Federal Housing News
April 11, 2013
NATIONAL HOUSING TRUST FUND
Next Steps on Housing Finance Reform
With Congress in recess for two weeks, Senate Banking Committee staff are working to agree on possible amendments to the “Johnson-Crapo” housing finance reform draft legislation that was made public on March 16. The Banking Committee is scheduled to mark-up the bill on April 29, the day after Senators return from recess. No agreed upon changes have been made public and several Senators on the committee continue to withhold their support pending potential amendments.
The major news of the week was about increased lobbying efforts by hedge funds and other who own stock in Fannie Mae and Freddie Mac and who want to be paid dividends before the companies are wound down and replaced by a new mortgage insurance entity. They are not expected to prevail with the Senators.
NLIHC remains hopeful that when the bill is marked up, it will continue to apply 75% of a new 10 basis point fee on users of the new system to the National Housing Trust Fund (NHTF). This is estimated to generate $3.75 billion a year in dedicated revenue to the NHTF.
On the House side, NLIHC President and CEO Sheila Crowley sent a letter to House Financial Services Committee Ranking Member Maxine Waters (D-CA) to thank her for funding provided for the NHTF in Ms. Waters’ draft housing finance reform legislation.
The letter, dated April 8 and sent on behalf of NLIHC’s members, thanks Representative Waters “for creating a robust dedicated source of revenue for the National Housing Trust Fund (NHTF) in your draft Housing Opportunities Move the Economy (HOME) Forward Act. We are grateful for your long time support of the NHTF and your prioritization of the housing needs of very poor people.” This bill, like the Johnson-Crapo bill, would direct 75% of the 10 basis point fee on users of the new housing finance system to the NHTF (see Memo, 3/28).
Read the letter to Representative Waters at: http://nlihc.org/sites/default/files/NLIHC_Waters_HOME_ForwardTY_2014.pdf
House THUD Appropriations Subcommittee Holds Second Hearing
The House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD) held its second hearing on HUD’s FY15 budget request on April 10 (see Memo, 4/4). HUD Secretary Shaun Donovan was the sole witness.
Subcommittee Chair Tom Latham (R-IA) opened the hearing by asking Secretary Donovan to address the “whopping $2.8 billion” difference between HUD’s FY15 estimate of receipts for the Federal Housing Administration (FHA) and the Congressional Budget Office’s (CBO) estimate of FHA receipts. FHA receipts are used to offset some of HUD’s annual expenses. The accuracy of the estimate is crucial as it dictates how much general revenue the subcommittee has to appropriate to cover the rest of HUD’s programs.
Secretary Donovan explained that HUD “made two very significant changes in premiums” for FHA products in the last year that CBO did not incorporate in its estimate. Despite anticipating lower FHA activity volume, HUD’s changes will result in higher premiums.
Mr. Latham urged the Secretary to address these differences with CBO, saying that a $2.8 billion difference in estimates “will have dire consequences.” Secretary Donovan replied that he believes CBO will score HUD’s FY15 budget request using HUD’s FHA premium changes. CBO is expected to release its score of HUD’s FY15 budget request during the week of April 14.
Ranking Member Ed Pastor (D-AZ) and Representative Charlie Dent (R-PA) questioned the Secretary about HUD’s proposed changes to the Community Development Block Grant (CDBG) program. Mr. Pastor criticized HUD’s proposal to fund CDBG at the “lowest level since 1976.”
Secretary Donovan said that HUD strongly supports reauthorization of CDBG. He reported that in the last year HUD launched the “Moving CDBG Forward” initiative to gather feedback on the program and develop recommendations to improve the program. HUD will seek three priority changes for CDBG: targeting funds to reach areas most in need, streamlining the program, and increasing accountability. Secretary Donovan said that HUD is preparing proposed legislative changes that will be submitted to Congress in six to eight weeks, as well as regulatory changes that HUD can make without Congressional authorization.
Representative Jaime Herrera-Beutler (R-WA) asked Secretary Donovan if HUD’s proposal to align the Project-Based Rental Assistance (PBRA) contract renewal cycle with the calendar year would “help end the uncertainty felt by the owners and managers of these properties?” The Secretary responded, “Absolutely,” and that HUD would not have proposed the shift if that goal could not be achieved.
Ranking Member on the House Appropriations Committee Nita Lowey (D-NY), asked the Secretary to discuss the Rental Assistance Demonstration (RAD). She said New York public housing agencies (PHAs) are using RAD with great success. Secretary Donovan reiterated what he said at the last House Subcommittee hearing that expanding the RAD cap would allow an additional 180,000 units of public housing to be converted and would leverage $6 billion in funding. RAD projects that HUD has already approved will create 34,000 jobs, primarily in construction. He also noted that to HUD’s surprise, RAD is being used disproportionately by smaller PHAs.
Representatives Mike Quigley (D-IL) and David Price (D-NC) asked about the Housing Opportunities for Persons with AIDS (HOPWA) program. Mr. Quigley wanted to know if HUD would be proposing any further changes to HOPWA. Secretary Donovan said that HUD will not propose changes beyond those in the FY15 budget request. HUD proposes to change the HOPWA formula to focus on areas with the greatest need. The proposed formula would be based on the number of people living with HIV (rather than cumulative AIDS cases), Fair Market Rents (FMRs), and the poverty rate in a community.
Mr. Price praised HUD for proposing to replace a formula that “simply doesn’t match the right amount of funding to the real need today around the country.” Mr. Price said he would urge the Subcommittee to include report language updating the formula in the HUD appropriations bill. The Secretary added that HUD also is trying to “create an alignment” between the offices that administer HOPWA and homeless assistance funding to help HUD better address the “increasing overlap between those populations.”
View Secretary Donovan’s testimony: http://appropriations.house.gov/calendar/eventsingle.aspx?EventID=374562
House Appropriations Committee Marks-up First 302(b) Allocations
The House Appropriations Committee marked up two of its twelve FY15 302(b) levels on April 9, a move that created some partisan discord. Committee Chair Hal Rogers (R-KY) said that the Committee could not mark up all of its 302(b) allocations before CBO scored the President’s budget. However, he wished to proceed with interim 302(b) allocations for the Military Construction and Veterans Affairs bill, and the Legislative Branch bill because “these bills are reasonably small” and he did not expect much variation in their allocations, regardless of CBO’s score.
Ranking Member Nita Lowey (D-NY) called this process “highly unusual” and objected to marking up two 302(b) allocations instead of waiting to mark up all twelve simultaneously. She said that the 302(b) process was created so that bills would not be marked up separately, which could result in those considered earlier in the process taking a greater share of the allocation. “The whole purpose of 302(b) is to make sure the last bill has funding available,” said Ms. Lowey. Representative Rosa DeLauro (D-CT) urged Committee members to support a “transparent and legitimate process by voting no” on approving just two of the 302(b) allocations. The Committee approved the two allocations by a voice vote.
At the start of the Congressional budget cycle, the Appropriations Committees take the overall spending budgeted for the fiscal year (called the 302(a) allocation) and divide it between the twelve Appropriations Subcommittees. The amounts budgeted for the Subcommittees are the 302(b) allocations.
House Passes FY15 Budget Resolution
On April 10, the House of Representatives passed its FY15 budget resolution H.Con.Res. 96, known as the “Path to Prosperity,” by a narrow margin. The vote was 219 in support and 205 opposed. Twelve Republican members voted with the Democrats to oppose the budget resolution.
The “Path to Prosperity,” introduced by House Budget Committee Chair Paul Ryan (R-WI) on April 1 (see Memo, 4/4), calls for broad cuts to social programs including food stamps and Pell education grants, repealing the Affordable Care Act, increasing the defense budget, and maintaining large tax breaks for wealthy individuals and businesses. Mr. Ryan’s budget has been widely criticized for its drastic cuts to social programs, with some Democrats referring to it as “The Path to Ruin.”
Democratic Members of the House Budget Committee put forth their own budget plan for FY15. The “Democratic Alternative Budget,” introduced by House Budget Committee Ranking Member Chris Van Hollen (D-MD), would increase funding for Function 600 Income Support. This section of the budget includes resources for most rental assistance programs. The Democratic Alternative Budget would fund Income Support at $532.2 billion for FY15, compared to the Path to Prosperity funding level of $505.7 billion.
The Path to Prosperity FY15 budget resolution will have little effect on the FY15 appropriations process because the FY15 discretionary spending cap was negotiated in December 2013 in the Bipartisan Budget Act of 2013. The Administration and Congressional appropriators have already based their budget and appropriations work on that FY15 spending cap. The Ryan budget simply signals what Republicans would like to do if they controlled the budget process.
View the vote results: http://clerk.house.gov/evs/2014/roll177.xml
View the “Path to Prosperity”: http://budget.house.gov/uploadedfiles/fy15_blueprint.pdf
View the House Democratic Alternative Budget here: http://democrats.budget.house.gov/issue/democratic-budget-fy-2015
MORE CAPITOL HILL
Homeless Youth Dear Colleague Being Circulated
Senator Elizabeth Warren (D-MA) and Representative Rosa DeLauro (D-CT) are circulating a “Dear Colleague” letter, requesting members of the House and Senate to co-sign a letter to HUD Secretary Shaun Donovan that asks HUD to provide more guidance on how funds intended to serve unaccompanied homeless youth will be distributed.
Specifically they ask HUD to include guidance in the Notice of Funding Availability for its Continuum of Care program that “strongly encourages applicants to include promising practices for identifying and documenting unaccompanied homeless youth,” and to “set appropriate performance measures for youth programs, which often have goals that are distinct from those that service chronically homeless adults and families.”
Current co-signers to the letter are: Representatives John Conyers (D-MI), Jim McDermott (D-WA), Carolyn Maloney (D-NY), Louise Slaughter (D-NY), John Lewis (D-GA), Jose Serrano (D-NY), Alcee Hastings (D-FL), Barbara Lee (D-CA), and Jan Schakowsky (D-IL).
To read the letter go to: http://bit.ly/1p37vFg
Office of Multifamily Asset Management Staff to Remain at Current Locations
An April 1 letter signed by the Chairs and Ranking Members of both the Senate and House Appropriations Committees endorsed four of the five components of HUD’s April 24, 2013, proposed Multifamily Transformation plan. The component that was rejected would have consolidated Asset Management field employees. As a result, HUD’s Office of Multifamily Housing Programs has announced that staff performing asset management functions will remain in their current locations for the time being. HUD states that as part of the FY15 budget process, the agency will continue to work with Congress to gain approval to consolidate Asset Management staff.
The Appropriators did endorse streamlining the Office of Multifamily Housing Program’s Production and Operations field staff by moving to a five-region field structure, with each region having one hub office and one or two core satellite offices. They also endorsed HUD’s proposals to undertake workload sharing, use an Underwriter Model in Production functions, and adopt an Account Executive Model in Asset Management (see Memo, 4/26/13).
The future hub and core satellite locations will be:
- Central Region: Fort Worth hub office with Kansas City, MO core satellite office;
- Midwest Region: Chicago hub office with Detroit and Minneapolis core satellite offices;
- Southeast Region: Atlanta hub office with Jacksonville core satellite office;
- Northeast Region: New York hub office with Boston and Baltimore core satellite offices; and,
Western Region: San
Francisco hub office with Denver core satellite office.
View HUD’s announcement about the Congressional action at: http://bit.ly/1hEBr6I
View “Moving Forward with Multifamily Transformation” and “Multifamily Q&A” at:
HOUSE SUBCOMMITTEE HEARING ON FY15 RD BUDGET SET FOR FRIDAY. At 10:00 a.m. Eastern time on April 4, USDA Rural Development officials will testify on the Administration’s FY15 budget request before the House Agriculture Appropriations Subcommittee. The hearing will be webcast. Updates will be posted on HAC’s site.
WATERS PROPOSES GSE REFORM BILL. On March 27 Rep. Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, released a discussion draft of a bill that would replace Fannie Mae and Freddie Mac with a lender cooperative and would fund the National Housing Trust Fund. It would also replace the affordable housing goals, instead requiring the cooperative to “facilitate” service to all income levels, including borrowers in underserved urban and rural markets. There are also two proposals in the Senate (see HAC News, 3/19/14) and H.R. 2767, introduced by Rep. Jeb Hensarling (R-TX), which passed the House Committee in July 2013 (see HAC News, 8/1/13).
USDA OFFERS HOUSEHOLD WATER WELL SYSTEM GRANTS. Nonprofits can use these funds to establish lending programs for homeowners, who can borrow up to $11,000 to construct or repair household water wells for existing homes. This year’s competition will give points to high-poverty places and to colonias or substantially underserved trust areas. Deadline is May 27. Contact Joyce M. Taylor, RUS, 202-720-9589.
DEADLINE EXTENDED FOR RD ENVIRONMENTAL RULES COMMENTS. Comments on environmental policies and procedures are now due May 7 instead of April 7. (See HAC News, 2/5/14.) Contact Mark S. Plank, RD, 202-720-1649.
NLIHC REPORT CONFIRMS HOUSING COSTS STILL OUT OF REACH. The National Low Income Housing Coalition’s annual Out of Reach report, prepared with HAC assistance for nonmetro data, shows a gap remains between rural rent and rural renters’ incomes. NLIHC estimates that the average hourly wage for nonmetro renters nationwide is $10.24, which falls $3 short of the Housing Wage necessary to afford a two-bedroom home at HUD’s Fair Market Rent. The nonmetro Housing Wage is out of reach for those earning the average renter wage in all but two states (Alaska and North Dakota), though the gap is very small in four other states (Arizona, Nevada, Oklahoma, and Wyoming). The report and data for states, counties, and metro areas are online, as is a HAC Rural Research Note.
GAO ADDRESSES TRIBES’ HOUSING CHALLENGES. Native American Housing: Additional Actions Needed to Better Support Tribal Efforts, GAO-14-255, is based on site visits, interviews, and sources including HAC. It states that challenges tribes face in their use of Indian Housing Block Grant funds are “largely related to remoteness and other geographical factors, land use regulations, lack of adequate infrastructure, differing federal agency requirements, potential reduction in training opportunities and program support, limited administrative capacity, conflict within tribes, and cultural factors.” GAO recommends changes such as federal agency coordination of environmental impact requirements.
NEW INDEX SHOWS WIDE OPPORTUNITY GAP FOR CHILDREN OF DIFFERENT RACES/ETHNICITIES. Race for Results: Building a Path to Opportunity for All Childrencompiles indicators on health, education, family environment, and neighborhood poverty into a single index and presents results for each state. Nationally, Asian/Pacific Islander and White children have far higher index scores than Latino and Native American children, and African-American children have the lowest. At the state level, the lowest scores were among American Indian children in South Dakota. Scores vary across states for all groups, but the range of scores is widest for American Indian children and narrowest for Latino children.
REPORT STRESSES HOME- AND COMMUNITY-BASED SERVICES FOR SENIORS. Aging in Every Place: Supportive Service Programs for High and Low Density Communities says such services are a cost-effective way to help older adults maintain their quality of life as they age in their homes. Published by the Center for Housing Policy at the National Housing Conference, the report notes that successful programs in rural places often offer transportation, use existing community centers, or bring services to the homes of those who are unable to travel.
RURAL HOUSING AND YOUTH SPOTLIGHTED IN RURAL VOICES. Looking to the Future: Housing and Youth in Rural America is the latest issue of HAC’s magazine. Sign up online for email notices when new issues are published, or request one free print subscription per organization from Dan Stern, HAC, 202-842-8600.