NCSHA Washington Report | September 16, 2022
The news that “surging housing costs are the engine driving” the latest inflation numbers wasn’t a revelation to any of us at the New Mexico Housing Summit in Albuquerque this week — rents in the city are up almost 40 percent since 2020.
And while higher costs are inflicting immediate pain on renters everywhere, they are also stopping cold new development that could ease it some, suggesting the spiraling affordability crisis will continue even once inflation is more under control.
The anecdotal evidence has been piling up for a while, with the Wall Street Journal observing that “affordable-housing developers nationwide are stalling work on new projects,” and Bloomberg reporting “some developers have simply given up,” because it’s too expensive to build.
A report NCSHA will release next week quantifies the breadth and depth of this unprecedented challenge. The report, produced by Abt Associates, finds affordable developments have experienced unexpected cost increases averaging 30 percent — and more than that in a number of cases — based on an analysis of trends in 11 states and interviews with agency officials and developers active in others.
In a representative example, the report finds 39 of 42 developments one state HFA had provided funding for recently now need additional funding, with funding gaps ranging from $145,000 to $5.7 million. The agency said that, while pre-Covid development costs averaged $150,000 per unit, they have risen to more than $200,000 per unit — a 33 percent increase.
Abt Associates’ report documents how state HFAs are urgently providing new financing, streamlining regulations, tapping new funding sources, and developing creative approaches to prevent critically needed projects from failing to proceed.
The New Mexico Mortgage Finance Authority led a statewide campaign last year to authorize a new recurring funding source that will generate an estimated $20 to $30 million annually starting in 2024. The agency also received $25 million in federal fiscal recovery funds, as many states and cities have, taking advantage of new Treasury Department rules that provide special advantages for using the funds for housing.
Developers are part of the solution, too, working with HFAs to bridge the unexpected funding gaps by modifying project designs, pursuing additional sources of financing, and deferring the fees, the Abt Associates report finds.
Yet, “even when these strategies have filled funding gaps and enabled projects to proceed, they have often come at the expense of the current and future production of affordable housing,” according to the report. “Longer-term and more comprehensive solutions are needed to avoid significant reductions in affordable housing production and preservation in the coming years.”
This is why we are on Capitol Hill urging Congress to increase funding for the HOME housing block grant and to expand the Low Income Housing Tax Credit before it adjourns this year or in an expected lame-duck session after the mid-term elections. These are the best tools states and cities have to ensure the national affordable housing deficit doesn’t worsen.
As one state HFA executive director told the Abt Associates researchers, “This is as urgent as it gets.”
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
HUD Providing $113 Million for Family Self-Sufficiency Program
The Department of Housing and Urban Development has announced it will provide $113 million for approximately 800 grant awards under a FY 2022 Notice of Funding Opportunity (NOFO) for the Family Self-Sufficiency (FSS) program. FSS is a grant program for public housing authorities and, starting with this NOFO, private and nonprofit owners of multifamily housing to pay FSS program coordinator salaries and training expenses. FSS program coordinators help eligible families access Housing Choice Vouchers and other federal and local rental assistance and connect people with additional resources to move toward greater economic independence and self-sufficiency. Applications are due October 7. More details are available in HUD’s webinar on the NOFO.
Legislative and Regulatory Activities
- September 16 | Comments Due to NCSHA | HUD’s Draft Solicitation on Housing Assistance Payments Contract Support Services (HAPSS)
- September 20, 2:30 p.m. ET | Senate Banking Committee Hearing | Examining the U.S. Department of Agriculture’s Rural Housing Service: Stakeholder Perspectives | Hybrid
- September 26 | Comments Due | Ginnie Mae/FHA Request for Input on Title I Manufactured Housing Programs
- September 28 | Comments Due | HUD’s Draft Solicitation on Housing Assistance Payments Contract Support Services (HAPSS)
- October 7 | Comments Due to NCSHA | FHFA Proposed Affordable Multifamily Housing Goals for Fannie Mae and Freddie Mac
- October 10 | Comments Due to NCSHA | FHFA Review of Federal Home Loan Bank System
- 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
NCSHA, State HFA, and Industry Events
- September 27 – 29 | Oklahoma Housing Conference | Oklahoma City, OK
Stockton Williams will speak at this event. - September 28 – 29 | 2022 Wisconsin Housing and Economic Development Authority Conference | Madison, WI
Garth Rieman will speak at this event. - September 29 – 30 | Novogradac 2022 Affordable Housing Tax Credit and Bonds Conference | Nashville, TN
Jennifer Schwartz will speak at this event. - 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 8 | 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.
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