August 6, 2018

Capitol Express Newsletter: Senate Passes THUD Appropriations Bill, NMTC Expansion Bill Introduced in the House

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CONGRESSIONAL AND ADMINISTRATION NEWS

Senate Passes THUD Appropriations in 4-Bill Spending Package

Last Wednesday, the Senate passed H.R. 6147, a four-bill “minibus” spending package that includes funding for HUD. The package covers four of the 12 fiscal year (FY) 2019 appropriation bills — Transportation, Housing and Urban Development (THUD), Interior-Environment, Financial Services, and Agriculture spending bills — and will need to be reconciled with companion legislation pending in the House. The bill passed with a vote of 92-6, a show of significant bipartisan support, and maintains funding for critical HUD-administered programs, including the Community Development Block Grant (CDBG) Program and the HOME Investment Partnership Program. Senate Majority Leader Mitch McConnell (R-KY) said that he hoped to pass at least two more spending packages during August and to send final bills to the President shortly after Labor Day. If the Senate and House encounter obstacles while attempting to finalize the appropriations bills, a continuing resolution to fund the government through the midterm elections remains likely. See Enterprise's blog post and updated budget chart for more information on the bill and program funding levels.

Bipartisan Legislation to Expand NMTC in Rural Communities Introduced in the House

Representatives Jason Smith (R-MO-8) and Terri Sewell (D-AL-7), both members of the House Ways and Means Committee, have introduced the Rural Jobs Zone Act of 2018 (H.R. 6627), a bipartisan bill that would authorize an additional $500 million in New Markets Tax Credit (NMTC) allocation for both 2018 and 2019. The additional NMTC allocation would be targeted exclusively for Rural Jobs Zones, which are NMTC-eligible census tracts in rural communities that qualify for the Department of Agriculture's Rural Development Business & Industry Program. Of the $1 billion total in additional allocation, at least 25 percent would be prioritized to “persistent poverty” and “high migration rural” counties. Read more about the new bill in Enterprise's blog post.

The NMTC is set to expire at the end of 2019 unless Congress extends the program. Recognizing the NMTC's proven track record, Congress retained the NMTC in the Tax Cuts and Jobs Act of 2017, preserving its current authorization through 2019. It is now critical that Congress permanently extend the NMTC and provide certainty to this critical community development tool for low-income communities. The New Markets Tax Credit Extension Act, bipartisan legislation in both the House (H.R. 1098) and Senate (S. 384), would indefinitely extend and strengthen the NMTC program. Enterprise urges Congress to enact both the NMTC Extension Act and the Rural Jobs Zone Act to increase the impact of this proven community development tool.

National Media Outlets Spotlight Growing Housing Affordability Challenges

CNN Highlights the Affordable Housing Credit Improvement Act as Opportunity to Increase Affordable Housing Production

An article in CNN Politics explores ways the federal government can boost the supply of affordable housing across the nation and make a dent in the growing shortage of affordable rental homes. The article highlights the Affordable Housing Credit Improvement Act (S. 548), bipartisan legislation sponsored by Senator Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT), as a prominent solution to help address the crisis. S. 548 would expand the Housing Credit by 50 percent and is estimated to help create an additional 400,000 units of affordable rental housing over 10 years. The article also notes that incentivizing local policy changes through federal grants, decreasing the cost of construction by lifting tariffs on lumber and steel, and supporting training programs to bring more skilled workers into the construction sector could all aid in expanding the supply of affordable housing nationwide. Ali Solis, president of Make Room, explains that "there needs to be a full commitment from the president down to the city council level to come together and make housing a national priority." Last month Enterprise released a new white paper, Proven Local Strategies for Expanding the Supply of Affordable Homes and Addressing Cost Challenges, which highlights how high-cost cities have boosted the supply of affordable homes and reduced costs. 

The Washington Post Looks at National Trends in Rental Costs

An article in The Washington Post uses data from Zillow to explain that rent increases are slowing nationally, although the trend is being driven primarily by falling prices for high-end rentals and not for housing that is affordable to low- and moderate-income people. In many metro areas, such as Los Angeles and Miami, rents have risen for both low-income and higher-income renters. However, in other major cities, including San Francisco and Washington, DC, rents have fallen for the highest earners while increasing for the poorest renters. City officials have responded to these rent increases with a range of policy measures, such as reforming zoning codes, creating new tools for financing affordable housing and mandating the inclusion of affordable units in new developments. However, advocates argue that the federal government needs to take more direct action to increase affordable housing construction and provide greater rental assistance to low-income families.

NPR Explores the Struggle to Find Affordable Housing in Boise, Idaho

An article from NPR explains that renters and potential homebuyers are becoming priced out of housing markets in cities nationwide, just ten years after the housing collapse. The article highlights Boise, Idaho, where the demand for housing is more than 10 times the number of homes being built, and 65 percent of homes for sale are on the upper end of the market. Tougher zoning regulations, the rising cost of building materials, and labor shortages in the construction industry have resulted in home construction per households reaching its lowest level in nearly 60 years. Boise will need to build an estimated 1,000 affordable homes each year to keep up with demand, according to Mayor Dave Biete, and they may seek to use voter-approved bonds as a way to address the issue.

HUD Implements Over-Income Rules for Public Housing Residents

HUD recently posted a notice in the Federal Register implementing income limits in public housing, as mandated by the Housing Opportunity Through Modernization Act of 2016 (HOTMA). HOTMA established that households earning 120 percent of area median income (AMI) or more for two consecutive years would be considered over-income. Once families meet this threshold, public housing authorities (PHAs) can now either charge the higher of the fair market rent for the unit/monthly subsidy or terminate the tenancy within six months. The notice finalizes how the over-income limit is determined based on HUD’s calculation of “very low-income” and informs PHAs how to begin implementing the statute. In the future, HUD is expected to issue regulations related to how a PHA determines the monthly subsidy to use in setting rents for over-income families allowed to remain in public housing, as well as guidelines for how PHAs should set policies for addressing over-income families following the two-year grace period.

Democrats Introduce New Bills to Address Affordable Housing Challenges

Representatives James Clyburn (D-SC-6) and Suzan DelBene (D-WA-1) recently introduced the Restoring Tax Credits for Affordable Housing Act (H.R. 6542),which seeks to restore the Housing Credit’s production potential after an unintended consequence of the Tax Cuts and Jobs Act of 2017 resulted in a reduction in the value of the Housing Credit. Accounting firm Novogradac and Company has estimated that 235,000 affordable rental homes will not be produced over the next 10 years as a result of the reduced corporate tax rate.

Senator Cory Booker (D-NJ) also recently introduced the Housing, Opportunity, Mobility and Equity (HOME) Act (S. 3342), which is designed to promote inclusionary zoning policies and improve housing affordability. The bill directs all jurisdictions receiving grants under the CDBG program to create strategies that increase the supply of housing and ease zoning restrictions that impede development. The goal is to ensure that at least 20 percent of all new housing units meet affordability requirements.

It is unclear whether the House and Senate will take up either piece of legislation, but Enterprise applauds Representatives Clyburn and DelBene and Senator Booker for their attention to the critical issues of affordable housing and community development.

Congress Extends National Flood Insurance Program until November 3

The Senate voted 86-12 last week to extend the National Flood Insurance Program (NFIP) until November 30, 2018. The House passed the bill (S. 1182) a week before on a 366-52 vote. Congress extended NFIP without making any reforms,which will eventually be needed in order to place the program on a financially sustainable path and preserve affordability for low- and moderate-income households. NFIP remains $25 billion in debt despite last year’s disaster relief bill, which forgave $16 billion in debt owed by the program.

HUD Approves Puerto Rico’s $1.5 Billion CDBG-DR Disaster Recovery Plan

Last week HUD approved Puerto Rico’s $1.5 billion disaster recovery plan funded by the Community Development Block Grant Disaster Recovery (CDBG-DR) Program. The plan addresses unmet needs following Hurricanes Irma and Maria, including $1 billion for housing, $145 million for economic revitalization and $100 million for infrastructure. In September 2017, Congress appropriated $7.4 billion for the CDBG-DR Program; HUD allocated $1.5 billion of that money to Puerto Rico earlier this year. Congress subsequently appropriated an additional $28 billion for CDBG-DR, of which HUD allocated $18.5 billion to Puerto Rico — the largest CDBG-DR allocation on record. However, the Federal Register notice guiding those funds have yet to be released. See Enterprise’s blog post for more information on CDBG-DR funding.

FEMA Temporarily Extends Transitional Sheltering Assistance Program

A Massachusetts federal judge ordered the Federal Emergency Management Administration (FEMA) to extend its Transitional Sheltering Assistance (TSA) Program for displaced survivors of Hurricane Maria through August 31. The agency had planned to terminate TSA benefits for those impacted by the storm more than two months ago, but court orders have extended TSA multiple times on a short-term basis. As of June, nearly 2,000 households remained in hotels and motels through the TSA program.

RESEARCH AND REPORTS

Enterprise Releases New Interactive Report on Housing Trends

Enterprise’s Policy Development & Research team recently released a new interactive report that examines trends in housing tenure — homeownership and rentership — across subsets of the population over time. The report uses data from the Census Bureau’s Housing VacancySurvey to compare trends in tenure rates, noting how different groups fared through the housing boom, market downturn and recent recovery. A blog post accompanying the release notes that not all households experience changes in tenure rates equally, leading to inequitable distributions of housing outcomes across the population. Groups with high rentership rates, including Black, Hispanic, under 35-year-old and low-income households, have less access to the economic benefits of homeownership, which federal housing policies also favor through tax deductions and support of the residential mortgage market. The report demonstrates that there is more policymakers can do to ensure affordable and suitable housing is available to all Americans, regardless of their housing tenure status.

New Study Explores Mortality Patterns for Individuals Experiencing Homelessness in Boston

A study published by JAMA Internal Medicine last week, which explored the mortality patterns for adults experiencing homelessness who primarily sleep outdoors, found that people sleeping on the street in Boston were 10 times more likely to die than the general public of Massachusetts. The 10-year cohort study of 445 adults experiencing homelessness revealed that the most common causes of death were noncommunicable diseases (cancer and heart disease), alcohol use disorder and chronic liver disease. Altogether, the findings underscore not only the need for a wide array of housing solutions for the unsheltered population, but also for robust wrap-around support services to meet their complex needs, including access to behavioral health services and street outreach.

STATE AND LOCAL POLICY

Seattle Adopts Resolution to Sell Public Land for Affordable Housing Development

Last week the Seattle City Council adopted a resolution to allowSeattle City Light, the city's publicly owned electric power utility, sell surplus properties below market value for the development of low-income housing.Councilmember Teresa Mosqueda, who proposed the resolution, anticipates it will lay the groundwork for one of the city's largest landowners to help alleviate an affordable housing shortage. As of May, City Light owned 176 properties, including five surplus properties totaling about 121,000 square feet. Read Enterprise’s report, "Public Benefit from Publicly Owned Parcels: Effective Practices in Affordable Housing Development", and its accompanying Seattle case study, "Public Benefit from Publicly Owned Parcels: Advancing Implementation in the Puget Sound Region," for more information about how communities are using public land to spur affordable housing development.

Article Explores the Potential of Naturally Occurring Affordable Housing in Atlanta

A recent news article highlights a report commissioned by Enterprise “Preserving Naturally-Occurring Housing Affordability in Metro Atlanta Neighborhoods,” which provides policy recommendations for preserving NOAH in the region. The report notes that although NOAH is cheaper to preserve naturally occurring affordable housing (NOAH) than building new affordable housing, the fact that it is unsubsidized makes it intensely vulnerable to market pressure. To maintain the current NOAH stock, government officials can offer developers and landlords tax relief — including property tax abatements — for housing that remains affordable, giving them an incentive against raising rents or turning the NOAH into luxury apartments.

IN CASE YOU MISSED IT

News Updates from Community Developments

In recent Community Developments, we highlighted the FHFA’s workforce housing workshop, the role banks can play in displacing low-income renters, the growing labor shortage in the housing construction market and much more. Sign up here to receive the Community Developments newsletter.

ACTION Campaign Fact Sheet Highlights the Importance of Enacting a Minimum 4 Percent Credit Rate

The ACTION Campaign released a new fact sheet explaining how the 4 percent Housing Credit works and the importance of establishing a minimum 4 percent Housing Credit rate, as proposed in the Affordable Housing Credit Improvement Act.The fact sheet explains how the floating Credit rate for the 4 percent program provides far less equity to developments than what Congress intended, and highlights the benefits of creating a fixed rate, such as filling critical financing gaps for developing affordable homes, providing more market certainty in Housing Credit financing, and allowing for greater flexibility and discretion for states to finance high-priority developments.Visit the ACTION Campaign’s Advocacy Toolkit to access this fact sheet,along with other advocacy resources to support the Housing Credit.

HEARINGS AND EVENTS

Upcoming Hearings and Mark-Ups

There are no affordable housing or community development related hearings scheduled at this time. The Senate is on recess for the week of August 6, and the House is on recess until September 3.

Upcoming Events 

August 2018

September 2018

October 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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