Community Developments: Treasury Released Report with Recommendations on CRA Reform
A daily roundup of news impacting housing and communities. Not receiving the Community Developments daily email yet? Sign up here.
- Yesterday the Treasury Department 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; 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.
- An article in Building Green points out that HUD has set stricter elevation requirements for construction and renovation efforts that use the agency’s funds in flood-prone areas, with the goal of reducing future flood risks to people and properties when rebuilding is funded with federal disaster recovery funds. Under the new rules, which govern $7.39 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funds, the bottom floor of new or rehabilitated buildings must be at least two feet above the base flood elevation established by FEMA, and critical facilities like hospitals and nursing homes must be elevated at least three feet. Enterprise’s Vice President for Public Policy Marion McFadden notes that “it makes great sense to be forward-looking about risk and thinking about the entire useful life of any property that taxpayer dollars are being used to build or rebuild.” (Building Green, April 4)
- A new report by the Wisconsin HOPE Lab, which surveyed 43,000 students at 66 institutions, found that 36 percent of university students and 42 percent of community college students were food insecure in the 30 days preceding the survey. It also found that 36 percent of university students and 51 percent of community college students were housing insecure in the last year. The report highlights a hidden issue of food and housing insecurity on college campuses, and researchers suggest that this challenge can be attributed to rising college costs, inadequate aid packages and growing enrollment among low-income students. The Government Accountability Office is scheduled to release a study on the extent of college hunger this fall. (The Washington Post, April 3)
- PolicyLink has launched the All-In Cities Anti-Displacement Policy Network, a multi-city effort that aims to combat displacement and identify new solutions for housing affordability. The network is comprised of community leaders of 10 cities, and will meet at PolicyLink's Equity Summit later this month to discuss strategies for reducing the burden of evictions, creating renter protection policies, stabilizing neighborhoods and other equitable development strategies. Research from PolicyLink shows that reducing rent burdens for low-income Americans, which is one of the main causes of displacement, would put $124 billion back into the budgets of local residents. (Curbed, April 3)
In Case You Missed It
- A blog post by Novogradac & Company proposes two steps that would address the loss of affordable housing production and preservation resulting from the reduction in the corporate income tax rate. The blog explains that the recent boosts to the Low-Income Housing Tax Credit (Housing Credit) in the 2018 omnibus spending bill – a 12.5 percent increase in annual Housing Credit allocations for the next four years and a provision that allows for income-averaging – will not entirely address the reduced pricing for Housing Credits and therefore lower production of affordable homes. The post points out that Congress could increase the amount of allocable Housing Credits each year, and that a 16 percent expansion of Housing Credit allocations is needed to sustain current production levels. It also emphasizes the importance of updating the annual Housing Credit percentage formula to ensure that affordable housing developments that were financially feasible under a top corporate rate of 35 percent remain so under a rate of 21 percent. (Novogradac & Company, April 2)
For the latest housing and community development news and notes, follow the Enterprise policy team on Twitter: @E_Housing Policy and subscribe to the Capitol Express Newsletter. The Enterprise Public Policy team works to safeguard, expand and improve programs that end housing insecurity. Learn more about our public policy efforts.