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NCSHA Washington Report | August 5, 2022

Published on August 5, 2022

The Biden-Harris Administration has put eviction prevention reform alongside increasing supply at the center of its ambitious affordable housing agenda.

On the latter, the policy path is clear and widely embraced by both parties: more flexibility from the federal government, epitomized by last week’s Treasury Department announcement on fiscal recovery funds, and more resources from Congress, through legislation like the Affordable Housing Credit Improvement Act and Neighborhood Homes Investment Act.

On the former, the route is less certain but may be opening up, through federal leadership and state and local innovation. Both were visible at an inspiring White House virtual summit this week, which highlighted model programs from around the country, including some in which HFAs are involved, in Colorado, Michigan, Oregon, and New Mexico.

With evictions overall remaining well-below their pre-pandemic level but emergency rental assistance drying up and rents surging almost everywhere, the White House sees a window of opportunity to fix a broken system. Partnerships between landlords, legal aid groups, public agencies, and courts could be the basis for a new national policy.

Many evictions are for shockingly small amounts of money. A New York Times analysis in 2019 found, “Among the millions of recent eviction cases researchers have begun to compile across the country, there are a startling number of modest sums.” It’s not unusual for families to face eviction for being behind an amount less than one month’s rent — unconscionable given the deep and lasting harm often inflicted.

Some landlords use the mere threat of an eviction to establish “legal pretext to remove a tenant for any reason and prevent tenants from exercising their legal rights regarding code enforcement,” according to a 2019 study. Diane Yentel of the National Low Income Housing Coalition points out, “Only 10% of renters in eviction court receive legal representation, compared to 90% of landlords.”

Yet, contrary to a common media narrative, most landlords don’t evict. Separate Harvard and U.C. Berkeley studies last year each found “only a relatively small share of landlords indicated they were likely to pursue evictions of tenants behind on rent.” According to Matthew Desmond of the Princeton Eviction Lab, “Most landlords evict tenants rarely, if they ever do — even in neighborhoods that have high overall eviction rates. Yet, a small set of landlords displace large numbers of tenants, year after year.”

Some evictions unfortunately are necessary. More than one in five are for reasons other than past-due rent, including “lease violations, creating a public nuisance or criminal activity, or restricting access to the apartment for emergency repairs.” Efforts to take evictions totally off the table mostly hurt the smallest landlords serving the most vulnerable renters. They make it harder to engage landlords doing the right thing as partners in reform.

There are far too many unnecessary evictions, most initiated by a very small share of landlords for small amounts of money. Partnerships like those highlighted by the White House this week suggest a better system may be as possible as it is urgent to achieve.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

NCSHA Mourns Housing Credit Champion Jackie Walorski
NCSHA is deeply saddened by the passing of Representative Jackie Walorski on August 3. Congresswoman Walorski (R-IN) was a dedicated and effective champion for affordable housing. One of the earliest cosponsors of the Affordable Housing Credit Improvement Act when it was first introduced in the 115th Congress, she was an original cosponsor when the bill was reintroduced in the 116th and the lead Republican sponsor in the 117th Congress. Congresswoman Walorski’s leadership was key to congressional enactment of the 4 percent minimum rate for Housing Bond-financed Housing Credit properties in 2021 — one of the most significant legislative improvements to the credit in its nearly 40-year history. Read NCSHA’s statement.

NCSHA Submits Comments on CRA Proposed Rule
Today, NCSHA submitted comments on proposed Community Reinvestment Act (CRA) regulations published earlier this year by the Federal Reserve Board, Federal Deposit Insurance Corporation, and Comptroller of the Currency. NCSHA’s comments stress the importance of CRA and recommend the agencies modify the proposed rule to encourage banks to invest in Housing Credits, Housing Bonds, and HFA mortgage-backed securities (MBS) — including MBS purchases, lending, and letters of credit; maintain a separate investment test; require that a certain threshold of a bank’s community development financing activity include equity investments; give equal weighting to banks’ retail lending and community development activities; allow banks to receive credit for community development financing and investment activities that occur outside their assessment areas; eliminate the peer-based review system to allow banks that engage in substantial CRA activity to receive fair ratings that reflect their performance; and include lending, community development, and investment incentives to increase racial equity, reduce racial disparities, and better serve historically underserved and discriminated-against individuals and communities.

Treasury Boosts Affordable Housing with Fiscal Recovery Funds
Following intense advocacy from NCSHA, the state HFAs, and numerous industry partners, the Treasury Department last week published critical new guidance that will make it significantly easier to use Coronavirus State and Local Fiscal Recovery Funds to support affordable housing development. The new guidance allows states and localities to use recovery dollars to fund the full principal amount of loans that finance long-term affordable housing investments and clarifies that repayment of long-term loans can be reinvested into future affordable housing uses. This new policy will optimize billions of dollars in recovery funds and free up hundreds of millions more for affordable housing — and establish a new source of long-term capital for state and local affordable housing activities. The new guidance also expands the list of presumptively eligible uses of funds to specify that affordable housing that meets core requirements of HOME, the National Housing Trust Fund, the Housing Credit, public housing capital funds, Section 202, Section 811, project-based rental assistance, and USDA multifamily preservation are considered eligible uses of recovery funds. To encourage state and local governments to utilize them, Treasury and the Department of Housing and Urban Development have jointly published a How-To Guide providing examples of how these flexibilities can help facilitate affordable housing development using multiple sources of federal funding. For more details, see NCSHA’s blog.

New Treasury Policy Adds Flexibility for Usage of Unobligated ERA 2 Funds
On July 27, the Treasury Department updated its Frequently Asked Questions (FAQs) guidance for the Emergency Rental Assistance (ERA) program to allow recipients to use ERA 2 funds that are unobligated as of October 1 for affordable housing construction, rehabilitation, and preservation and for operations of affordable housing projects constructed, rehabilitated, or preserved using ERA 2 funds. To be eligible to take advantage of this flexibility, a grantee first must obligate 75 percent of its ERA 2 grant on ERA-eligible financial assistance, housing stability services, and administrative costs. The 75 percent benchmark is based on the grantee’s ERA 2 grant amount as adjusted to account for any voluntary reallocation or recapture of funds. NCSHA has long advocated for maximum flexibility for these funds, and in particular for grantees to have the ability to use these funds for capital assistance, as often the biggest barrier to housing stability for very low-income households is the insufficient supply of affordable housing. For more information, refer to NCSHA’s blog.

HUD Publishes Draft Solicitation for PBCA Procurement
On July 27, HUD published a draft solicitation containing its proposal to formally procure contractors to provide Housing Assistance Payments (HAP) contract support services to HUD and service approximately 16,000 project-based rental assistance contracts, as authorized under Section 8 of the United States Housing Act of 1937, with owners of multifamily housing projects throughout the country. Comments on the draft solicitation are due August 29. In the announcement of the draft solicitation, Ethan Handelman, deputy assistant secretary of the Office of Multifamily Housing, said HUD wants to “develop a final solicitation that is fair, compliant with federal contracting laws, and promotes the highest quality of services for residents and HUD.”

Senate Appropriators Release FY 2023 Funding Bills
Senate Appropriations Committee Chair Patrick Leahy (D-VT) on July 28 released twelve FY 2023 appropriations bills, including those for the Transportation, Housing and Urban Development, and Related Agencies (THUD) and Department of Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (USDA). The FY 2023 THUD appropriations bill would provide $59.6 billion for HUD programs and activities, $5.9 billion more than the FY 2022 enacted level and $3.1 billion below the House-passed bill (H.R. 8249). The bill includes $1.725 billion for the HOME Investment Partnerships program, an increase of $25 million over the House-passed bill and the highest HOME funding level in more than a decade. The FY 2023 USDA appropriations bill would provide $27.1 billion in funding for the programs it covers, nearly $150 million less than the House-passed bill but $2.3 billion more than the FY 2022 funding level. Both the single-family direct and guaranteed loan programs would receive equal funding as in the House-passed bill, at $1.5 billion and $30 billion, respectively. The Senate is set to adjourn for its month-long August recess soon, so mark-ups and further action on these bills will be delayed until September. For more information, see NCSHA’s blog.

HUD Announces $2.8 Billion to Help People Experiencing Homelessness
On Monday, HUD announced it will provide $2.8 billion in funding for homelessness supportive services and housing programs across the country. This funding will be allocated through competitive bids in HUD’s Continuum of Care program, the largest source of federal grant support for housing and services for persons experiencing homelessness. The announcement specified the new funding will prioritize services for homeless youth and “survivors of domestic violence, dating violence, sexual assault, and stalking.” The funding also prioritizes racial equity and anti-discrimination policies for LGBTQ+ individuals.

HUD Awards $36 Million to Support Community Living for People with Disabilities
On July 27, HUD announced it had awarded $36 million to 218 housing agencies — including the Indiana Housing and Community Development Authority — in Mainstream Vouchers to assist people living with disabilities. Mainstream Vouchers are tenant-based for households that include a person between the ages of 18 and 62 years who lives with a disability. The vouchers are used to help secure housing in communities for people trying to avoid or transition out of institutional care settings. The $36 million in this round of funding will support new vouchers and provide administrative support for the agencies receiving the awards; $23 million will be used to support 2,391 new Mainstream Vouchers, and the remaining $13 million will be used by the agencies to support tenants’ housing searches and navigation, fund landlord engagement activities, and cover other move-in costs. Since 2018, HUD has awarded more than $500 million to support 50,000 vouchers through the program. The full list of recipients for this funding round is available here.

White House Hosts Summit on Eviction Prevention
This week, the White House hosted a virtual summit on Building Lasting Eviction Prevention Reform. The summit focused on reform models at all levels of government, progress made with the American Rescue Plan (ARP), and information on uses of ARP resources, including Emergency Rental Assistance and State and Local Fiscal Recovery Funds. Speakers included Oregon Housing and Community Services (OHCS) Executive Director Andrea Bell, who shared the many ways OHCS has used ERA funds, highlighting the 60,829 Oregon households that benefited from the program. She noted the Oregon state legislature allocated an additional $100 million in general funding to serve as a bridge from the federal rental assistance because those federal resources are time-limited. Oregon was one of the first states to supplement ERA funds with State and Local Fiscal Recovery Funds, among other innovative initiatives, and Treasury has strongly encouraged others to follow this example and build on the infrastructure of ERA.

HUD Announces Economic Justice Agenda to Help Low-Income Renters Build Assets
On August 4, HUD released a multiple-point plan for helping low-income renters build assets, Bridging the Wealth Gap: An Agenda for Economic Justice and Asset Building for Renters. The plan includes current and future actions HUD is taking to promote asset building through the Asset Building Moving to Work (MTW) Demonstration, expanding asset-building programs like the Family Self-Sufficiency Program, moving from annual to triennial income recertifications, supporting renters with credit and financial counseling, helping HUD-assisted young adults increase savings, and working with other federal agencies and stakeholders.

HUD also announced the related release of a Notice of Funding Opportunity for $113 million for the Family Self-Sufficiency Program to help HUD-assisted families increase earned income and improve financial stability.

Senate Banking Committee Hearing Explores Rental Housing Crisis
The Senate Banking Committee on Tuesday held a hearing to discuss how recent developments in the housing market have impacted rental housing affordability. In his opening statement, Committee Chair Sherrod Brown (D-OH) lamented the lack of affordable housing options available to low-income renters, and said the problem was getting worse because large-scale investors are buying an increasingly larger share of single-family rental homes. He called on Congress to take action to increase the supply of affordable housing and to increase eviction protections for tenants. Ranking Member Patrick Toomey (R-PA) disagreed with Brown, contending in his opening statement that federal affordable housing programs have distorted the housing market, driving up demand while making it difficult to increase supply. The solution, he argued, was to enact reforms that allow for more free enterprise in the housing market. In her written testimony, witness Diane Yentel of the National Low Income Housing Coalition expressed concern that many private investors have purchased properties subsidized by government programs, including Housing Credit properties. Yentel also advocated for increased funding for the Housing Trust Fund. In response to a question from Senator Mark Warner (D-VA) about possible capital sources for affordable housing, Yentel praised the Housing Credit for its track record. Senator Rafael Warnock (D-GA) also expressed his support for the Housing Credit and said it was critical that Congress take action to address the qualified contracts loophole, which he said was threatening to take affordable housing units off the market.

NLIHC Releases Annual Report on the High Cost of Housing
On July 28, the National Low Income Housing Coalition published its 2022 Out of Reach: The High Cost of Housing report detailing the average hourly wage an individual working full time (40 hours per week) must earn to afford a modest apartment without spending more than 30 percent of their income on housing. In 2022, that housing wage is $25.82 per hour for a modest two-bedroom and $21.25 per hour for a modest one-bedroom apartment. The report found that nowhere in the United States can a full-time minimum-wage earner afford a decent two-bedroom apartment at fair market rent. Additionally, the report focuses on recent record rent increases, an average of $179 per month, and the disparities that Black and Latino households face. The NLIHC report calls on Congress to make policy changes such as expanding emergency rental assistance to all eligible renters in need and making investments in the National Housing Trust Fund to create more affordable housing options.

NCSHA in the News
Novogradac, 8.1.22, Low-Income Housing Tax Credits News Briefs – August 2022
USA Today, 7.27.22, White House rewrites rules to push more affordable housing with COVID-19 rescue funds
Affordable Housing Finance, 7.27.22, Treasury Unlocks Financing for Affordable Housing
Vermont Biz, 7.27.22, Leahy, et al, celebrates $8 billion victory for affordable housing
McKnights Senior Living, 7.22.22, $400 billion House spending package includes historic affordable senior housing funding

Looking Ahead…

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • August 9 | HUD Office of Housing Counseling 2022 Community Conference | Virtual Event
    Rosemarie Sabatino and Greg Zagorski will speak at this event.
  • August 15 – 17 | US Bank HFA Symposium | St. Louis, MO
    Rosemarie Sabatino will speak at this event.
  • August 17 – 19 | Arizona Housing Forum | Scottsdale, AZ
    Jennifer Schwartz will speak at this event.
  • September 14 – 16 | 2022 New Mexico Housing Summit | Albuquerque, NM
    Stockton Williams and Jennifer Schwartz are speaking at this event.
  • September 27 – 29 | Oklahoma Housing Conference | Oklahoma City, OK
    Stockton Williams is speaking at this event.
  • October 22 – 25 | NCSHA Annual Conference & Showplace | Houston

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