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Housing Update
August 31, 2007
Following is an update on state and federal housing issues excerpted from housing updates issued by Bob Palmer of Housing Action Illinois. Information is included an all state housing legislation that has passed whether they have been a subject of previous alerts or not. Those that have also been signed by the governor have been marked with an asterisk. More information is available at www.housingactionil,org
GOVERNOR'S BUDGET VETO LEAVES HOUSING FUNDS INTACT
On August 10 the Illinois General Assembly finally agreed on a fiscal year 2008 budget, more than two months after the fiscal year actually started. While housing advocates didn’t get all their recommendations in the budget, the budget passed by the General Assembly could have been much worse. On August 23, Governor Rod Blagojevich released his veto message on the budget. All of the line items summarized here were funded at the level passed by the General Assembly as follows:
The Rental Housing Support Program was funded at $31 million, the same amount included in the governor’s budget proposal. The It Takes a Home to Raise a Child Campaign had been advocating that an additional $15 million in collected but unappropriated funds be added to the line item. There is still the possibility of an administrative charge and/or fund sweep from the unappropriated resources, which the Campaign continues to oppose. More info at www.chicagohomeless.org.
Supportive Housing Services were funded at $14.25 million, including the $3.9 million in new funding the Supportive Housing Providers Association had been seeking. The new funding will provide services for 30 supportive housing projects across the state, serving over 900 people who are homeless and/or have mental illness. More info at www.supportivehousingproviders.org.
The Emergency Food and Shelter Grant Program received a 6% budget increase, increasing funding to $9.4 million. The governor’s fiscal year 2008 budget proposal had flat-funded the program at $8.9 million. Housing Action Illinois and funded agencies had begun the session seeking a 30% increase to make up for budget cuts in prior years. More info at www.housingactionil.org.
There was no funding in the budget for the Chicago Coalition for the Homeless’ new Access to Recovery, Care & Housing (ARCH) initiative to fund housing, recovery services and job training for women on probation, supervision and parole. They had been seeking $5.4 million in funding. More info at www.chicagohomeless.org.
STATE LEGISLATION
The following legislation passed the General Assembly and has been, or will be, sent to Governor Blagojevich for his consideration.
The Good Housing, Good Schools Act (Senate Bill 220) will further encourage and support municipalities advancing the preservation and “live near work” goals of the State Housing Plan. As an incentive to develop affordable housing, if a municipality approved a new affordable multi-family housing development, it would receive additional funding for the local school district. This bonus—$1,120 for each two-bedroom unit, $560 for each additional bedroom—would be paid by the State Board of Education directly to the affected school district. The annual estimated cost of the bonus is less than $5 million. More info from the Metropolitan Planning Council at www.metroplanning.org.*
Amendments to the Safe Homes Act (Senate Bill 534) would improve legislation that established important protections for survivors of domestic and sexual violence who live in rental housing. The amendments will clarify the Act’s lock change policy, enabling landlords to better protect victims of violence and providing coverage to oral leaseholders. More info from Housing Action Illinois at www.housingactionil.org.*
Extension of the 7% Property Tax Cap (House Bill 664) increases the alternative general homestead exemption (the so-called “7% cap”) to $33,000 in the first year and then lowers it to $26,000 in the second year and $20,000 in the third year. Additional one-time increases in the alternative general homestead exemption are available in the first year if the assessed value of the home went up by more than 80% since the last assessment. The phased out alternative general homestead exemption is replaced with a tiered long-time occupant homestead exemption that would apply to those who reside in their homes ten years or more and who earn under $100,000 in household income. (All these exemptions only apply to counties that have approved them to address rapidly increasing home values. Cook County is the only county to do so to date.) The bill also includes clauses that will result in property tax reductions for veterans, people with disabilities, senior citizens, and surviving spouses of fallen police officers or rescue workers. The bill also establishes a Property Tax Reform and Relief Task Force selected from the House and the Senate. More info from the Tax Relief Action Coalition at www.geocities.com/trac_il.
The Condominium Conversion Notice Liability Act (House Bill 1797) amends the Condominium Property Act to require that a tenant who vacated their rental unit in a building because the real estate is being converted to a condominium, and who did not receive a notice of intent for the conversion as required by current law, can seek damages from the building owner for the tenant's actual moving expenses, not to exceed $1,500; 3 months’ rent at the subject property; and reasonable attorney's fees and court costs. Injunctive relief is also made available to tenants to enforce the condominium conversion notice provisions. A non-profit housing organization suing for an aggrieved tenant may also recover compensation for reasonable attorney's fees and court costs necessary for a court action. For more info contact Fran Tobin of the Rogers Park Community Action Network at fxtobin@earthlink.net.*
The Olmstead Implementation Act (Senate Bill 765) provides that the State will attempt to increase the percentage of state spending on long-term care that is dedicated to home- and community-based services. The specific goals in the plan are to transition 3,357 people from institutions to home and community-based settings over five years, resulting in 37% of all long-term care spending going for people in home and community-based setting. The legislation is much weaker than what advocates were seeking. The Illinois Olmstead Coalition’s preferred proposal would have empowered people in institutions to direct that the money already being spent to institutionalize them be used instead in the setting of their choice if it is deemed appropriate by a medical professional. More info is available at http://home.comcast.net/~sltriano/.
An amendment to the Mobile Home Landlord and Tenant Rights Act (Senate Bill 688) extends protections for residents of mobile home parks. The law deals with several issues, including duration of leases, provision of rent increase projections to current and prospective tenants, notice of rent increases and acceptance or rejection of rent increases; deferral of payment of rent increases, sales of homes by tenants, lease renewal and cancellation, and park closures. More info from the Mobile Home Owners Association of Illinois at www.mhoai.org.*
An amendment to the Residential Mortgage License Act (Senate Bill 1167) requires that licensees must assess a borrower’s ability to repay a loan when making a lending decision and requires brokers to act in good faith toward borrowers and provide the best loan options available. The bill also puts restrictions on prepayment penalties, changes in the loan terms before closing and other predatory lending practices. SB 1167 also makes some positive changes to the “HB4050” Predatory Lending Database Program, implementing it in all of Cook County on July 1, 2008. The bill also allows for the creation of Foreclosure Prevention Loan Funds through voter referenda in four Chicago communities with Guarantee Home Equity Funds. More info from Housing Action Illinois at www.housingactionil.org.
The Condominium Advisory Council Act (House Bill 759) creates a Condominium Advisory Council, subject to appropriation, to identify issues facing condo owners and condo associations, study the Condominium Property Act and related Acts that affect condominium ownership, suggest legislation to the General Assembly and otherwise report its findings.*
An amendment to the Code of Civil procedure (Senate Bill 258) requires that in a case of building foreclosure where the tenant is current on his or her rent, any order of possession must allow the tenant continue living in their apartment for 120 days or through the duration of the lease, whichever is shorter, as long as the tenant continues to pay rent.*
The Teacher Homebuyer Assistance Act (Senate Bill 1224) requires that, subject to appropriation, the Illinois Housing Development Authority establish and administer a teacher homebuyer assistance program in “hard-to-staff” public schools.
An amendment to the Illinois Human Rights Act (House Bill 257), which has already been signed into law, expands the Act to cover more residential properties and to bring it line with federal fair housing law. Previously, owner-occupied buildings with five or fewer units were exempt. Now, the exemption is limited to owner-occupied buildings with four or fewer units.
STATE CAPITAL BUDGET
Advocacy continues to include an annual $100 million line item in the capital budget, less than 1% of the proposed capital budget, to support the construction and preservation of affordable housing statewide through the Illinois Housing Development Authority.
Whether advocates are successful or not depends, in part, on whether the General Assembly and Governor Blagojevich pass a capital budget at all. So far, an agreement has not been reached on the overall size of the capital budget and what revenue will be raised to pay the debt on the general obligation bonds that generate funds for projects included in the budget.
U.S. CONGRESS
Congress returns from their break on September 4 and is expected to move forward on several positive pieces of legislation.
On July 31, the House Committee on Financial Services on a bipartisan vote approved the National Affordable Housing Trust Fund Act (H.R. 2895). The bill should be voted on by the full House in September and a companion bill should introduced in the Senate this fall.
The Federal Housing Finance Reform Act of 2007 (H.R. 1427), and the Expanding American Homeownership Act of 2007 (H.R. 1852) both provide funding for the National Affordable Housing Trust Fund and have advanced in the House. The House approved H.R. 1427 on May 22. The bill would modify the regulatory structure for Fannie Mae and Freddie Mac, known as Government Sponsored Enterprises (GSEs), and includes an Affordable Housing Fund, which would be reserved for a future national housing trust fund after the first year. On May 3, the House Financial Services Committee approved H.R. 1852, which is primarily designed to overhaul the Federal Housing Administration (FHA). This legislation also includes a provision to reserve funds for a national housing trust fund.
On July 12, the House on a bipartisan vote passed the Section 8 Voucher Reform Act of 2007 (SEVRA)(H.R. 1851). This legislation would make much-needed changes in the allocation formula for vouchers and provide for an additional 20,000 new vouchers. A similar bill is being prepared for introduction in the Senate.
Both the House and Senate have passed fiscal year 2008 budgets for the Department of Housing and Urban Development, and committees in each chamber have passed budgets for the Department of Agriculture’s rural housing programs. All the bills provide significantly more funding than requested by the Bush administration for most every program. However, since the end of the current fiscal year is September 30, Congress is expected to act on a short-term continuing resolution to fund federal government programs until individual appropriation bills can be enacted. With presidential vetoes threatened on many of the pending bills, Congress may develop an omnibus bill containing all or some of the individual appropriation bills that is less likely to be subject to a successful presidential veto.
Both the House and the Senate have other affordable housing legislation pending. Any issues not resolved before the Congress adjourns for the year will be carried over to the second session of the 110th Congress. The House is scheduled to adjourn October 26, but the date is subject to change. The Senate has not set an adjournment date.
More information, including a fiscal year 2008 budget chart for selected programs, is available from the National Low Income Housing Coalition at www.nlihc.org.
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