Community Developments: Section 4 Sign-On Letter, Tax Reform and Affordable Housing Production
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- The deadline for organizations to sign onto a nationwide letter urging Congress to fund the Section 4 Capacity Building for Affordable Housing and Community Development (Section 4) Program at $40 million in fiscal year (FY) 2019 is extended until Thursday, March 1. As previously reported in Community Developments, the President’s FY 2019 budget request proposes eliminating funding for Section 4, which is the only federal program exclusively focused on increasing the effectiveness of local community development organizations. The letter notes that the program has been funded at $35 million since FY 2012, but the demand for affordable housing and small business investments in low-income communities continues to grow. A modest $5 million increase in Section 4 funds will help local nonprofit organizations address the growing needs of the communities they serve. Sign your organization onto the letter by March 1.
- A video by Reuters Business explores the negative impacts of tax reform on affordable housing production, noting that the reduction of the corporate tax rate from 35 to 21 percent in the Tax Cuts and Jobs Act has reduced pricing and subsequent production for the Low-Income Housing Tax Credit (Housing Credit). The video notes that affordable housing developers who rely on the Housing Credit and Housing Bonds to finance their developments are facing funding gaps due to the diminished value of the tax credit. It concludes that the Affordable Housing Credit Improvement Act (S. 548), bipartisan legislation proposed by Senators Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah), would provide a fix to the expected losses by expanding the Housing Credit by 50 percent. (Reuters Business, February 26) See the ACTION Campaign’s Advocacy Toolkit for resources to advocate for the Affordable Housing Credit Improvement Act.
- Citing examples from Chicago, an article in NextCity notes that “source of income “ discrimination is still a barrier to mobility for voucher holders. The Chicago Housing Authority has adopted HUD’s new small area fair market rent rule, which allows public housing authorities to calculate fair market rents based on zip codes rather than across entire metropolitan areas, an approach that offers voucher holders the opportunity for greater mobility. However, Housing Choice Partners, the nonprofit contracted by the Chicago housing authority to run a mobility counseling program, points out that many landlords refuse to accept voucher payments or they employ other measures to deter voucher holders, such as high application fees and non-refundable move-in fees in lieu of a security deposit. The article also highlights that source of income discrimination is illegal in certain states and localities around the country; however, municipalities do not allocate sufficient resources to enforcement. (Next City, February 26)
- Last week the city of Medford, Oregon, adopted an excise tax on new construction to help fund new affordable housing. In 2016, the state lifted a ban on construction excise taxes (CETs), which are assessed on construction permits issued by local cities and counties, and at least eight cities in Oregon have adopted CETs to support affordability. According to the city’s planning director, the tax will be equal to one-third of 1 percent of building permit fees for major residential commercial and industrial developments, and the city estimates that the excise tax could generate $500,000 a year to be reinvested in affordable housing. (Next City, February 26)
- According to newly released Commerce Department data, new home sales declined in January both year-over-year and month-over-month by 7.8 and 1 percent, respectively, to a seasonally adjusted rate of 593,000 units. The data also show that median sales price of new homes sold in January 2018 was $323,000. (Zillow, February 26)
- This Wednesday, February 28, Enterprise is hosting a webinar to review responsibilities of governors in the Opportunity Zone nomination process and discuss how states are engaging local elected officials and other stakeholders in that process. It will also provide a full demonstration of our new Opportunity360 state mapping tool and how it can help guide the selection of eligible census tracts in each state. Register here for the webinar.
- Tomorrow, Ballard Spahr LLP is hosting a webinar on the “Impact of Tax Reform on Low-Income Housing Tax Credit Transactions.” It will summarize recent legislative changes, delve into the key legal and business considerations facing both nonprofit and for-profit developers as a result of tax reform, and highlight additional opportunities to strengthen and expand the Low-Income Housing Tax Credit. The webinar will feature Amy L. Broadwater of RubinBrown LLP, Molly Bryson of Ballard Spahr, Emily Cadik of Enterprise Community Partners, and Darren Swanson of Red Stone Equity Partners. Register here for the webinar.
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