February 13, 2018

Community Developments: The CDFI Fund Awards $3.5 Billion in NMTCs

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  • Today the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) awarded 73 Community Development Entities (CDEs) $3.5 billion in New Markets Tax Credits (NMTCs). Over the years, the NMTC Program has generated $8 of private investment for every $1 invested by the federal government, and through the end of fiscal year 2016, grantees have deployed more than $44.4 billion in investments in low-income communities and businesses. This year’s grantees were selected from a pool of 230 applicants that requested an aggregate total of $16.2 billion in tax credit allocation authority.  The work of 73 recipients is expected to include more than $685 million in NMTC investments in nonmetropolitan counties. (CDFI Fund, February 13) The President’s fiscal year (FY) 2019 budget request eliminates federal funding for CDFI Fund programs and proposes to lower funding for the CDFI Fund to $14 million solely for administrative funding to support the NMTC Program and the CDFI Bond Guarantee Program.
     
  • As previously reported in Community Developments, yesterday the White House released a proposal for President’s Trump long-awaited infrastructure plan, laying out a framework for lawmakers to craft legislation for a $1.5 trillion infrastructure package. According to the proposal, the federal government would contribute $200 billion – raised largely through spending cuts - to the infrastructure package, including $100 billion for an incentives program that would encourage increased state, local and private investment. A blog post by the Center on Budget and Policy Priorities (CBPP) notes that the $1.5 trillion plan assumes that states, localities and the private sector will contribute $1.3 trillion, without addressing the question of how they will raise these funds. The blog explains that the core element of the proposed plan, the $100 billion in grants that must account for no more than 20 percent of a project’s cost, would shift funding burden to financially-constrained states and local governments. (CBPP, February 12)
     
  • Governors must submit their recommendations for Opportunity Zone designations to the Treasury Department by March 21, unless they request a 30-day extension. Given that census tracts approved by the Treasury Department will retain an Opportunity Zones designation for 10 years, Enterprise’s Meaghan Shannon-Vlkovic, VP & Southeast Market Leader, and Olivia Barrow, Policy Analyst, urge Governor John Deal of Georgia to strategically nominate 25 percent of the state’s distressed census tracts for this classification, as well as to request a 30-day extension to consult with local stakeholders, advocates and residents before making these important decisions. A mapping tool developed by Enterprise shows that Georgia has 1,037 qualified distressed census tracts overall, which means up to 260 will be designated as an Opportunity Zone. The op-ed notes that aligning the census tract nomination process with current place-based approaches and local initiatives, such as transit, housing, healthcare, education and employment opportunities, is necessary for collective impact, growth and economic prosperity. (Sustainable Communities, February 12) 
     
  • A blog post by the Urban Institute looks at how instituting work requirements and raising rents for recipients of federal housing assistance, which the President’s fiscal year (FY) 2019 budget request proposes, would impact lower-income families. According to the blog, amending the U.S. Housing Act to raise rents and institute work requirements for residents of public housing and HUD-subsidized properties would reduce their ability to pay for other essential costs that support employment, such as childcare and transportation. In addition, the post highlights that there is no evidence to support that increasing rent or/and instituting work requirements for HUD-assisted households would result in increases in employment or income for lower-income households. (Urban Institute, February 13)

In Case You Missed It 

  • Yesterday the White House released the President’s fiscal year (FY) 2019 budget request, which includes cuts to housing and community development programs as drastic as its FY 2018 request. It calls for slashing funding for HUD 18 percent from current funding levels to $39.2 billion. It also proposes to eliminate funding for Section 4 Capacity Building for Affordable Housing and Community Development (Section 4), HOME Investment Partnerships (HOME), Community Development Block Grants (CDBG), the Community Development Financial Institutions (CDFI) Fund, Choice Neighborhoods Initiative, and the Public Housing Operating Fund. A small bright spot in the request is a proposal to allocate $100 million to the Rental Assistance Demonstration (RAD) program, which converts public housing properties to project-based Section 8 contracts that can leverage private capital and financing. The proposal also eliminates the 225,000-unit cap on RAD conversions. However, the $100 million would not address the nationwide public housing capital backlog of $27 billion. Last year Congress largely rejected the cuts proposed in the President’s budget request, and Enterprise urges housing and community development advocates to continue defending these programs and ensure that lawmakers understand their value. Learn more about the proposed cuts in an Enterprise blog post.

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