While the Secretary did not make a definitive statement regarding the repeal of the U.S. Housing Act of 1937, a more symbolic than substantive aspect of the bill which met with considerable opposition from the House Democrats last year, and is likely to again. He made a generalized statement regarding the need to look beyond symbolism, which will allow HUD to negotiate with both the House and the Senate and the Democrats and the Republicans on this issue. Generally speaking, Secretary Cuomo's testimony met with an affirmative response and a pledge to work together over the coming months.

Representative Lazio also conducted a hearing on H.R. 2 on February 25 at which several witnesses from area think tanks and local social service organizations spoke to the contents of the bill. He intends to conduct his final hearing on H.R. 2, on March 11 and begin marking up the bill the week of March 17. Although the House has obviously made a commitment to move ahead quickly on the public housing reform measure and HUD Secretary Andrew Cuomo has pledged to help pass a bill, H.R. 2 still contains many of the elements that brought it to a stalemate with the Senate last year. Senator Connie Mack (R-FL), Chairman of the Senate Banking Subcommittee on Housing Opportunity and Community Development, has indicated that "he will proceed cautiously on this matter" and there has been no indication from the Senate as to when they will begin discussion on public housing reform. It is more likely that the House will not mark-up the bill until some time in April, after the Easter Congressional recess.

H.R. 217, the "Homeless Housing Programs Consolidation and Flexibility Act"
Representative Rick Lazio (R-NY), Chairman of the House Banking Subcommittee on Housing and Community Opportunity also conducted a hearing on H.R. 217 - "Homeless Housing Programs Consolidation and Flexibility Act", last week on March 5. The witnesses consisted primarily of academics and representatives from local social service/public policy think tanks. H.R. 217 is a consolidation of the homeless McKinney programs. Some of the key elements of the bill include:

The Program created by H.R. 217 has two major components -- the Permanent Housing Development program and the Flexible Block Grant program. The Permanent Housing Development program would be a national competition among state and local governments for grants to do construction, substantial rehabilitation or acquisition for permanent housing. To the maximum extent possible this program is to help persons with disabilities. The Flexible Block Grant would be a formula allocation to local and state governments to undertake supportive housing (including transitional housing), supportive services, prevention activities, permanent housing, emergency shelter or technical assistance; A portion of the funds would be allocated on a competitive basis for Permanent Housing Development Grants. The portion allocated for competition will be 20% of the total appropriation for homeless assistance in the first year of consolidation and increase after four years to 30% of the total and remain there; The remaining funds would be allocated by formula - 70% to localities, 30% to states for the Flexible Block Grant; Emergency shelter assistance, which is funded through the Flexible Block Grant is limited to 10% of the aggregate flexible block grant amount; Calls for a 50% match unless the grant is less than $100,000 in which case no match will be required. Localities may require a subgrantee to supplement grant funds up to 25% of the grant amount, however these supplemental funds can not be used toward the match; 30% cap on supportive services provided through the Flexible Block Grant for year one of the consolidated program, decreasing to 15% cap for supportive services in year 4 and thereafter. The bill outlines provisions for HUD to set-up a "Companion Services Block Grant" program if adequate social services funds are not provided through other departments such as HHS, but there is no details regarding the grant, nor money authorized for it.

Although Lazio has moved forward quickly on both H.R. 2 and H.R. 217, the public housing measure is expected to go forward first unless it meets with substantial opposition. In the meantime, Lazio may conduct a few more hearings on the homeless consolidation bill over the coming months.

The Senate has not yet introduced a companion measure to H.R. 217, but according to Senate staff is likely to do so in the next several months.

GOVERNMENT OPERATIONS COMMITTEES CONDUCT INITIAL HEARINGS ON HUD - CDBG AND HOME NOTED FOR SUCCESSES

HUD Secretary Andrew Cuomo testified before the House Committee on Government Reform and Oversight on February 27 regarding HUD management and oversight procedures and deficiencies, focusing particularly on HUD's fiscal year 1998 budget and the pending Section 8 renewal crisis. Cuomo stated that approval of President Clinton's proposal to rescue and reform the Section 8 contract program is vital to preventing a sharp increase in homelessness and devastating cuts in other HUD programs. "If the 1.8 million Section 8 contracts expiring next year are not renewed, hundreds of thousand of elderly, children and disabled Americans will be pushed into homeless shelters and onto the streets of our communities," Cuomo emphatically stated.

He indicated that Congressional approval of the FY98 budget proposal will avert cuts in spending in other HUD programs. "It would take a 35 percent across-the-board cut in all our programs if we have to fund the Section 8 renewals out of our existing budget,", the Secretary said. "These draconian cuts would weaken the social and economic fabric of our communities.

Cuomo indicated that the key priorities of the Department in 1998 are: averting the Section 8 crisis; expanding affordable housing opportunities; making welfare reform work; and, restoring public trust in the Department.

Secretary Cuomo also took this opportunity to herald the CDBG and HOME programs as two of the most important and effective programs at HUD, saying, "CDBG and HOME are the closest you can come to model programs."

HUD Deputy Secretary Dwight Robinson was also called to testify before the Senate Government Affairs Committee on March 5 regarding the Department's acceleration of its management reform effort. Emphasizing HUD's continuing commitment to becoming "smarter, leaner and more focused", Robinson said the Department is moving to correct management deficiencies that caused the General Accounting Office to place the Department on its High Risk list.

He said reform efforts will focus on the lingering problem areas identified by GAO. These include: 1) internal controls; 2) information and financial management systems; 3) organization; and, 4) staffing skills mix. In each of these areas, the Deputy Secretary highlighted corrective actions the Department is taking: a new Financial Systems Integration Plan; enforcement of the requirements for front-end risk assessment for all new programs, and regular reviews of current programs; and, increases in HUD's training budget.

"We are proud of the progress we have made to date," Robinson said. "It is clear that we are on the right track to becoming a better agency so that we can better serve the needs of the America people."

It is likely that both the House and the Senate government oversight committees will continue to monitor HUD over the coming year to track its progress in management reform. Congress already indicated during Mr. Cuomo's confirmation hearings, that rectifying HUD management shortcomings is their number one issue for the Department.

HUD ISSUES EMPOWERMENT ZONE/ENTERPRISE COMMUNITY REVIEWS - PROGRESS CITED IN MOST COMMUNITIES

The U.S. Department of Housing and Urban Development released its first review of the 72 Empowerment Zones and Enterprise Communities on March 7. The agency reported progress in five of the six Empowerment Zones and in 62 of the 66 Enterprise Communities and warned that five communities are in risk of decertification and termination of their E/EC status if immediate action is not taken.

"Our performance reviews show that, at this early stage, the vast majority of Empowerment Zones and Enterprise Communities are already showing real, and in some places, substantial progress," HUD Secretary Andrew Cuomo said.

Among the top national performers at this stage of the program are the,

Empowerment Zones:

• Baltimore, MD; and,
• Detroit, MI; and,

Enterprise Communities:

• Akron, OH;
• Burlington, VT;
• Charleston, SC;
• Columbus,
• Southern NV;
• Louisville, KY;
• Nashville, TN;
• New Haven, CT;
• Norfolk, VA;
• Rochester, NY; and,
• San Francisco, CA

Key lessons cited in the report will be used by HUD in the near future to consolidate recommendations to President Clinton for the implementation of a second round of zones. They include: leverage private sector investment; make community development comprehensive; achieve community-wide buy-in; use performance benchmarks; and coordinate among government agencies.

For a copy of the E/EC Fact Sheet and the Executive Summaries of the Performance Reports contact, NCDA, (202) 293-7587.

HUD REQUESTS FOLLOW-UP MEETING WITH NCDA ON 108 GUIDELINES

NCDA and representatives from other national organizations concerned with economic and community development issues meet with HUD on March 4 to discuss some of the issues raised by NCDA and others in a letter dated February 12 regarding the new underwriting guidelines for the CDBG Section 108 loan guarantee program.

After several hours of discussion, some of the early concerns regarding the changes in the 108 program have been waylaid, particularly pertaining to the use of CDBG funds as collateral - HUD has confirmed that this is still allowable, but with constraints - and the focus on "low- risk" projects. HUD is in the process of putting final touches on the 108 guidelines notice and publication in the federal register is slated for April at the earliest. HUD has also clarified that these guidelines will be issued in "guideline" format only and will be published in draft form as well, to allow for full and complete input from practitioners.

SECOND ANNUAL HOMEOWNERSHIP SUMMIT ANNOUNCED

The second annual National Homeownership Summit will take place May 29-30, 1997 in Washington, DC. This major event is expected to include President Clinton, Vice-President Gore, the leadership of the 62 national organizations that constitute the National Partners in Homeownership, and more than 1,500 housing providers from across the United States.

Last year, more than 1,300 housing professionals--nonprofit housing providers, lenders, state and local government officials, real estate professionals, housing counselors, and many others- -met in Washington, DC to explore ways to increase homeownership opportunities. The two day conference proved to be informative and energizing for the participants. This year an even bigger and informative event is expected. Registration, which is free of charge, will commence in early April. To be placed on a mailing list for more information, please call the National Partners in Homeownership at 1-800-297-4183.

The Summit will also serve as a springboard for National Homeownership Week, to be held June 7th through the 14th. During this week, local partnerships will be encouraged to host community events, such as homebuyer fairs, unveiling of new products, or the initiation of a new local partnership.

NCDA will be a participating Partner in the Homeownership Summit and Homeownership Week. We urge NCDA members to participate by attending the Summit in May and by working with other local organizations to sponsor local events during National Homeownership Week.

HUD GOES FROM BBS TO INTERNET

Within the next few months, all of the functions of HUD's CPD Bulletin Board System (BBS) will be moving to the Internet, and the BBS will no longer be a communications option for grantees. This is particularly important for grantees who use the BBS to download software and information on the Integrated Disbursement and Information System (IDIS).

During the past two to three years, HUD has been developing its World Wide Web site so that it is useful for HUD employees, its community business partners, and the general public. To remain current and serve grantees and the public with information most efficiently, CPD will provide the same or better information on the Internet as was found on the bulletin board.

For grantees that do not currently have Internet access, CPD is encouraging them to find an Internet service provider as soon as possible. Rather than contacting HUD Headquarters or field offices, grantees and all BBS users should contact Internet service providers for access and questions about which provider to select.

Frequently Asked Questions:

1. Q: When is the BBS scheduled to be dismantled?
A: The exact date for CPD has not been determined. Other areas of the HUD BBS have already been transferred to the Internet. CPD will be the last to go, because it has the most users. Expect gradual movement of BBS functions to Internet over the next few months.

2. Q: How do I access the Internet?
A: Grantees should find their own Internet service providers.

3. Q: How much does a subscription to an Internet service provider cost?
A: Subscriptions can range from $10 to $20 per month.

4. Q: Once I subscribe, who helps me maintain my account, answer my technical questions, and provide me with information about the Internet and the World Wide Web?
A: Once you have an Internet account, all of your technical questions about Internet should be answered by the service provider.

5. Q: Who do I contact about information I find on HUD's Web Page?
A: All HUD web sites have contact names, telephone numbers, and e-mail addresses of those responsible for the information.

6. Q: Will I still be able to get CPD's monthly News brief, Spotlighting What Works, Regulations, and NOFAs, IDIS software, and other information I usually get from the BBS? A: Yes, in fact, even more information will be available with the Internet, and the information will be more easily retrievable. IDIS Sprintlink files are already available for download from the World Wide Web.

7. Q: What about interacting with my colleagues online?
A: With an Internet account, users can communicate "person-to-person" just like the e-mail option on the BBS. For interactive forums, HUD will offer a variety of "meeting room" and forum options. The exact options have not yet been determined, but will have the same kind of "threaded" discussion as the BBS offers.

8. Q: How will I obtain information if I opt not to get Internet service right now?
A: Everyday society is fast moving toward Internet use. To conduct business effectively, Internet service will be as important as a phone line and fax machine. If, however, you opt not to obtain service at this time, contact your HUD CPD office for hard copies or a disk containing the information you would like.

9. Q: How do I access HUD's Home Page?
A: HUD's Home Page is http://www.hud.gov.

HUD RELEASES PROGRAM MODEL GUIDEBOOK ON HOME AND TENANT BASED RENTAL ASSISTANCE

HUD's HOME office recently released, "Tenant Based Rental Assistance: A HOME Program Model" (HO 1146). The manual gives an overview of the Tenant-Based Rental Assistance Program and how participating jurisdictions can decide if a TBRA is a good use of HOME funds in their community, how PJ's can design a TBRA that meets community needs and HUD requirements, and how to successfully implement a TBRA Program.

For a copy of this guidebook, contact the Community Connections Information Center at (800) 998-9999, or by e-mail at comcon@aspensys.com or http://www.comcon.org.

NATIONAL COMMUNITY DEVELOPMENT WEEK '97 CELEBRATION APPROACHES -- FINAL PREPARATIONS UNDERWAY

This is your last opportunity to order Posters and Postcards for National Community Development week - March 24 - 30. The cut-off to order CD Week T-shirts has already passed and there are only a few posters and postcards left, so if you haven't sent in your order form, do so immediately before they are all gone! Be sure to participate in this important national effort and make NCDA aware of your involvement. (Please see the list of participating communities included in this mailing.)

FRIENDS OF NCDA SEE JOB CHANGES - PAUL WEECH DEPARTS TO SBA - JIM PARK TO FREDDIE MAC

In the past two weeks Washington, DC has seen several staff changes among them. Paul Weech, Professional Staff Member, Minority Staff, Senate Banking, Housing and Urban Affairs Committee and long time friend of NCDA and the CDBG and HOME programs has left the Senate to become the Chief of Staff for the Small Business Administration (SBA). We congratulate him, wish him well and will miss his presence and leadership on Capitol Hill. The Senate Banking Committee has not yet named a replacement for Mr. Weech, which may cause a further slowdown of the introduction of housing and community development legislation in the Senate.

Jim Park, former staff member of NCDA and most recently Special Assistant to Nicolas Retsinas, Assistant Secretary for Housing and Federal Housing Commissioner, has left HUD to become the Director of Industry Relations at Freddie Mac. Jim will also be sorely missed, but we will continue to have an opportunity to work with him at Freddie.

FEDERAL REGISTER NOTICES

Notice of Regulatory Waiver Requests - FR 62 6082 - 6088, 2/10/97 - Public notice on the granting of regulatory waivers from July 1, 1996 through September 30, 1996.

Notice Of Funding Availability for Public and Indian Housing Economic Development and Supportive Services (EDSS) Grant: Notice of Procedure for Determining Funding in the Event of Tie Scores - FR 62 7249 - 7250, 2/19/97 - This notice amends the NOFA published in the Federal Register on August 14, 1996 (61 FR 42356) to advise of the procedure that HUD will use to determine how public housing agency and Indian housing authority applications will be selected for funding in the event of tie scores.

Notice of Annual Factors for Determining Public Housing Agency Administrative Fees for the Section 8 Rental Voucher, Rental Certificate and Moderate Rehabilitation Programs - FR 62 9488 - 9634, 3/3/97 - This notice announces the monthly per unit fee amounts for use in determining the on-going administrative fee for public housing agencies and Indian housing authorities (HAs) administering the rental voucher, rental certificate and moderate rehabilitation programs (including Single Room Occupance and Shelter Plus Care) during Federal Fiscal Year 1997.

Notice of Extension of Application Deadline - Public Housing/Section 8 Moving to Work Demonstration Program - FR 62 9442 - 9443, 3/3/97 - This notice extends the Moving to Work application submission deadline from March 18, 1997 to May 19, 1997. The deadline is being extended to give public agencies and Indian housing authorities the time necessary to adequately prepare their applications and in particular, to allow sufficient time for a thorough and constructive planning process, including a public hearing.

Notice of Funding Availability - Community Development Work Study Program 1997 - FR 62 9898 - 9900, 3/4/97 - This notice invites applications from institutions of higher education, area-wide planning organizations (APOs), and States for grants under the Community Development Work Study Program (CDWSP). This notice announces HUD's intention to award up to $3 million from FY 1997 appropriations to fund work study programs to be carried out from August 1997 to September 1999.

Revised Interim Rule with Request for Comment - FR 62 10668 - 10678, 3/7/97 - The Department of the Treasury is issuing a revised interim rule implementing the Bank Enterprise Award Program administered by the Community Development Financial Institutions Fund. The program was authorized by the Community Development and Financial Institutions Act of 1994. Comments must be received on or before July 7, 1997.

Notice of Funding Availability Inviting Applications for the Bank Enterprise Awards (BEA) Program - the CDFI Fund's intention of awarding up to $16.25 million in Bank Enterprise Award Program funds. The revised interim rule listed above establishes the Program requirements. Applications may be submitted any time after March 7, 1997 and the deadline is April 25, 1997.

HUD PUBLICATIONS AND NOTICES

HUD-CPD Best Practices: Spotlighting What Works: A Showcase of Community Planning Successes in the Field - Issue No. 13, February 24, 1997 - "States, Cities Pool Resources for Common Purpose: Interstate Consortium Demonstrates Regional Approach".

IDIS "LIVE" - Issue No. 5, March 7, 1997 - Includes definitions of IDIS report fields, release notes for IDIS Version 2.10 and the IDIS fund type and source type matrix.

Moving Toward A Lead-Safe America: A Report to the Congress of the United States - Report prepared in Response to Section 1061(a) of the Housing and Community Development Act of 1992. February 1997.

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