Washington Update - 07/13/2007 (Plain Text Version)

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House Passes Section 8 Overhaul

By an overwhelming 383-83 margin, the House on July 12 approved H.R. 1851, the Section 8 Voucher Reform Act of 2007. The legislation would reform the Section 8 low-income housing voucher program by expanding rental assistance opportunities, streamlining program operations and providing a viable funding formula. The Section 8 Housing Choice Voucher program provides rental subsidies to approximately 2 million very-low income households who obtain housing in the private rental market. The basis of the program, which is to broaden the range of housing choices for families seeking affordable housing, has proven to be effective in helping low-income families find decent, safe and affordable housing.

The bill addresses several issues of interest to multifamily builders. Specifically, the measure:

Requires the U.S. Department of Housing and Urban Development (HUD) to translate official HUD documents and other papers commonly used by property managers that are considered “vital,” and to set up an 800 hotline number for oral interpretations under the newly launched Limited English Proficiency (LEP) Guidance.
Streamlines the unit inspection process by eliminating duplicative inspections and unnecessary delays, while ensuring that units continue to meet housing quality standards. This will encourage increased apartment owner participation.
Provides important changes to the project-based voucher program to ensure its flexibility as a tool for preserving or expanding the supply of apartments affordable to low-income families in many communities, particularly those with a tight housing market.

NAHB is encouraging the Senate to introduce companion legislation. To read the legislation, click here and type the bill number in the box in the center screen. For more information, contact Scott Meyer at 800-368-5242, x8144.

Builders Urge Congress to Support Market-Driven Green Building

NAHB Vice President and Secretary Bob Jones told Congress on July 11 how NAHB members have been in the forefront during the past decade in promoting and developing energy-efficient and environmentally-friendly construction techniques for the mainstream home builder. “More than 100,000 homes have been built and certified by voluntary, builder-supported green building programs around the country since the mid-1990s,” Jones said in testimony before the House Small Business Committee. “The green movement in residential construction derives much of its strength from its voluntary nature, which provides builders and developers the flexibility that is essential for incorporating the principles of sustainable design.” He added that the rapid growth and adoption of green building practices is being fueled by market demand.

Congress can foster private sector innovation in green construction for the millions of homes that are waiting to be built, Jones said, by keeping the market free of mandates, striving towards the greatest energy- and resource-efficient buildings available, allocating funds for providing education and training in green construction on a broader scale, and extending and expanding federal tax credits that passed as part of the Energy Policy Act of 2005. For more information, see NAHB's press release or contact Elizabeth Odina at 800-368-5242, x8570. [return to top]

Lawmakers Plow Forward on Appropriations Bills

House and Senate appropriators returned from the July 4th recess to a full plate of appropriations work. The House, which failed to meet its June 30 deadline to complete action on the fiscal 2008 appropriations bills, moved quickly to committee consideration of the remaining bills, including the Labor, Health and Human Services and Education bill; the Agriculture bill; and the Transportation and Housing bill. The full House hopes to pass these measures by the end of July. Meanwhile, the Senate began committee work on 10 spending bills this week and is expected to move the bulk of its spending measures out of committee by the end of July. The full chamber will take up the appropriations legislation in September.

President Bush has, however, almost guaranteed that the fiscal 2008 appropriations process will be a drawn-out affair by committing to veto any appropriations bill that increases spending above what the White House proposed in its fiscal 2008 budget. Presently, seven appropriations bills proposed by the House and Senate provide for increased spending above the Administration's budget request. Of interest to NAHB members in two of the key appropriations bills—the HUD and Labor spending measures—are the following spending levels:

House HUD Appropriations
HOME program formula grants: $1.75 billion
CDBG formula grants: $3.9 billion
Section 8 tenant based vouchers: $16.3 billion
Section 8 project based vouchers: $6.4 billion
HOPE VI: $120 million
Rural Housing and Economic Development: $16.8 million
PATH program: $5 million
Housing Counseling Assistance: $41 million

House and Senate Labor Appropriations:
Job Corps: $1.65 billion (House); $1.65 billion (Senate)
OSHA enforcement: $190 million (House); $188 million (Senate)
OSHA Harwood training grants: $10 million (House and Senate)
Youthbuild: $60 million (House), $65 million (Senate)
Responsible Reintegration of Youth Offenders: $0 (House); $55 million (Senate)
Reintegration of Ex-Offenders: $68.7 million (House); $13 million (Senate)

For more information, contact Jenna Hamilton at 800-368-5242, x8407. [return to top]

Senate Panel Focuses on Issue of "Carried Interest"

This week the Senate Finance Committee held the first of two hearings on the issue of so-called “carried interest.” Carried, or “promoted" interests, are income flows paid to private equity fund participants as a disproportionate share of the participant’s initial investment. They are generally associated with hedge fund managers, but promoted interests are also a common financing vehicle for payments to home builders, especially multifamily builders, for real estate joint ventures in which outside partners provided gap financing. Under present law, carried interests are taxed as capital gains income. However, many in Congress believe that such income should be taxed at higher rates as ordinary income because the income does not represent profit allocable to a capital interest.

In June, Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa) introduced legislation, S. 1624, that would require corporate taxation of all Publicly Traded Partnerships. The bill is silent on the issue of carried interest. However, the two issues have become co-mingled since the introduction of House bill H.R. 2834 by Rep. Sander Levin (D-Mich.). H.R. 2834 is also co-sponsored by House Ways and Means Committee Chairman Charlie Rangel (D-N.Y.) and Chairman Barney Frank (D-Mass.) of the House Financial Services Committee, among others. This bill is of much greater concern to the housing community.

The Levin bill would tax a carried interest at the ordinary income rate of 35 percent instead of the current capital gains rate of 15 percent. Clearly, this legislation would do significant damage to real estate development by disrupting real estate partnerships large and small, aside from the broader economic and community development implications. The House plans to hold hearings later in July. To view the legislation, click here and type the respective bill numbers in the box in the center screen. For more information, contact Greg Brown at 800-368-5242, x8421. [return to top]

Property Rights Bill Unveiled in House

This week, Reps. Jim Sensenbrenner (R-Wisc.) and Maxine Waters (D-Calif.) introduced the Private Property Rights Protection Act of 2007. The bill would prohibit federal, state and local governments from using the U.S. Supreme Court’s Kelo decision to condemn property, and it is very similar to legislation that passed the House last Congress by an overwhelmingly bipartisan vote of 376-38. The Kelo decision affirmed that taking property solely for economic development is a valid public use.

The bill would continue to allow governments to use eminent domain for traditional public purposes, such as roads, schools, brownfield redevelopment,and utilities. It also attempts to protect the right of government to use eminent domain to “remove harmful uses of land provided such uses constitute an immediate threat to public health and safety,” which is intended to mean blighted areas. As with last year’s bill, NAHB is concerned that the “harmful uses” language is too narrow. For more information, contact J.P. Delmore at 800-368-5242, x8412. [return to top]