Capitol Express Newsletter: Congress Passes Budget Resolution, Tax Reform Legislation Expected This Week
CONGRESSIONAL AND ADMINISTRATION NEWS
Congress Passes Budget Resolution, Sets Stage for Tax Reform
Last week, Congress passed a budget resolution for fiscal year (FY) 2018 that paves the way for tax reform legislation to be accomplished through reconciliation, a tool that authorizes the Senate to pass legislation with 50 votes. The budget resolution also allows the federal deficit to increase by $1.5 trillion over the next ten years to account for reduced revenue resulting from proposed decreases to corporate and individual tax rates. The budget resolution passed narrowly in both the Senate (51-49) and the House (216-212), with Democrats in unanimous opposition and several Republicans voting against it because of two primary objections – the increase in deficit spending and the potential for the state and local tax deduction to be eliminated in tax reform.
Republican leadership hopes to pass tax legislation before the end of the year, but several other contentious issues – including funding the government after the current continuing resolution expires on December 8 and passing additional disaster recovery resources – will also require lawmakers’ attention in the few remaining weeks.
House Ways and Means Chairman Kevin Brady (R-TX-8) is expected to release the text of his committee’s tax reform bill on November 1, followed by a markup in the committee the week of November 6 and a vote on the House floor the week of November 13. The Senate is expected to follow closely behind the House, with a markup of a tax reform bill in the Senate Finance Committee the week of November 13.
The next few weeks will be critical for Low-Income Housing Tax Credit (Housing Credit) and New Markets Tax Credit (NMTC) advocates to make the case for retaining and strengthening these programs through tax reform. Last month, the ACTION Campaign sent a letter to Congress and the Administration on behalf of 2,150 organizations thanking Republican leadership for recognizing the value of the Housing Credit in their tax reform blueprint, and urging lawmakers to protect and modernize our affordable housing delivery system during tax reform. The NMTC Coalition also sent a letter to Congress last month on behalf of more than 2,100 organizations urging Congress to expand and make the NMTC permanent in tax reform. Read more about advocacy in support of the Housing Credit and NMTC on the Enterprise blog.
HOME Coalition Circulates Sign-on Letter, Requests Success Stories
The HOME Coalition is circulating a national sign-on letter calling on Congress to protect and restore funding for the HOME Investment Partnerships (HOME) Program in FY 2018, which faces cuts in the House spending bill that would place its funding at a historic low. Adequate funding is even more critical this year as states and localities across the country redirect their HOME funds to respond and rebuild after natural disasters. The HOME Coalition is also requesting success stories to demonstrate how many communities across the country have benefited from the program and how organizations have used HOME for critical services like supportive housing, rebuilding homes after natural disasters or for gap financing through the Rental Assistance Demonstration (RAD) Program. These success stories will be shared with members of Congress and the Administration. Join the more than 1,400 organizations supporting HOME by signing the letter and sharing success stories by November 10.
Congress Passes Second Disaster Aid Package
Last week, the Senate passed a second round of disaster aid and sent the $36.5 billion package to the President for his signature. The package includes $18.7 billion for FEMA’s disaster relief fund and $16 billion to relieve debt for the National Flood Insurance Program (NFIP), but does not include funding for the Community Development Block Grant Disaster Recovery (CDBG-DR) program. The Administration has announced its intention to ask Congress for tens of billions more dollars in disaster aid in November, although it is unclear whether this package will include CDBG-DR funding. Office of Management and Budget Director Mick Mulvaney and House conservatives have called for the third package to be offset with spending cuts elsewhere in the budget, although representatives from areas damaged by the recent disasters will likely push back against this request.
RESEARCH AND REPORTS
New Report Shows Significant Shrinking of Affordable Housing Stock
A new report by Freddie Mac shows that the number of apartments deemed affordable for very low-income families across the country fell by more than 60 percent between 2010 and 2016. The report, which examines loans that Freddie Mac Multifamily financed twice during that period -- either when the units were refinanced or sold – finds that 11 percent of 100,000 rental units were deemed affordable for very low-income households at the first financing, while only 4 percent were categorized as affordable by the second financing. This is the first report to track increases in rent in specific units over time. The significant rise in rents when the units were refinanced or sold can be partially explained by the tight housing inventory, as the apartment vacancy rate dropped from 8 percent in 2009 to 4 percent in 2017. In addition, the report shows that Colorado and North Carolina were the top two states with the highest drop in the share of affordable apartments.
STATE AND LOCAL POLICY
California Wildfires Further Strain Housing Shortage
One of the worst wildfires in California’s history has wiped out an estimated 8,400 homes and other structures, exacerbating the housing shortage in a region already struggling with limited supply and soaring costs. According to the California Department of Housing and Community Development, the loss is about one-half of the number of housing units the region produced in recent years, a major setback in the efforts to address the affordable housing crisis. In Santa Rosa alone, where the city had already declared a state of emergency on housing costs, five percent of homes were lost. Recent natural disasters across the country are spurring more conversations about long-term housing policy. Read more about the damage to homes and plans to help residents with their short and long-term housing needs.
Momentum for Tenant Rights Increases in Michigan, Across the Country
Grand Rapids, Mich., has joined the ranks of a growing number of cities that are putting eviction prevention policies into place. A partnership between the city and the District Court would identify at-risk residents and assist those struggling with rent payments before they have to go to court. An increased recognition that housing stability and tenant protections are key components of broader affordable housing strategies have led to related policies in other cities, including New York City’s efforts to ensure access to legal counsel and Washington, D.C.’s provision of funds for emergency rental assistance. A growing list of cities – such as Denver, Los Angeles, and Philadelphia – are exploring options to follow suit.
IN CASE YOU MISSED IT
News Updates from Community Developments
In recent Community Developments, we highlighted the formation of the first citywide Community Land Trust (CLT) in New York City, the rise in existing home sales in September, how alternative investments such as affordable housing can help protect assets during economic downturn, and much more. Sign up here to receive Community Developments.
HEARINGS AND EVENTS
Upcoming Hearings and Mark-Ups
- November 1: Oversight Hearing on "Building Tribal Economies: Modernizing Tax Policies that Work for Indian Country,” Senate Committee on Indian Affairs
- November 1: Hearing on Examining the Community Development Block Grant-Disaster Recovery Program, House Financial Services Committee
- November 2: Hearing on Sustainable Housing Finance: Private Sector Perspectives on Housing Finance Reform, Part II, House Financial Services Committee
- November 3: Hearing on Legislative Proposals to Improve Small Businesses’ and Communities’ Access to Capital, House Financial Services Committee
- November 1: Housing Finance, Affordability, and Supply in the Digital Age, Urban Institute (Washington, D.C.)
- November 2-3: 2017 Housing is Infrastructure Conference, Neighborhood Preservation Coalition of New York State, Inc. (Albany, N.Y.)
- November 7: Expanding Opportunity, Local Initiatives Support Corporation (New York)
- November 7-9: Ohio Housing Conference, Ohio Housing Finance Agency and Ohio Capital Corporation for Housing (Columbus, Ohio)
- November 8-10: Greenbuild, The U.S. Green Building Council (Boston)
- November 8:10: 2017 Rural Housing Summit, California Coalition for Rural Housing (Pacific Grove, Calif.)
- November 14-16: AHF Live, The Affordable Housing Developers Summit (Chicago)
- November 15: Housing America’s Families Forum, J. Ronald Terwilliger Foundation for Housing America’s Families, Bipartisan Policy Center (Detroit)
- November 15: Promoting Economic Opportunity: Models That Work, Urban Institute (Washington, D.C.)
- November 18-September 16, 2018: Making Room: Housing for a Changing America (Washington, D.C.)
- November 20-December 1: Novogradac 2017 Tax Credit Housing Finance Conference, Novogradac & Co LLP (Las Vegas)
- November 29: Solutions for Affordable Housing, National Housing Conference (Washington, D.C.)
- November 30: Novogradac 2017 Tax Credit Housing Finance Conference, Novogradac & Co. (Las Vegas)
- December 1: NAAHL Policy and Practice Conference, National Association of Affordable Housing Lenders (Washington, D.C.)
- December 4-6: Homes Within Reach Conference, Housing Alliance of Pennsylvania (Harrisburg, Pa.)
- December 5: Affordable Housing Solutions for Rural Veterans: A Symposium, Housing Assistance Council (Washington, D.C.)
- December 6: NYHC/NHC 44th Annual Awards, New York Housing Conference/National Housing Conference (New York)