June 11, 2018

Capitol Express Newsletter: Senate Advances THUD Appropriations Bill, New Democrat Coalition Highlights National Shortage of Housing

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CONGRESSIONAL AND ADMINISTRATION NEWS

Senate Appropriators Provide Modest Increases for Affordable Housing

Last week, the Senate Appropriations Committee unanimously advanced its Fiscal Year (FY) 2019 Transportation, Housing, and Urban Development (THUD) spending bill, which would provide $44.5 billion in net discretionary funding for HUD, an increase of $1.8 billion above FY 2018 levels and $900 million above the House FY 2019 THUD bill. The Senate bill would:

  • Increase funding for Section 8 Housing Choice Vouchers to $22.8 billion, which is $800 million above FY 2018 levels and $325 million above the House bill. The Senate provides $20.5 billion for Voucher Renewals, which is the amount needed to fully renew all existing contracts. 
  • Increase funding for the Public Housing Capital Fund to $2.775 billion, which is $25 million above FY 2018 levels and the House bill, as well as increase the Public Housing Operating Fund to $4.756 billion, a raise of $206 million over FY 2018 levels and the House bill.
  • Increase funding for Project-Based Rental Assistance (PBRA) to $11.747 billion, level with the House bill and $800 million above FY 2018 levels. Both the Senate and House provide funding levels that are expected to be enough to renew all existing PBRA contracts.
  • Level fund the Community Development Block Grant (CDBG) Program at $3.3 billion, same as the House bill.
  • Level fund the HOME Investment Partnerships Program at $1.362 billion, which is $162 million above the House bill.
  • Level fund the Section 4 Capacity Building Program at $35 million, same as the House bill.
  • Level fund Section 202 Housing for the Elderly at $678 million, same as the House bill.
  • Increase funding for the Office of Lead Hazard Control and Healthy Homes to $260 million, an increase of $30 million over FY 2018 levels and the House bill.

The spending bill will now head to the full Senate for a floor vote. Congress has until the end of the fiscal year in September to either pass its spending bills or a Continuing Resolution to fund the government on a short-term basis.

Enterprise applauds the bipartisan effort of the House and Senate THUD Subcommittees to address the vast and growing need for affordable housing nationwide. For more information on the Senate bill and FY 2019 appropriations, see Enterprise’s blog post.

Enterprise CEO Urges Congress to Continue Investing in Affordable Housing

As lawmakers consider FY 2019 appropriations bills, Enterprise CEO Terri Ludwig urges Congress to continue supporting affordable housing programs as it did in the FY 2018 omnibus package passed in March. In an op-ed in The Hill, Ludwig notes that there are currently 18 million housing insecure households, meaning that they pay more than 50 percent of their income on housing, leaving too little for other necessities like healthcare, transportation and healthy food. Programs like the Section 4 Capacity Building Program, which has created or preserved 61,000 affordable homes and 112,000 jobs over the last seven years, and the HOME Investment Partnerships Program, which has created more than 1.2 million affordable homes and provided rental assistance for more than 320,000 families since the 1980s, are critical for connecting families to opportunity. Ludwig also notes that the Tax Cuts and Jobs Act of 2017 has had the unintended consequence of reducing the value of the Low-Income Housing Tax Credit (Housing Credit), our nation’s primary tool for developing and preserving affordable rental housing. By investing in these critical programs, Congress will enable people to “spend more on other necessities, funneling money into local economies, creating jobs and benefitting us as a nation.”

Elected Officials Continue to Show Support for the Housing Credit

Representative Carlos Curbelo (R-FL-26) is circulating a Dear Colleague letter asking his House colleagues to co-sponsor the Affordable Housing Credit Improvement Act (H.R. 1661), bipartisan legislation to strengthen the Housing Credit. Rep. Curbelo is the lead sponsor on the bill, which currently has 153 co-sponsors, including 81 Democrats and 72 Republicans. Companion legislation in the Senate, S. 548, currently has 40 total co-sponsors, including 28 Democrats, ten Republicans, and two Independents. Enterprise encourages all affordable housing stakeholders to share the Dear Colleague letter with your representatives and ask them to support the Affordable Housing Credit Improvement Act.

House Financial Services Approves Landmark CDBG-DR Permanent Authorization Bill

Late last week the House Committee on Financial Services passed the “Reforming Disaster Recovery Act of 2018” (H.R. 4557), which would permanently authorize the Community Development Block Grant Disaster Recovery (CDBG-DR) Program and includes provisions that would strengthen oversight and administration of a program that has become a crucial tool for helping communities rebuild after major disasters. In 2017, natural disasters caused over $300 billion of damage, and the federal government has committed over $130 billion in assistance, including over $35 billion for CDBG-DR.  Permanent authorization and other provisions in the bill will increase accountability and oversight for disaster funding, create consistent rules for grantees, ensure funds reach those who need help the most in a more timely manner and enact common sense mitigation standards so that the same buildings are not damaged in subsequent disasters. The Committee passed the landmark legislation with bipartisan support. Enterprise applauds the bipartisan leadership of Representative Ann Wagner (R-MO-2), who is sponsoring the bill, and Representative Al Green (D-TX-5), along with Chairman Hensarling (R-TX-5) and Ranking Member Maxine Waters (D-CA-42). Enterprise urges all stakeholders to reach out to their representatives and ask them to support full passage in the House. For more information on the bill and the Committee markup, see Enterprise’s blog post.

The bill includes numerous recommendations that Enterprise’s Vice President for Public Policy Marion McFadden made in her testimony before the Subcommittee on Oversight and Investigations last month, including: creating a set-aside for capacity building and technical assistance in all future CDBG-DR appropriations; providing more resources for HUD’s administration and oversight of the program; prohibiting HUD from decreasing the percentage of disaster recovery resources that are directed towards low- and moderate-income households below 70 percent, except in cases of compelling need; preventing homeowners from using CDBG-DR funds to repay Small Business Administration (SBA) Loans; and requiring households earning above 120 percent of area median income (AMI) to apply for SBA loans before applying for CDBG-DR. To learn more about Marion’s testimony, see Enterprise’s blog post on the hearing.

Secretary Carson Announces New EnVision Centers

Last week HUD Secretary Ben Carson announced the first round of ‘EnVision Center’ designations in 17 communities across the nation. The EnVision Center Demonstration, a multi-faceted effort that entails brick and mortar hub sites, digital resources and access to a network of local service organizations, will offer HUD-assisted families access to support services that can help them achieve self-sufficiency. The sites will serve as an incubator to support four key pillars: economic empowerment; educational advancement; health and wellness; and character and leadership. According to HUD, after the groundbreaking “each demonstration community receiving the EnVision Center designation will convene with their local stakeholders and resident councils to assist in the selection of services to be offered at the Center,” and HUD will develop tools to track and measure resident outcomes of EnVision Center participants and services. In addition to Detroit, which was designated earlier this year and opened their hub site last week, selected communities include Chicago, Philadelphia and Washington, D.C.

HUD Launches Lead Safety Enforcement Campaign to Kick Off National Healthy Homes Month

In celebration of National Healthy Homes Month, HUD announced the Protect Our Kids! Campaign, which is “focused on protecting current and future generations of children from exposure to lead-based paint hazards in older homes.” At a housing and health symposium at the University of North Carolina-Greensboro, Secretary Carson detailed the campaign’s goals of requiring landlords and sellers of older homes to fulfill their responsibilities of disclosing lead-based paint hazards, in addition to working to ensure all federally assisted homes are lead-safe. HUD has also developed a toolkit that provides tips for preventing and testing lead poisoning. Lead-based paint presents a serious health threat, especially to young children, who can experience damage to the brain and other vital organs when lead is absorbed into the body.

RESEARCH AND REPORTS

Studies Show Benefits of the Housing Credit in North Carolina

The North Carolina Housing Finance Agency recently released two studies, The Impact of the Low-Income Housing Tax Credit in North Carolina and The Low-Income Housing Tax Credit and Neighborhood Property Values in North Carolina, both of which provide an overview of the critical role that the Housing Credit plays in communities and residents’ lives. The studies show that in North Carolina, the Housing Credit saves up to $2.96 in health care dollars for every $1 invested over the life of the program, explaining that tenants of targeted units have very low incomes and their health care costs are typically paid by taxpayer dollars. The studies also find that the Housing Credit has generated $923 million in tax revenue over the years; has created 137,000 jobs overall; and properties built or preserved with the Credit do not negatively impact surrounding home values.

Report by the New Democrat Coalition Highlights the National Housing Shortage

The New Democrat Coalition, a group of 68 Democrats in the House of Representatives who are committed to “pro-economic growth, pro-innovation, and fiscally responsible policies,” have released a preliminary report on “America’s Housing Crisis: Missing Millions of Homes.” The report argues that years of too little construction has resulted in a national shortage of millions of homes, and more than a million additional new units are needed per year to address this shortage. It also identifies that “the biggest shortfall in housing supply is affordable housing for low-income families,” and notes that funding for critical affordable housing programs has remained stagnant or fallen in recent years. The Task Force will release a second report later this year with policy recommendations to address these concerns.

NMTC Coalition Releases Annual Progress Report

The New Markets Tax Credit (NMTC) Coalition released its 2018 New Markets Tax Credit Progress Report, which highlights NMTC activities in 2017 and documents the importance of the program in meeting the needs of distressed communities, creating jobs and growing business opportunities. The report shows that last year, community development entities (CDEs) used $3.9 billion in NMTC allocation to finance 272 projects, amounting to $5.8 billion in total capital. These projects include healthcare facilities, manufacturing, vocational training centers and facilities for youth and families. Over 83 percent of projects were located in severely distressed areas, 23 percent were located in non-metropolitan counties and 81 percent were located in areas experiencing significant economic decline. The report also finds that the NMTC created over 60,000 full-time and construction jobs in 2017. Enterprise urges all members of Congress to co-sponsor the New Markets Tax Credit Extension Act of 2017, bipartisan legislation in the House (H.R. 1098) and Senate (S. 384) that would expand and permanently extend the NMTC.

Urban Institute Explores the Potential of Opportunity Zones in Indian Country

Researchers from the Urban Institute have issued a new report examining the potential of the Opportunity Zones tax benefit in attracting private capital to tribal census tracts, particularly for spurring housing construction and rehabilitation. Their analysis finds that of 1,341 census tracts eligible in tribal areas, 30 percent were approved for Opportunity Zone designations. Yet, as demonstrated with other investment vehicles available to attract private funds, such as the Housing Credit and the New Markets Tax Credit, the unique barriers to accessing capital in Indian County can present a challenging investment landscape. However, the report suggests that the flexibility provided by Opportunity Zones presents promising opportunity for tribal areas, as they will be able to package development projects to build capacity, form partnerships and attract new investment. Visit our Opportunity Zones webpage for information and updates on the Opportunity Zones tax incentive. 

New Analysis Predicts Estimated Cost of Future Hurricane Damage

A report by CoreLogic shows that more than 6.9 million homes along the Atlantic and Gulf Coast are at risk of damage from hurricane storm surge in 2018. The report, which examines risk from hurricane-driven storm surges for homes along the coastlines of 19 states, points out that reconstruction of all these homes would cost more than $1.6 trillion, up 6.6 percent from 2017 due to higher construction, equipment and labor costs. Earlier this year 100 Resilient Cities, an initiative pioneered by the Rockefeller Foundation, released a report, Safer and Stronger Cities: Strategies for Advocating for Federal Resiliency Policy. This report, which was prepared by Enterprise Community Partners in collaboration with Climate Resilience Consulting, Georgetown Climate Center and HR&A Advisors, offers a menu of federal policy recommendations that can help cities become more resilient in the face of changing conditions, focusing on infrastructure, housing, flood insurance, economic development, and public safety. These policy recommendations have been endorsed by 22 mayors from across the country.

STATE AND LOCAL POLICY

Measure to Increase Bond Authority for Affordable Housing Headed to Ballot in Portland

Last week the Metro Council (Metro), the government for the metropolitan area of Portland, Oregon, referred a $652.8 million affordable housing bond to the November 2018 ballot. Six of Metro’s seven council members have signaled support for the proposal, intended to create thousands of new affordable housing units for the region. If approved, the measure would be the largest increase in the regional government’s authority in decades, outweighing the $258 million housing bond Portland voters approved in 2016. The impact of the increase in bond authority, however, depends on another measure headed to the ballot that would amend the state constitution to allow bond revenue to fund nongovernmental affordable housing. If the amendment is approved, the bond could create or preserve 3,900 affordable homes for up to 12,000 people. If the amendment is rejected, the bond is estimated to create or preserve 2,400 affordable homes for up to 7,500 people.

San Francisco Votes to Fund Legal Aid for Evictions

Last week, the residents of San Francisco voted to approve a ballot measure to give tenants facing eviction lawsuits the right to legal representation. Proposition F, “Defend SF Against Evictions,” passed with about 55 percent in favor. Roughly 1,600 tenants were evicted in San Francisco last year, a 26 percent increase since 2010, and the city currently spends about $2 million a year to provide legal aid to help low-income people. The provision is estimated to cost $5.6 million a year in legal services if approved. 

IN CASE YOU MISSED IT

News Updates from Community Developments

In recent Community Developments, we highlighted the connections between the growing incidence of baby boomers delaying downsizing by holding onto their homes and the tight inventory of homes, a report by CoreLogic that shows that home prices in April were up both year-over-year and month-over-month by 6.9 and 1.2 percent, a new $9.5 million investment that aims to prevent and address homelessness among LGBTQ youth in New York City, and much more. Sign up here to receive the Community Developments newsletter.

HEARINGS AND EVENTS

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June 2018

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If you have any questions, comments or suggestions regarding the Capitol Express newsletter, email Olivia Barrow. You can also follow the policy team on Twitter.

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