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Weekly update from the National Housing Conference
In this issue
June 27, 2021
Issue 90-25

• CDC extends eviction moratorium
• HUD and FHA announce changes to student loan debt calculation
• HUD announces plan to speed up delivery of relief to Puerto Rico and the U.S. Virgin Islands
• Treasury ERA guidance revised
• Report finds pandemic stalled payments for construction firms
• California mulling repaying 100% of low-income renters' arrears
• Fudge announces effort to improve public safety
• HUD publishes proposed rule on discriminatory effects

• Chart of the week: Policies favoring single-family homes led to more greenhouse gas emissions
Find the information you need at NHC's COVID-19 Housing Resource Center
The most important jobs in housing

by David M. Dworkin, NHC president and CEO

This week, the Supreme Court ruled that the president may fire the director of the Federal Housing Finance Agency (FHFA) at will. Hours later, practically before the ink was dry on the decision, President Biden fired FHFA Director Mark Calabria. For housing, this is the most consequential Supreme Court decision in recent history. For President Biden, his choice of a replacement will be one of the most important housing decisions of his presidency.

Many consider the director of FHFA to be the most powerful job in housing. Since Fannie Mae and Freddie Mac were placed into conservatorship in 2008, FHFA has closely supervised all of their activities. As a result, the FHFA director has her hand on the throttle of a 7 trillion-dollar mortgage market, influencing the cost of nearly every mortgage and the credit standards required to be approved.

Thompson is an ideal choice for interim director. She has the experience necessary to manage the enterprises’ complex business models while redirecting them to sustainably expand mortgage credit while appropriately managing credit risk. She also has the temperament and discipline to be a good steward of the agency while a successor is chosen for a five-year term.

The president made another major personnel decision just one day later. Julia Gordon, president and CEO of the National Community Stabilization Trust (NCST) was nominated to be Assistant Secretary of the Department of Housing and Urban Development and Commissioner of the Federal Housing Administration (FHA). FHA insures over $1.3 trillion of risk on more than 8 million single-family mortgages, almost 12,000 mortgages for multifamily properties, and over 3,700 residential care facilities mortgages.

As mortgage forbearance programs put in place during the pandemic begin to wind down more and hundreds of thousands of Americans find they can no longer afford their homes due to prolonged job loss, FHA will play a critical role in determining the future of thousands of neighborhoods in hundreds of cities as they struggle with foreclosures that cannot be avoided. The FHA Commissioner must have a deep understanding of how FHA risk is managed, losses mitigated, foreclosures prevented, and ultimately, how properties are resold in a way that protects the neighborhoods most impacted. This has been the more
News from Washington
CDC extends eviction moratorium

On Thursday, the Biden administration announced the extension of the Center for Disease Control and Prevention’s (CDC) national eviction moratorium for an additional 30 days. The new end date of the moratorium is July 31, 2021. The extension is meant to allow for more time to distribute the billions of dollars of emergency rental assistance available to those impacted by COVID-19. The administration also made it clear that this would be the last extension of the now 10-month long moratorium. “In the next 30 days, there’s no excuse to get this money out,” NHC President and CEO David Dworkin said in a recent Washington Post article. “We have the money to pay the rent. We need to get it paid.”

An estimated 7 million renters are behind on their payments, and many housing advocates were bracing for a wave of evictions at the expiration of the moratorium. The emergency rental assistance available for these renters had a slow start due to programs needing to be built from the ground up.

The federal government asked for quicker movement of money and efforts for eviction diversion over the next month to avoid unnecessary evictions. Building owners are critical of the additional extension, citing losses due to the moratorium. However, consumer groups are adamant that the moratorium is necessary until vaccination rates are higher.
HUD and FHA announce changes to student loan debt calculation

Last Friday, HUD and the Federal Housing Administration (FHA) announced updates to FHA student loan calculations in order to boost homeownership opportunities for low-income households and people of color. The calculation updates will remove barriers to affordable FHA-insured mortgages and streamlines the process for borrowers with student loan debt. The announcements, made in recognition of Juneteenth and Homeownership Awareness Month, seek to target first-time homebuyers and increase homeownership rates for underserved communities.

The updates on the calculation for FHA Single Family Title II forward mortgages remove the requirement of calculating 1% of the outstanding loan balance of student loans that are not fully amortizing, instead basing the number on the actual student loan payment, which is usually lower. The changes must be fully implemented by Aug. 16, 2021.
HUD announces plan to speed up delivery of relief to Puerto Rico and the U.S. Virgin Islands

HUD announced on Monday a plan to speed the delivery of $2 billion in Community Development Block Grant Disaster Relief (CDBG-DR) funds to Puerto Rico and the U.S. Virgin Islands to be used for improvements to the two territories’ electrical infrastructure. The plan encourages the use of public-private partnerships to get the most out of the funds. It also describes how the funds will be targeted at the neediest populations in the two territories.

Puerto Rico and the U.S. Virgin Islands remain in the process of rebuilding following Hurricanes Irma and Maria, which devastated the islands in 2017. Restoring power to all residents following the storm took five months in the Virgin Islands and almost a year in Puerto Rico. In a statement announcing the plan, HUD Secretary Marcia Fudge said, “By opening the door to this $2 billion in funding, HUD is enabling Puerto Rico and the USVI to improve the reliability and resilience of their electrical systems to promote environmental equity and to both withstand the impacts of climate change and contribute less to its causes.”
Treasury ERA guidance revised

On Thursday, the U.S. Department of Treasury updated their Frequently Asked Questions (FAQs) on Emergency Rental Assistance (ERA) to better distribute ERA resources and address concerns of housing leaders, some of which were expressed at a recent meeting of NHC’s National Advisory Council with Treasury officials.

The National Council of State Housing Agencies expressed specific concerns has been advocating for more efficient distribution of ERA funds, including making bulk payments to utility providers and landlords, that are remedied in the updated FAQ document. They further asked for more flexibility for the second round of ERA funding to streamline distribution, which was also changed. Further guidance on quarterly reports for grantees of both rounds of ERA funding is anticipated in future FAQs.
Report finds pandemic stalled payments for construction firms

A new report from construction software company Levelset finds that just 9% of construction firms consistently received on-time payments in 2020, a massive drop from the 60% who reported consistent on-time payments in 2019. According to the report, general contractors were more likely to get paid on time than subcontractors, suggesting that delays in payment compound were further down the payment chain. Firms also reported being paid in full less frequently, a trend the report notes began before the pandemic but accelerated over the course of last year.

Though on-time payments declined across the board, the report finds that firms working on residential projects were significantly less likely to report late payments than firms working on commercial projects. 17% of firms working on residential projects were paid on time, versus just 6% for firms working on commercial projects, likely a reflection of the vastly differing fortunes of residential and commercial real estate during the pandemic.
California mulling repaying 100% of low-income renters' arrears

A plan currently under negotiation in California’s legislature would pay back 100% of low-income households’ unpaid rent, an effort one expert told the New York Times is “certainly the largest rent relief there’s ever been.” The effort is part of a massive stimulus package that seeks to take advantage of the state’s unexpected budget surplus, which accumulated thanks to federal aid to the state government and windfalls to wealthy Californians even as the state’s working-class residents have seen their finances depleted during the pandemic.

California governments received $4.7 billion from the federal government over two rounds of funding for the emergency rental assistance program, though applicants were often eligible for relief only up to a certain dollar or monthly amount. The current proposal would pay off all unpaid rent, without a cap on payments or the number of unpaid months covered.
Fudge announces effort to improve public safety

HUD Secretary Marcia Fudge released a letter to key stakeholders on Thursday announcing new actions the agency is taking to improve public safety across the country, with a focus on rehousing those returning from spells in jails or prisons. The letter was released in conjunction with a new White House initiative to combat a rise in violent crime that began in the early months of 2020 and has intensified even as the country continues to recover from the pandemic.

In addition to clarifying that citizens returning from carceral institutions are eligible for emergency housing vouchers, the letter detailed additional steps HUD is taking to improve public safety. These include placing limits on the extent to which landlords can discriminate against applicants with criminal records and continuing to pursue research on reentry best practices, especially for juveniles.
HUD publishes new Disparate Impact proposal

On Friday, HUD published a proposed rule Restoring HUD’s Discriminatory Effects Standard in the Federal Register. The rule would reinstate the 2013 rule including guidance on disparate impact. HUD states in their press release that “the 2013 rule is more consistent with decades of caselaw and better effectuates the Act’s broad remedial purpose of eradicating unnecessary discriminatory practices from the housing market.”

A 60-day comment period is open until Aug. 24, 2021 for public input.
Chart of the week
Chart of the week: Policies favoring single-family homes led to more greenhouse gas emissions

Noting that different housing types can have vastly different energy needs, a paper in the journal Environmental Science and Technology traces the effects of federal policy on the composition of the housing stock and corresponding changes in residential demand for energy. The paper finds that three federal interventions – the 1973 Public Housing Moratorium, the 1986 Tax Reform Act, and the 1989 Financial Institutions Reform, Recovery and Enforcement Act – significantly increased the share of single-family homes in urban areas, increasing energy consumption and greenhouse gas emissions.
What we're reading
U.S. Mortgage Insurers’ (USMI) 2021 National Homeownership Market Survey found significant concerns about the lack of affordable homes among potential homebuyers, with African Americans and Hispanics most likely to report challenges becoming homeowners. According to USMI President Lindsey Johnson, “our survey shows that low- to moderate-income households and underserved communities struggle to become homeowners due to several major factors including low housing supply, lack of affordable housing, and personal economic factors such as imperfect credit score or the inability to afford a 20 percent down payment.”

The National Association of REALTORS® released a report titled Housing is Critical Infrastructure examining the extreme supply shortage of the United States’ housing stock. The report cites lack of new construction and severe underinvestment as major contributors to the affordable housing crisis. It calls for a national commitment to build more housing as part of an infrastructure strategy.

As part of their Keys Unlock Dreams initiative, the National Fair Housing Alliance partnered with Zillow to release a report on differences in access to amenities between majority White neighborhoods and neighborhoods of color. The report finds that access to financial and healthcare-related amenities is worse in majority-Black and majority-Hispanic neighborhoods and that many majority-Asian neighborhoods lag White areas with amenity access as well.
The week ahead
Monday, June 28
 
Tuesday, June 29
 
Wednesday, June 30
 
Thursday, July 1
 
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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