In response to inquiries by AFFORDABLE HOUSING FINANCE, the following statement was submitted by Rep. Barney Frank (D-Mass.), chairman of the House Committee on Financial Services:
“The committee has spent a great deal of time during the past session trying to improve the stock of affordable housing. I believe that the absence of affordable rental housing is a serious social and economic problem … And that it contributed some to the subprime crisis because it pushed people into homeownership when there should have been other alternatives for them, in many cases more suitable to their economic situations.
“My three highest legislative priorities for the coming year are:
- Finishing work on the creation of an affordable housing trust fund;
- Adopting legislation that to the maximum extent preserves existing affordable housing in a way that continues to make it available for low- and middle-income people, in the face of expiring-use provisions;
- Fully integrating the housing programs based on federal appropriations with those that are supported by tax benefits.
“In the legislation we have passed this year, we fund the affordable housing trust fund not from appropriations—so we don’t have to compete with other important public housing priorities—but from additional revenues generated from the Federal Housing Administration and from Fannie Mae and Freddie Mac. That is, we take profits that are generated in the housing area in general and put them to affordable housing. I hope to finish work on that in cooperation with our Senate colleagues this year.
“As to the preservation issue, legislation adopted in the 1960s and ’70s created affordable housing largely through federal subsidies to lenders but allowed the use restrictions to expire after 40 years. We face the loss of hundreds of thousands of affordable units if we do not adopt the legislation to prevent this, and that is a very high priority for me. This will cost some money, but dollar-for-dollar, money that we use to preserve existing affordable units gives us the best bang for the buck.
“There are a number of programs that are supported by state and federal appropriations processes, and there are also housing programs that are based in various tax preferences. Unfortunately, these two sets often have very conflicting rules and requirements, and people—especially in high-cost areas—seeking to put some of these programs together to get maximum return are frustrated by this. We intend to make this work together in a seamless fashion. I am working closely with Chairman Charlie Rangel of the House Ways and Means Committee in this regard.
“Finally, I will continue to argue that the goal of public policy should be to assist people into getting safe and decent homes, and that homeownership is a subset of this, but not the entirety of it. Reminding the country that a good supply of affordable rental housing is a critical aspect of our quality of life has, sadly, become easier because of the subprime crisis. I wish it had not taken such a disastrous event to help us make the point, but it is one of the things that we must do if we are to avoid a repetition.”