The House Banking, Finance and Urban Affairs Committee yesterday temporarily blocked the Housing and Urban Development Department's plans to have low-income tenants and nonprofit groups pay more of the costs of housing projects.
The committee passed two "resolutions of disapproval," which will prohibit HUD from implementing the plans for 90 calendar days. Under the Housing and Urban Development Act, the committee has the authority to review department rules.
HUD's plans would contradict provisions of the Housing and Urban/Rural Recovery Act of 1982, which the committee expects to bring to the floor in early June. Committee members hope it will pass Congress before the 90 days run out.
In regulations published May 4, HUD announced a schedule for increasing from 25 percent to 30 percent the rent contributed by tenants in public housing and so-called Section 8 subsidized housing projects. HUD said the change was mandated by Congress in last year's reconciliation bill, so it could bypass the public comment period and adopt the rule immediately.
The committee voted 24 to 1 to block that regulation; if the pending bill passes, it would reinstate the 25 percent contribution level.
On May 11, HUD also announced that nonprofit groups that sponsor homes for the elderly and handicapped would have to pay 1 percent of the mortgage, up to $25,000, to receive so-called Section 202 money for building those homes. Previously, the limit had been one-half of 1 percent, up to $10,000.
HUD also reduced the maximum mortgage that the department will provide such sponsors. As a result, the available mortgages would decrease by about 5 percent for buildings without elevators, and by about 12 to 15 percent for buildings with elevators, according to committee estimates.
The House bill would retain the $10,000 level and modify the mortgage level restrictions. The resolution blocking the second set of regulations was approved unanimously.