Federal Housing News
November 22, 2013
NATIONAL HOUSING TRUST FUND
Filibuster Reform Paves Way for Watt
President Barack Obama’s nomination of Representative Mel Watt (D-NC) to be director of the Federal Housing Finance Agency (FHFA) came closer to reality on November 21, when the Senate voted to change its filibuster rules. In a historic move, the Senate now allows a simple majority of senators to attain cloture and block filibusters, rather than the longstanding requirement of needing a 60-vote “supermajority” to do so. The new rule applies to all executive and judicial nominations, except U.S. Supreme Court nominations. It does not apply to legislation.
The rule change provides a path for Mr. Watt to be the next FHFA director. He was nominated by President Obama in May and voted out of committee on July 18. On October 31, the Senate failed to reach cloture on Mr. Watt’s confirmation on a 56-42 vote (see Memo, 11/1). The change means that a cloture vote will require only 51 “ayes.” Reconsideration of Mr. Watt’s nomination is expected in mid-December; he could be confirmed as soon as December 13.
FHFA is the regulator of the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, which have been in conservatorship since 2008. FHFA has been headed by Acting Director Edward DeMarco since 2009. Among other failings, Mr. DeMarco has never revisited the “temporary” suspension of Fannie Mae and Freddie Mac contributions to the National Housing Trust Fund (NHTF), as the 2008 Housing and Economic Recovery Act requires. Given record profits at both GSEs, NLIHC contends that contributions to the NHTF should begin immediately.
“With Mr. Watt at FHFA, I am confident that the law will be followed and hopeful that Fannie Mae and Freddie Mac will start to meet their obligation to contribute to the National Housing Trust Fund,” said NLIHC President and CEO Sheila Crowley in a statement released upon Mr. Watt’s nomination to head FHFA (see Memo, 5/3).
In remarks following the rule change, President Obama expressed his support for the action. “I support the step a majority of senators today took to change the way that Washington is doing business, more specifically, the way the Senate does business,” President Obama said. “What a majority of senators determined, by Senate rule, is that they would restore the longstanding tradition of considering judicial and public service nominations on a more routine basis.”
Senate Majority Leader Harry Reid (D-NV) joined other senators and members of the House Congressional Black Caucus (CBC) in celebrating the rule change. He said Senate Republicans had turned down one of the CBC’s own—Mr. Watt—but that was going to change now. “From now on, any president can put together the executive branch of government,” Senator Tom Harkin (D-IA) remarked.
Senators Tom Udall (D-NM) and Jeff Merkley (D-OR), junior senators credited with strongly advocating filibuster reform, applauded Senator Reid for the move. “Senator Reid had the courage to bring our democracy back to where it needs to be,” Senator Udall said. “I am looking forward to Mel Watt being at the Federal Housing Finance Agency,” Senator Merkley added.
Opposing the rule change were all Republican senators and three Democratic senators: Carl Levin (MI), Joe Manchin (WV), and Mark Pryor (AK).
House Appropriators Urge Budget Conferees to Reach Agreement, Avoid Damaging Repercussions
Nearly two months into FY14, Congressional appropriators still cannot craft spending bills because the Budget Conference Committee has yet to provide FY14 spending caps. On November 18, House Committee on Appropriations Chair Hal Rogers (R-KY) and all 12 Appropriations Subcommittee Chairs sent a letter to the Chairs and Ranking Members of the House and Senate Budget Committees, urging quick agreement on an FY14 budget.
“We urge you to redouble your efforts …and report common, top line levels for both the House and Senate before the Thanksgiving recess, or by December 2 at the latest,” the appropriators wrote. “If a timely agreement is not reached, the likely alternatives could have extremely damaging repercussions.” The letter raised the “specter” of another government shutdown, governance by continuing resolution (CR) instead of appropriations bills, and another round of sequestration cuts.
The House and Senate recessed on November 22, and do not return until December 2 and December 9, respectively. This recess leaves few legislative days remaining to address major budget decisions by the conference committee’s December 13 deadline to produce a report on the FY14 budget. Appropriators indicate they need one month to draft bills and pass an omnibus appropriations bill before the CR expires on January 15, the deadline for Congress to negotiate a FY14 budget, and pass an appropriations package or another CR to avoid a second government shutdown. January 15 also is an important date as the Administration would be required to implement FY14 sequestration at that time.
House Speaker John Boehner (R-OH) announced that leadership intends to introduce a full-year FY14 CR at the original House FY14 budget resolution level of $967 billion, perhaps indicating its lack of confidence that the conference committee will arrive at a timely agreement. The House’s original FY14 budget resolution would violate discretionary spending caps, cutting funds from non-defense programs to increase funding for defense programs. Details are not yet known.
The conference committee held a second meeting on November 13 (see Memo, 11/15), but it does not have another public meeting scheduled. Committee Chairs Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) reportedly met twice privately to negotiate since November 13.
Key issues separating Democrats and Republicans on the conference committee are replacing sequestration, raising revenue, and cutting entitlements (see Memo, 11/8). Democrats want to end sequestration by increasing revenues. Chair Murray is encouraging Republicans to identify tax loopholes to close in order to provide revenue to replace sequestration in FY14 and FY15. The Republican leadership opposes increasing revenue, even using that approach. Republicans are divided on whether replace sequestration; those who do advocate cutting entitlements, which most Democrats oppose.
Read Chair Rogers’ letter: http://1.usa.gov/1jh1VXI
Bills to Make PTFA Permanent Introduced
Senator Richard Blumenthal (D-CT) and Representative Keith Ellison (D-MN) have introduced legislation to make the federal Protecting Tenants at Foreclosure Act (PTFA) permanent, and to add a private right of action to the law. The House bill, H.R. 3543, was introduced on November 20 and has 18 original co-sponsors. It has been referred to the House Committee on Financial Services. The Senate bill, S. 1761, was introduced on November 21, with Senators Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) as co-sponsors. It has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.
The PTFA is the only federal protection for renters living in foreclosed properties. The law provides renters the right to at least 90 days’ notice before being required to move after the property in which they live has been foreclosed. Without an extension, the law will expire on December 31, 2014.
“The PTFA was a groundbreaking piece of federal legislation based on recognition that the foreclosure crisis was hitting a lot more people than homeowners. Almost half the people who lost their homes due to foreclosure were renters and they had no protections whatsoever,” NLIHC President and CEO Sheila Crowley said. “This piece of legislation needs to continue because if it expires, renters will have no federal protection, and the remaining patchwork of state laws will leave renters in many states facing the threat of immediate eviction again through no fault of their own. People who faithfully pay their rent every month should not be subjected to the threat of losing their home because their landlord is facing foreclosure. NLIHC commends Senator Blumenthal and Representative Ellison for their leadership in this effort to protect renters in foreclosure.”
NLIHC urges advocates to contact their Senators and Representatives and ask them to cosponsor the legislation. Making PTFA permanent is a major NLIHC policy objective in 2014.
Read H.R. 3543: http://1.usa.gov/1aDgiol
Bill to Assist Homeless and Foster Youth Introduced in Senate
Senators Patty Murray (D-WA), Mary Landrieu (D-LA), and Tammy Baldwin (D-WI) introduced S. 1754, the Higher Education Access and Success for Homeless and Foster Youth Act, on November 21. The bill has been referred to the Committee on Health, Education, Labor, and Pensions.
The legislation makes changes to the Higher Education Act to address ongoing barriers to higher education for homeless and foster youth. Among them, the measure would:
· Define youth under age 24 who are unaccompanied and homeless as “independent students.”
· Prioritize homeless and foster youth for financial aid and other opportunities to make college more affordable.
· Require higher education institutions to create a plan to help homeless and foster students to access housing resources during and between school terms.
· Require new data and outcome monitoring requirements, as well as a U.S. Government Accountability Office study of higher education outcomes for homeless and foster youth.
“A college degree is a critical stepping stone to a successful career, and every American deserves the same opportunity to go to college and chase their dreams, including young people who are homeless or in foster care,” Senator Murray said. “The legislation I introduced isn’t complicated; it simply reduces some of the incredible barriers that homeless and foster care youth face to make a better life through higher education.”
S. 1764 will be available at http://thomas.loc.gov/home/thomas.php.
House Subcommittee Considers Effectiveness of Disparate Impact Standard
The House Financial Services Subcommittee on Oversight and Investigations held a November 19 hearing on disparate impact theory and whether the practice meets its goal of protecting against discrimination. A legal precedent, the disparate impact standard holds that the Fair Housing Act prohibits practices resulting in discrimination, regardless whether there was intent to discriminate.
The hearing featured testimony covering diverse perspectives on civil rights. Subcommittee Chair Patrick McHenry (R-NC) stated that fundamental fairness is critical to the success of the lending system, that discrimination is intolerable, but that it is important to have honest conversations about the effectiveness of safeguards.
Peter Kirsanow, with the law firm of Benesch, Friedlander, Coplan & Aronoff, testified that HUD’s codification of disparate impact in February was ill conceived (see Memo, 2/8). “Despite others’ protestations, it simply is not the case that Congress intended the Fair Housing Act to include disparate impact,” Mr. Kirsanow said, adding that HUD’s proposed rule on Affirmatively Furthering Fair Housing is “built on sand.”
Kenneth Marcus of the Louis D. Brandeis Center for Human Rights Under Law testified that extending the Fair Housing Act to judge disparate impact is unwarranted. “In the fair housing context, the most obvious problem is that the applicable statute does not explicitly authorize it,” he said. “The disparate impact doctrine can be used to identify intentional discrimination that is hard to demonstrate under the doctrine of differential treatment. Used judiciously, disparate impact can be a useful enforcement tool for identifying intentional or unconscious discrimination in circumstances where the discriminators’ motivations are otherwise difficult to ascertain. Used improperly, however, it creates real problems of law and public policy and may entail violations of the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution.”
Both Mr. Marcus and Mr. Kirsanow expressed concern that disparate impact policy is vague and would not survive a review by the current Supreme Court. They claimed that the standard forces housing lenders to make decisions that restrict loans to underserved communities, and that enforcing it diverts limited resources from investigating organizations that deliberately discriminate against protected classes.
Dennis Parker of the American Civil Liberties Union’s Racial Justice Program disagreed, testifying that fair housing violations committed during the recent mortgage lending crisis would not have been identified without the disparate impact standard. Mr. Parker disputed claims about its vagueness, characterizing it as very clear and the basis for many successful Fair Housing violation prosecutions. Continuing the standard is critical to ensuring that mortgage lending is available to all communities, especially protected classes, he said
Despite the varied opinions, all subcommittee members and those providing testimony agreed that protections against discrimination are critical to a healthy lending environment.
View the hearing webcast and documents: http://1.usa.gov/1iuVS4a
HUD Issues Sandy Guidance
HUD has issued a notice on the “Second Allocation, Waivers, and Alternative Requirements for Grantees Receiving Community Development Block Grant (CDBG) Disaster Recovery Funds in Response to Hurricane Sandy.” Released on November 18, the notice announced a $5.1 billion allocation that can be used to address the ongoing recovery from presidentially declared disasters that occurred in 2011, 2012, and 2013, which includes Super Storm Sandy. The effective date for the notice is November 25. Funds must be used within two years of the obligation of funds, and no later than September 30, 2017.
The notice requires grantees to submit a substantial amendment to their previously approved action plans, indicating how the new round of funds will be used, and how so within the required timeframe. Grantees also are required to specify how funds will be used to address outstanding needs of HUD-assisted housing, other than housing operated by public housing agencies which already is required, as well as for other types of subsidized or tax credit-financed properties.
The HUD notice is available at: http://1.usa.gov/17TZ4El
NOVEMBER 16-24 IS NATIONAL HUNGER AND HOMELESSNESS AWARENESS WEEK. Information, planned events, and ideas are available from the National Coalition for the Homeless.
FEWER RURAL JOBS, MORE POVERTY, AND DECLINING POPULATION, RESEARCH SHOWS. The USDA Econom-ic Research Service’s annual “Rural America at a Glance” report says rural unemployment is declining, but – with exceptions in some areas – the change is due to declining populations rather than job creation. An article in the online rural news source the Daily Yonder summarizes ERS’s findings. A separate Daily Yonder analysis of unemploy-ment data in August 2012 and August 2013 includes an interactive map with figures for every county in the U.S.
RD CHANGES MULTIFAMILY TRANSFER PROCESS. An Unnumbered Letter dated September 30, 2013 focuses on determining the financial feasibility of a transfer or preservation transaction, including reducing Rental Assistance. Contact RD State Office preservation staff.
HUD CONSIDERS RISK SHARING INITIATIVE FOR SMALL MULTIFAMILY PROPERTIES. Comments are due January 3 on a proposal for mission-driven lenders, including CDFIs, to originate, underwrite, and service loans with HUD mortgage insurance for refinancing or rehab of small properties. Lenders would assume 50% of the risk on each loan. Contact Lynn Wehrli, HUD, 202-402-5210.
FEMA ISSUES FINAL RULE ON ASSISTANCE FOR HOUSING DAMAGE. Revisions to FEMA's repair, replacement, and housing construction assistance regulations are intended to clarify the eligibility criteria for assistance and to implement legislative changes. Contact John Carleton, FEMA, 202-212-1000.
HOUSING COUNSELING COMMENT PERIOD EXTENDED. Comments are now due December 12 on changes to HUD’s housing counseling program regulations, published September 13 (see HAC News, 9/11/13). Contact Ruth Román, HUD, 202-708-0317.
USDA USED MOST SECTION 502 FUNDS, BUT NOT SECTION 504 LOANS, IN FY13. Despite USDA’s success-ful efforts to attract borrowers near the end of the year (see HAC News, 8/1/13 and 8/28/13), HAC estimates that USDA used only 53% of its Section 504 home repair loan funds in FY13. Section 504 grant funds were fully used, and Section 502 direct and guaranteed loans were almost entirely obligated. HAC’s final USDA obligations reports for the year are posted online.
USDA ENCOURAGES LOCAL PARTNERSHIPS TO ADDRESS VETERAN HOMELESSNESS. An Unnumbered Letter dated November 8, 2013 suggests that RD field staff inform local organizations about RD housing programs.
HUD AND DOT LAUNCH SITE ON HOUSING AND TRANSPORTATION COSTS. The Location Affordability Portal is intended to provide consumers, researchers, and policymakers with data and resources on combined housing and transportation costs for all parts of the U.S. including remote rural areas.
SEQUESTRATION’S IMPACT ON GOVERNMENT ACTIVITIES, INCLUDING HOUSING, DESCRIBED. Faces of Austerity: How Budget Cuts Have Made Us Sicker, Poorer, and Less Secure, published by NDD United, compiles data, quotes, and individual stories. The Center on Budget and Policy Priorities has updated its data on use of HUD vouchers, including the number of vouchers that will be lost in each state if sequestration continues in FY14.
RESEARCH FROM SOURCES INCLUDING HAC COVERS VETERANS HOUSING ISSUES. “Housing Our Heroes: Veterans in Rural America,” a HAC research brief, summarizes data on demographics, housing conditions, and homelessness. USDA’s Economic Research Service provides demographic and economic data in “Rural Veterans at a Glance.” (ERS uses data for nonmetro areas, while HAC uses a definition of rural based on census tracts.) Housing Instability Among Our Nation’s Veterans, a National Low Income Housing Coalition report, examines housing issues for veterans nationwide. “Rental Assistance Helps More Than 300,000 Veterans Afford Homes, But Large Unmet Needs Remain,” from the Center on Budget and Policy Priorities, also covers the topic on a national basis.
RECORD SHARE OF YOUNG ADULTS LIVING AT HOME. More than one-third of Millennials aged 18-31 are living with their parents, according to A Rising Share of Young Adults Live in Their Parents’ Home, published by the Pew Research Center. A Forbes analysis of the report suggests that federal policies favoring homeownership led to high housing prices that young adults cannot afford.
HAC REPORTS ON FARMWORKER HOUSING. Housing Conditions for Rural Farmworkers explains character-istics of farmworker housing and obstacles to its improvement.