NCSHA Washington Report | October 14, 2022
The upshot of last week’s two announcements by the Treasury Department and IRS regarding the Housing Credit program is that a number of very good things for low-income renters and apartment owners that were unlikely to happen now can and some very bad things that were likely to occur now won’t.
The positives now possible are in the long-awaited new rules governing how Housing Credit developments can serve a wider range of low- and extremely low-income renters in the same property, lovingly known as the Average Income Test (AIT) minimum set-aside. After Congress authorized the policy in 2018, the IRS’ first stab at implementing regulations in 2020 was universally panned as unworkable, and as Novogradac’s Mark Shelburne notes, “as a result, many LIHTC equity providers started walking away from AIT properties.”
Last week’s largely total revision appears to fix all the major problems. It will reduce renter displacement pressures in preservation transactions and increase income mixing in Housing Credit developments also funded with HUD and USDA programs. The new rules also make rural affordable housing development more feasible and support economic revitalization in distressed areas. And they remove conflicts the original rules inadvertently created with civil rights and domestic violence protections.
In other words, the new AIT regulations make it possible for the affordable housing industry to achieve Congress’ intent in a breakthrough improvement of a well-established program.
The negatives now averted are thanks to Treasury and IRS’ extension of time-sensitive milestones Housing Credit developers, owners, and state agencies variously have to hit to ensure properties remain in compliance with the program’s strict requirements — and don’t lose their financing. The extensions, initially granted in response to the pandemic, remain necessary because of the economic disruptions it continues to inflict.
One example: But for last week’s announcement, Housing Credit developments across the country were facing the imminent prospect of not meeting their binding requirement to open by year’s end. That was causing cascading problems for their financiers, including state HFAs, which were already scrambling to cover mounting inflation-driven cost gaps through triage strategies.
The regulatory relief granted by Treasury and IRS stabilizes the entire affordable housing finance system.
The agencies didn’t have to make the moves they did last week. They could have said they did their best with a complicated statutory change and the always-adaptable Housing Credit industry would eventually make “income averaging” work to some extent. They could have said, with the pandemic fading, it’s time to remove temporary waivers granted in response to it.
Instead, IRS and Treasury analyzed the facts on the ground and assessed the legal and policy bases of other options. Rather than retreating into a bureaucratic bunker, they actively engaged with stakeholders and listened openly to their concerns and recommendations (some of which they rejected, by the way).
Public servants, whose names few who will benefit from their work will ever know, deserve thanks from all of us who do. Officials at every federal agency would do well to follow their lead.
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- Treasury Allows ERA Grantees to Request Extension of Quarter 3 Reporting Deadline
- New Toolkit Helps Housing Leaders Build Health Partner Investment Strategies
- NCSHA in the News
- Looking Ahead
Treasury Allows ERA Grantees to Request Extension of Quarter 3 Reporting Deadline
This week, the Treasury Department added an option in its Emergency Rental Assistance (ERA) reporting portal allowing ERA grantees to request a 30-day extension to the October 17 deadline for Quarter 3 reporting on program activities. NCSHA, in partnership with other national groups representing ERA grantees, had requested that grantees be provided more time to report as many grantees are in the process of obtaining all final invoices from their vendors and partners so that they can accurately estimate future ERA 1 administration costs as part of the program’s closeout on September 30.
New Toolkit Helps Housing Leaders Build Health Partner Investment Strategies
The Center for Community Investment (CCI) and NeighborWorks America have released a free toolkit, From Silos to Collaboration: Building a Health Partner Investment Strategy that provides advice, examples, and resources to help housing and community-based organizations develop partnerships with hospitals and other health institutions to invest in affordable housing. CCI is the lead advisor and technical assistance provider to NCSHA’s Healthy Housing, Healthy Communities (H3C) Partnerships initiative.
NCSHA in the News
Notes from Novogradac, 10.13.22, IRS Notice 2022-52 Extends Major LIHTC Statutory Deadline Relief Provided in Notice 2022-05, But Not All
NH Business Review, 10.12.22, Major New Hampshire housing forums set
Legislative and Regulatory Activities
- October 17 | Comments Due | FHFA Proposed Affordable Multifamily Housing Goals for Fannie Mae and Freddie Mac
- October 20 │ Applications Due │ HUD Continuum of Care Program Supplemental Funding Opportunity to Address Unsheltered and Rural Homelessness
- October 21 | Comments Due | FHFA Review of Federal Home Loan Bank System
- October 27 | Comments Due to NCSHA | HUD RFI on Green and Resilient Retrofit Program
- November 22 | Application Deadline | HUD Thriving Communities Technical Assistance
- November 28 | Comments Due to NCSHA | FHA RFI on Small Mortgage Lending
- December 5 | Comments Due | FHA RFI on Small Mortgage Lending
- January 11 | Application Deadline | FY22 Choice Neighborhoods Planning and Implementation Grants
NCSHA, State HFA, and Industry Events
- October 18 | Ohio Housing Council Fall Symposium | Columbus, OH
Jennifer Schwartz will speak at this event. - October 19 – 21 | Affordable Housing Investors Council 2022 Affordable Housing Summit | Minneapolis, MN
James Tassos will speak at this event. - October 22 – 25 | NCSHA Annual Conference & Showplace | Houston, TX
- October 25 – 28 | National Affordable Housing Management Association Fall Conference | Washington, DC
Jennifer Schwartz will speak at this event. - November 9 – 10 | ProLink Technology Live 2022 | Virtual
Jennifer Schwartz will speak at this event. - November 15 | New Hampshire Housing’s Housing & Economy Conference | Manchester, NH
Jennifer Schwartz will speak at this event. - November 16 | 2022 Vermont Statewide Housing Conference | Burlington, VT
Jennifer Schwartz will speak at this event. - January 8 – 13 | NCSHA’s HFA Institute 2023 | Washington, DC
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