NHC Member Brief: Appropriations, Capital Magnet Fund awards and more

Weekly update from the National Housing Conference

March 20, 2018

President's Message I By David M. Dworkin

Dear Friend,

This month, the Treasury Department’s Community Development Financial Institutions (CDFI) Fund made its third round of awards from the Capital Magnet Fund (CMF). In the three funding rounds completed by the CDFI Fund, more than $291 million has been made available to 95 highly qualified organizations that competed against hundreds of CDFIs and high-capacity nonprofit housing developers. At a time when the 2017 tax bill cut the value of the Low Income Housing Tax Credit (LIHTC) by as much as 20 percent and Congress continues to debate whether or not to increase the LIHTC allocation – more on that later this week – the CMF and CDFI Fund itself have never been more important.

In total, the CMF will create over 50,000 units of affordable housing, including 6,500 for moderate-income homeowners. Over 33,000 jobs have already been created as a result, and another 16,000 jobs are expected to be created as a result of this year’s round.

This critically important and enormously impactful source of affordable housing investment dollars was created in the Housing and Economic Recovery Act of 2008 (HERA) and is funded by a fee on the new business of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Just last week, a broad range of housing advocacy organizations issued a statement of principles on GSE reform that strongly endorsed both the CMF and the Affordable Housing Trust Fund (AHTF), created with the same funding mechanism in HERA.

These funds, along with LIHTC, are vitally important sources of affordable housing production and high-quality construction jobs. They are paid for through tax savings, not tax dollars, and are among the most effective housing subsidies in American history.

I am proud to have been a part of the CMF’s inception, along with NHC Board of Governors member Matt Josephs, now with LISC; Andrew Trueblood, currently with the D.C. Office of the Deputy Mayor for Planning and Development; and Scott Berman, currently with Capital Impact Partners. Today, the CMF is under the leadership of Kipp Kranbuhl, deputy assistant secretary of Treasury and CDFI Fund director Annie Donovan, who continue the tradition of rigorous, apolitical review based on well-defined metrics of success.

This latest award will support financing for the preservation, rehabilitation, development or purchase of affordable housing for low-income communities, as well as related economic development and community service facilities such as much needed workforce development centers, day care centers and health care clinics.

NHC strongly supports the continuation and expansion of LIHTC, the CMF and AHTF, and we will continue to defend them in the months and years ahead.

Sincerely,

David M. Dworkin

President and CEO

News from Washington I By Kaitlyn Snyder

Appropriations update

Federal funding under the current continuing resolution runs out this Friday, March 23. NHC expects a Tuesday-evening release of the omnibus bill that would fund the government through the remainder of FY 2018, through Sept. 30. Both chambers of Congress must pass the bill, and the president must sign the omnibus legislation before midnight on Friday to avoid another government shutdown. Given Senate rules of procedure, a short-term extension or brief government shutdown looks increasingly likely. Funding for Affordable Care Act subsidies, the New York Gateway Tunnel project, insurers that cover abortion services, the border wall and other items have complicated the negotiations and release of the omnibus text. Still in play is the increase in the allocation for the Low Income Housing Tax Credit (LIHTC), which is linked to the fix of an unrelated agricultural provision in last year’s tax bill. NHC and other members of the ACTION campaign lobbied for the LIHTC improvements through the weekend.

HUD Secretary Ben Carson testified before the House Appropriations Committee on the FY 2019 HUD budget this morning. A recording of the hearing is available here. Sec. Carson will also testify before the Senate Committee on Banking, Housing and Urban Affairs in an oversight hearing on March 22 at 10 a.m. EDT.

NHC president to speak at NYHC policy symposium

On Tuesday, March 27, NHC President and CEO David M. Dworkin will moderate a panel on federal policy changes impacting investment in housing at the New York Housing Conference Policy Symposium. Dworkin will join panelists Frank Korzekwinski of Flushing Bank, Dina Levy of NYS Homes & Community Renewal, Buzz Roberts of the National Association of Affordable Housing Lenders and Emily Cadik of Enterprise Community Partners. The event runs from 9 a.m.-12 p.m. EDT at the CUNY Graduate Center (365 5th Ave., New York, N.Y. 10016). Complimentary tickets are available here.

NHC, other housing groups sign CRL letter on housing finance reform

Last week, NHC and several other housing groups endorsed a set of housing finance principles led by the Center for Responsible Lending. Through NHC’s advocacy, the importance of expanding the Capital Magnet Fund was added to the letter. While housing finance reform efforts appear to have lost momentum in both the House and Senate, NHC and our partners will continue to engage in this work in order to lay the groundwork for future legislative efforts.

Join NHC for a webinar on March 22 at 2 p.m. EDT to discuss economic mobility strategies for HUD-subsidized housing residents. Sherry Riva, executive director of Compass Working Capital, will discuss her work on the Family Self-Sufficiency program and how public housing agencies and private owners of multifamily assisted housing are seeing significant outcomes from the program, and Adrianne Todman, CEO of the National Association of Housing and Redevelopment Officials, will discuss other strategies that public housing agencies are implementing to empower their residents to become more self-sufficient. Register here.

On April 4 at 2 p.m. EDT, join NHC for our monthly Restoring Neighborhoods webinar to discuss naturally occurring affordable housing, the importance of preserving this valuable housing stock and how affordable housing developers can engage in this work. Anne McCulloch, president and CEO of the Housing Partnership Equity Trust; Deidre Schmidt, president and CEO of CommonBond Communities and Jane Graf, president and CEO of Mercy Housing, will share their experiences in acquiring unsubsidized affordable housing including financing strategies and partnerships. Register here.

Senate passes banking bill

Last week, the Senate passed the Economic Growth, Regulatory Relief and Consumer Protection Act ( S.2155). The bill marks the biggest rollback of financial rules since the 2008 financial crisis. The bill changes stress testing requirements for banks with under $250 billion in assets, rolls back requirements for banks and credit unions with under $10 billion in assets; lowers the required capital cushion for custodian banks managing pensions, mutual funds and the like and requires credit-reporting companies to provide free credit freezes and free credit monitoring services to active-duty military.

The bill also includes the Family Self-Sufficiency (FSS) Act ( S.1344/ H.R. 4258), of which NHC is a strong supporter. The bill would permanently authorize FSS programs in privately owned properties with project-based rent assistance. The bill also makes streamlining improvements to the FSS statute and creates incentives for innovation and high performance.

The bill now moves to the House for a vote, where it faces an uncertain future. House Financial Services Chairman Jeb Hensarling (R-Texas) circulated a list of over 30 proposals he wants considered before the bill goes to the president’s desk.

Members of Congress send CRA letter

A group of Republican House members, all of whom serve on the House Financial Services Committee, recently sent a letter to Federal Reserve Chairman Jerome Powell, Treasury Secretary Stephen Mnuchin, Federal Deposit Insurance Corporation Chairman Martin Gruenberg and Comptroller of the Currency Joseph Otting thanking them for their efforts to modernize the Community Reinvestment Act. The letter also includes revisions they would like to see in the updated regulations including providing assessment area flexibility to rural and high-performing banks, updating for advances in technology, greater consistency and transparency from regulators and factoring for the business model and size of institutions during assessments.

New study on voucher utilization

Vincent Reina of the University of Pennsylvania and Ben Winter of HUD recently released “ Safety Net? The Utility of Vouchers When a Place-Based Rental Subsidy Ends.” When affordability restrictions end on project-based Section 8 properties, tenants are offered a voucher to secure new affordable housing. This paper creates a national census of every tenant who lived in a property, where the project-based Section 8 subsidy ended through 2010 and tracks their subsequent voucher utilization. The researchers found that the voucher is not used by the majority of households, despite high levels of household demand for the subsidy. Those who use the voucher and move tend to move to lower poverty tracts. The subsidy offers the weakest safety net for households, where the head is African-American or age 62 or older.

NHC joins FY 2019 302b letter

NHC signed the FY 2019 302b letter led by the Campaign for Housing and Community Development Funding. 302b allocations are the total amount of federal funding for a fiscal year divided among the 12 appropriations subcommittees. This letter asks members of Congress to fund the Transportation-HUD appropriations subcommittee bill at the highest level possible. The deadline to sign on is Friday, April 6.

NLIHC releases “The Gap”

NHC member the National Low Income Housing Coalition recently released its 2018 update of “T he Gap: A Shortage of Affordable Homes.” The report finds that no state has an adequate supply of affordable rental housing for the lowest income renters and only 35 affordable and available rental homes exist for every 100 extremely low income renter households

Everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. The National Housing Conference educates decision makers and the public about housing policies and practices to move housing forward together. NHC convenes and collaborates with our diverse membership of housing stakeholders including tenant advocates, mortgage bankers, nonprofit and for-profit home builders, property managers, policy practitioners, real estate professionals, equity investors and more to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Founded in 1931, we are a nonpartisan, 501(c)3 nonprofit organization.

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