Weekly update from the National Housing Conference |
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In this issue
February 6, 2022
Issue 91-5
• Commerce considers lumber tariff reduction
• GAO recommends stronger ERAP oversight
• White House releases Infrastructure Investment and Jobs Act guidebook
• Senate Banking Committee hears nominations of Raskin, Cook and Jefferson
• HUD announces disaster funding
• AARP launches 2022 Community Challenge
• Chart of the week: Rents rising an average of 14%, fueling further inflation
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Is housing still a priority for the Biden administration?
By David M. Dworkin, NHC president and CEO
President Biden has been a strong advocate for affordable housing, but recent decisions on housing-related issues, and a deafening silence on housing as a key priority in the Build Back Better negotiations, raise troubling questions. The President and senior staff must adopt clear and vocal support for making housing affordability a top priority. The gap between what the President has said and what is done must be closed.
Housing must be a top priority, and not just because housers say so. As I noted in my January 21 Member Note, if there is one unalterable fact in market economics, it is that the law of supply and demand is never repealed. Less supply and more demand mean higher prices, and that’s exactly what we’ve seen. The median existing-home sales price rose 13.9% year-over-year 2021 to a new high of $353,900. The national median rent increased by 17.8%. This compares to 2017-2019, when rent growth averaged just 2.3%. According to the Bureau of Labor Statistics, increases in the cost of shelter and transportation were the largest contributors to inflation, which increased to 7.0% for the 12 months ending December 2021, the largest increase since 1982. Even if you take out food and energy, inflation is 5.5%, the largest 12-month change since 1991. As the White House Council of Economic Advisors warned in a recent report, “even small increases in rent and home prices can, in principle, have noticeable effects on overall inflation more...
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News from Washington | By Luke Villalobos
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Commerce considers lumber tariff reduction
On Monday, the Department of Commerce moved to review duties on shipments of Canadian lumber. The review could reduce tariffs on lumber entering the United States from Canada from their current level of 17.99% to 11.64%.
Housers and non-housers alike have pointed to high lumber tariffs as a key cause of supply chain disruptions and home price inflation in recent months. The National Association of Home Builders (NAHB), which has been leading advocacy efforts to stabilize lumber prices since they spiked 400% last year, applauded Commerce's review of the tariffs. In his statement endorsing the move, NAHB Chairman Chuck Fowke argued that the Biden administration should take further steps to reduce pressure on the lumber supply. "To help further address the nation's housing affordability challenges, we encourage the Biden administration to build on today's positive development by taking the following actions: enter into negotiations with Canada to achieve a new softwood lumber agreement that will eliminate duties; increase the domestic supply of timber from public lands in an environmentally responsible manner; and seek immediate remedies to the lumber and building materials supply chain that will increase production and lower construction costs,” he said.
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GAO recommends stronger ERAP oversight
Last week, the Government Accountability Office (GAO) published a new report on the response to the COVID-19 pandemic arguing for increased oversight of distribution of the federal relief funds. GAO singled out the Emergency Rental Assistance Program (ERAP) as especially in need of increased supervision, noting that the Treasury Department has not yet designed a process to identify and recover overpayments made to grantees. GAO also recommended the design and implementation of post-payment reviews and recovery audits.
The review comes after housing stakeholders successfully advocated for a less burdensome ERAP application process, arguing that distributing funds quickly was more important than guarding against every possible instance of fraud. After a slow start to distribution, the simplified process has allowed grantees to disburse $38 billion of the $45 billion Congress appropriated for the program.
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White House releases Infrastructure Investment and Jobs Act guidebook
The White House released a guidebook for state and local governments with details on every program that received funding through last year’s Infrastructure Investment and Jobs Act on Monday. The guidebook summarizes the law’s provisions and provides guidance to local lawmakers on applying for funding through both new and previously existing programs.
White House Infrastructure Implementation Coordinator Mitch Landrieu said that the Biden administration would update the document as federal agencies release new guidance under the Act. “This guidebook is another step in our effort to be as transparent as possible, so you know what to apply for, who to contact, and how to get ready to rebuild. After all, most of the building will actually be done by state, Tribal, and local government partners,” he said.
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Senate Banking Committee hears nominations of Raskin, Cook and Jefferson
On Thursday, the Senate Banking Committee held a hearing on Sarah Bloom Raskin, Lisa Cook and Philip Jefferson, President Biden’s nominees to fill vacancies on the seven-seat Federal Reserve Board of Governors. The hearings proved more contentious than some had expected, with Democrats expressing support of the nominees while Republicans zeroed in on the nominees’ past statements on climate change and racial justice, which they said were disqualifying. However, the Washington Post reported after the hearing that it appeared likely that the nominees would receive enough votes to secure seats on the Board.
NHC President and CEO David Dworkin endorsed Raskin after Biden nominated her on January 14, calling her “eminently qualified” for the powerful role of vice chair for supervision for which President Biden has nominated her. The Committee is expected to vote on the nominees on February 15, after which they will face a vote by the entire Senate.
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HUD announces disaster funding
On Monday, HUD announced allocations of more than $2 billion in Community Development Block Grant Disaster Relief (CDBG-DR) funds, opening access to funding for localities that experienced major disasters in 2020 and 2021. Grantees receiving funding will be required to incorporate disaster mitigation measures into their recovery projects and ensure CDBG-DR resources are distributed equitably across affected communities. The funds allocated Monday are a portion of the $5 billion appropriated for CDBG-DR under last year's Extending Government Funding and Delivering Emergency Assistance Act; HUD said it would allocate the remaining funds over the next few months as it assesses outstanding needs.
On Wednesday, HUD joined with the Departments of Energy and Homeland Security launched a new effort to modernize Puerto Rico's energy grid and move the territory toward using only renewable power sources. The effort includes funding for a community-driven study on Puerto Rico's energy needs and the disbursement of over $12 billion in federal disaster recovery funds. Puerto Rico has suffered severe energy shortages since 2017, when Hurricane María caused $90 billion in damage and left most residents without power for weeks.
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AARP launches 2022 Community Challenge
Last week, AARP launched its 2022 AARP Community Challenge that provides grants for smaller, quick-action projects in communities. AARP said that this year's applications should focus on improvements to public spaces, housing, transportation, and civic engagement.
Projects should also support diversity, equity, and inclusion, build engagement and pursue new and innovative ideas supporting people age 50 and over. Grants average $11,500 and range from several hundred dollars to $50,000. Applications are due on March 22nd, and grantees will be announced on June 29th.
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Chart of the week: Rents rising an average of 14%, fueling further inflation
An article in the Washington Post discussed rapidly rising rents in cities across the United States, some as high as 40%, and the repercussions for families facing higher housing costs. On average, rents rose 14% last year, and the Federal Reserve Bank of New York expects further rises in 2022. The article was published a day before Jim Parrot and Mark Zandi wrote an op-ed for the paper arguing that addressing rising inflation cannot be successful without addressing rising housing costs.
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TechCrunch profiles Esusu, a new fintech firm that aims to help members of marginalized groups improve their credit scores, primarily through accounting for on-time rent payments that traditional credit reporters typically ignore. Led by two second-generation immigrants with firsthand experience of the challenges their families faced due to a lack of credit, Esusu has raised $130 million in recent months, pushing the startup’s value over $1 billion.
Apartment Therapy covers the Black Homeownership Collaborative's commitment to create three million net new Black homeowners by 2030, likely pushing the Black homeownership rate above 50%. Despite the obstacles to achieving the Collaborative’s goal, the article notes that its members have already had success in shaping federal policy, with many of its provisions having been incorporated into President Biden’s signature Build Back Better bill.
A Time Magazine profile of HUD Secretary Marcia Fudge covers her work within HUD so far, including a focus on addressing homelessness, making federally-backed home loans more accessible, and handling the COVID-19 pandemic. Fudge said that it has been difficult to enter office during a time of crisis, saying, "I don't know how you choose between people in need."
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Monday, February 7
Tuesday, February 8
Wednesday, February 9
Thursday, February 10
Friday, February 11
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The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest. |
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