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Weekly update from the National Housing Conference
News from Washington
Treasury updates ERA guidance

The Treasury Department released updated guidance for administration of state and local emergency rental assistance (ERA) programs Friday. The new guidance addresses concerns about renter access to ERA funds through additional requirements and recommendations for grantees. Apartment owners and managers, however, are concerned some of the changes may make it harder to distribute the funds efficiently. The updates were summarized in a fact sheet released by the White House.

The new guidance requires state and local programs that receive the federal aid to offer assistance directly to renters if their landlords choose to forgo ERA funds. The previous guidance required landlords to participate within 10-14 days before relief could be offered directly to the tenant. The new guidance cuts the wait times to 5-7 days. The new guidance prohibits burdensome documentation requirements for recipients, which has been a problem in some of the programs.

Treasury strongly encourages the programs to require that landlords not evict tenants for nonpayment of rent for 30 to 90 days longer than the period covered by the emergency rental assistance as a condition of receiving payment. Some landlords will refuse to take the rental assistance if they are concerned that they are at risk of losing an additional 90 days of rent. If renters do not use the funds for paying rent, they could be evicted and be legally liable for back rent.

The new guidance also prohibits states from denying funding to renters already receiving federal housing subsidies, a practice the White House said could violate federal prohibitions on discrimination in federally-funded programs. Some states and localities had initially denied federally-assisted applicants ERA funding due to a misreading of the statute that allocated funds or a desire to prioritize households receiving no assistance to stretch funds farther.
Federal judge vacates CDC eviction moratorium

A federal court on Wednesday vacated the Centers for Disease Control and Prevention’s (CDC) eviction moratorium, which has been in place since September of last year. The decision was immediately appealed by the Department of Justice (DOJ) on behalf of CDC, and the District of Columbia Circuit Court of Appeals quickly stayed the ruling, meaning that for now, the moratorium remains in place pending a ruling by the higher court.

The ruling is the latest in a series by federal judges that have sided with landlords who argue that Congress never granted CDC the authority to enforce such a moratorium. Supporters of the moratorium have pointed to Congress’ decision to extend the moratorium last summer, which, according to National Housing Law Project Director of Litigation Eric Dunn, “implies that Congress was approving that the CDC has [that] authority.” Researchers have repeatedly found that eviction moratoria reduce COVID-19 infections and deaths.

NHC President and CEO David Dworkin noted that conflicts over the moratorium could be resolved if struggling renters were more able to pay rent, allowing them to avoid risking eviction in the first place. He pointed to state and local emergency rent assistance programs as the best mechanism to ensure that outcome. “There’s no need for a moratorium if people’s rent gets paid,” he said.
FHFA asks GSEs for "living wills"

The Federal Housing Finance Agency (FHFA) published a final rule on Monday requiring the GSEs to develop within two years so-called “living wills,” credible exit plans that would resolve them from conservatorship without causing any large-scale harm to the housing finance system. The rule also requires the GSEs to: identify their core business lines, outline weaknesses that could cause economic harm, and lay out their plans to address those weaknesses. Subsequent resolution plans will be required every two years after the initial plans are submitted. The final rule makes clear that FHFA believes that any resolution plans “should not assume extraordinary government support.”

“After the capital rule, the finalization of the living will rule is one of the last major regulatory pieces needed to give effect to Congress' intent in HERA. Just like other large financial institutions, these plans will provide Fannie Mae, Freddie Mac and FHFA with a roadmap for preserving business continuity should they fail again,” said FHFA Director Mark Calabria in a statement announcing the final rule. “This rule helps create a stronger, more resilient housing finance system by protecting taxpayers and the mortgage market from harm if either Enterprise fails.”
Iowa will require localities to allow source-of-income discrimination

Iowa Governor Kim Reynolds (R) signed a bill into law last week requiring localities in the state to allow landlords to reject applicants who are recipients of Housing Choice Vouchers (HCV), a practice known by opponents as source-of-income discrimination. The law prohibits local legislation against the practice and requires localities that currently ban it to change their laws by 2023.

Supporters of the law argued that the law is necessary to protect landlords from onerous regulation of properties where HCV recipients live. “All we're trying to do here is control the expenses and the people that get into this business get in voluntarily,” said Andrew Lietzow, executive director of the Iowa Landlord Association. He stressed that the law was not intended to allow discrimination against any protected group, but instead to allow landlords greater control over “the quality of the resident.”

Source-of-income discrimination is not explicitly prohibited under the Fair Housing Act, though advocates have argued that the practice violates the act’s prohibition on practices that have a disparate impact on protected groups. Last year, the Supreme Court declined to hear a case that could have settled the question, though Secretary of Housing and Urban Development Marcia Fudge indicated earlier this year that she would be open to partnering with DOJ to fight laws like Iowa’s. “Fair housing is the law of the land,” she said. “If they want to get into a fight about it, we’re ready.”
HUD announces fair housing grants

The Department of Housing and Urban Development (HUD) announced on Monday that $20 million of funding is available to support fair housing initiatives and fight housing discrimination. The funds are being provided through the Fair Housing Initiatives Program to support a variety of enforcement activities, including fair housing testing, education and outreach, and capacity-building for fair housing organizations.

The funds will be available through three initiatives. HUD allocated $7 million for the Education and Outreach Initiative, which helps to develop and implement training and information programs. The $2 million Fair Housing Organizations Initiative focuses on capacity-building for fair housing organizations and effectiveness. The Private Enforcement Initiative, receiving the bulk of the funding, carries out investigations and enforcement against discriminatory practices. Applicants can apply for the funding through the deadline of June 14, 2021.

The announcement came a day before Attorney General (AG) Merrick Garland touched on the same subject in testimony to the House Appropriations Committee, emphasizing the need to increase the budget of the DOJ Civil Rights Division. He said, “Almost 65 years after its creation, the Civil Rights Division’s work remains vital to addressing unlawful discrimination and bias.” The AG requested a $33 million increase in the division’s budget.
Powell endorses CRA expansion to non-bank lenders

Federal Reserve Board Chair Jerome Powell said Monday that Community Reinvestment Act (CRA) regulations should cover non-bank lenders as well as banks. “Consumers require protection, and low- and moderate-income communities require credit support, regardless of the nature of the institution," he said in a question-and-answer session following his remarks at NHC member National Community Reinvestment Coalition’s Just Economy Conference. "Like activities should have like regulation.” The comment puts him in alignment with President Biden’s push to expand the law to cover non-bank lenders, which make up an increasingly significant portion of the consumer credit market.

In his remarks, Powell also offered his assessment of the economic recovery, saying that he was optimistic but worried that its effects were being felt unequally across class, race and gender groups. He highlighted as particularly troubling racial imbalances in the well-being of small businesses and the declining participation by women in the labor force. “The Fed is focused on these long-standing disparities because they weigh on the productive capacity of our economy,” he said.
CFPB finds increased complaints against mortgage servicers

Consumer complaints against mortgage servicers hit a three-year high this March, according to a report released Tuesday by the Consumer Financial Protection Bureau (CFPB). The report found a large increase in consumers reporting problems communicating with servicers, noting that one of the most common complaints was that servicers were unclear about post-forbearance options for homeowners enrolled in a forbearance plan. CFPB also reported an uptick in complaints regarding servicer delays and denials of loan modifications.

CFPB noted that homeowners with government-backed loans, who are disproportionately low-income and people of color, were particularly likely to submit forbearance complaints against servicers this spring. This finding is consistent with data from another CFPB report released this week, on the demographics of pandemic-era mortgage borrowers, which found that forbearance and delinquencies are more common in low-income communities and communities of color.

In a statement announcing both reports, Acting CFPB Director Dave Uejio said that servicers need to be prepared to communicate with the high number of delinquent borrowers. “CFPB will continue to seek and actively respond to developments in the market, doing everything in our power to help families stay in their homes. As we warned mortgage servicers last month, unprepared is unacceptable,” he said.
HUD and HHS partner on vaccine distribution

The Department of Health and Human Services (HHS) and HUD announced a joint effort on Wednesday to increase access to COVID-19 vaccinations in communities disproportionately impacted by the pandemic. The effort leverages the Health Center COVID-19 Vaccine Program and includes both prevention and treatment services for HUD-assisted communities and people experiencing homelessness. HHS Secretary Xavier Becerra and HUD Secretary Marcia Fudge estimate that the effort will benefit 6,000 multifamily housing properties, 6,700 homeless shelters, and 7,500 public housing properties.

“Despite continuing efforts to address these inequities, communities of color and other populations that are underserved continue to be affected disproportionately by the pandemic,” Becerra and Fudge explained in a joint letter on the new effort. “Addressing these inequities is both a moral imperative and pragmatic policy. It is impossible to change the course of the pandemic without tackling it in the communities that are disproportionately affected.”

The administration officials also released a fact sheet laying out their targeted plans for equitable pandemic response. The initiative focuses on communities with high proportions of people of color, disabled and elderly people, and people living in high-density areas or shelters. Establishing further partnerships between HHS and HUD will help to engage communities at a local level and support a comprehensive vaccine strategy, they said.
Chart of the week
Chart of the week: 21 million households cannot afford a home over $100,000

In its 2021 Priced Out report, the National Association of Home Builders estimates that more than 21 million households cannot afford homes over $100,000 at the same time as the median price of a new home nationally is $346,757. The report also finds that those priced out of homeownership outnumber those who can afford it in all but two states: Delaware and Virginia.
What we're reading
An article from Recode discusses how sky-high housing prices push more Americans into renting their homes, as more homes are bought by investors who rent them out rather than selling them to individuals. The article notes that institutional ownership of single-family rental units is up 25% from 2018, and the share of single-family homes specifically built to be rented is double what is typical.

Vox reports that the lumber crisis has become so severe that it is becoming a meme on social media. One Twitter user posted a picture of a Lowes lumber aisle with the caption, “All of this wealth and not a single security guard to be found.”

Inman covers NHC member NAR’s effort to diversify real estate ethics boards after changing its professional standards to increase sanctions against discrimination. According to Matt Difanis, chair of NAR’s Professional Standards Interpretations and Procedures Advisory Board, solving the problem “requires that state and local leaders proactively work to recruit more inclusive groups of volunteers, and […] ensure that members of color are not exclusively stacked up in diversity, fair housing or other committees concerned with DEI [diversity, equity and inclusion].”
The week ahead
Monday, May 10

Tuesday, May 11

Wednesday, May 12

Thursday, May 13
NAFCU: BSA training for board, 2 – 3:15 p.m. ET

Friday, May 14
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