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Weekly update from the National Housing Conference
In this issue
April 11, 2021
Issue 90-14

• Biden proposes increased HUD funding in FY 2022 budget
• Nevada legislature debates inclusionary zoning bills
• HUD announces new grants to Housing Trust Fund, other programs
• NHC responds to possible delay of Qualified Mortgage Definition
• CFPB proposes mortgage servicing changes ahead of expiration of forbearance protections
• Supreme Court rules that firms may autodial consumers in most cases
• Chart of the week: Housing distress persisted long after the official end of the Great Recession
Find the information you need at NHC's COVID-19 Housing Resource Center
The filibuster, reconciliation, and the art of the possible

by David M. Dworkin, NHC President and CEO

Earlier this week, as CNN reported, it seemed that “the Senate could potentially take an unprecedented step to use a process known as budget reconciliation twice every fiscal year, possibly giving Democrats a chance to move a total of six pieces of legislation with just 51 votes before the end of this Congress.” This would “effectively circumvent Republicans and a filibuster, which requires 60 votes to overcome.” The development, said former Senate Parliamentarian Alan Frumin, was on par with the discovery of water.

The next day, Sen. Joe Manchin (D-W.V.) threw cold water on that discovery. “There is no circumstance in which I will vote to eliminate or weaken the filibuster,” he said in an op-ed in the Washington Post. He was clear that this includes using the budget reconciliation process to subvert regular order. “The time has come to end these political games,” Sen. Manchin said, “and to usher a new era of bipartisanship where we find common ground on the major policy debates facing our nation.”

We can love or hate what Sen. Manchin has done, but the impact is the same. There will be no action on trillions of dollars of spending or major social policy reform without some degree of bipartisan agreement. “If the filibuster is eliminated or budget reconciliation becomes the norm,” Sen. Manchin warned, “a new and dangerous precedent will be set to pass sweeping, partisan legislation that changes the direction of our nation every time there is a change in political control.” History provides plenty of support for his argument.

As I said in January, we are all going to have to learn how to count to 60. Several Republican senators are already promising prospects for housers. Sens. Todd Young (R-Ind.), Jerry Moran (R-Kan.), Rob Portman (R-Ohio), and Tim Scott (R-S.C.) are cosponsors of the Neighborhood Homes Investment Act. Sen. Pat Toomey (R-Penn.) voted for the December stimulus bill that included $25 billion in emergency rental assistance. Sen. Susan Collins (R-Maine) has been a supporter of several housing programs, including the Affordable Housing Tax Credit Improvement Act, which has also been cosponsored by Sens. Young, Portman, Scott, Shelley Moore Capito (R-W.V.), Dan Sullivan (R-Alaska), Kevin Cramer (R-N.D.), Lindsay Graham (R-S.C.), and Lisa Murkowski (R-Alaska). Sen. Young is leading an effort to reintroduce the bill in the 117th Congress. All of the past Republican cosponsors of the bill should know how much we appreciate their support of this important housing legislation. Other potential housing allies include Sens. Mitt Romney (R-Utah) and Marco Rubio (R-Fla.).

All of us should plan on spending a lot of time with their staffs, their most influential constituents and donors and with them, both on Zoom and, when safe again, in their offices. Our politics have become toxic, but they don’t have to remain so. Housing can be an issue where we find common ground, and ultimately, maybe even some real reconciliation. Otto von Bismarck, the 19th century German leader who mastered “balance of power” diplomacy to maintain peace in Europe for over 20 years said, “politics is the art of the possible, the attainable — the art of the next best.” His admonition is as relevant today as it was 150 years ago.
News from Washington
Biden proposes increased HUD funding in FY 2022 Budget

President Biden released a “budget blueprint” on Friday as a precursor to his full Fiscal Year (FY) 2022 budget request. The discretionary request includes a 15% budget increase worth $9 billion to the U.S. Department of Housing and Urban Development (HUD) funding, totaling $68.7 billion.

The new HUD budget “significantly expands rental assistance to low-income households; funds strategies to end homelessness; addresses the critical shortage of affordable housing; improves the quality of affordable housing through investments in resiliency and energy efficiency; and makes strategic investments across multiple programs to strengthen communities facing underinvestment and prevent and redress housing-related discrimination.”

A key part of the housing budget calls for expanding the Housing Choice Voucher program to include 200,000 more households with a $5.4 billion increase in funding. Homelessness Assistance Grants also receive an increase of $500 million to support an additional 100,000 households. The blueprint frequently notes an effort to target those fleeing domestic violence and people who are experiencing homelessness, both issues that have been exacerbated by the pandemic. Community Development Block Grants and the HOME Investment Partnership Program also received increases of $295 million and $500 million respectively to address housing shortages and community development, particularly in marginalized communities. Further investments are made for housing rehabilitation and energy efficiency, housing for Tribal communities, and reducing health hazards. HUD also released a fact sheet outlining the budget priorities for housing.

The full budget is expected to be released in upcoming weeks.
Nevada legislature debates inclusionary zoning bills

The Nevada Legislature is debating two bills addressing the state’s growing housing affordability crisis. Both bills are designed to raise funds in support of affordable housing projects by encouraging inclusionary zoning. One bill gives two options for developers to follow inclusionary zoning policies: paying a fee to avoid inclusionary zoning requirements or establishing linkage fees for commercial and residential development that go into a housing trust fund for affordable housing. The other bill incorporates the same two options but expands on them by establishing five-year goals for cities with large populations to preserve and produce more affordable housing. It would also direct the Nevada Housing Division to consider progress towards these goals when allocating future funding.

Both bills face opposition from many developers, some of whom have argued “linkage fees and inclusionary zoning act like a tax on housing” and will make housing even more expensive. Groups representing them have stated their members’ preference for tools like tax credits and rental assistance over bills that they say could discourage development. However, proponents of the bills are adamant that the options will increase housing stock. “These two [additional] tools balance out that toolbox by allowing local governments if they choose to, to enact additional fees to help put some more money in that pot to fill the gaps,” asserted a representative from the Nevada Housing Coalition. As broader conversations around inclusionary zoning continue, developments in state legislation may indicate changing attitudes toward zoning modernization in upcoming federal policy discussions.
HUD announces new grants to Housing Trust Fund, other programs

HUD allocated nearly three-quarters of a billion dollars in grants Tuesday to meet pressing housing needs. HUD allotted approximately $700 million for the Housing Trust Fund (HTF), as well as another $36 million to support housing stability among Native Americans and Alaska Natives, and $5 million for lead hazard reduction and weatherization programs.

The HTF allocation is a major increase compared to last year’s amount of $323 million. The funding will focus on the most vulnerable populations, with the majority going to rental housing to produce 5,400 affordable units. Five local governments will receive grants to promote energy efficiency and healthy housing for seniors and families with young children, and to coordinate the lead hazard reduction and weatherization efforts. Funds for Native American housing needs will be funneled through public housing authorities and associations, nonprofit organizations, and Native American tribes to support Resident Opportunity and Family Self-Sufficiency programs for improving economic and housing self-sufficiency.
NHC responds to possible delay of Qualified Mortgage definition

NHC joined 12 organizations to call for no change to the framework or effective date of the General Qualified Mortgage (QM) definition under the Truth in Lending Act final rule, as was proposed by the Consumer Financial Protection Bureau (CFPB). The QM rule is an important element of the Dodd Frank Act’s protection of mortgage consumers to ensure they have the ability to repay their mortgage. QM mortgages are considered the safest mortgages and convey legal protections to lenders who make them. The letter to CFPB Acting Director Dave Uejio was in response to a Notice of Proposed Rulemaking (NPR) on delaying the mandatory compliance date of the QM final rule from July 1, 2021 until Oct. 1, 2022. The new framework replaces the debt to income (DTI) requirement with a price-based threshold that, according to CFPB, is both a stronger and more flexible indicator of a consumer’s ability to repay than DTI alone. The letter points out postponing the compliance period further delays the implementation of diligently researched policy solutions that will best serve consumers seeking affordable mortgage credit.

“The General QM Final Rule is the result of a robust and comprehensive process in which the Bureau and dozens of interested stakeholders considered a variety of options, and the General QM Final Rule reflects the rigorous data analysis that supports the revised QM framework,” the letter states. “All agree that the framework provides the best solution available to achieve these goals while retaining the core consumer protections provided by the QM product safeguards and requirements for lenders to consider and verify debts and income.”
CFPB proposes mortgage servicing changes ahead of expiration of forbearance protections

Last week, CFPB proposed a slate of changes to mortgage servicing regulations intended to protect against a potential wave of foreclosures when federal COVID-19 protections expire this fall. The proposed changes would require servicers to wait to initiate most foreclosure actions until 2022. This would allow for streamlined loan modifications, and increase servicers’ ability to communicate with homeowners in a timely manner. The proposal comes a week after CFPB put servicers on notice to prepare for an expected increase in homeowners needing assistance after federal forbearance requirements lapse. The agency emphasized to servicers “unprepared is unacceptable.”

“Millions of families are at risk of losing their homes to foreclosure in the coming months, even as the country opens back up,” said Acting CFPB Director Dave Uejio. “We will do everything in our power to ensure servicers work with struggling families to find solutions that prevent avoidable foreclosures.”

CFPB has requested that comments on the proposed changes be submitted before May 11.
Supreme Court rules that firms may autodial consumers in most cases

The Supreme Court unanimously ruled on Wednesday that firms do not need to obtain consumer consent to contact them via autodialing, unless firms use a random or sequential number generator to do so. The decision will be welcomed by mortgage servicers and other housing industry players who use autodialing to contact consumers, often to inform them of their options to avoid foreclosure if they fall behind on payments.

Autodialing’s legality had been unclear since 2018, when D.C. Circuit Court ordered the Federal Communications Commission to narrow its definition of “automatic telephone dialing systems,” which are regulated under the Telephone Consumer Protection Act. In the absence of an official definition, different courts had adopted varying definitions in recent years, leading to confusion about firms’ obligations under the act.
Chart of the week
Chart of the week: Housing distress persisted long after the official end of the Great Recession

Housing distress persisted for several years following the Great Recession, after other sectors of the economy had recovered. That is according to a recent Brookings Institution report titled, “What the Great Recession Can Teach Us About Post-Pandemic Housing." Importantly, says Brookings, homeownership rates that declined due to the subprime mortgage crisis “generally hit ... a trough around 2014, nearly five years after the recession officially ‘ended’.”
What we're reading
A blog post from the Urban Institute argues for the creation of a new down payment assistance program to equalize homeownership opportunities across racial and class groups. “Renters say that coming up with enough savings for a down payment and closing costs is the biggest obstacle they face to buying a home,” the authors write. “Down payment assistance can break this cycle.”

An article in The Wall Street Journal explores plans by the Biden administration to ease the housing shortage by spurring local governments to loosen zoning regulations through a new competitive grant program. Though the initiative has promise, some affordable housing advocates argue that a more effective solution would be to provide incentives through existing sources of funding. For example, they say, Surface Transportation Block grants could be used to incentivize wealthier communities, which might otherwise be tempted to forgo smaller grants. “There’s no carrot if you don’t eat carrots,” shared NHC President and CEO David Dworkin with WSJ.

BisNow covers Los Angeles’ most recent round of rent relief, in which landlords were permitted to apply on their tenants’ behalf. Landlords are eligible to receive up to 80% of back rent owed to them, if they agree to forgive the remaining 20%, something many landlords told BisNow was an easy tradeoff to make.

An op-ed for the New York Daily News discusses historic and ongoing housing discrimination on Long Island, where a 2019 investigation by Newsday found that 39% of Hispanic and 49% of Black potential homebuyers and renters experienced disparate treatment.
The week ahead
Monday, April 12
 
Tuesday, April 13
NMHC: 2021 Research Forum, 1 – 4 p.m. ET
 
Wednesday, April 14

Thursday, April 15
 
Friday, April 16
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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