December 21, 2018

Government Heads Towards Partial Shutdown, Enterprise Submitted Comments on Opportunity Zone Regulations

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Programming Note: This is the final issue of Community Developments in 2018. We will return Wednesday, January 2. We wish you a safe and happy new year!

  • The current continuing resolution (CR) funding approximately 25 percent of the government expires at midnight tonight. Earlier today Enterprise’s Senior Director of Congressional Relations Liz Osborn released a blog post pointing out that while both the House and Senate have passed different stopgap bills to fund the agencies covered in the current CR through February 8, it seems unlikely that the two chambers will come to an agreement before tonight’s deadline. Osborn notes that the “main sticking point is the fact that the House’s CR includes $5 billion in funding for a border wall, while the Senate’s does not. With Senate Democrats vowing to reject any funding for the border wall, and the President stating that he will veto any funding legislation that does not include that money, a government shutdown looks highly likely.” She also emphasizes that a shutdown would affect many of the agencies that manage vital affordable housing and community development programs, including the Departments of Housing and Urban Development, Agriculture, and Treasury. Enterprise strongly urges Congress and the Administration to quickly arrive at an agreement on full-year spending bills for each agency impacted by this potential shutdown. Learn more about how a partial government shutdown could affect vital affordable housing and community development programs in our blog
  • In October, the IRS released a first round of proposed rules for Opportunity Zones and provided 60 days to submit comments. Enterprise has submitted comments to the IRS on the proposed rule for investing in qualified Opportunity Funds, pointing out our main priorities at this stage in the rule-making process: 1) preventing predatory land-banking under the substantial improvement test; 2) requiring a higher “substantially all’ threshold for real estate projects; 3) providing flexibility for measuring compliance with the 90-percent asset test; 4) developing regulations that encourage pairing Opportunity Zone investments with other tax credits; and 5) tracking and reporting outcomes of Opportunity Fund investments. Enterprise looks forward to working with Treasury to ensure that Opportunity Zones are successful community investment tool that brings equitable and inclusive growth to the more than 8,700 designated census tracts. We encourage all affordable housing and community development stakeholders to submit their comments to the IRS before the December 28 deadline.
  • The Washington Post notes that the Department of Agriculture has released a proposal that would direct states to waive the Supplemental Nutrition Assistance program’s (SNAP) work requirement only in areas where unemployment is above 7 percent –  current regulations allow states to waive the requirement in areas with unemployment rates that are at least 20 percent greater than the national rate. The program already imposes work requirements on most adults without dependents if they collect SNAP benefits for more than three months in a three-year period. According to the department’s latest data, nearly 2.8 million able-bodied recipients without children or an ailing person in their care were not working in 2016, and about 755,000 live in areas that stand to lose work requirement waivers. (The Washington Post,  December 20) The Center on Budget and Policy Priority has released a statement noting that the proposed change would ”cut off basic food assistance for hundreds of thousands of the nation’s poorest and most destitute people…It would hit hard at people who are between jobs or whose employers have cut their hours to less than 20 hours a week, which occurs not infrequently in the very-low-wage labor market even when the economy is strong.” 
  • The President has appointed Comptroller of the Currency Joseph Otting as acting director of the Federal Housing Finance Agency (FHFA) starting January 6 when Director Mel Watt's term ends. Otting will serve in the role until a new FHFA director is confirmed. (American Banker, December 21) As previously reported in Community Developments, the Administration intends to nominate Mark Calabria, who currently serves as chief economist for Vice President Mike Pence, to lead the Federal Housing Finance Agency (FHFA) once current Director Watt’s term ends in January 2019. Calabria served as deputy assistant secretary for regulatory affairs at HUD during former President George W. Bush’s administration, as well as a senior aide on the Senate Banking Committee, where he was one of the lead drafters of the Housing and Economic Recovery Act of 2008 that created the FHFA.
  • Today HUD awarded $29 million in grants to public housing authorities and nonprofit organizations across the nation to “help promote employment and self-sufficiency for public housing residents.” Provided through HUD’s Resident Opportunities and Self Sufficiency - Service Coordinators program, the grants will help public housing authorities, resident associations, non-profit organizations, Indian tribes or entities representing Indian tribes hire or retain service coordinators to help residents find jobs and educational opportunities. (HUD, December 21) 

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