Thursday, June 27, 2013

Appropriations bills advance in both chambers

by Liza Getsinger, National Housing Conference

Today the House and Senate full appropriations committees approved FY14 Transportation, Housing, and Urban Development (THUD) spending bills, setting up what may be a heated summer showdown over domestic discretionary spending. The two bills approved are far apart both in spending levels and priorities. If the two chambers do not pass THUD bills and engage around the specifics, we may well end up with another continuing resolution, which could end up being almost as damaging for HUD programs as the House bill.

The Senate, faced with a tight schedule due to a pending immigration bill vote, approved 19-5 a $54 billion FY14 THUD appropriation bill. Chairwoman Rep. Mikulski (D-Md.) offered opening remarks in support of the bipartisan effort highlighting her particular support of HUD’s Community Development Block Grant (CDBG) program, and housing assistance for the elderly, disabled, and homeless. Vice Chairman Rep. Shelby (R-Ala.) voiced his strong opposition for the bill, remarking that the overall allocation level was higher than current law allows and thus making it impossible for him to support the bill in its current form. THUD Subcommittee Chair Sen. Murray (D-Wash.) drew distinctions between the House and Senate bills by lauding the strong allocation that paved the way for spending on valuable housing and community development programs. Ranking member Sen. Collins (R-Maine), broke from the party line to challenge Republican committee members to think critically about the important social and infrastructure investments the bills supports. She urged them to not just be a “rubber stamp for the House.” She went on to acknowledge that the Senate bill was just a starting point and that additional cuts will be needed in order to pass a full bill.

On the House side, a more spirited debate emerged over the merits of HUD programs that provide valuable housing and community development assistance to millions of Americans. Democratic members offered amendments on increased CDBG funding and eliminating sequester cuts both which failed on party-line votes. Rep. Lee (D-CA) was successful in adding two amendments, one that adds $3 million to the Housing Opportunities for Persons with Aids (HOPWA) account and one adds bill language expressing a “sense of Congress” that legislation should not be passed that “increases poverty in the U.S.” Ranking Member Rep. Nita Lowey (D-N.Y.), a vocal opponent of the bill in subcommittee continued to voice her objection over the unacceptable allocation levels. She was joined by her Democratic committee colleagues Rep. Serrano (D-N.Y.), Rep. Price (D-N.C.), Rep. McCollum (D-Minn.), Rep. Wasserman Schultz (D-Fla.), and several others in voicing strong opposition to the bill in its current form. The bill was approved by the full committee on a vote of 28-20.

House hearing on HUD’s Moving-to-Work program highlights public housing challenges

by Liza Getsinger, National Housing Conference

Yesterday the House Financial Services Subcommittee on Housing and Insurance brought together a panel of public housing authority (PHA) directors and the director of Financial Markets and Community Investment from U.S. Government Accountability Office (GAO) to discuss “Evaluating How HUD’s Moving-to-Work Program Benefits Public and Assisted Housing Residents.” The hearing, chaired by Rep. Blaine Luetkemeyer (R-Tenn.), emphasized potential program expansion. Currently the Moving-to-Work (MTW) demonstration—implemented in 39 PHAs around the country—grants statutory and regulatory waivers and establishes more funding flexibilities for agencies that administer the public housing and Housing Choice Voucher programs.

The committee heard testimony from Mr. Daniel Nackerman from the San Bernardino County Housing Authority and Mr. Gregory Russ from the Cambridge Housing Authority, both directing MTW-designated PHAs, who explained that they believe the MTW program has helped their agencies increase efficiency and effectiveness by allowing them to take innovative approaches to help residents work towards self-sufficiency. PHA directors without the MTW designation urged Congress to expand the program and allow their agencies the opportunity to benefit from greater regulatory and financial flexibility. Mr. Mathew Scire from GAO cautioned that in the absence of performance data or benchmarks, the recent GAO study could not draw conclusions about program performance. He added that without this information, “it would be difficult for Congress to know whether an expanded MTW would benefit additional agencies and the residents they serve."

Members on both sides of the aisle asked questions that seemed in general to support MTW expansion. Ranking Member Rep. Michael Capuano (D-Mass.), while voicing his support for MTW expansion, did raise concerns about funding reductions. He asked panelists if additional funding would increase the number of people assisted and reduce waiting lists. All PHA directors answered affirmatively, and MTW PHA directors acknowledged that even with program designation there is more demand for housing assistance than they can meet.

Rep. Capuano’s implied point goes well beyond the topic of the hearing. Housing need exceeds available assistance by approximately four to one. Years of funding reductions, particularly for public housing, have created deep challenges that are not easily solved. For example, a 2010 study commissioned by HUD estimated the public housing capital backlog at roughly $26 billion and the accrual need at $3.4 billion per year. The deteriorating housing stock combined with a growing need for housing assistance will need to be part of a broader conversation on public and assisted housing reform—a conversation that will need to include stakeholders outside of the public housing community.

Wednesday, June 26, 2013

Senate transportation and housing appropriations bill clears subcommittee

by Liza Getsinger, National Housing Conference

Yesterday the Senate Appropriations Subcommittee on Transportation, Housing, and Urban Development (THUD) approved without objection a draft of the FY 2014 spending bill. That there was little or no debate is a reminder that funding levels for HUD programs flow quite directly from the overall committee allocation, which is why NHC and many other housing stakeholders have been advocating for a higher THUD 302(b) allocation. The bill, which provides $54 billion housing and transportation related activities, is a significant improvement over the House’s $44 billion appropriation. The additional $10 billion provides crucial funding support for housing and community development programs such as tenant and project based rental assistance, HOME, and Community Development Block Grants (CDBG). The bill also provides increased funding over FY13 for public housing operating and capital funds, Choice Neighborhoods Initiative, housing counseling assistance, and continued funding for the National Foreclosure Mitigation Counseling program. Overall the Senate bill provides a better starting point than the House bill, but, as the budget battle heats up in both chambers, continued action is needed in order to ensure the preservation and expansion of vital housing assistance programs. Full committee consideration is scheduled for the Senate and House bills on Thursday. We will continue to update NHC’s Open House Blog with developments over the next week.

Below is a comparison chart of a few key HUD programs to highlight differences between the President’s request and the House and Senate bills. Look for more detail to come after the full committee markup.

Fiscal Year 2014 Budget Chart  (in millions)
Selected HUD Programs
President's Budget Request
House Subcmte Bill
Senate Subcmte Bill
Section 8 Tenant-Based Rental Assistance
Project-Based Rental Assistance
Public Housing Capital Fund
Public Housing Operating Fund
Choice Neighborhoods Initiative
Community Development Block Grants
HOME Investment Partnership Program
Homeless Assistance Grants
Housing Counseling Assistance

Tuesday, June 25, 2013

NHC welcomes bipartisan effort in the Senate to reform housing finance

by Ethan Handelman and Amy Clark, National Housing Conference

The mortgage finance reform bill introduced today by Senators Bob Corker (R-Tenn.) and Mark Warner (D-Va.) is a comprehensive, bipartisan effort at a time when Congress appears ready to reform the nation’s mortgage finance system.

Housing advocates are calling on Congress to take up this issue in earnest to craft a replacement for the temporary measures in place since the financial crisis. The National Housing Conference (NHC) urges all members of Congress to create a system that ensures reliable access to long-term fixed-rate mortgages, finance for multifamily housing nationwide, and support for affordable housing.

“Enacting mortgage finance reform could be this Congress’ single most far-reaching accomplishment in housing, as long as it provides families with access to the affordable mortgages and rental housing they so desperately need. When people talk about stimulating economic growth, this is a key opportunity to do so,” said NHC President and CEO Chris Estes.

A bipartisan effort is essential to ensure Congress creates a system that meets families’ need for stable, affordable housing options, protects taxpayers from excessive risk, and gives investors and lenders clear rules and protections. The action today by Senators Warner, Corker, Johanns, Tester, Heitkamp, Heller, Moran and Hagan shows how housing need overcomes partisan divisions and makes practical legislation possible. The ongoing work by the Bipartisan Policy Center’s Housing Commission, whose report was released in February, shows just how much common ground there is in many areas of housing.

“There’s a moment to seize here, and housing stakeholders should pitch in to help. Congress really could get mortgage finance reform done this session, which would create the liquidity, stability, and access to capital that the housing economy sorely needs,” observed Ethan Handelman, NHC’s Vice President for Policy and Advocacy.

NHC has joined with a coalition of housing stakeholders to offer comments on the Corker-Warner proposal, and its Housing Mortgage Working Group will continue to offer advice on core principles and more technical aspects of housing finance.

Wednesday, June 19, 2013

Unacceptable House Appropriations Bill Clears Subcommittee (The Bad, The Worse, and The Ugly)

by Liza Getsinger and Ethan Handelman, National Housing Conference

The Bad: The House Appropriations Subcommittee on Transportation, Housing and Urban Development (THUD) FY14 appropriations bill was doomed from the start. Faced with unacceptably low allocation levels, committee members were forced to make dramatic cuts from valuable programming, which if enacted would cause dramatic immediate pain and quickly reduce the supply of affordable housing.

Today, the House Appropriations THUD Subcommittee (THUD) marked up the FY14 appropriations bill. The bill passed subcommittee, but with strong objections from the Democrats on the committee, setting up what looks to be a long and ugly fight in full committee. Full Committee Ranking Member Rep. Nita Lowey (D-NY), called the bill “inadequate” and because of the low allocation levels, “unworkable from the start.” She urged the subcommittee to work towards reaching a larger budget agreement. As we highlighted last month, the House allocation for Transportation, Housing and Urban Development (THUD) is only $44.1 billion, which is $4 billion less than the post-sequestration FY 2013 level.

The House bill in its current form slashes HUD’s overall funding level by 15 percent compared to HUD FY13 allocations. The bill zeros out many of the Administration’s priorities—it provides no funding for “green,” “livable,” or “sustainable” programming, zeros out and rescinds Choice Neighborhoods, cuts Community Development Block Grants (CDBG) funds by 45 percent, and drastically reduces HOME funds. Both CBDG and HOME would be at the lowest levels since the programs were created. The bill would also cut Section 8 and public housing overall by $953 million to $24.9 billion, which is $2.8 billion less than the President requested. Funded at President’s request level were valuable programs for seniors and people with disabilities and the veterans housing voucher program. Full committee markup is expected next week.

The Worse: These cuts are already on top of the dramatic federal budgets cuts known as sequestration enacted March 1, which threaten to further undermine the already scarce funding going to state and local housing agencies. Sequestration cuts have been particularly damaging to the Housing Choice Voucher Program, which has been mostly sheltered from budget cuts over the last several decades. Housing agencies are beginning to speak out about the tough choices they are being forced to make such staff layoffs, reducing monthly subsidy amounts, and failing to issue new vouchers. Further cuts in FY14 will severely undermine housing agencies’ ability to provide much needed housing services to vulnerable individuals and families. And in the worst case, people already relying on housing supports may lose assistance altogether. NHC feels this is unacceptable, which is why as part of the Campaign for Housing and Community Development Funding, we pressed for a much higher THUD 302(b) spending level and continue to advocate for more funding.

The Ugly: The House THUD appropriation level as proposed is unlikely to become law, but it does set up a major battle with the Senate, which has not yet set its 302(b) allocations. The two chambers set very different overall budget levels; Senate Appropriations Committee Chairman Barbara Mikulski (D-MD) announced a 302(a) level of $1.058 trillion, which is substantially high than the House’s level of $967 billion. The House and Senate have yet to come to any compromise or agreement on them. With three and a half months until the end of FY13, expect a major battle this year, largely along party lines, over the total amount of federal spending. Yet another continuing resolution is not acceptable. The course of that battle will be partly determined by how strongly advocates call for funding of essential priorities like affordable housing, and the result of that battle will then flow back downward in the federal spending decisions. In such a charged political climate it is easy to lose sight of what matters—the millions of Americans who rely on housing assistance to help improve outcomes for themselves and their children.

Monday, June 10, 2013

The next housing finance system should create access and affordability for all in America

by Ethan Handelman, National Housing Conference

Since financial crisis six years ago, the gears of government have ground slowly toward a replacement housing finance system. NHC offered our recommendations, as have many others, but much of the attention has focused on risks of default and prevention of another crisis. Recently, NHC joined with the Center for American Progress and National Council of La Raza in a paper calling for access and affordability to be central goals of the next housing finance system.

The basic principles are well established—the secondary mortgage market can encourage the primary market to offer safe, sustainable mortgage products to responsible borrowers that have been historically under-served by capital, and it can also make capital available reliably to finance affordable rental housing. The paper, “Making the Mortgage Market Work for America’s Families,” offers a concise objective: “By supporting these core values of access and affordability, the housing finance system can help provide access to credit, enable families to build wealth, build strong neighborhoods, and support both the local and national economy.”

Efforts towards mortgage finance reform are showing signs of movement in 2013, and multiple bipartisan bills are taking shape. Legislators need to hear from all of us that access and affordability are not only compatible with a sound housing finance system, but essential to its ongoing success.