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NCSHA Washington Report | June 4, 2021

Published on June 4, 2021

Web Washington Report Graphics - June 4, 2021

Readers of this newsletter know the view here is that affordable housing is, and has to be, a bipartisan policy priority in Washington. We’ve argued affordable housing — the glue that helps hold families and neighborhoods together — can also be a binding agent for a compromise on a set of essential infrastructure investments the nation needs.

Listeners to “Bloomberg Surveillance” heading into the holiday weekend last Friday heard one of President Biden’s top economic advisors cite some evidence for the case. Asked by a somewhat skeptical interviewer whether the president’s big infrastructure agenda has a “clear, powerful ally to shepherd the plan” on Capitol Hill, National Economic Council Deputy Director Bharat Ramamurti replied, “There’s broad bipartisan support for expanding tax credits for affordable housing,” including “in existing legislation.”

That’s one reason why an expansion of the Housing Credit is a centerpiece of the $313 billion affordable housing component in the Biden – Harris Administration’s infrastructure proposal. The existing legislation to increase and improve the Housing Credit, the Affordable Housing Credit Improvement Act, epitomizes bipartisanship.

The existing infrastructure of 3.5 million Housing Credit apartments — an inventory with a median resident income of less than $18,000 — has held up remarkably well during a period of major stress on low-income renters and their landlords. Investment has remained strong as well, with some softening in equity pricing.

Nevertheless, any sense of complacency would be misguided. While the Housing Credit is politically and operationally as strong as it has ever been, policymakers and practitioners have a host of major issues on their plates.

The same day Ramamurti spoke to Bloomberg, NCSHA sent the IRS extensive recommendations for time-sensitive regulatory action on an array of critical matters. At stake is whether the Housing Credit can functionally achieve Congress’ intent to better support mixed-income developments, generate additional equity to fill financing gaps, help states rebuild from major natural disasters, and avoid cost increases on developers and owners to meet regulatory mandates.

We should all also be troubled by abusive actions of some real estate investment firms to seize control of Housing Credit properties purely for the purpose of reaping financial windfalls. While courts have ruled variously on individual cases, we agree with the National Housing Trust that the practice constitutes a threat to the preservation of affordable housing. We support legislative efforts in development to curtail this practice, which even some transaction participants agree Congress should “correct.”

And even as Housing Credit industry leaders can point to plenty of evidence that the program is increasingly being used to address racial equity and climate change concerns, state Housing Credit agencies agree there’s more progress to be made on both fronts.

Whether the Housing Credit can seize a generational legislative opportunity, when it will resolve critical regulatory issues, and how it can be a lever for social and environmental change will be determined by the leadership and ideas of every corner of its industry. Play a part in shaping the Credit’s present and future at NCSHA’s Housing Credit Connect.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

Ben Addi Leaving Delaware State Housing Authority; Young to Be Nominated as Next Director
After 12 years at the helm, Anas Ben Addi is stepping down as director of the Delaware State Housing Authority (DSHA) to become the chief financial officer for Delaware State University. Ben Addi has served on the NCSHA Board of Directors since 2011 and was elected secretary/treasurer last October.

Governor John Carney will nominate Eugene Young Jr. as DSHA’s next director; the Delaware Senate is expected to consider his nomination on June 23. Young has served as the president and CEO of the Metropolitan Wilmington Urban League since 2017. He founded the grassroots organizing nonprofit Network Delaware and previously was an aide in the Delaware General Assembly and to former mayor and current U.S. Senator Cory Booker.

Conine Selected as Arkansas Development Finance Authority President
Mark Conine has been named president of the Arkansas Development Finance Authority (ADFA). He replaces Bryan Scoggins, who retired this spring. Conine most recently was ADFA’s chief financial officer and vice president of finance and administration. Previously, Conine served 12 years as the chief financial officer of the Arkansas Student Loan Authority.

NCSHA Recommends IRS Include Housing Credit, Bond Items in 2021–2022 Priority Guidance Plan
On May 28, NCSHA submitted a comment letter to the Treasury Department and Internal Revenue Service (IRS) urging the agencies to include guidance projects related to the Housing Credit and Housing Bonds in the 2021–2022 Priority Guidance Plan. The annual Priority Guidance Plan sets forth the tax issues Treasury and IRS intend to address through administrative guidance during the period from July 1 to June 30. NCSHA’s comments focused on Housing Credit regulatory issues including compliance monitoring, the Average Income Test, the minimum 4 percent credit rate, disaster credits, and COVID-19 relief and Housing Bond regulatory issues including bond carryforward, retention requirements, mortgage fees and effective interest rates for Mortgage Revenue Bond loans, and the special yield reduction rule.

Housing Credit Legislation Cosponsorship Round-Up
Since our last report on cosponsorship of the Affordable Housing Credit Improvement Act (AHCIA; S. 1136/H.R. 2573), 10 Senators and seven House members have signed on as cosponsors. The addition of Senators Patrick Leahy (D-VT), Krysten Sinema (D-AZ), Benjamin Cardin (D-MD), Debbie Stabenow (D-MI), Sheldon Whitehouse (D-RI), Lindsey Graham (R-SC), Shelley Moore Capito (R-WV), Susan Collins (R-ME), Dan Sullivan (R-AK), and Jerry Moran (R-KS) brings support in the Senate to 14 — seven Democrats and seven Republicans — including the bill’s leads. The addition of Representatives Daniel Kildee (D-MI), Dwight Evans (D-PA), Rodney Davis (R-IL), Judy Chu (D-CA), Troy Balderson (R-OH), Richard Hudson (R-NC), and Linda Sanchez (D-CA) brings support in the House to 21 members — 11 Democrats and 10 Republicans. Support on the tax committees is at 25 percent of the Senate Finance Committee and 35 percent of the House Ways and Means Committee. 

Please keep up your efforts to urge more members of Congress to cosponsor this critical bipartisan legislation. The materials in the ACTION Campaign’s advocacy toolkit can help you make the case. To learn more about the AHCIA, watch this ACTION video series in which NCSHA’s Jennifer Schwartz and Enterprise’s Ayrianne Parks walk through each section of the legislation. 

NeighborWorks America Launches $100M Housing Counseling Program; State HFAs Eligible to Apply
NeighborWorks America is accepting applications for its Housing Stability Counseling Program (HSCP). NeighborWorks was authorized by the American Rescue Plan Act to create the $100 million HSCP to distribute funding to housing counseling agencies providing services in neighborhoods with high concentrations of minority and low-income populations. Eligible applicants include HUD-approved intermediaries, state HFAs, and NeighborWorks network organizations. The application deadline is June 30. More information is available here.

Finance Committee Advances Legislation Allowing Developers to Take Energy Efficiency Credit Without Reducing Housing Credit Basis
On May 26, the Senate Finance Committee passed the Clean Energy for America Act, which makes changes to the tax code intended to support a low carbon economy. The bill includes a provision modifying the Section 45L Energy-Efficient Home Credit and allowing Housing Credit developers to claim the credit without reducing the Housing Credit basis for which the property is eligible. This modification to the tax code also is included in the Affordable Housing Credit Improvement Act. 

White House Presents Biden’s FY 2022 Budget Proposal 
On May 28, the Biden Administration submitted to Congress the president’s FY 2022 budget request, which totaled $6 trillion. This budget request is the largest increase in federal spending in decades and provides $68.7 billion for the U.S. Department of Housing and Urban Development and $27.8 billion for the U.S. Department of Agriculture, an increase of $9 billion (15 percent) and $3.6 billion (16 percent) over the FY 2021 enacted levels, respectively. The budget request includes a significant increase in HOME Investment Partnerships program funding, additional Housing Credit authority, creation of a new for-sale housing production tax credit, reinstatement of the Federal Financing Bank Risk-Sharing initiative, and a $100 million HOME set-aside for down payment assistance. For more information, refer to NCSHA’s blog and detailed budget analysis.

Biden Announces Housing, Other Actions to Reduce the Racial Wealth Gap
At a June 1 event in Oklahoma to commemorate the 100th anniversary of the 1921 Tulsa Race Massacre, President Biden announced a set of proposals to help narrow the racial wealth gap and reinvest in distressed communities. Biden said HUD Secretary Marcia Fudge will lead an interagency effort to address inequity in home appraisals and HUD will publish next week in the Federal Register a proposed rule countering housing practices with discriminatory effects (disparate impact) and an interim proposed rule on Affirmatively Furthering Fair Housing. The administration’s plan includes a $10 billion HUD-administered Community Revitalization Fund; the Neighborhood Homes Investment Credit; $5 billion for jurisdictions taking steps to reduce unnecessary barriers to affordable housing production and expand housing choices for people with low or moderate incomes; $15 billion for transportation projects that address barriers to mobility, access, or economic development; and $30 billion for Small Business Administration initiatives to reduce barriers to small business ownership and success. Refer to NCSHA’s blog for more details.

Infrastructure Talks Continue
The White House and Senate Republican negotiators continued discussions this week on how to resolve their different infrastructure legislation proposals, however, the two sides remain billions of dollars apart in spending and revenue recommendations. In a major concession, President Biden proposed the package could be paid for with a corporate alternative minimum tax of 15 percent, rather than raising the corporate tax rate from 21 to 28 percent. Republicans are expected to present a new proposal on spending today, though negotiators doubt they could get enough Republican support to go much higher on spending than previous offers. It is unclear how much longer the two sides will stay at the negotiating table. If they are unable to reach a deal, Democrats are expected to pursue a party-line approach using the budgetary tactic of reconciliation to move an infrastructure bill without Republican support.  

White House Announces $1 Billion for Pre-Disaster Hazard Mitigation
On May 24, the White House announced the Federal Emergency Management Agency will provide $1 billion in pre-disaster mitigation resources for communities in 2021 through its Building Resilient Infrastructure and Communities program (BRIC), double the amount provided last year. BRIC supports states, local communities, tribes, and territories in undertaking pre-disaster hazard mitigation projects, reducing the risks they face from disasters and natural hazards. The program seeks to shift the federal focus away from reactive disaster spending and toward research-supported, proactive investment in community resilience so that when the next hurricane, flood, or wildfire comes, communities are better prepared. Agencies designated by states that have had a federally declared major disaster in the last seven years will be eligible to apply for BRIC assistance.

HUD Awards Choice Neighborhoods Grants to Five Communities
On May 26, HUD announced it was awarding $160 million to five cities under its Choice Neighborhoods program: $35 million to Camden, NJ; $35 million to Cleveland, OH; $30 million to Detroit, MI; $30 million to Fort Myers, FL; and $30 million to Lewiston, ME. The Choice Neighborhoods initiative supports the revitalization of communities by linking housing improvements with comprehensive social services and physical neighborhood improvements. Read each community’s project summary.

White House, HUD Launch National Homeownership Month
President Biden on Tuesday issued a statement proclaiming June to be National Homeownership Month. The president said HUD will continue its mission to “advance affordable and sustainable homeownership” and called on Americans to recognize the value of owning a home and to “recommit” to helping people realize the dream of homeownership.

AHTCC Accepting Nominations for Tax Credit Excellence Awards
The Affordable Housing Tax Credit Coalition (AHTCC) is accepting entries for the 2021 Charles L. Edson Tax Credit Excellence Awards through June 11. The awards recognize exceptional Housing Credit developments that aim to strengthen communities, improve health, and boost the economy in urban, suburban, and rural areas across the nation. This year’s award categories include Rural Area, Small Metropolitan Area, Large Metropolitan Area, Housing for Veterans of the Armed Forces, Housing for Senior Citizens, Housing for Other Special Needs Populations, HUD Preservation Properties, and Historic Preservation Property. Projects placed in service between January 1, 2018, and July 1, 2021, are eligible.

NCSHA in the News
Raleigh News & Observer, 6.2.21, Cooper urges NC tenants behind on rent and utilities due to COVID to apply for aid
Star Tribune, 5.26.21, Minnesotans anxiously await rent help as a fraction of federal aid has gone out

Looking Ahead…

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • June 4 | Discounted Early and Team Registration Deadline | NCSHA’s Housing Credit Connect
  • June 8 – 10 | National Multifamily Housing Council Annual Conference | San Diego, CA
    Stockton Williams will speak at this event.
  • June 9 | “Build Back Better: Building Rental Housing Security Through Technology Infrastructure and Community Partnerships” | Hosted by Avail | Virtual
    Stockton Williams will speak at this event.
  • June 10 | National Association of Home Builders’ Multifamily Finance Subcommittee Meeting | Virtual
    Jennifer Schwartz will speak at this event.
  • June 17 | REALTOR.com Webinar | “Real Connections”
    Garth Rieman will speak at this event.
  • June 21 – 24 | NCSHA’s Housing Credit Connect | Virtual
  • June 23 | Oklahoma Housing Conference | Virtual
    Stockton Williams will speak at this event.
  • June 28 – 29 | Council for Affordable and Rural Housing’s 2021 Annual Meeting & Legislative Conference | Arlington, VA
    Jennifer Schwartz will speak at this event.

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