Statement of Administration Policy: H.R. 1 - Housing Act of 1986

(House Rules)
(Gonzalez (D) Texas)

The Administration is strongly opposed to the substitute to H.R. 1 because it would reverse the course of Federal housing policies which Congress and the Administration have been following since 1981. If the substitute to H.R. 1 were to reach the President's desk in its present form, his senior advisers would recommend disapproval. The Administration recommends enactment of a simple extension of the expiring Federal Housing Administration (FHA) insuring authorities instead of this version of H.R. 1.

The most objectionable features of H.R. 1 are:

— deletion of the 1981 Omnibus Budget Reconciliation Act provision which targeted subsidized housing on the neediest households;

— the requirement that HUD provide rent subsidies to many of the tenants in FHA-insured projects if HUD takes control of the projects on default, this would inappropriately create another new and very costly subsidized housing program as well as impede HUD's ability to manage and dispose of Federal assets efficiently;

— imposition of a limit on the rent which can be charged in public housing units;

— creation of a new Federal subsidy for moderate income homeownership, which would be feasible only in a few large cities, contains hidden costs, and targets funds to moderate income homebuyers at a time when interest rates are falling and more families are qualifying for conventional or FHA homeownership;

— extension and/or expansion of programs which should be terminated, such as Urban Development Action Grants (UDAG), section 312 rehabilitation loans, and crime insurance;

— alteration of the public housing operating subsidy system, resulting in added operating subsidy costs and unnecessary restrictions on HUD's regulatory authority; and

— prohibition on the establishment of or increases in housing credit user fees for the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Government National Mortgage Association and Federal Housing Administration.