"Millions of Americans today are spending 40%, 50% or more of their limited incomes on housing," Mr. Sanders remarked. "In extreme cases, we have families sleeping out on the street and in their cars." Mr. Sanders declared the lack of affordable housing as one of the most serious problems facing communities throughout America. He told the crowd that Congress has frequently set up trust funds in many other areas of government activity, including highways and social security. "It is now time," Mr. Sanders avowed, "for Congress to, at the very least, use a portion of the Federal Housing Administration surplus to address the affordable housing crisis."

Among those joining Mr. Sanders in support of the bill was Congresswoman Barbara Lee (D_CA), who acknowledged the need for "new and innovative ways to solve the severe lack of affordable housing" and said the establishment of a National Housing Trust Fund would create an enormous resource to combat the nation's housing crisis.

Sheila Crowley, president of NLIHC, thanked the bill's sponsors and stated that members of Congress from both sides of the aisle are hearing from their constituents about their responsibility to expand federal investment in the creation of housing for low_income people. "We are now at a moment in time when it is possible to renew the federal commitment to affordable housing production. Housing trust funds have been established by 170 state and local governments in the past 15 years and have proven to be a successful approach to funding affordable housing programs. This bill reflects the valuable experience of these states and localities that have committed dedicated sources of revenue to address their housing problems."

What the Bill Proposes

The Act, is similar to the bill to be introduced shortly in the Senate [also introduced last year by Senator John Kerry (D_MA)], but differs in several important ways. What is most encouraging is that this year, at the request of the National Housing Trust Fund Campaign, both bills establish a goal of the production of 1,500,000 homes.

Both bills create a national housing trust fund using excess revenue from the FHA single family insurance program and from Ginnie Mae.

Both bills focus on rental housing production for extremely low income people, with 75% of funds targeted to households at 30% AMI and less and 25% for households up to 80% AMI. However, the House bill designates that 30% of the funds must be used for housing production for people with incomes at minimum wage or less.

While both bills distribute trust fund dollars to states by formula, the House bill provides for a small state minimum and the Senate bill retains 25% of the funds for a national competition. Both require a substantial match by the state and discourage development that would serve to concentrate poor people.

Another important way the bills differ is that the House bill allows housing preservation to be an eligible activity, while the Senate bill focuses on new production. The National Housing Trust Fund Campaign supports inclusion of preservation as an eligible activity. While a preservation matching grant bill (H.R. 425) was introduced in the House and will soon be reintroduced in the Senate, the national housing trust fund might provide more capital resources for preservation than a stand alone program will.