Rural Rental Housing At Risk - the Ney-Ross Amendment (July 10, 2002)

On July 10, 2002, the House Financial Services Committee marked up H.R. 3995, the Housing Affordability for America Act of 2002. Included in the mark-up was an amendment sponsored by Bob Ney (R-OH) and Mike Ross (D-AR) which would deregulate pre-1989 Section 515 projects, allowing prepayment.

Thanks to a very strong lobbying effort by the National Rural Housing Coalition and Rapoza Associates, this amendment was significantly altered during the mark up. Although the amendment passed, it is much less damaging - and possibly not damaging at all.

Five members of the Committee took strong stances against the amendment. The two Republicans indicated opposition were Representatives Mike Castle (R-DE) and Doug Bereuter (R-NE). Castle wrote a letter to all Republican members of the Committee asking for their opposition to the amendment. Bereuter's (R-NE) proposal, which was accepted, changed the amendment and hopefully put an end to it.

The Ney-Ross Amendment proposed vouchers as an option for those displaced by the prepayment of pre-1989 Section 515 properties. Aside from the fact that vouchers are simply not feasible in most rural areas, there was also NO MONEY or even a requirement that funds be made available through the amendment. Bereuter's proposal made it a requirement that voucher money be made available before owners could prepay. The cost of vouchers is estimated at $1.5 billion. It is doubtful that any of this money will be available. So, in effect, the proposal probably ended the effect of the Ney-Ross Amendment.

The Committee also agreed to prepare language for the House floor which would require the owners prepaying the loans to take vouchers held by their Section 515 tenants.

The three other members who fought the Ney-Ross Amendment were Democrats: Mel Watt (D-NC), Ranking Member of the Committee John LaFalce (D-NY) and Ranking Member of the Housing Subcommittee Barney Frank (D-MA). Watt and Frank both spoke out during the mark-up; Frank and LaFalce sent letters encouraging opposition to all Democratic Committee members.

What's next? The "amended" Ney-Ross Amendment will soon be reconsidered on the House Floor. And time will tell whether it will be considered in the Senate.