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Weekly update from the National Housing Conference |
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In this issue
April 4, 2021
Issue 90-13
• CDC extends eviction moratorium
• HUD will not change FHA MMIF rates
• SAHF and HPN partner to address housing instability
• Colorado to expand housing assistance to undocumented immigrants
• Treasury updates ERA guidance
• Chart of the week: ADU construction takes off in California
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Find the information you need at NHC's COVID-19 Housing Resource Center |
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The Biden infrastructure plan and its effect on housing
by Buzz Roberts, president and CEO of the National Association of Affordable Housing Lenders (NAAHL). This note originally appeared in NAAHL's Daily Download.
President Biden announced a $2.25 trillion infrastructure plan, the American Jobs Plan, that includes the Neighborhood Homes Investment Act (NHIA) among $213 billion in affordable housing investments that could also include expansions of the Low-Income Housing Tax Credit, public housing capital funding, and other programs. The House and Senate are expected to consider the package over the next several months.
Under the NHIA, states would allocate tax credits for developing owner-occupied homes in distressed urban, suburban, and rural communities. The tax credits would cover the gap between development costs and the price at which homes are sold, up to 35 percent of development costs. Tax credits could also be used to rehabilitate homes that are already owner-occupied. According to the White House fact sheet:
"President Biden is calling on Congress to take immediate steps to spur the construction and rehabilitation of homes for underserved communities. Specifically, he is calling on Congress to pass the innovative, bipartisan Neighborhood Homes Investment Act (NHIA). Offering $20 billion worth of NHIA tax credits over the next five years will result in approximately 500,000 homes built or rehabilitated, creating a pathway for more families to buy a home and start building wealth."
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CDC extends eviction moratorium
The Centers for Disease Control and Prevention (CDC) extended its eviction moratorium just two days before expiration on Monday, expanding protections for millions of renters still struggling to pay rent due to the pandemic. The moratorium now runs through June 30.
“Keeping people in their homes and out of crowded or congregate settings – like homeless shelters – by preventing evictions is a key step in helping to stop the spread of COVID-19,” said CDC Director Rochelle P. Walensky in a statement announcing the extension. Researchers have found a significant connection between eviction moratoria expirations and increased deaths due to COVID-19.
The extension is welcome news for those who feared that a mass wave of evictions would contribute to an uptick in COVID-19 cases and deaths, especially before distribution of federal rental assistance is complete. Millions of tenants and landlords who lost income during the pandemic are in the same situation across the country, NHC President and CEO David Dworkin told the South Florida Sun Sentinel. The latest extension buys more time to prevent an eviction crisis, he said. “There’s no question that the three-month extension allows the appropriate amount of time for all rental assistance programs to be fully up and running. It’s a complicated and arduous process. We’ve never done anything like this before.”
However, some advocates were disappointed that the CDC did not strengthen the moratorium. “While the Biden administration is well aware of the shortcomings in the moratorium order that allow some evictions to proceed during the pandemic, the CDC director did not correct them,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition.
Others criticized the extension in full, arguing that it comes at the expense of landlords who must continue to maintain properties despite not receiving full rent payments. In a joint statement issued Monday, the National Multifamily Housing Council and National Apartment Association argued that the extension “only serves to exacerbate the challenges facing the rental housing industry and does not address the underlying financial stress of apartment residents, instead forcing households to accumulate insurmountable levels of debt.” |
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HUD will not change FHA MMIF rates
The Department of Housing and Urban Development (HUD) will not make changes to the Federal Housing Administration’s (FHA) Single-Family Mutual Mortgage Insurance Fund (MMIF), HUD Secretary Marcia Fudge announced Tuesday. “Given the current FHA delinquency crisis and our duty to manage risks and the overall health of the fund, we have no near-term plans to change FHA’s mortgage insurance premium pricing. We will continue to rigorously evaluate our strategy and work transparently with Congress,” Fudge said.
Some advocates in the housing industry have pushed for a 25-basis point cut in the price of the premiums. Other industry leaders noted that such a change would have had unpredictable effects on the housing market and thus would have been inappropriate at a time of economic uncertainty. In a statement, Mortgage Bankers Association President and CEO Bob Broeksmit commended the decision stating, “…while it is desirable to have lower mortgage financing costs, particularly as rates rise and home prices continue to increase, we agree with HUD that we need more data about how the more than 1 million FHA loans that are delinquent perform as they exit COVID-19-related forbearance.”
Claims on FHA-insured home mortgages are paid out of the MMIF, which is funded through fees paid by borrowers (called premiums). High MIPs result in homebuyers paying higher rates. But if the MIP is too low, then the MMIF is at risk of dropping below the 2% minimum, leading to a taxpayer bailout. The current MIP is at or near historic lows. NHC has supported holding back on changes to the MIP until pandemic related losses are more clear. “Getting the MIP right is a decision that should prioritize the long term benefits for first time home buyers and the safety and soundness of the MMIF. These two issues are not mutually exclusive,” NHC communicated to HUD in January.
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SAHF and HPN partner to address housing instability
Stewards of Affordable Housing for the Future (SAHF) and Housing Partnership Network (HPN) announced a joint effort to bolster housing stability in response to the COVID-19 pandemic on Thursday, funded with a $3 million grant from JPMorgan Chase that will benefit 19 affordable housing nonprofits. The collaboration will focus its efforts on 7,500 households in seven states: California, Illinois, Maryland, Minnesota, Ohio, Texas, and Virginia, as well as Washington, D.C. The investment will go towards maintaining renter housing stability and supportive services for households experiencing economic hardship due to the pandemic.
“The COVID-19 pandemic has disproportionately impacted people of color and people of limited economic means, including those living in affordable rental homes,” said SAHF CEO Andrea Ponsor. “The resident services systems that nonprofit affordable housing providers have in place have been invaluable and the support of JPMorgan Chase to expand these services has helped connect thousands of people to resources they need to remain in their homes.”
SAHF and HPN will also collaborate to develop general housing stability strategies that will be useful during future periods of economic distress. “Deep and sustained peer-to-peer learning has proven essential to our members’ ability to manage through major disruptions — such as the 2008 financial crisis, Hurricane Katrina, and now COVID-19 — learn from each other and quickly replicate best practices around emerging needs,” said Kim Dempsey, HPN’s executive vice president for capital markets. SAHF, HPN and JPMorgan Chase are all active members of NHC.
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Colorado to expand housing assistance to undocumented immigrants
Colorado is on the verge of becoming the first state to expand housing assistance benefits to undocumented immigrants. A state bill passed by the legislature on Tuesday would allow any Colorado resident to apply for all forms of state housing assistance regardless of citizenship status. The bill marks a major shift away from the use of immigration status to determine eligibility for housing assistance programs. One of the lead sponsors, State Rep. Dominique Jackson, says the expansion of benefits are needed “because housing is a human right and everybody deserves a safe and affordable place to live.”
The bill is supported by Colorado’s Department of Local Affairs, which administers the state’s housing assistance programs. Gov. Jared Polis has committed to signing it. An estimated 180,000 undocumented people living in Colorado are expected to become eligible for benefits. |
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Treasury updates ERA guidance
The new guidance clarifies that grantees may use federal funds for both direct and indirect administrative costs (such as those incurred by subgrantees), as well as administrative costs associated with the provision of housing stability services (such as housing counseling). However, the guidance notes that administrative costs may not exceed 10% of the grantee’s total allocation, as required under the Consolidated Appropriations Act, which created the ERA program.
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Chart of the week: ADU construction takes off in California
Bloomberg CityLab explores the boom in accessory dwelling unit (ADU) construction in California, following the state legislature's preemption of local zoning codes to legalize them in 2016. As a result of the legislature's action, "there’s a meaningful amount of housing units being put into neighborhoods that were traditionally very low-density," according to one ADU manufacturer.
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The San José Spotlight reports on a recently approved plan to grant the city’s affordable housing developers rights of first refusal to purchase multifamily buildings. Similar policies already are in place in San Francisco and Washington, D.C. Advocates say such policies would increase the supply of affordable housing and reduce displacement. The article notes policy may not work as well in San José as in other cities, due to the city’s low share of multifamily housing.
A new report from the Urban Institute analyzes the drivers of the national housing shortage and discusses measures policymakers could take to remedy it. The report finds that the primary causes of the crisis are limited land availability and financing and argues that “more housing construction will increase the economy’s growth rate and the number of jobs as activity increases.” The Urban Institute estimates that an additional 400,000 additional jobs in the housing production industry could be possible by the mid-2020s.
The New York Times covers efforts to deliver care to seniors in their homes, rather than in assisted living facilities, as demand for spots in those facilities drops and supply constraints make it more difficult for seniors to find homes in which they can age in place. “The troubles have intensified a spotlight on long-running questions about how communities can do a better job supporting people who need care but want to live outside an institutional setting.” |
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Tuesday, April 6
Wednesday, April 7
Thursday, April 8
Friday, April 9
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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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Defending our American Home since 1931 |
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