Community Developments: An Analysis on the Recent Boost to the Housing Credit
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- A blog post by Novogradac & Company notes that the 12.5 percent temporary increase in the Low-Income Housing Tax Credit (Housing Credit) included in the 2018 omnibus spending bill would partially offset the reduced production of nearly 235,000 rental homes over 10 years resulting from last year’s tax reform legislation. The blog explains that the 12.5 percent increase in annual Housing Credit allocations for the next four years is expected to increase the supply of affordable rentals by 28,400 units over ten years. The blog also includes the estimated number of affordable rental homes and jobs that each state would gain. However, the blog also notes that further work is needed to restore affordable rental housing production to pre-tax reform levels since these estimated increases make up for only about 12 percent of the expected reduction in affordable rental housing production that is resulting from tax reform. (Novogradac & Company, April 4)
- Senators are currently circulating “Dear Colleague” letters that aim to build support for affordable housing and community development programs in fiscal year (FY) 2019 appropriations. Enterprise encourages advocates to reach out to their Senators and call on them to sign onto the following letters:
- Senator Joe Donnelly (D-IN) is sponsoring a “Dear Colleague” letter urging the Senate Appropriations Transportation, Housing and Urban Development (THUD) Subcommittee to provide $40 million for the Section 4 Capacity Building for Affordable Housing and Community Development Program in FY 2019. The deadline for Senate offices to sign on is COB Tuesday, April 10.
- Senators Dianne Feinstein (D-CA), Tammy Baldwin (D-WI) and Chris Coons (D-DE) are co-sponsoring a “Dear Colleague” letter urging the Senate Appropriations THUD Subcommittee to provide $3.5 billion for the Community Development Block Grant (CDBG) Program in FY 2019. The deadline for Senate offices to sign on is COB Friday, April 13.
- A blog post by the Urban Institute looks at the impact of escalating housing costs on Denver’s low-income homeowners. The blog shows that the share of very low-income homeowners fell from 29 percent to 18 percent between 2000 and 2015, and low-income renter cost burdens increased from 60 percent to 82 percent during the same period. It also notes that the displacement of residents is increasingly growing, particularly in working class neighborhoods. However, the post notes that the city of Denver is pursuing strategies that can help address the displacement of lower-income homeowners, including offering home-buyer education and assistance, using accessory dwelling units to boost homeowners’ income, providing property tax abatements for increasing affordability, and acquiring land for affordable homes through community land trusts. (Urban Institute, April 4)
- The first Opportunity Zones nomination deadline has passed and governors who have requested a 30-day extension have until April 20 to submit their recommendations for Zone designations to Treasury. On Wednesday April 25, Enterprise is hosting a webinar on “Analyzing Opportunity Zone Nominations and What States Should Do Next”. It will analyze the results of Zone nominations in select states and discuss ideas for local policies and programs that could maximize the benefit of investments incented through Opportunity Zones. Register here for the webinar.
In Case You Missed It
- The Treasury Department has released a report with findings and recommendations related to the Community Reinvestment Act (CRA). The report is targeted at the primary CRA regulators – the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC) – and provides recommendations for regulatory and administrative reforms intended to reduce CRA complexity and burden. These recommendations include updating the definition of assessment areas to include low- and moderate-income communities outside of the bank’s physical footprint and where the bank does substantial business; establishing clearer standards around what is eligible for CRA credit; adopting less subjective evaluation techniques and greater consistency and predictability across the three regulators; and standardizing CRA exam schedules across the three agencies. OCC is expected to release an advanced notice of proposed rulemaking on CRA in the coming weeks, but it is unclear at this point if the Federal Reserve and FDIC will sign on to the OCC’s notice. Learn more about the recommendation in Enterprise’s blog post and stay tuned to the Enterprise blog for more information as additional CRA recommendations and reform proposals are introduced.
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