From the Office of Senator Kerry

Thursday, July 27, 2000

Washington, D.C. – Senator John F. Kerry (D-MA) today introduced legislation that would establish a National Affordable Housing Trust Fund to address the growing gap in the availability of adequate affordable housing in this country. The Kerry bill would utilize some of the excess income generated by 2 federal housing programs, the Federal Housing Administration (FHA) and the Government National Mortgage Association (GNMA), to help alleviate the current housing crisis. The Trust Fund aims to create long-term affordable, mixed-income developments in areas with the greatest opportunities for low-income families.

"While many Americans have prospered in this booming economy, one unfortunate side effect has been a tight housing market that leaves too many working people without a decent and safe place to live," said Senator Kerry. "In fact, there is not one metropolitan area in the country where a person making the minimum wage can afford to pay the rent for a two-bedroom apartment. For these families living paycheck to paycheck, one unforseen circumstance, a sick child, a car repair bill, can send them into homelessness. What I am doing today is standing up before the Nation and saying no more. We have the resources we need to ensure that all Americans have the opportunity to live in decent and safe housing, yet we are not devoting these resources to fix the problem."

Aaron Gornstein, Executive Director of the Citizens' Housing and Planning Association, said "In Massachusetts, we are in the midst of the most acute housing crisis on record. Nearly 245,000 households pay more than half of their incomes for rent, a 21 percent jump since 1990. The trust fund provides flexible funds to the states and non-profit developers so that these entities can tailor solutions to meet local needs."

"This historic legislation recognizes that now is the time to deal with our national need to produce more safe and sanitary housing for low-income Americans," said Kristin Siglin, Vice President of The Enterprise Foundation. "This bill strikes a thoughtful balance between devolution to the states and federal innovation. It allows states to decide how to spend the majority of the grant funds according to their housing needs but also allows federal funding of innovative private/public partnership models as a way to leverage limited public resources."

Michael Bodaken, President of the National Housing Trust, said "The Need for a National Affordable Housing Trust Fund, with funds dedicated both to state and local housing finance agencies and capable nonprofit intermediaries is abundantly clear. Indeed, one consequence of our stronger real estate market is the worsening plight of poor renters. The working poor simply cannot afford non-subsidized shelter."

Dennis Cronk, President of the National Association of Realtors, said "The National Association of Realtors believes the time is appropriate to address our nation's affordable housing crisis as a national priority and forge a coherent and focused set of policies for immediate action. We believe this important legislation reduces the barriers to affordable housing production and closes the gap in needed housing opportunities for American families."

Judith A. Kennedy, President of the National Association of Affordable Housing Lenders, said "Senator Kerry's bill would help provide substantive relief for millions of Americans who cannot yet find decent, affordable housing – even in the best of times. The proposed fund would be provide an important new resource for the production of affordable housing, primarily rental property, where there is greatest need – among extremely low-income families, working poor families, and the elderly."

Trust Fund assistance would go directly to the production of rental housing for low-income working families. Trust Fund assistance would also be used to promote homeownership for low-income families, those families whose incomes are below 80% of the area median income. 75% of the assistance will be given out through matching grants to States based on need. The remaining 25% will be awarded by HUD through competitive grants to non-profit organizations.

Over the past 5 years, more than $20 billion has been cut or diverted from federal housing programs for other uses, while the number of Americans without access to affordable housing continues to rise. From 1996 to 1998, there was a 19% reduction in the number of affordable housing units. This amounted to a dramatic reduction of 1.3 million affordable housing units available to low-income Americans to be used for the production of desperately needed affordable housing. 5.4 million low-income households have "worst case" housing needs, paying over half their income towards housing costs or living in severely substandard housing. Since 1990, the number of families who have "worst case" housing needs has increased by 12 percent-- that's 600,000 more American families who cannot afford a decent and safe place to live.

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