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Thursday, February 3, 2011

Housing Issues for Congress

Maggie McCarty, Coordinator
Specialist in Housing Policy

Libby Perl, Coordinator
Specialist in Housing Policy

Housing issues related to the recent turmoil in U.S. housing markets, as well as perennial issues related to the housing needs of low-income individuals and families, were prominent in the 111th Congress and will likely remain so in the 112th Congress. The recent recession that was, in part, both a cause and a result of issues in the housing finance system put legislation designed to address current foreclosures and prevent a future crisis on the congressional agenda. At the same time, the 111th Congress faced questions about how best to meet the affordable housing needs of low-income and vulnerable populations, particularly as unemployment climbed and the economy worsened. While the recession ended well before the start of the 112th Congress, housing markets in many parts of the country are still experiencing the effects of an economic downturn. The 112th Congress may continue to consider legislation to shore up the housing market and to consider issues that were left unresolved at the end of the 111th Congress.

This report summarizes housing issues that were considered in the 111
th Congress and may be considered in the 112th Congress. The report divides issues into three main sections: “Housing Finance and Homeownership,” “Housing for Low-Income Individuals and Families,” and “Other Issues.”

Within the realm of housing finance and homeownership, the 111
th Congress enacted the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act, P.L. 111-203). The Dodd-Frank Act included foreclosure prevention-related provisions and changes to mortgage origination standards and practices. Notably absent from the Dodd-Frank Act were changes to the way in which the Government Sponsored Enterprises (GSEs)—Fannie Mae and Freddie Mac— are structured and their role in the mortgage market. Discussions regarding reform of the GSEs are likely to continue into the 112th Congress. The 111th Congress also enacted tax provisions meant to bolster the housing market by providing a tax credit for first-time homebuyers. Changes to the tax system may also be considered in the 112th Congress in response to a recommendation from the National Commission on Fiscal Responsibility and Reform to reevaluate tax benefits for homeowners.

Congress also enacted laws that made changes to existing programs that provide housing assistance to low-income individuals and families. The Homeless Assistance Grants, administered by the Department of Housing and Urban Development (HUD) were amended to give communities greater flexibility in providing housing and services to homeless individuals (P.L. 111-22). The programs that fund housing for low-income seniors and individuals with disabilities (Section 202 and Section 811, respectively) also were changed to allow greater integration of funding from non-HUD sources in housing developments (P.L. 111-372 and P.L. 111-374). The implementation of these laws may be of interest to the 112
th Congress. The 111th Congress also considered legislation that was not ultimately enacted but may be part of the agenda in the 112th Congress, including reform to HUD’s largest assistance programs: public housing and the Section 8 Housing Choice Voucher program.

The 112
th Congress may also choose to exercise its oversight authority over the implementation of housing-related legislation enacted in prior Congresses, ranging from the mortgage-related provisions in the Housing and Economic Recovery Act of 2008 (P.L. 110-289) to funding for new programs in the American Recovery and Reinvestment Act (P.L. 111-5). Further, housing assistance programs may be reevaluated in response to concern about the budget deficit and interest in reducing funding for non-security domestic discretionary programs.

Date of Report: January 27, 2011
Number of Pages: 19
Order Number: R41616
Price: $29.95

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