Frank Pushes Housing Bill Through House

by Becky Evans

WASHINGTON - The House passed a bill on Tuesday that would promote construction of apartment buildings in Massachusetts and other states where housing prices have skyrocketed.

The bill would increase the size of loans that may be insured by the Federal Housing Administration, a critical source of financing for developers of affordable rental housing.

"Because of runaway housing costs in Massachusetts, the FHA loan limits have gotten too low and developers can't afford to build housing units for the amount the government will insure," said Kay Gibbs, spokeswoman for Democrats on the House Financial Services Committee. "This bill will provide the FHA with the ability to raise those limits in high-cost markets."

Rep. Barney Frank (D-Mass.), who co-sponsored the bill with Rep. Gary G. Miller (R-Calif.), said the bill was "very important" to his constituents.

"Two years ago, I had a meeting on the bill with the governor of California and I thought this should not be just a California bill, it should be for everybody, wherever the limits are too low," said Frank, the committee's senior Democrat.

Frank said he was "hopeful, not confident" that the Senate would approve the bill.

Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations, said the increase in loan capital would "be a big help" to New Bedford and other Southeastern Massachusetts towns that suffer from a shortage of affordable housing units.

"Getting low loan limits increased to more accurately reflect market prices here will be helpful," he said. "Lord knows we need all the help we can getá. High rents are eating up more and more of paychecks and are a drag on the economy. It is critical that more housing be built."

The Community Economic Development Center of Eastern Massachusetts, located in downtown New Bedford, recently completed a study of affordable housing issues in New Bedford. The report concluded that housing problems are linked to high unemployment, low wages and rising rents.

New Bedford's per capita income of $15, 602 is one of the lowest in the state, according to CEDC director Corinn Williams. Over the last two years, apartment rents have been increasing while wages have remained the same, she said.

"It's a real crisis down here," she said. "If people who are renting lose a housing subsidy, get an increase in rent or something happens to their job, there is a real risk for homelessness."

The outlook for first-time homebuyers in New Bedford isn't any better.

Williams said buyers would need an annual income of at least $50,000 to be able to afford an "average home," which she estimated would cost $164,000.

In New Bedford, where 75 percent of households earn less than $49,000 a year, only two out of 10 families can afford to purchase their own home, she said.

Arlene McNamee, executive director of Catholic Social Services in Fall River, agreed that the House bill would help create more housing, but that many people still wouldn't be able to afford it. She said lawmakers should also increase rent subsidies, raise the minimum wage and take other steps to make housing more accessible to lower-income people.

"While creating this bill, [Rep. Frank] needs to remember his responsibility to the poor, not just the middle class," she said. "We need a playing field that everyone can enjoy."

Rep. Frank, who said he is working hard to raise wages, believes housing decisions should be kept independent of pay increases.

"Besides," he said. "It is hard to raise average wages through a bill."