Capitol Express Newsletter Special Edition: Congress Passes Tax Reform and Short-Term Spending Bills
Programming note: this will be the last edition of Capitol Express in 2017. Please stay tuned for the next edition on Monday, January 8, 2018. To stay up to date on housing and community developments news, sign up to receive Community Developments as a daily email.
CONGRESSIONAL AND ADMINISTRATION NEWS
Tax Reform Bill Signed Into Law, Preserves Critical Affordable Housing Programs
Today President Trump signed the Tax Cuts and Jobs Act into law after it passed both chambers of Congress earlier this week. The House approved the bill by a vote of 227 – 203, with 12 Republicans and all Democrats voting against it; the Senate approved the bill by a party-line vote of 51 – 48.
The Tax Cuts and Jobs Act retains all core affordable housing and community development programs: the Low-Income Housing Tax Credit (Housing Credit); private activity bonds, including multifamily Housing Bonds; the New Markets Tax Credit (NMTC); and the historic rehabilitation tax credit. The bill also lowers the top corporate tax rate from 35 to 21 percent, effective January 1, 2018.
A new analysis by Novogradac and Co. estimates that the final version of the tax reform bill would reduce affordable rental housing production by nearly 235,000 homes over ten years, largely as a result of the lower corporate tax rate. A new base erosion and anti-abuse tax will also affect certain investors’ ability to use the Housing Credit and other credits. Read more about the final version of the Tax Cuts and Jobs Act in Enterprise’s blog post.
In a statement, Enterprise President and CEO Terri Ludwig thanked members of Congress who fought to retain the Housing Credit, Housing Bonds and NMTC, and adds that Enterprise will “continue advocating for improvements to these critical programs, including strengthening and expanding the Housing Credit, enacting the Affordable Housing Credit Improvement Act, and permanently extending the NMTC.” Enterprise’s Public Policy Director Emily Cadik also noted in an article in Affordable Housing Finance that “the industry will now seek modifications to the Housing Credit to ensure we continue to produce at least as much affordable housing as we did prior to tax reform,” emphasizing the importance of advancing the Affordable Housing Credit Improvement Act, which will be vital in the new tax system.
Congress Passes Short-Term Spending Bill, House Approves Disaster Recovery Funding
Yesterday, Congress passed stopgap legislation to keep the government funded through January 19. The legislation also includes a short-term funding fix for the Children’s Health Insurance Program and a PAYGO waiver to prevent the tax bill from triggering $150 billion a year in cuts to Medicare and other federal programs.
Before leaving for the holidays, the House also approved an $81 billion disaster recovery package. The bill, which is nearly double the White House’s $44 billion request, would provide $27.6 billion for FEMA, $26.1 billion for HUD’s Community Development Block Grants-Disaster Recovery (CDBG-DR) program, $2.9 billion for hurricane education recovery to help displaced students return to school, $1.6 billion for the Small Business Administration’s disaster loan program and $600 million for economic development grants. The House disaster aid package also includes $10 million for technical assistance and capacity building to help local governments and nonprofit organizations administer federal disaster recovery resources more effectively. However, the Senate is not expected to consider its version of the legislation before the new year.
HUD Accepting Public Comments on EnVision Centers
Earlier this month, HUD Secretary Ben Carson announced the launch of the first EnVision Center hub in Detroit, an initiative designed to provide those receiving housing assistance with long-term skills and training “to help people take the first few steps towards self-sufficiency.” HUD is now accepting public comments on the EnVision Center demonstration until February 12, 2018. The demonstration is intended to empower people living in HUD-assisted housing to become responsible homeowners and renters in the private market, and will offer communities with a centralized hub for resources and support based on what the program defines as four pillars of opportunity: economic empowerment, educational advancement, health and wellness, and character and leadership. The ten-community pilot, starting in Detroit, will leverage public and private funds to bring together services from government, community-based and non-profit organization to contribute to the economic mobility of public housing residents.
RESEARCH AND REPORTS
Bipartisan Policy Center Event Highlights New Health and Housing Research
Last week the Bipartisan Policy Center held an event to discuss its new report, "Building the Case: Low-Income Housing Tax Credits and Health.” In remarks at the event, Sen. Maria Cantwell (D-WA), lead sponsor of the Affordable Housing Credit Improvement Act (S. 548), made the case that the Housing Credit is the most critical component in the delivery of affordable housing, noting that strengthening the credit would not only expand the supply of affordable housing, but would also reduce costs for taxpayers and improve public health. Following Sen. Cantwell's speech, a panel of health and housing experts discussed innovative ways to leverage the Housing Credit and other federal policy to improve health outcomes. Enterprise's Stephany De Scisciolo, senior director of Knowledge, Impact & Strategy, addressed the data gaps in measuring health in housing over time, in addition to how the Opportunity360 platform can help identify areas of opportunity with positive social determinants of health. Michelle M. Rushing, policy impact specialist at the Georgia Health Policy Center, described how states can incorporate Health Impact Assessment into their Qualified Action Plans, and Jenny Ismert, vice president of housing at UnitedHealthcare, discussed the different ways health stakeholders, such as health insurance providers, can better assist low-income people attain housing. Read more about the report in Enterprise’s blog post.
Harvard Joint Center for Housing Studies Releases Report on America’s Rental Housing
On December 14, the Harvard University Joint Center for Housing Studies (JCHS) released a new report, America’s Rental Housing 2017, which found that the unprecedented growth in the rental housing market is slowing amid persistent rental housing affordability challenges, especially for lower-income households. These challenges include rental housing cost burdens; the shortage of rental assistance; the potential loss of affordable rental homes by 2020 because of their expiring affordability requirements; and the need to rebuild and repair of damaged rental units after this year’s natural disasters. According to JCHS, the number of cost-burdened renter households -- defined as those spending more than 30 percent of income on housing -- dropped from 21.3 million in 2014 to 20.8 million in 2016. However, at the average annual pace of decline between 2014 and 2016, it would take another 24 years for the U.S. to return to its 2001 level of 14.8 million cost-burdened renter households. JCHS notes that addressing the nation’s rental affordability challenges will require a federal, state and local policy landscape that supports the efficient provision of affordable rental homes, and a regulatory environment that does not cripple innovative solutions for expanding rental housing affordability. Learn more about JCHS’ new housing report in Enterprise’s blog post.
STATE AND LOCAL POLICY
New Report Details Paths Forward for Affordable Housing in the Bay Area
Earlier this month, Enterprise released The Elephant in the Region: Charting a Path for Bay Area Metro to Lead a Bold Housing Agenda, which looks at how the Bay Area could transform its collective ability to deliver affordable housing through the creation, resourcing and staffing of a new regional housing entity at Bay Area Metro. The report provides action steps to create this new housing entity, including establishing, capitalizing, and managing regional land coordination. The report notes that the integration of the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) into Bay Area Metro would provide an important opportunity to create a stable foundation for regional housing solutions.
Los Angeles City Council Approves New Linkage Fee to Support Affordable Housing
The Los Angeles City Council has approved the imposition of a linkage fee on developers of new residential and commercial projects to generate revenue for the city’s affordable housing trust fund. The linkage fee, which ranges between $8 and $15 per square foot for residential development, is expected to raise up to $100 million annually, which will be used to finance the construction or preservation of up to 1,800 affordable units per year. Recently, the California Housing Partnership Corporation found that the city would need to build more than 500,000 units of affordable housing to meet renters’ needs. Supporters of this new measure argue that it will help address the increase in the number of homeless individuals in the city, while those in opposition to the measure argue that the fees will discourage new construction.
IN CASE YOU MISSED IT
News Updates from Community Developments
In recent Community Developments, we highlighted the rise in new housing starts in November, a new report that highlights the surge in first-time homebuyer demand, the connection between skyrocketing rents and food insecurity in the Bay Area, and much more. Sign up here to receive the Community Developments newsletter.
HEARINGS AND EVENTS
Upcoming Hearings and Mark-Ups
There are no housing and community development-related hearings or mark-ups scheduled at this time.
- January 7-10: PHADA Commissioners’ Conference, Public Housing Authorities Directors Association (San Diego)
- January 7-12: The HFA Institute, National Council of State Housing Agencies (Washington, D.C.)
- January 8-19: Affordable Housing and Community Development Forums, CohnReznick (various cities)
- January 9: Housing Finance Reform Debate: How Can the FHA Meet the Future Needs of US Housing?, Urban Institute (Washington, D.C.)
- January 10-12: Beyond Housing 2018: A National Conversation on Child Homelessness and Poverty, The Institute for Children, Poverty, and Homelessness (New York)
- January 11: Novogradac 2018 Tax Credit Developers Conference, Novogradac & Co. (Miami Beach, Fla.)
- January 22 – 23: Affordable Housing Tax Credit Coalition Annual Meeting, Affordable Housing Tax Credit Coalition (Austin, Texas)
- January 23: Novogradac 2018 New Markets Tax Credit Conference, Novogradac & Co. (San Diego)
- January 23-24: Prosperity Indiana Summit & Statehouse Day, Prosperity Indiana (Indianapolis)
- February 7-8: 2018 LeadingAge Minnesota Institute, LeadingAge Minnesota (Saint Paul, Minn.)
- February 21 - 22: 2018 Illinois Governor's Conference on Affordable Housing, Illinois Housing Council and Illinois Housing Development Authority (Chicago)
- March 4-6: Empowering Texas Communities 2018 Conference, Texas Association of Community Development Corporations (Galveston, Texas)
- March 5: 2018 Legislative Conference, National Council of State Housing Agencies (Washington, D.C.)
- March 6: 2018 LeadingAge Oklahoma Annual Conference, LeadingAge Oklahoma (MidWest City, Okla.)
- March 8: 2018 Annual Conference, Housing California (Sacramento, Calif.)