President’s budget shows sequestration’s constraints mean housing advocates must unite

by Liza Getsinger, National Housing Conference

The unveiling of the President’s FY 2015 budget request yesterday offered few surprises, in what have been several tough budget years for discretionary spending programs. The budget, which provides $46.7 billion for Department of Housing and Urban Development (HUD) programs, adheres to the FY 2015 spending levels agreed to in the Bipartisan Budget Act. Yesterday in his address to stakeholders, Secretary Donovan highlighted the devastating effects sequestration cuts have had on housing programs and the tremendous efforts of housing assistance providers to buffer tenants from harm whenever possible. 

With roughly 84 percent of HUD’s budget going to renew existing housing assistance, the increasingly constrained budget environment forces HUD and the administration to make tough calls with the remaining program funding. The FY 2015 HUD budget restores all vouchers lost because of sequestration cuts, but overall funding levels provide little flexibility for expansions in other areas. The proposed cuts for FY 2015 fell hardest on the HOME and CDBG programs, and HUD is looking for some programmatic changes in order to provide more predictable funding for Project-Based Rental Assistance contracts. 

In this tough budget environment, is it hard to resist the temptation to advocate for individual pieces of the pie, but, like Sec. Donovan said yesterday, our voices are more effective when asking instead for a larger pie. This is why NHC, through the Campaign for Housing and Community Development Funding, is launching its 302(b) sign-on letter for FY 2015. The 302(b) allocation sets the THUD spending cap, and a higher cap means increased investments in essential housing and community development programs. We encourage you to add your organization to the letter, and to please share widely with your networks. The deadline to sign is March 12.

You can view a copy of the letter here, and sign on to the letter on this page.

A budget summary chart of selected HUD and USDA housing and community development programs can be found here.

More than a number

Making strides in housing advocacy
 by improving how we communicate

by Chris Estes, National Housing Conference 

March is here but spring is not! DC is currently blanketed by eight inches of snow, bringing the city to a picturesque halt. We at NHC won’t be slowing down though, as we have big events planned throughout the spring.

Coming up on March 21 is NHC’s Annual Budget Forum at the Capitol Visitor Center Main Auditorium. Something NHC has been doing for decades, the Budget Forum is an important opportunity to educate Hill staffers on housing programs, the people they serve and what the President’s budget means for them.

While there are many resources that can tell you what’s in the budget, this event seeks to make these numbers real for Congressional staff and other officials. In recent years, Ethan and Liza have put together a great panel of experts from across the continuum of housing to talk about what the housing budget recommendations mean from the local, city and state perspectives.

We’ll also use this forum to present the Center for Housing Policy’s report, Housing Landscape. Each year the Center presents this analysis of national housing need, detailing income and housing costs for both homeowners and renters in each state. This year, lead author Janet Viveiros provides interesting information on the changes in income and the percentage of cost burdened households. Janet and the Center staff worked hard to make this edition of the report more useful to you in your work educating the public and policymakers about the housing challenges in your community. 

Traditionally, many area housing organizations and companies attend as do a number of HUD staff. This has made it both an opportunity to discuss how to talk about these programs and data, and an opportunity to network.

If you are outside of the DC area and cannot attend the Budget Forum in person, we would like to gauge your interest in a webcast of the forum that would allow you to watch it live and ask questions of the panelists. If you would like to have this option to participate, please let us know.

Hopefully by March 21 the snow will be long gone in DC and we will be seeing the first signs of spring and the blooming of the cherry trees at the Tidal Basin. No matter what, we’ll still be fully engaged in being the best resource for the affordable housing community.

Why housing needs a bigger boat for federal funding

What we're building

by Ethan Handelman, National Housing Conference 

If we look at federal appropriations for affordable housing, it’s clear that we need to fight for higher overall funding, not just advocate for specific programs. The hole created by unrelenting housing need is too big for a piecemeal approach. Just like in Jaws, let’s agree that we need a bigger boat. Looking at the numbers makes this very clear:

• Most of HUD’s funding renews housing assistance to current recipients. That’s public housing, project-based Section 8, and current voucher holders. In recent years, just those renewals have consumed 80% to 85% of HUD’s budget, and even they have been squeezed. Public housing has not had sufficient capital funds for many years, project-based contracts have started doing some less-than-full-year renewals, and voucher portfolios shrank significantly under sequestration.
•  When funding drops, everything else gets squeezed, especially HOME and CDBG. The remainder of HUD’s budget is mostly the block grants: HOME Investment Partnerships (HOME) and Community Development Block Grants (CDBG). All other HUD programs are small in comparison. Over the last several years, HOME has dropped to just $1 billion, about half of what it was at its height, and CDBG is 16% below what it was in 2001 (yes, more than a decade ago). So if something has to give, it’s block grant funding.

This waterfall—from existing recipients to block grants and everything else—comes from harsh political reality. No member of Congress wants a headline saying they’ve cut funding and kicked someone out of their home. Headlines about not funding new properties, shelters, or families are simply easier to handle.

So, we need a bigger boat, a larger allocation to the appropriations subcommittee that handles both housing and transportation, so that they can fund existing recipients and new assistance. The only way to accomplish that is with a big coalition, so I urge you to join the Campaign for Housing and Community Development Funding. Read the coalition letter and then sign the letter. Advocacy for individual programs can and should happen, but first let’s make the allocation as large as possible. It’s our best shot to stay afloat.

Sec. Donovan calls for housing finance reform to address rental housing need

by Ethan Handelman, National Housing Conference 

HUD Secretary Shaun Donovan today called for elements of housing finance reform to focus on the unprecedented need for affordable rental housing during an address at the Center for American Progress.  Donovan called the state of rental housing in America a crisis, “the worst rental affordability crisis that our country has ever known.”  He highlighted the successful track record of the Fannie Mae and Freddie Mac multifamily businesses throughout and after the financial crisis, and he supported key elements of multifamily housing finance reform that NHC and others have been advocating: a properly priced government backstop behind private risk-bearing capital, continuation of both successful GSE multifamily platforms, allowing competition from new issuers, ensuring that housing finance reaches all qualified borrowers and neighborhoods, a baseline portfolio requirement to serve affordable housing, and generation of at least $5 billion in annual revenue from the entire secondary mortgage market dedicated for affordable housing. 

NHC, CAP, and others support these elements to housing finance reform.  You can see details in my recent testimony to the Senate Banking Committee.

See a full recording of Sec. Donovan’s speech and the following panel discussion.

The Landscape of Housing Affordability—Widespread Challenges and Local Solutions

Developing solutions through research

by Lisa Sturtevant, Ph.D., Center for Housing Policy


The Widespread Challenge of Housing Affordability

The landscape of housing affordability in the U.S. is complex and evolving, but the fact remains that millions of working American households continue to face daunting affordability challenges, even as the economy recovers. The Center for Housing Policy’s latest edition of Housing Landscape chronicles the changes in housing costs and wages for low- and moderate-income workers.

According to our analysis of the most recent American Community Survey data, more than one in four low- and moderate-income working renter households spends more than half of its income on housing. While the share of severely cost burdened households fell slightly between 2011 and 2012, there are still more than four million working renter households facing substantial affordability challenges.

Rising incomes and declining costs drove the modest affordability improvements in 2012. Wages of low- and moderate-income working households rose slightly faster than rents, and owner costs continued to fall, which led to a slight decline in the share of severely cost burdened working households.

In the report, the Center finds high housing costs and low incomes remain significant challenges in many parts of the country. The highest cost burdens are in states on the coasts with high-cost metro areas. As the housing market has rebounded and rents have risen, it is very difficult for low- and moderate-wage workers to find affordable housing in these desirable, fast-growing places.

Local Solutions to Housing Challenges

The landscape of housing needs in communities across the country depends on macroeconomic and demographic trends, but in many cases the responses and policy interventions are driven by local capacity and innovation. The Center for Housing Policy is currently working on several projects that highlight effective local programs and is providing support to local government efforts to find solutions to their affordability challenges:  

• Research associate Janet Viveiros has just completed an analysis of home- and community-based supportive service programs that have been effective in helping older adults age in place. She found that there are common elements to successful supportive service programs, but the characteristics of different communities influence which approaches are most successful. Janet profiles successful home- and community-based programs targeting older adults in three types of communities: multifamily buildings concentrated in dense neighborhoods, single-family and multifamily homes clustered in a few neighborhoods, and single-family homes dispersed across a wide geographic area. The final report will be available on the NHC website in March.
• Senior research associate Maya Brennan is working on a paper analyzing how Moving to Work (MTW) agencies are using flexibility in funding and management to develop successful self-sufficiency programs. Grounded in cutting-edge brain science research on the effect of poverty on mental well-being and decision-making, Maya offers recommendations for how local housing authorities can structure their Family Self-Sufficiency (FSS) programs to increase the potential for low-income families to improve their economic well-being. She shared her research findings with the Fairfax County (VA) Redevelopment and Housing Authority, an NHC member, and members of their community housing group as they begin to design their MTW activities. A final report will be out later this spring.
•  Robert Hickey, another senior research associate at the Center, was invited to participate in a day-long event in Seattle hosted by the mayor and city council as part of their efforts to revise and expand the city’s inclusionary housing programs. Alongside developers and local government officials from communities throughout the west coast, Robert provided information on how other cities have successfully developed productive inclusionary zoning (IZ) programs. His IZ research—including his report on inclusionary housing after the economic downturn—was of tremendous value to the local officials and housing community working to find solutions to Seattle’s affordability challenges.
• Finally, this week I’m kicking off a year-long project to develop an affordable housing plan for Arlington County, Virginia. In addition to a housing demand and supply analysis and a countywide housing survey, the Arlington study will include a review of successful local housing policies and programs from around the country. The process will include significant input from county housing staff and community leaders, and will culminate in a comprehensive plan affordable housing element.

These research and outreach activities by Center staff underscore the important links we strive to make between policy analysis and program implementation. Understanding that housing affordability challenges across the country are complex and evolving, our work at the local level provides a valuable resource to local housing staff, advocates, developers, and others.

National Housing Trust receives MACEI award

News from NHC's family members 

by Radiah Shabazz, National Housing Conference 

The John D. and Catherine T. MacArthur Foundation recently announced the seven recipients of the prestigious 2014 MacArthur Award for Creative and Effective Institutions (MACEI Award) and NHC member National Housing Trust (NHT) was among them. NHT received $1 million from the MacArthur Foundation to create an innovation fund that will sponsor policy work.

The MACEI Awards are given every year to organizations that exemplify a body of work or research that mirrors the core values of the MacArthur Foundation.  Recipients have exhibited strong leadership and made a measurable impact that is likely to expand into the future. Recipients must also have an implementation plan for expansion or sustainability of programs and the organization as a whole.

NHT earned the award for its continued commitment to preserving affordable rental housing by working to ensure that private rental housing is sustainable and available.  NHT accomplishes these goals by offering housing policy solutions and developing and financing affordable housing.  NHT has renovated and preserved more than 25,000 affordable rental properties throughout 41 states. These renovations have leveraged over $1 billion in project financing.

Most recently, NHT has joined the green preservation movement, advocating for increased energy efficiency in affordable rental housing nationwide. The organization is leading a state-by-state campaign to convince private utility companies to fund additional energy efficiency projects on existing homes. 

“It was unexpected and most appreciated,” NHT President Michael Bodaken told the Washington Post of the award. “It’s not every day you get a gift or an award for doing work you love.”

In addition to NHT, 2014 MACEI Award recipients are: Campaign Legal Center, NatureServe, ProPublica, The Citizen Lab, The University of Chicago Crime Lab and Women’s Rights Advancement and Protection Alternative.  

NPR features Housing Partnership Network REIT effort

News from NHC's family of members

by Radiah Shabazz, National Housing Conference

NHC member Housing Partnership Network (HPN) was recently featured in an NPR story on HPN’s formation of the first-ever nonprofit real estate investment trust (REIT).  The REIT allows investors to pool their funds to buy property and collect dividends without any public financing.

Investors are offered modest five to seven percent returns on their investment and HPN has favored investors’ desire to preserve affordable housing. So far the REIT has snagged several large-scale investors, including Prudential, Citibank and the John D. and Catherine T. MacArthur Foundation to invest $100 million.

HPN and its coalition of nonprofit members hopes that the REIT will assist in preserving housing units that cater to low and moderate-income families. The REIT will help HPN to improve the conditions of moderately-priced apartments that might otherwise be purchased by high-power developers who would increase rent and force existing tenants out.

“What we're trying to do is keep rents affordable, but also really invest in the property, really invest in the community and really invest in the residents," said Drew Ades, president of Housing Partnership Equity Trust, HPN’s social-purpose REIT.

Often, properties are built with rents that cater to low to moderate-income families, but these lower rental costs are not high enough to fund building upkeep. This is an issue that many communities with affordable rental housing options are trying to handle. HPN’s REIT addresses the operating costs associated with running these affordable housing developments. Our Lifecycle Underwriting Cost Modeling Tool was created to help developers deal with funding issues using up-front financing for developments. The tool helps to assess whether or not a property is able to fund its long-term capital needs.

HPN has purchased properties in California, Illinois and Virginia. They are in active search of other potential apartment complexes and are hoping to raise an additional $250 million in investment funds.