NCSHA Washington Report | November 8, 2019
With daylight saving time in effect, we’re missing the late afternoon light on the East Coast and thinking a little more about the sun.
On the West Coast, in California, most everyone involved in residential development, construction, and sales is bracing for the sun to have a bigger role in their businesses: Starting January 1, virtually all new homes and apartments under three stories will have to have solar panels.
The California Energy Commission (CEC) projects the requirement will add an average of $8,000 – $10,000 to the upfront cost of a typical single-family home (and generate an average savings of $19,000 over 30 years). The National Association of Home Builders estimates that every $1,000 increase in price prevents around 10,000 households from affording a home, which suggests the California mandate could worsen affordability for 80,000 – 100,000 families.
The actual impact may be less severe. Home builders like Lennar, Meritage, and KB Home have been delivering moderately-priced solar homes in California and other states for years, building a viable market. Wider adoption could drive down solar panel costs, which have plunged 65 percent since 2009 due to manufacturing and installation improvements.
And innovations will likely emerge. California Building Industry Association CEO Dan Dunmoyer told the Los Angeles Times that alternatives to rooftop photovoltaic (PV) systems, such as “community solar” and offsite solar farms, could cut the CEC’s projected price increase by 85 percent.
While California will remain the nation’s major market for solar, industry analysts who project PV capacity to double in the next five years point to “a growing residential sector that is rapidly diversifying across state markets,” such as in Florida, South Carolina, Texas, and Utah.
Of course, most solar installations outside California will continue to be on existing homes. Importantly, “almost half of all the United States’ residential rooftop solar technical potential is on the dwellings of low-to-moderate-income (LMI) households,” mostly multifamily rental properties, according to the National Renewable Energy Laboratory.
All the barriers to making solar more widely available to LMI families will be familiar to anyone working to provide them better housing options: credit challenges, financing complexities, limited awareness, burdensome local regulation.
Still, it’s happening. State HFAs recently have integrated solar into senior rental apartments (Rhode Island Housing), prioritized it in Housing Credit awards (Mississippi HC), linked it to preservation and job training (DC HFA), and helped deliver it at a community scale (Texas DHCA).
In July, HUD issued guidance that will allow hundreds of thousands of low-income renters to fully realize the economic benefits of California’s $1 billion solar program for multifamily housing, which advocates hope “could pave the way for similar rulings affecting solar programs across the country.”
It’s often noted that solar generates a tiny share of the nation’s electricity (less than two percent). Yet the relatively small amount of installed solar produces enough power for more than 13 million homes.
In affordable housing, we recognize the power of leverage when we see it.
Stockton Williams | Executive Director
In This Issue
- AHCIA Cosponsorship Surpasses Major Milestones: More Than One-Third of House and One-Fourth of Senate
- NLIHC to Honor Minnesota Housing Commissioner
- FHFA Seeks Input on GSE Loan Pooling Practices; Considers Limits on Specified Pools
- Cortez Masto Praises AHCIA During Senate Hearing
- Wyden Introduces Legislation to Reform Opportunity Zone Incentive
- Roget Moving from HUD to NCUA
- NCSHA in the News
- Looking Ahead
AHCIA Cosponsorship Surpasses Major Milestones: More Than One-Third of House and One-Fourth of Senate
As we get closer to the year’s end, cosponsorship of the Affordable Housing Credit Improvement Act (AHCIA; S. 1703 and H.R. 3077), has surged. As of this writing, 29 Senators and 155 House members have cosponsored the bill — more than a quarter of the Senate and one-third of the House. Forty states have at least one cosponsor. Three states — Maine, New Hampshire, and Vermont — have 100 percent of their delegations on board (including Democratic Senators on the waiting list to get onto S. 1703). The state with the most cosponsors is New York with 19 cosponsors. California follows closely behind with 18 cosponsors. And this week, thanks in large part to the determined efforts of Carol Ditmore and her team at the Arizona Department of Housing, Senator Martha McSally (R-AZ) became the latest cosponsor of S. 1703, the eleventh Republican to do so.
Please keep up the good work! While the fate of a tax vehicle this year is still unknown, if we get that opportunity, we need the highest possible cosponsorship rates to make it onto the short list for negotiation. Even more importantly, make sure your cosponsors — especially your Democratic cosponsors — are telling their leadership and tax committee leaders that AHCIA should be a top priority in any negotiations leading to an end-of-year tax bill. If you have questions or need assistance in your outreach, contact NCSHA’s Jennifer Schwartz.
NLIHC to Honor Minnesota Housing Commissioner
The National Low Income Housing Coalition (NLIHC) this week announced its 2020 Housing Leadership Award honorees, including Minnesota Housing Commissioner Jennifer Ho, Shauna Sorells from the Housing Opportunities Commission of Montgomery County, and Bill Lord from the Coalition on Homelessness and Housing in Ohio. Ho will receive the Sheila Crowley Housing Justice Award, named after the former NLIHC president and CEO, in recognition of her work to end homelessness and housing poverty while at Minnesota Housing and previously at HUD, the U.S. Interagency Council on Homelessness, and Hearth Connection. NLIHC will recognize these three leaders at its 38th Annual Housing Leadership Reception on March 26 in Washington, DC.
FHFA Seeks Input on GSE Loan Pooling Practices; Considers Limits on Specified Pools
The Federal Housing Finance Agency (FHFA) Monday published a Request for Input (RFI) pertaining to the practices Fannie Mae and Freddie Mac use when pooling loans to include them in mortgage-backed securities (MBS). The RFI follows the launch in June of the common Uniform Mortgage Backed Security (UMBS), which replaced the individual securities Fannie Mae and Freddie Mac previously issued. FHFA is looking to increase the stability of the UMBS market by channeling more Fannie Mae and Freddie Mac loans into larger, multi-lender pools that offer a wider variety of loans and, consequently, more fungibility between individual UMBS. As part of these efforts, FHFA asks whether it should place limits on the issuance of specified pools, a type of pool frequently used to securitize HFA program loans so HFAs can receive more competitive pricing for their loans. Investors are often willing to pay a premium for pools composed of HFA loans because HFA loans often prepay at slower rates than the market as a whole.
The deadline to submit comments is December 18. NCSHA is still examining the proposal and intends to respond on behalf of all HFAs. Please contact Greg Zagorski by December 3 with questions or input.
Cortez Masto Praises AHCIA During Senate Hearing
The Senate Banking Committee held a hearing Thursday on “Examining Bipartisan Bills to Promote Affordable Housing Access and Safety.” The hearing was focused on three bills in particular: S. 2160, which would require carbon monoxide alarms in federally assisted housing; S. 1804, which would require HUD to include manufactured housing guidelines in consolidated plans; and H.R. 4300, which would provide housing assistance for those aging out of foster care. While not under the jurisdiction of the Banking Committee, Senator Catherine Cortez Masto (D-NV), who serves on both the Banking and Finance committees, seized the opportunity to stress the importance of strengthening the Low Income Housing Tax Credit program by passing the Affordable Housing Credit Improvement Act (AHCIA). NCSHA worked with the Senator’s staff to help prepare her remarks about the Housing Credit and AHCIA. A recording of the hearing is available here.
Wyden Introduces Legislation to Reform Opportunity Zone Incentive
On November 6, Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced legislation to significantly modify the Opportunity Zone tax incentive enacted as part of the 2017 Tax Cuts and Jobs Act. As detailed in the accompanying bill summary, the legislation would require Qualified Opportunity Funds to report certain information about their activities and investors in those funds to submit annual statements to the IRS about their investments. The bill would also prohibit investments in residential rental property unless 50 percent of the units are both rent restricted and occupied by individuals whose incomes are 50 percent or less of area median income. This provision would make most affordable and workforce housing developments in Opportunity Zones impossible, and NCSHA will be reaching out to Senator Wyden’s staff to explain the potential impact of this change.
Roget Moving from HUD to NCUA
Federal Housing Administration (FHA) Deputy Assistant Secretary for Single-Family Housing Gisele Roget is moving from HUD to the National Credit Union Administration (NCUA). While at FHA, Roget has played a key role in setting single-family lending policies, including possible rulemaking on government entity down payment assistance programs. She has represented FHA at several NCSHA events and also met with NCSHA and HFA staff to discuss down payment assistance and other important issues related to HFAs’ single-family programs. Roget will start at NCUA on November 12, serving as deputy chief of staff and director of external affairs. NCSHA thanks her for her public service.
NCSHA in the News
Sustainable: Opportunity zones could boost clean energy (Finance & Commerce)
Opportunity Zone Fund Admin: Can Blockchain Do the Trick? (FinOps Report)
Legislative and Regulatory Activities
- November 8 | Deadline to submit comments to NCSHA | Proposed Modifications to Fannie Mae and Freddie Mac’s Underserved Markets Plans
- November 14 | Deadline to submit comments to NCSHA | GASB Exposure Draft on LIBOR Replacement
- November 15 | Comment Deadline | Proposed Modifications to Fannie Mae and Freddie Mac’s Underserved Markets Plans
- November 18 | Comment Deadline | HUD Proposed Rule on HOTMA
- November 20 | House Subcommittee on Housing, Community Development, and Insurance Hearing | “Safe and Decent? Examining the Current State of Residents’ Health and Safety in HUD Housing”
Oregon Housing and Community Services Director Margaret Salazar will testify.
- November 23 | Comment Deadline | Treasury Department Proposed Regulations on LIBOR Phaseout and Municipal Bonds
- November 27 | Comment Deadline | GASB Exposure Draft on LIBOR Replacement
- December 3 | Deadline to submit comments to NCSHA | FHFA RFI on Enterprise UMBS Pooling Practices
- December 9 | Comment Deadline | Proposed Opportunity Zone Grant Certification Form
- December 18 | Comment Deadline | FHFA RFI on Enterprise UMBS Pooling Practices
- December 24 | Comment Deadline | FHA Revisions to Loan Level Certification Form
NCSHA, State HFA, and Industry Events
- November 18 – 20 | Prosperity Now I’M HOME Conference | Portland, OR
Greg Zagorski will speak at this event.
- November 20 – 22 | Virginia Governor’s Housing Conference | Hampton, VA
Stockton Williams will speak at this event.
- November 20 | American Bar Association Forum on Affordable Housing and Community Development Law, “Income Averaging in LIHTC Projects — Where Are We Now?” | Webinar
Jennifer Schwartz will speak at this event.
- December 2 | Federal Housing Finance Agency Duty-to-Serve Listening Session | Washington, DC
NCSHA will speak at this event.
- December 5 – 6 | Novogradac 2019 Tax Credit Housing Finance Conference | Las Vegas
Jennifer Schwartz will speak at this event.
- December 9 | Early Registration and Hotel Group Rate Cutoff | NCSHA’s HFA Institute 2020
- January 12 – 17 | NCSHA’s HFA Institute 2020 | Washington, DC