Community Developments: The Stage is Set for Opportunity Funds, Legislation that Revises the Dodd-Frank Act Passes in the House
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- An article in Next City notes that “with the nationwide map of designated ‘Opportunity Zones’ nearly completed, community development lenders and analysts are gearing up to implement what has the potential to become the largest low-income community investment program in at least a generation.” The article points out that in a congressional hearing on the “Promise of Opportunity Zones,” which took place last week, community development lenders expressed clear concerns about the potential for displacement, even as they expressed overall support for this tax incentive. In her testimony, Enterprise Community Partners CEO Terri Ludwig noted that some communities are worried that “additional private investment without an explicit commitment to benefiting residents and businesses could unintentionally displace the very residents and businesses that Congress is seeking to support through this new tax benefit.” The article notes, for example, how Enterprise assisted members of Oregon Governor Kate Brown’s team in incorporating a measure of housing stability into their Opportunity Zones nomination process, allowing them to focus on areas where residents were less likely to be displaced by increasing land values as a result of investments. (Next City, May 22) Learn more about Ludwig’s testimony before the Joint Economic Committee in Enterprise’s blog post and join our May 30 webinar on “State and Local Policies to Prevent Displacement and Attract Investment.”
- Yesterday the House of Representatives voted 258 to 159 to pass the Economic Growth, Regulatory Relief and Consumer Protection Act, legislation that would revise and remove key parts of The Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill, which passed the Senate in March and was sent to the House for approval, now heads to the President’s office for final approval. (HousingWire, May 22) As previously highlighted in Community Developments, an analysis by American Banker identified controversial provisions in the bill, including amendments that would: exempt 85 percent of banks and credit unions from Home Mortgage Disclosure Act (HMDA) reporting requirements, meaning they would no longer be required to report the race, sex or credit scores of applicants, which could increase discriminatory lending; give manufactured-home retailers the ability to make financing recommendations, which could lead to lending abuses; and grant Qualified Mortgage (QM) status to loans in the portfolios of banks and credit unions with less than $10 billion of assets, which could be a return to making bad loans.
- The Federal Reserve Board released its annual report on the Economic Well-Being of U.S. Households, which provides insights into how households are faring financially and approaching their financial decisions. The report notes that 74 percent of individuals reported that their finances have improved over the past five years, an increase of 10 percent from the first survey in 2013. However, the report finds notable disparities in economic well-being and outcomes among sub-populations, particularly low-income renters and those living in low- and moderate-income neighborhoods. The report points out that seven out of 10 low-income renters surveyed experienced housing strain, spending more than 30 percent of their monthly income on rent. Additionally, those living in low- and moderate-income households were 21 percent less likely to be satisfied with their neighborhood than those in middle and upper-income communities. (Federal Reserve, May 22)
- An article in Next City notes that a year after New Orleans legalized short-term rentals, such as through Airbnb, in many parts of the city, the incoming city council is considering a temporary freeze on those rentals. The proposed legislation, introduced by councilwoman Kristin Gisleson Palmer, would require the city to stop issuing permits for short-term rentals in historic core areas where homeowners do not live in their properties. The legislation would allow short-term rentals with current permits to continue operating until their licenses expire, but the city would not issue new permits for at least a year. The city council is expected to vote on the bill by the end of this week. (Next City, May 22)
- In a blog post, researchers from the Urban Institute explore how community-based organizations can help address barriers to employment and economic mobility for low-income people. Citing April's national unemployment rate of 3.9 percent, the lowest level since 2000, they note that the residents of distressed areas with high concentrations of poverty face barriers to professional attainment, such as limited transportation access and housing instability, that impede them from seeing economic benefits. The blog explains that community-based organizations can provide direct support programs, such as housing assistance, training and legal aid, that can help strengthen the pathway to high quality jobs and assist lower-income individuals in becoming self-sufficient. (Urban Institute, May 22)
In Case You Missed It
- Representative Carlos Curbelo (R-FL-26) is circulating a ‘Dear Colleague’ letter asking his House colleagues to cosponsor the Affordable Housing Credit Improvement Act (H.R. 1661), bipartisan legislation that would strengthen the Low-Income Housing Tax Credit (Housing Credit). In the letter, Representative Curbelo notes that the legislation “will make the Housing Credit more flexible, simplify program requirements, support the preservation of existing affordable housing, facilitate Housing Credit development in challenging markets and for hard-to-reach populations, and institute other modifications to make the Credit an even more effective program.” Congress enacted income averaging, a provision from H.R. 1661, in the March omnibus spending bill. Representative Curbelo now urges Congress to advance the remaining provisions of H.R. 1661 to strengthen the Housing Credit and ensure that the program will be best able to meet today’s affordable housing challenges. The ACTION Campaign urges Housing Credit stakeholders to share this letter with elected officials and ask them to cosponsor H.R. 1661.
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