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NCSHA Washington Report | May 10, 2024

Published on May 10, 2024

NCSHA Washington Report
State housing finance agencies in recent years have taken extraordinary steps in response to unprecedented cost increases in affordable apartment construction. They have helped secure billions in additional funding from the federal government and many state legislatures, created an array of new gap-filling programs across the country, and provided substantial cost-saving regulatory and administrative flexibilities to developers and their properties.

HFAs’ efforts have saved countless developments from “falling through the cracks” and ensured delivery of thousands of affordable apartments during a period of worsening housing need for millions of low-income families. This article in the new edition of the Novogradac Journal of Tax Credits tells some of the story.

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

In This Issue

Allocations for HOME, HTF, ESG, Other CPD Programs Announced
On Tuesday, the U.S. Department of Housing and Urban Development (HUD) announced the fiscal year 2024 allocations to more than 2,400 grantees for these Community Planning and Development (CPD) programs: Community Development Block Grants (CDBG), CDBG Recovery Housing Program, HOME Investment Partnerships, Emergency Solutions Grants, Housing Opportunities for Persons with AIDS, and Housing Trust Fund. Individual grantees’ allocations by program are available here. The announcement follows closely upon Congress finalizing FY24 HUD appropriations in March.

HUD Issues Final Rule Implementing HOTMA Changes to Voucher Programs
HUD published on Tuesday a final rule in the Federal Register implementing changes to the Housing Choice Voucher and Project-Based Voucher programs in response to the Housing Opportunity Through Modernization Act of 2016 (HOTMA). The final rule comes after HUD initially proposed a rule in October 2020 to codify HOTMA provisions previously implemented through a series of notices. Changes in the final rule include additional flexibility in the methodology used by public housing agencies (PHAs) to establish fair market rents, the information PHAs must provide in their annual and five-year plans, updates to the utility allowance schedule, and Housing Assistance Payment calculations, among other items.

HUD Issues Fair Housing Guidance on AI Use in Tenant Screening, Marketing of Housing and Services
Earlier this month, HUD released guidance documents to ensure fair housing requirements are maintained when housing and housing-related service providers use artificial intelligence (AI) for tenant screening or targeted advertising of housing opportunities on online platforms. As technology advances, some housing providers have begun to use third-party screening companies, some of which rely on machine learning and AI, to assist in tenant screening. HUD’s new tenant screening guidance describes how providers can take advantage of these services in a nondiscriminatory manner and provides best practices for complying with the Fair Housing Act. Its new guidance on advertising of housing and related services on digital platforms explains how the Fair Housing Act applies to these marketing mechanisms and addresses the responsibilities and potential liabilities of both advertisers and ad platforms using automated systems, such as algorithmic processes and AI, to facilitate ad targeting and delivery.

USDA Approves Exemption on Seller Concessions for Single-Family Housing Guaranteed Loans
On May 9, U.S. Department of Agriculture Rural Housing Service (RHS) Administrator Joaquín Altoro announced RHS will exempt real estate commission fees paid by the seller on behalf of the buyer from the agency’s six percent cap on seller concessions for its Single-Family Housing Guaranteed Loan Program. This modification is intended to better align the program with industry standards on seller concessions and ensure rural home buyers can continue to access affordable housing financing through RHS regardless of potential industry changes on real estate commissions.

Senate Banking Committee Holds Hearing on Rental Housing, Financial Services Fees
The Senate Banking Committee yesterday held a hearing to examine the impact service fees are having on the affordability of rental housing and financial services. In his opening statement, Committee Chair Sherrod Brown (D-OH) lamented that many firms, including rental housing owners, charge consumers surprise add-on “junk fees” that increase costs and make it more difficult to shop for the best price. Committee Democrats largely echoed Brown’s views. Senators Jon Tester (D-MT) and Catherine Cortez Masto (D-NV) specifically raised concerns about investors purchasing manufactured housing communities and enacting rent increases and new service fees existing tenants cannot afford. Committee Ranking Member Tim Scott (R-SC) countered that most of the fees discussed were for legitimate business expenses and the real driver of increased costs for consumers were Biden Administration policies that increased inflation and imposed burdensome regulations on businesses. Other committee Republicans shared Scott’s sentiment and were especially critical of a Consumer Financial Protection Bureau rule restricting credit card fees.

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