December 10, 2018

Capitol Express Newsletter: Lawmakers Agree to Fund the Government through December 21 as Shutdown Remains Possible

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Short-term Continuing Resolution Funds Government through December 21

President Trump signed a two-week extension to the ongoing Continuing Resolution (CR) last week, providing funding for agencies whose fiscal year (FY) 2019 spending authority has yet to be finalized. The CR, which pushed the expiration of government funding from December 7 to December 21, provides short-term funding for critical government agencies, including HUD, USDA and Treasury. Also included in the CR is an extension of the National Flood Insurance Program, a key federal resiliency and recovery program that was set to expire on December 7. Despite the extension of short-term funding, federal agencies operating under the CR will have to continue to make contingency plans for a potential shutdown later this month, as it is still unclear if lawmakers and the White House will be able to agree on a spending package due to controversial negotiations around funding for border security. Enterprise urges lawmakers to work towards finalizing FY 2019 spending legislation over the next two weeks to ensure that the federal government’s housing and community development programs receive their full-year appropriations as soon as possible.

House Republicans Introduce Year-End Tax Package, Outlook Remains Uncertain 

House Ways and Means Chairman Kevin Brady (R-TX) introduced tax legislation at the end of November that would renew expired tax provisions, make technical fixes to last year's Tax Cuts and Jobs Act, and offer tax relief for natural disaster victims, among other provisions. The tax package also includes a technical correction that would modify the general public use rule for multifamily Housing Bonds to clarify that there is an exemption for properties serving veterans. House Republican leadership’s plan to vote on the proposal was ultimately postponed because it did not have the votes to pass with Democratic opposition and some Republican absences. Complicating matters is the fact that there is limited legislative time remaining for House and Senate negotiations this year and lawmakers’ top priority is finalizing FY 2019 appropriations before December 21.

Despite an unclear path, the ACTION Campaign is working closely with affordable housing champions in Congress who are looking for any opportunity to enact the minimum 4 percent Low-Income Housing Tax Credit (Housing Credit) rate – which Novogradac & Co. estimates could finance 65,000 additional affordable homes over the next decade – and other provisions from the Affordable Housing Credit Improvement Act (S. 548/H.R. 1661). Join the ACTION Campaign to receive updates on legislation to strengthen and expand the Housing Credit, access advocacy materials for meeting with members of Congress, and support the effort to advance the Housing Credit.

President and CEO of Utah Housing Corporation Urges Congress to Strengthen and Expand the Housing Credit

Grant S. Whitaker, President and CEO of Utah Housing Corporation, urges lawmakers in an op-ed to pass the remaining provisions of the Affordable Housing Credit Improvement Act. Congress already took a significant step earlier this year to meet the nation’s growing housing affordability challenges by passing the first expansion of the Housing Credit in 10 years. This bipartisan legislation, which was introduced by Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT), would strengthen and expand the Housing Credit, the primary tool for creating homes affordable to low-income families, seniors and veterans in Utah and across the country. 


White House Report Indicates that Climate Change Disproportionately Affects Low-Income Communities

In the coming years and decades, climate change will disrupt economic growth, public health and ecosystems, according to the Fourth National Climate Assessment, which was published by the Trump Administration late last month. In a new blog post, Enterprise President Laurel Blatchford strongly applauds the assessment’s emphasis on the disproportionate impacts of climate change on low-income communities, communities of color and other vulnerable populations unprepared to cope with these disruptions. The government assessment highlights climate change’s impacts across geographic regions and economic sectors and calls for greater adaptation efforts to prevent catastrophic economic losses. Blatchford calls for the affordable housing and community development sectors to respond to the effects that climate change, natural disasters, and ecological degradation are already having on housing needs for low and moderate-income communities in particular.  

New Report Finds that Homes in Majority-Black Neighborhoods are Significantly Under-valued

A new report by the Brookings Metropolitan Policy Program and Gallup examines the devaluation of owner-occupied homes in metropolitan areas’ majority-black communities, where the share of the population is at least 50 percent black. The report finds that owner-occupied homes in majority-black neighborhoods are undervalued on average by $48,000 per home, amounting to $156 billion in cumulative losses. According to the report, differences in home and neighborhood quality do not fully explain the devaluation of homes in majority-black neighborhoods, which indicates that this challenge stems from racial bias. Finally, the report notes that metropolitan areas with greater devaluation of black neighborhoods are more segregated and produce less upward mobility for the black children who grow up in those communities.

Freddie Mac Analyzes the Mismatch between Housing Demand and Supply

Freddie Mac has released a new analysis of the mismatch between housing demand and supply across the country, pointing out that while the U.S. housing market added 1.25 million housing units last year, the current rate of demand is approximately 1.62 million housing units per year. The U.S. is currently about 2.5 million housing units below what is needed to match long-term demand, and residential construction across the country has been weak by historical standards for almost a decade. Freddie Mac suggests that three major factors have been driving demand for more housing construction: a growing population; the need to replenish existing stock; and the fact that a well-functioning housing market requires some vacant units.

Report Finds that Wildfire-Resistant Construction Does Not Increase Construction Costs

A report co-authored by the Insurance Institute for Business & Home Safety suggests that homes in wildfire-prone areas could be built to better withstand wildfires without increasing the cost of construction. The report, which looked at a typical three-bedroom, 2,500-square-foot, single-story home constructed in wildfire-prone Montana, found that using wildfire-resistant construction would be 2 percent less expensive than following traditional construction methods. Insurers have urged local governments to implement more resilient building codes, but this move is generally opposed by home builders who have concerns over additional construction costs. These findings were released days after a major federal report concluded that climate change will cause deadlier and costlier wildfires and that communities in wildfire-prone areas are not well prepared to address this challenge. 


Enterprise Co-hosts New York Area Affordable and Fair Housing Summit

On November 27, in partnership with the Fair Housing Justice Center, Enterprise New York convened the Regional Affordable and Fair Housing Summit, bringing together nearly 400 stakeholders from affordable housing, fair housing, disability rights, community development, education, faith-based and for-and nonprofit organizations. The full-day event featured three panel discussions previewing recommendations outlined in “Closing the Divide: Creating Equitable, Inclusive and Affordable Communities,” a policy platform developed by the Regional Affordable and Fair Housing Roundtable and slated for release in January 2019. The panels focused on how to improve tenant rights in the region, maximize density to promote affordable multi-family housing, and eliminate exclusionary zoning and other land-use barriers to affordable housing development. The event also featured designing the WE’s interactive exhibit Undesign the Redline, which connects the intentional and systemic racism of the 1930s to the political and social issues of today. Read Enterprise’s blog for full coverage of the event, including details on the keynote address by Isabel Wilkerson, author of The Warmth of Other Suns, and more information about “Closing the Divide: Creating Equitable, Inclusive and Affordable Communities.” 


News Updates from Community Developments

In recent Community Developments, we highlighted a drop in sales of new U.S. homes in October, proposed legislation that would eliminate minimum parking requirements in San Francisco, an analysis by CoreLogic that shows that home prices in October were up both year-over-year and month-over-month and much more. Sign up here to receive the Community Developments newsletter.


Upcoming Hearings and Mark-Ups

There are no affordable housing or community development-related hearings or mark-ups scheduled at this time.

Upcoming Events

December 2018

•    December 12-13: 2018 Annual NMTC Conference, New Markets Tax Credit Coalition (Washington, DC)

January 2019

•    January 10-11: 2019 Affordable Housing Conference: Using RAD and the LITHC to Improve Communities, Novogradac & Company (Miami Beach, FL)
•    January 24-25: 2019 New Markets Tax Credit Conference, Novogradac & Company (San Diego)
•    January 28-29: 2019 AHTCC Annual Meeting, Affordable Housing Tax Credit Coalition (New Orleans)

February 2019

•    February 4-6: Housing Opportunity 2019, Urban Land Institute (Newport Beach, California)
•    February 18-22: Cleveland NeighborWorks Training Institute, NeighborWorks (Cleveland)

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