NCSHA Washington Report | April 15, 2022
An extraordinary opportunity for immediate federal support to stem surging housing costs we first flagged in February is now in clearer focus as a result of a new NCSHA survey and webpage online today.
The survey provides the most detailed analysis to date of how states are using federal fiscal recovery funds appropriated last year to meet a range of housing costs exacerbated by inflation.
As of today, 18 states have committed nearly $8 billion in recovery funds to affordable housing. That amount will grow in the coming weeks as at least 13 more states finalize their recovery fund housing investment plans. The NCSHA website will reflect updates in real time going forward.
Among the key findings of our survey:
- It’s a nationwide commitment. States committing recovery funds for housing are in every region and span the political spectrum.
- HFAs are at the center. In nearly two-thirds of states that have stepped up so far, the HFA is responsible for some or all of the funding.
- Construction costs are the priority. The five most common uses of funds all relate to housing development and rehab. Nearly two-thirds of states plan to use recovery funds to fill cost gaps in pending Housing Credit transactions — the top identified priority by a wide margin.
The federal rules for the recovery funds, written by the Treasury Department, provide significant flexibility, so some states also expect to use funds for down payment assistance and support for vulnerable renters and homeowners.
Dozens of counties and cities are also putting federal recovery funds to work for affordable housing. While we aren’t tracking those efforts as closely, Treasury estimated last month the combined state and local commitment so far exceeds $11 billion.
The Treasury rules still need to provide clarity NCSHA has recommended on several issues to get the most bang for the inflation-combatting buck.
With construction costs surging and states forced to take triage measures to keep already-approved affordable housing developments alive, Treasury should be laser-focused on optimizing recovery funds to fill development financing gaps.
A failure to do so — quickly — could prevent affordable housing developments scheduled to close and break ground soon from proceeding. There’s no telling whether projects that fall out will ever come back as viable developments.
Representatives Alma Adams (D-NC) and David Rouzer (R-NC) and Senator Patrick Leahy (D-VT) are leading bicameral, bipartisan efforts to make housing-focused statutory improvements to the recovery fund program. Dozens of state and local government groups and housing organizations are supporting their efforts.
State leadership with recovery funds is an unexpected opportunity to alleviate the pain paid by low-income people for an astonishing 39 percent increase in residential construction cost drivers since March 2020. With more responsive policy from Washington, relief could come soon.
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- Adams, Rouzer Circulate Dear Colleague Letter Seeking Cosponsors for LIFELINE Act
- White House Announces Federal Agency Equity Action Plans
- NCSHA, Other Credit and Bond Advocates Raise Concerns About Impact of Global Minimum Tax
- FHFA Publishes Final 2022 – 26 Strategic Plan
- HUD Celebrates HOME, CDBG During National Community Development Week
- NCSHA in the News
- Looking Ahead
Adams, Rouzer Circulate Dear Colleague Letter Seeking Cosponsors for LIFELINE Act
This week, Representatives Alma Adams (D-NC) and David Rouzer (R-NC) circulated a “Dear Colleague” letter to their fellow members of the House of Representatives urging them to cosponsor the LIHTC Financing Enabling Long-term Investment in Neighborhood Excellence (LIFELINE) Act, H.R. 7078. The bill, which NCSHA has endorsed, would enable states and localities to leverage State and Local Fiscal Recovery Fund (SLFRF) dollars from the American Rescue Plan with the Housing Credit, by allowing SLFRF grantees to make long-term loans to Housing Credit developments with those funds. We encourage HFAs and other Housing Credit stakeholders to use the Dear Colleague letter in their advocacy efforts to build support and increase cosponsorship for the legislation. We expect the bipartisan Senate companion bill to be introduced when Congress returns from recess.
White House Announces Federal Agency Equity Action Plans
Yesterday, Department of Housing and Urban Development (HUD) Secretary Marcia Fudge joined White House officials and other Cabinet Secretaries to announce Equity Action Plans created by more than 90 federal agencies — including all Cabinet-level agencies — as called for in President Biden’s Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. Agencies that released plans on Wednesday included HUD, the Department of the Treasury, and the Department of Agriculture (USDA). HUD’s plan includes actions to reduce the racial homeownership gap and center equity in the delivery of services to people experiencing homelessness. It also includes priorities related to procurement, fair housing and civil rights, improving asset and credit building for renters interested in transitioning to homeownership, and reducing home appraisal bias. Please see NCSHA’s blog for more information.
In related news, Fudge announced Tuesday she has instructed her staff to conduct within six months a review of policies that bar people with criminal histories from housing, including guidance documents and model leases.
NCSHA, Other Credit and Bond Advocates Raise Concerns About Impact of Global Minimum Tax
On April 5, NCSHA and 29 other national organizations that advocate for tax-based housing and community development finance programs sent Treasury Secretary Janet Yellen a letter raising concerns about the impact the Organization for Economic Co-operation and Development (OECD) Pillar II Model Rules implementing a global minimum tax could have on important tax credits, including the Housing Credit, and tax-exempt bonds. If implemented as currently envisioned, the global minimum tax could reduce investor interest in community development tax credits and bonds. The letter urges Secretary Yellen to work with OECD to prevent unintended consequences that would significantly reduce investment in community development tools.
FHFA Publishes Final 2022 – 26 Strategic Plan
The Federal Housing Finance Agency (FHFA) Thursday published its Strategic Plan for Fiscal Years 2022 – 26. The plan, which is substantially very similar to the agency’s February proposal, outlines priorities for regulation of the Federal Home Loan Bank (FHLB) system and the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The plan’s three main goals are securing the FHLBs’ and GSEs’ safety and soundness, responsibly stewarding FHFA’s infrastructure, and fostering housing finance markets that promote equitable access to affordable and sustainable housing. The plan lays out a number of methods and strategies the agency will use to meet each of the three goals. Notable strategies for promoting equitable access to affordable housing include overseeing the GSEs’ efforts to meet their affordable housing goals and duty-to-serve obligations and supervising GSE implementation of their equitable housing finance plans.
In our comments on the proposed plan, NCSHA commended FHFA for its focus on promoting housing affordability and suggested the GSEs could meet the country’s pressing housing needs through increased partnerships with HFAs.
HUD Celebrates HOME, CDBG During National Community Development Week
This week, HUD has been celebrating National Community Development Week to highlight the success of its Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs in building high-quality affordable homes and stronger communities. Since 1992, HOME has built and preserved more than 1.34 million affordable homes and provided rental assistance to more than 403,000 families. Since 2005, CDBG has rehabilitated more than 1.3 million units of housing and funded public infrastructure projects that have assisted more than 16 million people. President Biden’s FY 2023 budget included significant funding increases for both programs.
The HOME Coalition, which NCSHA convenes, is urging Congress to provide at least $2.5 billion for HOME in FY 2023. For nearly three decades, HOME has been one of the most effective and flexible tools states and localities have had to meet their affordable housing needs. HOME can be used to build and preserve affordable rental housing, build new and rehabilitate single-family housing, provide tenant-based rental assistance, and support other homeownership assistance. HOME is more critical than ever as we work to tackle rising housing inflation and navigate the ongoing impacts of the Covid-19 pandemic on the nation’s housing market. Go here to add your organization’s name by April 22 to the HOME Coalition’s national sign-on letter urging Congress to provide at least $2.5 billion for HOME in FY 2023.
NCSHA in the News
Louisville Business First, 4.14.22, Opportunity Zone investors have extra time to take advantage of capital gains benefit
Vermont Biz, 4.14.22, VELCO adds Board member, corporate secretary, COO
Legislative and Regulatory Activities
- April 22 | Signature Deadline | HOME Coalition National Sign-On Letter Urging Congress to Provide $2.5 Billion for HOME in FY 2023
- May 2 | Comments Due to NCSHA | HUD Proposed Rule on Increased 40-Year Term for Loan Modifications
- May 6 | Comments Due to NCSHA | Labor Department Proposed Rulemaking to Update Davis-Bacon Act Regulations
- May 17 | Comments Due | Labor Department Proposed Rulemaking to Update Davis-Bacon Act Regulations
- May 31 | Comments Due | HUD Proposed Rule on Increased 40-Year Term for Loan Modifications
NCSHA, State HFA, and Industry Events
- April 28 – 29 | Novogradac Affordable Housing Conference | San Francisco and Online
Jennifer Schwartz will speak at this event. - May 2 – 4 | Mountain Plains HFA Summit | Billings, MT
Garth Rieman will speak at this event. - May 11 – 12 | Outside the Box: 2022 PHFA Housing Forum | Harrisburg, PA
Jennifer Schwartz will speak at this event. - May 23 | NCSHA’s Housing Credit Connect: Last Day for Registration and Hotel Discounts | Chicago
- May 25 – 27 | ABA Forum on Affordable Housing and Community Development Law Annual Conference | Washington, DC
Jennifer Schwartz will speak at this event. - June 8 – 9 | CAHEC Partners Conference | Greensboro, NC
Stockton Williams will speak at this event. - June 21 – 24 | NCSHA’s Housing Credit Connect | Chicago
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