August 1, 2018

Community Developments: Senate Passes THUD Spending Bill, Nationwide Construction Labor Shortage

Community Developments

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Community Developments: Senate Passes THUD Spending Bill, Nationwide Construction Labor Shortage

  • Today, the Senate passed a four-bill “minibus” spending package that includes funding for the Department of Housing and Urban Development (HUD), Department of Agriculture (including the Rural Housing Service) , and Department of Treasury (including the Community Development Financial Institution Fund). The package includes four of the twelve fiscal year 2019 (FY 2019) appropriation bills and will still need to be reconciled with the House’s version of the bill. (The Hill, August 1) The bill passed with strong bipartisan support, 92-6, and provides adequate funding for housing voucher programs and maintains funding for vital housing and community development programs, including the Community Development Block Grant Program and the HOME Investment Partnership Program. See Enterprise’s updated budget chart for more information on program funding levels
  • An article in ImpactAlpha examines how real estate firms are planning to use the Opportunity Zones tax incentive to spur urban and rural development while preventing displacement. The prospect of Opportunity Zones investment is raising concerns around rising housing costs and displacement of residents, and a growing group of stakeholders are seeking collaborative ways to create more transparency on the impact of investments in communities. Enterprise Community Loan Fund's Rachel Reilly notes that “third parties like Enterprise can see where those projects are located and benchmark impact on those communities and observe how communities at the census tract level change over time.” She also noted that understanding opportunity funds’ investment strategies will be particularly important to understanding the law’s overall impact. (ImpactAlpha, August 1)
  • In a blog posted yesterday, the Urban Institute showed that small-dollar mortgages were denied at higher rates than higher-dollar mortgages. They found that in 2015 almost 80 percent of homes valued between $70,000 and $150,000 were bought with a mortgage but that only a quarter of homes sold for under $70,000 were financed for a mortgage. Previous research from Urban also finds that higher denial rates have nothing to do with an applicants’ creditworthiness. They claim that traditional measures of mortgage denial rates mask differences in creditworthiness among applicants and have subsequently develop a real denial rate (RDR), which controls for differences in creditworthiness and better understand those differences in higher denial rates for smaller loans. 
  • The Wall Street Journal examined the growing labor shortage in the housing construction market, where the share of workers 24 and under has declined in 48 states since 2005. Among the factors driving the labor shortage are the high cost of living in areas where most construction jobs are available, particularly for homes and apartments; this increase has been driven by a lack of new construction. Wages are another factor, as builders facing rising costs for materials do not want to invest in training workers new to the industry. If this trend continues, housing construction may continue to falter, further driving up prices for existing homes. (The Wall Street Journal, July 31)
  • An article in The Washington Post highlights the Swipe Out Hunger program, which allows students to donate their unused meal plan vouchers to other students experiencing food insecurity to use at campus dining halls and food pantries. Studies have shown that up to half of college students report that they were either not getting enough to eat or were worried about it. Federal rules require students to work at least 20 hours per week to qualify for the Supplemental Nutritional Assistance Program (SNAP), which many students cannot manage. Student and anti-hunger advocates are seeking system-wide solutions to addressing the problem. Efforts are underway in the University of California-Berkley, for example, to enroll eligible students in the CalFresh, the state’s version SNAP. (The Washington Post, July 31)

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