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Weekly update from the National Housing Conference
News from Washington
Treasury awards $1.25 billion to CDFIs

The Treasury Department will award $1.25 billion to community development financial institutions (CDFIs) in order to support underserved communities in the wake of the COVID-19 pandemic, Vice President Kamala Harris and Treasury Secretary Janet Yellen announced on Tuesday at a White House event. The grants will be disbursed to 868 awardees through Treasury’s CDFI Rapid Response Program, which was authorized to distribute CDFI funds for pandemic relief by the Consolidated Appropriations Act of 2021.

“In serving places that the financial sector historically hasn’t served well, CDFIs lift our whole economy up,” Yellen said in her remarks. “We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment, meaning that today’s announcement might lead to an additional $10 billion in investment.”

Awardees represent a diverse range of communities, with $478 million going to CDFIs in large urban areas, $414 million going to those in small urban areas, and $353 going to rural CDFIs. Treasury reports that the bulk of grantees are loan funds, but CDFI grantees also include credit unions, banks and venture capital funds that focus on underserved communities. Additionally, 10% of grantees are minority depository institutions (MDIs), and 58 grantees committed to targeting investments using the funds in Native communities.
FDIC Board approves new policy statement on MDIs

The Federal Deposit Insurance Corporation’s (FDIC) Board of Directors voted to approve a final Statement of Policy regarding MDIs, which FDIC is charged with supporting by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. The new Statement of Policy updates standards for FDIC’s protection of and communication with MDIs it insures and updates several definitions to enhance its role in preserving them.

In their statement announcing the final Statement of Policy, FDIC also noted its ongoing work with public and private stakeholders to establish a Mission-Driven Bank Fund to support and grow the number of the approximately 250 FDIC-insured MDIs and CDFIs. According to FDIC, their work aims to establish a platform whereby private actors can make equity investments in MDIs and CDFIs, which allows those institutions to loan many times the amount of the initial investment.
Members of Congress reintroduce Housing is a Human Right Act

On June 8, Reps. Pramila Jayapal (D-Wash.) and Grace Meng (D-N.Y.) reintroduced the Housing is a Human Right Act, which aims to invest over $300 billion in affordable housing and homelessness services and prevention. The bill includes a provision allowing the Department of Justice to disburse up to $100 million in grants to communities to develop alternatives to criminalization for those experiencing homelessness.

Both Reps. Jayapal and Meng noted the bill’s emphasis on respecting those experiencing homelessness, as opposed to penalizing or expelling them from their communities. “This gives communities like mine the resources we need to guarantee access to affordable housing, as well as the tools needed to tackle homelessness — while upholding the dignity of each person,” Meng said in a statement announcing the bill’s reintroduction.
Amazon commits to affordable housing around transit

On Wednesday, Amazon announced that it is committing $125 million to affordable housing development in a joint effort with WMATA in the D.C. metro area. The commitment will build more than 1,000 affordable housing units around metro stations through an innovative community development approach that unifies housing and transportation. This is the third initiative Amazon has announced with a partnered transit agency; two similar investments were made in Washington state and Nashville totaling $300 million. After decreases in ridership during the COVID-19, WMATA is hoping that more housing near stations will help rebuild ridership.

Amazon’s effort seems intended to assuage worries that its location of a second headquarters in Arlington, Va., will contribute to faster increases in housing prices in the surrounding region, a concern that contributed to the demise of a similar headquarters planned for Long Island City, N.Y. in 2019. However, the Washington Post noted that 1,000 units are a “small fraction” of the estimated 320,000 new housing units needed by 2030 to avoid further price increases in the Washington region. Still, Amazon Head of Community Development Catherine Buell noted that Amazon should not be expected to solve the region’s affordability woes on its own. “The demand for housing affordability preceded Amazon coming into the capital region,” she said.
FHFA releases its Annual Report to Congress

On Tuesday, the Federal Housing Finance Agency (FHFA) released its annual Report to Congress for 2020. The report detailed the role of FHFA has during the COVID-19 response, its efforts in building a world-class regulator, preparations for natural disasters, and preparing for an end to the conservatorship of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.

The report included an overview of how FHFA responded to the chaotic circumstances of 2020 and helped borrowers and renters stay in their homes while continuing to maintain mortgage markets. It also made the case for greater capital requirements and the eventual end of conservatorship. The report further asks that Congress take steps to “level the playing field” for the GSEs with the private sector, another signal that FHFA seeks to consider the end of conservatorship. Finally, the report requested the authority to examine third-party service providers to identify practices that risk safety and soundness to the GSEs.
Chart of the week
Chart of the week: Homeowner disaster repair costs increase as billion-dollar disasters become more frequent

The Joint Center for Housing Studies’ (JCHS) 2021 State of the Nation’s Housing Report finds that homeowner expenditure on disaster repairs has risen with the number of severe events costing $1 billion or more. The report notes that the number of billion-dollar disasters is expected to continue to rise in 2021, which already has seen the costliest winter storm on record in the $10 billion in damages from a storm that devastated Texas in February, due primarily to climate change.
What we're reading
A new paper from the Urban Institute counters a recent FHFA report that took aim at the GSEs’ credit risk transfer (CRT) program for being untested, too expensive and too risky. Though the authors at Urban concede that the latter point has some merit, they argue that FHFA’s analysis failed to consider options to make the program less risky, and ignored benefits of CRT such as the broader distribution of risk and the program’s countercyclicality

Politico covers a Biden administration effort to stamp out housing discrimination through an interagency task force led by HUD. While the article notes that “even slight changes” to the way property is assessed could carry “substantial repercussions for the $11.8 trillion single-family residential mortgage market,” some activists see that as necessary to end appraisal discrimination. “When we want to do things big and bold, we do them. If it has a huge impact on the market, so be it,” says Lisa Rice, president and CEO of NHC member National Fair Housing Alliance.

Barrett Lo kicked off construction of a new 44-story residential tower in Milwaukee, part of an effort to redevelop an underutilized transit hub that has attracted the investment of HUD and NHC member AFL-CIO Housing Investment Trust (HIT). HIT has noted that the development will create thousands of unionized jobs for city residents, as well as contribute to its mission of investing in workforce housing.
The week ahead
Monday, June 21
Tuesday, June 22
MBA: Fair lending webinar, 2 – 3 p.m. ET
Wednesday, June 23
NCRC: Fundraising for sustainability, 10 a.m. – 3 p.m. ET
Thursday, June 24
WHF: 2021 annual meeting, 5 – 6 p.m. ET
Friday, June 25
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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