NCSHA Washington Report | July 22, 2022
At this week’s Senate Finance Committee hearing on tax incentives for affordable housing, Oregon Housing and Community Services Executive Director Andrea Bell didn’t mince words, pointing out that even though her state has nearly tripled its investments in housing over the past few years, “States cannot solve this problem without the help of the federal government.”
Her message resonated in this most influential panel, which while stocked with party stalwarts from both sides, is also a stronghold of bipartisan cooperation on the essential issues for readers of this newsletter.
The most important proposals in Congress to address the unsustainable costs and insufficient supply of housing for lower-income people are jointly authored by Democratic and Republican members of the Finance Committee: the Affordable Housing Credit Improvement Act (Senators Cantwell [D-WA] and Wyden [D-OR] with Senators Young [R-IN] and Portman [R-OH]) and the Neighborhood Homes Investment Act (Senators Cardin [D-MD] and Portman [R-OH]).
“Numerous other Finance Committee members are also interested in finding affordable housing solutions,” said the committee’s top Republican, Senator Crapo (R-ID). One example: Committee members Bennett (D-CO) and Brown (D-OH), with Young and Portman, are all working together on eviction remedies.
Senator Wyden, who chairs the committee, is also working to push forward the LIFELINE Act. He didn’t mince words at the hearing either, saying of that critical bill, “If the Congress and the Treasury move forward together, this can get done a lot quicker than it would if Congress moves alone, and I’ll be discussing this with the administration directly.” Crapo has also taken interest, as Idaho is one of the 24 states it would benefit.
Substantive, bipartisan cooperation on housing is an underappreciated committee tradition. Senate Finance hatched the Housing Credit program in 1986, under the stewardship of Senators Mitchell (D-ME) and Packwood (R-OR). In 2000, Senators Roth (R-DE) and Moynihan (D-NY) made crucial improvements to the House-passed bill that ultimately enacted historic Housing Bond and Housing Credit increases. In 2008, Senators Baucus (D-MT) and Grassley (R-IA) ensured the housing rescue bill included expansions of bonds and credits.
A Finance Committee hearing almost five years ago to the day as this week’s helped set the stage for the first increase in the Housing Credit in a decade and establishment of income averaging for Housing Credit properties in 2018. This happened, by the way, just a few months after the committee, led by then-Chairman Hatch (R-UT), blocked a repeal of tax-exempt “private activity” bonds passed by the House, which would have devastated affordable housing production.
At Wednesday’s hearing, Senator Cantwell fondly remembered Hatch for his work with her and other committee members on housing issues.
Maybe in these polarized times you want to roll your eyes a little at recollections of obscure legislative history and kind comments in a hearing room about a departed colleague from across the aisle.
That would be a mistake.
The Senate Finance Committee’s sustained bipartisan approach on affordable housing will keep our issue in the mix until the end of this congressional session — and go a long way to keeping it relevant in future ones.
Stockton Williams | Executive Director
Washington Report will return August 5.
State HFA Emergency Housing Assistance
In This Issue
- Bell Urges Action on Housing Credit, Bond Legislation at Senate Finance Hearing
- NCSHA Documents $9.6 Billion in State Affordable Housing Investment Using Fiscal Recovery Funds
- House Passes HUD, Rural Housing Funding Bills
- House Financial Services Committee Examines FHFA
- Senate Banking Committee Discusses Housing Affordability Amidst Rising Costs
- Senate Banking Committee Holds Hearing on Homelessness
- NCSHA in the News
- Looking Ahead
Bell Urges Action on Housing Credit, Bond Legislation at Senate Finance Hearing
On July 20, the Senate Finance Committee held a hearing on the role of tax incentives in affordable housing. Testifying on behalf of NCSHA, Oregon Housing and Community Services Executive Director Andrea Bell described the imbalance between affordable housing supply and demand and the obstacles to production in the current economic environment. She called on Congress to pass NCSHA legislative priorities — the Affordable Housing Credit Improvement Act (AHCIA, S. 1136), the LIFELINE Act (S. 4181), the Affordable Housing Bond Enhancement Act (S. 4445), and the Neighborhood Homes Investment Act (S. 98) — to jumpstart production and help both low-income renters and would-be homeowners. Committee members from both sides of the aisle recognized the magnitude of the housing crisis during the hearing, and while they considered various methods of addressing the crisis, there was general agreement that Congress must take action.
Senator Todd Young (R-IN), the lead Republican sponsor of the AHCIA, at one point asked all the witnesses whether they support the bill. All five raised their hands to indicate they do. This unanimous support for any particular piece of legislation by hearing witnesses is uncommon and underscores the consensus on the enhancements to the Housing Credit in the AHCIA. Senator Maria Cantwell (D-WA), the lead Democratic sponsor of the AHCIA, expressed her frustration that more progress has not been made on addressing the dearth of supply, which she argued is the underlying problem causing the affordable housing crisis, saying, “It’s really just about supply.”
NCSHA Documents $9.6 Billion in State Affordable Housing Investment Using Fiscal Recovery Funds
This week, NCSHA published updated findings on the use of Fiscal Recovery Funds (FRF) for affordable housing. Based on survey responses from 46 HFAs, nearly 70 percent expect their states to devote fiscal recovery dollars to affordable housing activities, with the total amount committed to such uses now exceeding $9.6 billion nationwide. In half of the responding states, the HFA will administer all or a portion of the FRF dollars committed to housing activities. HFAs expect to use fiscal recovery dollars for a wide variety of affordable housing activities, including as a capital resource to help finance Housing Credit and other affordable rental housing production or preservation, permanent supportive housing, new for-sale housing, workforce housing development, homeless assistance, and down payment assistance. HFAs plan to leverage FRF dollars with a range of other affordable housing finance tools, including Housing Credits, Housing Trust Fund, tax-exempt bonds, state funds, HOME, and HOME-ARP.
NCSHA continues to press the Treasury Department to provide states and cities additional flexibility to optimize recovery funds in combination with Housing Credits, which will significantly increase their effectiveness, and to advocate that Congress pass the LIFELINE Act, referenced above, which will further support that outcome.
House Passes HUD, Rural Housing Funding Bills
The House of Representatives on Wednesday passed H.R. 8249, a “minibus” appropriations package that contains six FY 2023 appropriations bills, including the FY 2023 Transportation, Housing and Urban Development, and Related Agencies (THUD) and FY 2023 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies spending bills. The bill provides $62.7 billion in funding for U.S. Department of Housing and Urban Development (HUD) programs, an $8.9 billion increase over FY 2022; including $1.7 billion for the HOME Investment Partnerships program, $200 million above FY 2022; and $14.9 billion for project-based rental assistance, seven percent over FY 2022. In addition, the bill includes $31 billion for tenant-based rental assistance, including $1.1 billion to expand housing assistance to more than 140,000 renters.
The bill includes a total funding level of $27.2 billion for U.S. Department of Agriculture (USDA) programs and includes increased investment for rural housing programs over FY 2022 funding levels. The Section 502 single-family direct loan program would receive $1.5 billion, $50 million above the FY 2022 enacted level. The bill includes level funding for the Section 502 single-family guaranteed loan program at $30 billion. The Section 515 multifamily direct loan program would receive $150 million, $100 million more than the FY 2022 enacted level. The Section 521 rental assistance program would receive $1.5 billion, a $44 million increase over FY 2022. For specifics on the THUD appropriations bill, see NCSHA’s blog, and for details on HUD and USDA key programs, see NCSHA’s budget chart.
House Financial Services Committee Examines FHFA
The House Financial Services Committee on Wednesday held an oversight hearing of the Federal Housing Finance Agency (FHFA) which included testimony from FHFA Director Sandra Thompson. In her written testimony, Thompson outlined many of the steps FHFA has taken in recent years to improve the financial health of Fannie Mae and Freddie Mac, including promoting the use of credit risk transfers and adopting capital standards for the firms. She also touted efforts the agency has made to promote affordable housing and a more equitable housing finance market, including strengthening Fannie Mae’s and Freddie Mac’s Duty to Serve and Affordable Housing Goal obligations. Committee Chair Maxine Waters (D-CA) and other committee Democrats largely praised Thompson for her leadership of the agency and asked what FHFA could to do increase the supply of affordable housing and access to credit for disadvantaged communities. Thompson said FHFA will continue to explore options for addressing these issues and noted the recent initiatives by Fannie Mae and Freddie Mac to incorporate rental payments into loan underwriting. Many committee Republicans asked Thompson when Fannie Mae and Freddie Mac would leave conservatorship. Thompson said FHFA is working to ensure the firms raise the capital they need to exit conservatorship, which she estimated would be $300 billion combined, but many other issues need to be worked out still. Thompson also told the committee FHFA would soon reexamine the structure of the Federal Home Loan Banks and their role in the housing market.
Senate Banking Committee Discusses Housing Affordability Amidst Rising Costs
The Senate Banking Committee yesterday held a hearing to examine the affordable housing crisis and possible policy solutions. Committee Chair Sherrod Brown (D-OH) said the country has not produced the housing it needs, driving up costs and putting homeownership out of reach for many working families. He said Congress should do more to increase the housing supply and favorably mentioned several proposals by committee Democrats. Committee Ranking Member Pat Toomey (R-PA) countered that federal housing and monetary policies are to blame for increased housing costs because they artificially drive up demand for homeownership lending through loose credit. He called on Congress and the Biden Administration to allow the private sector to play a larger role in the housing market and to remove tariffs on materials related to housing construction. Many of the panel’s witnesses proposed their own policies to increase the availability of affordable housing. Peggy Bailey, vice president for housing policy at the Center on Budget and Policy Priorities, urged the committee to expand the Housing Credit and increase funding for housing programs such as vouchers, HOME, and the Housing Trust Fund.
Senate Banking Committee Holds Hearing on Homelessness
Tuesday, the Senate Subcommittee on Housing, Transportation, and Community Development hosted a hearing to discuss lessons learned from policies and investments designed to mitigate pandemic-related homelessness as well as what continued strategies are needed to prevent and end homelessness. Chair Tina Smith (D-MN) spoke about homelessness against the backdrop of the affordable housing crisis and the need to increase housing supply. Additionally, she highlighted legislation including the Eviction Crisis Act and Tribal Access to Homeless Assistance Act as pathways to addressing the issue. Ranking Member Mike Rounds (R-SD) emphasized the essential role of supportive services in combatting homelessness. He advocated for increased flexibility in federal funding so communities can more effectively address local needs.
Hearing witnesses included Ann Oliva, CEO of the National Alliance to End Homelessness; Kathryn Monet, CEO of the National Coalition for Homeless Veterans; Cathy ten Broeke, assistant commissioner and executive director of the Minnesota Interagency Council on Homelessness; Isabel McDevitt, co-founder and board president of Work Works America; and Jamie Kirsch, board member of Journey On. Each testified that pandemic-related relief provided by Congress through programs such as the CARES Act and the American Rescue Plan Act had a positive impact on homelessness. However, increased inflation and tight housing markets are exacerbating housing stability in many communities and continued funding for homeless prevention efforts is needed.
NCSHA in the News
Route Fifty, 7.20.22, House Passes Spending Bill With $9B Increase for Local Housing Initiatives
Legislative and Regulatory Activities
- August 5 | Comments Due | Joint Agency Proposed Community Reinvestment Act Regulations
- August 16 | Comments Due | SEC’s Proposed Rule on Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices
- October 22 │ Applications Due │ HUD Continuum of Care (CoC) Program Supplemental Funding Opportunity to Address Unsheltered and Rural Homelessness
NCSHA, State HFA, and Industry Events
- July 27 – 29 | IPED Tax Credit Property Disposition Conference | Philadelphia, PA
Jennifer Schwartz will speak at this event. - August 3 | National Conference of State Legislatures’ Legislative Summit | Denver, CO
Garth Rieman 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.
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