Industry Insight - February 2021 |
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Note from the Executive Director |
It may not be everything we need, but it’s certainly progress.
After Congress acted in December (finally) to direct $2.6 billion in rental relief to California, the Legislature and Governor moved quickly to craft legislation that will keep struggling renters housed—while also supporting providers of essential affordable housing.
The final bill, SB 91, which passed last week only a few days before the state’s eviction moratorium expired, provides a much-needed backstop for vulnerable tenants and housing providers, while also directing funding where it’s needed most: starting with households earning under 50% of area median income.
Is the bill perfect? I’ll say this: It’s a perfect example of how the federal government and state can work in partnership to help millions of Californians struggling through this pandemic. It’s what we need to get through the next few months, and it’s to the credit of affordable housing champions like Asm. David Chiu and others that the state saw this opportunity—and acted on it.
As these financial resources start to go out, I hope this decisive, targeted approach is also a model for how we can respond to this crisis going forward—with a new president and a new legislative session underway.
The White House’s proposed stimulus package includes another $30 billion for renters and affordable housing providers—and Speaker Pelosi says she’s aiming to pass the bill before the end of February. Asm. Chiu plans to “revisit” the state’s rent relief legislation to address gaps and provide assistance to those who need it. In Sacramento, with the bill introduction deadline only a few weeks away, other members of the Legislature are doing the same—from Senate President Pro Tem Toni Atkins, whose new bond, SB 5, could help build tens of thousands of affordable housing units, to Asm. Richard Bloom, whose AB 115 would greatly expand the number of sites available to build it.
We are in the midst of a terrible crisis, and there is a long way to go.
The good news is, many of our leaders recognize it—and they are starting, at last, to take action.
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Sincerely,
Ray Pearl
Executive Director
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Governor Newsom signed a bill extending California’s eviction moratorium through at least June 2021 and created a new program for distributing $2.6 billion in federal rent relief to lower-income tenants and property owners. The legislation, SB 91:
- Allows tenants to avoid eviction if they pay at least 25% of the rent they owe per month.
- Allocates California’s share of the $25 billion in rent relief approved by Congress in December: Under the state’s new program, landlords will be to collect up to 80% of unpaid rent during the pandemic—provided adequate funds are available.
- Prioritizes communities disproportionately impacted by COVID-19, with the first round of funding being made available to households earning under 50% of area median income. Additional funding rounds will include households earning under 80% of AMI.
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A detailed bill analysis prepared by the Senate Budget and Fiscal Review Committee on SB 91 is here. CHC’s response to the legislation is here.
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Assemblymember Richard Bloom has formally reintroduced a CHC-sponsored bill, AB 115, that would make housing an allowable use on site zoned for commercial purposes. A similar bill authored by Asm. Bloom passed the Assembly last year with a vote of 52-14 but was pulled from consideration in the Senate due to political issues. The bill will be heard first this year in the Assembly Housing and Community Development Committee.
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Federal Update with David Gasson, Housing Advisory Group |
This is the update I looked forward to writing after the November election and before the events of January 6th. Please allow me this brief moment on the soap box.
The storming of the U.S. Capitol, a building that holds a special place in my heart after working in it for almost ten years, were both unfathomable and heartbreaking. Many of you have been to the Capitol building at least once for our annual Housing Advisory Group reception, for a meeting with Speaker Pelosi or another Member or staff, or just as a tourist. It is the heart of our democracy and I have never not been in awe when in its halls. What legal sanctions result from that day will be determined by others but for me, it reinforced the importance of being honest, having integrity and supporting those that put country first.
So, unexpected by most everyone, Jon Ossoff and Raphael Warnock won the two Senate seats in Georgia, thus giving the Democrats the majority in the U.S. Senate. Now that the negotiations over how the Senate will be organized have been resolved, we have Finance Committee Chairman Ron Wyden (D-OR), Banking Committee Chairman Sherrod Brown (D-OH), Budget Committee Chairman Bernie Sanders (I-VT) and Appropriations Committee Chairman Patrick Leahy (D-VT). For our housing agenda, this is almost a best-case scenario. I say almost because with the Senate split 50/50, all committees will have an equal number of Republicans and Democrats making for very interesting negotiations on all the spending and tax bills. While affordable housing enjoys strong bi-partisan support, the cost of some of our proposals will dictate quite a bit of tap dancing to get the next version of the Affordable Housing Credit Improvement Act (AHCIA) through the legislative process. I will not take the time or your patience to explain the possible scenarios by which the bill may become law as we will have time to do that on forthcoming Zoom calls and conferences (look up reconciliation and the Byrd Rule for fun) but I will say we have our priorities set and are in sync with our champions on the Hill.
With the permanent fixed 4% LIHTC checked off the list (thank you all for your efforts on that accomplishment) we now focus on expanding its effectiveness as well as increasing resources in the 9% program. I can tell you with 99% certainty that a reduction of the 50% test will be included in the new version of the AHCIA. We have some work to do with the Joint Committee on Taxation but there is universal support for it within the industry and on the Hill. That along with the recycling bond provision (already part of the AHCIA) would go a long way to expanding bond resources.
A 50% increase in the 9% LIHTC over two years is also on track for inclusion in the bill but we are pushing for the increase to be phased in over two years instead of five. In addition, the 12.5% increase we secured as part of the 2017 tax bill expires at the end of this year, so we are including its permanent extension, continuing it as the baseline for any additional allocation we secure. We are working on the text of the bill now and hope to have it out for distribution soon.
As for timing, it is unlikely any of our tax provisions will be included in the COVID relief package soon to be debated on Capitol Hill. It is likely we will be part of the Infrastructure/Stimulus/Recovery bill that is being worked on and will see action later this year. This bill will have many pieces, but rest assured we are very much in the mix and Finance Committee Chairman Wyden, Ranking Member Crapo & Ways and Means Chairman Neal are on board with our efforts to secure more housing resources.
It is going to be a very interesting year, hopefully only in good ways, as we work toward securing more resources for affordable housing. I am so appreciative of your efforts and support. As I have said many times at our in-person gatherings, the LIHTC is a winner. I look forward to the year ahead and our shared efforts to expand housing production.
Be well.
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Affordable Housing in the News |
This month's affordable housing news articles were focused on regional efforts to update their housing plans in preparation for the 2021-2029 RHNA cycle—as well as the Governor’s proposed new “Housing Accountability Unit,” which will be charged with ensuring millions of new housing units in these plans are actually built.
The budget includes $4.3 million for HCD to support governments seeking to meeting planning and zoning requirements. “We know the numbers weren’t met in the (current) cycle, but most importantly we look forward to the (next) cycle where the numbers are much greater—but the assistance that the state can render to local jurisdictions will also be much greater,” HCD director Gustavo Velasquez told the Orange County Register. “Helping local governments clear the regulatory path for responsible residential development is essential to yielding actual construction of new housing units.”
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Each new year marks the new age of boardmembers as we say hello and goodbye to a variety of dedicated members of our industry.
We can't say thank you enough to outgoing boardmembers Lynn Hutchins of Goldfarb Lipman, Jim Kroger of Novogradac, Richard Gertwitz of Citi and Carol Galante from the Terner Center. We appreciate your involvement, support and hard work while on serving on our Board!
And welcome to our three new boardmembers!
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Adhi Nagraj
McCormack Baron Salazar
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Ben Metcalf
Terner Center for Housing Innovation
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Sindy Spivak
Bank of America Merrill Lynch
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California Housing Consortium
30141 Agoura Road, Suite 106
Agoura Hills, CA 91301
818-735-9551 phone
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Sacramento Office
1107 9th Street, Suite 710
Sacramento, CA 95814
916-272-2325 phone
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