July 9, 2018

Capitol Express Newsletter: Senate Appropriations Bills Move through Committee, HUD Secretary Carson Testifies Before Congress

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CONGRESSIONAL AND ADMINISTRATION NEWS

House and Senate Move Forward with Appropriations, But Final Bills Not Expected Until after Mid-Terms

Both the House and Senate are voting on fiscal year (FY) 2019 appropriations bills, and the Senate may bring the Transportation, Housing, and Urban Development (THUD) bill to the floor for a vote as early as this month. Final passage of FY 2019 spending legislation is not expected until after November’s mid-term elections, however, with Congress likely to pass a short-term Continuing Resolution to fund the government once the current fiscal year ends on September 30. Depending on the election outcome, spending bill negotiations could wrap up during the lame-duck session at the end of the year or go into the next Congress. For more information on funding levels in the House and Senate FY 2019 bills, see Enterprise’s budget and appropriations chart.

HUD Secretary Carson Testifies in Oversight Hearing, Ranking Member Waters Introduces Fair Housing Bill

HUD Secretary Ben Carson testified before the House Committee on Financial Services during a hearing to examine the agency and its level of success in implementing and overseeing federal housing policy. Much of the hearing was spent discussing the Administration’s proposed funding cuts to the agency and Secretary Carson’s proposals to increase rents and impose work requirements on recipients of HUD funding. Members of the committee questioned Secretary Carson about why he was committed to pursuing these proposals, noting that nearly 470,000 people with extremely low incomes would be affected by them and that there is a broader affordable housing crisis nationwide. Other topics of discussion included HUD’s efforts to remediate mold and lead-based paint hazards in federally-assisted housing, modernizing the Federal Housing Administration’s (FHA) outdated technology, Secretary Carson’s plans to release a final rule easing certain restrictions on using FHA insurance, and the need for comprehensive housing disaster recovery efforts.

Lawmakers also expressed concerns over Secretary Carson’s efforts to limit fair housing protections, most notably the agency’s decision to suspend key elements of the Affirmatively Furthering Fair Housing (AFFH) rule. Ranking Member Maxine Waters (D-CA-43) recently introduced a bill to combat these efforts, the Restoring Fair Housing Protections Eliminated by HUD Act (H.R. 6220). The bill would reinstate the Local Government Assessment Tool, which assists jurisdictions with complying with the AFFH Rule but which HUD suspended earlier this year; require HUD to codify language referring to “inclusive and sustainable communities free from discrimination” in HUD’s mission statement; and would reissue a Federal Register notice regarding a proposal to require owners and operators of HUD-funded homeless shelters to inform individuals of their rights under HUD's “Equal Access in Accordance with an Individual’s Gender Identity in Community Planning and Development Programs” rule.

Court Orders FEMA To Extend Temporary Shelter Assistance Program

Last week a federal court ordered the Federal Emergency Management Administration (FEMA) to halt the eviction of nearly 2,000 individuals from Puerto Rico displaced by Hurricane Maria, who are living in hotels both on the island and on the mainland. FEMA was set to terminate the Temporary Shelter Assistance (TSA) Program on June 30, when a federal court ordered FEMA to delay evictions until July 3 and subsequently extended that date until July 23. The court determined that victims are entitled to assistance as long as they remain eligible and are transitioning into other housing. The judge also noted that after Hurricane Katrina, FEMA provided survivors with rental assistance for 18 months through a similar program. The class action lawsuit was filed by national civil rights groups LatinoJustice PRLDEF and Faith and Action, which are both members of the Disaster Housing Recovery Coalition, along with Enterprise.

Advocates have called on Congress to enact longer-term housing solutions for Hurricane Maria survivors. The Disaster Housing Recovery Coalition is supporting companion bills introduced by Sen. Elizabeth Warren (D-MA) and Rep. Adriano Espillat (D-NY) “The Housing Victims of Major Disasters Act” (S.2996 and H.R.5474),” which would activate the Disaster Housing Assistance Program (DHAP). DHAP provides disaster survivors with temporary housing assistance and wrap-around case management and is administered by Public Housing Agencies. Enterprise supports activating DHAP and encourages FEMA, HUD, and Congress to provide displaced hurricane survivors with temporary housing assistance.

HUD Approves CDBG-DR Action Plans for Texas and Florida

HUD has approved Action Plans outlining how Texas and Florida will use their Community Development Block Grant Disaster Recovery (CDBG-DR) dollars to rebuild communities devastated by last year’s hurricanes. These Action Plans guide grants that were awarded to the states in November 2017. Texas’s plan for $5 billion includes: $1.1 billion for a single-family homeowners assistance program; $275 million for buyouts and acquisitions; $100 million for homeowner reimbursement; and $413 million for local infrastructure, among other priorities. Texas is also sub-granting $2.3 billion to the City of Houston and Harris County -- approximately $1.1 billion for each -- to allow these jurisdictions to address unmet recovery needs. Florida’s Action Plan covers $616 million and includes: $273 million for a housing repair program; $100 million for workforce affordable rental new construction; and $75 million for a voluntary home buyout program, among other priorities. HUD also awarded $1.5 billion in CDBG-DR to Puerto Rico in February 2018, and approval of Puerto Rico’s Action Plan is still spending. Enterprise provided detailed comments on Puerto Rico’s CDBG-DR Action Plan.

This April, HUD allocated an additional $4.7 billion to Texas, $791 million to Florida, $18.4 billion to Puerto Rico, and $1.6 billion to the U.S. Virgin Islands as part of a $28 billion tranche of funding to address unmet need and support mitigation activities. HUD is expected to release its Federal Register notice guiding these funds in the coming weeks.

Where Will We Live Campaign Launches Website

Today the National Housing Trust (NHT), in partnership with Enterprise Community Partners and People's Action, officially launched a dedicated website for the Where Will We Live campaign, an effort that aims to elevate housing issues at the federal, state and local levels. The campaign captures compelling narratives that highlight how affordable housing directly impacts the lives of low-income families, and brings together a wide array of groups to help amplify the importance of affordable housing in combination with other high-profile issues. Please join NHT and Enterprise in sharing this important work during a Twitterstorm at 2 p.m. ET today -- Monday, July 9.

Administration Proposes Major Changes to the Nation’s Housing Finance System

Last month the Trump Administration unveiled a proposal to overhaul the federal government,  including a number of major changes to the nation’s housing finance system. Enterprise’s Vice President for Policy Development, Andrew Jakabovics explains that the proposal calls for ending the conservatorship (and charters) of Fannie Mae and Freddie Mac (collectively, the Government Sponsored Enterprises or GSEs), creating a paid-for guarantee of catastrophic risk on mortgage-backed securities, and establishing other fully private guarantors. Using previous Enterprise policy recommendations for housing finance reform as a guide, Jakabovics notes that the proposal is largely in line with the mainstream, bipartisan consensus around reform efforts, including the role of a paid-for government backstop that would limit investor losses on mortgage-backed securities without guaranteeing the entities issuing them. However, the proposal is entirely silent on the future of rental housing finance and the GSEs’ multifamily business lines, and makes a critical mistake in assuming that affordable housing objectives and traditional underwriting are mutually exclusive. Enterprise will continue to remain engaged on this critical issue and work towards a future system that is structured to protect taxpayers while broadly serving the needs of homeowners and renters.

HUD Announces Changes to RAD Implementation

HUD has published two notices in the Federal Register implementing several modifications to the Rental Assistance Demonstration (RAD), including changes that were enacted in the Consolidated Appropriations Act of 2018. The RAD program, enacted in 2012, converts public housing properties to project-based Section 8 housing by leveraging private capital and financing, largely through the Low-Income Housing Tax Credit (Housing Credit). The first notice officially increases the number of public housing units that may be awarded competitively from 225,000 units to 455,000 units (as authorized in the March omnibus), extends the deadline for application submissions, outlines the process for implementing the unit increases, and implements provisions relating to initial rent setting for conversions and the prohibition against rescreening residents. The second notice expands the ability of public housing authorities (PHAs) to rent bundle project-based voucher contracts, permits PHAs to establish project-specific utility allowances for covered projects, provides alternative developer fee limits when a PHA has a waiting list preference for families exiting homelessness and creates a streamlined conversion option for PHAs with a housing portfolio of 50 or fewer units.

RESEARCH AND REPORTS

JEC Releases Report on the State of the Rural Economy

Senator Martin Heinrich (D-NM), Ranking Member of the Joint Economic Committee, released a report, Investing in Rural America, which provides a deep dive into the current state of the rural economy and the policies that may help advance opportunity in rural areas -- including opportunities for affordable housing. Among the report’s key takeaways: rural residents enjoy higher homeownership rates than their urban counterparts, but have fewer adequate and affordable rental homes available, particularly in Indian Country; there is limited access to mortgage credit, and community banks can fill critical gaps left by closed big banks; investing in housing revitalization can help attract and retain a high-skilled workforce; and preparing for the growing elderly population requires ensuring aging rural residents can remain in their communities. The Affordable Housing Credit Improvement Act (S. 548 and H.R. 1661) would help address the need for affordable rental housing in rural areas, as well as the need for rental housing that is affordable to senior populations, by enacting provisions to strengthen the Housing Credit.

Reports Examine the State of New York's Subsidized Housing

The Furman Center at NYU has released a fact brief on the state of New York City’s subsidized housing, which reviews major programs used to develop and preserve affordable housing in the city and provides the number and location of properties that benefited from a subsidy or incentive in 2017. The report finds that there were over 1,900 properties containing a total of nearly 116,000 units in 2017 that were developed using the Housing Credit, with the majority of these units in Manhattan (37.7 percent) and the Bronx (35.6 percent). It also notes that of the 2,663 properties in the city with HUD and Mitchell-Lama subsidies in 2017, 11 percent could age out of affordability restrictions by 2023 unless renewed by the owners or the housing agencies. Since 2011, the NYU Furman Center has tracked information on the city’s subsidized housing and recently updated their Subsidized Housing Database, which includes data on financing programs, zoning and tax incentives to help affordable housing developers.

Last week the New York City Housing Authority (NYCHA) released a report estimating $31.8 billion in unmet capital needs for its aging NYCHA portfolio, in which the average building is roughly 60 years old and 70 percent was built prior to 1970. The report projects that the unmet capital needs will grow to $45.2 billion over the next 20 years. Last month the City of New York and NYCHA reached an agreement with the federal government that requires the city to invest over $2 billion more than what has already been promised to the agency over the next ten years—$1 billion within the first four years and then $200 million annually for the remaining six years—to make much-needed repairs in tens of thousands of public housing units.

New Tool Maps Access to Federal Housing and Community Development Funds

The Urban Institute has released the Community Development Financial Flow data tool to compare how counties have been accessing federal funds and inform strategy design about local capacity to access federal funds. Using data from 2011 to 2015, researchers measured the average federal funding for housing, small business, impact finance and other community development efforts to all U.S. counties with populations greater than 50,000. The District of Columbia, San Francisco County and St. Louis City were the three jurisdictions receiving the largest combined amounts of federal capital flows during the period, while Puerto Rico had the lowest federal capital flow of the large counties. 

STATE AND LOCAL POLICY

LA City Council Announces New Transit Plan

The Los Angeles City Council has approved the Exposition Corridor Transit Neighborhood Plan, which will allow the development of taller, mixed-use buildings within a half-mile radius around five train stations and aims to boost transit ridership, reduce dependency on cars and create vibrant neighborhoods. The plan rezones 256 acres of land, mostly from industrial and light manufacturing uses, to residential and office space. It also alters several single-family zones to allow “neighborhood-scale mixed-use development that creates ground-floor commercial activity” with the “capacity for multifamily housing.” The plan estimates that between 4,400 and 6,000 new housing units and between 9,400 and 14,300 new jobs could be added across the 256 acres by 2035.

Denver Considering Anti- Source of Income Discrimination Bill

The city of Denver is considering legislation to ban landlords from discriminating against tenants who use housing vouchers to pay rent. About 10 percent of Denver’s 6,900 voucher holders say they’ve experienced source-of-income discrimination, which may also be caused in part by the city’s tight housing market. Denver City Councilwoman At-large Robin Kniech has introduced a bill that would require landlords to accept all forms of payment, exempting landlords of owner-occupied duplexes and single-family homes. The bill would impose penalties that range from ordering the landlord to end discriminatory practices and make the unit in question or a similar unit available to a fine of up to $5,000 and/or an order to pay possible damages, such as the cost of a hotel stay. The city of San Diego is also considering legislation that would prohibit landlords from rejecting applicants because they use federal housing vouchers to help pay their rent.

Austin Approves Bond Measure that Includes Funding for Affordable Housing

Last week the Austin City Council voted 8-3 to add a $925 million bond package that includes $250 million for affordable housing to the November general election ballot – the city’s largest affordable housing bond ever. The bond package would also allocate $184 million for flood mitigation and open space and $160 million for transportation. Under the proposed bond package, the average Austin homeowner would see their property tax rate increase by 2 cents per $100 of valuation.

HEARINGS AND EVENTS

Upcoming Hearings and Events

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July 2018

August 2018

September 2018

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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