My name is Mary Yeaton. I live at Charlesbank Apartments in Boston, Massachusetts. I am a Board member of the National Alliance of HUD Tenants (NAHT). On behalf of NAHT, I am pleased to submit these comments to the Subcommittee in support of S. 513.
NAHT appreciates the invitation to testify before Congress on legislation which affects our homes. Founded in 1992, NAHT is the only national membership organization representing the 2.1 million lower income families served by HUD's multifamily portfolio. Our membership-- including tenant groups and area wide tenant coalitions in 24 states-- has led the grass-roots fight against proposals to voucherize and deregulate HUD multifamily housing and for alternatives such as S. 513 that would save our homes instead.
NAHT support for S. 513. NAHT supports the Committee's approach to Section 8 renewals and mortgage restructuring as outlined in S. 513. The bill represents a thoughtful, workable framework to preserve assisted housing in a manner largely consistent with NAHT's principles. In particular, the requirement in S. 513 for owners to renew project-based Section 8 contracts for at least 20 years in exchange for debt restructuring and new HUD mortgage insurance would preserve affordable housing and minimize the risk of tenant displacement. S. 513 also would allow HUD to delegate restructuring to state or local governments, but not to for-profit companies. This would help avoid a Resolution Trust Corporation (RTC)-type "fire sale" of HUD housing and ensure that the public interest is protected. By contrast, HUD's approach in H.R. 1433 does not meet these tests.
Tenants' objections to voucherization are by now well-known, and are summarized in our written testimony. NAHT believes that deregulation and "voucherization" can and should be separated from plans to financially restructure HUD's pro-Ject-based Section 8 housing, an otherwise worthy goal.
Improvements to S. 513. While a good start, S. 513 could be improved in several areas. Briefly, NAHT believes that the best provisions of the HUD "2020" bill--stronger enforcement provisions; tax breaks to owners who sell to tenant or nonprofit groups; and long term use restrictions in the event that Section 8 funds are not available--should be added onto S. 513. We also urge the Committee to reduce long-term costs even further by adopting NAHT's proposal for "Balanced Budget Rents" along with one-time use of HUD's Mortgage Insurance Fund for repairs. In addition, the $5,000 rehab cap in S. 513 serves no purpose and should be removed.
Restore One Year Notice Provision. One issue, however, deserves special mention today. Last week, Congress voted to reduce the required notice period to tenants of expiration of recently renewed Sectior. F contracts from one year to six months. NAHT certainly agrees with proponents of this change that HUD's current notice letter is poorly worded and confusing to tenants. However, to respond by withholding information from tenants about their true risk situation until it may be too late is a mistaken, if well-intentioned approach. As an alternative, HUD has agreed to publish next week, almost verbatim, a new letter to tenants prepared by NAHT and its affiliates which should obviate the need for a legislative response.
We urge the Committee to restore the one year notice requirement or at least to clarify in Committee Report language that the new six month notice is a minimum requirement which HUD can exceed by regulation.
Make Tenants HUD's "Eyes and Ears" in Enforcement. Perhaps the least developed concepts in S. 513 have to do with the role of tenants in enforcement of HUD standards in properties with Section 8 contract renewals and/or restructured mortgages. HUD is currently woefully understaffed to carry out its oversight obligations. NAHT believes there is an alternative which can preserve and improve the assisted stock at virtually no cost to the government: let tenants assist HUD in its oversight of HUD housing.
Tenants are the "Customers" with the greatest stake in the quality maintenance of HUD's multifamily portfolio; we are the people who must live, every day, with the consequences of HUD oversight of our homes. Potentially, tenants make up millions of unpaid volunteers with the interest and on-site knowledge to maintain affordable housing and ensure that owners keep up their obligations.
Tenants across the country, working through NAHT and its affiliates, have already initiated a revolutionary volunteer effort to serve as the "Eyes and Ears" of HUD. In New York and New Jersey, NAHT tenants have been meeting on a quarterly basis for over three years with HUD multifamily housing staff to identify problems and work out solutions. These meetings have resulted in dramatic improvements in people's living conditions, HUD's enforcement response, and agency morale, at virtually no cost to other taxpayers.
Some people talk about "reinventing government." Through NAHT, and with the cooperation of HUD, tenants are actually doing it--from the ground up.
With S.513, Congress has a unique opportunity to join this exciting effort. Since l992, NAHT has proposed several specific measures to "Make Tenants HUD's 'Eyes and Ears" in Enforcement. Several of these came close to adoption by Congress in September 1994. As a starting point, the Committee should incorporate these provisions in S. 513. NAHT's legislative suggestions to enhance tenants' volunteer partnership with HUD are described in our written testimony. In brief, Congress could:
1) Establish a Tenant's Right to Repair and Be Reimbursed By HUD Where HUD Withholds Section 8 Payment (as passed by the House in 1994) .
2) Establish a Right of Section 8 Tenants to Withhold Rent and Pay into an Escrow Fund for Repairs (as stated in the bipartisan Staff Draft of the Senate Floor Manager's Amendment, September 19, 1994). This provision should include a mandatory inspection and enforcement program as well.
3) Establish tenants and their organizations as third-party beneficiaries to HUD Section 8 and mortgage contracts with the power to sue for enforcement. Congress can mandate that language to this effect is added upon contract renewal.
4) Allow tenant-based consortiums to participate as subcontractors to HUD and/or Participating Administrative Entities (PAE's) to assist in oversight of the assisted housing stock.
5) Clarify that PAE's and qualified nonprofit subcontractors may assess HUD sanctions on non-performing owners and managers.
6)Allow tenants and tenant-based organizations to sue for enforcement under the federal False Claims Act. Tenants and tenant-based organizations, including the enforcement consortiums described above, should be allowed to use this innovative statute to collect monetary damages in cases where properties are mismanaged.
7) Provide for technical assistance funds for tenant organizations to participate fully in project restructuring and oversight. NAHT requests that the Subcommittee provide at least $20 million annually for tenant outreach and training to ensure that residents are able to participate as full partners with HUD and PAE's in the mortgage restructuring and project oversight process. Section 104(f)(3) should be amended to clarify HUD's flexibility to allocate technical assistance funds directly to tenant-based providers to conduct extensive outreach and training and support "Eyes and Ears" meetings in their areas, as well as more intensive "projectspecific" technical assistance in the restructuring and/or ownership transfer of specific buildings.
Conclusion. With S. 3 1 3, the Committee has an historic opportunity to preserve housing, prevent displacement, save long-term budget authority, and empower residents to help oversee our homes.
In particular, by empowering citizen volunteers to be partners with HUD in enforcement, Congress will augment the Department's limited staff to safeguard its investment in Section 8 housing. By enlisting residents as HUD's "eyes and ears" to arrest problems before they require more expensive solutions, Congress will save HUD money otherwise needed for more extensive repairs in the future. Accordingly, we urge that language accomplishing these objectives be added to the proposed Senate bill.
Thank you for the opportunity to make tenant voices heard in this process.
Home | Menu | Links | Info | Chairman's Page