Capitol Express Newsletter: Tax Reform Negotiations Begin, Senate to Vote on FY 2018 Budget
CONGRESSIONAL AND ADMINISTRATION NEWS
Letters to Congress Show Support for Housing Credit and NMTC
Now that administration and congressional Republican leadership have released their “Unified Framework for Fixing Our Broken Tax Code,” the tax-writing committees in the House and Senate are negotiating details and drafting legislation. The House Ways and Means Committee is expected to release its tax bill as early as next week, and the Senate Finance Committee is aiming to follow soon after. While the framework proposed retaining the Low-Income Housing Tax Credit (Housing Credit), it was silent on the tax exemption for Housing Bonds, which provide critical financing to roughly half of all Housing Credit properties, and on the New Markets Tax Credit (NMTC), which is essential for attracting private capital and jobs to some of the nation’s most distressed communities. Read an analysis of the tax reform framework on Enterprise's blog.
Now is a pivotal time for housing and community development advocates to weigh in to ensure that the Housing Credit, Housing Bonds and NMTC are preserved, strengthened and expanded. The ACTION Campaign, which Enterprise co-chairs with the National Council of State Housing Agencies, is sending a letter to Congress and the Administration that will thank Republican leadership for recognizing the value of the Housing Credit and call on lawmakers to strengthen and modernize our affordable housing delivery system. Read the ACTION Campaign letter and sign-on by Tuesday, October 17 to support the Housing Credit and Housing Bonds in tax reform.
The New Markets Tax Credit Coalition is also sending a letter to Congress in support of the NMTC, including calls for Congress to permanently extend and expand the NMTC as proposed in the bipartisan New Markets Tax Credit Extension Act of 2017.
House Passes FY 2018 Budget Resolution, Senate Expected to Vote This Week
The House passed a budget resolution for fiscal year (FY) 2018 earlier this month, which paves the way for tax reform through the budget reconciliation process, calls for cutting spending over 10 years and directs lawmakers to find at least $203 billion in extra savings from mandatory programs. The House budget resolution does not allow for increasing the deficit. The Senate will now take up a budget resolution, but the version it is considering has significant differences from the House version. The Senate Budget Committee approved a FY 2018 budget plan that would increase the deficit by $1.5 trillion over the next decade in order to allow for tax cuts with fewer offsets. The Senate budget resolution is expected to be considered on the floor this week, after which House and Senate budget writers must reconcile the different packages during conference negotiations this fall.
House Passes $36.5 Billion Package in Second Round of Disaster Recovery Funds
Last week, the House passed a $36.5 billion emergency aid package for Puerto Rico and other areas affected by recent hurricanes, wildfires and other natural disasters. The package would provide $18.7 billion for FEMA’s disaster relief fund, which can be used for necessities like housing and child care assistance, and $4.9 billion of which can be used for loans to Puerto Rico for emergency services. Also included in the legislation is $16 billion to partially eliminate the National Flood Insurance Program’s debt. The Senate is expected to consider the emergency aid package this week. Congress passed an initial $15.25 billion disaster aid installment five weeks ago after Hurricanes Harvey and Irma, which included funds for FEMA, the Small Business Administration (SBA), and HUD’s Community Development Block Grant Disaster Recovery (CDBG-DR) program.
Congress may also still consider a disaster tax relief package, which advocates argue should include benefits similar to those in the Gulf Opportunity (GO) Zone Act of 2005. Michelle Whetten, Vice President and Gulf Coast Market Leader at Enterprise, notes that establishing the GO Zone helped leverage the Housing Credit to produce tens of thousands of affordable units in Louisiana and Mississippi after Hurricane Katrina. Emily Cadik, Enterprise’s Director of Public Policy, commented that disaster tax legislation has been reintroduced in Congress, but in order to advance it will likely need the leadership of a member of Congress representing one of the more recently impacted communities.
Secretary Carson Testifies Before House Financial Services Committee
Last week, HUD Secretary Ben Carson testified before the House Committee on Financial Services in a hearing on “The Future of Housing in America: Oversight of the Department of Housing and Urban Development.” Common themes discussed during the hearing included: reforming HUD programs to become more efficient; reforming the Federal Housing Administration (FHA) to expand homeownership and reduce taxpayer liability; and clarifying and strengthening HUD’s role in disaster recovery efforts. Secretary Carson repeatedly pointed to public-private partnerships, including the Rental Assistance Demonstration (RAD) program, as a strategy for expanding housing opportunity, and the Secretary spoke positively about the Housing Credit being one of only two tax expenditures explicitly retained in the Administration and Congressional Republican leadership’s framework for tax reform. Ranking Member Maxine Waters (D-CA) expressed alarm that proposed rental assistance reforms in the Administration’s FY 2018 budget request, such as rent increases and new minimum rents, would harm low-income renters at a time when there is a record number of worst-case housing needs. Read more about the hearing on Enterprise’s blog.
RESEARCH AND REPORTS
New Enterprise Case Study Addresses Challenges to Developing Publicly Owned Parcels in the Puget Sound Region
Enterprise has released a new case study, Public Benefit from Publicly Owned Parcels: Advancing Implementation in the Puget Sound Region, that addresses challenges associated with the publicly owned parcel development process. Publicly owned parcels are a promising approach to developing affordable housing because of the ability to leverage diverse policy tools across both public and private sector stakeholders. The case study focuses on six recommendations that will help public agencies expand and better coordinate their efforts to effectively and equitably develop on these parcels. Examples explored in the case study include supporting mixed-income development, developing large and master planned sites efficiently and equitably and establishing effective site control and valuation practices to facilitate affordable housing.
Enterprise Paper Examines How to Bring Pay for Success Programs to Scale
Enterprise has released a new paper, “Scaling and Sustaining Pay for Success: Recommendations for Creating a More Sustainable and Scalable Financing Model,” that examines how to make pay for success (PFS) programs more sustainable and scalable. Pay for success is a financing mechanism designed to bring new investment and cross-sector collaboration to solving social problems, such as the shortage of affordable rental housing. Drawing on a range of material – including lessons learned from Enterprise’s PFS projects in Denver and Cuyahoga County, OH, as well as the Housing Credit’s success as a mature public-private partnership – the paper offers recommendations to address the current challenges in scaling PFS programs, including: standardizing roles, tools and processes to streamline the due diligence process; addressing financial risks assumed by service providers, particularly risks at the completion of a project; and expanding the federal government’s support for PFS project development to include credit enhancement.
New Fact Sheets Highlight How Housing Credit Legislation Will Benefit for Native American Households and Supportive Housing
The ACTION Campaign has released new fact sheets highlighting how the Affordable Housing Credit Improvement Act – legislation to modernize the Housing Credit – will facilitate the development of affordable rental housing for Native Americans and supportive housing. Native American households face some of the worst housing and living conditions in the U.S., and approximately 1.2 million individuals and families in the U.S. are in need of supportive housing, both of which underscore the importance of expanding the Housing Credit to ensure access to quality, affordable housing. These new fact sheets are part of a series that demonstrates how the Affordable Housing Credit Improvement Act can benefit specific communities, including rural areas and seniors, and the preservation of existing affordable housing.
NYU’s Furman Center Finds High Numbers of Rent-Burdened Households
New York University’s Furman Center recently released the “2017 National Rental Housing Landscape,” a study on the rental housing trends from 2006 to 2015 in 53 metropolitan areas across the U.S. The report found that 47.7 percent of renter households were “rent burdened,” spending more than 30 percent of their income on rent, a 1.2 percent drop in the number of rent-burdened households between 2012 and 2015. The report also shows that the number of rent-burdened households is still far above pre-recession figures, and rent grew faster than inflation in nearly every major metro area. Enterprise’s Vice President for Policy Marion McFadden joined a panel of housing experts at the report’s launch, where there was agreement that both federal and local policy should focus on subsidizing more affordable units and changing regulations to make construction of such units more profitable.
STATE AND LOCAL POLICY
Number of Homeless Students in New York Increases
According to data by the New York State Technical and Education Assistance Center for Homeless Students, one in every 10 New York City public school students was homeless at some point during the 2016-17 school year. In addition, the data show that the number of homeless students in the city’s public school system rose by 6 percent to 111,500 during that school year. Students who experience homelessness or housing insecurity have poorer educational performance than students who are housing secure, underscoring the importance of ensuring that all students have access to safe, stable and decent housing. The New York City Council is scheduled to hold a hearing on students in temporary housing to discuss three related bills, one of which would ensure that homeless families receive school information while they are applying for shelter.
IN CASE YOU MISSED IT
News Updates from Community Developments
In recent Community Developments, we highlighted the drop in child poverty rate, how local officials are struggling to distribute aid across Puerto Rico, recent data by CoreLogic that show that home prices were up both month-over-month and year-over-year in August 2017, and much more.
HEARINGS AND EVENTS
Congressional Hearing Update
Upcoming Hearings and Mark-Ups
No housing- or community development-related hearings or mark-ups have been scheduled at this time.
- October 17: The NHP Foundation 2017 Symposium & Dinner, The NHP Foundation (Washington, D.C.)
- October 17-18: Annual Conference & Trade Show, New England Affordable Housing Management Association (Norwood, Mass.)
- October 19: Novogradac 2017 New Markets Tax Credit Fall Conference, Novogradac & Co. (Chicago)
- October 19-20: 2017 Fall Seminar—The Mature Section 8 Project, National Leased Housing Association (Washington, D.C.)
- October 23-26: ULI Fall Meeting, Urban Land Institute (Los Angeles)
- October 24: When the Facts Don't Fit the Frame, Enterprise Community Partners (webinar)
- October 25: Transforming Communities with Affordable Housing, IPED (Austin, TX)
- October 25-26: 2017 North Carolina Affordable Housing Conference, North Carolina Housing Coalition (Raleigh, N.C.)
- October 26: 2017 NMCEH Sixth Annual Conference, Housing for All, New Mexico Coalition to End Homelessness (Albuquerque, N.M.)
- October 27-29: NAHRO National Conference & Exhibition, National Association of Housing and Redevelopment Officials (Pittsburgh)
- October 29-November 1: LeadingAge Annual Meeting & EXPO, LeadingAge (New Orleans)
- November 1: Housing Finance, Affordability, and Supply in the Digital Age, Urban Institute (Washington, D.C.)
- November 1: Year 15: Transition Strategies for Expiring LIHTC Properties, Enterprise Community Partners (webinar)
- November 7 – 9: Ohio Housing Conference, Ohio Housing Finance Agency and Ohio Capital Corporation for Housing (Columbus, OH)
- 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 29: Solutions for Affordable Housing, National Housing Conference (Washington, D.C.)
- November 30: Novogradac 2017 Tax Credit Housing Finance Conference, Novogradac & Co. (Las Vegas)
- November 20- December 1: Novogradac 2017 Tax Credit Housing Finance Conference, Novogradac & Co LLP (Las Vegas)
- December 1: NAAHL Policy and Practice Conference, National Association of Affordable Housing Lenders (Washington, D.C.)
- 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)