NCSHA Washington Report | October 6, 2023

Anyone else on the short list of elected officials who have delivered affordable housing results like Maine Governor Jane Mills (D) has recently might have basked a little longer in the warm reception she received at the Maine Affordable Housing Conference in Portland this week, but the governor was there to deliver a blunt call to action: “We all have to build more housing to meet the need of our growing workforce.”

She cited a study by HR&A Advisors that pegged the “housing availability rate” across the state at a stunning 2.3 percent and projected the need for up to 84,000 additional homes and apartments by 2030 — an almost doubling of current production.

Maine’s challenge is not unique, and as a result, a “housing revolution is brewing” among state legislatures, in the words of the Mercatus Center at George Mason University, which identified more than 200 bills relating to housing supply introduced in 15 states through the first half of this year. The center’s analysts cited Montana, Rhode Island, Vermont, and Washington for efforts “that have clearly succeeded on a large scale.” (They intentionally omitted California from their count, which itself “has adopted over 100 new laws designed to increase housing production,” since 2017, according to the U.C. Berkeley Terner Center.)

Local jurisdictions are also doing more than ever in many places. A report by the National Low Income Housing Coalition found nearly 100 ballot measures that passed during the 2022 elections, including approval of a combined $2 billion in local bond issuances for housing supply programs “across every region of the country.” The coalition highlights efforts in California, Colorado, New York, and Florida.

The politics of the revolution might surprise. A Moody’s report on the 2022 mid-terms found “voters in both red and blue states overwhelmingly support ballot measures meant to address housing insecurity,” in many cases with up to 70 percent of the vote. Yet, “political alignment on supply remains chaotic,” write the Mercatus Center analysts: Republicans and Democrats each variously supported and opposed similar legislation from one state to another.

Minneapolis illustrates other political cross currents. In August, a Bloomberg analysis concluded the city’s 2018 pro-housing zoning reforms and its investment over several subsequent years of several hundred million in development assistance and rent subsidies were the main reasons that this past May “the Twin Cities became the first major metropolitan area to see annual inflation fall below the Federal Reserve’s target rate of 2%.”

But last month, a Hennepin County district court judge forced Minneapolis to revert to its pre-2018 zoning rules, agreeing with smart growth advocates that the current policy violated Minnesota’s Environmental Rights Act. The city is appealing the ruling.

The situation appears similar to a long-running one in California, where in 2020 alone environmental litigation “challenged projects representing almost 50,000 housing units,” resulting in more expensive projects and fewer new affordable homes, according to the Terner Center. A topic for another day.

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

• ACTION Campaign Releases Video Series Explaining Housing Credit Legislation
• Five States Added to HFA1 Affordable Homeownership Lender Toolkit
• Congress Passes Continuing Resolution, Turns to Agency Appropriations Bills
• HOME Coalition Sends Congress Letter Urging Sufficient Funding for HOME Program
• HUD Releases HOTMA Implementation Guidance
• CDFI Capital Magnet Fund Awards $321 Million to HFAs, Others for Affordable Housing, Community Facilities
• Looking Ahead

ACTION Campaign Releases Video Series Explaining Housing Credit Legislation
The ACTION Campaign, co-chaired by NCSHA and Enterprise Community Partners, this week released seven videos in a series that delves into the provisions of the Affordable Housing Credit Improvement Act (AHCIA; S. 1557 / H.R. 3238). In the videos, NCSHA’s Jennifer Schwartz and Enterprise Community Partner’s Ayrianne Parks discuss how each AHCIA provision would strengthen the Housing Credit program, including increasing Housing Credit authority, lowering the bond financing threshold, providing basis boosts of up to 30 percent in rural and Native American areas, establishing a basis boost of up to 50 percent for properties serving extremely low-income households, mitigating NIMBY opposition to developments, and simplifying the Housing Credit student rule. More videos in the series will be released over the next two weeks.

Five States Added to HFA1 Affordable Homeownership Lender Toolkit
This week NCSHA released an update of the HFA1 Affordable Homeownership Lender Toolkit with the addition of five state HFAs: Delaware State Housing Authority, Indiana Housing and Community Development Authority, Nebraska Investment Finance Authority, Nevada Housing Division, and West Virginia Housing Development Fund. That brings to 23 the total number of state HFAs that have aligned their first mortgage and down payment assistance programs and shared their information via the toolkit. Targeted to mortgage lenders, the information in the toolkit makes it easier for lenders to understand the key features of the aligned homeownership program in each state, assess opportunities to partner with those programs, and serve lower-income home buyers across multiple states.

The toolkit is free; request a copy here.

Congress Passes Continuing Resolution, Turns to Agency Appropriations Bills
Hours before the federal government would have shut down at midnight on September 30, Congress passed and President Biden signed into law a 45-day continuing resolution (CR) extending funding for federal agencies through November 17. Coupled with the CR was an extension of authorization for the National Flood Insurance Program for the same duration. Among other issues, Congress must now turn its attention to processing regular appropriations legislation, including the Transportation, Housing and Urban Development (THUD) bill. In the House, the Committee on Rules previously announced floor consideration of its THUD bill could begin as early as the week of October 9; that timeline now appears unrealistic. In the Senate, a package of appropriations bills including THUD cleared a procedural hurdle last week on a bipartisan basis but was set aside to process the CR.

You can find NCSHA’s FY24 budget chart, including House and Senate proposed funding levels, here.

HOME Coalition Sends Congress Letter Urging Sufficient Funding for HOME Program
As Congress continues to consider legislation to fund the Department of Housing and Urban Development (HUD), the HOME Coalition, which NCSHA chairs, sent House and Senate leadership and appropriators an October 2 letter urging them to adopt no less than the $1.5 billion funding level set for the HOME Investment Partnerships program by the THUD bill reported out of the Senate Appropriations Committee and to reject the substantial cuts to the HOME program proposed in the House THUD bill. The House THUD bill proposes to cut funding for HOME to $500 million in fiscal year 2024, a two-thirds cut, which would result in as many as 17,000 fewer affordable homes built or preserved and rental assistance for 5,000 fewer people in need.

HUD Releases HOTMA Implementation Guidance
On September 29, HUD published Notice PIH 2023-17, which contains implementation guidance for Sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). HOTMA Sections 102 and 104 contain significant changes to the requirements for tenant income and assets, respectively, for public housing and Section 8 program participants. The effective date of the final HOTMA rule for covered public housing agencies (PHAs) and owners of HUD-assisted multifamily housing is January 1, 2024; however, the compliance date for the rule is January 1, 2025. Each PHA will set its own compliance date no later than January 1, 2025, dependent on when its annual plan is due to HUD. Multifamily owners are required to update tenant selection plans and income verification systems to comply with the final rule by March 31, 2024, but will not be penalized for HOTMA-related errors during Management and Occupancy Reviews until January 1, 2025.

CDFI Capital Magnet Fund Awards $321 Million to HFAs, Others for Affordable Housing, Community Facilities
The Treasury Department’s Community Development Financial Institutions Fund on Wednesday announced the recipients of the FY23 round of the Capital Magnet Fund (CMF). Fifty-two organizations were selected to receive a total of $321.2 million for preservation, rehabilitation, development, and/or purchase of affordable housing and community service facilities, such as daycare centers, health care clinics, and workforce development centers. Award recipients are expected to leverage more than $11.1 billion dollars for affordable housing and community development in private and public funding as part of their CMF projects. Two HFAs — MassHousing and the Vermont Housing Finance Agency — were selected to receive awards totaling $16.5 million. See the full list of award recipients.

Looking Ahead…

Legislative and Regulatory Activities

• October 6 | Comments Due to NCSHA | Treasury’s Interim Final Rule to Implement Amendments to the Coronavirus State and Local Fiscal Recovery Funds
• October 12 | Application Deadline EXTENDED | Solar for All Notice of Funding Opportunity
• October 13 | Application Deadline | Federal Advisory Committee on Affordable, Equitable, and Sustainable Housing
• October 16 | Effective Date | IRS Additional Guidance on Low-Income Communities Bonus Credit Program
• October 16 | Comment Deadline | RHS Proposed Rule to Update Manufactured Housing Provisions
• October 30 | Application Deadline | Pathways to Removing Obstacles to Housing

NCSHA, State HFA, and Industry Events

• October 14 – 17 | NCSHA’s 2023 Annual Conference & Showplace | Boston
• October 23 – 24 | North Carolina Affordable Housing Conference | Raleigh, NC
  Stockton Williams is speaking at this event.
• October 24 – 26 | NAHMA Biannual Top Issues in Affordable Housing Fall Conference | Washington, DC
  Jennifer Schwartz is speaking at this event.
• November 7 – 8 | ProLink Technology Live 2023 | Virtual
  Stockton Williams is speaking at this event.
• November 16 – 17 | National Association of Home Builders Mortgage Roundtable | New York, NY
  Stockton Williams is participating in this event.

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