3714 EXTENSIONS OF REMARKS March 9, 1982 EXTENSIONS OF REMARKS THE HOUSING ACT OF 1982 The problems confronting housing available, with over 900 rural commu­ are compounded by the weakening nities not even served by a local sav­ condition of the Nation's savings insti­ ings institution. With the exception of HON. STAN LUNDINE tutions, which traditionally provide housing efforts sponsored by the OF NEW YORK the bulk of home mortgage financing. Farmers Home Administration IN THE HOUSE OF REPRESENTATIVES According to a recent Brookings Insti­ <FmHA), housing construction in most Tuesday, March 9, 1982 tution study, at least 1,000 mutual sav­ rural areas has been at a standstill for ings banks and savings and loan insti­ years. Rural communities continue to e Mr. LUNDINE. Mr. Speaker, I am tutions will fail during the next 2 be burdened with nearly 60 percent of pleased to join with Mr. ST GERMAIN years unless extensive Federal assist­ the Nation's stock of substandard and Mr. GONZALEZ, the chairman of ance is provided. Collective losses housing and with unemployment that the Banking Committee and Housing among these institutions totaled is nearly 10 percent higher than in Subcommittee, in sponsoring H.R. nearly $5 billion last year, a decline in urban areas. 5731, the Housing and Community De­ net worth of over 15 percent. Three The administration's budget propos­ velopment Act of 1982. I wish to com­ out of every four savings institutions als would reduce loans to finance mend Chairman GONZALEZ for his lead­ operated at a loss last year, with the single-family housing for lower income ership in formulating this comprehen­ industry cutting its mortgage activity sive legislation that will significantly rural families by nearly two-thirds and reduce the cost of Federal housing by more than 50 percent. cut assistance for multifamily rental programs, continue our long-standing The continuing recession in the housing by nearly 80 percent. The commitment to provide decent hous­ housing industry not only undermines rental assistance required to make any ing for the poor, and provide new ini­ efforts to revitalize the Nation's econ­ rental housing affordable to most tiatives to stimulate housing construc­ omy, it guarantees future housing rural residents would be virtually tion. shortages and high housing costs. eliminated. These proposals would gut The problems of the Nation's hous­ Unless conditions change drastically, the housing efforts of the Farmers ing industry have reached crisis pro­ we will see most of our children Home Administration and end any portions. The current housing reces­ robbed of the chance of ever owning hope of providing new housing in most sion is entering its 38th month, the their own home. The loss of capacity rural communities. deepest housing slump since the Great represented by the closing of hundreds The legislation we have introduced Depression. New housing starts in 1981 of building firms, savings banks, real offers a clear alternative to the Presi­ dropped below 1 million units, half the estate offices, and lumber dealers will dent's short-sighted and destructive level of the previous year and less severely limit our ability to meet housing proposals. The American than 40 percent of the Nation's esti­ future demand for housing, even if in­ people now require a clear national mated annual demand for housing. terest rates drop dramatically. If the housing policy-one that will stimu­ Housing construction has continued to current recession were to end tomor­ late private mortgage finance and decline this year, with new starts in row, it would require more than 2 home construction and will assure con­ January nearly 44 percent below last years to bring the housing industry tinued housing opportunities for the year's disappointing level. Sales of new back to full production. elderly and the poor. H.R. 5731 offers and existing homes are also running The Reagan administration's re­ a comprehensive national program de­ far below last year's levels, reaching sponse to what is clearly a depression signed to meet these urgent housing their lowest point in more than a in the housing industry has been to needs. decade. reduce direct Government involve­ The legislation extends, at fiscal Home mortgage interest rates, which ment in housing and restrict Federal year 1982 budget levels, current Feder­ remain above 17 percent, continue to insurance, loan guarantee, and other al programs providing public housing price more than 95 percent of the Na­ assistance to private housing construc­ construction and modernization, tion's population out of the new hous­ tion and finance. The administration's rental housing for the elderly and ing market. The inability of potential fiscal year 1983 budget eliminates all handicapped, and special housing for home buyers to secure mortgages at new Government-sponsored housing Indians and migrant workers. It con­ more reasonable rates has not only construction for low- and moderate­ tinues current levels of support for dropped housing demand to a record income families, while ending most FmHA's single-family and multifamily low, it has caused the first sustained housing rehabilitation aid. It curtails housing programs for the rural poor, decline in housing prices since World the mortgage insurance activity of the and provides an additional 30,000 new War II. Federal Housing Administration commitments for rental assistance in The decline in housing construction <FHA> and limits the stimulus to mort­ existing housing under HUD's section and sales has put hundreds of thou­ gage financing provided by the Gov­ 8 program. Housing rehabilitation as­ sands of Americans out of work. Bank­ ernment National Mortgage Associa­ sistance would continue to be made ruptcies among general building con­ tion <GNMA>. The President also op­ available under HUD's section 312 and tractors during 1981 increased more poses any major effort to prevent FmHA's section 504 programs. than 50 percent from 1980. The failure widespread failure among savings in­ In contrast to the administration's rate among smaller subcontractors stitutions. policies, H.R. 5731 would continue cur­ rose nearly 130 percent. Unemploy­ These Hoover-like policies are clear­ rent levels of assistance for private ment in the construction industry is ly inadequate to deal with the growing mortgage activity through the FHA currently 18. 7 percent, more than housing crisis and will serve only to mortgage insurance and GNMA mort­ twice the national unemployment rate. prolong current depressed conditions. gage backed securities programs. Sec­ The closing or reduced operation of The effects will be particularly severe tion 235 homeownership insurance hundreds of real estate firms, lumber in the southern tier of New York State would continue to be provided for an dealers, and sawmills has also added and in other rural areas of the coun­ additional 15,000 new homes and thousands of workers to the unem­ try. In most rural communities, pri­ nearly $2 billion in additional funding ployment rolls. vate mortgage financing has been un- would be made available for long-term e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. March 9, 1982 EXTENSIONS OF REMARKS 3715 financing assistance for multifamily lar to current mortgage assistance pro­ housing assistance best suited to local rental projects under the GNMA grams for FHA-insured property. needs and conditions. "tamdem" program. Homeowners would be eligible for I believe H.R. 5731 provides the kind In a significant departure from mortgage assistance if they are more of initiatives that can halt further de­ recent Federal housing policy, H.R. than 90 days delinquent in their mort­ cline in the housing market and stimu­ 5731 would end the controversial sec­ gage payments and have suffered a late recovery in the housing industry. tion 8 multifamily rental construction significant loss of income due to unem­ I strongly endorse this legislation and and rehabilitation program. While this ployment or other conditions beyond urge its prompt and favorable consid­ program has been extremely success­ their control. Assistance would be pro­ eration by the Congress.• ful in providing needed housing for vided for up to 12 months and would hundreds of thousands of low-income amount to the difference between the families since 1974, it has proven to be required mortgage payment and the PRESIDENT DUARTE'S VIEWS ON increasingly expensive as housing amount the owner is capable of ELECTIONS costs have risen in recent years. Our paying. All assistance would be repaid proposal would replace this program with interest and would be secured by with a more cost-effective housing pro­ a lien on the assisted property. HON. ROBERT J. LAGOMARSINO duction program that would be target­ At a time when unemployment is ap­ OF CALIFORNIA ed to areas of demonstrated housing proaching 10 percent, when mortgage IN THE HOUSE OF REPRESENTATIVES need and would be operated largely by foreclosures and bankruptcies are Tuesday, March 9, 1982 local government agencies. reaching their highest level in several e Mr. LAGOMARSINO. Mr. Speaker, Under the initiative, Federal assist­ decades, it is imperative for Congress ance would be provided to local agen­ on March 2, the House of Representa­ to intervene to prevent thousands of tives debated and passed House Con­ cies in the form of flexible housing families from losing their homes. This grants that would then be extended to current Resolution 226, expressing the initiative would provide mortgage as­ sense of the Congress that the Presi­ developers to help reduce the cost of sistance to thousands of temporarily producing new multifamily rental dent should push for unconditional distressed households with minimal discussions among the major political projects. Assistance could be in the long-term cost to the Federal Treas­ form of capital grants, loans, interest factions in El Salvador.