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NCSHA Washington Report | January 5, 2024

Published on January 5, 2024

Washington Report NCSHA

While we’re laser-focused on doing everything we can over the next few weeks, in yet another delayed congressional appropriations process, to increase the two most important federal programs for affordable apartment development — HOME and the Housing Credit — we’re also engaged behind the scenes with agencies across the government on final regulations and funding announcements we expect over the next few months that could substantially impact affordable housing in a number of areas. They include:

More opportunities to transform obsolete federal property for homeless housing. With homelessness at an all-time high, vacant federal buildings — of which there are thousands across the country — are an almost entirely untapped resource to local governments and nonprofits for housing conversions due to unworkable regulations that HUD, HHS, and GSA are revising. NCSHA’s recommendations and advocacy with the National Homeless Law Center specify simple tweaks that would unlock a huge housing supply opportunity for those who need it most.

A workable approach for furthering fair housing. Candidate Biden pledged in 2020 to fix a HUD regulation that had been a political football for decades, resulting in a serious structural weakening of the “last plank” in the legal framework for full civil rights. HUD last year put forward a largely balanced proposed rule for “affirmatively furthering” fair housing that was more responsive to state and local concerns than any prior attempt and, with some additional modifications, could in final form create a feasible pathway for communities to better support equal ownership and rental housing opportunity.

Bank capital standards that keep the door open to low-income homeownership. The Fed, OCC, and FDIC have proposed increasing capital requirements for large banks, especially for mortgages with down payments below 20 percent, which analysts say would increase rates for “borrowers least able to afford the increases.” NCSHA is part of a coalition of housing and civil rights groups urging the regulators to change course, because the rules as written would undermine efforts to better serve borrowers of color and undercut community development objectives in the recently updated Community Reinvestment Act regulations.

Billions in funding for energy improvements for low-income homes and apartments. Massive federal infrastructure and climate laws passed in 2021 and 2022, respectively, authorized a total of at least $21.5 billion in grant funding and $36.5 billion in tax credits for housing-related energy efficiency and renewable energy improvements, much of which will be allocated starting this spring. State HFAs, which have been active in these areas for years, will play key roles delivering the capital to homeowners, apartment operators, and housing developers.

Happy New Year.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

Washington Report will return January 19.

State HFA Emergency Housing Assistance

In This Issue

AHCIA Champions Fighting for Place in Possible Tax Bill
As tax bill negotiations continue in Congress, inclusion of NCSHA’s Housing Credit priorities could be decided within the next week. With Democrats focusing on increasing the Child Tax Credit and Republicans on including a set of business tax incentives, we’re doing everything we can to ensure the Housing Credit doesn’t get left on the cutting room floor if a package comes together. Any deal now could very well be the last tax bill Congress considers until 2025, when much of the Tax Cuts and Jobs Act — the major tax reform bill Republicans passed in 2017 — is set to expire.

The sponsors of the Affordable Housing Credit Improvement Act (AHCIA) are pressing tax committee leadership, both publicly and behind the scenes, to include the Housing Credit. The six House bill sponsors — Representatives Darin LaHood (R-IL), Suzan DelBene (D-WA), Brad Wenstrup (R-OH), Don Beyer (D-VA), Claudia Tenney (R-NY), and Jimmy Panetta (D-CA) — sent House Speaker Mike Johnson (R-LA) and Minority Leader Hakeem Jeffries (D-NY) a December 15 letter urging them to include key AHCIA provisions in any tax legislation Congress considers. Earlier this week, LaHood and DelBene followed up with an op-ed published in The Hill. Both the letter to leadership and the op-ed tout the bill’s wide bipartisan support, with more than 200 cosponsors evenly split across the parties.

We’re asking all the bill’s cosponsors to tell the tax committee leaders — Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) and Ways and Means Committee Chair Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA) — they must include the Housing Credit in their tax bill. All four tax committee leaders support the AHCIA, but if they don’t hear enough from rank-and-file members in both chambers that the tax bill must include the Housing Credit, all available resources will be dedicated to the other tax issues under discussion.

FHFA Announces Increase in Enterprises’ LIHTC Cap, Qualified Contract Property Investment Restrictions
On December 21, the Federal Housing Finance Agency (FHFA) announced it will allow the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to increase investment in the Housing Credit equity market in 2024. The new FHFA-imposed investment limit is $1 billion for each GSE, $150 million more than the GSEs were eligible to invest each in 2023. Any investments above $500 million annually must be targeted to developments that have difficulty attracting investors, such as those in rural areas, preservation projects, mixed-income projects, or supportive housing.

FHFA also announced it will require the GSEs to institute new policies to invest only in Housing Credit developments for which the owners have waived the right to a qualified contract, thereby ensuring such properties remain affordable for the full period outlined in the developments’ extended use agreement. NCSHA and several of our partner advocacy groups had urged FHFA to take this action to mitigate the premature loss of Housing Credit homes from the affordable housing inventory. For more information, see NCSHA’s blog.

HUD Reports Homelessness Increase in 2023
The U.S. Department of Housing and Urban Development (HUD) has released its 2023 Point-in-Time Estimates, a component of its Annual Homeless Assessment Report. The report finds that homelessness increased 12 percent from 2022, with more than 650,000 people experiencing homelessness on a single night in January 2023. HUD’s data indicates the increase is largely due to a sharp rise in the number of people experiencing homelessness for the first time; between fiscal years 2021 and 2022, that number increased by 25 percent. HUD attributes the rise in first-time homelessness to very tight rental markets and the winding down of relief programs, such as the Emergency Rental Assistance program, and eviction protections in place during the Covid-19 public health crisis.

HUD Awards $174 Million in GRRP Funding, Extends Application Deadline for More Awards
HUD announced the award of $174 million in funding through its Green and Resilient Retrofit Program (GRRP) to support energy efficiency and electrification in 30 HUD-assisted multifamily properties representing 3,070 rental units. The GRRP, authorized by the Inflation Reduction Act, provides more than $800 million in grant funding and up to $4 billion in loan commitment authority for projects to improve energy or water efficiency, enhance indoor air quality, implement the use of zero-emission electricity generation, and other purposes. Awards are being issued in three categories, or cohorts, depending on the status of properties. HUD also announced an extension in the application deadline from January 4 to March 28 for the Elements cohort for properties currently undergoing recapitalization transactions.

HUD Awards $10 Million in Family Unification Vouchers
HUD last month announced it had awarded under the Family Unification Program $10 million for 625 vouchers to 13 public housing agencies (PHAs), including Rhode Island Housing. Under the program, PHAs will identify people age 18 – 24 years who have either exited foster care or will do so within the next 90 days and are at risk of homelessness and families for whom the lack of affordable housing is the primary reason for the imminent placement of their children in foster care. The vouchers are available to house the people identified and increase access to other supportive services for those who need them. See the full list of awardees.

HUD Makes $40 Million Available to Hire Service Coordinators
Last month, HUD’s Office of Multifamily Housing Programs announced $40 million is being made available to increase the number of service coordinators who support seniors and persons with disabilities living in affordable multifamily housing. HUD intends to provide 160 grant awards to pay salaries and associated benefits for the service coordinators hired through this process. Applications are due by March 11; more information is available here.

FHFA Releases Summary of Tenant Protections RFI Responses
FHFA on Wednesday released a report summarizing the feedback to its May 30 Request for Input (RFI) on tenant protections for residents of multifamily properties financed with loans guaranteed by either Fannie Mae or Freddie Mac. FHFA received more than a thousand responses to the RFI, including from tenants and tenant advocates, nonprofits, lenders, landlords, government agencies, and mortgage industry advocates. The RFI followed the White House Blueprint for a Renters Bill of Rights, which stated FHFA would solicit stakeholder outreach to help identify opportunities for and challenges of adopting and enforcing tenant protections. NCSHA submitted comments highlighting the work state HFAs are doing to address issues tenants face and urging the agency to focus on preserving the affordability and quality of existing affordable housing properties.

NCSHA in the News
Reuters, 1.4.24, From guns to housing, the impact from spending cuts on Black Americans is far and wide
Reuters, 1.4.24, Black Americans would feel the sting of Republican budget cut proposals
Enterprise Blog, 1.4.24, Decarbonizing Multifamily Housing: How State Finance Agencies Are Gearing Up for the IRA
Notes from Novogradac, 1.2.24, FHFA Increase to the GSEs’ Annual LIHTC Equity Investment Cap to $1 Billion Each; Release of Public Use Database Shows Commitment to Affordable Housing
Notes from Novogradac, 12.27.23, Benefits Far Outweigh Costs for Tax Incentives Promoting Community Development, Affordable Housing and Historic Preservation
TCN News, 12.23.23, Charities that help with deposit for rent

Looking Ahead

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • January 7 – 12 | NCSHA’s HFA Institute 2024 | Washington, DC
  • January 18 – 19 | Novogradac 2024 Affordable Housing Developers Conference | Fort Lauderdale, FL
    Jennifer Schwartz will speak at this event.
  • January 24 – 25 | Affordable Housing Tax Credit Coalition Annual Conference | Charleston, SC
    Jennifer Schwartz will speak at this event.
  • January 25 | Release: America’s Rental Housing Report | Harvard University Joint Center for Housing Studies | Washington, DC

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