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Potentially historic levels of affordable housing investment in proposed infrastructure plan
- Biden Administration's budget proposal
- Non-profit housing developments facing Right of First Refusal (ROFR) challenges
- Cinnaire releases paper on single-family development challenge in Wilmington, Delaware
- More policy news from Washington D.C.
- What we're reading
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Biden Infrastructure Proposal:
Historic Levels of Proposed Affordable Housing Investment
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At the moment, President Biden remains publicly open to reaching a bipartisan agreement despite any real progress in negotiations with Republicans. A group of bipartisan Senators will continue discussions in hopes of reaching an agreement, but the parties remain very far apart on how much to spend and how to pay for it.
The President's Memorial Day deadline to reach agreement has come and gone. Democrats, who want to enact some version of the American Jobs Plan this summer, will need to decide soon whether to continue pursuing bipartisan negotiations or use the party-line reconciliation process they used to pass the American Rescue Plan Act earlier this year.
If a bipartisan deal is not possible, Democrats will likely pursue a "big and bold" package. While they remain open to a bipartisan agreement, Congressional Democrats are working on a parallel track to set up the reconciliation process that will enable them to pass infrastructure legislation. For that to work, however, Democrats will need to get their entire caucus on board. With a one-vote majority in the Senate, the Democrats' infrastructure plan would need the support of progressive and more moderate members alike.
Details of the Biden Administration's Housing Infrastructure Plan
The Biden Administration recently released new details on its proposed historic $213 billion investment in affordable housing. It remains to be seen whether these proposals will be included in an infrastructure bill, and it will be up to Congress to fill in the details. The Biden plan includes:
- $55 billion for additional Low-Income Housing Tax Credit resources
- $35 billion for the HOME Investment Partnerships Program
- $12 billion for the Capital Magnet Fund
- $45 billion for the National Housing Trust Fund
- $20 billion for a new tax credit to revitalize single-family homes in distressed communities, based on the Neighborhood Homes Investment Act (NHIA)
- $2 billion for new Project-Based Rental Assistance
- $2 billion for HUD's Section 202 program aimed at increasing the supply of affordable housing for very low-income older Americans
- $2 billion for a new Community Development Block Grant (CDBG) program for communities vulnerable to climate change
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In addition to the President's multi-year infrastructure plan, the Biden Administration released his proposed annual budget for the upcoming fiscal year. The ambitious Fiscal Year 2022 budget includes several elements of the President's separate infrastructure plan and calls for a major increase in annual spending by federal agencies.
Like the President's infrastructure plans, the budget proposal could have major implications for affordable housing and community development programs. The budget calls for an increase of more than 15% for the Department of Housing and Urban Development's (HUD) programs and a 22% increase for the CDFI Fund. One new proposal from the administration is a $100 million homebuyer assistance initiative with a set-aside for a new pilot loan program to lower barriers to homeownership for first-time, first-generation homebuyers.
Details on the Administration's proposed funding levels for HUD and UDSA programs can be found here.
While the President's budget proposal is an important marker, it is just the start of discussions. Congress has the power of the purse, and key committees in the House and Senate will now begin working on their annual spending bills for federal agencies.
In conjunction with the budget release, the Biden Administration also released details on their plans for the Low-Income Housing Tax Credit (including new allocations specifically for high opportunity areas), a new Neighborhood Homes Investment Credit (NHIC), and permanence for the New Markets Tax Credit.
The proposal would create an additional type of Housing Credit authority with separate allocation for projects in high-opportunity areas.
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Cinnaire Policy Paper on the
Single-Family Development Challenge in Wilmington
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Like many communities across the country, the City of Wilmington continues to grapple with the consequences of racially discriminatory housing policies set in place by Federal, state, and local governments in the 20th century.
Wilmington’s neighborhoods have been particularly harmed by the legacy of racist policies that have fueled segregation and a vicious cycle of disinvestment, leading to the devaluation of assets and a large number of vacant properties that contribute to crime and instability in communities of color. It has never been clearer that this disinvestment dynamic requires policy action to reverse it.
Earlier this week, Cinnaire published a paper to build understanding of the barriers to bringing new investment to these communities, why policy action is needed, and what policies we think it will take to begin this important work.
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Podcasts Profile New Threats to Affordable Housing |
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Cinnaire has posted a series of three podcasts discussing the troubling trend of private equity and investors seeking windfall returns in affordable housing after Year 15. By ignoring Right of First Refusal agreements and forcing owners to either make large payment plans to retain ownership or force a sale, these profit motivated investors are jeopardizing mission-focused organizations and our nation’s affordable housing stock.
In our latest podcast, Cinnaire's Chief Strategy Officer Jim Peffley talks with Dr. Willie Logan, CEO of Opa-Locka Community Development Corp about how his organization successfully defended itself against a lawsuit filed by a property management company, the implications the litigation has for affordable housing owners across the country and how owners and developers can protect themselves and their affordable housing properties from these disturbing practices.
Listen to all three Advancing Communities Year 15 podcasts:
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More Policy News From Washington |
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Guidance on American Rescue Plan Funding for State and Local Governments
In the American Rescue Plan Act, Congress provided $350 billion for state and local governments to meet a wide range of needs resulting from the COVID pandemic. The Treasury Department issued an Interim Final Rule that provides guidance on how states and localities can use this funding. The interim final rule includes affordable housing activities in qualified census tracts (QCTs) in a non-exclusive list of eligible uses. State and local governments are determining how best to utilize these new resources, and it will be critical for affordable housing and community development advocates to encourage states to prioritize these important initiatives.
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Feds Not Moving Forward with Controversial CRA Rule
The Office of the Comptroller of the Currency (OCC), the chief regulator of the largest commercial banks, announced that it would not move forward with the agency's controversial 2020 Community Reinvestment Act (CRA) rule.
Along with affordable housing and community development industry groups, Cinnaire urged the OCC to rescind the rule.
Federal Reserve Chairman Jerome Powell indicated his agency's desire to work with the OCC and the Federal Depository Insurance Corporation (FDIC) on a joint rulemaking.
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ICYMI: Affordable Housing Credit Improvement Act Reintroduced
On April 15th, a bipartisan group of Members of Congress introduced the Affordable Housing Credit Improvement Act (AHCIA). This legislation (H.R. 2573 / S. 1136) would expand and strengthen the Low-Income Housing Tax Credit (Housing Credit), providing as many as 2,015,000 additional affordable homes over the next decade. It would also support nearly 3 million jobs and generate $346 billion in wages and business income and nearly $120 billion in local, state, and federal tax revenue. For more information on the bill, see the summary and details about each provision.
With enactment of the 4% minimum rate, focus will turn to additional changes, including an allocation increase, lowering of the 50% test, basis boosts for rural areas, and other provisions.
The Senate AHCIA is led by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR), and Rob Portman (R-OH). The House AHCIA is led by Representatives Suzan DelBene (D-WA), Jackie Walorski (R-IN), Don Beyer (D-VA), and Brad Wenstrup (R-OH).
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Senator Todd Young (R-IN) |
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Representative Jackie Walorski (R-IN) |
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President Biden released a plan to narrow the racial wealth gap, which includes several housing components.
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A new study from the Terner Center explores the complex and fragmented system of financing Low-Income Housing Tax Credit (LIHTC) housing development.
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Terner Center's latest Cost of Building Housing Research Series, titled The Complexity of Financing LIHTC Housing in the United States, presents stakeholder interviews and new data analysis.
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WBUR reported on Right of First Refusal challenges: Investors Mine For Profits In Affordable Housing, Leaving Thousands Of Tenants At Risk.
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An Urban Institute article by Mike Loftin, CEO of Homewise, Homeownership is Affordable Housing, provides a new, data-driven lens on affordable homeownership for low-income households.
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An Urban Institute blog post explains the looming senior rental crisis: The Forthcoming Senior Rental Crisis Has Implications for Federal, State, and Local Policymaking
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