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Communication with Iowa Congressional Delegation ~ ~ CITY OF DUBUQUE, IOWA MEMORANDUM August 31, 2000 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Authorization for Communication with Iowa Congressional Delegation Housing Services Manager David Harris is recommending City sponsorship of communications to the Iowa Congressional delegation in support of legislation to assist Section 8 households at risk of loss of housing due to expiration of existing, project-based HUD contracts. I concur with the recommendation and respectfully request Mayor and City Council approval. rvuJJ ~AJl Mrchael C. Van Milligen cc: Barry Lindahl, Corporation Counsel Tim Moerman, Assistant City Manager David Harris, Housing Services Manager 0 Cl C) (j'<- :r~:lJ. :::0 c: C) '-n t.A) , .J - r: ; .'n "':-' -c: -- ~~'o. -- '''- ~-) ill )> - ..., c.) -..-,.", "::J ()" CD <.r1 Q. MCVM/dd Attachment " ~ ~ CITY OF DUBUQUE, IOWA MEMORANDUM 29 August 00 To: Mike Y Xi Milligen, City Manager From: Da~ \lams, Housing Services Department Re: Authorization for communication with Iowa Congressional delegation Introduction The purpose of this memorandum is to request the City Council's authorization for City sponsorship of communications to the Iowa Congressional delegation, in support oflegislation to assist Section 8 households at risk ofloss of housing due to expiration of existin~, project-based HUD contracts. Discussion The Iowa Coalition for Housing and the Homeless (ICHH) has requested cities and housing authorities throughout Iowa to co-sponsor the attached letters to the Iowa Congressional delegation. Each supports pending legislation for appropriations for aid to households at risk of loss of Section 8 rental assistance, for reason of owner opts-outs when existing HUD contracts reach expiration dates. In Dubuque, housing providers with "project-based" HUD Section 8 contracts include Alvemo Apartments, Sheridan Village, St Mary's and Hillcrest Apartments. Each of these received long- term Section 8 contracts when constructed, under a variety ofHUD programs. The expiration dates for these contracts is nearing for these and for many other project-based housing developments originally built in the 1960's and 1970's, throughout the country. At expiration, owners have the option of renewing their HUD contracts or "opting out," and renting their units at market rates. When the latter occurs, current subsidized tenants are faced with significant rent increases. An example ofthis in Iowa, as mentioned in the ICHH letter, occurred last year in Marshaltown. Elderly tenants there were forced to pay upwards of 40-50% of their income in order to remain, once the new rents were put in place. This creates a severe rent burden on lower-income households. The proposed legislation will fund "enhanced" housing vouchers for residents and also provide federal matching funds - to states, municipalities and organizations - wishing to purchase expiring project-based Section 8 properties, to maintain their affordability. The Iowa Coalition has prepared the attached letters in support of these legislative initiatives and has requested cities and housing authorities to sign-on as sponsors. Recommendation It is recommended that the Council approve support ofthe Iowa Coalition initiative. Availability ofHUD funds, for either the vouchers or matching funds for purchase of housing projects, does not limit owner options. At contract expiration, those owners may choose to renew their HUD contracts, raise rents to market rates or sell their housing units at market prices. Given the potential hardship for Section 8 tenants, however, Congressional authorization of these requested funding initiatives would provide significant relief and an opportunity to preserve rental housing at affordable rates. FRoM. :. IOWA COALITION HOUSING HOMELES FAX NO. , , Aug. 25 2000 03:02PM P2 c Iowa Coalition for Housing and the Homeless 713 E. Loculit Street · Des Moines, IA 50309 · 515-288-5022 . August 25, 2000 Dear Colleagues, Attached are two sign-on letters we'd like your organization to support. They are related to two issues that v..;Jl soon be before Congress. The first sign-on letter is born out of work lCIllI has been doing over the last nine months to get enhanced vouchers for over 150 elderly Iowans who reside in housing in which they are paying as much as 62% of their income for rent These folks are residing in properties in which the owners opted--out of their project-based Section 8 contracts last year. Once the owner opted-out, the residence were given regular Section 8 vouchers to continue living there. However, the payment standard for the regular voucher was much less than the true rent being charged by the owner so not only have the tenants been paying the regular 30% of their income for rent, they've had to pay the difference between the voucher payment standard and the true rent as well. I've attached a summary of one of these properties, Prairie Village in Marshalltown to give you an idea of the impact on the residence. Congressman Leach's staff has expressed interest in pursuing this issue, however, we need to demonstrate the support that exists for such move. The second issue involves support for S. 2773, the Affordable Housing for Seniors and Family Act that will begin working its way through the Senate after the Labor Day recess. One of the most important features oftbis legislation is the matching grant provision in which the federal government will match funds used by states and localities to assist organizations in buying expiring project-based Section 8 properties to maintain their affordability. Several non-profits and for-profit OI"ganizarions in Iowa have expressed interest in such purchases- MAHP in Cedar Rapids undertook such a purchase a couple of years ago. Responding to this action alert is simple. easy and quick Review the two attached sign- on letters, than email me back if your orgaDization is interested in signing-on. I need your response by the c;kOSE OF BUSINESS TUESDAY. AUGUST 29th_ Please lend your support. Thank you! ve Director Coalition for Housing and the Homeless .......u FROM IOWA COALITION HOUSING HOMELES FAX NO. ,. ' Aug. 25 2000 03:03PM P5 Statement of Support Extending Section 8 Enhanced vouchers to Residents of Pre..FY2000 Opt-Outs August_, 2000 The undersigned organizations strongly support the extension of Section 8 enhanced vouchers to eligible residents of properties that opted out of the Section 8 program prior to October 1. )999. Under this proposal, Congress would provide for a "voucher upgrade" by amending Section 8(t)(2) of the United States Housing Act of 1937 to extend enhanced voucher eligibility to residents who occupied an eligible property that opted out before FY2000, are still Jiving in the opt-out property, and meet current income eligibility requirements for enhanced vouchers. Currently. residents of properties that opted out prior to FY2000 receive a regular voucher (generally capped at HUD's area..wide Fair Market Rent)_ In many cases, these residents are rent burdened and remain at risk of losing their housing. This action is necessary to correct a legislative omission - while last year Congress extended enhanced vouchers to opt-out residents, the amendment has been interpreted such that only those residents in properties opting out in FY2000 (October 1, 1999 or later) may receive an enhanced voucher. Th~ the very residents whose plight led Congress to extend enhanced vouchers to opt-out properties have been blocked from receivjng that benefit. It is time for Congress to address this inequity. We look forward to working with the Congress to further refine this me8SW'e as needed so that :it can be enacted before the end of this legislative session. <List of Organimtions> ].OT more in/ormation. contact Jim Cain at the Iowa CoaJitk>"for HOfISingand the Homele.u at 5/5-288-5022 or Todd Trehubenko ofRecapita/izationAdvisors at 617-338-9484. FR~~ IOWR CORLITION HOUSING HOMELES FRX NO. Rug. 25 2000 03:02PM P3 $.2833 SIGN ON LETTER August _, 2000 (To all Senators except those already co-sponsoring S. 2733) United States Senate Washington, DC 20510 Dear Senator The undersigned organizations are writing to express our support for the recently introduced S. 2733, the Affordable Housing for Seniors and Families Act, and to urge you to co--sponsor this important legislation. This bill includes important provisions affecting elderly housing, including revision of the financing ofSec1ion 202 properties,. and authorizes desperately needed funds to preserve federally assisted multifamily housing. The bill also reauthorizes and modernjzes the Section 811 Supporthie Housing for People with Disabilities program. In particular, we strongly support the provisions of the legislation that would authorize the Department of Housing and Urban DeveloJmCDt to establish a matchina grant program (Section 401)~ which would distribute grants to states and localities that spend their own funds to preserve HUD...assisted housing for low-income use. Preserving existing affordable housing is far more cost-effective than new construction, and avoids the risk of displacing famiHes, the elderly and people with disabilities from their homes and communities. The matching grant provisions of the bill will help safeguard the availability offederaUy assisted housing affordable to families with low-incomes. By channeling funds to both existing owners and new pW'Cbasers ofHUD-assisted housing to cover capital eKpenditures or higher equity values, the matching grant program would enable preservation of the affordable chaJacte.r of this vital housing stock. In addition, by requiring that existing or new owners accept extended use restrictions in exchange for the matching grant funds, Section 401 would ensure that these new investments achie\'e their intended public pwpose. We are also pleased that the Section 401 matching grant program would allow HOD to provide matching funds at up to twice the level of state or local funding. sigJ'~1ing Congress' commitment to work in partnership with state and local governments to protect the supply of affordable housing. We also support those provisions that channel federal matching funds through state and local housing agencies with a demODStIated commitment to presetVing affordable housing. An increasing number of states and localities are dedicating funds toward the preservation of fedenilly assisted housing. This bill will help those state and local governments worldng for preservation. While \Ve have a number of specific reoommendatioDS on how to strenathen the bill to create a more effective program. including a preference or priority for resident-endorsed non profits, we will submit those suggestions as the bill moves forward with hearings and staff revisions_ r '" .FRoT;1.:. IOWR CORLITION HOUSING HCMELES FRX NO. Rug. 25 2000 03:03PM P4 Prairie Vjllage~ Marshalltown, Iowa* Date of opt-out: 2/14/99 Number of residents still Bffeded: 33/56 Rent to owner: $450 VoueberPay~tStandard:$361 4 Th I b T ts Table 1. e InPad on t e eDan Tenant Adj. , 30 % of Tenant Rent Annual ! Annual payment % Income Income $250 $6443 $131 470.10 $272 $7317 $183 45% $302 $8517 $213 43% $356 $10683 $267 40% $267 S7llS $178 45% $274 $7405 $185 44% $313 $89.57 $224 42% $288 $7955 $199 43% $185 $3854 596 58% $315 $9019 $225 42% $393 $12.149 $304 39% $271 $7266 $182 45% $309 $8794 $220 42% $314 $8993 $225 42% $249 $6412 $160 47% $261 $6864 $172 46% $265 57058 $176 45% $312 $8920 $223 42% $338 $9965 $249 41% $212 $4927 $123 52% i 5268 57181 $180 45% $220 $5249 $131 I 50% I $307 $8738 $218 T 42% $206 $4680 $117 53% $239 $5984 $150 , 48% i $237 55923 $148 I 48% I $233 $5744 $144 49% $283 $7772 $194 44% $239 $5996 $150 48% 5265 $8492 $212 370.4 $338 $9958 $249 41% $173 $3362 $84 62% $326 $9480 $237 41% · Included as example of impact. Three other properties (located in Knoxville. Pella and Boone) with sim11ar % of income being paid toward rent.