March 5, 2010

National Housing Trust Fund

New Push to Get NHTF Funding in Senate Tax Extender Bill

The effort to find a legislative vehicle to get funding for the NHTF in the U.S. Senate shifted to the American Workers, State, and Business Relief Act of 2010, a companion bill to H.R. 4213, the Tax Extenders Act of 2009, which passed the House in December 2009.

The National Housing Trust Fund campaign sent a letter signed by 38 national housing, civil rights, and faith organizations to Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) on March 4 urging them to include $1.065 billion in the bill. The U.S Conference of Catholic Bishops, a member of the NHTF campaign, sent a separate letter to all Senators on March 5 urging the same.

Senators who had earlier sent a similar letter to Senate leadership also weighed in with Senator Baucus.

Debate on the bill on the Senate floor is expected to continue until March 9.

To see the NHTF campaign sign-on letter, go to http://www.nlihc.org/doc/NHTF-letter-Baucus-Grassley3-4-2010.pdf

To see the Bishops’ letter, go to http://www.nlihc.org/doc/USCCB3-5-10-Senate-letter.pdf

Capitol Hill

House Takes Action on FY11 Budget; Senate Plans Appropriations Hearing

Work on the FY11 appropriations process continued this week as the House Committee on Financial Services held a mark up on March 3 to debate its “Views and Estimates” document that will be submitted to the House Committee on the Budget. The document, produced annually, allows the Financial Services Committee to express its funding priorities with the hope that the Budget Committee will take these priorities into account when setting the overall discretionary funding cap for the upcoming budget year. 

The same day, the House Committee on the Budget held a “Members’ Day” hearing to receive testimony on the FY11 budget. This annual hearing provides all members the opportunity to speak about their priorities in all programs across the budget.

At the Financial Services Committee mark up, Chairman Barney Frank’s (D-MA) opening comments focused on the Committee’s potential to influence the Budget Committee during this part of the process. The printed “Views and Estimates of the Committee on Financial Services on Matters to be Set Forth in the Concurrent Resolution on the Budget for Fiscal Year 2011” expresses the Committee’s support for the Administration’s proposed HUD funding level of $41.6 billion, but criticizes cuts that were proposed for some programs.

In the document, the Committee pledges to work to restore funding for programs including HOME, Section 202 Supportive Housing for the Elderly, Section 811 Supportive Housing for People with Disabilities, Community Development Block Grants (CDBG), Native American Housing Block Grants, and the Section 108 Loan Guarantee Program, among others.

In addition, the document includes praises the Administration for its inclusion of $1 billion in funding to capitalize the National Housing Trust Fund, in order to provide housing for low and extremely low income households. The Committee also states that it expects to work with the Administration on authorizing the proposed Choice Neighborhoods Initiative. 

A substitute amendment to the Committee’s Views and Estimates, offered by Ranking Member Spencer Bachus (R-AL), was defeated. Mr. Bachus’s substitute document would have criticized the Administration’s proposals for creating new initiatives within HUD, as well as the cost of continuing to administer programs such as the housing choice voucher program. The amendment also criticized what Mr. Bachus called the Administration’s failure to propose changes to the government sponsored entities Fannie Mae and Freddie Mac.

The amendment specifically criticized the inclusion of $1 billion in mandatory funding for the National Housing Trust Fund, saying that the program would duplicate the HOME program.

Mr. Frank disagreed with Mr. Bachus’s criticisms and spoke strongly in favor of the National Housing Trust Fund. During both the Clinton and Bush administrations when the focus was on homeownership, Mr. Frank said, the Committee “wanted to provide rental housing” options. He said that he will continue to support funding for the National Housing Trust Fund.

The Committee voted to submit the original print of Views and Estimates to the Budget Committee by a vote of 39 - 25. 

At the House Budget Committee’s “Members’ Day” hearing on the FY11 budget, members expressed support for a variety of HUD programs including CDBG, the Neighborhood Stabilization Program, Section 202, and Section 811. Representative Donna Christensen (D-VI) provided testimony in support of funding the National Housing Trust Fund at $1 billion. Ms. Christensen said this funding is critical as the trust fund will “prevent homelessness and strengthen families.”

The Campaign for Housing and Community Development Funding (CHCDF), of which NLIHC is a member, sent a letter to the House and Senate Budget Committees on March 2. The letter urges the Committees to set the discretionary spending cap at a level sufficient to increase funding for critical HUD programs and restore funding to those programs the Administration proposes to cut. CHCDF says that “the need for assistance in FY11 still far outstrips the capacity of [HUD] programs,” and that Congress has “the opportunity to make a tremendous impact by sustaining funding for housing and community development programs that improve the lives of Americans.”  

In related budget news, the Senate Appropriations Transportation, Housing and Urban Development, and Related Agencies (T-HUD) Subcommittee has rescheduled its HUD FY11 budget hearing. The hearing, originally planned for February, has been rescheduled for March 11 at 9:30 am.  HUD Secretary Shaun Donovan will testify at the hearing.

The House Appropriations T-HUD Subcommittee held its HUD FY11 budget hearing on February 23 (see Memo, 2/26 ); these hearings mark the first steps in Congress’s process to enact a FY11 budget. 

View the “Views and Estimates” mark up of the Financial Services Committee at:  http://www.house.gov/apps/list/speech/financialsvcs_dem/fcmrk_03032010.shtml

View members’ testimony to the Budget Committee at: http://budget.house.gov/hearings.aspx

View CHCDF’s letter to the Budget Committees at: 

http://www.nlihc.org/doc/CHCDF-FY11-Budget-Committees-3.2.10.pdf

View NLIHC’s budget chart at: http://www.nlihc.org/doc/FY11-Budget-Chart-HUD-Programs.pdf

House Offices Rally Colleagues for Housing Funding

As Congress begins the process of considering funding for FY11, a number of “Dear Colleague” letters are circulating the House in support of funding for key HUD programs.

House Financial Services Subcommittee on Housing and Community Opportunity Chair Maxine Waters (D-CA) is asking her House colleagues to join her on a letter to House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (T-HUD) Chair John Olver (D-MA) and Ranking Member Tom Latham (R-IA).

Chairwoman Waters’s letter seeks full funding for HUD’s public housing ($5 billion for the operating and $5 billion for the capital fund), tenant-based Section 8 ($19,55 billion), project-based Section 8 ($9.38 billion), Section 202 Supportive Housing for the Elderly ($825 million), Section 811 Supportive Housing for People with Disabilities ($300 million), Housing for Persons with HIV and AIDS ($340 million), HOME ($1.825 billion), and Community Development Block Grants ($4.5 billion) for FY11. The letter also supports $1 billion for the National Housing Trust Fund.

Advocates are asked to call their Representatives and ask them to sign onto this letter by March 16. House offices should be told they can contact Amanda Fischer in Chairwoman Waters’ office to sign on: Amanda.Fischer@mail.house.gov

Representatives Jerrold Nadler (D-NY) and Nydia Velázquez (D-NY) are circulating a letter to Chair Olver and Ranking Member Latham in support of fully funding the tenant- and project-based Section 8 programs and funding 250,000 new tenant-based vouchers. The letter thanks the House Committee on Appropriations for its work to restore more than half of the 150,000 vouchers that were lost due to the voucher program’s instability from 2004 to 2006. Noting that Congress has not funded a substantial increase in new vouchers since 2001, nearly a decade ago, the letter requests 250,000 new vouchers for FY11. Achieving 250,000 new vouches in FY11 is a policy priority for NLIHC.

“When asked what they need most to reduce homelessness, the top response (96%) of city officials is ‘more subsidized housing, such as Housing Choice vouchers,’ according to a recent survey by the U.S. Conference of Mayors,” the letter notes. “The Section 8 voucher program has always received broad bipartisan support because it is the most flexible and cost effective way to provide rental assistance.”

Advocates are asked to call their Representatives and ask them to sign onto this letter by noon on March 12. House offices can contact John Doty in Mr. Nadler’s or Sean Hughes in Ms. Velázquez’s office.

A third letter is being circulated by Representatives Gwen Moore (D-WI) and Geoff Davis (R-KY) to their House colleagues. This letter is specifically in support of $2.4 billion for HUD’s McKinney homeless assistance programs in FY11. The $2.4 billion level is $606 million more than what HUD is requesting for FY11 ($1.794 billion), which itself is an increase of almost $117 million over FY09’s funding level. Advocates are seeking $2.4 billion for HUD’s homeless assistance grants programs in FY11, as this amount is seen as necessary to fully implement the HEARTH Act, enacted in 2009.

The HEARTH Act increases the amount of HUD’s homeless funds that will go to communities in the form of Emergency Solutions Grants, a funding stream that focuses on homelessness prevention. Funding of $2.4 billion would allow for the preventative ESG program to be implemented, as well as HUD’s other programs that focus on supportive services, transitional housing, and permanent housing.

Advocates are asked to encourage their Representatives to sign this letter as well. House offices can contact Andrew Stevens, in Ms. Moore’s office,  Andrew.Stevens@mail.house.gov or Lauren O’Brien, in Mr. Davis’ office, Lauren.Obrien@mail.house.gov to sign on.

View Chairwoman Waters’ letter here: http://www.nlihc.org/doc/Waters-Dear-Colleague.pdf

View Mr. Nadler’s letter here: http://www.nlihc.org/doc/Nadler-Velazquez.pdf

View Ms. Moore’s and Mr. Davis’ letter here: http://www.nlihc.org/doc/Moore-Davis-Dear-Colleague.pdf

Extension of 9% LIHTC Exchange Still Under Consideration

As the Senate takes up the American Workers, State, and Business Relief Act of 2010, legislation that would extend various tax-related programs, (see article elsewhere in Memo), Senators Max Baucus (D-MT) and Charles Grassley (R-IA), chair and raking member of the Senate Committee on Finance respectively, have followed the lead of the House and included in their Senate proposal a one-year extension of the 9% tax credit exchange program designed to reinvigorate the Low Income Housing Tax Credit program.

The financial crisis reduced investor interest in the LIHTC program, and, as a result, many projects have been unable to move forward. Congress, in the American Recovery and Reinvestment Act of 2009, partially addressed this lack of investor interest by creating an exchange program for the 9% credit (TCEP). Under this program, state allocating entities can exchange a portion of their 2008 and 2009 9% LIHTC allocations for cash that can then be used to replace the equity normally supplied by a private investor.

The crisis in the LIHTC has not abated, however, and advocates identified four actions for Congress to take to protect the program: 1) extending the TECP to apply to 2010 LIHTC allocations, 2) amending the TECP to include 4% credits, 3) expanding the ability of investors to use credits against prior year income, and 4) encouraging new investors, such as small financial institutions and limited partnerships to enter the LIHTC market.

The other LIHTC-related provisions sought by advocates are unlikely to be included in the tax extender bill. However, some provisions are being introduced as stand-alone legislation in the hopes that they can garner sufficient support to be included in legislation before the end of the session. Representative Linda Sanchez (D-CA) introduced H.R. 4687, the Low Income Housing Tax Credit Exchange Expansion and Job Creation Act of 2010, which would among other things expand the TCEP to include the 4% credits (see Memo, 2/26 ). Additional legislation on the other two advocate proposals is expected in the near future.

Financial Services Committee to Hold Choice Neighborhoods Hearing

The Financial Services Committee will hold a hearing on March 17 on HUD’s Choice Neighborhoods Initiative proposal, at which HUD Secretary Shaun Donovan is expected to testify. Choice Neighborhoods is the next iteration of the HOPE VI program, and would provide grants to communities to revitalize severely distressed housing.

HUD first proposed CNI as part of its FY10 budget request and released a draft of its proposal in November 2009 (see Memo, 11/13/09 ). At the time of the draft proposal’s release, NLIHC submitted comments on this proposal. HUD is expected to release a new version of CNI by the time of the March 17 hearing.

Congress approved $65 million for a CNI demonstration in the FY10 HUD appropriations bill. HUD is requesting $250 million for CNI in its FY11 budget request.

NLIHC’s comments on CNI are available at: http://www.nlihc.org/doc/NLIHC-NHLP-CNI11-09.pdf

CDFI Hearing Set

The House Committee on Financial Services has announced that it will hold a hearing titled “Community Development Financial Institutions (CDFIs): Their Unique Role and Challenges Serving Lower Income, Underserved and Minority Communities.”

The hearing will be at 2 pm on March 9, in room 2128 of the Rayburn House office building. Witnesses have not been announced.     

Capacity Building Bill Introduced

Representative Maxine Waters (D-CA) introduced H.R. 4737, to reauthorize assistance for capacity building for community development and affordable housing under Section 4 of the HUD Demonstration Act of 1993, on March 3. Section 4 provides funds to national groups to develop the capacity and ability of community development corporations and housing organizations to undertake community development and affordable housing projects and programs.

The bill, the HUD Demonstration Improvement Act of 2010, would reauthorize and amend the Act to state that the Secretary would be responsible for distributing the funds on a competitive basis to eligible entities. Entities eligible to receive assistance are: The National Community Development Initiative, Local Initiatives Support Corporation, The Enterprise Foundation, Habitat for Humanity, Youthbuild USA, the National Urban League, and the Housing Partnership Network. Of these, the National Urban League and the Housing Partnership Network are currently not formally authorized by Congress to provide capacity building assistance.

The bill would require eligible entities to submit a plan for each fiscal year describing how Section 4 funds would be used to develop the capacity and ability of community development corporations and housing organizations to undertake community development and affordable housing projects and programs. The plans would have to be made available to the public and HUD would have to submit an annual report to Congress on the use of funds. The bill would also explicitly require the capacity building activities to impact both urban and rural areas.

The bill would set minimum grants of 10% and maximum grants of 50% of the total funds made available in any fiscal year for Section 4 activities for each eligible grantee. It would also increase the Section 4 program’s formal authorization level from $25 million to $60 million, for each of fiscal years 2011 through 2015. HUD’s capacity building programs were funded at $50 million in FY10.

For the $50 million provided in FY10 for capacity building, the funds are only to be used for loans, grants, predevelopment assistance, and other activities approved by the Secretary. The FY10 bill does not allow any of these funds to be used for the “training, education, support, and advice to enhance the technical and administrative capabilities of community development corporations and community housing development organizations” as is currently authorized by statute. The bill would increase the availability of information on Section 4 activities and, once again, allow for the training, education, and support functions of Section 4 to resume.

The bill was referred to the House Committee on Financial Services.