Research Explores Perceptions and Experiences of LIHTC Residents

A study in Housing Policy Debate, “Rethinking Opportunity in the Siting of Affordable Housing in California,” found that residents’ perspectives on housing affordability, neighborhood conditions, and access to educational and economic opportunity can differ from commonly used measures.

The study’s findings suggest Low Income Housing Tax Credit (LIHTC) residents’ perceptions of their neighborhoods and opportunities do not necessarily align with standard metrics often used in “opportunity maps.” Residents in the study shared that barriers to opportunity might not be driven by neighborhood factors as much as by larger issues in education and the labor and housing markets.

Efforts have been made in recent years to encourage more affordable housing in “high-opportunity” neighborhoods to improve residents’ economic mobility. Little research, however, has examined LIHTC residents’ neighborhood preferences or their own perceptions of barriers to economic mobility. The author explored resident perspectives through interviews and surveys with 251 residents from 18 LIHTC properties owned and managed by non-profits across California. The properties were sited in neighborhoods that varied in neighborhood quality, but they tended to be in neighborhoods with poverty rates more than 20%.

Many residents learned about their property through a local connection. Nearly one-third of participants had a friend or family member living at the property or another property managed by the same company. Approximately 28% of participants learned about their property simply by walking by it during construction, and another 10% were referred by a social service or non-profit agency. These findings suggest social connections play a key role in steering residents to LIHTC properties, which may result in the clustering of demographics.

Nearly 50% of participants lived in the same ZIP code prior to moving into their current LIHTC home. Seventy percent of residents had moved from a neighborhood with a similar level of poverty, 20% had moved from a lower-poverty neighborhood, and 10% had moved from a higher-poverty neighborhood.

Residents reported significant challenges prior to becoming LIHTC residents. Fifty percent of participants worried about paying for rent prior to moving into their LIHTC home, 40% reported previous food insecurity, 20% moved as the result of an eviction or rent increase, and 20% were previously homeless. Participants commonly cited the affordability and quality of their unit as their primary motivation for moving, eclipsing concerns about neighborhood quality. Another theme that emerged from resident interviews was the lack of social stigma associated with living in a LIHTC home, especially compared to other forms of housing assistance such as public housing or Section 8 assistance.

Participants shared how their LIHTC home afforded them economic stability. Over one-third of participants reported activities typically associated with economic mobility, such as learning English or pursuing a high school or college degree. Participants also, however, highlighted significant barriers to economic security and mobility inherent in the low-wage and low-skill labor market. Participants did not appear to struggle with finding work, but they struggled with low wages, poor benefits, and job insecurity.

Many participants viewed the housing stability provided by their LIHTC rental unit as a buffer to the precariousness of the low-wage, low-skill labor market. Residents also cited issues of educational opportunity that were more closely related to city-wide or school-district-wide issues than to their neighborhood. In terms of economic mobility, respondents tended to focus on these larger issues in the labor market and on education instead of their neighborhoods.

Overall, LIHTC residents’ perceptions of a positive neighborhood environment can differ from empirical measures of neighborhood opportunity. The author makes clear, however, that these findings should not be used to undermine current efforts to promote more affordable housing in neighborhoods of higher opportunity to provide low-income households with more residential choice.

“Rethinking Opportunity in the Siting of Affordable Housing in California: Resident Perspectives on the Low-Income Housing Tax Credit” is available at: https://bit.ly/2QgoAwe

USDA to Publish its Own Rule Prohibiting “Mixed-Status” Immigrant Families from Living in Assisted Housing

The Office of Information and Regulatory Affairs (OIRA) is currently reviewing a proposed ruleon the Rural Housing Service’s citizenship requirements for the agency’s multifamily housing programs. The proposed rule will likely prohibit mixed-status immigrant families from living in RHS programs covered by Section 214 of the Housing and Community Development Act of 1980. The notice of proposed rulemaking is projected to be published in August 2019. HUD earlier published a rule prohibiting mixed-status families from living in public and other subsidized housing.

Section 214 covers several RHS programs, including the Rural Development (RD) Voucher program, Section 514 Farm Labor Housing, and Section 515 and Section 514/516 developments that receive RD Rental Assistance. The proposed RHS rule could lead to families splitting up, forgoing assistance, or being evicted from their homes.

Under Section 214 undocumented immigrants cannot receive federal housing assistance, but families of mixed-immigration status can live in subsidized housing if at least one member of the household is eligible to receive assistance. U.S. citizens, lawful permanent residents, refugees and asylum seekers are eligible to receive housing assistance. Residents can declare themselves ineligible and are not required to reveal their immigration status. When a family of mixed-immigration status receives housing assistance, the family’s subsidy is pro-rated to account for only legally eligible residents.

Lawmakers Reintroduce Bill to Activate Disaster Housing Assistance Program

Senator Elizabeth Warren (D-MA) and Representative Adriano Espaillat (D-NY) together with 10 of their Senate and House colleagues reintroduced the "Housing Survivors of Major Disasters Act of 2019" (S 1605 and HR 2914) on May 22. This bill would require FEMA to enter into an interagency agreement with HUD to implement the Disaster Housing Assistance Program (DHAP), providing temporary rental assistance and wrap-around counseling services for individuals affected by recent and future disasters. The proposal also aims to address barriers low-income survivors face when applying for FEMA assistance.

The bill builds on a proposal introduced during the previous Congress by including language that will help ensure all disaster survivors receive FEMA assistance, even if they do not have documentation related to their residences. This provision would make applying for aid easier for renters without leases, unsheltered individuals, people experiencing homelessness, and homeowners without formal titles. After every disaster, local advocates find these survivors are often denied assistance even when otherwise eligible.

Joining Senator Warren and Representative Espaillat on the bicameral bill were Representative Jenniffer González-Colón (R-PR) and Senators Richard Blumenthal (D-CT), Edward J. Markey (D-MA), Kamala D. Harris (D-CA), Dick Durbin (D-IL), Amy Klobuchar (D-MN), Bernie Sanders (I-VT), Kirsten Gillibrand (D-NY), Bob Menendez (D-NJ), and Tim Kaine (D-VA).

In a press release, NLIHC President and CEO Diane Yentel offered strong support for the bill: "On behalf of the National Low Income Housing Coalition and the Disaster Housing Recovery Coalition, I applaud Senator Elizabeth Warren and Congressman Adriano Espaillat for introducing legislation to enact critically needed reforms to the Federal Emergency Management Agency (FEMA) to ensure that the lowest-income survivors – including seniors, people with disabilities, families with children, people experiencing homelessness, and other individuals – receive the housing assistance they need to rebuild their lives. Congress should immediately enact this legislation and hold FEMA accountable for its continued failure to address the housing needs of the most vulnerable survivors, which has forced thousands of families to return to uninhabitable homes, sleep in cars or shelters, double- or triple-up with other low-income families, or pay far too much of their incomes on rent, putting them at higher risk of evictions and, in worst cases, homelessness."

In the same press release, Representative Espaillat called the lack of adequate and timely disaster relief “a slap in the face and blatant disregard of the lives of thousands of individuals and families in need.” Senator Warren stated: "The Housing Survivors of Major Disasters Act would push the Federal government to step up for these families and make it easier for them to access the help they are entitled to and desperately need."

Read text of the bill at: https://bit.ly/2Et9NKb

Read the press release at: https://bit.ly/30HxIPA

Bipartisan Legislation Introduced to Protect Children from Lead Poisoning

The “Lead-Safe Housing for Kids Act of 2019” was introduced on May 21 by a bipartisan group of senators, including Dick Durbin (D-IL), Tim Scott (R-SC), Bob Menendez (D-NJ), Todd Young (R-IN), Tammy Duckworth (D-IL), Tim Kaine (D-VA), Rob Portman (R-OH), and Tina Smith (D-MN). NLIHC supports the legislation, which would require HUD to update its lead-poisoning prevention measures to reflect modern science and ensure that families and children living in federally assisted housing are protected from the devastating consequences of lead poisoning.
According to HUD, lead-based paint is present in roughly 37 million U.S. homes, posing serious health and safety risks, including long-term and irreversible health, neurological, and behavioral problems in children. While the available science for detecting and remediating lead hazards in a home has evolved significantly in the last two decades, federal laws and regulations continue to lag far behind, putting children at the risk of being exposed lead before any intervention is triggered.

Specifically, the “Lead-Safe Housing for Kids Act of 2019” would require more stringent risk assessments and more accurate evaluation tools to identify lead hazards before a family moves into a home, provide opportunities for families to relocate on an emergency basis if a lead hazard is not abated within 30 days, and require landlords to disclose the presence of lead if lead hazards are found in the home.

House Subcommittee Convenes to Mark Up FY 2020 USDA Appropriations Bill

The House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies met last month to mark up a proposed Fiscal Year (FY) 2020 appropriations bill for the Department of Agriculture (USDA), the Food and Drug Administration, and related agencies.

Subcommittee members focused their pre-vote remarks during the markup predominately on programs concerning food production and farming rather than rural housing. No amendments were proposed during the markup. The bill was favorably reported out of the Subcommittee by a voice vote.

The bill includes funding for USDA’s Rural Housing Service (RHS) programs. Highlights of the proposed funding levels for some RHS programs promoting affordable housing in rural communities are below.

  • The Section 502 Single Family Housing Direct Loan Program would be funded at $1 billion, a $100 million decrease from FY 2019 enacted funding levels. The Administration marked the Direct Loan Program for elimination in its FY 2020 and FY 2019 budget requests.
  • The Section 502 Guaranteed Rural Housing Loan Program would be funded at $24 billion, equal to its enacted FY 2019 funding levels.
  • $45 million would be designated for the Section 515 Multi-Family Housing Direct Loan Program, an increase of $5 million from the program’s enacted funding levels for FY 2019. The Administration marked the program for elimination in its FY 2020 and FY 2019 budget requests.
  • The Section 538 Guaranteed Multi-Family Housing Loan Program would receive $250 million, a $20 million increase from its enacted FY 2019 funding levels.
  • Section 521 Rural Rental Assistance would be funded at $1.375 billion, a 3 percent increase in funding levels from the $1.331 billion appropriated in FY 2019.
  • The Section 542 Rural Development Voucher Program would be funded at $35 million, an $8 million increase from enacted FY 2019 funding levels.
  • Vouchers are available to any low-income household residing in a property financed with a Section 515 loan that has been prepaid after September 30, 2005.
  • The bill also directs the Secretary of Agriculture to administer the vouchers in alignment, when possible, with regulations governing the administration of HUD Section 8 housing vouchers.
  • The Secretary is also authorized to use any surplus funding not needed for the voucher program toward the rental preservation demonstration program described below.

$40 million would be appropriated for the multifamily rental preservation demonstration for the preservation and revitalization of Section 514, 515, and 516 properties — a $15 million increase from enacted FY 2019 funding levels. The Administration’s FY 2020 Budget Request marked the demonstration program for elimination. If it is determined that more funding is required for the Section 542 voucher program, the Secretary is authorized to divert funds from the demonstration program to fund additional vouchers. For more information regarding the bill, please contact Glenn Gallo.

AHCIA Reintroduction Expected Soon

The ACTION Campaign and our Congressional partners have been hard at work to finalize both the Senate and House versions of the Affordable Housing Credit Improvement Act (AHCIA). We are expecting the reintroduction of the bipartisan bill at the start of the June working session. As soon as the AHCIA is reintroduced, ACTION will share an update, including a summary of the bill, and we will call on our partners to sign on to a letter urging Members of Congress to support the advancement of this critical legislation.

Senate Finance Committee Forming Bipartisan Taskforces to Examine Certain Expiring/Expired Tax Provisions

On May 16, Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) announced that the Senate Finance Committee is forming six bipartisan taskforces to examine a total of 42 temporary tax provisions that expired, or will expire, between December 31, 2017 and December 31, 2019. In his remarks on the Senate floor, Chairman Grassley noted that the taskforces will be charged to examine the temporary tax policies and to work with stakeholders, other Senate offices, and interested parties “to consider the original purpose of the policy and whether the need for the provision continues today.” The taskforces will be asked “to identify possible solutions that would provide long-term certainty” for each of the 42 expired or expiring tax provisions, which may mean: elimination; a phase-out; a scale-back in exchange for long-term extension or permanency; a short-term extension as is; a long-term extension as is; or permanency. Senator Grassley also noted that the taskforces will complete their efforts by the end of June.

Of the six bipartisan taskforces, the Employment & Community Development Taskforce is expected to consider the New Markets Tax Credit (NMTC) and would also be the taskforce interested in other community development tax provisions such as those related to the Housing Credit. The Employment & Community Development Taskforce will be co-led by Senators Rob Portman (R-OH) and Maria Cantwell (D-WA), and also includes Senators Tim Scott (R-SC), James Lankford (R-OK), Todd Young (R-IN), Ben Cardin (D-MD), Sherrod Brown (D-OH), and Catherine Cortez Masto (D-NV).

Public comments can be submitted to the Employment & Community Development Taskforce at Employment&Development_Taskforce.

To view Chairman Grassley’s press release, click here.

To view Chairman Grassley’s remarks, click here.

ACTION Submits Letter to House Financial Services in Response to Housing Infrastructure Hearing

On April 30, the House Financial Services held a hearing, Housing in America: Assessing the Infrastructure Needs of America’s Housing Stock. The ACTION Campaign submitted a letter for the record, thanking Chairwoman Waters for her dedication to affordable housing and encouraging the Committee to support the inclusion of provisions of the AHCIA bill in any infrastructure package, given the Housing Credit’s key role in financing affordable housing. Click here to view ACTION’s letter.

Director Calabria Announces Plans to Create Framework for GSE Reform

On May 14, the National Association of Realtors held a policy discussion with Director of the Federal Housing Finance Agency Mark Calabria, in which he discussed his agency’s agenda for housing finance reform. Director Calabria explained that while he would like to develop a road map for housing finance reform by the end of this year, which will include a path for releasing Freddie Mac and Fannie Mae from conservatorship by the federal government, the plan itself will not follow a strict timeline. He also announced plans to negotiate with the Treasury Department this fall on changes to the GSEs’ current preferred stock purchase agreements, which require Freddie and Fannie to deliver nearly all of their annual profits to the Treasury, using this as a step towards creating a path for ending conservatorship. This action will follow the release of the Treasury’s and HUD’s upcoming proposals for reforming the housing finance system, which are being developed in response to a recent presidential memorandum. (See our section-by-section analysis of this memo). Finally, Calabria emphasized that Fannie and Freddie will need a strong supervisory framework, successful business model and adequate capital before they are released from government conservatorship. Enterprise has released recommendations for housing finance reform that would expand support for affordable single-family and rental housing.

HUD Secretary Testifies Before House Financial Service Committee on Administration’s Priorities

On May 21, HUD Secretary Ben Carson testified before the House Financial Services (HFS) Committee for a hearing on “Housing in America: Oversight of the U.S. Department of Housing and Urban Development.” In an often times contentious hearing, members of the committee grilled Secretary Carson on a number of matters including, cuts to his agency’s budget, a proposal to increase the share of rent that low-income households must pay, roll back of affirmatively furthering fair housing, and a recent proposed rule to prohibit mixed-status families from receiving housing assistance from Section 214 covered programs. Carson countered accusations of evicting children from assisted housing due to the need to create space for “hundreds of thousands of children as well as elderly and disabled people on the waiting list who are legal citizens.” Enterprise joined housing, civil rights, and immigration organizations in opposing HUD’s proposed rule.

In a rare occurrence of bipartisanship during the hearing, committee members from both sides agreed with Secretary Carson that authorization of the Community Development Block Grant Disaster Recovery (CDBG-DR) program should be codified into law and made permanent. According to Secretary Carson, he has asked every office to look at their internal procedures to see what changes can be made to distribute funds more quickly and believes making the permanently authorizing the program would be a positive. Last Congress, Rep. Ann Wagner (R-MO-2) introduced bipartisan legislation that would permanently authorized CDBG-DR. More recently, Enterprise testified before this same committee to discuss ways of improving CDBG-DR.

Members also asked the secretary questions regarding HUD’s coordination around Opportunity Zones and the Low-Income Housing Tax Credit (Housing Credit). When asked specifically about the Housing Credit, Carson voiced support and his interest in utilizing the Housing Credit along with the Rental Assistance Demonstration (RAD) program with the Opportunity Zone tax incentive.

Senate Finance Committee Forming Bipartisan Taskforces to Examine Certain Expiring/Expired Tax Provisions, including the New Markets Tax Credit

On May 16, Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) announced that the Senate Finance Committee is forming six bipartisan taskforces to examine a total of 42 temporary tax provisions that expired, or will expire, between December 31, 2017 and December 31, 2019. This will include the New Markets Tax Credit (NMTC) which expires at the end of 2019. Of the six bipartisan taskforces, the Employment & Community Development Taskforce is expected to consider the NMTC. Enterprise will be submitting comments to the taskforce expressing the demonstrated success and importance of the NMTC and recommending its permanentextension. To learn more about the taskforces and how to support the permanent extension of the NMTC, please see this blog post.