NCSHA Washington Report | August 2, 2024
It was inspiring to spend a day this week in Syracuse with a group of state and local housing and economic development officials who were strategizing about how the six-county region known as “central New York” can create the necessary housing supply and affordability to accommodate the transformational impacts expected from Micron’s recent $100 billion commitment to build the country’s largest semiconductor facility in the nearby town of Clay.
The region needs to triple its current rate of housing production over the next several years to absorb the thousands of jobs that will be created by the plant’s construction and operations, according to a presentation by HR&A Advisors. Because the increased housing demand will come from lower- as well as higher-income households, and from current residents along with new arrivals, the necessary new development also will need to reflect a wider range of product types and price points than the market currently can produce, firm representatives said.
Perhaps the key takeaway from HR&A’s data-rich analysis was that significant public investment likely will be needed not only to meet the housing needs of the region’s low-income renters but those of some middle-income renters and first-time home buyers as well.
New York is not the only place a U.S. “manufacturing renaissance” — fueled by an emergent national industrial policy — is creating a new set of challenges for state and local housing leaders.
In Georgia, “economic development efforts throughout rural parts of the state, including the development of large manufacturing plants by companies like Hyundai and Rivian, have driven jobs growth in areas with historically little investment,” according to the state’s Department of Community Affairs, which handles both housing and economic development. The agency is running an innovative new initiative to finance affordable home building and infrastructure improvements to create a more sustainable jobs ‒ housing nexus.
In Arizona, TSMC’s plans to build three chips factories in Phoenix are expected to create tens of thousands of jobs for workers “who will need places to live.” While it appears home builders will be able to meet some of that demand, the state’s Department of Housing has been investing in affordable rental development in the area to help protect current lower-income residents from unsustainable price pressures that are expected to follow. Ohio State’s Stephanie Moulton, a housing scholar whose work has covered HFAs, shares similar concerns about Intel’s plans to build two large factories near Columbus.
Some state-supported manufacturing innovation is directly housing related. One of the priorities of Colorado’s Affordable Housing Financing Fund is investing in manufactured and other factory-built home-building companies aiming to serve the middle of the market. In February, the fund, which is administered by the Colorado Housing and Finance Authority, announced commitments to eight manufacturers to create an estimated 4,755 new homes per year.
Synchronizing federal and state housing and economic development initiatives has been something of a holy grail for policy wonks. Around the country, governors and the state officials are making it happen. Not a moment too soon.
Stockton Williams | Executive Director
In This Issue
- NCSHA, HOME Coalition Submit Comments on HUD Proposed HOME Rule
- Vote on Tax Legislation with Housing Credit Expansion Fails in Senate
- Witnesses, Senators Extol Housing Programs During Committee Hearing
- Legislation to Facilitate GSE Housing Credit Investment in Rural Areas Introduced in Senate, House
- HUD Announces $3.5 Billion to Help People Experiencing Homelessness
- FHA Publishes Final Rule on Engaging Mortgagors in Default
- NCSHA in the News
- Looking Ahead
NCSHA, HOME Coalition Submit Comments on HUD Proposed HOME Rule
On Monday, NCSHA submitted comments to the U.S. Department of Housing and Urban Development on its proposed rule to streamline and update the HOME Investment Partnerships program. The proposed rule, if finalized, would represent the most significant regulatory update for the HOME program since 2013 and make numerous changes in areas including rent and income limits, utility allowances, community housing development organization requirements, and homeowner resale formulas.
Separately, the HOME Coalition, which NCSHA chairs, submitted comments on behalf of a number of its members.
Vote on Tax Legislation with Housing Credit Expansion Fails in Senate
Yesterday, the Senate voted to reject a motion to proceed with debate on the Tax Relief for American Families and Workers Act (H.R. 7024), which includes two temporary provisions to expand Housing Credit production by restoring the 12.5 percent cap increase that expired in 2021 and lowering the bond financing threshold to 30 percent. Unfortunately, but as widely predicted, the motion did not garner the support of three-fifths of the senators present and voting that it needed to proceed. The final vote, mostly along party lines, was 48 ‒ 44.
Senate Republican leadership opposed the bill due to reasons unrelated to its affordable housing provisions. Republican Senators Markwayne Mullin (OK), Josh Hawley (MO), and Rick Scott (FL) voted in favor of the bill, while Independents Joe Manchin (WV) and Bernie Sanders (VT) voted against it. The House of Representatives had passed the bill by a wide bipartisan margin in January.
Witnesses, Senators Extol Housing Programs During Committee Hearing
The Senate Finance Committee held a hearing Tuesday on tax tools for local economic development. While the hearing was not intended to focus on affordable housing specifically, several committee members, including Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID), spoke about the need for affordable housing and the benefits of the Low Income Housing Tax Credit to economic development. In his testimony, Novogradac & Company Managing Partner Michael Novogradac observed how the shortage of affordable housing is impacting local economies and low-income households. He noted the Affordable Housing Credit Improvement Act would free up more bond authority by lowering the bond financing test and increase affordable housing production with the Housing Credit. In addition, Novogradac commended Senator Catherine Cortez Masto (D-NV) for a provision in the Affordable Housing Bond Enhancement Act — one of NCSHA’s top tax priorities — that would allow a state to redesignate carryforward bond authority for affordable housing purposes should the state determine it will not use the carryforward authority for the purpose originally envisioned upon designation.
Legislation to Facilitate GSE Housing Credit Investment in Rural Areas Introduced in Senate, House
This week, Senators Jerry Moran (R-KS), Mark Warner (D-VA), and Todd Young (R-IN) and Representatives Darin LaHood (R-IL) and Dan Kildee (D-MI) introduced bipartisan, bicameral legislation, the Preserving Rural Housing Investments Act, clarifying the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac are not tax-exempt controlled entities (TECEs) and thus may invest in multi-investor Housing Credit funds without negatively impacting the tax benefits available to all investors in those funds. Multi-investor Housing Credit funds are particularly critical for investments in smaller, rural areas; thus, GSE investment in those funds is consistent with Fannie’s and Freddie’s Duty to Serve.
For the last couple of years, NCSHA has been pressing the Treasury Department to find an administrative solution to this problem. Unfortunately, despite congressional pressure and NCSHA and other stakeholders weighing in, the administration has not been able to find a way to clarify the GSEs’ tax status to fix this problem. NCSHA will continue to encourage administrative action but also strongly supports this legislation. For more information, see our blog.
HUD Announces $3.5 Billion to Help People Experiencing Homelessness
On Wednesday, HUD announced more than $3.5 billion will be available through its Continuum of Care (CoC) Program for supportive services and housing programs for people experiencing homelessness. HUD funds approximately 7,000 homeless service projects annually — operated by states, tribes, and local governments — through the CoC Program. For the first time, organizations are required to submit only one application to be considered for the next two rounds of CoC funding. HUD also is applying for the first time a cost-of-living adjustment that will enable CoC budgets to better keep up with rising costs. The deadline to apply is October 30. More information is available here.
FHA Publishes Final Rule on Engaging Mortgagors in Default
Today, the Federal Housing Administration (FHA) published a final rule updating its current regulation that requires mortgagees to meet in person with borrowers who are in default on their mortgage payments. The final rule allows mortgagees to use electronic and other remote methods of communication to satisfy FHA’s requirement to meet with a borrower who is in default. FHA says these changes align its regulation with advances in electronic communication technology and borrower engagement preferences while preserving necessary consumer protections. NCSHA submitted comments to HUD on September 5, 2023, expressing support for the proposed rule, as well as comments on December 20, 2023, on a related proposal seeking to modernize the delivery of housing counseling services. The final rule’s changes become effective on January 1, 2025.
NCSHA in the News
Novogradac, 8.1.24, PAB-Financed Housing Remains Strong Despite Higher Interest Rates, Construction Costs
Mile High CRE, 7.25.24, Movers and Shakers Week Ending 07.26.24
Legislative and Regulatory Activities
- August 2 | Comments Due to NCSHA | FHFA Request for Input on Fannie Mae’s and Freddie Mac’s 2025 – 2027 Duty to Serve Plans
- August 12 | Comments Due | FHFA Request for Input on Fannie Mae’s and Freddie Mac’s 2025 – 2027 Duty to Serve Plans
- August 28, 2:00 pm ET | FHA Stakeholder Briefing: Changes to the 203(k) Rehabilitation Mortgage Insurance Program | Register
NCSHA, State HFA, and Industry Events
- August 5 – 6 | US Bank 2024 HFA Symposium | St. Louis, MO
Garth Rieman and Rosemarie Sabatino will participate in this event. - August 9 | Early-Bird Registration Discount Ends | NCSHA’s Housing Credit 101: Compliance | Virtual
- August 14 – 15 | Council of Development Finance Agencies’ Intro Housing Finance WebCourse
Garth Rieman will participate in this event. - August 20 – 22, 1:30 – 4:30 pm ET | NCSHA’s Housing Credit 101: Compliance | Virtual
- August 21 – 23 | 2024 Arizona Housing Forum | Fort McDowell, AZ
Jennifer Schwartz will participate in this event. - August 27 | Early-Bird Registration and Hotel Discounts End | NCSHA’s 2024 Annual Conference & Showplace | Phoenix
- September 24 – 26 | Oklahoma Housing Conference 2024 | Midwest City, OK
Stockton Williams will speak at this event. - September 28 – October 1 | NCSHA’s 2024 Annual Conference & Showplace | Phoenix
