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Washington Report | June 28, 2024

Published on June 28, 2024

NCSHA Washington Report

About five years ago — before Covid — encampments of unhoused people began appearing around the country “in numbers not seen in almost a century.” Cities characterized as “liberal” as well as “conservative” have been responding by forcibly clearing the areas and, in many cases, ticketing, fining, and threatening residents with jail time if they don’t find someplace else to sleep.

Not everybody wanting to see encampments cleared is simply coldhearted. In some areas, encampments jeopardize public health and safety, for their residents and others, and hurt local businesses. But the results of the most aggressive approaches — effectively criminalizing people for being homeless, even if they have no real choice —  are often “counterproductive, costly, and harmful.”

The U.S. Supreme Court decision today upholding the Oregon city of Grants Pass’s law banning people experiencing homelessness from sleeping outside, even if no shelter beds are available to them, reversed a decision by the U.S. Court of Appeals for the Ninth Circuit that declared such a ban to be in violation of the Constitution’s prohibition against “cruel and unusual punishment.” Experts such as the National Law Center on Homelessness have argued the decision “will give cities and states permission to punish people who are forced to sleep outside, even when they have no other safe option.”

Few proponents of camping bans argue they meaningfully address the causes of homelessness. During earlier oral arguments, Justice Brett Kavanaugh, who joined five of his colleagues in today’s 6 – 3 decision, observed someone sent to jail for sleeping outside is “not going to be any better off than [they] were before” if there’s no place for them to go when they get out.

Where housing and services are in place, people do end up better off: An estimated 900,000 transition out of local service systems every year. The problem has been getting worse recently, in large part, because the same number or more are becoming homeless on an annual basis. That’s why Jeff Olivet, the head of the U.S. Interagency Council on Homelessness, says that, “although housing is the immediate solution to homelessness, prevention is the other half of the equation.”

State HFAs have a role on both sides of it. At least 17 are using State and Local Fiscal Recovery Funds for homeless assistance and development of new permanent supportive housing. In each of the 10 states which collectively have two-thirds of the nation’s unhoused people, the HFA is prioritizing homeless housing developments with their Housing Credit programs. Housing Credit development “does significantly reduce county-level homelessness,” according to a 2015 study by the Federal Reserve Bank of Boston.

And to Olivet’s point about prevention, more than a million households living in Housing Credit-financed properties have poverty-level incomes or even less. Credit properties, in combination with rental assistance, are keeping untold numbers of vulnerable children and adults from becoming homeless in the first place, too.

Stockton-Williams-Washington-ReportThere were already plenty of reasons for Congress to authorize more vouchers and expand the Housing Credit, which it still can this summer. The Supreme Court’s decision today makes it all the more urgent.

Stockton Williams | Executive Director

Washington Report will return July 12.

NCSHA Welcomes New Members
NCSHA welcomed these organizations as Affiliate members in June: Council of Federal Home Loan Banks; CSONE CORP.; Langston Hughes Affordable Housing, Inc.; Onity Group Inc.; and Pacifica Law Group LLP. If you work with a partner interested in becoming a member, please contact Phaedra Stoger.

Johnson Hall Named to Equitable Housing Finance Advisory Committee
California Housing Finance Agency Executive Director and NCSHA Board Director Tiena Johnson Hall has been selected to serve on the Advisory Committee on Affordable, Equitable, and Sustainable Housing, the Federal Housing Finance Agency (FHFA) announced yesterday. The 20 members of the advisory committee will provide non-binding advice to FHFA on how its regulated entities — Fannie Mae, Freddie Mac, and the Federal Home Loan Banks — can best serve as reliable and responsible sources of liquidity and funding for housing finance and community investment, including single- and multifamily housing.

Treasury Announces Affordable Housing Initiatives
U.S. Secretary of the Treasury Janet Yellen announced Monday a set of new initiatives the Biden Administration is undertaking to increase affordable housing production. The initiatives include exploring how to provide greater interest rate predictability to state and local HFAs participating in the Risk-Sharing program to access Federal Financing Bank support, urging the Federal Home Loan Banks to increase their housing program spending from 15 to 20 percent of their net income, publishing a new how-to guide to support state and local governments in using recovery funds provided by Treasury to construct housing, and updating the Capital Magnet Fund to provide greater flexibility to community development financial institutions and nonprofits that finance affordable housing. Secretary Yellen made the announcement during an event in Minneapolis that included Minnesota Housing Commissioner Jennifer Ho.

Interim Rule Announces Capital Magnet Fund Changes
On Monday, the U.S. Treasury’s Community Development Financial Institutions Fund published revisions to its Capital Magnet Fund (CMF) interim rule initially published in February 2016. The revised interim rule proposes to align the CMF more closely with other federal programs, including the Housing Credit, the HOME Investment Partnerships program, Section 8 Housing Choice Vouchers, and the Rural Development Section 515 program. The CMF was established by the Housing and Economic Recovery Act of 2008 as a trust fund to promote investment, especially in affordable housing, for underserved populations and in distressed communities. Comments on the revised rule are due by August 26.

HUD Makes $500 Million Available to Eliminate Housing-Related Health, Safety Hazards
On Monday, the U.S. Department of Housing and Urban Development (HUD) announced more than $469 million in grant funding is available to state and local governments through its Lead Hazard Reduction Grant program. Grantees may use the funds to improve the health and safety of privately-owned homes built before 1978 and to house low-income families. Applications for this grant funding are being accepted until August 19.

House Subcommittee-Passed FY25 Funding Bill Provides $64.8 Billion for HUD
Yesterday, the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies advanced Fiscal Year 2025 legislation to provide $64.8 billion for HUD, which if enacted would represent a $5.2 billion cut from FY24. The bill cuts funding for the HOME Investment Partnerships program from $1.25 billion to $500 million and includes language directing HUD to pursue new Performance-Based Contract Administration awards through a new competition on a state-by-state basis to eligible public housing agencies, including HFAs. Read more about the bill in NCSHA’s blog.

HUD Awards $85 Million for PRO Housing Program
HUD announced Wednesday it has awarded almost $85 million to 21 communities through the Pathways to Removing Obstacles to Housing (PRO Housing) program. Grantees will use PRO Housing program funds to identify and remove barriers to preserving and producing affordable housing, including initiatives to boost housing supply, reform local regulations, incentivize development, prevent displacement, and encourage community-driven solutions. There will be an additional round of $100 million in PRO funding later this year. HUD is rolling out profiles of the 21 awardees, highlighting how each community is addressing their local housing needs.

FHFA Approves Freddie Mac Plan to Purchase Closed-End Second Mortgages
Last Friday, FHFA conditionally approved Freddie Mac’s pilot to purchase qualifying single-family closed-end second mortgages. The conditional approval includes several limitations, including a maximum volume of $2.5 billion in purchases; a maximum duration of 18 months; a maximum loan amount of $78,277; a minimum seasoning period of 24 months for the first mortgage; and eligibility only for principal/primary residences. Once the pilot concludes, FHFA will evaluate whether its objectives were met. FHFA indicated conversion of the pilot to a programmatic activity would be treated as a new product subject to public notice and comment and FHFA approval. NCSHA provided comments on the proposed new product to FHFA on May 22.

New Treasury Data Shows HAF Has Helped 535,000 Families Stay in Their Homes
The Homeowner Assistance Fund (HAF) has provided more than $7.1 billion in assistance to help 535,380 struggling homeowners avoid foreclosure through 2023, according to the Treasury Department’s HAF report for the first quarter of 2024. This data shows an eight percent increase in assistance and seven percent increase in households assisted over the last quarter of 2023. Through the first quarter of 2024, HAF agencies had spent 83 percent of HAF money received. The Treasury data demonstrates HAF agencies have assisted vulnerable and underserved households: Eighty-nine percent of recipients earned at or below area median income, while 50 percent earned at or below 50 percent. Thirty-nine percent of HAF beneficiaries identified as Black and 20 percent as Latino.

Seventeen More Properties Receive HUD Green and Resilient Retrofit Program Grants
On Tuesday, HUD announced more than $142 million in new grant and loan awards under its Green and Resilient Retrofit Program, which now has made more than $754 million in total awards for energy efficiency and climate resilience upgrades at HUD-supported affordable housing properties. The press release and list of 17 properties receiving awards are available here.

Housing Subcommittee Hears from HUD, FHFA Inspectors General
The House Subcommittee on Housing and Insurance Wednesday held an oversight hearing featuring testimony from the inspectors general of HUD and FHFA. In his opening remarks, Subcommittee Chair Warren Davidson (R-OH) praised HUD Inspector General Rae Oliver Davis for her office’s reporting on mismanagement issues at local public housing agencies and highlighted several bills the Financial Services Committee has passed to reform PHAs. Davidson also expressed his concerns about two pilot programs FHFA recently approved that will allow Freddie Mac to purchase some second mortgages and allow Fannie Mae and Freddie Mac to waive title insurance requirements for certain loans. Such initiatives, Davidson argued, threaten the financial soundness of Fannie Mae and Freddie Mac and interfere with the private market. Davidson and several other subcommittee Republicans asked FHFA Inspector General Brian Tomney to investigate these recent decisions. Tomney said he would consider the subcommittee’s input when forming his office’s agenda. Subcommittee Democrats suggested their Republican colleagues were too focused on investigating HUD and FHFA when they should be working to pass legislation to increase support for affordable housing.

NLIHC “Out of Reach” Report Documents High Housing Costs
The National Low Income Housing Coalition’s latest report Out of Reach: The High Cost of Housing, released this week, finds that, despite minimum wage increases, cooling inflation, and low unemployment, homelessness increased; HUD’s annual Point-in-Time count rose 12 percent from the previous year, reaching the highest total ever. The report says among the nation’s 20 most common occupations, 14 pay median wages below the housing wage required to afford a one-bedroom apartment. These 14 occupations collectively employ more than 64 million workers, comprising 42 percent of the workforce. The report urges Congress to establish a federal housing safety net with investments to expand both short- and long-term rental assistance, build deeply affordable housing, maintain existing affordable housing, and enhance protections for renters.

NCSHA in the News
Bloomberg Tax, 6.26.24, Affordable Housing Backers’ Hopes Dim as Tax Package Withers
Ozaukee County News Graphic, 6.25.24, Longabaugh named Thiensville’s newest trustee

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