08-R261
2008 -- S 2970
Enacted 05/31/08
S E N A T E R E S O L U T I O N
RESPECTFULLY
REQUESTING THAT THE UNITED STATES CONGRESS ADOPT AN EMERGENCY APPROPRIATION FOR
PROJECT-BASED SECTION 8 HOUSING
Introduced By: Senators
Ciccone, Miller, Metts, Pichardo, and Ruggerio
Date Introduced: April 23,
2008
WHEREAS,
The federal project-based Section 8 program provides subsidies to multi-
family
apartment owners to keep rents affordable for $1.3 million low income families,
elderly
and
disabled people nationwide, including Hillside Apartments in the State of Rhode
Island; and
WHEREAS,
The U.S. Congress has provided 6.14 billion dollars to the U.S. Department
of
Housing and Urban Development (HUD) for project-based Section 8 in federal
fiscal year
(FFY)
2008, a significant increase over the 5.5 billion dollars requested by the
Administration in
its
2008 budget request; and
WHEREAS,
On November 16, 2007, HUD’s Chief Financial Officer, John Cox,
acknowledged
in a letter to the House Financial Services Committee that the actual amount
required
to renew all Section 8 contracts that expire during FFY 2008 for a full one
year term is
8.1
billion dollars, 2 billion dollars more than the amounts now available for FFY
2008; and
WHEREAS,
It is now apparent that HUD and the White House Office of Management
and
Budget have understated the amounts needed for annual renewals of Section 8
contracts is the
Administration’s
requests to Congress for the past few years in order to shift funds to other
Administration
priorities; and
WHEREAS,
HUD ran out of funds to renew expiring contracts with owners during the
FFY
2007, resulting in a crisis of late reimbursement to owners, which forced many
to skip utility
and
mortgage payments and to cut back repairs and maintenance to residents; and
WHEREAS,
It is now apparent that HUD averted the catastrophe of funding cutoffs and
mass
displacement of low income tenants in 2007 only by “short funding” contract
payments to
owners
for less than one year and diverting funds from other program accounts; and
WHEREAS,
HUD has stated that the anticipated 2 billion dollar shortfall in FFY 2008
will
be addressed by again “short funding” contracts to owners this year; and
WHEREAS,
HUD’s controversial practice of “short funding” contracts has created
uncertainty
and instability among owners and financial markets that finance low-income
housing,
and
anxiety among residents that their homes may not be secure; and
WHEREAS,
Owners of more than 500,000 Section 8 apartments nationwide, including
approximately
14,000 in Rhode Island located in higher rent areas, may now consider “opting
out”
of their Section 8 contracts due to the new financial uncertainty, leading to a
permanent loss
of
scarce housing available to low income households; and
WHEREAS,
The Section 8 shortfall, now estimated at 2.4 billion dollars, combined with
the
administrative complexities of HUD’s new approach, could result in HUD cutting
off funds to
owners
during FFY 2008, forcing these owners to triple rents paid by low income
households
overnight
to cover their operating costs, resulting in mass displacement of affected
tenants; and
WHEREAS,
HUD’s November 16, 2007 letter acknowledges that if HUD cuts off
payments
to owners due to lack of funds, there are currently no federal requirements
whatsoever
to
provide notice to owners or tenants, or measures to protect tenants from
massive overnight rent
increases;
now, therefore be it
RESOLVED,
That this Senate of the State of Rhode Island and Providence Plantations
recognizes
the vital importance of project-based Section 8 housing to low income families,
elderly,
and disabled people of the state, and the need for financial security to owners
and lenders
of
Section 8 housing and is also concerned that the shortfall in Section 8 funding
in FFY 2008
and
HUD’s administrative practices threaten the state and nation with the permanent
loss of
scarce
affordable housing and the possibility of mass displacement of low income
families; and
be
it further
RESOLVED,
That this Senate of the State of Rhode Island and Providence Plantations
urgently
calls upon the U.S. Congress to adopt an Emergency Supplemental Appropriation
of 2.4
billion
dollars for project-based Section 8 funding as soon as possible during FFY
2008, to make
appropriate
provisions for full one-year renewals of all Section 8 contracts, subject to
annual
appropriation
in the Congressional Budget Resolution for FFY 2009, and to adopt protections
for
tenants
in the event of funding termination or cutoffs by HUD; and be it further
RESOLVED,
That the Secretary of State be and he hereby is authorized and directed to
transmit
duly certified copies of this resolution to the Rhode Island delegation to the
United
States
Congress.
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LC02781
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