In response to the housing crisis as a result of Hurricane Katrina, House Financial Services chairman Michael G. Oxley, R-Ohio, and Rep. Richard Baker, R-La., said they would adjust an affordable housing fund, currently in pending legislation, in order to meet housing needs of Katrina survivors.
If enacted, the change would stipulate that affordable housing in areas affected by Hurricane Katrina would receive priority consideration, including the actual disaster areas, as well as current locations where survivors are temporarily lodged.
The affordable housing fund, or H.R. 1461, the Federal Housing Finance Reform Act of 2005, was created to increase ownership and owner-occupied rental housing for low-income families and to increase housing investment and community development in economically underserved areas.
For the first two years, each enterprise would reserve 3.5 percent of after-tax income for the affordable housing fund, increasing to 5 percent in later years. The fund may be used for the production, preservation, and rehabilitation of both rental and owned housing.
"We know that the recovery from Katrina will entail unprecedented amounts of federal assistance, but what we're proposing is an innovative approach, a public-private partnership that directs truly significant resources toward meeting the affordable housing challenge, but not by federal expenditure or direct taxpayer contribution," said Baker, in a statement.
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