House Releases New 21st Century ROAD to Housing Bill
Late Wednesday night, House leaders released updated text of the 21st Century ROAD to Housing Act, the latest version of the comprehensive affordable housing authorizing package under consideration in Congress. The House and Senate have been in a standoff over the legislation, with the Senate pressing the House to take up the version of the legislation it passed in March without changes, and the House countering that the Senate bill would not be able to pass the lower chamber due to member objections to aspects of the Senate’s bill.
The House bill’s release follows a social media post by President Trump earlier this week doubling down on his support for the Senate bill and urging the House to pass it. According to press reports Thursday afternoon, a White House spokesperson said, “The bill is under review. New provisions were added before the administration had a chance to review or provide technical assistance.”
House leaders are expected to bring the bill to the floor next week.
Highlights of the new House bill follow.
Public Welfare Investment Cap
Like the Senate bill and previous versions of the House bill, the updated legislation would raise the cap on public welfare investments — including Housing Credit investments — made by banks from 15 to 20 percent of capital and surplus. This provision is a high priority for NCSHA because it would allow banks currently up against the limit to invest more in Housing Credit developments.
Reauthorization and Reforms to the HOME Program
The bill would retain all the provisions strengthening the HOME program from the Senate’s bill passed in March, including reauthorization, improvements to HOME’s homeownership activities, streamlining Section 3 requirements, and simplifying property inspection requirements.
It also includes two additional provisions that were part of the version of the legislation that passed the House in February but left out of the Senate-passed bill:
- A requirement that the HUD Secretary conduct a review of the implementation of Build America, Buy America (BABA) requirements as they relate to the HOME program and update BABA guidance for HOME. HUD would have up to 180 days to conduct the review and up to 90 days following the review to publish new guidance. It also requires HUD to submit a report to the House Financial Services and Senate Banking committees describing the results of the review and the guidance update.
- Exemption of certain HOME activities from environmental review requirements; specifically, housing that qualifies as new construction infill housing projects, acquisition of real property for affordable housing purposes, rehabilitation projects carried out pursuant to section 212(a)(1), and new construction projects of 15 units or fewer. Additionally, HOME participating jurisdictions would not need to conduct duplicative environmental reviews due to the “addition, subtraction, or reallocation” of other federal funds within the project’s capital stack if the “scope, scale, and location” of the project remains substantially the same or if a similar review has already been conducted on the project for purposes of a different federal program. The bill requires the HUD Secretary to issue a rulemaking within one year of the bill’s passage to implement these changes.
Rural Housing Reforms
Unlike the version of the legislation the House passed in February, the new House bill includes provisions from the Senate-passed bill that would allow the U.S. Department of Agriculture’s Rural Housing Service to preserve more rural affordable housing and authorize appropriations for technology improvements and increased staffing within the Rural Housing Service. The bill would permanently authorize the pilot program allowing the USDA Secretary to decouple rental assistance from properties with expiring USDA multifamily mortgages, allowing for continued rental assistance for units located in properties where a USDA mortgage has been paid off. The bill also would permanently authorize the Multifamily Preservation and Revitalization program, which is currently a pilot program designed to rehabilitate housing properties financed with Section 514, 515, or 516 loans.
Whole Home Repair Pilot Program
The House incorporated a provision, which prior to this had only been in the Senate bill, to authorize HUD to establish a five-year pilot program to provide grants to nonprofits, state and local governments, and American Indian tribes to offer grants and forgivable loans to low- and moderate-income homeowners and qualifying small landlords to address repair needs and health hazards for single-family homes occupied by low-income households (earning 80 percent of area median income or below). State and local governments would be eligible to apply for funding only in areas where a qualified nonprofit is not participating in the program.
Prohibition on Institutional Investor Purchases of Single-Family Homes
Like the Senate-passed bill, the updated House bill includes a provision to restrict large institutional investors from competing with individual home buyers to purchase single-family homes. Limiting institutional investor ownership of single-family homes is a priority for the White House. Both bills prohibit institutional investors from owning more than 350 homes (though homes previously purchased by those investors would be grandfathered in under both bills). Beyond that, the details of the two chambers’ bills diverge.
Unlike the Senate bill, which requires investors to sell any “build-to-rent” or “build-to-renovate” properties within seven years, the House bill specifically states that it does not require institutional investors to divest or otherwise sell any single-family home purchased before or after the date of enactment. Instead, institutional investors who violate the prohibition would be subject to civil penalties of up to $1 million per violation or three times the purchase price of the property, and such penalties would be funneled to the HOME program to support homeownership activities.
The House bill provides an explicit exemption from the prohibition for single-family rental housing financed under the Low-Income Housing Tax Credit, as NCSHA had sought. The bill also exempts states, tribes, the federal government, nonprofits, and community land trusts from being considered institutional investors.
The House bill defines single-family properties as those with two or fewer dwelling units but specifically does not include manufactured housing, properties that when occupied have always been occupied by renters, properties that when occupied are rented to certain members of the military or National Guard, properties made up of multiple rental housing units constructed on a single parcel, and other exemptions.
Other Differences of Note
A few provisions from the Senate bill were not included in the House bill, including one that is an NCSHA priority: the PRICE Act, which would support manufactured housing preservation and reinvestment. The House bill also omits the expansion of the Rental Assistance Demonstration program, authorization of the Community Development Block Grant Disaster Recovery program, and expansion of the Moving to Work program.
The House bill also includes a few provisions that were not in the Senate bill, including a title of the bill focused on community banking legislation that is a priority for House Republicans.
