Federal Legislation Affecting Cities

House Passes “Landmark, Comprehensive” Housing Stabilization Measures

Earlier this week, the House passed H.R. 5818, The Neighborhood Stabilization Act, and H.R. 3221, The American Housing Rescue and Foreclosure Prevention Act.

* H.R. 5818, The Neighborhood Stabilization Act, authorizes a one-year $15 billion grant and loan program to help ease the growing burden of vacant housing on cities and states. Funding could be used to purchase qualified houses made vacant by foreclosure; to rehabilitate the houses to restore compliance with local codes and general habitability, including energy-efficiency improvements, and to resell or rent the houses to income-targeted families. The bill makes cities, states, and urban counties with high rates of foreclosure eligible for funding from HUD directly.

* H.R. 3221, The American Housing Rescue and Foreclosure Prevention Act, is a combination of several bills packaged together under the leadership of House Financial Services Committee Chair Barney Frank (D-MA). Among other things, the legislation:
1. allows the Federal Housing Administration (FHA) to provide up to $300 billion in new mortgage loan guarantees to help refinance borrowers at risk of foreclosure into lower-interest, fixed-rate federally insured mortgages;
2. allows state housing finance agencies to sell an additional $10 billion in tax-exempt mortgage bonds to raise funds for refinancing subprime mortgage loans of borrowers at risk of default;
3. allows the Federal Home Loan Banks to guarantee tax-exempt municipal bonds, allowing them to expand their financing capacity into broader community and economic development activities, including infrastructure improvement programs; and
4. provides an additional standard deduction for state and local property taxes of up to $350 for individuals and $700 for couples. Although the bills passed with strong bipartisan support, the measures did not gain veto-proof majorities. As a result, the Senate may choose to scale the bill back to levels more in line with President Bush, who has threatened to veto the House-passed legislation.


Impasse Over Highway Funds Stalls Airport Reauthorization Bill

A long term reauthorization of the federal airport programs and the taxes that support them reached an impasse in the Senate this week and will be put on indefinite hold. Senators will instead introduce another short term extension through 2009. Attempts to limit debate on the reauthorization bill, H.R. 2881, failed as Republicans and the White House voiced strenuous objections to a provision that imposed new oil spill fees that would fund a shortfall in the Highway Trust Fund. The House passed its version of the FAA reauthorization bill last summer, and the program, which expired in September 2007, has been running on short term extensions; the current extension expires at the end of June.

For local governments, the program funds the Airport Improvement Program for metropolitan airport programs, sets the Passenger Facility Charge imposed by individual airports, and extends the Essential Air Services program for smaller airports that might not otherwise receive commercial air service.


State and Local Government Groups Urge Congress to Restore Byrne Justice Assistance Grant Funding

In a letter to the Chairs and Ranking Members of the House and Senate Appropriations Committees state and local government groups urged the Committees to restore funding for the Byrne Justice Assistance Grant (Byrne JAG) program in an FY ’08 emergency supplemental appropriations bill. In last year’s budget, funding for the program was cut by two-thirds from FY ’07, endangering the continuance of a large number of public safety programs across the United States. Although 218 Representatives and 56 Senators also have signed letters urging congressional leadership and appropriators to restore funding for this program, the outlook remains unclear.


Join Building America's Future Coalition

In a speech before the Economic Policy Institute in Washington, D.C. earlier this month, Pennsylvania Governor and former Philadelphia Mayor Ed Rendell warned that the infrastructure of “our major American cities are a few years away from totally crumbling” and called for local leaders to join a national effort to “create an environment where infrastructure is treated as a national priority.” This effort, Building America's Future, was founded by Rendell, California Governor Arnold Schwarzenegger, and New York City Mayor Michael Bloomberg. "Local government officials know better than anyone how important infrastructure is in our communities and to this country," wrote Rendell, Schwarzenegger and Bloomberg recently in a letter to local government leaders. "Infrastructure is a federal challenge. It requires a federal commitment of resources."

Joining Rendell in his assessment of the critical impact of the deteriorating infrastructure on metropolitan areas was the Urban Land Institute (ULI), which released a report showing that the U.S. lags far behind other nations in infrastructure investment. ULI became the latest group this year to highlight the daunting challenges of deteriorating infrastructure and the need for a new national commitment to fixing the nations roads, bridges and highways.