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Weekly update from the National Housing Conference
News from Washington
Treasury issues HAF guidance

The Treasury Department on Wednesday issued guidance on the administration of the Homeowner Assistance Fund (HAF), which distributes $10 billion to states, territories and tribal entities for relief to homeowners struggling as a result of COVID-19. The guidance was welcomed by NHC and other members of the housing industry, who advocated for members of Congress to include assistance to homeowners in the American Rescue Plan stimulus package that passed last month. NHC President and CEO David Dworkin commended Treasury’s timely release of the guidance, saying that the fund is “an important step forward in building back greater economic stability for the nation.”

The guidance notes that homeowners at or below 150% of area median income (AMI) are eligible to receive assistance for a broad array of costs in addition to mortgage payments, including utilities, insurance, fees related to forbearance, and more as long as they were incurred after Jan. 21 of last year. While funds are technically available for homeowners making up to 150% of AMI, the guidance directs grantees to set aside at least 60% of their allocated funds for assistance to households at or below AMI, with remaining funds being prioritized for households of color.

Treasury directs states and territories to apply to receive their HAF allocation by April 25. The deadline for eligible tribal entities to request funds is Sept. 30.
HUD to reinstate fair housing rules

The Department of Housing and Urban Development (HUD) took steps last week to reinstate two major fair housing regulations: Affirmatively Furthering Fair Housing (AFFH) and the Disparate Impact rule. Both regulations were established by the 1968 Fair Housing Act and aim to address systematic racism within housing. AFFH requires housing providers to actively further the original initiatives of the Fair Housing Act when making decisions. The Disparate Impact rule allows for policies that are nondiscriminatory at face value to still be considered discriminatory if the policy disproportionately harms disadvantaged populations. Both rules provide an additional layer of responsibility for HUD grantees to grapple with systemic racial discrimination and work towards more equitable housing programs, or else risk losing federal funding.

In a statement issued Wednesday, Dworkin expressed his support of the Biden administration’s plan to restore the rules. “HUD’s reinstatement of these critically important civil rights rules is an important first step to ensuring that federal, state and local governments are committed to fair housing and closing the significant and unacceptable racial wealth gap. Progress on closing the racial wealth gap will not occur with housing,” he said.
Members of Congress reintroduce AHTCIA

The Affordable Housing Tax Credit Improvement Act (AHTCIA) was reintroduced on Thursday by a bipartisan group of senators and representatives including Sens. Todd Young (R-Ind.) and Maria Cantwell (D-Wa.). AHTCIA aims to expand and strengthen the Low-Income Housing Tax Credit program by better targeting underserved communities, preserving existing affordable housing and increasing housing credit allocations overall.

The 2021 version of AHTCIA differs from past iterations in lowering the threshold of private activity bond financing from 50% to 25% to provide more room to finance new developments. Another change accelerates implementation of the credit allocation increase from five years to two years. Advocates say that both changes encourage more rapid and effective use of what is already one of the most successful national affordable housing development tools. If the 2021 Act is implemented, it could result in the production of over 2 million additional affordable homes over the next 10 years, according to the ACTION Campaign. The 2021 AHTCIA also simplifies program requirements in order to streamline its use by developers.
Subsidized renters often barred from receiving ERA payments

As states and localities continue to roll out their emergency rental assistance (ERA) programs, many grantees have barred renters living in subsidized housing from receiving payments. Some grantees have done so due to a misreading of guidance on administering ERA programs, which prohibits payments to households that are duplicative of subsidies they already receive, but allows that households “may receive ERA assistance for the tenant-owed portion of rent or utilities that is not subsidized.” Other grantees have done so due to a higher level of need for rental assistance in areas under their purview, which has led them to prioritize applicants who are not currently receiving housing assistance of any kind in order to maximize the impact of funds.

In either case, renters living in subsidized housing are left without access to assistance regardless of the size of their required contribution to rent payments, which can be substantial, or how far behind they are on those payments. States currently barring ERA access for subsidized tenants include Georgia, Illinois, New Jersey, New York and Texas, in addition to dozens of local grantees across the country.

Housing advocates have sought to stress that there is no legal requirement to restrict access to non-subsidized renters. “The Emergency Rental Assistance programs as enacted provide that federally subsidized renters are eligible as long as the assistance is not duplicative of a federal rental subsidy,” Denise Muha, executive director of the National Leased Housing Association, told NHC. “This means that the tenant portion of the rent and utilities are eligible, and that states and localities should act accordingly. Failure to do so will result in the ultimate eviction of thousands of very low income families.”
Members of Congress publish new DPA legislation

Members of Congress published draft legislation to provide up to $25,000 in down payment assistance (DPA) to first-generation homebuyers on Wednesday. The proposal follows that of the Black Homeownership Collaborative, of which NHC is a founding committee member, and would take the form of a grant applied at the closing table. First-generation homebuyers, defined as individuals who have not, and whose parents have not, owned a home in the past three years, would be eligible for a grant of $20,000. An additional $5,000 would be available to homebuyers of color. In most areas, the grant would be available to households making up to 120% of AMI, though this threshold would increase to 180% in high-cost markets.

The DPA taking the form of a grant is a departure from previous proposals, which typically proposed DPA in the form of a tax credit. The new proposal reflects some advocates' worries that a tax credit that would be difficult to apply at the time of purchase and thus inhibit access to the program.

Industry members say the legislation would narrow the racial homeownership gap by targeting DPA to first-generation homebuyers. In arguing for the importance of the legislation, NHC’s David Dworkin noted the importance of having homeowning family members when purchasing a home, calling it a “quintessential component of why and how people become homeowners.” Without parents who can walk first-time homebuyers through a home purchase – and assist them materially if need be – the homebuying process can be “rife with fear and dread,” Dworkin said.
HUD announces additional allocations for tribes and PHAs

HUD announced three more major allocations for tribal entities and public housing agencies (PHAs). Tribes and tribally designated housing entities (TDHEs) will receive over $90 million of grants to support new affordable housing construction, rehabilitation, and critical infrastructure to create an estimated 350 new housing units. Funds will be dispersed to 24 tribes and TDHEs throughout Indian Country through the Indian Housing Block Grant program, a competitive grant program that received 141 applications for this round alone.

PHAs across the country will receive $13.7 million to address needed capital improvements in public housing developments. The funds were awarded through HUD’s Capital Fund Emergency Safety and Security Program and will help to improve safety and security for public housing residents.
Chart of the week
Chart of the week: Neighborhoods at risk of mass eviction concentrated in already-disadvantaged areas

The Urban Institute published an interactive map of neighborhoods across the country where low-income renters are at higher risk of housing instability, neighborhoods they say should be prioritized as local governments distribute emergency rental assistance dollars. The map illustrates how neighborhoods most at risk of mass evictions are those disadvantaged on a number of other axes; in Miami, for example, neighborhoods most at risk are concentrated north of downtown in areas that were historically redlined.
What we're reading
A Brookings Institution blog post explains how the American Rescue Plan utilizes flexible funding to encourage innovative spending at the local level. The funding allows state and local government broad discretion in using funds, which Brookings researchers argue allows for creative problem solving among grantees. This autonomy encourages investment in projects most needed by communities rather than simple spending of allotments.

An article in the Atlantic argues that cities should stop worrying about the proliferation of so-called “luxury” housing and build more of it. The article notes that most multifamily developments marketed as luxury are in fact far more affordable than nearby single-family homes and cites research showing that “even new high-end development can help cool local housing prices” by adding more supply.

The Baltimore Business Journal covers a Maryland effort to address the appraisal gap in formerly redlined and otherwise distressed neighborhoods by funding the difference between the cost to develop a home and its appraised value. “Just a little bit of investment by the state through a program like this will yield generations of positive returns for the homeowners and for the neighborhood,” says bill sponsor State Delegate Brooke Lierman.

An op-ed in The Hill notes that virtual eviction hearings risk further disenfranchising the most vulnerable renters, who often lack the technology and language skills to effectively advocate for themselves online. “Seasoned lawyers paint a ‘wild west’ of virtual court proceedings, with fluctuating rules they find confusing, at best,” the authors write. “If lawyers find remote hearings challenging, how can we expect tenants, many of whom lack legal representation, to figure things out?”
The week ahead
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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