Tuesday, February 9, 2016

A first look at the president's proposed FY 2017 budget request for housing and community development

by Kaitlyn Snyder, National Housing Conference

Under President Obama’s proposed FY 2017 budget, HUD would receive $48.9 billion in gross discretionary funding and $11.3 billion in new mandatory spending over 10 years. Emphasis is placed on supporting 4.5 million households through rental assistance, increasing homeless assistance, supporting tribal communities and providing opportunities to Native American youth and making targeted investments in communities to help revitalize high-poverty neighborhoods and improve housing affordability. The FY 2017 budget shows a historic investment in homelessness with the goal of ending family and youth homelessness by 2020 as laid out in “Opening Doors: The Federal Strategic Plan to Prevent and End Homelessness.”

After the Supreme Court’s decision in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc. and HUD’s Affirmatively Furthering Fair Housing proposed rule, HUD is placing an emphasis on ways to connect housing and opportunity. It would support mobility strategies with its new proposal for $15 million for a new mobility counseling demonstration. For place-based efforts, the $300 million proposal for local community efforts to reduce barriers to housing development and increase housing affordability would support the important role states and local communities play in ensuring affordable housing for all. Click the following links to view HUD’s budget announcementsummary and congressional justifications. The detailed HUD budget is available here

Important funding and policy proposals for rural housing under the U.S. Department of Agriculture (USDA) are also included in President Obama’s budget request. Rural multifamily rental programs see funding increases under the president’s request, which would support more preservation and potentially even new construction.

The president’s request also provides support for community development programs within the Treasury Department budget. The budget proposes:
  • $300 million one-time mandatory appropriation for a new Pay for Success (PFS) program.
  • $245,923,000 for the Community Development Financial Institutions Fund Program.

Additionally, the Treasury Department lays out the following changes to the Low Income Housing Tax Credits (LIHTC) in their green book of revenue proposals for FY 2017:
  • Allow conversion of private activity bond volume cap into LIHTCs.
  • Encourage mixed-income occupancy by allowing LIHTC-supported projects to elect a criterion.
  • Employing a restriction on average income.
  • Add furthering fair housing and preservation of publicly assisted affordable housing to allocation criteria.
  • Remove the QCT population cap.
  • Implement a requirement that LIHTC-supported housing protect victims of domestic abuse.

The Capital Magnet Fund (CMF), which was established by the Housing and Economic Recovery Act of 2008 (HERA) and received a one-time discretionary appropriation of $80 million in 2010, should begin receiving assessments for the first time in 2016 from Fannie Mae and Freddie Mac. HERA directs Fannie Mae and Freddie Mac to set aside in each fiscal year 4.2 basis points of each dollar of the unpaid principal balance of new business purchases to be allocated to the CMF and the Housing Trust Fund.

Below are highlights from the president’s budget and a chart showing funding for selected HUD and USDA programs.

Highlights of the funding proposals:
  • $5 million for the ConnectHome initiative.
  • $200 million for the Choice Neighborhoods Program.
  • Fully funds public housing authorities’ administrative fees at $2.1 billion.
  • $50 million to support public housing conversions to project-based rental assistance through the Rental Assistance Demonstration, with a targeted expansion to include certain properties that provide housing for the elderly.
  • $35 million for the Jobs Plus program and $85 million for the Family Self-Sufficiency program.
  • The budget projection includes in its calculation additional revenue of approximately 9.5 billion dollars from 2017 FHA loan business. 

Policy Proposals
  • Enhances local decision making, improves program accountability and provides more options for regional coordination and planning through a series of reforms to the Community Development Block Grant program.
  • Updates the formula of the Housing Opportunities for Persons with AIDS program by using HIV incidence rates and adjusting for fair market rents and poverty rates to better reflect the current nature and distribution of the epidemic.
  • Under the HOME Investment Partnership Program the budget proposes statutory changes that would eliminate the 24-month commitment requirement, eliminate the 15 percent Community Housing Development Organization (CHDO) set-aside, establish a single qualification threshold of $500,000 irrespective of the appropriation amount, revise the current "grandfathering" provision so that participating jurisdictions that fall below the threshold three years out of a five-year period are ineligible for direct formula funds and allow recaptured HOME CHDO technical assistance funds be reallocated as HOME technical assistance funds. When implemented, these changes will improve the targeting focus and effectiveness of the overall administration of the program.

The budget also proposes new initiatives:
  • $10.967 billion in mandatory spending to house homeless families over the next 10 years for:
  • 10,000 new housing vouchers for families with children experiencing homelessness.
  • 25,500 new units of permanent supportive housing to end chronic homelessness.
  • 8,000 new units of rapid rehousing.
  • $25 million to test innovative projects for youth experiencing homelessness.
  • $300 million for local community efforts to reduce barriers to housing development and increase housing affordability.
  • $15 million for a new mobility counseling demonstration that is designed to help HUD-assisted families move and stay in higher-opportunity neighborhoods.
  • Upward Mobility Project would allow 10 localities to combine funding from the Department of Health and Human Services’ Social Services Block Grant and Community Services Block Grant and HUD’s Community Development Block Grant and HOME Investment Partnership Program. Participating communities will also be eligible to receive HHS funding up to $300 million per year ($1.5 billion in new funding over five years), to combine with the added flexibility with currently provided resources.

For a more detailed analysis of President Obama’s budget request, please join NHC for our Annual Budget Forum on Thursday, Feb. 18 from 2-4 p.m. Register now for this free webinar.

Tuesday, February 2, 2016

A small group of thoughtful, committed citizens who changed housing

by Chris Estes, National Housing Conference 

In the first issue of Under One Roof of 2016 I noted that the National Housing Conference is celebrating its 85th anniversary as an organization this year. In each issue of Under One Roof, I will highlight a little bit about the amazing people and policy success NHC has had in its 85-year history. This month, I honor Mary Kingsbury Simkhovitch, a social worker who started the movement that we are all a part of today!

In 1931, the Great Depression was in full effect, exacerbating the filthy, overcrowded conditions of the poor in cities across the country and wiping out family farms and small towns across the south and midwest. In New York City, Mrs. Simkhovitch prodded civic leaders into action. A reformer and social worker, she believed that imaginative programs could replace unhealthy and crime-ridden slums with decent housing and a new spirit of community.

That year she formed the National Public Housing Conference, a pioneering advocacy coalition made up of other women reformers along with bankers, builders, realtors, labor leaders, architects and residents. New York City began an effort to produce new housing and to educate and build public support for this work by highlighting the consequences that slum conditions had on the general welfare, crime, health and the local economy.

Recognizing the national scope of these issues and the important role the federal government must play in solving housing challenges, this group would soon move to Washington, D.C. and rename itself the National Housing Conference. It is noteworthy that NHC’s first policy success was the passage of the Federal Home Loan Bank Act that established the Federal Home Loan Bank Board and 12 regional banks.

I look forward to sharing more NHC stories with you in the coming months. If you have your own stories to share, I hope you’ll do so through our website.

One of NHC’s annual traditions is our Budget Forum. Set after the anticipated release of the president’s budget, this event gives our members insight into both the proposed budget for housing programs and the likely budget process for the coming year.

To make this event accessible to all parts of the country we moved it from being an in person event at the Capitol Visitors Center to an online webinar that is free to all. Ethan and Kaitlyn have lined up a diverse and knowledgeable group of speakers for the webinar who you will not want to miss. In addition to the budget discussion, we will also host a conversation with Bob Moss of CohnReznick on legislative prospects for tax reform and what members of the affordable housing community should focus on in that area for the coming year.

In order to make sure this event is as engaging as possible for our attendees, we are offering registrants the opportunity to submit questions for our speakers in advance, as well as during the webinar. You can find more information on all of this below from Kaitlyn and on our website.

As always, thank you for being a member of NHC. 

Can a 1952 speech provide a window on the present?

News from NHC
by Radiah Shabazz and Amy Clark, National Housing Conference 

It would probably have been difficult for the men and women who founded NHC to imagine that an organization begun in 1931 to address slum housing in urban communities following the Great Depression would still be going strong in 2016. As the oldest affordable housing advocacy group in the country, NHC has been a vital voice in everything from passing of the National Housing Act of 1934 to the Low Income Housing Tax Credit to the ongoing push for housing finance reform. Today, 85 years later, we continue to tackle some of the nation's greatest housing challenges as we work to ensure that everyone has access to safe, decent and affordable housing. 

Draft text from Sen. Humphrey's speech
In 1952, then-senator Hubert H. Humphrey gave a speech to a National Housing Conference convening. National Low Income Housing Coalition (NLIHC) founder and 1995 NHC Housing Person of the Year Award honoree Cushing Dolbeare, then in one of her first jobs as speechwriter for Sen. Humphrey, drafted the senator’s remarks. At the time, future Vice President Humphrey was still a Minnesota lawmaker and public housing was still a relatively new program. The focus of federal housing policy was the elimination of substandard housing for the nation’s poorest citizens and clearing communities plagued by blight.

It is interesting to read Sen. Humphrey’s remarks, passed on to us from NLIHC’s archives, as they provide insight into what the housing landscape was like in the 1950s and help us see how much—and how little—has changed. He vividly describes the impact of the Housing Act of 1937, where the federal government funded new local public housing agencies to improve substandard housing for low-income families.  As Sen. Humphrey describes, the act, through public-private partnership, succeeded in providing nearly 192,000 affordable homes in 278 localities, thus turning a “housing problem” into a “housing opportunity.” The Housing Act of 1937 “scratched the surface,” as Sen. Humphrey says, but it was only the beginning.

Sen. Humphrey goes on to describe several factors stunting the progress of affordable housing development at that time. While the Housing Act of 1949 was passed “largely thanks to [NHC’s] efforts in rousing people to the need… for action,” appropriations cuts, a shortage of key building materials and pockets of opposition to public housing all slowed construction and rehabilitation of housing affordable to America’s growing population. Short the needed affordable housing, Sen. Humphrey says, the only affordable housing option available to many Americans was the housing built for the top third of the market that, with age, would eventually “filter down” to those with lower incomes.

We can see some parallels between what Sen. Humphrey describes and our housing landscape today. As we work to ensure affordable housing is a reality for all Americans, obstacles like limited (or reduced) funding often make this reality difficult to achieve. While it’s still true that market-rate housing does not “filter” all the way down to the lowest income people, local programs like inclusionary zoning are now in place in many cities, making neighborhoods of opportunity more affordable to lower-income people. The public housing program created by the 1949 act “only takes care of a small part of the bottom part of our population [and] does not begin to fill the tremendous need of middle income groups for rental housing,” according to the senator. LIHTC, HOME and the countless local housing programs have made great strides in filling that gap, though as our “Paycheck to Paycheck” continues to show, there is often a mismatch between the incomes of working people and the cost of housing in their communities. And public-private partnerships are still vitally important across the continuum of housing. As NHC makes clear in our principles for housing finance reform, restoring the balance between private risk-bearing capital and the government guarantee is essential to serving the housing needs of all in America.

The purpose of Sen. Humphrey’s speech to the NHC gathering was in part to rally support for public housing appropriations, saying that “only overwhelming public pressure can save” public housing. We still have far to go before we can truly say we’ve achieved the goal of the 1949 Housing Act of “a decent home in a suitable living environment for all Americans.” Decent, affordable housing in communities of opportunity remains out of reach for many Americans. As long as this remains true, there is a need for NHC and our colleagues in advocacy in D.C. and across the country. So while we joyfully celebrate our 85th anniversary and all that we’ve accomplished together, we must continue to focus on strengthening the movement for affordable housing

Monday, February 1, 2016

How is a budget forum like your car's GPS?

What we're building 
by Ethan Handelman, National Housing Conference 

You have probably gotten an email about NHC’s upcoming Budget Forum, and assuredly you will get more before February 18 at 2 p.m.  We’re persistent not because we’re trying to sell tickets (you can register for free, after all) but because there should be new ideas and information for anyone in housing. So what can you learn?

  • How critical federal funding is to affordable housing. This may seem obvious, but the last few years of appropriations certainly don’t reflect it. Learn where the current trajectory for federal funding is heading and what that could mean for different types of affordable housing work.
  • How the pieces fit together. Many of us in housing work with just parts of the puzzle, but creating and preserving affordable housing takes a combination of federal, state and local resources. Those resources come from appropriations and tax programs alike. And a mix of private sector companies, nonprofit entities and public sector agencies come together to bring housing about. Learn how other housing stakeholders are making best use of the resources available.
  • How the process will look this year. Appropriations and tax reform are moving on separate tracks, each with their own momentum. The national election overshadows all. Learn how you can get involved to help make affordable housing a federal priority.

When the president’s budget proposal comes out next week, many of us will immediately dive deep into the many pages of supporting materials, looking for the key details we hope (or fear) will be in there (or missing). That analysis will take weeks, so we don’t expect to have all the answers for you at the Budget Forum. Rather, we hope to point you in a direction, remind you how exciting affordable housing really can be and help surface the questions we will collectively need to answer this year and beyond. Please join us.

Oh, and the riddle in the title? The answer is manifold. Your car’s GPS points you where you want to go, but you need to know your objective to begin with. You are the one driving; the GPS just gives advice. And it only works if you pay attention. Just like the NHC Budget Forum.

The landscape of income and wealth inequality and housing affordability

Solutions through research
by Lisa Sturtevant, Ph.D., National Housing Conference 

The National Housing Conference is getting set to release the 2016 edition of “Housing Landscape.” For years, NHC’s Center for Housing Policy has released this analysis of the housing affordability challenges among the nation’s low- and moderate-income working households. Consistently, over the past several years, more than a quarter of all low- and moderate-income working renters have been severely cost burdened—that is, paying half or more of their income in rent. Millions of Americans go out to work each day, serving local communities and businesses, but earn too little to find housing they can afford in the communities in which they work.

NHC’s analysis of the incomes and housing costs of working households in the U.S. is particularly germane as the conversation around income and wealth inequality intensifies during this election year. Even working a full-time job, many workers continue to see stagnant wage growth and find it increasingly difficult to find affordable housing. According to our Paycheck to Paycheck tool, most moderate-wage workers in metro areas across the country cannot afford to rent the typical one-bedroom apartment. A mid-level graphic designer or urban planner in the San Francisco metro area doesn’t earn enough to afford a median-priced one-bedroom apartment. A one-bedroom apartment is too expensive for the typical e-commerce customer service representative or security guard in the Austin, Texas metro area. In the Raleigh area, school bus drivers and nursing aids must spend more than 30 percent of their income on rent to afford the typical one-bedroom home in the region. Unable to save for a down payment, homeownership likely feels out of the question for many of these working households.

Across the country, local jurisdictions are looking for ways to increase the supply of rental housing that is affordable to the workers who serve important roles in their communities. From inclusionary zoning policies to public land programs to regional housing trust funds, there is a tremendous amount of innovation happening at the local level designed to produce and preserve affordable rental housing.

But will it be enough to meet the needs of the workforce? And what happens when lower-income workers continue to spend a disproportionate amount of their incomes on housing and fall further behind on opportunities to gain wealth through homeownership?

Over the course of the year, research from NHC’s Center for Housing Policy will continue to analyze the relationships between income and wealth inequality and the availability and affordability of housing. Look for the release of this year’s “Housing Landscape” at the end of February.

Friday, January 29, 2016

Minnesota Housing Partnership awarded Wells Fargo grant to leverage community-driven investment in rural communities, American Indian reservations

News from NHC's family of members 
by Radiah Shabazz, National Housing Conference

Last month NHC member Minnesota Housing Partnership (MHP) was awarded a grant from NHC Chairman’s Circle member Wells Fargo Housing Foundation to expand its support to rural communities and American Indian reservations. The Community Resilience Initiative will connect rural and tribal communities to financial resources and technical skills they need to launch new projects, invest in economic vitality and build local collaborations.

Minnesota Housing Partnership has worked for many years to help rural and tribal communities achieve their goals of stable economies, sustainable housing and cultural autonomy. The $300,000 commitment from Wells Fargo to MHP is expected to attract more than $3 million in new development investment over the next five to ten years, from private and public sources, in more than a dozen rural and American Indian communities and regions across the country.

“Wells Fargo is committed to supporting the efforts of Minnesota Housing Partnership's community development team and we're proud to be a part of this effort to further strengthen our rural and Native American communities," Wells Fargo Senior Vice President and Community Relations Manager Muffie Gabler said in a press release. "Resilient, sustainable communities are critical to a healthy economy," she added.

Though founded with a focus on housing conditions in urban areas, in recent years NHC has expanded its focus to include rural communities in our work to move affordable housing forward. We’ve advocated for policy that would provide funding for the preservation of affordable housing in rural communities. As we look ahead into 2016, we’ll continue working to ensure that rural communities are not forgotten in the midst of the affordable housing movement.  

Minnesota Housing Partnership’s director of strategy and partnerships, Sarah Berke, added that “each dollar of investment from Wells Fargo will be matched directly by federal capacity-building dollars to attract ten to twenty times that amount in new investment over the longer term, as our partners launch their development projects."

San Diego Housing Commission Housing Development Partners, LISC preserve affordable housing for low-income seniors

News from NHC's family of members
by Radiah Shabazz, National Housing Conference 

NHC member San Diego Housing Commission’s nonprofit affiliate, Housing Development Partners (HDP), and Local Initiatives Support Corporation (LISC) recently purchased the New Palace Hotel in Banker’s Hill, San Diego to preserve as affordable housing for low-income seniors at risk of homelessness. The development will provide 79 affordable efficiency units for seniors aged 62 and older.

The former hotel will be renovated into studio apartments with kitchenettes ranging in size from 157 to 320 square feet. The development will remain affordable for the next 55 years to tenants with incomes up to 60 percent of San Diego’s area median income, which is about $34,000 a year for single individuals. LISC provided a loan of $5.8 million to fund HDP’s purchase of the hotel and closing costs. 

“The units at New Palace Hotel will remain affordable for 55 years, providing much-needed affordable housing for vulnerable seniors in San Diego,” San Diego Housing Commission President Richard Gentry said in a press release. “The San Diego Housing Commission is pleased to partner with Housing Development Partners and LISC for this purchase.”

The need for affordable housing in high-cost metro areas like San Diego is evidenced in our housing affordability research report, “Housing Landscape 2015.” The research shows that 20 percent of households in the area spend at least half of their income on housing costs, compared to a nationwide average of 15 percent. The 2016 edition of “Housing Landscape” will be released later this month.

New Palace Hotel first opened in 1913. It was destroyed by a fire in 1989 but rebuilt two years later to provide affordable housing.