Noting that there continues to be a critical shortage of affordable rental housing for both low- and moderate-income households, the nation's home builders today urged Congress to include a new rental housing production program as part of a comprehensive housing bill now pending in the U.S. House of Representatives.

Testifying on behalf of the National Association of Home Builders (NAHB) in support of H.R. 3995, the "Housing Affordability for America Act of 2002," Robert Lawson, a home builder from Virginia Beach, Va., urged the House Financial Services Committee to focus on the housing needs of the 3.7 million households who are the "working poor."

Citing the Joint Center for Housing Studies of Harvard University's most recent "State of the Nation's Housing" report and a second study by the Center for Housing Policy, "Paycheck to Paycheck: Working Families and the Cost of Housing in America," Lawson noted that more than 14 million owner and renter households spend more than half their incomes on housing.

"NAHB believes that the creation of a new rental housing production program that produces 60,000 to 70,000 units annually should be a top housing priority for the Administration and the Congress in the coming year to meet the affordable housing needs of households with incomes between 60 percent and 100 percent of area median income -- America's working poor," said Lawson. "There are signs of persistent and worsening housing affordability for this group in all parts of the country, including cities, suburbs and rural areas, and these households are not eligible for housing assistance through most current federal housing programs."

Lawson told Congress that by utilizing low interest rates available through Ginnie Mae-guaranteed lower floater securities, the housing production program would only require a modest federal outlay to cover Ginnie Mae's participation, interest rate subsidies or buy-downs, and a marginal increase in the cost of rental assistance vouchers.

"Our program is designed to produce mixed-income housing, which has proven to provide greater financial stability and community acceptance than developments that concentrate on very low-income households," said Lawson. "The program focuses primarily on the working poor, with up to 25 percent of each development reserved for very low-income households."

Introduced last month by House Financial Services Chairman Michael Oxley (R-Ohio) and Housing Subcommittee Chairwoman Marge Roukema (R-N.J.), H.R. 3995 contains several provisions to enhance affordability for renters and home owners. These include: allowing FHA multifamily loan limits to be indexed for inflation; giving the HUD secretary the discretion to raise FHA loan limits in high cost areas; making down payment simplification permanent for the FHA single-family program; eliminating the cap on FHA 5/1 adjusted rate mortgages; repealing the scheduled increase to nine basis points in the Ginnie Mae guarantee fee; and requiring that agencies publish a housing impact analysis as part of their regulatory rulemaking.

Published: April 12, 2002

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