Community Developments: Improving the Affordability & Effectiveness of the NFIP
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- Drawing on Houston’s experience after Hurricane Harvey, an article in POLITICO looks at the challenges low-income households face in seeking federal disaster relief. The article notes that numerous low-income families were denied funding from FEMA because “much of Kashmere Gardens [one of the complexes featured in the article] was in a flood zone, and homeowners were thus required to carry flood insurance — a law that many of them were unaware of. Other families, struggling with language issues and inexperienced with the federal bureaucracy, simply couldn’t cope with a system.” Enterprise Community Partners Vice President for Public Policy Marion McFadden points out that “no one inside of the government has taken the time to really sit down long-term and say what is the permanent solution to the challenges we are facing.” McFadden also explains that Congress gave FEMA the authority to study the National Flood Insurance Program (NFIP) but not to address the concerns about NFIP’s affordability and effectiveness, noting that “Congress needs to do something so homeowners can afford to stay in their homes.” (POLITICO, May 29) As previously highlighted in Community Developments, in a House Financial Services Oversight and Investigations Subcommittee hearing earlier this month McFadden called on Congress to authorize permanently and strengthen the Community Development Block Grant – Disaster Recovery (CDBG-DR) program to “allow HUD to write regulations, create pre-approved model housing programs, and develop systems that grantees could quickly customize and adopt to shorten the time it takes to get people home again.” Learn more about McFadden’s testimony in Enterprise’s blog post.
- In a letter to the three federal banking agencies – the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) – 16 Democratic senators urge the regulators to amend the Community Reinvestment Act in a way that increases opportunities for minorities. Led by Senator Mark Warner (D-VA), the letter underscores the positive contributions of the CRA to low- and moderate-income communities, while noting that changes to the implementation of the CRA are overdue. The letter endorses a number of recommendations for CRA improvement that the Treasury Department released last month, such as broadening the definition of a bank’s assessment area to “better account for the range of delivery channels banks offer”. However, it also expresses concern over other suggestions, such as the OCC policy that would permit the expansion of banks with “less than satisfactory” CRA ratings.
- Last week President Trump signed the Family Self-Sufficiency (FSS) Act into law. The FSS Act, which was included in a larger bank deregulation bill (S. 2155) that passed the House on May 22, reauthorizes the FSS program, combines the FSS programs for Housing Choice Vouchers and public housing (they are currently run separately), and expands eligibility to include families in privately owned properties subsidized with HUD project-based rental assistance. The FSS Program enables households with increasing incomes to place their additional rent contributions in a savings account, allowing them to use these savings toward their financial goals. (NLIHC, May 29)
- Tomorrow, Enterprise will host a two-part webinar on Opportunity Zones: Part 1 - State and Local Policies to Prevent Displacement (1-2 p.m. ET), which will discuss anti-displacement policies that help ensure existing residents and businesses can benefit from, and participate in, the growth and economic development that occurs in a community; Part 2 - State and Local Policies to Attract Investment (2-3 p.m. ET), which will discuss policies that can be pursued at the state and local level to attract investments to specific communities or projects through the creative use of incentives. Register here for the webinar.
- On Thursday, May 31, Enterprise will host a webinar on “Year 15: Transition Strategies for Expiring LIHTC Properties.” Many Low Income Housing Tax Credit properties are reaching the end of the 15-year Low-Income Housing Tax Credit compliance period, and year 10 in the life of a Housing Credit property is an ideal time to begin planning and taking action. This webinar will discuss disposition strategies for the nonprofit sponsor, as well review partnership provisions including rights of first refusal, purchase options, exit taxes and preservation of affordability. Register here for the webinar.
In Case You Missed it
- The House Appropriations Committee voted 34-17 to approve their Fiscal Year (FY) 2019 Transportation, Housing, and Urban Development (THUD) Appropriations Bill, advancing it to a full floor vote. The bill provides $43.6 billion in net discretionary funding for HUD, which represents a $941 million increase above FY 2018 enacted levels. The House THUD Appropriations bill would: increase funding for Section 8 Housing Choice Vouchers, providing $22.476 billion, which is a $455 million increase over FY 2018 enacted levels; provide level funding for the Community Development Block Grant Program at $3.3 billion and the Section 4 Capacity Building for Affordable Housing and Community Development Program at $35 million; and allocate $50 million for a new family mobility demonstration project, which would allow families living in HUD-supported housing to move to lower-poverty, higher-opportunity areas. However, the bill would cut funding for the HOME Investment Partnerships Program by $162 million to $1.2 billion. For more information on the House THUD Appropriations bill, see Enterprise’s blog post and updated appropriations and budget chart
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