Call for Action: SB1713 Aesthetic Design

SB1713 related to aesthetic design requirements by municipalities is scheduled to be heard in the Senate Business, Commerce, Tourism Committee today, Thursday, February 20th at 10:30am in Room 419-C. CLICK HERE to view the Committee Agenda. CLICK HERE for a list of Committee Members.

Senate Bill 1713 provides the opportunity to increase the inventory of much-needed attainable, workforce housing across the State of Oklahoma. The vision of the Oklahoma Coalition for Affordable Housing is that all residents have the opportunity to live in safe, healthy and affordable homes. Our members are dedicated to the creation of safe, healthy and affordable housing for all Oklahomans, in order that our children, families, and seniors might thrive.

According to the 2015 Oklahoma Statewide Housing Needs Assessment, Oklahoma needs:

  • 43,942 Housing Units for Homeownership – 7,454 of these for households earning 60% of the Area Median Income (AMI) or less
  • 22,879 Housing Units for Rentals – 11,630 of these for households earning 60% AMI or less

At the time of the study, 40.01% of Oklahoma renters and 19.12% of homeowners are cost overburdened, meaning they pay 30% or more of their income towards housing. SB1713 would not take away a city’s right to exercise their control of providing for the orderly and wise development of a city, affording adequate facilities for housing, transportation, distribution, comfort, convenience, and most importantly, the health, safety, and welfare of its citizenry. Furthermore, SB1713 does not affect building codes, safety codes, or property values.

SB1713 is a bill that creates and encourages transparency among city government by protecting property owners’ rights to build and buy housing that remains affordable for our hometown heroes: our teachers, police, firemen, and nurses. SB1713 keeps government from interfering with the purely aesthetic building and design of a home.

Source: http://nahbnow.com/2020/02/housing-affordability-crisis-explained-in-one-graph/

Applying conventional underwriting standards that the cost of a mortgage, property taxes and property insurance should not exceed 28% of household income, NAHB economists have calculated how many households have enough income to afford a home at various price thresholds.

The housing affordability pyramid shown reveals that 63 million households out of a total of 120 million are unable to afford a $250,000 home. At the base of the pyramid are 25.4 million U.S. households with insufficient incomes to be able to afford a $100,000 home. The pyramid’s second step consists of 20.0 million with enough income to afford $100,000 but not $175,000, and so on up the pyramid.

Adding up the bottom three steps shows that there are 63 million households who cannot afford a $250,000 home. This helps put affordability concerns into perspective and goes a long way toward explaining the result published in last September’s Eye on Housing post, that 49% of home buyers are looking to buy homes priced under $250,000.

In January, NAHB released its new Priced-Out Estimates for 2020. A previous Eye on Housing post discussed the often-cited estimate that a $1,000 increase in the price of a median-priced new home will price 158,857 U.S. households out of the market for the home. A second post discussed the related estimate that a quarter point increase in the mortgage rate will price out 1.3 million.

SB1713 is a bill that creates and encourages transparency among city government by protecting property owners’ rights to build and buy housing that remains affordable for our hometown heroes: our teachers, police, firemen, and nurses. SB1713 keeps government from interfering with the purely aesthetic building and design of a home.

Across Oklahoma, there is a shortage of homes affordable and available for all income levels, including those earning 60% or less of the Area Median Income. Many of these households are cost burdened, spending more than 30%, and in some cases, more than 50% of their income on housing. Cost burdened households are more likely to sacrifice other necessities like healthy food and healthcare. SB1713 will keep homes affordable for all Oklahomans.

If aesthetic design requirements is of consequence to you, your business or your clients, please contact your State Senator and Senators that are members of the Committee and request they support this legislation and the preservation of housing options for Oklahoman’s at all income levels.

For a more complete description of the methodology underpinning NAHB’s latest priced-out estimates, please consult the full study published in HousingEconomics.com

NOTICE OF 2020 HOME PROGRAM APPLICATION DATES

NOTICE OF 2020 HOME PROGRAM APPLICATION DATES

Please take note of the following important dates for the 2020 HOME Program Application:

February 7, 2020 OHFA Staff will post a draft of the 2020 HOME Program Application on the OHFA website, www.ohfa.org

February 28, 2020 OHFA Staff will post the final version of the 2020 HOME Program Application on the OHFA website, www.ohfa.org

March 16, 2020 2020 HOME Program Application Training Workshop

10:00 a.m. 100 NW 63rd Street, Oklahoma City, Will Rogers Conference Room

April 1, 2020 OHFA will begin accepting applications for 2020 HOME Program Year funds.

May 1, 2020 Deadline to apply for consideration at the July meeting of OHFA’s Board of Trustees. (Applications received after that date will be considered at a later Board meeting if there are still funds available.)

If you have any questions, please contact Danette Carr, Housing Development Allocation Supervisor.

Contact information:

(405) 419-8136 danette.carr

Written comments on the 2020 HOME Application draft will also be accepted through close of business on February 21, 2020. Written comments may be sent via email to danette.carr or by regular mail to the Oklahoma Housing Finance Agency at 100 NW 63rd Street, Suite 200, Oklahoma City, OK, 73116, attention Danette Carr.

All interested parties are welcome to attend the March 16, 2020 Application Training Workshop. Registration is not required.

HUD Guidance on Assistance Animals

On January 29, 2020, HUD issued updated guidance on the topic of assistance animals as a reasonable accommodation. The new guidance provides clarity on some of the complex issues that property owners, property managers, and tenants have encountered. This updated guidance can be found on HUD’s website at https://www.hud.gov/sites/dfiles/PA/documents/HUDAsstAnimalNC1-28-2020.pdf (PDF).

HUD also released a fact sheet to accompany the new guidance. This additional document can be found on HUD’s website at https://www.hud.gov/sites/dfiles/PA/documents/AsstAnimalsGuidFS1-24-20.pdf (PDF).

from our friends at NCSHA – NCSHA Recommends Regulatory Reforms of Housing Programs to Trump Administration

NCSHA Recommends Regulatory Reforms of Housing Programs to Trump Administration

On January 31, NCSHA submitted comments to the White House Council on Eliminating Regulatory Barriers to Affordable Housing recommending specific steps the Departments of Agriculture, Housing and Urban Development, and Treasury can take to streamline and improve federal housing programs. These actions would lead to more affordable housing production with reductions in cost and administrative burden.

NCSHA’s comments, summarized in this chart, suggest modifications to critical housing programs including the Low Income Housing Tax Credit (Housing Credit), Mortgage Revenue Bonds, Mortgage Credit Certificates, FHA single-family insurance, the FHA-HFA Risk-Sharing program, the HOME Investment Partnerships program (HOME), the Housing Trust Fund (HTF), rental assistance, the Section 811 program, and Rural Housing Service programs, as well as to cross-cutting federal requirements. All the changes NCSHA suggests can be accomplished through the regulatory process without the need for congressional action.

NCSHA’s recommendations include:

  • Rescinding the current Housing Credit compliance monitoring regulations published last year and issuing a new rule with full opportunity for public comment
  • Empowering states to determine when a Housing Credit foreclosure is for the express purpose of terminating the affordability restrictions on the property
  • Reinstating the HUD-Federal Financing Bank 542(c) Risk-Share Program
  • Prorating the state/local repayment obligation under HOME and HTF according to how long the property was in compliance with program rules
  • Revising the Community Housing Development Organization requirements under HOME
  • Ensuring better alignment of HUD programs with the Housing Credit
  • Removing the face-to-face meeting requirement from the HUD FHA single-family mortgage insurance program
  • Simplifying the Section 811 program for persons with disabilities

LIHTC Market Shows Strong Key Fundamentals

CBRE Affordable Housing Research – Affordable Housing Brief – January 2020

CohnReznick, LLP recently released its eighth annual comprehensive report on the performance of apartment properties financed with federal low-income housing tax credits (LIHTCs). Using the data provided from a large pool of syndicators, operators, and investors, CohnReznick has assembled a database of more than 21,000 housing credit properties consisting of 1,553,683 LIHTC units in all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. We have briefed the CohnReznick survey results for five consecutive years with a concentration on the operational metrics set out in the report: physical occupancy, economic occupancy, debt coverage ratio (“DCR”), and per unit net cash flow.

For more information, download the full brief.

Progressive House Members Release Affordable Housing Platform

Progressive House Members Release Affordable Housing Platform

February 5, 2020

Representative Earl Blumenauer (D-OR) has been joined by other progressive House members — Representatives Pramila Jayapal (D-WA), Jesus “Chuy” Garcia (D-IL), Alexandria Ocasio-Cortez (D-NY), Ilhan Omar (D-MN), Ayanna Pressley (D-MA), and Rashida Tlaib (D-MI) — in releasing a framework for addressing the affordable housing crisis, which the authors call the People’s Housing platform. The platform contends that housing is a human right and federal affordable housing policy has been insufficient to address housing needs. It prescribes numerous steps the federal government should take to invest in affordable housing.

The details of the People’s Housing platform are set forth in a report the Congresspeople released, “Locked Out: Reversing Federal Housing Failures and Unlocking Opportunity,” spearheaded by Blumenauer. The report includes a menu of policy recommendations, including the following.

Public Housing

  • Quadrupling the Public Housing Capital Fund to address all existing and anticipated capital needs of the public housing stock
  • Eliminating the Rental Assistance Demonstration program once public housing capital needs are met
  • Repealing the Faircloth Amendment, which limits new public housing construction
  • Creating a new Public Housing construction fund

Homelessness

  • Providing federal funding incentives to states for enacting “Housing First” policies
  • Doubling federal homeless assistance funding
  • Permanently authorizing and increasing funding for the U.S. Interagency Council on Homelessness
  • Expanding legal services for unjust evictions and providing funding for eviction protection

Rental Housing

  • Creating a renter’s tax credit
  • Making the Section 8 Housing Choice Voucher program an entitlement
  • Doubling the Housing Credit volume cap and setting a minimum 4 percent rate for bond-financed Housing Credit properties
  • Providing incentives for state rent control policies
  • Tripling funding for the Section 202 and Section 811 programs

Homeownership

  • Turning the mortgage interest deduction into a credit
  • Creating a loan guarantee program to help first-time homebuyers living in formerly redlined or segregated areas
  • Reinstating the First-Time Homebuyer Tax Credit, which had been available from 2008 until 2011

Fair Housing

  • Providing federal incentives to communities that end exclusionary zoning
  • Finalizing the Obama-era Affirmatively Furthering Fair Housing protections
  • Amending the Fair Housing Act to prohibit housing discrimination on the basis of sexual orientation, gender identity, marital status, veteran status, immigration status, and source of income
  • Removing barriers to federal housing assistance for people with criminal records
  • Increasing Fair Housing Act enforcement

A one-page summary of the report can be found here.

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U.S. Faces Growing Rental Affordability Challenges According to New Harvard Report

On January 31, Harvard University’s Joint Center for Housing Studies (JCHS) released its 2020 edition of “America’s Rental Housing” report. The new report shows that, despite slowing demand and the continued strength of new construction, rental markets in the United States remain extremely tight. According to JCHS, vacancy rates are the lowest in decades, the number and share of cost-burdened renters are again on the rise, and the number of people experiencing homelessness is also increasing. These conditions mark significant market changes since the Great Recession, including an influx of higher-income households, constraints on new supply, and substantial losses of low-cost rental units.

JCHS hosted its report release at the Federal Reserve Bank of Minneapolis, with remarks by Minnesota Lieutenant Governor Peggy Flanagan, Minneapolis Mayor Jacob Frey, Minneapolis Federal Reserve President and CEO Neel Kashkari, and MacArthur Foundation’s Mijo Vodopic. JCHS’s release also featured a panel discussion about the report and how public and private partners are working together to provide affordable rental housing. Minnesota Housing Commissioner Jennifer Ho participated on this panel, alongside Tony Barranco from Ryan Companies, Conor Dougherty from the New York Times, Chris Herbert from JCHS, and Deidre Schmidt from CommonBond Communities.

New Construction Focuses on Higher End of Market

According to the report, households with incomes at or above $75,000 accounted for more than three-quarters of the growth in renters (3.2 million) from 2010 to 2018. The report also found that new construction continues to target the high end of the market, with the median monthly rent for units completed in 2018 at over $1,600 (78 percent higher than the $900 median contract rent for all units in 2018). JCHS argues that, while these higher rents may be partly explained by the growth in demand from higher-income renters, the rising cost of housing development is also clearly responsible. As shown in the figure below, the price of vacant land doubled between 2012 and 2019, and the rise in construction costs well outpaced inflation as measured by the Consumer Price Index.
America's Rental Housing 2020: Figure 19

Fewer Affordable Options for Lower-Income Households

The JCHS report finds the U.S. rental market remains extremely tight, with vacancy rates at the lowest level since the mid-1980s and rents continuing their climb for the seventh year straight. The report also sounds the alarm about the substantial loss of low-cost unsubsidized rental units. The number of units renting for less than $600 a month fell by 2.4 million between 2000 and 2017, reducing the low-cost share of the national rental stock from 37 percent to 25 percent. These large declines in the stock of low-cost units continue to restrict the supply of affordable housing across the country.

The country is also at risk of losing some of its subsidized affordable housing stock. According to JCHS tabulations of the National Housing Preservation Database (created by the Public and Affordable Housing Research Corporation and the National Low Income Housing Coalition), the affordability restrictions on 935,000 subsidized rentals could expire by 2030. This includes 529,000 Low Income Housing Tax Credit (Housing Credit) and 266,000 project-based Section 8 units. In five states — Montana, North Dakota, Oregon, South Dakota, and Wisconsin — contracts could expire on more than a quarter of subsidized units with end dates. These projected losses far surpass losses in recent years, which the report estimates at less than 50,000 from 2014–2018.

Cost-Burdened Households on the Rise Again

After three years of modest declines, the number of renters who are cost-burdened (paying at least 30 percent of income for housing and utilities) edged up in 2018. According to JCHS, one in four renters is severely cost-burdened, spending more than half of their income on rent.

The report also finds that this cost burden is rising among middle-income households, jumping 5.4 percentage points between 2011 and 2018, and that this rise is increasingly common in large metropolitan areas.

The consequences of cost burden, however, are more dire for lower-income households. After paying rent, the median renter earning less than $15,000 in 2018 had just $410 left on average each month to cover all other necessities, including food and medical care. These households have no ability to absorb a financial shock, teetering on the edge of homelessness.

According to the 2017 American Housing Survey, 1.9 percent of renters — including 1.4 million adults and 810,500 children — reported being threatened with eviction over the previous three months. The share is especially high among renters making less than $30,000, and particularly among black households. Eviction can ultimately end in homelessness, and JCHS’s report finds that, after falling for six straight years, the number of people experiencing homelessness nationwide grew in 2016–2018 to 552,830.

JCHS also found that 8.1 million renter households do not have the financial resources to evacuate their homes if a disaster strikes.

Federal Investments Not Keeping Pace with Need; States Increasing Efforts

Federal funding for affordable rental housing has not kept pace with the need. According to HUD’s latest data (cited in the report), the mismatch between supply and demand left 8.3 million very low-income renters with severe cost burdens and/or living in housing with serious deficiencies.

The report also explains, while Congress provided a modest funding increase to federal rental assistance programs between 2014 and 2018, because the cost of assistance rose along with an increase in fair market rents during this time, the result was actually a slight drop (0.4 percent) in the number of households receiving that assistance.

State and local governments have tried to step in with various funding and regulatory tools to help produce and preserve affordable rental housing. According to the report, tax-exempt bond issuances for affordable multifamily housing have risen dramatically, averaging $2.4 billion annually in 2017 and 2018. State agencies, including HFAs, accounted for about half of total issuances in 2018.
America's Rental Housing 2020: Figure 34
Even with these state and local responses, more must be done to address the affordable rental housing crisis. The report highlights several private-sector initiatives but argues these are not an adequate-enough response. Instead, JCHS concludes that only the federal government has the scope and resources to provide housing assistance at a scale appropriate to address the need.

Comptroller of the Currency Otting Testifies Before the House Financial Services Committee

Comptroller of the Currency Otting Testifies Before the House Financial Services Committee

On January 29, Comptroller of the Currency Joseph Otting testified before the House Financial Services on the Federal Deposit Insurance Corporation’s (FDIC) and the Office of the Comptroller of the Currency’s (OCC) joint notice of proposed rulemaking (NPR) to modernize the Community Reinvestment Act (CRA). In his testimony, Otting discussed the NPR’s major proposed changes to the CRA regulations: 1) clarifying what type of activities count for CRA credit; 2) updating the definition of CRA assessment areas; 3) evaluating CRA performance more “objectively,” requiring the assessment of retail lending distribution and the impact of CRA activities; and 4) improving the transparency and timeliness of CRA reporting. Some critics of the NPR argued that the proposed changes would weaken banks’ accountability for serving their communities by relying on a single metric in determining bank’s CRA rating, straying from the law’s focus on low- and moderate-income (LMI) communities, and allowing banks that fail in as many as half of its assessment areas to pass CRA evaluations. Otting pushed back, claiming that the opposition to the rule change is based on “misperceptions.”

Support for these proposed changes among Committee members was largely split along party lines. Chairwoman Maxine Waters (D-CA-43) argued that the proposed changes would lead to “widespread bank disinvestment from low- and moderate-communities throughout the country” and urged the two U.S. banking regulators to extend the NPR’s public comment period to at least 120 days to allow for a “heightened level of public scrutiny.” Other objections that were raised by lawmakers during the hearing included: disincentivizing investments in and lending to community development activities in LMI areas by enacting a 2% threshold for such CRA activities as well a single ratio evaluation process; continuing to consider activities perceived to be outside of the original intent of the law (like building stadiums in distressed areas) as eligible CRA activities; providing banks with CRA credit for eligible volunteer hours on a one-to-one basis; discouraging maintaining and creating local branches by amending the definition of assessment areas; and creating two separate CRA rating systems by moving forward without the Federal Reserve Board’s (the third banking regulator’s) approval on these changes.

Public comments on the NPR are due on Monday, March 9. Enterprise, along with its partners, will closely monitor efforts to modernize the CRA and will continue to encourage regulators to emphasize robust investment in affordable housing and community development programs that create opportunity for LMI people. For more information, stay tuned to Enterprise’s blog and sign up to receive our policy newsletters.

Read Otting’s testimony before the House Financial Services and Rep. Water’s opening statement at the hearing, and learn more about the hearing in an American Banker article.

House Ways & Means Committee Hearing on Infrastructure Stresses Importance of Housing Credit; House Democrats Release $760 Billion Infrastructure Framework

House Ways & Means Committee Hearing on Infrastructure Stresses Importance of Housing Credit; House Democrats Release $760 Billion Infrastructure Framework

Last month, the House Ways and Means Committee held the hearing, “Paving the Way for Funding and Financing Infrastructure Investments.” At the hearing, a number of Ways and Means Committee members voiced strong support for the Housing Credit, including Chairman Richard Neal (D-MA-01) and Representatives Suzan DelBene (D-WA-01), Dwight Evans (D-PA-03) and Stephanie Murphy (D-FL-07). The ACTION Campaign released a statement ahead of the hearing urging committee members to ensure that any infrastructure bill includes a housing title, and that the housing title make central the Affordable Housing Credit Improvement Act (AHCIA). It highlights the important role that the Low-Income Housing Tax Credit (Housing Credit) plays in combating the affordable housing infrastructure deficit across the country, stressing that safe, affordable housing is a vital part of our nation’s infrastructure.

Representative DelBene, lead cosponsor of the AHCIA, submitted ACTION’s statement in support of the Housing Credit to the record. She stated: “Safe and affordable housing is a critical part of our nation’s infrastructure, and like roads and bridges, affordable housing is really a long-term economic development asset.” Chairman Neal also made a strong case for the Housing Credit: “We need to remember that when we invest in infrastructure, we need to do so fairly. Infrastructure is not only about financing public projects, but it is also about encouraging economic development and revitalizing struggling communities. We must continue to reinvest in both urban and rural neighborhoods through successful programs like the Low-Income Housing Tax Credit, the New Markets Tax Credit, and indeed the Historic Tax Credit. I have been a longtime supporter of these initiatives because they have real, positive impacts on our communities.” Representative Evans, a cosponsor of the AHCIA, also stressed the importance of affordable housing, stating: “None of us are home until all of us are home.” Representative Murphy, another AHCIA cosponsor, expressed the need for the Housing Credit in her district, stating: “My constituents…face the most severe affordable housing shortage in the country, yet another outcome of underfunded infrastructure in the United States.”

Witness Laura L. Canter, Executive Vice President and Division Director of the Finance Programs Division at the Massachusetts Development Finance Agency, explained how the 4 percent credit minimum, a provision of the AHCIA, is crucial to the success of the program. She stated, “The 4 percent credit is basically tied to the federal cost of borrowing…with interest rates being so low, it’s not 4 percent anymore, its much lower, it’s closer to 3. So, if we knew that 4 percent was the floor, [projects] wouldn’t have to wait and see what their credit would be depending on what interest rates are when projects close.” Witness Dr. Phillip Fischer of eBooleant Consulting LLC and Former Head of Fixed Income and Municipal Bond Strategy agreed that a 4 percent minimum would be beneficial, stating: “Increasing the certainty of the cash flows would reduce cost.” Ms. Canter concluded by stressing that “The [Housing] credit is well understood by the market. It’s a mature program… The only trouble with the program is there simply isn’t enough of it… The program itself works.”

That same day, House Democrats released a five-year, $760 billion infrastructure framework, titled “Moving Forward.” In addition to a heavy focus on transportation and clean energy, the plan identifies the expansion of existing tax credits as a key infrastructure need, including “housing investments incentivized by the low-income housing tax credit.” The more detailed infrastructure package is expected to be released in May. The ACTION Campaign will continue to advocate for any infrastructure proposals to include key provisions from the AHCIA.

Watch the W&M hearing here.
Read the ACTION statement here.
Read the Moving Forward Framework here