Help That Hits Home

The Washington Post
By David S. Broder
Thursday, October 18, 2007; A25

The House of Representatives, which has a penchant for spending time
on issues such as the Armenian genocide of 1915, actually did
something useful last week. It passed a bill to create an Affordable
Housing Trust Fund, a measure that, if it becomes law, will add 1.5
million badly needed units in the next decade.

The bill has been sought by advocates for housing and the homeless;
local governments; and their allies for the better part of a decade.
It was endorsed by the National Association of Realtors and the
National Association of Home Builders. Its champions in the House
included Rep. Barney Frank of Massachusetts, the Democratic Financial
Services Committee chairman, and Rep. Maxine Waters of California, who
heads the housing subcommittee.

The measure, which passed the House last Wednesday, would create a
separate Treasury account, similar to the Highway Trust Fund, that
could be used only to build, repair or rehabilitate affordable rental
units and assist first-time home buyers with their down payments. The
funds from the trust would be distributed to states and local
communities, which would allocate money to people on the basis of
need. The first priority would be those who are struggling hardest to
find decent shelter for their families.

Sadly, their numbers have been increasing. The Joint Center for
Housing Studies at Harvard reported that in 2005, the latest year for
which records are available, 2.3 million more households faced housing
costs that consumed at least 30 percent of their incomes — bringing
the total of such burdened households to 37.3 million. More than 8.9
million renters and 8 million homeowners had "severe" housing burdens,
meaning more than half their incomes went for that purpose.

In addition, on any given night, about 750,000 people were homeless.

If it is created, the new fund is expected to have between $800
million and $1 billion a year to distribute. The money would come from
a 1.2 percent charge on the value of mortgages held by Fannie Mae and
Freddie Mac, two government-chartered, privately owned financial
agencies, and a similar contribution from the reserves of the Federal
Housing Administration.

Some Republicans argued that this is a backdoor way of taxing some
home buyers to benefit others, but Frank insisted that no one’s
mortgage payments would rise as a result of the bill.

The other Republican objection was bureaucratic — an argument that
this fund should be made part of another, smaller program already
running at the Department of Housing and Urban Development. But the
other program depends on annual appropriations, while this one would
have an assured source of money not subject to the vagaries of the
congressional budget process.

Rep. Shelley Moore Capito, a West Virginia Republican who spoke in
favor of the bill, noted that her state, like several others, has a
housing trust fund of its own and said she welcomed the aid that the
federal fund could provide — with great flexibility on its use.

The bad news is that prospects for Senate action are uncertain, in
part because Sen. Chris Dodd of Connecticut, Frank’s counterpart on
the Senate’s banking and housing committee, is preoccupied with his
campaign for the Democratic presidential nomination.

And the Bush administration has warned that the measure could face a
presidential veto if it gets that far in anything like its present
form. An Oct. 9 memo from the White House Office of Management and
Budget, which said it would recommend a veto, argued that the trust
fund proposal would "disrupt the appropriations process" and might
even lead the FHA to "ration credit."

The spending issue is the same one that has caused the president to
strike down the proposed expansion of the State Children’s Health
Insurance Program.

The bill creating the Housing Trust Fund passed 264 to 148 — 26 votes
short of the maximum two-thirds majority needed to override a veto but
with 23 members absent and uncounted.

Housing is not a sexy issue for presidents or presidential candidates.
The House action drew almost no newspaper coverage. But housing is as
important to people as food and drink — and life itself. Will the
Senate act? Will the president recant? I will keep reporting this
story.

***

In my Oct. 14 column, I attributed to the Congressional Budget Office
the estimate that the Wyden-Bennett health-care plan, if enacted,
would save the country $336 billion over the next 10 years. The
estimate actually came from the Lewin Group, a private consulting
firm. The CBO has not scored the legislation.

davidbroder@washpost.com

Source: le/2007/10/17/AR2007101702116.html?sub=AR