House Appropriation Subcommittees Approve Funding Levels for Key Housing and Rural Development Programs

House Appropriations Subcommittee on Transportation, Housing and Urban Development recently approved a markup bill for Fiscal Year 2020 (FY20) funding levels for housing and community development programs. Members of the subcommittee provided increases to programs, while rejecting drastic cuts that the current administration proposed in the President’s budget request. Overall, the draft legislation increases HUD’s budget 13% above current levels and provides strong increases to HOME Investment Partnerships, Community Development Block Grants, and the Section 4 Capacity Building Program. Funding was also provided to voucher programs that will likely be enough to cover contract renewals. The Subcommittee on Agriculture also approved their FY20 funding bill, which includes a five million dollar increase for Section 515 and a $15.5 million increase for Housing Demonstration Preservation Program. Both bills will now move towards the full Committee for markup. For more information on funding levels and an in-depth breakdown of FY20 funding levels, please visit Enterprise’s blog.

Location Affordability Index Updates

HUD is pleased to announce the publication of Version 3 of the Location Affordability Index (LAI)dataset. The LAI is a nationwide database of modeled household housing and transportation costs launched by HUD and DOT in 2013, and now updated, with the goal of providing greater insight into how these costs vary by geographic and household characteristics. Version 3 primarily uses data from the 2012-2016 American Community Survey (in addition to updating data from other Census products, the National Transit Database, and Illinois EPA odometer data) to synthesize a database covering all fifty states and the District of Columbia. Version 3 models the LAI at the Census tract level (rather than the block group level used in Versions 1 and 2) and includes income percentiles for each household profile relative to tract income distribution to help users better understand how applicable LAI estimates for each representative household are to any given Census tract.

The LAI has seen significant use since its initial release in 2013. Policymakers have used this data for local and regional transportation and land-use planning. It has also been used by a number of researchers for a variety of topics. In 2016 it was the focus of a special Location Affordability double issue of Housing Policy Debate, which included new research on the impact of location affordability on residential mobility (especially for low-income households and recipients of Federal housing subsidies); the effect of location affordability on mortgage default risk for low-income households; the role of location affordability in predicting regional real estate investment activity; and the role of transportation systems in housing affordability, with a particular focus on walkability and transit. Lastly, the LAI has proved valuable to software developers because it makes a large amount of Census data on demographics and the built environment available via web service.

The data can be accessed via the LAI page on HUD Exchange or directly from HUD’s Enterprise GIS Open Data Portal.

Numbers of the Day

From our friends at the OKPolicy Institute…

438,000 – Estimated number of Oklahoma workers who would directly benefit if the minimum wage was increased to $15 by 2024

22.6% – Percentage of Oklahoma citizens age 18 to 24 who voted in November 2018 elections, third lowest in the nation.

590 – Number of municipal governments in Oklahoma (2017)

$121 – Average annual loss for the average state EITC recipient in Oklahoma since the credit was made non-refundable in 2016

More than $173,000 – Amount of SNAP benefits that were used at farmer’s markets across the state in FY 2018

Changing inflation measurement for poverty limits

OMB is considering changing the inflation calculation that is used to adjust the Official Poverty Measure every year. It seeks public comments for consideration by a working group it has assembled to make a recommendation. The poverty guidelines that determine eligibility for a number of housing programs are calculated based on the Official Poverty Measure, so a change in the OPM would lead to a change in eligibility. Comments are due June 25. For more information, contact Bob Sivinski, OMB, 202-395-1205.

New Report Finds Expansion of Housing Vouchers Could Play Major Role in Reducing Child Poverty

The Children’s Defense Fund (CDF), a leading non-profit child advocacy organization and Steering Committee member of the Opportunity Starts at Home multi-sector affordable homes campaign, released a new Ending Child Poverty Now report affirming that greater investments in affordable housing are necessary to end child poverty in America.

New Study Examines Public Housing Authorities Operating in the Private Market

A new study published inHousing Policy Debate, “Public Housing Authorities in the Private Market,” examines the factors that impact the involvement of public housing authorities (PHAs) in owning housing outside of the traditional HUD-assisted stock and the extent to which this occurs. PHAs owned more than 150,000 housing units outside of the traditional HUD-assisted stock in 2013.

Affordable Housing Credit Improvement Act Reintroduced

The Affordable Housing Credit Improvement Act of 2019 was introduced on June 4th. The legislation is bipartisan and bicameral. On the Senate side, Senators Maria Cantwell (D-WA); Johnny Isakson (R-GA); Ron Wyden (D-OR); and Todd Young (R-IN) introduced S. 1703. The companion bill, H.R. 3077, was introduced in the House by Representatives Suzan DelBene (D-WA); Kenny Marchant (R-TX); Don Beyer (D-VA); and Jackie Walorski (R-IN).

The new bills retain the provisions from S. 548, affordable housing legislation introduced in the 115th Congress, but make important improvements and enhancements. Key provisions carried forward include:

  • A 50 percent increase in housing credit allocations, phased in over five years.
  • A permanent minimum 4 percent rate for credits used to finance acquisitions and housing bond-financed developments.

H.R. 3077 and S. 1703 contain several new provisions, including:

  • Giving states the ability to provide up to a 30 percent basis boost to properties in rural areas if needed for financial feasibility.
  • Allowing states to provide up to a 30 percent basis boost for bond-financed properties if necessary for financial feasibility.
  • Clarifying the general public use language to ensure that bonds can be used to develop properties specifically for veterans and other specific populations.
  • Allowing states to use recycled multifamily bond proceeds to finance homeownership through Mortgage Revenue Bonds, therefore allowing more new bond cap for multifamily production that would be eligible for the 4 percent credit authority.
  • Aligning the housing credit statute with the Violence Against Women Act to better protect domestic violence victims in affordable housing properties.
  • Ensuring that cost reasonableness will be considered as part of selection criteria.

We are working with the industry and the ACTION Campaign to encourage Members of Congress to cosponsor this very important legislation.

Ground-breaking events, ribbon-cuttings, and property tours are a great way to educate Members of Congress about the credit. Please look for opportunities to show your elected officials what you are doing in their districts and states, and encourage them to support S. 1703 and H.R. 3077. To cosponsor S. 1703, Senate offices may contact Lara Muldoon (Senator Cantwell) at (202) 224-3441, and to cosponsor H.R. 3077, House offices may contact Victoria Honard (Rep. DelBene) at (202) 225-6311. You may find a Section by Section description of the bill here which you should feel free to share with congressional staff and colleagues. Please let us know of any conversations you have with Members of Congress or their staff about cosponsorship. Thank you.

Financing Affordable Home Ownership

A new report from the real estate consulting firm RCLCO reveals a profound disconnect in the housing market, with significant implications for anyone involved in financing affordable homeownership.

RCLCO notes that consumer preference studies suggest lower- and middle-income households in search of “attainable” housing will accept (and some may prefer) smaller homes in denser neighborhoods, so long as the location and amenities of the community are appealing.

Yet the firm finds the homebuilders and developers it surveyed believe the most effective ways they can meet needs for new entry-level homes run in the opposite direction. “The opinion of the industry is that the top three solutions are limiting community amenities, providing lower-quality finishes, and locating homes in less desirable areas.”