Cranston: New Federal Legislation Will Bring Housing Investment to Los Angeles

Three years ago, when I assumed leadership of the Senate Housing Subcommittee, I announced my determination to mobilize the country’s resources to provide the affordable housing that our people will need during the next decade and beyond. I have worked with the country’s housing leaders on a bipartisan basis to achieve this goal.

The product of these efforts is the landmark National Affordable Housing Act, which I introduced in March 1989 and the Senate passed with the overwhelming vote of 96-1 on June 27, 1990. This bill authorizes a tough-minded, nation­wide housing initiative over the next decade, with $14 billion in new funding authorized during the first three years.

A comparable bill is currently moving through the House of Representatives. I am confident that major housing legislation will be enacted this year. Enactment will be particularly beneficial to California, where the shortage of affordable housing is one of the worst—if not the worst—in the country.

If the Cranston bill is fully funded, our state could receive $1.5 billion in federal investment for affordable housing over the next three years, which would be matched by even larger investments by state and local communities and the private sector.

The National Affordable Housing Act takes a comprehensive approach to the full range of housing problems—from homelessness to affordable rental housing to first-time homeownership.

First, the bill will expand the supply of housing that is affordable to low-income and moderate-income Americans by building strong local partnerships among the government, non-profit organizations and private industry.

The bill creates Housing Opportunities Partnerships (HOP) as an exciting new way to increase investment in more affordable housing that is suited to local needs. HOP will provide states and local communities with various forms of federal assistance to produce affordable housing while allowing them the flexibility to tailor their efforts to varying local housing conditions and local housing markets.

HOP will provide a one-stop shop at the national level, with an incentive to support state and local housing strategies, capital subsidies and credit assistance, and technical assistance, designed to facilitate the adoption of the best approaches by states and local communities. Full funding of HOP will provide some 49,000 affordable homes for Californians over the next few years.

A second major provision of the Senate bill is designed to regain the long-term financial health of Federal Housing Administration (FHA), which was sorely damaged under the Reagan Administration. The Senate adopted a proposal for restructuring FHA premiums, which was recommended by the Bush Administration.

I believe that is a responsible proposal. But I’m concerned that in its current form this solution may raise down payment costs unnecessarily high. As the bill continues through Congress, I will actively seek refinements to prevent unnecessary harm to first-time homebuyers.

Third, the bill will provide a permanent solution that will maintain the affordability of as much of the country’s existing stock of low-income housing as possible. More than a quarter million units of affordable housing are likely to be lost over the next few years if Congress does not act effectively on this problem this year. The problem is disproportionately located in several states, including California. This is the most unavoidable housing crisis facing Congress, and the past Administration did little or nothing to address it.

Fourth, the bill will expand tenant management and tenant ownership of low-income housing and help low-income families make the transition from poverty to economic self-sufficiency. The bill will provide better coordination of housing assistance with education, job training, employment counseling, child care, health care and other supportive services.

Fifth, the bill will revise the existing rental assistance programs—section 8 vouchers and certificates—to make them more useful in tight housing markets. As many as 23,000 new families will receive rental assistance in California over the next three years.

Sixth, the bill will provide adequate housing for people with special needs‑par­ticularly elderly persons, persons with disabilities, and homeless Americans, as well as very low-income families with children. Such housing must combine a range of supportive services that many homeless persons need to live independently and with dignity.

The bill would give states and local communities more flexibility and responsibility in administering the McKinney homeless assistance programs. This will enable nonprofit organizations to provide assistance to homeless persons more quickly and efficiency than under the current system.

The bill adopts the recommendations of the Los Angeles Task Force on Runaway Youth to create a demonstration project to coordinate services for teenage run­aways, between 10,000 and 20,000 of whom are estimated to be homeless on the streets of Los Angeles alone.

Finally, the bill reauthorizes the very successful Community Development Block Grant program through which California annually receives nearly $300 million to undertake community and economic development activities. Other sections of the bill will extend and reform authorizations for public housing and rural housing.

I will do all I can to get this major housing legislation enacted into law this year so that Congress, the Administration, state government, local communities and the private and non-profit sectors can together begin to provide the good, affordable housing that American families will need in the years to come.