NCSHA Washington Report | June 7, 2024
Facing a housing deficit in the millions and growing, it’s self-evident that America needs to “build, build, build,” especially at sales prices and rents lower-income people can reasonably afford. The housing supply shortage is also injecting new momentum into wide-ranging efforts to convert non-residential buildings of almost all kinds into new homes and apartments.
Office-to-residential conversions you’ve probably heard about, and if so, absorbed the sobering assessments that they don’t represent a large-scale opportunity in many places. Still, the commercial real estate services firm CBRE last month cited “a notable increase in office-conversion projects over the past six months,” counting 169 projects planned or underway that are projected to create 31,000 new apartments.
Another “growing real estate trend,” the New York Times reported earlier this year, is faith-based groups’ “redeveloping unused or derelict facilities to help rectify a housing affordability crisis while also fulfilling their mission to do good in the world.” One measure of the potential is the Urban Institute’s estimate that the 800 vacant parcels owned by religious organizations in Washington, DC, and surrounding counties in Virginia and Maryland, most of which are already zoned for residential use, could support development of 43,000 – 108,000 homes.
Then, there are the thousands of vacant and obsolete buildings owned by the federal government all over the country. The General Services Administration, looking at the expiration of leases on roughly half its massive portfolio over the next five years, is accelerating the disposition process, teeing up redevelopment opportunities for millions of square feet of property, including for housing.
An Enterprise Community Partners white paper last year speculated that “repurposing the top 10% of strip mall space suited for redevelopment could create more than 700,000 new homes across the U.S.” (More than half of the 135 recent redevelopments of traditional malls included residential space, according to a Jones Lang LaSalle analysis.)
Even empty market-rate apartments may be a tappable source. Drexel University’s Bruce Katz and real estate investor Andrew Gibbs argue that the 1.5 million vacant units represent a window of opportunity for local governments to offer owners tax abatements and low-cost loans in return for locked-in lower rents. By doing so, they say, “cities could unlock billions of private capital that can be used to convert hundreds of thousands of market-rate units into deed-restricted affordable housing.”
All these kinds of conversions have been happening here and there for years, mostly under policymakers’ radar. What’s new is a growing recognition at the federal, state, and local levels that zoning reforms and financial incentives can unlock significantly more housing development when other real estate asset classes are economically challenged. Analysts point to recently enacted laws in Arizona, California, Florida, Montana, Rhode Island, Washington, and Wisconsin as examples. Many cities are taking similar steps.
The Biden – Harris Administration has been supportive of these kinds of efforts. Additional reforms to federal property disposition rules that prioritize sites for homeless housing, as NCSHA and the National Law Center on Homelessness have been pushing, could ensure much more of that redevelopment serves the neediest.
Stockton Williams | Executive Director
Washington Report will return June 21.
In This Issue
- NCSHA Comments on FHFA Equitable Housing Finance RFI During Public Listening Session
- NCSHA, HFAs Participate in Fannie Mae Affordable Lending Summit
- HFAs Testify at HUD PBCA Virtual Listening Sessions
- HUD Launches Program to Invest in Manufactured Home Communities
- FHA Releases First-Time Home Buyers Webinar for National Homeownership Month
- Looking Ahead
NCSHA Comments on FHFA Equitable Housing Finance RFI During Public Listening Session
NCSHA Director of Housing Advocacy and Strategic Initiatives Garth Rieman spoke during a virtual roundtable the Federal Housing Finance Agency (FHFA) held Wednesday to solicit input on Fannie Mae’s and Freddie Mac’s Equitable Housing Finance Plans for 2025 – 2027. Both firms are expected to publish their draft plans for the new three-year period later this summer. In his remarks, Rieman thanked FHFA for its continued focus on establishing an equitable housing finance market and for recently acting to codify the Equitable Housing Finance plans into federal regulations. Rieman also recommended Fannie Mae and Freddie Mac fully restore the pricing advantage for the firms’ HFA products and facilitate acquisition, development, and construction financing for affordable for-sale homes through HFAs. Earlier today, NCSHA submitted written comments to FHFA that included the same proposals.
NCSHA, HFAs Participate in Fannie Mae Affordable Lending Summit
Fannie Mae earlier this week held its 14th annual Affordable Lending Summit (previously known as the HFA Summit). Staff from NCSHA and nearly 20 state HFAs attended, along with representatives from local HFAs, community development financial institutions, and housing advocacy organizations. Fannie Mae CEO Priscilla Almodovar delivered introductory remarks thanking HFAs and other lenders for their work with Fannie Mae and reaffirming Fannie Mae’s commitment to supporting affordable housing. NCSHA Executive Director Stockton Williams also spoke, highlighting the HFA – Fannie Mae partnership and urging further collaborations moving forward. The summit included sessions on several crucial topics, including expanding access to credit, increasing the supply of affordable for-sale homes, mortgage servicing, and Fannie Mae’s Equitable Housing Finance Plan for 2025 – 2027.
HFAs Testify at HUD PBCA Virtual Listening Sessions
During a pair of stakeholder virtual listening sessions this week, HFAs continued to offer feedback on the U.S. Department of Housing and Urban Development’s proposed appropriations language authorizing it to solicit proposals for Performance-Based Contract Administration (PBCA) services on a state-by-state basis through a notice of funding opportunity and to structure future PBCA awards as cooperative agreements. During these sessions, HFA representatives expressed general support for HUD’s proposed approach, while representatives from local public housing authorities and their instrumentalities continued to oppose the use of cooperative agreements.
HUD Launches Program to Invest in Manufactured Home Communities
HUD on Tuesday announced the creation of the Manufactured Home Community loan product, which allows Federal Housing Administration-insured financing for the purchase, refinance, and revitalization of manufactured home communities. Mission-oriented entities, including resident-owned manufactured home communities, cooperatives, nonprofit entities and consortia, state and local governments, community development financial institutions, and tribes will be eligible to utilize this product to finance the acquisition and/or improvement of existing manufactured home communities and keep them affordable. HUD created this loan product to provide an alternative financing option to conventional financing, which HUD believes can negatively impact the affordability of these communities.
FHA Releases First-Time Home Buyers Webinar for National Homeownership Month
As part of HUD’s celebration of June as National Homeownership Month, the Federal Housing Administration’s Office of Single-Family Housing and Office of Housing Counseling have released a pre-recorded webinar highlighting resources available to first-time home buyers. The webinar is designed to inform program participants, potential home buyers, and mortgage industry professionals about available resources for home buyers, dispel persistent myths about the home-buying process, and provide guidance on how to work with HUD-approved housing counseling agencies.
Legislative and Regulatory Activities
- June 7 | Comments Due to FHFA | FHFA Request for Input: Fannie Mae, Freddie Mac Equitable Housing Finance Plans
- June 11 | House Appropriations Subcommittee Markup of FY 2025 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Bill
- June 15 | Comments Due to IRS | IRS Revenue Procedure 2024-21 on New MRB and MCC Purchase Price Limits and Safe Harbors
- June 20 | FHFA FHLBank and CDFI Symposium | Washington, DC, and Virtual
- June 27 | House Appropriations Subcommittee Markup of FY 2025 Transportation, Housing and Urban Development, and Related Agencies Bill
- June 28 | Comments Due to NCSHA | FHFA Request for Input: FHLBank System Mission
- July 10 | House Appropriations Committee Markup of FY 2025 Agriculture and HUD Funding Bills
NCSHA, State HFA, and Industry Events
- June 10 – 13 | NCSHA’s Housing Credit Connect & Marketplace | Atlanta
- July 22 – 24 | 2024 Texas Housing Conference | Austin, TX
Jennifer Schwartz will participate in this event.
