NCSHA Washington Report | April 21, 2023
One of the reasons the Fair Housing Act, sometimes called the “last plank” of the civil rights movement, has been perhaps the hardest of all to put in place is because it not only bars discrimination but also demands actions to solve for its wide-ranging harms in the housing market.
Discrimination remains a problem: Housing discrimination complaints hit an all-time high last year, according to the National Fair Housing Alliance. Overcoming the causes within the fair housing legal framework has been daunting because accountability for “affirmatively furthering” the law’s intent falls to state and local agencies that administer federal housing funds but nevertheless lack influence over some of the main obstacles to actually achieving fair housing.
“Exclusionary zoning” practices, for example, which are embedded in local land use regulations largely outside the purview of funding agencies, make it harder and more expensive to build housing and are “connected…[to] racial segregation, creating greater disparities in measurable outcomes,” according to the White House Council of Economic Advisors.
Analysts from the Terner Center at UC Berkeley argue that, when it comes to furthering fair housing, “even land use reforms may be insufficient; expensive land and fierce local opposition in high-opportunity neighborhoods layer on top of high costs for labor, construction materials, and fees.”
The Poverty and Race Research Action Council’s recommendations for state actions to further fair housing go well beyond funding program policies and include new state laws to prevent “discrimination in the housing market based on source of income” (e.g., rental vouchers) and to require and encourage a “fair share” of new development throughout local communities in the state.
All this said, for decades “various courts, in decisions regarding HUD’s obligations,” have issued opinions reflecting “the desire to have HUD use its grant programs to assist in ending discrimination and segregation, to the point where the supply of genuinely open housing increases,” according to the Congressional Research Service. The local and state agencies that administer HUD programs, among them most state HFAs, are broadly accountable.
Their actual responsibilities have been at best vaguely articulated and rarely enforced by the federal government for most of the past half-century. In January, HUD put forward a new regulatory approach that represents the most workable attempt to do both to date. HUD’s proposed regime is clearer, better balanced, and less administratively burdensome than prior versions from Democratic and Republican administrations.
The new rules are, to HUD’s credit, highly responsive to multiple rounds of detailed comments NCSHA has provided over the years, as well as input from governmental groups and fair housing advocates. We’re hopeful the final version of the regulations will make several needed additional improvements, detailed in our latest set of recommendations to the department.
Stockton Williams | Executive Director
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- House, Senate Appropriations Subcommittees Discuss HUD’s FY24 Budget Proposal with Secretary Fudge
- EPA Releases Implementation Framework for Greenhouse Gas Reduction Fund
- HUD Announces Funding for HFAs, Others to Address Unsheltered, Rural Homelessness
- HUD Posts Draft Mortgagee Letter Proposing ADU Underwriting Changes
- FHFA Proposes Rule to Codify GSE Equitable Housing Plans, Other Fair Lending Activities
- Looking Ahead
House, Senate Appropriations Subcommittees Discuss HUD’s FY24 Budget Proposal with Secretary Fudge
The House and Senate Transportation, Housing, and Urban Development (THUD) appropriations subcommittees held hearings on April 18 and April 20, respectively, featuring Secretary Marcia L. Fudge to evaluate the President’s FY24 Budget Request for the Department of Housing and Urban Development (HUD). In her opening and written statements in both chambers, Secretary Fudge noted the President’s FY24 Budget requests $73.3 billion for HUD, approximately $1.1 billion more than the FY23 enacted level. Secretary Fudge highlighted specific requests for $32.7 billion for the Housing Choice Voucher program, which would allow HUD to expand assistance to an additional 50,000 families, as well as $1.8 billion for the HOME Investment Partnerships program to help increase production of affordable housing. More details are available in NCSHA’s blog.
EPA Releases Implementation Framework for Greenhouse Gas Reduction Fund
On Wednesday, the Environmental Protection Agency (EPA) released a detailed implementation framework for its new Greenhouse Gas Reduction Fund (GGRF), authorized by the Inflation Reduction Act, that will invest $27 billion to finance projects that reduce greenhouse gas emissions and air pollution. The implementation framework provides detailed descriptions of program design, grant requirements, and application evaluation factors in advance of the publication of formal Notices of Funding Opportunities for the various GGRF components, anticipated as early as June. EPA is soliciting written comments on the GGRF implementation framework, and interested parties may send feedback to ggrf@epa.gov by May 12. Please send to Robert Henson by April 28 feedback for NCSHA to consider in our comments. More details about the GGRF implementation framework can be found in NCSHA’s blog.
HUD Announces Funding for HFAs, Others to Address Unsheltered, Rural Homelessness
On April 17, HUD announced an additional $171.2 million in awards made under a special Notice of Funding Opportunity for homeless service and housing programs dedicated to unsheltered and rural populations through the continuum of care (CoC) program, including a number of awards made to state HFAs. This announcement follows a previous announcement of $322 million in awards made in February. These special awards were authorized by a set-aside in an FY20 omnibus spending bill. The CoC program is the largest source of federal grant funding for services and housing programs serving people experiencing homelessness and provides grants to nonprofit providers, states, tribes or tribally designated housing entities, and local governments to quickly rehouse homeless individuals, families, youth, and persons fleeing domestic violence, dating violence, sexual assault, and stalking.
In addition to the CoC grants, HUD also announced $43.4 million in new incremental vouchers targeting individuals and families experiencing or at risk of homelessness; fleeing or attempting to flee domestic or sexual violence, human trafficking, or stalking; and veterans and families that include a veteran family member. This funding, authorized in the FY21 omnibus spending legislation, will support approximately 3,300 new Stability Vouchers, many of which will be administered by state HFAs, to provide rental assistance to households in eligible categories.
HUD Posts Draft Mortgagee Letter Proposing ADU Underwriting Changes
Last week, the Federal Housing Administration (FHA) announced it had posted a draft mortgagee letter (ML) on its Single-Family Housing Drafting Table for stakeholder feedback by April 27. FHA’s draft ML would allow prospective borrowers financing a property with an accessory dwelling unit (ADU) to use the actual or projected rental income from the ADU to help meet FHA income guidelines. It also would add ADUs to the types of improvements eligible for the FHA Standard 203(k) Rehabilitation Mortgage Insurance Program and include ADU rental income when performing financial assessments for home equity conversion mortgages.
FHFA Proposes Rule to Codify GSE Equitable Housing Plans, Other Fair Lending Activities
The Federal Housing Finance Agency (FHFA) on Wednesday announced a proposed rule that would formalize many of the agency’s recent efforts to ensure Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) support fair and equitable housing. The proposed rule would require Fannie Mae and Freddie Mac to publish and maintain Equitable Housing Finance Plans outlining the activities each firm will undertake to support equitable access to affordable and sustainable housing. Fannie Mae and Freddie Mac first published such plans in June 2022 at FHFA’s direction. NCSHA strongly supported this FHFA directive. By codifying the plans through regulation, FHFA would make the requirement more difficult to rescind. The proposed rule would also enhance FHFA’s ability to supervise Fannie Mae, Freddie Mac, and the FHLBs for potential fair housing violations; require each entity to submit annual fair housing compliance reports; and codify a 2022 FHFA mandate that Fannie Mae and Freddie Mac collect information on mortgage applicants’ language preference and whether they received home buyer education or counseling. NCSHA signed a press release issued by the Underserved Mortgage Markets Coalition supporting FHFA’s efforts to codify the Equitable Housing Finance Plans. FHFA will accept comments until 60 days after the proposal is published in the Federal Register. NCSHA will submit comments on behalf of HFAs and their partners. If you have input for NCSHA to consider, please email Greg Zagorski by May 26.
Legislative and Regulatory Activities
- April 24 | Comments Due | Affirmatively Furthering Fair Housing Proposed Rule
- April 26 | Comments Due | Department of Energy RFI on IRA Funding Opportunity
- April 27 | Comments Due | Consideration of Accessory Dwelling Unit Rental Income
- April 27 | Comments Due | NSPIRE Scoring Notice
- April 28 | Comments Due to NCSHA | EPA Implementation Framework for the Greenhouse Gas Reduction Fund
- May 1 | Comments Due | Review of Mortgage Loan Origination Rules (including Loan Originator Compensation)
- May 12 | Comments Due | EPA Implementation Framework for the Greenhouse Gas Reduction Fund
- May 12 | Comments Due | Proposed Changes to GSE Capital Requirements
- May 17 | Comments Due | FHFA RFI on Enterprise Single-Family Social Bond Program
- May 26 | Comments Due to NCSHA | FHFA Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans
- TBD | Comments Due | FHFA Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans
NCSHA, State HFA, and Industry Events
- April 25 – 27 | Affordable Housing Investors Council’s 2023 Spring Meeting | Baltimore, MD
Stockton Williams will speak at this event. - April 27 – 28 | Novogradac 2023 Affordable Housing Conference | San Francisco, CA
Jennifer Schwartz will speak at this event. - May 3 | Stewards of Affordable Housing for the Future/National Affordable Housing Trust Annual Retreat | Washington, DC
Jennifer Schwartz will speak at this event. - May 3 – 6 | National Association of Local Housing Finance Agencies Annual Conference | Tampa, FL
Robert Henson will speak at this event. - May 9 | Ballard Spahr National Housing Summit | Washington, DC
Jennifer Schwartz will speak at this event. - May 10, 11:59 p.m. ET | Entry Deadline | NCSHA’s 2023 Awards for Program Excellence
- May 15 | Last Day for Discounted Early Registration, Hotel Group Rate: NCSHA’s Housing Credit Connect & Marketplace | Seattle, WA
- June 7 | HCCP Board of Governors Average Income Test Webinar | Virtual
Jennifer Schwartz will speak at this event. - June 13 – 16 | NCSHA’s Housing Credit Connect & Marketplace | Seattle, WA
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