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NCSHA Washington Report | March 15, 2024

Published on March 15, 2024

Web Washington Report Graphics - March 15, 2024

No part of the country offers more compelling proof that solving housing affordability is a top priority for policymakers of every political persuasion than the Mountain West.

From blue Colorado and New Mexico, to red Idaho, Montana, Utah, and Wyoming, to two of the six deep purple states expected to decide the 2024 presidential election — Arizona and Nevada — elected officials are taking some of the boldest steps on housing anywhere.

Five of those states were among the 10 fastest growing in the country between 2010 and 2020, igniting a surge in prices and rents. Covid caused “an influx of telecommuting and remote workers, new residents pushed out of more expensive cities, and new housing market investment that has increased home prices more rapidly and more dramatically than in any other region of the country.”

If the Economic Innovation Group is right that the Mountain West “could be the big winner in the new era of industrial policy and partial deglobalization,” attracting even more in-migration, an unfolding affordability challenge could become an unmanageable affordability crisis.

Leaders in the region get it.

Governor Greg Gianforte (R) is credited for making Montana “the first red state to enact sweeping housing legislation to confront a cost crisis.” New Mexico Governor Michelle Lujan Grisham (D) just signed into law the largest state investment in housing in history, $200 million, saying, “We gotta build houses.” Arizona committed more than $200 million last year, its highest amount ever by far.

Utah Governor Spencer Cox calls housing costs “the single greatest threat to our future prosperity” and has proposed a program to build 35,000 starter homes over the next five years, earning kudos from the Democrats in the state legislature. Colorado residents voted in 2022 to direct several hundred million dollars in tax revenue annually to jurisdictions that expedite affordable development; more than 90 percent of the state’s population lives in communities that have opted-in to receive funding.

It’s no surprise that the National Governors Association has put housing high on its list in Washington: Cox and Colorado Governor Jared Polis (D) are the co-chairs of the organization.

The West’s congressional representatives are also leading. One example: The Republican senators of Utah (Lee and Romney) and Wyoming (Barrasso and Lummis), along with Senator Dan Sullivan of Alaska (R), want to free up federally owned land — which is half of all the land in the West — for affordable development, potentially leading to millions of additional homes, according to Congress’ Joint Economic Committee.

Nobody in the Senate is more effective on housing than Nevada’s Catherine Cortez Masto (D), who’s leading efforts to strengthen Housing Bonds, improve the HOME program, and increase Federal Home Loan Bank commitments. Her colleague from Idaho, Senator Mike Crapo (R), is central to continuing discussions about whether the largest expansion of Housing Credits and Housing Bonds in 20-plus years, included in a bipartisan House-passed bill, will move forward in the Senate. He said this week: “I’ve been working to get this done for three years. And I think we should do it as soon as we can.”

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

In This Issue

Willman Appointed LHC Executive Director; Karnai Confirmed as DSHA Director
The Board of Directors of the Louisiana Housing Corporation (LHC) has appointed Marjorianna Willman as executive director. Willman has served as interim executive director since October 2023. She previously was LHC’s chief operating and legal officer.

The Delaware Senate has confirmed Governor John Carney’s nomination of Cynthia Karnai to be director of the Delaware State Housing Authority (DSHA). Karnai will succeed Eugene Young who is stepping down in April after leading the agency since 2021. Named DSHA’s deputy director in 2022, Karnai previously served in the roles of chief operating officer and director of housing finance; she joined DSHA in 2005.

Biden Signs into Law FY24 HUD, Rural Housing Appropriations Bills
Shortly after the existing continuing resolution for Fiscal Year 2024 (FY24) expired at midnight on March 8, President Biden signed into law legislation finalizing FY24 appropriations for a number of federal agencies, including the U.S. Departments of Agriculture (USDA) and Housing and Urban Development (HUD). That legislation provided $70.1 billion in funding for HUD, which will maintain all existing rental assistance provided through the Housing Choice Voucher and Project-Based Rental Assistance programs, fund new targeted incremental vouchers for youth aging out of foster care and veterans at risk of or experiencing homelessness, and increase funding for Homeless Assistance Grants. The bill also provides $1.25 billion for the HOME Investment Partnerships program, a decrease of $250 million from the FY23 enacted level but significantly higher than the $500 million originally proposed in the House. In addition, the legislation grants USDA explicit authority for the first time to “decouple” rental assistance from certain properties securing maturing or prepaid Section 515 mortgages, helping preserve access to affordable housing in rural areas.

For more information on individual program funding, see NCSHA’s Budget Chart.

President’s FY25 Budget Proposes More Money, New Programs for Affordable Housing
On March 11, the Biden Administration released its budget proposal for Fiscal Year 2025 (FY25). The president’s budget would establish a number of new housing programs and provide significant funding for efforts to expand housing supply and make it more affordable for low-income tenants and home buyers. In addition to $72.6 billion in discretionary funding for HUD, the budget proposes nearly $185 billion in mandatory investments, including $81.3 billion for new HUD-administered initiatives, as well as significant expansion of the Housing Credit and new credits such as the Neighborhood Homes Investment Credit and homeownership tax credits.

Read NCSHA’s analysis of the president’s FY25 budget.

HUD Secretary to Retire March 22
HUD Secretary Marcia L. Fudge announced Monday she is resigning and retiring March 22. Fudge has served as the department’s 18th secretary since being confirmed in 2021. During her tenure, Fudge worked closely with NCSHA and state HFAs to expand affordable housing options for low- and moderate-income Americans and to help those impacted by the Covid-19 pandemic remain in their homes. Fudge was instrumental in extending the Federal Housing Administration – Federal Financing Bank Risk-Sharing Program and in implementing the HOME-ARP and Emergency Housing Voucher programs. NCSHA issued this statement thanking Secretary Fudge for her service and commitment to affordable housing.

Deputy Secretary Adrianne Todman will become the acting secretary upon Fudge’s departure. Todman was a featured speaker during NCSHA’s 2024 Legislative Conference earlier this month.

Warnock Reintroduces Down Payment Toward Equity Act
Senate Banking Committee member Raphael Warnock (D-GA) on Tuesday introduced the Down Payment Toward Equity Act to establish the First-Generation Down Payment Assistance Program, which would fund down payment assistance for low- and middle-income first-time home buyers whose parents do not own a home. The legislation is nearly identical to legislation Warnock introduced last Congress and which has also been introduced by House Financial Services Committee Chair Maxine Waters (D-CA). NCSHA has endorsed the Waters’ legislation. Senators Laphonza Butler (D-CA), Sherrod Brown (D-OH), and Chris Van Hollen (D-MD) are original cosponsors.

HUD Announces Housing Counseling Funding Opportunity, Grant Awards
On March 5, HUD announced $10 million is available to help selected HUD-approved housing counseling agencies provide culturally sensitive and language-appropriate pre- and post-purchase housing counseling in distressed communities. Applications must be submitted to HUD by April 4.

On Tuesday of this week, HUD announced seven nonprofit housing counseling organizations were awarded a total of $2.75 million in grant funding to train current and prospective housing counselors. Grantees will use the funds for professional development of existing counselors to keep up with the evolving needs of homeowners, home buyers, and renters, as well as to attract new talent to the profession.

Treasury Marks Third Anniversary of ARPA, Publishes New Analysis of Impact on Economic Recovery
This week, the U.S. Treasury Department commemorated the third anniversary of the American Rescue Plan Act (ARPA) and published a new analysis of the impact state and local governmental activities using ARPA programs, particularly the Coronavirus State and Local Fiscal Recovery Fund (SLFRF), have had on the nation’s economic recovery during and since the Covid-19 pandemic. According to the analysis, state and local governments have dedicated $18.5 billion in SLFRF for nearly 3,000 projects to meet housing need, including $7 billion for affordable housing development and preservation. The report notes that the SLFRF investments in affordable housing represent a 33 percent expansion over the annual amount state and local governments typically spend on these activities and that affordable housing strengthens the economy by allowing workers to live near jobs and provides long-term benefits to children.

Treasury’s announcement also highlights how the Emergency Rental Assistance (ERA) program and Homeowner Assistance Fund (HAF) — both ARPA programs — have helped families avoid eviction or prevented them from losing their homes. Treasury says states and localities have used ERA to make more than 12.3 million payments for rent and utilities and HAF to help more than 450,000 homeowners, with both programs having a significant impact on households of color.

Updated Treasury SLFRF, ERA Guidance Could Facilitate Increased Housing Production
As NCSHA reported in greater detail in a March 6 blog post, Treasury last week released updated Frequently Asked Questions (FAQs) for both the SLFRF and ERA programs, making these programs more flexible for use by state and local governments to build and preserve affordable housing. The updated SLFRF FAQs expand the universe of properties the Treasury Department considers presumptively eligible to receive SLFRF financing, including projects housing families earning up to 120 percent of area median income (AMI); the prior FAQs provided presumptive eligibility to projects targeting households earning up to 65 percent of AMI. The ERA FAQs clarify that ERA2 funds may be used to finance acquisition and pre-development activities, which had not been explicitly included in the eligible activities in prior FAQs.

USDA’s Rural Development Launches Policy Desk, Releases Revised Servicing Chapters for Comment
On March 5, USDA’s Office of Rural Development launched a Single-Family Housing Guaranteed Loan Program Policy Desk to collect input from stakeholders on proposed policy revisions. At the same time, the Office of Rural Development released in draft form for comment proposed changes to Chapters 17 (Regular Servicing Performing Loans), 18 (Servicing Non-Performing Loans), and 19 (Loss Claims) of its Single-Family Housing Guaranteed Loan Program Handbook. Comments may be provided online through April 12.

Senate Banking Committee Explores Proposals to Address Housing Affordability
The Senate Banking Committee on Tuesday held a hearing to consider policy solutions for the affordable housing crisis. Chair Sherrod Brown (D-OH) kicked off the hearing by expressing hope the committee could reach a bipartisan consensus on legislation to expand affordable options for renters and homeowners. Ranking Member Tim Scott (R-SC) said he shared Brown’s desire to work together on housing legislation, but in his view, the federal government can play only a minimal role in supporting affordable housing compared to state and local governments. The best thing the federal government can do, Scott argued, is eliminate unnecessary regulations.

In his testimony, witness Matt Josephs of the Local Initiatives Support Corporation called on Congress to pass the Affordable Housing Credit Improvement Act (AHCIA) and Neighborhood Homes Investment Act. Later, in reply to a question from Senator Jon Tester (D-MT), Josephs said passing AHCIA was the best thing Congress could do to support affordable housing. During her question time, Senator Catherine Cortez Masto (D-NV) championed legislation she has introduced, and NCSHA supports, to reauthorize the HOME program.

HAC Releases New Resource for Rural Multifamily Housing Preservation
On March 6, the Housing Assistance Council announced its Center for Rural Multifamily Housing Preservation. The resource will provide technical assistance and expertise to preserve the long-term affordability of the rural multifamily housing stock, especially properties financed through USDA’s Section 515 program.

NLIHC “Gap” Report Shows Worsening Affordability Challenges
This week, the National Low Income Housing Coalition (NLIHC) released The Gap, a report detailing its research on the shortage of housing for extremely low-income households (defined in the report as households with incomes below 30 percent of the area median income or below the poverty line, whichever is greater). According to the report, extremely low-income renters in the United States are facing a shortage of 7.3 million affordable homes — a deficit that is more acute than it was before the pandemic. The shortage increased by more than 480,000 homes between 2019 and 2022. NLIHC recommends increased federal investment in the preservation and expansion of the affordable housing stock, more Housing Choice Vouchers, and emergency assistance for renters.

NCSHA in the News
Altus Group, 3.13.24, Patient capital and risk tolerance could yield high returns in Opportunity Zones
National Low Income Housing Coalition Memo to Members, 3.11.24, Housing Assistance Council Announces New Center for Rural Multifamily Housing Preservation
Route Fifty, 3.11.24, Housing Gets a Big Boost in Biden Budget
Route Fifty, 3.1.24, Biden administration announces new efforts to boost the nation’s housing supply

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