But proponents remain optimistic that Legislature will approve affordable housing overhaul
The state’s budget crunch is making the path toward reform of the affordable housing system a little more difficult, but reform backers are still optimistic that the Legislature will approve an overhaul of the regional housing authority system this session.
Senate Bill 20, sponsored by Mary Kay Papen, D-Las Cruces, would expand reforms approved in 2007 to further increase oversight and completely restructure the system. But the state is in the process of cutting the budget to deal with the sagging economy, and Papen’s bill asks for $600,000 for the restructuring and the restarting of housing authorities that shut down during the scandalous collapse of most of the system in 2006.
The bill has already received a unanimous do-pass recommendation from the Senate Public Affairs Committee, but it’s been bogged down in the Senate Finance Committee because of the funding issue. Papen said she’s in the process of stripping the funding provision from the bill so it can get the Finance Committee’s approval and begin the rest of its trek through the Senate and then the House.
She expects the Finance Committee to approve the bill in the coming days.
When House Bill 2, the state budget bill, comes before the Senate, Papen said she and others are going to try to insert some money there to fund the restructuring and restarting of the housing system. It will take $200,000 or $250,000 to begin the transition, and additional funding could be appropriated in later years, she said.
Lt. Gov. Diane Denish, who has taken the lead along with Papen and Rep. Janice Arnold-Jones, R-Albuquerque, on the housing authority reform, said she’s “cautiously optimistic” that the funding “for the complete reform” can be appropriated this session.
“I am more hopeful about the oversight measures and reporting requirements that will improve assurances to New Mexico’s families,” Denish said about the reform provisions in the bill. “We are doing everything we can to overcome any resistance in the House. There is strong support for oversight and monitoring in both chambers, because this is good government.”
Denish was referring to the resistance that existed in the House when the first reform bill was approved in 2007. Papen also said she expects less resistance this year.
“I think the chances of it passing are very good,” she said.
Governor supports Papen’s bill
Most of the housing authority system crumbled in 2006 when the Albuquerque-based Region III Housing Authority defaulted on $5 million in bonds it owed the state. Soon thereafter, the State Investment Council released a report that found widespread misuse of the bond money, which was supposed to be spent on houses. Last month, the state auditor released long-awaited special audits that confirmed the problems.
Attorney General Gary King has been investigating and is preparing to take the case before a grand jury.
Some of the reforms in Papen’s bill include consolidating the seven regional authorities into three, designating an oversight agency to oversee regional operations, strengthening conflict-of-interest language, permanently eliminating the authorities’ ability to issue bonds and requiring that transactions of over $100,000 be reviewed and approved by the mortgage finance authority.
That builds on reforms approved in 2007, when the Legislature and Denish, signing the bill in the place of the governor, temporarily stripped the housing authorities’ bonding authority and gave the Department of Finance and Administration and state treasurer roles in administering the agencies’ finances.
Gov. Bill Richardson has endorsed Papen’s bill.
“This bill builds on those reforms we’ve already made to regional housing by allowing us to expand opportunities for safe and affordable housing to New Mexicans while ensuring the proper oversight is in place,” he said in a statement released by his office.