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Weekly update from the National Housing Conference |
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In this issue
November 7, 2021
Issue 90-42
• Key housing programs added to Build Back Better
• Treasury sends ERA reallocation guidance
• Report argues construction labor shortage is central to housing crisis
• HUD allocates disaster relief funding
• Affordable housing investor acquires majority stake in HPET
• Freddie Mac announces initiative to increase rent payment reporting to credit bureaus
• Chart of the week: Women represent growing numbers in construction
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Find the information you need at NHC's COVID-19 Housing Resource Center |
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Your Membership, Your Member Brief and more
By David M. Dworkin, NHC president and CEO
Your membership will be even more valuable in 2022 when the NHC Member Brief, access to our archives, including conference videos and transcripts, and event discounts become available to members only. Our last free Member Brief will go out in December, and our Solutions for Affordable Housing online convening on November 17, is already free to members who save $50 per registration. We hope that you will take the opportunity to join or renew your membership in NHC today.
Paid Full, Silver and Gold Members will also be invited to our 2021 holiday party, Celebrating Collaboration, held on December 15, 2021, from 6:00 pm to 9:00 pm at the Andrew Mellon Auditorium. This limited event will allow us to safely celebrate the many ways we have all worked together through the darkest days of the pandemic and the historic opportunity for affordable housing funding – a task still very much underway. As past attendees at our Annual Housing Visionary Awards Gala know, the Andrew Mellon Auditorium has a capacity of 1000 and 40 foot high ceilings. We are confident that requiring proof of vaccination and optional mask-wearing when not eating will allow us to gather safely. This party is our way of saying thank you to Members of our Board of Governors, National Advisory Council, Gold, Silver and Full members. Only 250 tickets will be issued.
2021 was the most influential year for NHC in recent history. We succeeded in building a broad coalition to win passage of the $10 billion Homeowner Assistance Fund. Every major housing industry group, dozens of state and local organizations, and the country’s most progressive affordable housing advocates joined this initiative. The unprecedented ideological diversity of this group was a major factor in getting the Biden administration to include it in its American Rescue Plan proposal and successfully adding it to the congressional legislative package.
On June 18, the first federal Juneteenth holiday, members of the Black Homeownership Collaborative joined HUD Secretary Marcia Fudge; Senate Banking, Housing and Urban Affairs Committee Chairman Sherrod Brown (D-Ohio) and Congressman Tim Ryan (D-Ohio) at Cleveland State University to launch the 3 by 30 initiative, a 7-point plan to sustainably create 3 million net new Black homeowners by 2030. NHC founded the more...
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News from Washington | By Luke Villalobos
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Key housing programs added to Build Back Better
On Wednesday, the House Rules Committee released amended text and a summarized version of the Build Back Better Act that includes additional housing provisions. You can read NHC’s summary of all the provisions of the latest draft with descriptions and Title locations here.
The new text includes two major improvements previously left out of the bill; a scaled-down version of the Neighborhood Homes Investment Act (NHIA) and the Low Income Housing Tax Credit (LIHTC). These provisions will help address the dwindling affordable housing supply and provide important investments for the development of distressed and rural communities.
The new text makes improvements to LIHTC, including a 10% increase in credit allocation, lowering the bond financing threshold from 50% to 25% for five years, and basis boosts for extremely low-income tenants and properties on Native American land. These increases will allow for more development of affordable housing properties, while the lowered bond finance threshold will simultaneously free up existing funding for developers to increase housing production. The new text also includes several modifications, including allowing housing credit properties to take Sec. 48 Energy Investment Tax Credits, curtailing the use of Qualified Contracts, and updating the Right of First Refusal.
National Housing Conference is a strong supporter of increases in LIHTC and enactment of the NHIA.
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Treasury sends ERA reallocation guidance
Last week, the U.S Department of the Treasury sent a letter to grantees of the Emergency Rental Assistance Program providing further guidance on the planned reallocation process. The initial deadline for states to spend their ERA funding, which came in two rounds of $25 billion (ERA1) and $21.55 billion (ERA2), was to spend 65% of funds by September 30. Treasury previously sent a letter to recipients on October 4 informing them of the reallocation deadline.
According to the new letter, Treasury will begin identifying excess funds in mid-November. The letter further outlined the prioritization of reallocated funds in three steps. First, Treasury will prioritize requests from grantees within the same state the excess funds were received. Second, grantees that are close to running out of ERA1 and ERA2 funds will be prioritized based on the total expenditures of the programs. Third, any remaining funds will be held in a pool for reallocation nationwide that will be distributed proportionally to grantees based on need.
States vary widely in their distribution of ERA funds. New York has nearly run out of funds, while Missouri and Georgia are reporting lags in spending, having only spent 18% and 7% of their allocations, respectively. The Treasury letter states, “This statutory reallocation process is a critical step towards ensuring additional funds are made available to grantees with a proven capacity to deliver ERA in jurisdictions where families remain at serious risk of eviction or housing instability.”
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Report argues construction labor shortage is central to housing crisis
A new report from the Home Builders Institute (HBI) finds that a lack of skilled construction labor is a central factor in the current housing shortage, which has seen household formation outpace new home construction by 2 million units. HBI estimates that the construction industry needs to add 2.2 million new workers between 2022 and 2024, a figure HBI President and CEO Ed Brady called “staggering.”
“The construction worker shortage has reached crisis level. The situation will only become more challenged in the coming year when other industries rebound and offer competitive wages and benefits to prospective employees,” he said.
Brady suggested several steps the construction industry and policymakers can take to increase employment, including increasing awareness of construction careers among secondary school students and increasing employment of women, people of color and veterans. He also noted that depressed wages and immigration levels have contributed to low construction employment and urged policymakers from both parties to find common-sense solutions to these problems.
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HUD allocates disaster relief funding
On Monday, the U.S. Department of Housing and Urban Development (HUD) announced allocations of more than $2 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) and Community Development Block Grant Mitigation (CDBG-MIT) funds. Allocations were made to ten states (Alabama, California, Florida, Iowa, Louisiana, Michigan, Mississippi, Oregon, Puerto Rico, and Tennessee), covering 15 qualifying major disasters in 2020. According to the press release, the funds will be used for “disaster relief, long-term recovery, restoration of infrastructure and housing, economic revitalization, and mitigation, in the most impacted and distressed areas.” The funding was provided through the continuing resolution Extending Government Funding and Delivering Emergency Assistance Act, and aims to build resilience and provide long-term recovery for marginalized communities impacted by disasters.
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Affordable housing investor acquires majority stake in HPET
The Housing Partnership Equity Trust (HPET) announced Tuesday that mission-driven affordable housing investor Lincoln Avenue Capital (LAC) will purchase a majority stake in the organization. The purchase will see LAC, which has established itself in recent years as a major player in LIHTC investment, become one of the largest private affordable housing investors in the country.
Both organizations noted HPET would retain its longtime focus on naturally-occurring affordable housing (NOAH) under LAC’s leadership. “Building and preserving affordable housing is one of the most important social causes of our time,” said Jeremy Bronfman, CEO and founder of Lincoln Avenue Capital. “HPET has pioneered and proven a powerful model for bringing together private and nonprofit partners to develop and sustain affordable and workforce housing that strengthens communities. Lincoln Avenue Capital is well equipped to build on this success. We are delighted to be partnering with leading nonprofit and philanthropic organizations that share our mission to increase HPET’s impact across the country.”
“This acquisition is the culmination of a vision, almost a decade in the making, to truly scale up and expand social impact investment in affordable housing,” said Linda Mandolini, HPET board member and CEO of California’s Eden Housing, one of HPET’s 14 not-for-profit developers. “Now nonprofits will have an even greater set of tools to expand investment in the development and preservation of critically needed housing.”
NHC Board of Governors Chair and HPET President and CEO Anne McCulloch noted that this move by Lincoln Avenue Capital demonstrates that investments in affordable housing make sense for impact investors who want to deliver immediate results for our communities and our environment while earning a fair return.
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Freddie Mac announces initiative to increase rent payment reporting to credit bureaus
Freddie Mac announced Wednesday a new initiative to incent landlords to report on-time rent payments to the three major credit reporting agencies. The initiative promotes the use of technology developed by Esusu Financial, a firm founded in 2018 that aims to reduce racial and class disparities by increasing the number of renters whose payment history is reflected in their credit score. Freddie Mac estimates that less than a tenth of renters currently see their payment history reflected in conventional credit scores.
“Rent payments are often the single largest monthly line item in a family’s budget but paying your rent on time does not show up in a credit report like a mortgage payment,” said Freddie Mac CEO Michael DeVito. “That puts the 44 million households who rent at a significant disadvantage when they seek financing for a home, a car or even an education. While there remains more to do, this is a meaningful step in addressing this age-old problem.”
The initiative is part of a push by FHFA and the Enterprises to better account for faithful rental payment in evaluating consumer credit risk. In August, FHFA announced that Fannie Mae would begin to consider rental payment history in mortgage approval decisions by examining electronic bank statements, a move NHC President and CEO David Dworkin called “a major innovation to expand homeownership.” Fannie Mae estimates that 17% of those whose mortgage applications are rejected under the current system will qualify when rental payment information is considered.
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Chart of the week: Women represent growing numbers in construction
An HBI report on the Construction Labor Market shows slightly increasing numbers of women in construction. During the Great Recession, there were significant decreases of women in the construction workforce, dropping by nearly 30%. There has been a slow expansion from 2010 to 2017. Women still only represent 6% of construction and maintenance occupations within the broader construction industry. Increased hiring of women could help address labor shortages.
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A panel by UCLA Anderson offered a Roadmap to Black Homeownership through a public policy lens. The panel discussed the importance of encouraging Black homeownership, the long-term impacts of redlining, and opportunities to expand Black homeownership in the current mortgage environment. Panelists emphasized the importance of participation and advocacy of stories within the community to encourage progress and better market to underserved groups.
A paper by researchers at UC Berkeley and the Census Bureau finds that housing has grown so expensive in many large cities that “housing costs consume more than 100% of the nominal earnings gain that a typical worker obtains from moving to a larger or higher‐ earnings [city].” In other words, people who move from a low-wage city to a high-wage one - presumably to take a higher-paying job - experience a net loss in real income due to the high price of housing.
An episode of Last Week Tonight with John Oliver included a segment on the issue of increasing homelessness in the United States. The segment discussed the rising rates of homelessness and some of the issues surrounding it, including NIMBYism, hostile architecture, access to shelters and bathrooms, and the shortage of housing stock. The segment ultimately introduces Housing First as a policy solution for unhoused people.
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Monday, November 8
Tuesday, November 9
Wednesday, November 10
Thursday, November 11
Friday, November 12
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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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