Washington Report | July 27, 2018
The 2018 edition of the “State of the Nation’s Housing” from Harvard’s Joint Center for Housing Studies, published last month, marks the 30th anniversary of that indispensable report, which enabled the researchers to assess how current conditions “echo the past and are a yardstick for the progress we as a nation have and have not made in fulfilling the promise of a decent, affordable home for all.”
NCSHA’s release this week of our latest “State HFA Factbook” — which in its current form is about the same age as “State of the Nation’s Housing” — marks a similar opportunity to reflect on the growth and evolution of state HFAs in helping fulfill that promise over a generation. Three themes stand out:
- State HFAs have massively increased their financial commitment and impact. In 2016, HFAs generated more than $22 billion in new financing to provide affordable homeownership, more than double the amount they provided 30 years ago, even after adjusting for inflation. HFAs also issued more than $7 billion in multifamily housing bonds in 2016, a nearly five-fold increase, in real terms, over three decades.
- State HFAs have substantially diversified their services. The aggregate HFA multifamily portfolio as of 2016 consisted of more than 1.2 million units in more than 16,000 properties — more than doubling in both categories since the late 1980s. And many more agencies today are providing much more funding and services to expand housing options for the homeless, disabled, and elderly.
- State HFAs have stepped up to deliver essential federal housing resources. The “State HFA Factbook” from 30 years back barely mentions HFA administration of the then-new Housing Credit, which the current edition reports represented a $16.5 billion investment that created 2 million affordable apartments as of 2016. Dozens of HFAs are delivering other resources authorized over time by Congresses controlled by both parties to help communities rebuild from foreclosure, recover from natural disasters, revitalize distressed areas, and meet other pressing needs.
Like this year’s “State of the Nation’s Housing,” the “State HFA Factbook” also finds that some things remained consistent over the past 30 years. Foremost for HFAs is their unique capacity to provide financing to all parts of their states — urban areas, rural communities, suburban towns, and tribal lands — and to borrowers who otherwise would not be served.
The median borrower income for an HFA homeownership loan in 2016 was just under $50,000, 14 percent lower than the national median family income. And more than 80 percent of all households in Housing Credit apartments earn 50 percent or less of their area’s median income.
On the surface, the “State HFA Factbook” is a technical compendium of data and analysis (soon to be made more accessible, readable, and searchable online via NCSHA’s new website; stay tuned).
Below the surface, yet abundantly clear, are the remarkable results and increasing impacts of state HFAs, acting at the center of the affordable housing system, to address their states’ and the nation’s current and continuing housing challenges.
Stockton Williams | Executive Director
In This Issue
- Brady Releases New Tax Reform Proposal
- Clyburn Introduces Bill to Restore Housing Credit Buying Power
- NCSHA Participates in GAO Focus Group on Housing Finance Reform
- Senate Considers FY 2019 HUD and USDA Funding Bills
- House Votes to Extend Federal Flood Insurance Program through November 30
- House Financial Services Committee Advances Bills Impacting Youth Aging Out of Foster Care and Experiencing Homelessness
- Senators Introduce Bipartisan Affordable Housing Task Force Bill
- Senate Bill Would Establish Tax Credit for Renters
- Senate Banking Committee Holds Hearing on Kraninger Nomination to Lead CFPB
- Senate Banking Committee Considers Ginnie Mae, HUD OIG Nominees
- Maxine Waters Says Housing Issues Would Top Her Agenda as Chair of House Financial Services Committee
- FY 2018 Capital Magnet Fund Application Round Now Open
- USICH Releases New Strategic Plan to Prevent and End Homelessness
- Looking Ahead
House Ways and Means Committee Chairman Kevin Brady (R-TX) has released a framework outlining key goals for tax legislation he intends to introduce this Fall as a follow-up to the tax reform legislation enacted last year. The bill, commonly referred to as “Tax Reform 2.0,” would make permanent individual and small business tax rates enacted on a temporary basis in the 2017 bill, encourage retirement and other types of savings vehicles, and provide tax write-offs to start-up businesses. While it is unlikely that Congress would pass Tax Reform 2.0 legislation, as the bill would require 60 votes in the Senate, NCSHA will be following it closely and advocating against any potential effort to eliminate or reduce authority for private activity Housing Bonds. The House-passed version of the 2017 tax reform bill would have eliminated all private activity bonds in order to raise revenue to help offset the cost of tax changes in that bill. Though the framework for tax cut does not include information about potential revenue raisers, Chairman Brady has publically expressed concerns about private activity bonds since the passage of the 2017 tax reform legislation. For more information, see our blog post.
On July 26, House Assistant Democratic Leader James Clyburn (D-SC) introduced the Restoring Tax Credits for Affordable Housing Act (H.R. 6542). Clyburn’s bill would increase the state Housing Credit ceiling to $2.90 per capita and the small-state minimum to $3.365 million, both roughly 20 percent increases. The bill would also increase the Housing Credit discount rate by 1.5 percentage points and the Housing Credit applicable percentage by 16 percent. The bill’s changes would be effective for calendar years after 2018. Clyburn’s press release on the bill projects that the bill would result in the production of 235,000 additional Housing Credit units over the next 10 years. Experts estimate that the 2017 tax reform law, by lowering the corporate tax rate from 35 percent to 21 percent and changing the inflation factor for future increases in authority, will result in the loss of approximately 235,000 units over 10 years. Thus, Clyburn’s bill would effectively make up for the loss in production. This week, Clyburn also cosponsored H.R. 1661, the Affordable Housing Credit Improvement Act. Ways and Means Committee member Suzan DelBene (D-WA) cosponsored Clyburn’s new bill.
NCSHA participated this week in a Government Accountability Office (GAO) focus group discussion about housing finance reform. GAO invited NCSHA and several other groups, including the National Association for the Advancement of Colored People, Center for Responsible Lending, and the National Community Reinvestment Coalition, to one of a series of focus group meetings to discuss market trends affecting housing, Fannie Mae’s and Freddie Mac’s housing activities, recent housing finance reform proposals, and recommendations for housing finance reform. NCSHA stressed the importance of affordable housing and the strong delivery system state HFAs represent to provide affordable housing help to those who need it.
The Senate this week began consideration of its FY 2019 Transportation-HUD (THUD) and Agriculture appropriations bills, as part of a $154.2 billion four-bill “minibus” package. The Senate may need to work into next week to complete consideration of this sizeable measure. The Senate Appropriations Committee-passed THUD bill fully funds all tenant- and project-based rental assistance and maintains FY 2018’s increased funding levels for the HOME Investment Partnerships Program. See NCSHA’s budget chart for more on proposed HUD and USDA rural housing program funding levels.
The U.S. House of Representatives July 25 voted to extend the National Flood Insurance Program’s (NFIP) authorization for four months through November 30 by a bipartisan vote of 366 to 52. The program is set to expire on July 31. House consideration of an NFIP extension had been delayed in recent weeks as House Financial Services Committee Chair Jeb Hensarling (R-TX), whose committee has jurisdiction over NFIP, pushed for Congress to adopt several reforms to NFIP intended to improve its financial health. Hensarling finally relented last week and agreed to have the House consider a “clean” extension of NFIP that included no program changes. Senate Majority Leader Mitch McConnell (R-KY) filed cloture on the extension Thursday in anticipation of a Senate vote next week. Several Senate Republicans have indicated they may delay consideration of the extension in an effort to get the Senate to consider reforms to NFIP.
On July 24, the House Financial Services Committee advanced H.R. 1511, the Homeless Children and Youth Act of 2017 and H.R. 2069, the Fostering Stable Housing Opportunities Act of 2017, both aimed at expanding housing assistance to at-risk youth. As NCSHA wrote in a previous blog, H.R. 1511 would broaden HUD’s definitions related to homeless individuals and youth to align them with definitions used for other federal assistance programs. H.R. 2069, amended since the Housing and Insurance Subcommittee held a hearing on it, would prioritize public housing, Housing Choice vouchers, and rural rental assistance for youth aging out of foster care. The bills passed on largely party lines, 39–18 and 34–23, respectively.
Ranking Member Maxine Waters (D-CA) and other Committee Democrats opposed H.R. 1511 because it would expand eligibility for HUD’s homelessness programs by 4 million individuals without additional resources to serve them. Waters and other Democrats opposed H.R. 2069 because it would prioritize certain populations in already over-subscribed programs and impose a combination of work- and training-requirements as a condition of receiving housing assistance.
Last week, Senator Todd Young (R-IN) introduced S. 3231, the Task Force on the Impact of Affordable Housing Crisis Act, which establishes an 18-member task force charged with evaluating and quantifying the impact of affordable housing on other government programs and making recommendations to Congress on how to use affordable housing to improve the effectiveness of other federal programs and improve life outcomes. Cosponsoring Senators include Maria Cantwell (D-WA), Angus King (I-ME), Dean Heller (R-NV), Tim Kaine (D-VA), Doug Jones (D-AL), Cory Gardner (R-CO), Marco Rubio (R-FL), Chris Coons (D-DE), and John Kennedy (R-LA). For more information, see our blog post.
On July 19, Senator Kamala Harris (D-CA) introduced The Rent Relief Act of 2018 (S. 3250) to provide renters with a refundable credit against their federal tax liability for the rent and utilities they pay in excess of 30 percent of their gross annual income. The value of the tax cut would depend on annual income, phasing out entirely for households earning more than $100,000 ($125,000 in high-cost areas). The bill would also make households living in government-subsidized housing eligible to receive an annual tax credit equal to the value of the tenant-paid portion of one month’s rent for the household. See our blog post for more information.
The Senate Banking Committee last week held a hearing to consider the nomination of Kathleen Kraninger to serve as Director of the Consumer Financial Protection Bureau (CFPB). If confirmed, Kraninger will replace Office of Management and Budget (OMB) Director Mick Mulvaney, who has been running CFPB in an acting capacity in addition to his role at OMB since last November.
In her opening testimony, Kraninger laid out four priorities she would follow as Director: using cost-benefit analysis to ensure CFPB rules are cost-effective; working closely with other federal financial regulators and state agencies; safeguarding the sensitive information in CFPB’s possession and only collecting what personal information is needed; and making CFPB accountable to the public. Committee Republicans and Democrats clashed over Kraninger’s qualifications to lead CFPB and her role at OMB in developing and implementing several controversial Trump Administration policies, including its “zero-tolerance” immigration policy and its response to Hurricane Maria. The Committee has not yet scheduled a vote on Kraninger’s nomination. You can read more about the hearing on NCSHA’s blog.
The Senate Banking Committee July 24 held a hearing to examine nominees for two key HUD positions: Michael Bright to serve as President of Ginnie Mae and Rae Oliver Davis to serve as HUD’s Inspector General (IG). Both nominees appeared to enjoy bipartisan support. Bright, who has served as the Acting President of Ginnie Mae for the past year, demurred when asked by Committee Democrats about aspects of a housing finance reform proposal Bright released with former Federal Housing Finance Agency Director Ed DeMarco when both were at the Milken Institute, saying that his job at Ginnie Mae would be to run the agency day to day and modernize its operations, not to advocate for specific policies.
Davis said her priorities as HUD IG would be securing safe and sanitary HUD housing, particularly with regard to the danger posed by lead; effectively overseeing disaster relief; and “thoroughly investigating allegations of misconduct at the Department.” She later told the Committee that ensuring FHA loan programs adequately protect consumers and responsibly manage risk has always been a focus of the IG office. The Committee has not yet scheduled a vote on either nominee. You can read more about the hearing on NCSHA’s blog.
At an event hosted by CNBC Wednesday, Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, laid out her priorities for the Committee should she become Chair next Congress. Waters is widely expected to chair the Committee should Democrats win a House majority in November. Waters told the audience that reforming the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac would be one of her top priorities. Specifically, Waters said it was time to remove the GSEs from conservatorship and ensure future GSEs foster a secondary market that can support housing for working people. Waters cited addressing the shortage of affordable housing as another key priority.
On July 18, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) opened the FY 2018 funding round for the Capital Magnet Fund (CMF). The CDFI Fund this year will award approximately $142 million to CDFIs and qualified nonprofit housing organizations to finance affordable housing activities, related economic development activities, and community service facilities. Last year, the CDFI Fund awarded $120 million in CMF funding to 40 applicants, including state HFAs in Colorado, New Mexico, Pennsylvania, Rhode Island, and Wisconsin. For more information, including application instructions, please read NCSHA’s blog.
Last week, the United States Interagency Council on Homelessness (USICH) released “Home, Together” — its third federal strategic plan on preventing and ending homelessness. This Fiscal Year 2018 – 2022 plan builds upon what USICH and its 19 federal agency members have learned from states and communities over time and lays out strategies for federal action to support and accelerate state and local progress. “Home, Together” outlines efforts to expand affordable and accessible housing opportunities, address the unique needs of rural communities, strengthen prevention and diversion practices, create solutions for unsheltered homeless persons, and help people who exit homelessness to find employment success.
- August 13 – 15 | U.S. Bank HFA Symposium
Garth Rieman will participate in this event.
- August 14 – 15 | New Mexico Mortgage Finance Authority Board and Staff Retreat
Stockton Williams will participate in this event.
- August 21 – 22 | Oklahoma State Housing Conference
Garth Rieman will participate in this event.
- September 14 | Discounted Early Registration Deadline for the 2018 Annual Conference & Showplace
- October 13 – 16 | 2018 Annual Conference & Showplace | Austin, TX
Legislative and Regulatory Activity
- August 3 | Comments due to NCSHA on HUD’s Disparate Impact Standard Final Rule
- August 7 | Application deadline for HUD Counseling Grant Program NOFA
- August 15 | 2018 HUD Meeting for Approved Housing Counseling Intermediaries, State HFAs, and Multi-State Organizations
NCSHA’s Greg Zagorski and Glenn Gallo will attend.
- August 20 | Comments due to HUD on its Disparate Impact Standard Final Rule
- September 17 | Consumer Financial Protection Bureau Symposium on Credit Visibility
- deadline on Federal Housing Finance Agency proposed rule on Capital Requirements for Fannie Mae and Freddie Mac