Capitol Express Newsletter: Congress Drafting Omnibus Bill, Advocacy for Housing Credit and HUD Programs Critical
CONGRESSIONAL AND ADMINISTRATION NEWS
Congress Moves Forward with FY 2018 Appropriations Bills
Congress is in the middle of the fiscal year (FY) 2018 appropriations process after raising spending caps by $300 billion in its recent two-year budget deal. Appropriators now have $63 billion more to spend on non-defense discretionary programs in FY 2018, and $69 billion in FY 2019. It is not yet clear how the higher caps will affect housing and community development program funding, but Transportation, Housing and Urban Development Appropriations Subcommittee leadership have remarked that they received a favorable allocation. Congress needs to pass an FY 2018 omnibus appropriations package by March 23, when the current continuing resolution expires.
Once Congress passes an FY 2018 Omnibus package in late March, appropriators will quickly move on to writing FY 2019 spending bills. In order to protect and restore funding levels for vital programs like the HOME Investments Partnership Program (HOME), Community Development Block Grants (CDBG), Section 4 Capacity Building Program (Section 4), and the Community Development Financial Institutions (CDFI) Fund, lawmakers will need to hear from advocates about the urgent need for housing and community development investments in their state and districts. Last week, over 1,000 organizations nationwide signed on to a letter urging lawmakers to fund the Section 4 Program at $40 million in FY 2019, an increase of $5 million from current funding levels. There will also be a sign-on letter supporting the HOME program in the coming weeks. Stay tuned to the Enterprise blog for more information about advocating for these critical programs.
Omnibus Presents Opportunity to Advance Housing Credit, NMTC
The FY 2018 omnibus spending bill is likely to include a tax component, presenting an opportunity to pass the bipartisan Affordable Housing Credit Improvement Act (S. 548), comprehensive legislation to strengthen and expand the Low-Income Housing Tax Credit (Housing Credit). The ACTION Campaign urges Congress to pass the Housing Credit bill, including the 50 percent cap increase in Housing Credit allocation authority, especially in light of the reduced production potential resulting from tax reform. A recent 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 of credits and therefore production of housing through the Housing Credit.
ACTION encourages advocates to reach out to current co-sponsors of the House (H.R. 1661) and Senate (S. 548) versions of the bill and ask them to urge House and Senate leadership to include the Affordable Housing Credit Improvement Act in the upcoming omnibus package. We are also continuing to urge members who are not already signed on to these bills to do so. See the ACTION Campaign’s Advocacy Toolkit for resources to advocate for the Affordable Housing Credit Improvement Act.
The New Markets Tax Credit (NMTC) Coalition is also asking advocates to reach out to members of Congress to support the New Markets Tax Credit Extension Act of 2017 in the House (H.R. 1098) and Senate (S. 384). Rep. Tom Reed (R-NY-23), who took over as the lead Republican sponsor on the House bill after Rep. Pat Tiberi (R-OH-12) left Congress in January, and Rep. Richard Neal (D-MA-1) are circulating a Dear Colleague letter in support of the NMTC. The coalition encourages advocates to share this letter with their members of Congress and request that they co-sponsor the extension legislation.
Governors’ Census Tract Nominations Will be Critical to the Impact of Opportunity Zones
As previously reported in Capitol Express, the Tax Cuts and Jobs Act authorized Opportunity Zones, a new tax incentive that allows investors to defer paying capital gains taxes by placing their unrealized capital gains in Opportunity Funds, a new investment vehicle that channels funds to distressed communities. In an article in Affordable Housing Finance, Lori Chatman, president of Enterprise Community Loan Fund, provides an overview of the Opportunity Zones designation process and explains why the next several months will be critical to the impact of this new program. Governors must nominate eligible census tracts or request a 30-day extension from the U.S. Department of the Treasury by March 21 in order to qualify for Opportunity Zones investments; if a governor does not nominate census tracts, the state essentially opts out of benefiting from this incentive over the next ten years.
Chatman notes that it is important for governors to think critically about which census tracts they nominate, and to target tracts with the capacity to receive an influx of private capital in a way that benefits communities and residents. Enterprise has developed an online mapping tool that can guide the selection of tracts in each state by providing additional information about federal programs and designations that currently exist in each tract. For example, the tool shows Choice Neighborhoods, Promise Zones, and New Markets Tax Credit developments in each tract, offering an overview of where Opportunity Zone investments could be layered on existing investments for maximum benefit. The coming weeks will be critical for advocates and local stakeholders to weigh in with Treasury as the rules and regulations around this new tax benefit are implemented.
HUD Awards Choice Neighborhoods Planning Grants
Last week HUD awarded nearly $5 million to six communities to help them revitalize neighborhoods and create redevelopment plans for severely distressed HUD-assisted housing. Funded through HUD's Choice Neighborhoods Initiative, these grants are intended to help local leaders develop comprehensive plans to transform neighborhoods struggling to address the interconnected challenges of distressed housing, inadequate schools, poor health, high crime, and lack of capital. Three of the awardees, located in California, Maine and Pennsylvania, will receive an additional $950,000 for “action activities” to build momentum and attract additional investments. Eligible uses of these funds include making fresh food more accessible, place-making and community arts projects, homeowner improvement programs, gap financing for economic development projects and offering neighborhood broadband.
RESEARCH AND REPORTS
Report Highlights Ongoing Prevalence of Racial Inequality
A report by the Economic Policy Institute finds that since 1968, there has been no progress in how African Americans fare in comparison to their white counterparts when it comes to homeownership, unemployment and incarceration. The report shows the homeownership rate for African American households remains just over 40 percent, 30 points below the rate for white households. It also notes that 7.5 percent of African Americans were unemployed in 2017, compared with 6.7 percent in 1968 – leaving unemployment rates for African Americans at roughly twice the level for whites. The report also looks at other racial gaps, finding that African Americans make only 82.5 cents of every dollar earned by the typical white worker, and African Americans are 2.5 times more likely to live in poverty than whites are. The study was published in connection with the 50th anniversary of the Kerner Commission report, which identified factors contributing to pervasive discrimination.
Analysis Shows Surge in the Number of High-Income Renters
An analysis in the Harvard Joint Center for Housing Studies’ most recent America's Rental Housing report shows that high-income people are a growing share of all rental households, particularly in the nation's most expensive metropolitan areas. Between 2006 and 2016, the rental housing market added 2.9 million high-income households – those with real annual incomes exceeding $100,000 – with Boston, Los Angeles, New York, San Francisco and Washington, D.C. accounting for 30 percent of this growth. The analysis notes that despite the distinct growth in the number of high-income renters, low- and modest-income renters still outnumber high-income renters in nearly every metro. For example, in 2016, over one-third (35 percent) of the nation's renter households had incomes below $25,000, and nearly two-thirds (62 percent) had incomes below $50,000.
STATE AND LOCAL POLICY
California State Senator Scott Wiener (D-San Francisco) introduced a bill (SB 827) in January that aims to expand the supply of new housing near the state’s core transit stations by imposing minimum height requirements and eliminating density and parking restrictions in those areas. Last week, Senator Weiner introduced a series of amendments to the bill that are meant to address the potential harmful impacts of new development, such as displacement and spikes in home values. The amendments include provisions that mandate preserving local demolition controls and limitations, protect rent-controlled housing, prohibit the demolition of all renter-occupied housing unless a “Right to Remain Guarantee” is granted for existing tenants and preserve, without creating new, local inclusionary zoning requirements for developments.
IN CASE YOU MISSED IT
In recent Community Developments, we highlighted an analysis by the Urban Institute that maps the racial disparities in homeownership in the U.S., the decline in new home sales in January, an investigation by POLITICO that finds that wage laws are poorly enforced nationwide, and much more. Sign up here to receive the Community Developments newsletter.
Correction: California’s Transformative Climate Communities (TCC) program has allocated $140 million to three communities in the state to help them reduce greenhouse gas emissions and address challenges like public health disparities, housing shortages, pollution and displacement. The first round of TCC grants allocated $35 million to the neighborhood of Watts in Los Angeles, $70 million to the city of Fresno, and $35 million to the city of Ontario. The program, which is designed to improve public health in disadvantaged communities, targets communities with the greatest burdens from pollution and other health and social indicators in order to encourage them to design their own solutions to urban and environmental problems. The February 9 Community Developments newsletter misstated the grantees.
HEARINGS AND EVENTS
Upcoming Hearings and Mark-Ups
• March 6: Hearing on the FY 2019 Budget Request for the Department of the Treasury with testimony from Secretary Steven Mnuchin, House Appropriations Committee
• March 6: Markup of the FY 2019 Budget Views and Estimates, House Financial Services Committee
• March 6: Hearing on the Administration’s Infrastructure Proposal, House Transportation and Infrastructure Committee
• March 7: Hearing on Building a 21st Century Infrastructure for American: Long-Term Funding for Highways and Transit Programs, House Transportation and Infrastructure Committee
• March 14: Hearing on Post Tax Reform Evaluation of Recently Expired Tax Provisions, House Ways and Means Tax Policy Subcommittee
• March 5-7: 2018 Legislative Conference, National Council of State Housing Agencies (Washington, D.C.)
• March 6-7: 2018 LeadingAge Oklahoma Annual Conference, LeadingAge Oklahoma (MidWest City, Okla.)
• March 7-9: 2018 Annual Conference, Housing California (Sacramento, Calif.)
• March 19-21: NLIHC 2018 Housing Policy Forum: Building the Movement, National Low Income Housing Coalition (Washington, D.C.)
• March 19 – 21: Georgia Affordable Housing Coalition Annual Conference and Trade Show (Savannah, Ga.)
• April 9-11: The Just Economy Conference, The National Community Reinvestment Coalition (Washington, D.C.)
• April 11-13: Equity Summit 2018, Prosperity Now (Chicago)
• April 13: Western Housing Conference, Ballard Spahr (Denver)
• April 17: Solutions for Housing Communications 2018, National Housing Conference (Washington, D.C.)
• April 19-20: Learn the Basics: Housing Tax Credits 101, The Institute for Professional and Executive Development (Boston)
• April 22-14: LOCUS Leadership Summit: Rebuild America's Neighborhoods, Smart Growth America (Washington, D.C.)
• April 25 -27: AHF Live! Housing Developers Forum, Affordable Housing Finance (New Orleans)
• April 26-27: Novogradac 2018 RAD Public Housing Conference, Novogradac & Co. (Philadelphia)
• May 3-4: Novogradac 2018 Financing Renewable Energy Tax Credits Conference, Novogradac & Co. (San Francisco)
• May 6-9: 2018 Annual Convention and Exhibition, PHAHDA (New Orleans)
• May 14-16: New Markets Tax Credit Summit 2018, Cohn Reznick (Miami)
• May 17-18: Novogradac 2018 Affordable Housing Conference, Novogradac & Co. (San Francisco)