By Washington standards, the money -- $47 million -- wasn't much. But the political clash illustrates the bitter disputes over housing policy that have marked the Reagan years.
In this struggle, centered on the often-conflicting interests of the nation's homeowners, the real estate industry and a weak Department of Housing and Urban Development, the poor are losing out.
Their ranks are increasing, their housing costs are rising and their names are growing on waiting lists for public housing. Only one-fifth of the households eligible for federal housing assistance are receiving it.
Against this backdrop, several Republican senators last week laid an unexpected procedural trap for a housing authorization bill that had sailed through the House on a vote of 391 to 1 and was expected to pass the Senate.
The roadblock outraged Democrats and some Republican backers, who said they had worked hard for compromises that would make the bill palatable enough to gain the votes needed to pass and override an expected presidential veto.
Supporters hope to rescue the legislation by changing or dropping some provisions after the Thanksgiving recess, but only after hard bargaining.
"It is absolutely clear" that the bill's backers will not vote for a permanent extension of the Federal Housing Administration's home-mortgage insuring authority unless it is part of a "balanced, comprehensive housing bill," said Donald W. Campbell, staff director for the Senate housing and urban affairs subcommittee. The FHA is expected to insure up to $100 billion in home loans for middle-income Americans next year.
Senate opponents of the housing bill are expected to try for passage of permanent authorization for the popular program, which would remove much of the pressure for approving a housing bill.
Opponents, led by Sen. William L. Armstrong (R-Colo.) and the Office of Management and Budget, are designing legislation that they say would be less costly.
The housing bill, which a House and Senate conference committee agreed on, was stopped in the Senate when supporters could not get the 60 votes needed to waive a budget ceiling, which the legislation exceeds by $47 million.
Some senators "felt they were in an awkward position" of being asked to vote for a bill authorizing $15 billion in fiscal 1988 and $15.6 billion in 1989 while congressional and White House negotiators were at a critical stage in their efforts to reduce the budget deficit. Office of Management and Budget Deputy Director Joseph R. Wright Jr. said hidden costs brought the real price of the bill to $19 billion. But Campbell called Wright's statement a "deliberate distortion."
The legislation would provide $9.2 billion in fiscal 1988 and $9.6 billion in 1989 for public and subsidized housing and loans for elderly housing construction, $2.17 billion in fiscal 1988 and $2.27 billion in 1989 for rural housing programs, and $3 billion in each year for Community Development Action Grants.
It holds spending on most major housing programs at current levels for the next two years. But Urban Development Action Grants and Housing Development Action Grants, which the White House has been trying to kill for years, would be funded again at levels of $225 million and $75 million, respectively. The bill also authorizes plans to prevent the sale, conversion or demolition of hundreds of low-income apartment projects in urban and rural communities and a controversial homeownership program for moderate income persons, all items on the administration hit list.
The substitute bill being prepared by Senate Republicans and the White House would eliminate these programs. Rep. Charles E. Schumer (D-N.Y.) remarked that while opponents say they are willing to compromise on some items, they want to kill "everything we care about."
Rep. Barney Frank (D-Mass.) blamed 1988 presidential election politics and a frustrated "right wing" for the ambush of the housing bill. The need of Senate Minority Leader Robert J. Dole (R-Kan.), an '88 contender, to appease conservatives led him to join opposition to the bill, Frank said, adding that conservative opposition was fueled by the warmer relationship developing between the United States and the Soviet Union, the defeat of a Supreme Court nominee and the withdrawal of another.
"So they decided to go beat up poor people," he said.
Frank's view goes to the heart of the battle over the best way to care for the nation's housing needs and urban development. Simply put, the number of poor people in need of housing relief is increasing.
The number of low-income households rose by 5.8 million between 1975 and 1983, according to Anthony Downs, an economist with the Brookings Institution. About 45 percent of all American households were classified as low-income, meaning that their incomes were less than 80 percent of their area's median incomes. And of all Americans -- not just poor -- 24 percent said their major housing problem is that it costs too much.
Privatization has been a major element of administration policy, with an effort to turn over responsibility for most housing and community development to local and state governments and private groups.
The White House has opposed construction of public housing, and espoused federal aid to help public housing tenants buy their units. Instead of replacing the low-income housing stock, the administration has introduced housing vouchers, a form of rental assistance low-income families can use to help pay for housing on the private market. HUD has argued that private housing is available and that tenants need help to pay for it.
At the same time, the administration and its congressional allies have cut HUD's budget by nearly 70 percent. HUD's budget authority has dropped from $30.1 billion in fiscal 1981 to $10.7 billion in fiscal 1987.
The reduction far exceeds cuts made in the budget of any other federal agency. This prompted one senator to remark that if all other agency budgets had been cut by the same percentage, "We not only would not have a budget deficit, we would have a surplus."
Major housing production and rehabilitation programs have been eliminated at HUD, and while some were expensive and inefficient, they were not replaced by other means of providing housing. Increased use of rental assistance for private housing, including vouchers, however, has enabled HUD to subsidize 4.1 million households in 1986, an increase from the 3.1 million aided in 1980, according to the administration.
Opponents discount the program, noting that vouchers last only five years and often force the poor to pay more for rent than they did under the old 15-year housing assistance certificates HUD once issued. Vouchers also are not competitive in tight housing markets, the opponents contend.
Some of the most acrimonious disagreements this year have focused on how to house hundreds of thousands of poor people living in public housing or privately owned, subsidized units that are likely to be removed from the low-income housing stock in the next decade.
Some liberal lawmakers suggest a series of measures to prevent the loss of the units or require that the government replace them. The administration's answer, in most cases, is to give vouchers to displaced families and let them find their own housing.
The legislation in dispute contains provisions intended to preserve hundreds of thousands of subsidized housing units that could otherwise be lost. These provisions, and several other programs authorized by the bill, would cost $387 million in fiscal 1988 and $498 million in 1989.
Endangered housing units are those in privately owned multifamily buildings constructed with the help of federal interest rate subsidies. In return for the aid, owners agreed to rent the units to low-income tenants for 40 years, but with an option of prepaying the mortgage at the end of 20 years, thus freeing themselves of the obligation to house poor families.
The Congressional Budget Office estimates that within the next five years, 200,000 of an estimated 600,000 apartments thoughought the nation could be free of the regulatory restraints that ensured their continued use as low- and moderate-income housing. Within 15 years, 60 percent could be free of restrictions. Housing experts believe many owners will want to convert their buildings to condominiums or high-cost rentals in several major metropolitan areas, such as Washington and Boston, where property values have risen along with gentrification in many neighborhooods.
The housing bill would permit owners to pay off their loans and convert their buildings only in accordance with a government-approved plan that would prevent tenant hardship or displacement when other affordable housing is unavailable.
The legislation also sets up a system to preserve 190,000 units of rural housing on which owners can prepay mortgages at any time if there are no restraints. A temporary moratorium on prepayments has forestalled widespread sales, "but this is not a long-term solution," said Robert A. Rapoza, legislative director for the National Rural Housing Coalition. During a lapse of a few days between expiration of the moratorium and its extension by Congress, "three loans were prepaid," Rapoza said.
For 1988, the bill authorizes $72 million for the preservation programs, and $76 million for 1989.
Money the government receives when private owners pay off their mortgages would go back into low-income housing programs rather than into the federal treasury, as is the current practice.
The bill also prohibits public housing from being demolished or sold through tenant ownership programs or for other reasons unless the units are replaced or rental assistance is provided for displaced households. In addition, low- and moderate-income families displaced because of development funded by the Community Development Action Grant and Urban Development Action Grant programs would be given other affordable housing for 10 years and moving expenses.
The administration condemns these measures as unnecessary and expensive.
The largest federal housing subsidy, however, has been one of the most popular over the last half-century: the homeowners' mortgage interest deduction. This subsidy and other real estate tax breaks, going mainly to middle- and upper-income Americans, totaled almost $65 billion this year.