September 7, 2018
Community Developments: NCSHA Releases Report on Development Costs in Housing Credit Units
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- Today the National Council of State Housing Agencies (NCSHA) published a new report – completed by Abt Associates – that analyzes total development costs in Low-Income Housing Tax Credit (Housing Credit) developments nationwide. An Enterprise blog post summarizes the key findings of the report, highlighting that Housing Credit-financed apartments cost on average roughly the same to develop as the typical apartment, even though Housing Credit properties must by law meet many requirements that typical apartment buildings do not. It also shows that that development costs in Housing Credit properties have grown no faster over the last several years than development costs for apartments overall. This report is a powerful testament to the success of the Housing Credit, which has financed over 3 million affordable apartments over the past 30 years. (Visit the ACTION Campaign website for more information about the Housing Credit.) Enterprise has been a leader in efforts to lower the costs of developing and preserving affordable housing. Our Bending the Cost Curve research, launched five years ago, continues to introduce and disseminate methods for reducing costs. We recently published a white paper, Proven Local Strategies For Expanding the Supply of Affordable Homes and Addressing Cost Challenges, which draws on the successes of some of the country’s most expensive areas to offer options to communities working to address the scarcity of affordable homes and the rising cost of development. We remain committed to finding ways to help provide more well-designed, affordable homes at the lowest possible cost.
- The Housing Assistance Council (HAC) has released a report that examines the state of affordable, rental rural housing across the country. It shows that the U.S. Department of Agriculture’s (USDA) Section 515 Rural Rental Housing Program finances over 13,000 rental properties, providing more than 415,000 affordable homes to families and individuals across rural America. However, the report estimates that an average of 1,788 units will exit the program each year until 2027 as mortgages mature, and that almost all of the rest of the portfolio may follow. The report explains that while some properties are restricted to an affordable housing use for a period after they leave the program, tenants of units without those provisions are often priced out of their homes after they are converted to market-rate. (HAC, September 2018) The Affordable Housing Credit Improvement Act (S. 548) includes provisions that would make it easier to preserve existing affordable housing units and finance affordable housing properties in rural areas using the Housing Credit.
- HUD, the U.S. Census Bureau and FEMA have released the 2017 American Housing Survey, which shows that renters are three times more likely to need financial assistance to evacuate during a major disaster than home owners. The survey points out that 39 percent of nearly 44 million renter households and 12 percent of 77.3 million owner households reported that they do not have access to $2,000 to cover evacuation expenses. HUD Deputy Secretary Pamela Hughes Patenaude notes that the agency has collaborated with FEMA to add disaster preparedness questions to the 2017 Survey to “better understand the challenges that households face as they prepare for and respond to disasters.” (HUD, September 6)
- Today HUD awarded more than $12 million to 13 tribes and tribal agencies to help them make affordable housing safer and healthier. Granted through HUD’s Healthy Homes program, these grants will help address health and safety hazards in 1,300 affordable homes. (HUD, September 7) HUD has also awarded $18 million to 20 public housing agencies to help them identify and eliminate lead-based paint hazards in their developments. Awarded through the HUD's Lead-Based Paint Capital Fund program, these grants will be used to ensure public housing developments that were tested and abated over twenty years ago remain lead-free. (HUD, September 5)
In Case You Missed It
- In a blog post, Enterprise’s Vice President for Policy Development Andrew Jakabovics examines the latest bipartisan housing finance reform effort. On the tenth anniversary of Fannie Mae and Freddie Mac’s (collectively, the Government Sponsored Enterprises or GSEs) conservatorships, House Financial Services Chairman Jeb Hensarling (R-Texas) and Rep. John Delaney (D-Maryland) have introduced a bill to resolve the status of the GSEs and move towards a system intended to reduce systemic and taxpayer risk by mandating private capital serve as a buffer in front of an explicit, paid-for government guarantee of principal and interest to investors in mortgage-backed securities (MBS). This legislation would dramatically expand the role of Ginnie Mae in the secondary market by establishing “Ginnie Mae Plus” and authorizing it to guarantee MBS issued by private entities, with the critical stipulation that private capital “credit enhance” the loans – that is, serve as a buffer to absorb losses before Ginnie Mae’s reserves would be touched. Enterprise has signed on to an open letter that urges the Administration and Congress to ensure that any housing finance reform effort locks in recent reforms to the GSEs and completes the necessary additional changes to protect taxpayers as well as serves the entire market of renters and qualified homebuyers. We previously released a white paper with policy recommendations for housing finance reform, including ensuring stable access to affordable single-family and multifamily credit for all eligible borrowers and expanding support for rental housing that is affordable to low- and moderate-income households.