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107th Congress Rept. 107-640
HOUSE OF REPRESENTATIVES
2d Session Part 1
HOUSING AFFORDABILITY FOR AMERICA ACT OF 2002
September 4, 2002.--Ordered to be printed
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
R E P O R T
[To accompany H.R. 3995]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 3995) to amend and extend certain laws relating to
housing and community opportunity, and for other purposes,
having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Committee Consideration.......................................... 3
Vote of the Committee............................................ 3
Committee Oversight Findings..................................... 3
Performance Goals and Objectives................................. 3
New Budget Authority and Tax Expenditures........................ 4
Congressional Budget Office Cost Estimate........................ 4
Constitutional Authority Statement............................... 14
Section-by-Section Analysis and Discussion....................... 15
Changes in Existing Law Made by the Bill, as Reported............ 17
Markup Transcript................................................ 17
Purpose and Summary
H.R. 3995 improves access to affordable housing for more
Americans by amending specified housing-related Acts in the
following areas: (1) home investment partnerships; (2) Federal
Housing Administration mortgage insurance for single and
multifamily housing, and health care facilities; (3) supportive
housing for elderly and disabled families; (4) section 8 rental
housing assistance; (5) public housing; (6) Hope VI
revitalization assistance; (7) homeless housing programs; (8)
Native American housing; (9) housing impact analysis; (10)
community development block grants; (11) housing counseling
programs; (12) housing opportunities for persons with AIDS; and
(13) Government National Mortgage Association guarantee fees.
Background and Need for the Legislation
The legislation, introduced on March 19, 2002 by
Representative Marge Roukema (R-NJ), was referred to the
Financial Services Committee and to the Judiciary Committee.
Title VIII of H.R. 3995 is the only title within the
jurisdiction of the Judiciary Committee.
Housing is one of the Nation's most heavily regulated
industries. Currently, Federal agencies are required to conduct
certain economic analyses when promulgating new rules.\1\
However, there is no such requirement that any analysis be
conducted to determine a rule's impact on housing
affordability. The rising cost of housing threatens the
attainment of home ownership for an increasing number of
Americans. A recent study found that nearly one out of every
seven American households paid at least half their income for
housing and/or lived in substandard conditions in 1999.\2\
Title VIII is intended to heighten agency and public awareness
of the significant costs to housing affordability caused by
Federal regulations, and to lessen the adverse impact such
regulations may have on achieving home ownership.
\1\ See, e.g., 5 U.S.C. Sec. 604 (2002) (regulatory flexibility
analysis of proposed rules considering their effect on small entities);
42 U.S.C. Sec. 1302 (2002) (impact analysis of Medicare and Medicaid
rules and regulations on small rural hospitals); and 42 U.S.C.
Sec. 7617 (2002) (economic impact statements of air pollution and
control rules on small business, consumer costs and energy use).
\2\ Four Windows: A Metropolitan Perspective on Affordable Housing
Policy in America, 2001, NHC Senior Executive Roundtable Series (Nat'l
Housing Conf., Wash., D.C.), April, 2002, at 1, 4.
Title VIII requires agencies, when promulgating any
proposed or final rule for notice and comment, to issue a
housing impact analysis when that rule has a significant
economic impact on housing affordability. ``Significant,'' as
it applies to impact, is defined as increasing consumers' cost
of housing by more than $100,000,000 per year.
As drafted, section 803 directs an agency, when publishing
general notice of proposed rulemaking for any proposed rule, to
prepare and make available for public comment an initial
housing impact analysis. Section 804 provides that such
analysis describe and, where feasible, estimate the extent to
which the proposed rule would increase the cost or reduce the
supply of housing or land for residential development.
Section 805 directs an agency to prepare a final housing
impact analysis when promulgating a final rule. Under section
805, each final housing impact analysis must summarize and
assess the issues, analyses and alternatives to the proposed
rule raised during the comment period, and must state any
changes made in the proposed rule as a result of such comments.
Final housing impact analyses must also describe and estimate
the extent of the rule's impact on housing affordability.
Agencies promulgating proposed or final rules which do not
have a significant deleterious impact on housing affordability
are exempt from the reporting requirements of sections 804 and
805, provided the agency publishes with the rule a
certification and supporting factual statement to that effect
in the Federal Register. Section 809 also provides procedures
for the delay in completion or waiver of initial housing impact
analyses upon publication in the Federal Register of a
certification and written finding by the head of the respective
agency that the final rule is being promulgated in response to
an emergency. Final housing impact analyses may be delayed, but
not waived, under Section 809, for a period of not more than
180 days after the date of publication in the Federal Register
of a final rule. In such instances, the head of the agency must
publish in the Federal Register a certification and written
finding that the final rule is being promulgated in response to
The provisions of title VIII will lead to rules which make
affordable housing less burdensome to acquire and accessible to
more Americans. Recognizing the need for such legislation, the
House in the 106th Congress passed overwhelmingly a bill
containing language nearly identical to title VIII.\3\ Title
VIII of H.R. 3995 is virtually identical to H.R. 2753, which
was introduced by Representative Mark Green (R-WI) on August 2,
2001, and referred to the Judiciary Committee.
\3\ H.R. 1776, the ``American Homeownership and Economic
Opportunity Act of 2000,'' was approved by the House on April 6, 2000
by a vote of 417 to 8. The Senate referred the bill to the Committee on
Banking, Housing, and Urban Affairs on April 7, 2000. After referral of
H.R. 1776 to the Subcommittee on Housing and Transportation, no further
action was taken by the Senate.
The were no hearings held on H.R. 3995.
On July 16, 2002, the Subcommittee on Commercial and
Administrative Law met in open session and ordered favorably
reported H.R. 3995, without amendment, by voice vote, a quorum
being present. On July 23, 2002, the Judiciary Committee met in
open session and ordered favorably reported H.R. 3995 without
amendment, by voice vote, a quorum being present.
Vote of the Committee
There were no recorded votes on H.R. 3995.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Performance Goals and Objectives
Title VIII of H.R. 3995, the portion of the legislation
within the jurisdiction of the Judiciary Committee, does not
authorize funding. Therefore, clause 3(c) of rule XIII of the
Rules of the House in inapplicable.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of House rule XIII is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to bill, H.R. 3995, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
Congressional Budget Office,
Washington, DC, August 21, 2002.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3995, the Housing
Affordability for America Act of 2002.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Chad Chirico,
who can be reached at 226-2820.
Dan L. Crippen, Director.
Honorable John Conyers, Jr.
H.R. 3995--Housing Affordability for America Act of 2002.
H.R. 3995 would amend and extend certain laws relating to
housing opportunity and community development. The bill would
seek to increase the availability of affordable housing and
expand homeownership opportunities across the country. H.R.
3995 would authorize appropriations to fund both new
initiatives and existing housing programs.
CBO estimates that implementing this legislation would cost
about $12.6 billion over the next 5 years, assuming
appropriation of the necessary amounts. CBO estimates that
enacting the bill also would increase direct spending by $34
million over the 2003-2008 period. Therefore, pay-as-you-go
procedures would apply. The increase in direct spending would
stem from the bill's authority to use certain unobligated funds
for new grants related to elderly housing.
H.R. 3995 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on State, local, or tribal
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 3995 is summarized
in Table 1. The costs of this legislation would fall within
budget functions 370 (mortgage and housing credit), 450
(community and regional development), and 600 (income
The 2002 level is the amount appropriated for that year for
the Certificate Fund, HOME Investment Partnership Program,
Housing for Special Populations, HOPE VI, Homeless Assistance
Grants, Housing Opportunities for Persons with AIDS, Assistance
for Self-Help Housing Providers, and includes offsetting
collections generated by the Federal Housing Administration's
single-family program and the Government National Mortgage
Association's single-family Mortgage-Backed Security program.
The 2003-2007 levels are the 2002 amounts adjusted for
inflation except for programs with expiring authorizations.
BASIS OF ESTIMATE
For this estimate, CBO assumes that H.R. 3995 will be
enacted near the beginning of fiscal year 2003 and that the
amounts necessary to implement the bill will be appropriated
for each fiscal year. The costs by provision are shown in Table
2, which is followed by a description of the estimated costs.
SPENDING SUBJECT TO APPROPRIATION
Title I: Home Investment Partnerships Program. CBO
estimates that implementing title I would cost $4.3 billion
over the 2003-2007 period, assuming appropriation of the
Affordable Housing Production and Preservation. Section 101
would establish a housing production and preservation program
for rental housing affordable to very low-income families.
Funding for this program would be derived from any unobligated
Certificate Fund balances appropriated for fiscal year 2004 or
any subsequent fiscal year (the Certificate Fund provides
funding for Section 8 rental assistance contracts). The bill
would provide grants to participating State and local
jurisdictions through the HOME Investment Partnership program.
Families occupying units produced through this program would be
required to pay not more than 40 percent of their adjusted
monthly income toward rent.
Assuming the availability of future appropriations and the
enactment of section 403 of this bill, CBO estimates that
approximately $1.1 billion would be available for recapture
from the Certificate Fund between 2005 and 2007 (as a result of
tenant-based voucher utilization rates below 100 percent). Data
provided by the Department of Housing and Urban Development
(HUD) indicate that units currently produced through the HOME
program cost an average of $90,000. Assuming that participating
jurisdictions would provide the required 25 percent match of
program funding, CBO estimates that implementing this provision
would provide enough funding over the 2005-2007 period to
produce approximately 15,400 units of affordable housing, which
would increase outlays by $236 million over that period.
Eligibility of Room Additions for Use for Grandparents and
Grandchildren. Section 106 would allow participating local
jurisdictions to provide HOME Investment Partnership funds to
low-income families to build an additional room or add a
cottage to an existing dwelling for an elderly relative if it
is necessary to avoid the relative's placement in an
institutionalized setting. Based on data published by the
Centers for Disease Control and Prevention and the Agency for
Healthcare Research and Quality, CBO assumes that nearly a
million elderly individuals from families eligible to receive
assistance under this provision are admitted into nursing home
facilities each year. About one in six of these individuals
require help with fewer than three activities of daily living
(ADLs), which would make them suitable candidates for home
Results from a 1991 survey conducted by the American
Association of Retired Persons indicate that 44 percent of
families would prefer to care for frail or disabled family
members at home. Assuming appropriation of the necessary
amounts, CBO estimates that this provision would allow about
72,000 of these elderly individuals to avoid placement in an
institutionalized setting each year at a cost of approximately
$10,000 per grant. CBO notes that this reduction in nursing
home placement could result in Medicaid savings if the beds not
used by this population are not filled by previously unmet
demand. (Any such change in Medicaid spending can not be
attributed to H.R. 3995, however, because the grants that might
lead to the savings are contingent upon appropriation action.)
In addition, based on data published by the National
Alliance for Caregiving, CBO assumes that by 2007 roughly 10
percent of the 1.4 million low-income households that are
involved in caregiving for frail elderly relatives requiring
some help (individuals with one or two ADLs) also would receive
funding through this provision. This estimate is highly
uncertain because the legislative language would provide little
guidance to HUD on how to limit eligibility. If HUD were to
target funding to families with frail relatives most likely to
be admitted to nursing homes, participation would be lower than
the CBO estimate. However, given the lack of predictability of
nursing home admissions, the regulations might become less
restrictive than CBO assumes. In total, CBO estimates that
section 106 would authorize the appropriation of about $7
billion over the 2003-2007 period, with estimated outlays of
about $4 billion over that period.
Title II: FHA Mortgage Insurance. CBO estimates that
implementing title II would cost $3 million in 2003 but save
$24 million over the 2003-2007 period.
Simplification of Down Payment. Section 221 would
permanently change the process the Federal Housing
Administration (FHA) uses to determine the amount of a down
payment that is necessary for mortgages on the single-family
homes that it insures. Under current law, the down payment is
calculated using a formula established in a 1996 pilot program.
Under this formula, the maximum mortgage amount that FHA could
insure would be determined as a fixed percentage of the home
value. Authority to use this formula is scheduled to terminate
on December 31, 2002, but section 221would make its use
Based on information from FHA, CBO estimates that
continuing the use of the current down-payment formula would
slightly increase the cost of guaranteeing FHA loans because it
would lead to a small increase in the loan-to-value (LTV)
ratios of about 15 percent of the loans guaranteed each year
after 2002. The LTV ratio indicates how much equity a borrower
initially has in the home, and serves as a good predictor of
the likelihood of default. On average, borrowers with less
equity (that is, higher LTV ratios) have higher default rates
than borrowers with more equity. We estimate that this
provision would increase the cost of guaranteeing some loans,
resulting in a cost of $6 million in 2003 and $40 million over
the 2003-2007 period. The estimated changes in FHA's loan
subsidy costs--which are treated as discretionary spending--
would be recorded in each year as new loans are disbursed.
Reduced Down-Payment Requirements. Section 222 would reduce
the down-payment requirements for federally insured mortgages
for teachers and public safety officers. Enacting this
provision could enable certain teachers and public safety
officers to purchase homes within their work regions with an
FHA guarantee, by permitting a down payment as low as 1 percent
of the mortgage amount instead of the 3 percent minimum down
payment that is currently required. In addition, for each year
that the loan is held and the borrower continues to work in the
designated school district or public safety jurisdiction, FHA
would defer 20 percent of the up-front cost of obtaining the
loan. Normally, FHA charges a fee of 1.5 percent of the loan
amount as the up-front cost of obtaining an FHA loan guarantee.
The budgetary impact of this new loan program would depend
on how many households would use this provision to help them
become homeowners and how long these homeowners would remain in
their homes. Based on information from associations, private
investment firms, banks, FHA, and industry experts, CBO expects
that about 10,000 loans (with a face value of about $1 billion)
would be guaranteed after the program is fully implemented in
2004. CBO expects that demand for this program would grow to
almost 20,000 loans by 2007. CBO expects that this new program
would be profitable (and thus generate negative subsidies),
though not as profitable as the current single-family program
where fees are not waived or reduced and default rates are
slightly lower. We estimate that this new program would have a
subsidy rate of about negative 0.75 percent, compared to a
subsidy rate of negative 2.53 percent for FHA's single-family
program in 2003 and negative 2.4 percent in subsequent years.
CBO estimates that implementing the program would result in
additional offsetting collections of $2 million in 2003 and $41
million over the 2003-2007 period.
In addition, because the majority of FHA-insured loans are
eventually included in the Government National Mortgage
Association (GNMA) Mortgage-Backed Securities (MBS) program,
CBO estimates that implementing this provision would result in
additional collections to GNMA of $1 million in 2003 and $23
million over the 2003-2007 period.
Title III: Supportive Housing for Elderly and Disabled
Families. CBO estimates that implementing title III would cost
$60 million over the 2003-2007 period, assuming the
appropriation of the necessary amounts.
Section 302 would add Section 811 Supportive Housing for
the Disabled to the list of federally assisted housing programs
that are eligible to receive grants to provide service
coordinators. Service coordinators assist residents in
obtaining needed supportive services from community agencies.
In fiscal year 2002, 6.4 percent of the total allocation for
the Section 202 elderly housing program was earmarked for
service coordinators. Assuming a similar ratio, CBO estimates
that section 302 of H.R. 3995 would authorize $82 million for
the 2003-2007 period, with outlays of $60 million over that
Title IV: Section 8 Rental Housing Assistance Program. CBO
estimates that implementing title IV would cost $2.7 billion
over the 2003-2007 period, assuming appropriation of the
Thrifty Production Vouchers. Section 401 would establish a
project-based voucher program to be used for the production or
substantial rehabilitation of affordable housing. The provision
would allow public housing agencies (PHAs) to use tenant-based
vouchers for these purposes and would cap the payment standard
for assisted units at 75 percent of the public housing agency's
payment standard for a unit of the same size. The provision
also would require HUD to increase the number of vouchers
allocated to PHAs by the number of additional families that can
be assisted by the agencies as a result of the cap on the
payment standard for those units. Assuming that these vouchers
would be used in conjunction with the housing production and
preservation program in section 101, CBO estimates that 2,500
additional vouchers would be allocated to PHAs over the 2003-
2007 period. These additional vouchers would result in
increased administrative fees paid to public housing agencies,
costing approximately $2 million over the same period.
Flexibility to Assist Hard-to-House Families. Section 403
would allow public housing authorities to use up to 5 percent
of amounts allocated to the agency each year for purposes that
directly support the agency's housing choice voucher program
(the program that provides tenant-based vouchers to low income-
families). These funds could be used for housing counseling
programs, down-payment assistance, rental security deposits,
and other activities that assist eligible families in obtaining
suitable dwelling units. Currently, many PHAs are not able to
utilize their full allotments each year because some tenant-
based vouchers cannot be placed. Assuming the availability of
appropriations, CBO estimates that this authority would
increase outlays by $2.6 billion over the 2003-2007 period.
PHA Administrative Fees. Section 405 would authorize the
Secretary of HUD to pay incentive fees to public housing
agencies that succeed in achieving high or substantially
improved performances on specified program requirements. Based
on information provided by HUD, CBO assumes that one-third of
all units are administered by public housing authorities that
have been rated as ``high performers'' under the Section 8
Management Assessment Program and, therefore, would be likely
recipients of the incentive fees. Assuming an administrative
fee bonus of 3 percent, CBO estimates that this provision would
require the appropriation of $63 million over the 2003-2007
period, with outlays of $60 million over that period.
Extension of Project-Based Section 8 Contract Renewals.
Section 408 would amend the Multifamily Assisted Housing Reform
and Affordability Act of 1997 to allow rents for properties
subsidized through the moderate rehabilitation program to be
renewed at market rates. Under current law, rents are renewed
at the lesser of adjusted existing rents, fair market rents, or
Based on data provided by HUD, State housing agencies, and
public housing agencies, CBO estimates that almost half of the
52,000 moderate rehabilitation units subsidized by HUD
currently have contract rents that are below market for
comparable units. Average monthly rents for such units are
estimated to be approximately $50 below the market rate. CBO
estimates that allowing contract rents on these units to be
marked up to market upon contract expiration would require the
appropriation of $61 million over the 2003-2007 period, with
outlays of $54 million over that period.
Title V: Public Housing. CBO estimates that implementing
title V would cost $532 million over the 2003-2007 period,
assuming appropriation of the necessary amounts.
Third-Party Public Housing Assessment System. Section 503
would give HUD the authority to develop a prototype of an
alternative evaluation system for assessing the overall
performance of housing authorities. The bill would require HUD
to enter into a contract with an outside entity to develop the
prototype assessment system. CBO estimates that this provision
would cost approximately $1 million in fiscal year 2003.
HOPE VI Authorization of Appropriations. Section 522 would
authorize the appropriation of such sums as necessary for the
HOPE VI program through 2004. In 2002, $574 million was
appropriated for this program. Assuming inflation-adjusted
appropriations, CBO estimates that the bill would authorize
$1.2 billion for the 2003-2004 period, with outlays totaling
$531 million through 2007.
Title VI: Homeless Housing Programs. CBO estimates that
implementing title VI would cost about $1.7 billion over the
2003-2007 period, assuming inflation-adjusted appropriations.
Title VI would extend the authorizations for the following
programs through 2004 for such sums as may be necessary:
LInteragency Council on the Homeless
(estimated outlays of $2 million over the 2003-2007
LFederal Emergency Management Agency food and
shelter program (estimated outlays of $283 million over
the 2003-2007 period);
LEmergency shelter grants program (estimated
outlays of $188 million over the 2003-2007 period);
LSupportive housing program (estimated outlays
of $950 million over the 2003-2007 period);
LSection 8 assistance for single room
occupancy dwellings (estimated outlays of $19 million
over the 2003-2007 period); and
LShelter plus care (estimated outlays of $299
million over the 2003-2007 period).
Title VII: Reauthorization of Native American Housing and
Self-Determination Act of 1996. Section 701 would authorize the
appropriation of such sums as necessary through 2007 for Native
American Housing Block Grants, title VI loan guarantees, and
training and technical assistance. For 2002, $649 million was
appropriated for these purposes. Assuming continued funding at
that level and adjusting for inflation, CBO estimates that
implementing this provision would cost $2.3 billion over the
Title IX: Other Housing Programs. CBO estimates that
implementing title IX would cost $1.1 billion over the 2003-
2007 period, assuming appropriation of the necessary amounts.
GNMA Guarantee Fee. GNMA is responsible for guaranteeing
securities backed by pools of mortgages insured by the Federal
Government. (These securities are known as mortgage-backed
securities or MBS). For a fee charged to lenders or issuers of
the securities, GNMA guarantees the timely payments of
scheduled principal and interest due on the pooled mortgages
that back their securities. Under current law, GNMA charges
lenders or issuers an annual fee of 6 cents for every $100 (6
basis points) of guaranteed mortgage-backed securities backed
by single-family loans. Furthermore, a fee increase to 9 basis
points is scheduled to take effect on October 1, 2004. Section
901 would repeal that fee increase. CBO estimates that
eliminating the fee increase would increase the subsidy rate
associated with the single-family MBS program and increase the
demand for the program.
Based on information from GNMA, CBO estimates that the
collection of lower fees would reduce the subsidy for the
single-family MBS program from negative 0.56 percent to
negative 0.37 percent. (As with the FHA single-family program,
GNMA guarantee fees for the mortgage-backed securities more
than offset the costs of expected defaults, resulting in net
collections from the MBS program.) CBO expects that by
extending the lower fee of 6 basis points, however, GNMA would
remain more competitive with other MBS programs and continue to
guarantee more than $100 billion worth of mortgage-backed
securities, as it does under the current fee structure. Thus,
while repealing the fee increase would result in a less
profitable program, this loss would be partially offset by
additional receipts stemming from an expected increase in
demand for GNMA services of about 25 percent. On balance, CBO
estimates that implementing this provision would cost $56
million in 2005 and $173 million over the 2005-2007 period.
Assistance for Self-Help Housing Providers. Section 903
would authorize the appropriation of such sums as necessary for
the Assistance for Self-Help Housing Providers program through
2007. For 2002, $22 million was appropriated for this program.
Assuming continued funding at that level and adjusting for
anticipated inflation, CBO estimates that implementing this
provision would cost $69 million over the 2003-2007 period.
Housing Opportunities for Persons with AIDS. Section 904
would authorize the appropriation of such sums as necessary
through 2007 for the Housing Opportunities for Persons with
Aids program. For 2002, $277 million was appropriated for this
program. Assuming inflation-adjusted appropriations, CBO
estimates that the bill would authorize $1.5 billion for the
2003-2007 period, with outlays of $820 million over that
Section 301 would authorize the use of any amounts that
remain unobligated as of September 30, 2002, for grants under
section 202b of the Housing Act of 1959 to carry out a program
to demonstrate the effectiveness of providing funds to be used
for the repair, rehabilitation and modernization needs of
section 236 elderly housing. Based on information provided by
HUD, CBO estimates that the use of unobligated funds will
increase outlays by $34 million over the 2003-2008 period.
The Balanced Budget and Emergency Deficit Control Act sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts. The changes in outlays that are subject
to pay-as-you-go procedures are shown in the following table.
For the purposes of enforcing pay-as-you-go procedures, only
the effects through 2006 are counted.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
HR. 3995 contains no intergovernmental or private-sector
mandates as defined in UMRA and would impose no costs on State,
local, or tribal governments. Any significant costs to State,
local, or tribal governments would result from complying with
conditions of Federal aid.
ESTIMATE PREPARED BY:
Housing Assistance Programs: Chad Chirico (226-2820)
FHA and GNMA Subsidies: Susanne S. Mehlman (226-2860)
Self-Help Housing Providers: Lanette Walker (226-2860)
Impact on State, Local, and Tribal Governments: Greg Waring
Impact on the Private Sector: Cecil McPherson (226-2949)
ESTIMATE APPROVED BY:
Peter H. Fontaine
Deputy Assistant Director for Budget Analysis
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clause 3 of the
Section-by-Section Analysis and Discussion
Section 801. Applicability. Except for certain agencies
delineated by section 802, the requirements of this title shall
apply to any proposed rule unless the agency promulgating the
rule certifies that the proposed rule will not, if given force
or effect as a final rule, have a significant deleterious
impact on housing affordability. This certification must be
published in the Federal Register at the time of publication of
the general notice of proposed rulemaking for the rule. Section
801 also applies to any final rule, unless the agency
promulgating the rule has certified that the rule will not have
a significant deleterious impact on housing affordability. This
certification must be published in the Federal Register at the
time of publication of the final rule.
Section 802. Exception for Certain Banking Rules. This
title does not apply to any proposed or final rule relating to
the safety and soundness of a federally insured depository
institution; credit union, Federal home loan bank; government
sponsored enterprise; a Farm Credit institution or foreign bank
or their branches; agencies or their representative offices
operating in the United States.
Section 803. Statement of Proposed Rulemaking. Unless the
agency has made a certification, the agency shall publish a
general notice of proposed rulemaking for any proposed rule.
The notice must state the text of the proposed rule and request
any interested persons to submit to the agency any written
analyses, views and any specific alternatives to the proposed
rule. The agency must also provide an opportunity for
interested persons to comment prior to promulgation of the
final rule. In addition, the agency is required to prepare and
make available an initial housing impact analysis in accordance
with section 804.
Section 804. Initial Housing Impact Analysis. For each
proposed rule, the initial housing impact analysis shall
consist of a description of the reasons an agency is taking
that particular action, the objectives and legal basis for such
rule, and a description of and, where feasible, of the estimate
of the extent to which the proposed rule would increase the
cost or reduce the supply of housing or land for residential
development. The initial analysis must also include a
description of the relevant Federal rules, which may be
duplicative or conflict with the proposed rule.
Section 805. Final Housing Impact Analysis. Whenever an
agency promulgates a final rule after publication of a general
notice of proposed rulemaking, the agency shall prepare a final
housing impact analysis. Each final housing impact analysis
shall contain a statement of the need for and objectives of the
rule; a summary of the significant issues, analyses and
alternatives to the proposed rule raised during the public
comment period in response to the proposed rule and initial
housing impact analysis; a summary of the agency assessment of
the issues, analyses and alternatives, and a statement of any
changes made in the proposed rule as a result of such comments;
and a description of and an estimate of the extent to which the
rule will impact housing affordability or an explanation of why
no such estimate is available. The agency is required to make
copies of the final housing impact analysis available to
members of the public and shall publish in the Federal Register
Section 806. Avoidance of Duplicative or Unnecessary
Analyses. An agency may perform the analyses required by
sections 804 and 805 in conjunction with any other agenda or
analyses required by any other law, executive order, or
directive. In order to avoid unnecessary duplication, an agency
may consider a series of closely related rules as one rule for
purposes of sections 804 and 805 requirements.
Section 807. Preparation of Analyses. In complying with
sections 804 and 805, an agency may use either a quantifiable
or numerical description of the effects of a proposed rule or
alternatives to the proposed rule, or more general descriptive
statement if quantification is not practicable or reliable.
Section 808. Effect on Other Law. The requirements of
sections 804 and 805 do not alter in any way otherwise
applicable by law to agency action.
Section 809. Procedure for Waiver or Delay of Completion.
Section 804 compliance may be waived or delayed by publication
in the Federal Register of a written finding that the final
rule cannot be delayed and is being promulgated in response to
an emergency. Section 805 compliance may be delayed, but not
waived, for no more than 180 days after publication in the
Federal Register of the final rule. Section 805 compliance may
be delayed by publication in the Federal Register of a written
finding that the final rule cannot be delayed and is being
promulgated in response to an emergency. If the agency has not
prepared a final housing impact analysis within 180 days from
the date of publication of the final rule, such rule shall
lapse and have no force or effect.
Section 810. Definitions. (1) the term ``agency'' does not
include Congress; the courts of the United States; the
governments of the territories or possessions of the United
States; the government of the District of Columbia; agencies
composed of representatives of the parties or of
representatives of organizations of the parties to the disputes
determined by them; courts-martial and military commissions; or
military authority exercised in the field in time of war.
(2) the term ``families'' has the meaning given such term
as in section 3 of the United States Housing Act of 1937.
(3) the term ``housing affordability'' means the quantity
of housing that is affordable to families having incomes that
do not exceed 150 percent of the median income of families in
the area in which the housing is located, adjusting for the
size of the family.
(4) the term ``rule'' means any rule for which the agency
published a general notice of proposed rulemaking pursuant to
section 553(b) of title 5, United States Code, or any other law
for which an agency to state and local governments provides an
opportunity for notice and public comment, with certain
(5) the term ``significant'' impact is defined as
increasing consumer's costs of housing by more than
$100,000,000 a year.
Section 811. Development. No later than 1 year after
enactment, the Secretary of Housing and Urban Development shall
develop model initial and final housing impact analyses under
this title which shall be published in the Federal Register.
The model analyses shall define the primary elements of a
housing impact analyses to instruct other agencies on how to
carry out and develop the analyses required under sections 804
Section 812. Judicial Review. Any determination by an
agency concerning the applicability of any provisions of this
title shall not be subject to judicial review. Housing impact
analyses prepared in accordance with this title are not subject
to judicial review. Title VIII does not bar judicial review of
any other impact statement required by any other law.
Changes in Existing Law Made by the Bill, as Reported
The bill was referred to this Committee for consideration
of such provisions of the bill as fall within the jurisdiction
of this Committee pursuant to clause 1(k) of rule X of the
Rules of the House of Representatives. Such provisions under
the consideration of this Committee, as reported by the
Committee, does not make any changes in existing law.
TUESDAY, JULY 23, 2002
House of Representatives,
Committee on the Judiciary,
The Committee met, pursuant to notice, at 10:00 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
* * * * * * *
The next item on the agenda is the adoption of H.R. 3995,
the ``Housing Affordability for America Act of 2002.''
The Chair recognizes the gentleman from Georgia, Mr. Barr,
Chairman of the Subcommittee on Commercial and Administrative
Mr. Barr. Mr. Chairman, the Subcommittee on Commercial and
Administrative Law reports favorably on H.R. 3995. On March 19
of this year, Congresswoman Marge Roukema introduced H.R. 3995.
Chairman Sensenbrenner. Without objection, H.R. 3995 will
be considered as read and open for amendment at any point.
[The bill, H.R. 3995, follows:]
Chairman Sensenbrenner. The Chair recognizes the gentleman
from Georgia, Mr. Barr, to strike the last word.
Mr. Barr. Thank you, Mr. Chairman.
Mr. Chairman, the Subcommittee on Commercial and
Administrative Law reports favorably on H.R. 3995. On March 19
of this year, Congresswoman Marge Roukema introduced H.R. 3995,
the ``Housing Affordability for America Act of 2002,'' and
since its introduction, 73 Members have co-sponsored the bill.
This bill concerns a topic that affects everyone:
affordable housing for Americans.
Homeownership is an investment in our neighborhoods and our
society. It stabilizes and strengthens communities. Yet, while
levels of homeownership are at an all-time high, the dream of
affordable housing still remains out of reach for many
Americans. This bill recognizes this problem and seeks to make
the dream a reality for more Americans.
The Financial Services Committee exercised its jurisdiction
over all but one portion of this bill. Its Subcommittee on
Housing and Community Opportunity held hearings and markup on
H.R. 3995, and on July 10, the Committee approved the bill.
The Judiciary Committee retains jurisdiction over title
VIII of H.R. 3995. And on July 16th, the Subcommittee on
Commercial and Administrative Law reported the bill to the full
Committee by voice vote without amendment.
That title is virtually identical to H.R. 2753, which was
introduced on August 2 of last year by my distinguished
colleague from Wisconsin, Mr. Green.
Title VIII simply requires Federal agencies to prepare and
publish a housing impact analysis when noticing proposed rules
for public comment when those rules have an impact on housing
affordability in excess of $100 million. Under title VIII,
agencies publishing notice of proposed rulemaking for a
proposed rule will be required to prepare an initial housing
This analysis would include: one, reasons why the agency
action is being considered; two, the objectives of and legal
basis for the proposed rule; and, three, a description and an
estimate of the extent to which the proposed rule would
increase the cost or reduce the supply of housing or land for
To accompany the promulgation of a final rule, title VIII
would require a final housing impact analysis statement to
summarize and assess the issues and alternatives raised during
the public comment period. The final impact analysis would
include a statement of any changes made in the proposed rule as
a result of such comments and describe and estimate the extent
to which the rule will impact housing affordability.
Title VIII will not unduly burden agencies. Agencies which
propose rules that will not have an economic impact on housing
in excess of $100 million need not prepare impact analysis
statements. In such cases, the head of the agency must simply
provide a certification to that effect and a supporting factual
statement for publication in the Federal Register.
Title VIII also provides procedures for the delay of
completion of an impact analysis and, in the case of proposed
rules, for the waiver of the impact analyses when rules are
being promulgated in response to an emergency.
Our recognition of the need for housing impact analyses
when promulgating agency rules is not new. In the 106th
Congress, the House approved H.R. 1776, the ``American
Homeownership and Economic Opportunity Act of 2000,'' a bill
containing a more exacting version of the impact analysis
requirements contained in title VIII. That bill was approved by
a vote of 417 to 8 but did not come up for vote in the Senate.
Title VIII of H.R. 3995 will hopefully lead to rules which
make affordable housing less burdensome to acquire and more
accessible to more Americans. It should be supported, and I
urge its adoption.
I yield back.
Chairman Sensenbrenner. The gentleman from North Carolina,
Mr. Watt, the Ranking Member.
Mr. Watt. Thank you, Mr. Chairman.
The part of this bill over which our Subcommittee and over
which this full Committee has jurisdiction is very limited and
noncontroversial. It will probably add some more paperwork at
the Federal level, but with a valuable purpose.
And I encourage my colleagues to support the bill and yield
[The prepared statement of Ms. Jackson Lee follows:]
Chairman Sensenbrenner. Are there amendments to title VIII
of the bill?
If there are not, the Chair notes the presence of a
reporting quorum. The question occurs on the motion to report
the bill H.R. 3995 favorably.
Those in favor will say aye.
The ayes appear to have it. The ayes have it, and the
motion to report favorably is agreed to.
Without objection, the Chairman is authorized to move to go
to conference pursuant to House rules. Without objection, the
staff is directed to make any technical and conforming changes.
And all Members will be given 2 days, as provided by the rules,
in which to submit additional, dissenting, supplemental, or