April 27, 1966
Page 9092
RENT SUPPLEMENT PROGRAM
The PRESIDING OFFICER. The Senator from Colorado is recognized for 1 additional minute.
Mr. ALLOTT. Mr. President, I repeat that my desire to support the Appropriations Committee which voted upon a roll call of 15 to 12 to eliminate all funds to commence this program at this time is not founded on total opposition to the rent supplement program. And, I would also emphasize, particularly to those who strongly support this program, that we may well be helping, not hurting it, by delaying its commencement for 8 or 10 weeks so that the proper Appropriations Committees can study it and develop the record before bringing it before this body.
I believe that the Senate should sustain the action the committee took this week and I hope that the Senate will do so.
Mr. PASTORE. Mr. President, a parliamentary inquiry.
The PRESIDING OFFICER. The Senator will state it.
Mr. PASTORE. Mr. President, I understand from the Parliamentarian that we have a half-hour remaining before the vote and that the time is about equally divided between the proponents and opponents.
The PRESIDING OFFICER. The Senator is correct.
Mr. PASTORE. That means that the Senator from Rhode Island is in charge of 15 minutes and the Senator from North Dakota is in charge of 15 minutes.
The PRESIDING OFFICER. The time is equally divided; 16 minutes to the side.
Mr. PASTORE. Mr. President, I have four or five additional speakers on my side. The reason that I mention this is that I hope they will make their remarks as brief as possible and place in the RECORD anything they desire to put in the RECORD.
At this time I yield 3 minutes to the Senator from Maine.
The PRESIDING OFFICER. The Senator from Maine is recognized for 3 minutes.
Mr. MUSKIE. Mr. President, last year the issue of rent supplements was thoroughly discussed and debated in both Houses of the Congress.
On the Senate side, it was first considered in the Committee on Banking and Currency, of which I am a member. As originally presented by the administration, it was designed as a program for lower middle-income groups. In committee, that concept was abandoned and the program was redesigned as an alternative to public housing and to serve the same groups as are eligible for public housing.
It was debated in that form here in the Senate and finally approved by the Senate in that form.
The rent supplement program enlists private enterprise in the task of housing low-income people to a degree never before realized. Projects under the program will be privately initiated, privately financed, privately built, privately owned, and privately managed.
A majority of the Senate was persuaded that this was a program worth trying because, first, it might be a more effective program than public housing, and second, it would be less costly.
The reasons that persuaded us to support this program last year still obtain.
Subsequently, in last year's session, funds to implement the authorization act were requested. These funds were denied. They were denied for the reasons suggested in this language from the conference report:
Funds for rent supplements are denied at this time without prejudice. Congress has only recently authorized legislation for this program and the new department should have more time to develop sound plans and criteria which can be reviewed when funds are sought early next year.
During the appropriation hearings and in the Senate and House floor debates, it was clear that the Congress expected that the $450,000 provided for administrative expenses of the Federal Housing Administration would be used for certain preparatory work in connection with the program. The Congress expressed the expectation that in the next session, the executive branch would request appropriations based on firm indications of interest in and need for rent supplement projects.
The Department, in following the expressed intention of Congress, carried out its obligations to discuss proposals with potential sponsors interested in the program, and received preliminary proposals and expressions of interest covering nearly 70,000 units.
The preparatory work, therefore, has been done. The Senate has twice indicated its approval of the program. The amount sought is only 40 percent of that authorized last year. It seems to me, Mr. President, that the time has come to act.
The rent supplement program is designed to assist only low-income families and individuals, and among them only such as belong to one or more of the following, statutory categories -- that is, those displaced by governmental action, 62 years of age or older, physically handicapped, living in substandard housing, or living or formerly living in housing destroyed or extensively damaged by natural disaster.
To assure that only low-income people are helped, income limits for eligibility will be established in each community. In no case will these limits be above those established for Federally-aided low-rent public housing in the same community. In addition, allowable asset limitations will be established which are below those generally applied in public housing.
To assure that only housing of modest design is encouraged, maximum mortgage limits will be established in each community which will rule out frills and luxury features. A maximum economic rent level for each size unit will also be established.
This, Mr. President, is a reasonable and modest approach to the housing problems of groups whose housing needs have been our concern since 1937.
It is an alternative to public housing which is worth considering.
If it works, it will cost the Government less, and that, too, is a consideration.
The amount of the rent supplement payment that may be made on behalf of a particular family will never be greater than the amount of the subsidy that would be paid for that same family in a public housing unit. As to average costs, it is estimated that the average subsidy cost under rent supplements would run about $40 a month per unit -- the level of the subsidy for public housing units currently being built runs about $58 a month per unit.
There are several reasons for the lower subsidy cost in the rent supplement program. Land and construction costs in the rent supplement program would be less than in the public housing program. There will be available to sponsors of rent supplement projects a much wider range of selections of sites, including suburban and outlying land, and generally no clearance would be involved. In addition, certain special construction requirements that add to the cost of public housing would not apply to housing constructed under the rent supplement program.
Under the rent supplement program, the occupant would be required to pay 25 percent of his income for rent compared to the general 20 percent requirement under the public housing program.
These factors alone -- lower land and construction costs and greater payments by occupants -- will offset the advantages of low-interest rate loans through tax exemptions in the public housing program. In addition, of course, the tax exemption accorded income on bonds issued in the public housing program involves a very substantial loss of revenue to the Treasury and this represents a cost that must be borne by other tax sources. It is estimated that the tax exemption of the income on public housing bonds now costs the Treasury $48 million a year in revenues.
Finally, the local property tax exemption accorded public housing represents a very substantial local contribution and is, also, a part of the economic cost of public housing.
For these reasons, Mr. President, I urge the Senate to support the amendment.