Weekly update from the National Housing Conference
News from Washington
Several affordable housing measures approved at local level

Voters approved affordable housing measures in cities and states across the country on election day this week. Residents of Ann Arbor, Michigan, passed a 20-year new affordable housing tax to raise roughly $160 million over the next 20 years towards the construction of an estimated 1,500 affordable housing units. Voters in San Francisco, California, one of the least affordable housing markets in the country, approved Proposition I and K, including a property sales transfer tax increase, to support the construction, renovation and preservation of affordable housing units in the city. At the state level, Californians rejected Proposition 21, which would have placed new restrictions on rent increases.

More than 70% of voters in Raleigh, North Carolina, approved an $80 million affordable housing bond. The majority of the bond funds will go towards the purchase of land for affordable housing development ($16 million), public-private partnerships ($28 million) and funding for nonprofits and affordable housing developers ($24 million). “We are thrilled,” said Raleigh Mayor Mary-Ann Baldwin. “More than anything, I think it indicates a true compassion for people…and our homeless people, our most vulnerable families, our families living in hotels.”
New study quantifies the minority appraisal gap

A new study published by Oxford University Press spotlights the appraisal gap between White and minority homeowners, specifically Black and Latinx households, which has nearly doubled in recent decades. The study finds that the valuation gap, which was $86,000 in 1980, grew to $164,000 in 2015, and cites the popular property sales comparison model as a key contributor to the disparity.

In instances where the comparison includes home sales that pre-date fair housing laws, the valuation may be negatively impacted. “Without adjusting the price, you literally baked into the system the racialized element and continued it,” said Junia Howell, study co-author and assistant professor at the University of Pittsburgh.

Several appraisal organizations, including the Appraisal Institute, American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the Massachusetts Board of Real Estate Appraisers, recently announced plans to partner to combat unconscious bias in appraisal practices. The participating organizations will revamp appraiser training and review their governing ethics documents. “During this important time in our nation’s history, our organizations stand together to enhance existing training and ethics initiatives and work even harder to ensure that the appraisal process is free of bias or discrimination of any kind,” said Appraisal Institute President Jefferson Sherman.

“The reality is White homeowners have gotten very specific benefits over time that accumulate," NHC’s David Dworkin told participants at a National Association of Real Estate Brokers event; these benefits include advantages in property valuation.
Lawmakers sound the alarm on utility shutoffs

Sens. Sherrod Brown (D-Ohio), Chris Van Hollen (D-Md.), Dianne Feinstein (D-Calif.), Ron Wyden (D-Ore.), Bernie Sanders (I-Vt.), Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.), and Tina Smith (D-Minn.) sent letters to CEOs at 22 of the largest utility companies in the U.S. urging them to halt the shutoff of basic utilities, including electricity, water and broadband, during COVID-19.

“Because of the economic devastation wrought by the pandemic, millions of Americans are struggling to make ends meet,” the senators wrote. “In order to effectively address the concurrent public health and economic crises, the families you serve must have uninterrupted access to these essential public services.”

As more than half of the states have allowed protections against utility shutoffs to expire, an estimated 179 million Americans are at risk of losing access to basic utilities, according to the National Energy Assistance Directors’ Association (NEADA). This problem is likely to worsen, Brookings warned, as households – in the absence of additional unemployment insurance and rental assistance – opt to skip utility bill payment to cover rent. Brookings reported that roughly 70% of low-income households are struggling to pay utilities and NEADA estimated that past-due electric and gas bills will exceed $24 billion by January 2021.
IRS proposes changes to LIHTC as industry asks for more support of program residents and property owners

The Internal Revenue Service (IRS) published a notice of proposed rulemaking clarifying income-averaging rules for Low Income Housing Tax Credit (LIHTC) properties. The proposal would restrict property owners’ ability to change their designation for imputed income limitation. Novogradac warned that, if implemented, the new provision could “preclude necessary responses to market conditions, prevent the best approach to serving households and risk creating fair housing issues.” The proposal would also change property owner requirements in instances of noncompliance.

With the demand for affordable housing likely to increase in the wake of the pandemic and the resulting economic recession, the LIHTC program will play an increasingly important role in incentivizing the necessary expansion of affordable housing. NHC’s David Dworkin discussed the role of tax credits like LIHTC and the New Markets Tax Credit in furthering affordable housing at the African Union for Housing Finance’s Annual Conference this week.

Michael Gaber, executive vice president of WNC, National Association of Home Builders trustee and NHC Board of Governors member, urged Speaker of the House Nancy Pelosi (R-Calif.) to provide immediate assistance for residents and owners of LIHTC properties. "There is an urgent need for additional renters' assistance for many residents of affordable housing," said Gaber. "Of course, it is equally important to recognize the severe impact the ongoing pandemic is having on the owners of affordable LIHTC properties, which remain subject to foreclosure despite the economic challenges confronting this specialized segment of the rental housing industry during the ongoing pandemic."
Chart of the week
Chart of the week: GSE borrowers exit COVID forbearance at higher rate than FHA, VA borrowers

More GSE borrowers in COVID-related forbearances have exited their plan than Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) borrowers in similar plans, according to National Mortgage News. On average 36% of borrowers who entered forbearance are now reperforming in their mortgage; that share is 42% among GSE borrowers and 27% among FHA borrowers.
What we're reading
“The composition of key banking committees in the House of Representatives and Senate should remain largely intact, ensuring some continuity for the industry next Congress,” Reuters wrote in its analysis of the impact of the election results on the makeup of the House Financial Services Committee and Senate Banking Committee. Both House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and Ranking Member Patrick McHenry (R-N.C.) successfully defended their seats on Tuesday.

The Center for American Progress offered policy recommendations to address the disparate effects of COVID-19 on communities of color. “It is clear that the coronavirus pandemic is affecting renters of color differently, exacerbating past inequality, and leading the path to a future of worsening inequality.” To overcome worsening inequities in housing, the Center for American Progress recommended leaning into community partnerships, maintaining ongoing equity initiatives, expanding protections for renters, removing barriers to stable housing and broadening access to affordable housing.

A new report from AARP and Harvard’s Joint Center for Housing Studies concluded that most older adults live in communities that score low on AARP’s Livability Index, which measures “key aspects of the built, economic, and social environments that contribute to community and individual well-being.” The report also found differences in livability based on race. Whereas renters, Latinx and Black households lived in communities that scored higher in amenities and transportation, homeowners and White households lived in areas that scored higher in opportunity and the environment.
The week ahead
Monday, November 9

Tuesday, November 10
MBA: Lender placed insurance, 2 – 3:30 p.m. ET

Thursday, November 12
NAHRO: Site-based learning, 1:30 – 4 p.m. ET

Friday, November 13
NAHRO: Site-based learning, 1:30 – 4 p.m. ET
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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