Weekly update from the National Housing Conference

In this issue

July 30, 2023

Issue 92-27

· Additional tenant protections announced by Biden Administration

· Biden Administration expands Housing Supply Action Plan

· One-third of Congress supports AHCIA

· HUD awards Choice Neighborhoods funding to eight communities

· Grounded Solutions Network accepting applications for technical assistance initiative

Chart of the week: Case-Shiller shows monthly home price increase, but year-over-year decrease

Worse than anticipated – the proposed rule on bank capital is a partisan mistake.

By David M. Dworkin, President and CEO

This week, the three federal banking regulators, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation, proposed a new capital rule that would dramatically increase the capital treatment of most mortgage loans. Earlier this week, a diverse group of housing groups including NHC, the Mortgage Bankers Association, the National Association of REALTORS®, the NAACP and the National Urban League wrote to banking regulators warning of the damage that could be done to first-time and especially first-generation homebuyers by a proposed bank capital rule. That proposed rule that was advanced on Thursday was worse than we feared. Unless the bank regulators make major changes based on the comments they receive, this rule will be swept away with the next inevitable swing of the political pendulum, serving no one.

The proposed rule would increase the risk weighting of bank-originated mortgages with down payments below 20%, discouraging banks from making loans to low- and moderate-income homebuyers. In our letter, we noted that down payment cost is often the biggest barrier to buying a home for these groups, and warned that the proposed rule would make it harder for them to get a mortgage. Further, the increase would undercut the Community Reinvestment Act (CRA) and Special Purpose Credit Programs (SPCPs) that seek to redress barriers to homeownership. The FDIC itself noted in its own report on Down Payment and Closing Cost Assistance, that “for many low- and moderate-income people, the most significant barrier to homeownership is the down payment and closing costs associated with getting a mortgage loan.” Not only did the proposed rule ignore the concerns that it acknowledged, it explicitly dismissed the role of mortgage insurance paid by millions of homebuyers, so lenders and investors are protected from default.

“Without significant revisions, this proposal will increase borrowing costs and reduce credit availability for the very consumers and borrowers this administration ostensibly seeks to assist,” said Bob Broeksmit, President and CEO of the Mortgage Bankers Association, in a press release. “Given ongoing affordable housing challenges, regulators should be taking steps that encourage banks to better support real estate finance markets. These proposed changes do precisely the opposite during a time of near record-low single-family delinquencies and pristine underwriting. This proposal also undermines several current policy objectives, from closing the racial homeownership gap to promoting competition over consolidation.” more...

News from Washington | By Brittany Webb

Additional tenant protections announced by Biden Administration

The Biden Administration announced new initiatives expanding on its Blueprint for a Renters Bill of Rights that offer tenant protections to the nation’s renters. The Administration highlighted three concrete steps: ensure tenants have an opportunity to address incorrect credit and criminal screening reports, provide funding for tenant organizing efforts, and ensure tenants receive reasonable notice of eviction. Five federal agencies released best practice guidance for landlords and other operators who rely on screening reports for tenant selection. The best practices outline the Administration’s expectations on telling renters what information in their screening reports can lead to denying their applications. These announcements come a few days before the July 31 deadline for an open request for comment by the Federal Housing Finance Agency regarding tenant protections.

Investments for tenant organizing efforts are provided by the U.S. Department of Housing and Urban Development (HUD), allocating $10 million available for tenant education and outreach in properties supported by the Section 8 Project-Based Rental Assistance program. The funding will support capacity-building efforts for tenants to engage with management to sustain quality affordable housing. Applications for this funding must be submitted by Jan. 1, 2024.

HUD also committed to issuing a notice of proposed rulemaking requiring residents of public housing and properties with project-based rental assistance (PBRA) to receive at minimum 30 days’ notice before terminating leases due to nonpayment of rent. The proposal intends to help curtail unnecessary evictions by providing time for residents to address their nonpayment violations. While tenants living in public housing and properties with PBRA are already entitled to receive these 30-day notices, this proposed rule will make that entitlement permanent in HUD’s regulations.

The Administration’s Fact Sheet of these announcements further noted that HUD published new guidance for public housing authorities and multifamily owners participating in the Rental Assistance Demonstration program. The guidance updates resident engagement requirements and ensures renters have a seat at the table by prioritizing engagement with tenants and tenant organizers. 

Biden Administration expands Housing Supply Action Plan

The Biden Administration announced efforts to build on its Housing Supply Action Plan. The measures include reducing barriers to building housing and expanding financing for green housing initiatives. To reduce the obstacles to building, the Administration addresses restrictive land use and zoning rules with an announcement from HUD of a new Pathways to Removing Obstacles to Housing program. This first-of-its-kind program will commit $85 million to provide communities with the capital needed to identify and remove barriers to producing affordable housing in their jurisdictions. HUD will grant up to $10 million to communities with an acute demand for more affordable units that are working to identify ways to increase production and preservation. The Economic Development Administration also updated its “Investment Priorities” guide to prioritize the agency’s grantmaking on land use.

HUD also announced a Notice of Funding Opportunity (NOFO) for research on office-to-residential conversions. The NOFO seeks case studies on conversion projects to improve understanding of financing limitations and opportunities for subsidies to support conversions. Data and information gathered from this research will serve as a toolkit for local leaders and development practitioners to improve economic viability and metrics of conversions. Proposals are due by Oct. 12.

These actions reiterated other announcements earlier this year to address transportation and efficient and climate-resilient housing. This includes a new program from the Department of Transportation called Reconnecting Communities and Neighborhoods that will provide $3.16 billion for planning and construction projects to connect disadvantaged neighborhoods to affordable housing and daily destinations, a $27 billion Greenhouse Gas Reduction Fund commitment from the Environmental Protection Agency to finance clean energy projects, and further updates to guidelines for Low-Income Housing Tax Credit and Rental Assistance Demonstration programs that help boost production efforts.

The announcement coincided with a roundtable with housing leaders and HUD Deputy Secretary Adrianne Todman. National Multifamily Housing Council President Sharon Wilson Géno who participated in the forum said, “Policies that actually move the needle and expand housing supply are the only real way we are going to lower the cost of housing and broaden housing availability.” Noting areas of agreement between tenant advocates and housing providers, Géno stated that “now more than ever, housing providers and residents need to work closely together to convince lawmakers to expand programs that support renters in need, including emergency rental assistance and housing choice vouchers, as well as incentives to increase housing supply.”

One-third of Congress supports AHCIA

The Affordable Housing Tax Credit Coalition (AHTCC) announced a major milestone for the Affordable Housing Credit Improvement Act (AHCIA) of 2023. One-third of Congress, 151 Representatives and 28 Senators, now support AHCIA. Support is balanced among Democrats and Republicans, and the number of cosponsors is over double what it was at this point in the last Congress. NHC strongly supports the legislation.

“With one-third of Congress supporting this bill on a bipartisan basis, the momentum behind this legislation is driven by a compelling show of support,” said AHTCC Chief Executive Officer Emily Cadik. “This demonstrates to members across the political spectrum that the AHCIA is a well-vetted, viable solution to address a problem that impacts states and districts across the country.”

HUD awards Choice Neighborhoods funding to eight communities

HUD Secretary Marcia Fudge announced a $370 million award for Choice Neighborhoods Implementation (CNI) to eight communities nationwide. This funding will support redeveloping public and HUD-assisted housing in communities that have presented comprehensive planning. HUD granted the Housing Authority of the Birmingham District and the City of Birmingham in Alabama a $50 million grant. The City of Birmingham and the Housing Authority of the Birmingham District carry the principle of “Putting People First.” Experiencing the adverse effects of redlining, racial zoning, and expansion of the interstate system, a neighborhood formerly cut off from central economic opportunities will seek to bring back the community to its thriving and creative character. “When we envision the future of public housing investment, we think of programs like Choice Neighborhoods. These awards promote the innovative collaboration needed to tackle the affordable housing crisis. A community-driven, whole-of-government approach to neighborhood revitalization is what leads to impactful changes in the neighborhoods that need it the most,” said Fudge. HUD will announce additional awards through Aug. 4. Full details are here.

Grounded Solutions Network accepting applications for technical assistance initiative

Grounded Solutions Network (GSN) opened its application window for its ForEveryoneHome initiative, which provides eight-month technical assistance, peer learning, and community engagement guidance. GSN partnered with Up for Growth on the initiative to work with teams of municipal officials and community leaders where BIPOC households lack equitable access to affordable housing to help localities chart a path to inclusive housing production and preservation. The program provides $300,000 in research and technical assistance, and participating cities contribute $150,000 in matching funds. Applications are due by Aug. 15.

Chart of the week

Case-Shiller shows monthly home price increase, but year-over-year decrease

The newly released S&P CoreLogic Case-Shiller U.S. National Home Price data shows month-over-month increases but year-over-year (YOY) decreases for all indices, according to Bill McBride at CalculatedRisk blog. Seasonally adjusted, the month-over-month National Index increased by 0.7% in May. The 10-City Composite increased by 1.1%, and the 20-City Composite increased by 1.0%. These increases mark the fourth straight month of rising home prices. Despite those increases, the YOY Composite 10 is down by 1.1%, the Composite 20 is down by 1.8%, and the National Index is down by 0.5%. These YOY trends suggest prices might decline in the coming months. 

What we're reading

Urban Institute released a list of recommendations for FHFA to strengthen its equitable housing finance plans for Fannie Mae and Freddie Mac (the GSEs). FHFA’s recent proposed rule on the plans would allow the GSEs to help households of color and low-income households. But the Urban Institute notes that FHFA could strengthen the rule by ensuring equity goals are measurable and meaningful, holding the GSEs accountable for more equitable results, and leveraging FHFA’s influence on the housing finance industry.

The National Low Income Housing Coalition worked with the University of Pennsylvania’s Housing Initiative on a report about emergency rental assistance. The Treasury’s Department Emergency Rental Assistance (ERA) program, created for the COVID-19 pandemic, is almost exhausted. However, the report shows that about half of the state and local authorities surveyed plan to continue ERA. The report collects which facets of the federal program are being retained by state and local programs and stresses that many renters still need rental assistance.

NPR published an article about home insurance issues for those who live in areas more susceptible to extreme climate change. As the cost of climate disasters increases, so are home insurance costs. These rising costs cause millions of homeowners to struggle to find affordable insurance, increasing the exclusivity of private insurance markets. This exclusivity negatively impacts home lending, home building, and more.

A New York Times piece describes a new affordable housing development in Brooklyn that intends to replicate a “Blue Zone,” a small community area where people live healthy lives together. New York State is injecting a low-income, prominently Black and Hispanic area of Brooklyn with a 2,600-unit affordable development that should facilitate community and sustainability. Affordable housing activists and neighborhood residents are still discussing with state planners how affordable the apartments will be and their targeted demographic.

The week ahead

Monday, July 31

NAACP National Convention (NAACP), in person in Boston, MA

NH&RA Summer Institute (NH&RA), in person in Laguna Beach, CA

HOPWA Overview of VAWA 2013 (HUD Exchange), 1 - 2:30 PM ET

Ethics for Commissioners (NAHRO), 1:30 - 4 PM ET

National Call on HoUSed: Universal, Stable, Affordable Housing (NLIHC), 2:30 PM ET


Tuesday, August 1

NAREB Annual Convention (NAREB), in person in Houston, TX

NAREB The Youth Academy (NAREB), in person in Houston, TX

NH&RA Summer Institute (NH&RA), in person in Laguna Beach, CA

Procurement and Contract Management (NAHRO), 1 - 4 PM ET

Ethics for Housing Professionals (NAHRO), 1:30 - 4 PM ET


Wednesday, August 2

NAREB Annual Convention (NAREB), in person in Houston, TX

NAREB The Youth Academy (NAREB), in person in Houston, TX

NH&RA Summer Institute (NH&RA), in person in Laguna Beach, CA

Procurement and Contract Management (NAHRO), 1 - 4 PM ET

Build America, Buy America Act Webinar for Recovery Housing Program Grantees (HUD Exchange), 2 - 3 PM ET

DHRC’s Disaster Recovery Working Group (NLIHC), 2 PM ET


Thursday, August 3

NAREB Annual Convention (NAREB), in person in Houston, TX

NAREB The Youth Academy (NAREB), in person in Houston, TX

NH&RA Summer Institute (NH&RA), in person in Laguna Beach, CA

Promoting Equity, Lived Experience, Housing First, and System Performance: What Matters in the 2023 NOFO (National Alliance to End Homelessness), 12:15 - 2 PM ET

Procurement and Contract Management (NAHRO), 1 - 4 PM ET

How to Combat Risk, Fraud and Losses in an Economic Downturn (Mortgage Bankers Association), 3 - 4 PM ET


Friday, August 4

NAREB Annual Convention (NAREB), in person in Houston, TX

NAREB The Youth Academy (NAREB), in person in Houston, TX

Procurement and Contract Management (NAHRO), 1 - 4 PM ET

Celebration of Home (NCRC), in person in Pueblo, CO, 7:30 PM - 12 AM ET

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