December 22, 2010

H.R. 3082: Continuing Appropriations and Surface Transportation Extensions Act

Yesterday, Congress passed an amended version H.R. 3082, the Continuing Appropriations and Surface Transportation Extensions Act.  Instead of a full year continuing resolution (CR) and increased funding levels for multifamily housing programs, as proposed by the original House bill, Congress has extended the CR through March 4, 2011.  This means all federal programs will be funded at FY 2010 levels through March 4.  This will give House and Senate additional time to consider the FY 2011 omnibus appropriations legislation in the 112th Congress.

The bill also provided an extension for current surface transportation programs.

The legislation will now go to President Obama to be signed into law.

S. 118: Section 202 Supportive Housing for the Elderly Act

This week, the House and Senate passed S. 118, the Section 202 Supportive Housing for the Elderly Act.  This legislation simplifies development and facilitates preservation of affordable, supportive, senior housing.  It allows Section 202 properties to pre-pay their debt and use excess proceeds to further the non-profits’ housing and services mission.  The properties may also use residual receipts and requires HUD to provide project-based rental assistance for the project under a senior preservation rental assistance contract in the case of refinancing, rehabilitation, and other preservation efforts. 

NAHMA, in conjunction with industry colleagues, has been working extensively with House and Senate authorizers to pass this important legislation.  We are very pleased to see S. 118 will finally become law.

The legislation will now go to President Obama to be signed into law.

S. 1481: The Frank Melville Supportive Housing Investment Act

This week, the House and Senate passed S. 1481, the Frank Melville Supportive Housing Investment Act.  The act would provide assistance to private nonprofit organizations to expand the supply of housing for persons with disabilities through capital advances and contracts for project rental assistance.  It would also provide incremental vouchers to the Section 811 properties through Tenant Based Section 8.  

In addition, S. 1481 also allows delegated processing for Section 811 applications to state and local housing agencies.  It modernizes the capital advance program and the tenant selection process, as well as increases tenant protections.  The bill would make technical corrections to Section 811 to increase project flexibility.  The act also authorizes appropriations of $300 million for FY 2011-2015.

Finally, the legislation would require a GAO study on the section 811 program to determine its adequacy and effectiveness at helping the disabled low-income population.

NAHMA, in conjunction with industry colleagues, has been working extensively with House and Senate authorizers to pass this important legislation.  We are very pleased to see S. 1481 will finally become law.

The legislation will now go to President Obama to be signed into law.

 

December 17, 2010

H.R.4853: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

This week, Congress passed H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.  The act extends the expiring Bush tax cuts for all income levels for two years.

The act also contains language extending the GO Zone LIHTC placed in service date from January 1, 2011 to January 1, 2012.

The final legislation did not contain an extension for the ARRA Section 1602 cash-exchange program to 2010 housing tax credits that NAHMA and the industry have been requesting.  The legislation also did not contain a paired down version of the Section 8 Voucher Reform Act NAHMA requested be included on the first available, moving legislative vehicle as a cost offset.

The legislation will now go to President Obama for his signature into law.

Continuing Resolution

Despite the Senate Democrats desire to pass an omnibus appropriations bill, it seems likely that both the House and Senate will approve extending the continuing resolution from December 18, 2010 to February 1, 2011.  This will give Congress more time to reconsider passing the omnibus appropriations legislation, discussed below, or agree to extend the continuing resolution for the full year.

No votes have been taken on the CR extension as of press time.

Senate’s FY 2011 Consolidated Appropriations Act

Prior to the sudden change in strategy on appropriations, Senator Daniel Inouye had introduced an amendment to the House’s Full-Year Continuing Appropriations Act for FY 2011, the omnibus FY 2011 Consolidated Appropriations Act.  The legislation would cost $1.108 trillion, $29 billion below the President’s budget request.  The bill provides appropriations for all federally funded programs for FY 2011, which include several federally-subsidized multifamily housing programs.  Unlike the House’s proposal (the Full-Year Continuing Appropriations Act for FY 2011), the Senate omnibus does include earmarks, which has become a large point of contention for Republicans and fiscally conservative Democrats.

Because of the conflict surrounding the omnibus legislation, it does not appear that the Senate will consider the omnibus legislation before the end of the 111th Congress and the holiday break.  As noted above, Congress is proposing extending the CR through February 1, 2011 to give appropriations legislation, whether it is an omnibus or a full year CR in FY 2011, additional time for consideration.
For the most part, the Senate omnibus legislation’s funding levels mirror the House’s continuing resolution appropriations for multifamily HUD programs in FY 2011.  The Senate omnibus would increase the number of specialized vouchers available to tenants (mortgage maturation protection, veteran’s vouchers, etc.).  The omnibus provides full funding for all tenant-based vouchers and all 12-month project-based Section 8 contracts.  It also provides funding for LEP translations and does not provide funding for HUD’s transformation of rental assistance initiative.  However, the omnibus would decrease the amount of funding available for new construction of Section 811 properties.  The Housing and Urban Development FY 2011 funding levels proposed by omnibus are as follows:

• Tenant-Based Rental Assistance: $19.2 billion (total); $16.99 billion (contract renewals)
  -House FY 2011 CR: $18.86 billion (total); $16.99 billion (contract renewals)
  - Budget Request:  $19.6 billion (total); $17.3 billion (contract renewals)
  - FY 2010 Appropriation: $18.2 billion (total); $16.339 billion (contract renewals)
• Project-Based Rental Assistance:  $9.28 billion (total); $8.88 billion (contract renewals); $400 million as an FY 2012 Advanced Appropriation included in the total funding level
  -House FY 2011 CR: $9.28 billion (total); $8.88 billion (contract renewals); $400 million as an FY 2012 Advanced Appropriation included in the total funding level
  - Budget Request: $9.4 billion total; $9.04 billion (contract renewals); $400 million as an FY 2012 Advanced Appropriation included in the total funding level
  -FY 2009 Appropriation: $8.5 billion (total); $8.325 billion (contract renewals); $393 million as an FY 2011 Advanced Appropriation included in the total funding level
• Limited English Proficiency (LEP) Funding: $500,000
  -House FY 2011 CR: $500,000 (no language requiring the zero out of this account in the legislation)
  - Budget Request: $0
  - FY 2010 Appropriation: $500,000
• Section 202 Housing for the Elderly:  $825 million; $465 million for new construction, $210 million for PRACs, $90 million for services coordinators, $40 million for assisted living conversions, and $20 million for non-profit planning grants
  -House FY 2011 CR: $825 million (no cuts to new construction as proposed in FY 2011 budget request)
• - Budget Request: $274 million
  - FY 2010 Appropriation:  $825 million
• Section 811 Housing for the Disabled:  $235 million; $169 for new construction, $66 for PRACs
  -House FY 2011 CR: $300 million (no cuts to new construction as proposed in FY 2011 budget request)
  - Budget Request: $90 million
  - FY 2010 Appropriation: $300 million
• HOME: $1.825 billion
  -House FY 2011 CR: $1.825 billion
  - Budget Request:  $1.65 billion
  - FY 2010 Appropriation: $1.825 billion
• CDBG: $4.45 billion; $3.99 billion for grants (includes earmarks)
  -House FY 2011 CR: $4.25 billion; $3.99 billion for grants (does not include earmarks)
  - Budget Request: $4.38 billion; $3.99 billion for grants  
  - FY 2010 Appropriation: $4.45 billion; $3.99 billion for grants
• Hope VI: $200 million; up to $90 million for the Choice Neighborhoods demonstration program
  -House FY 2011 CR: $200 million; up to $65 million for the Choice Neighborhoods demonstration program (nothing in the legislative language alters this)
  - Budget Request: $0
  - FY 2010 Appropriation: $200 million; up to $65 million for the Choice Neighborhoods demonstration program
• Choice Neighborhoods Initiative to replace Hope VI: Up to $90 million for the Choice Neighborhoods demonstration program
  -House FY 2011 CR: Up to $65 million for a demonstration program under the Hope VI account
  - Budget Request: $250 million
  - FY 2010 Appropriation: $65 million for the Choice Neighborhoods demonstration program under the Hope VI account
• Transforming Rental Assistance Initiative: $0
  -House FY 2011 CR: $0
  - Budget Request: $350 million
  - FY 2010 Appropriation: n/a

The omnibus would fund rural housing programs at levels equal to or below the FY 2010 appropriations.  The House continuing resolution proposal would provide slightly more money to rural rental assistance and the multifamily housing revitalization program than the Senate omnibus has proposed.  The omnibus proposal generally falls in line with the President’s budget request, which proposed flat-lining or decreasing appropriations available to multifamily rural housing programs.  The USDA-RHS FY 2011 funding levels proposed by omnibus are as follows:

• Rural Rental Assistance: $966 million
  -House FY 2011 CR: $972 million
  -Budget Request:  $966 million
  - FY 2010 Appropriation: $980 million
• Rural housing assistance grants for rehabilitation and repairs: $40 million
  -House FY 2011 CR:$45 million
  -Budget Request:  $0
  - FY 2010 Appropriation: $45 million
• Section 515 Housing Direct Loans: $69.5 million, includes $23.4 million for repair, rehab, and new construction
  -House FY 2011 CR:$69.5 million
  -Budget Request:  $95 million
  - FY 2010 Appropriation: $69.5 million
• Section 538 Housing Loan Guarantees: $129 million, no interest subsidies included
  -House FY 2011 CR: $129 million, no interest subsidies included
  -Budget Request:  $129 million, no interest subsidies included
  - FY 2010 Appropriation: $129 million, no interest subsidies included
• Multifamily Housing Revitalization Program: $40.8 million; $14 million for vouchers, $25 million for the demonstration program, and $1.8 million for non-profit loans
  -House FY 2011 CR: $43.2 million; $16.4 million in vouchers, $25 million for the demonstration program, and $2 million for non-profit loans
  -Budget Request:  $18 million for housing vouchers
  - FY 2010 Appropriation: $43.2 million; $16.4 million in vouchers, $25 million for the demonstration program, and $2 million for non-profit loans

Republican House Financial Services Committee Members Announced

This week, the Republicans announced the following Representatives would be joining the House Financial Services Committee in the 112th Congress: Francisco Canseco (R-TX), Robert Dold (R-IL), Sean Duffy (R-WI), Michael Fitzpatrick (R-PA), Michael Grimm (R-NY), Nan Hayworth (R-NY), Bill Huizenga (R-MI), Robert Hurt (R-VA), Blaine Luetkemeyer (R-MO), Steve Pearce (R-NM), Steve Stivers (R-OH), and Lynn Westmoreland (R-GA).

Republican House Ways and Means Committee Members Announced

This week, the Republicans announced the following Representatives would be joining the House Ways and Means Committee in the 112th Congress:  Rick Berg (R-ND), Diane Black (R-TN), Vern Buchanan (R-FL), Jim Gerlach (R-PA), Lynn Jenkins (R-KS), Christopher Lee (R-NY), Erik Paulsen (R-MN), Tom Price (R-GA), Aaron Schock (R-IL), and Adrian Smith (R-NE).

The Republicans will have 22 seats on the Ways and Means Committee and the Democrats will have 15.  Six Democratic Committee members who won re-election are expected to be dropped from the Committee roster.

Republican House Appropriations Committee Members Announced

This week, the Republicans announced the following Representatives would be joining the House Appropriations Committee in the 112th Congress:  Steve Austria (R-OH), Mario Diaz-Balart (R-FL), Steve Womack (R-AR), Alan Nunnelee (R-MS), Tom Graves (R-GA), Jeff Flake (R-AZ), Kevin Yoder (R-KS), Charlie Dent (R-PA), and Cynthia Lummis (R-WY).

The Republicans will have 29 seats on the Committee, while Democrats will have 20 seats.  Six Democratic Committee members who won re-election are expected to be dropped from the Committee roster.

 

December 10, 2010

House Committee Leadership Announced

This week, the House Democrats and Republicans announced the leadership for Committees for the 112th Congress.

Spencer Baucus (R-AL) will become the Chair of the House Financial Services Committee, while Barney Frank (D-MA) will become the Ranking Member.  Judy Biggert (R-IL) will be the Chair of the Insurance, Housing and Community Opportunity Subcommittee.

The Appropriations Committee Chair will be Harold Rogers (R-KY).  Norm Dicks (D-WA) will assume the Committee Ranking Member position.

Dave Camp (R-MI) will be the Ways and Means Committee Chairman, while Sanders Levin (D-MI) will be the ranking member.

Most of the Subcommittee leadership positions have still not been determined.  Committee members typically vote on the Subcommittee leadership at the beginning of the new Congress.  NAHMA has updated our 2010 Midterm Election NAHMAnalysis to reflect these changes.  We will let members know when the House Subcommittee leaders and Senate Committee leaders are finalized.

H.R. 3082: Full-Year Continuing Appropriations Act for FY 2011

This week, the House passed legislation that would freeze FY 2011 discretionary appropriations at the FY 2010 level; providing $45.9 billion less than the Obama Administration’s budget request for the year.  The legislation would also eliminate all Congressional earmarks in FY 2011. 

The legislation essentially is a continuing resolution (CR), funding government programs at FY 2010 levels, for FY 2011 in its entirety.  However, it does provide specific funding adjustments for certain programs.  In terms of multifamily housing programs, both the tenant-based and project-based Section 8 accounts received increases in funding.  NAHMA has been advocating for the full 12-month funding for project-based Section 8 contracts in FY 2011.  We are pleased the House has included an adjustment for this account, despite the funding freeze.

FY 2011 Rural Housing Service multifamily program funding levels specified by H.R. 3082 include:

• Rural Rental Assistance: $972 million
  -Budget Request:  $966 million
  - FY 2010 Appropriation: $980 million

FY 2011 HUD multifamily program funding levels specified by H.R. 3082 include:

• Tenant-Based Rental Assistance: $18.86 billion (total); $16.99 billion (contract renewals) and $4 billion as an FY 2012 Advanced Appropriation available October 1, 2011
  - Budget Request:  $19.6 billion (total); $17.3 billion (contract renewals)
  - FY 2010 Appropriation: $18.2 billion (total); $16.339 billion (contract renewals)
• Project-Based Rental Assistance:  $9.28 billion (total); $8.88 billion (contract renewals) and $400 million as an FY 2012 Advanced Appropriation available October 1, 2011
  - Budget Request: $9.4 billion total; $9.04 billion (contract renewals) and $400 million as an FY 2012 Advanced Appropriation available October 1, 2011
  -FY 2010 Appropriation: $8.5 billion (total); $8.325 billion (contract renewals) and $393 million as an FY 2011 Advanced Appropriation available October 1, 2010
• CDBG: $4.25 billion; $3.99 billion for grants
  - Budget Request: $4.38 billion; $3.99 billion for grants  
  - FY 2010 Appropriation: $4.45 billion; $3.99 billion for grants

The legislation is expected to be considered by the Senate in the next week.  Senate Appropriations Committee Chairman Daniel Inouye (D-HI) has indicated his interest in substituting an omnibus appropriations bill for the long-term CR, which would include all 12 appropriations acts, for the House passed language.  The Senate Appropriations Committee has crafted omnibus language that would be $26 billion below the Administration’s FY 2011 budget request, but $18 billion above FY 2010 due to increases for the Defense and State Departments.  It remains to be seen whether the Senate will accept the House language or substitute the omnibus language.
NAHMA urges our members to contact your representatives and let them know you support:

• Full funding for all multifamily housing programs, including:

• Full funding for all 12-month project-based Section 8 contracts;
• Continued funding for new construction for the Section 202 and Section 811 programs; and
• $500,000 for LEP translations; and

• The inclusion of the SEVRA language on the first available legislative vehicle.

If you would like to contact your Senators, please visit: http://www.senate.gov/general/contact_information/senators_cfm.cfm

If you would like to contact your Member of the House of Representatives, please visit: http://www.house.gov/writerep/

H.R. 6500: Housing Opportunities Made Equal (HOME) Act

This week, Rep. Jerry Nadler (D-NY) introduced H.R. 6500, the Housing Opportunities Made Equal (HOME) Act.  The legislation would amend the Fair Housing Act to prohibit discrimination based on sexual orientation, gender identity, source of income, and marital status.

The legislation has been referred to the House Financial Services and Judiciary Committees.

 

December 3, 2010

FY 2011 Appropriations

This week, Congress extended the continuing resolution (CR), which makes continued appropriations for government at FY 2010 levels, from December 3 to December 18, 2010. 

During this two-week extension, Congress will consider whether to extend the CR into 2011 or to pass the FY 2011 Omnibus Appropriations bill.  Media reports indicate Congress will likely extend the CR until late January, early February of 2011 and consider the FY 2011 appropriations legislation in the 112th Congress.

H.R. 6468: Rental Housing Revitalization Act

Rep. Keith Ellison (D-MN) introduced H.R. 6468, the Rental Housing Revitalization Act (RHRA), this week.  H.R. 6468 is the revised version of HUD’s proposed Preservation, Enhancement, and Transforming Rental Assistance Act (PETRA), which was released as a legislative draft last May.

RHRA will offer the PETRA’s voluntary conversion option for public housing and privately owned RAP, Rent Supp, and old Mod Rehab properties to long-term project-based rental assistance.  RHRA, like PETRA, will also include a resident mobility feature.  Under the legislation, Congress would be required to give statutory approval to expand RHRA to other programs.  Section 8 owners could voluntarily convert their contracts to RHRA, unless they request to renew under MAHRA.

The legislation would still include a first right of purchase by HUD for converted properties, a more detailed explanation on the resident mobility feature, and an expansion/streamlining of tenants rights in federally-assisted housing programs.  The streamlining efforts include the release of building and management information to tenants’ organizations, similar to Section 304 from H.R. 4868, the Housing Preservation and Tenant Protection Act.

Ellison does not believe the 111th Congress will consider this legislation.  Rather, RHRA will act as a place-holder for the 112th Congress starting in January 2011.  He also intends to use RHRA as a jumping off point for further discussion with HUD and industry groups—including public housing, multifamily owners, and tenants’ organizations. 

Several concerns NAHMA members had with PETRA remain in H.R. 6468.  We are also extremely concerned about the inclusion of a section that would release building and management information to tenants’ organizations.  Therefore, NAHMA opposes this legislation as introduced. 

NAHMA will be releasing an updated NAHMAnalysis on this legislation to our members in the near future. 

S. 510: FDA Food Safety Modernization Act

This week, the Senate attempted to attach two amendments to S. 510, the FDA Food Safety Modernization act, which would have repealed the requirement in the health care bill that businesses file 1099 forms for payments of $600 or more to corporations. 

The amendments required at least two-thirds of the Senate’s approval, 66 votes, to be attached to S. 510.  The amendment from Sen. Mike Johanns (R-NE) would have offset the repeal with unused stimulus funds.  It failed by a vote of 61 in favor, 35 against.

The amendment from Sen. Max Baucus (D-MT) did not have an offset to pay for the lost revenue.  It failed by a vote of 44 in favor, 53 against.

National Commission on Fiscal Responsibility and Reform Report “The Moment of Truth” Released

This week, the bipartisan National Commission on Fiscal Responsibility and Reform released their draft proposal, “The Moment of Truth,” to address the United States’ fiscal challenges.  The Commission’s report suggests that the government adopt a massive overhaul of taxation, government spending, and the social safety net in order to reduce the nation's mounting national debt.

The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run.  It is made up of both Democrats and Republicans appointed by President Obama.  The leadership consists of former Senator Alan Simpson, a Republican, and Erskine Bowles, the former chief of staff to President Bill Clinton.  Twelve of the members are current Congressional representatives.  They are: Sen. Rich Durbin (D-IL), Sen. Max Baucus (D-MT), Sen. Kent Conrad (D-ND), Sen. Judd Gregg (R-NH), Sen. Tom Coburn (R-OK), Sen. Michael Crapo (R-ID), Rep. Jan Schakowsky (D-IL), Rep. Xavier Becerra (D-CA), Rep. John Spratt (D-SC), Rep. Dave Camp (R-MI), Rep. Paul Ryan (R-WI), and Rep. Jeb Hensarling (R-TX).  Others Commission members include: Alice Rivlin, a former budget director to Congress and to President Clinton; David Cote, the chief executive of Honeywell International; Ann Fudge, a former chief executive of Young & Rubicam; and Andrew Stern, President of the Service Employees International Union.

The proposal recommends cutting discretionary spending by $50 billion immediately and reducing spending by $200 billion by FY 2015, reforming the tax code, containing health care costs, reforming subsidy and government pension programs, reforming social security, and reforming the budgetary process.  Both the discretionary spending cuts and reforming the tax code could directly affect the affordable housing industry.

The report proposes capping discretionary spending through FY 2020 by gradually reducing spending to FY 2008 levels.  Both defense and non-security spending would be eligible for cuts.  The proposal goes further, suggesting Congress and the Obama Administration cut at least 15 percent of their budgets, freeze the pay of government employees for at least three years, reduce the size of the government workforce, reduce travel and printing budgets, and eliminate earmarks.  This could potentially results in harmful spending cuts to affordable housing programs if implemented.

The report suggested streamlining the corporate tax rate, which would eliminate all tax deductions and expenditures for businesses.  These eliminations would encompass tax credits that aid in affordable housing development and preservation, including the low-income housing tax credit (LIHTC), New Markets Tax Credit (NMTC), historic rehabilitation tax credits, and energy tax credits.  The President's Economic Recovery Advisory Board (PERAB) made a similar proposal in their August 28, 2010 report: “The Report on Tax Reform Options:  Simplification, Compliance, and Corporate Taxation.”

The Commission needs the agreement of 14 of its 18 members to formalize their recommendations and send the suggestions to Congress for a vote. 

A copy of the report can be found here: http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf

NAHMA recognizes there will be very difficult decisions made in the near future by Congress in order to reduce government spending.  NAHMA will continue working with Congress and the Obama Administration to ensure multifamily rental housing programs receive adequate appropriations. 

We would also like to encourage NAHMA members to remain active in their grassroots advocacy efforts to keep affordable housing issues, including funding levels, at the forefront of Congressional and the Administration’s agenda.  Please let NAHMA know if you need any assistance contacting your Congressional representatives to let them know you support full funding for affordable housing rental programs.

 

November 19, 2010

House and Senate Leadership for 112th Congress

This week, both the Congressional Democrats and Republicans agreed upon their respective leaders for the 112th Congress, which will begin on January 5, 2011.

The House Republicans have chosen Rep. John Boehner (R-OH) as the Speaker of the House and Rep. Eric Cantor (R-VA) as the Majority Leader.  The House Democrats have selected Rep. Nancy Pelosi (D-CA) as Minority Leader. 

The Senate Democrats will keep Senator Harry Reid (D-NV) as their Majority Leader.  The Senate Republicans have also opted to keep Senator Mitch McConnell (R-KY) as the Minority Leader.

Committee leadership and seat assignments for the 112th Congress are still being determined.  NAHMA will be releasing a NAHMAnalysis on the mid-term elections results and the new Congressional leaders in the next few weeks.

FY 2011 Appropriations and the Continuing Resolution

It seems very likely that Congress will extend the continuing resolution (CR), which would fund government programs at FY 2011 levels, that ends on December 3, 2010 through at least late January, early February 2011.  Senate Appropriations Chairman Daniel Inouye (D-HI) has publically started that he wants the Senate to try and pass an omnibus appropriations bill for FY 2011 instead of extending the CR for the full fiscal year. 

However, if the CR is extended, the FY 2011 omnibus appropriations legislation would likely be considered at the beginning of the 112th Congress. 

Nevertheless, nothing is certain at this point.  NAHMA will keep members informed as more information on FY 2011 appropriations becomes available.

S. 3964: Small Business Paperwork Relief Act

This week, Senate Finance Chairman Max Baucus (D-MT) introduced legislation to repeal the requirement in the health care bill that businesses file 1099 forms for payments of $600 or more to corporations.  The Chairman has not elaborated on how to pay the additional $17 billion in revenue this provision was supposed to provide to offset the costs of the health care bill.

The legislation has been referred to the Senate Finance Committee.

112th Congress Starts January 5

The House and the Senate agreed that the first session of the 112th Congress would begin on Wednesday, January 5, 2011.  The final adjournment date for the 111th Congress is still yet to be determined.

 

November 5, 2010

2010 Midterm Elections: G.O.P. Retakes the House, Dems Retain Control of Senate

The nation held its 2010 Midterm Elections on Tuesday.  The G.O.P. retook the House of Representatives, gaining at least 60 seats.  The Republicans now control 239 seats in the House, while the Democrats currently control 186 seats.  Ten House seats were still being contested at press time.

Rep. John Boehner (R-OH) will become Speaker of the House for the 112th Congress, which will begin in January 2011.  Current Speaker of the House Nancy Pelosi (D-CA) has been quiet on whether or not she will seek the Minority Leader position in the House.

The media is reporting that a few of the senior Republicans plan to challenge Rep. Spencer Baucus (R-AL) for the Chairmanship of the House Financial Services Committee, including Rep. Ed Royce (R-CA).  Rep. Barney Frank (D-MA) is expected to remain the House Financial Services Committee Ranking Member.

Rep. Jeb Hensarling (R-TX) and Rep. Michele Bachmann (R-MN) have both announced they will seek the G.O.P. Conference Chair position. 

The Democrats retained control of the Senate, but did lose six seats to the Republicans.  Democrats currently have 52 seats, while Republicans have 46.  There are two undecided seats.  At press time, the election for the Washington state Senate seat was going to Sen. Patty Murray (D-WA).  The Alaska seat appeared to be going to write-in candidate and current incumbent, Sen. Lisa Murkowski (R-AK).  Murkowski is expected to vote with the Republicans, despite running as an Independent. 

Senate Majority Leader Harry Reid (D-NV) maintained his seat in a tight election against Tea Party Insurgent Sharron Angle.  Reid will remain Senate Majority Leader and Senator Mitch McConnell (R-KY) is expected to remain Senate Minority Leader. 

Sen. Blanche Lincoln (D-AR) lost to Republican challenger John Boozman.  Pat Toomey (R) beat out Rep. Joe Sestak (D-PA) for Pennsylvania’s Senate seat.  Tea Party-supported candidate Mark Rubio won against Democratic nominee Rep. Kendrick Meek (D-FL) and the former Florida Government Charlie Crist, who ran as an Independent, for the Senate election in Florida.

NAHMA will be releasing a more detailed analysis of the 2010 midterm election and possible new authorizing and appropriations Committee leadership in a NAHMAnalysis in the coming weeks.

FY 2011 Omnibus Appropriations Act

The media is reporting that the Democrats and working in conjunction with the Republicans on the FY 2011 Omnibus Appropriations Act.  The spending package is expected to hold discretionary spending for FY 2011 to $1.108 trillion, the same cap that Senate Republicans pushed for earlier this year.
Senate Minority Leader Mitch McConnell (R-KY) is quoted as saying he would like the FY 2011 spending bills completed as quickly as possible. 

Congressional staff officials said they hope to have the measure ready for a sign-off from members as early as next week.

NAHMA has been working in conjunction with House Financial Services majority staff, HUD, and industry partners on affordable housing authorizing language the Committee staff would like to include in the omnibus.  The language is expected to include elements of SEVRA, including LEP authorizing language, and authorization language allowing RAP and Rent Supp programs to convert to project-based Section 8 contracts.  It is still unknown if this language will be included in the omnibus as introduced.

NAHMA will have more information on the omnibus in the November 19 Washington Update.

 

October 1, 2010

H.R. 3081 Department of State, Foreign Operations, and Related Programs Appropriations Act of 2010 and Continuing Resolution

This week, the House and the Senate both passed H.R. 3081, which provided funding for Department of State, Foreign Operations, and related programs through September 30, 2010.  H.R. 3081 also included a continuing resolution (CR) to provide funding for government programs, including federally-subsidized multifamily housing programs, at FY 2010 levels through December 3, 2010.  Congress did not pass a single appropriations bill for FY 2011 before they went on break to campaign for the mid-term elections. 

Although the bill provided funding for all government programs at FY 2010 levels, it did not include language that would direct HUD to obligate funds to renew or amend, in a timely manner, all project-based Section 8, Section 202, and Section 811 rental assistance contracts and would allow payments to be made beyond the CR end date.  The FY 2008 and 2009 CRs included such language to help prevent delays in processing and sending HAPs to O/As in order to avoid late payments. According to a source on the House Appropriations Committee, the language is no longer necessary because OMB and HUD currently support the 12-month obligations for project-based Section 8.  The source explained the Committee felt the direction was no longer required.

President Obama signed the measure into law yesterday.  Congressional aides have told the media they expect to resume consideration of the regular FY 2011 appropriations acts when the House and Senate return for a lame-duck session the week of November 15.

S. 118: Section 202 Supportive Housing for the Elderly Act of 2009 and S.1481, H.R. 1675: Frank Melville Supportive Housing Investment Act of 2009

Yesterday, the Senate Banking Committee marked up and passed S. 118, the Section 202 Supportive Housing for the Elderly Act of 2009, and S.1481/H.R. 1675, the Frank Melville Supportive Housing Investment Act of 2009, in an executive session.

Both bills included managers’ amendments that made technical and clarifying changes.  The text of the managers’ amendments was not available at press time, but it is understood that the changes did not alter the portions of the legislation NAHMA supports.

The next step is for the bills to be considered on the Senate floor.

House Financial Services Committee Holds Hearing on Housing Finance Reform Proposals

On Wednesday, the House Financial Services Committee held a hearing to discuss proposals and reform the housing finance system, including the government sponsored entities (GSE) of Fannie Mae and Freddie Mac.  Several experts on the panel testified on ways to strengthen affordable housing when reforming the housing finance system. 

Co-President of Wells Fargo Home Mortgage and Chairman of the Housing Policy Council of The Financial Services Roundtable, Michael Heid, suggested providing a separate flow of funding to support affordable owner-occupied and rental housing.  He proposed having privately capitalized mortgage securities insurance companies
support owner-occupied and rental housing for extremely-low and very-low income families.  However, Heid did not believe the mortgage securities insurance companies should be subject to specific housing goals.

Former Treasury Department Assistant Secretary for Economic Policy Phillip Swagel, now a visiting professor at Georgetown University’s McDonough School of Business, discussed his hesitancy to support fostering affordable housing through private firms with potentially conflicting missions.  Instead, he supported funding affordable housing through the public sector and possibly targeting affordable housing resources on low-income families in the future.  He believed that rental assistance is an important component for policies that seek to improve access to affordable housing going forward.

President of the National Housing Trust Michael Bodaken testified that providing quality rental housing should play an equal role to that of home ownership when reforming the housing finance system.  He said that, often, the discussion of rental housing as a meaningful part of addressing American’s housing needs is sidelined.  He discussed the success of Fannie Mae’s and Freddie Mac’s affordable housing portfolios, citing significantly lower delinquency rates on their multifamily mortgages when compared to their single family mortgage portfolios, “private label” investors in multifamily mortgaged back securities, and commercial bank loans for multifamily developments. 

Bodaken reminded the Committee that preserving Section 8 housing was one of the most effective ways to solve the housing needs of low-income renters.  He also reminded the Committee of the role low-income housing tax credits play in preserving the affordable rental housing portfolio.  Any changes in the future housing finance system must take into account the ways a Section 8 property is financed, Bodaken said.

The Managing Director and Policy Director at e21: Economic Policies, Christopher Papagianis, echoed Bodaken’s concerns that rental housing should be treated more equitably with homeownership in the housing finance system.  However, he cautioned that renters should not receive more subsidies because of this.

Congress in Recess Until November 15

Congress will be on a break to campaign for the mid-term elections for the next six weeks.  They will return on November 15 for a lame duck session to consider the FY 2011 appropriations bills, tax extenders legislation, and extending the Bush Administration tax cuts from 2001 and 2003.

The NAHMA Washington Update will be on hiatus until November 5, after the mid-term elections. 

 

September 24, 2010

HUD Releases Draft Notice of Section 202 and 811 Updated Guidance

Today, HUD posted a draft Notice on “Updated Guidance for the Section 202 Supportive Housing for the Elderly and Section 811 Supportive Housing for Persons with Disabilities Programs” for stakeholder review and comment.  The draft Notice can be found here: http://www.hud.gov/offices/hsg/mfh/progdesc/progdesc.cfm

NAHMA will be meeting with DAS Galante to discuss possible changes to the Section 202 and 811 programs next week.  We will be submitting comments on the draft Notice.  Please let us know if you have any thoughts that you would like us to incorporate into the NAHMA comments.  The last day to submit comments to NAHMA is COB Wednesday October 6, 2010. 

H.R. 5297: Small Business Jobs Act

The House and the Senate have both passed H.R. 5297, the Small Business Jobs Act.  The act will provide $30 billion in capital to community banks to help them boost lending to creditworthy small businesses looking to hire and expand their operations.  The legislation is intended to help small businesses that are struggling to gain access to credit due to the financial crisis.  Under the legislation, community banks would be required to repay the capital over time.

The National Association of Affordable Housing Lenders believe this legislation will help finance more affordable rental housing through more loans to the small businesses, driving economic growth in their local communities

The legislation will now go to President Obama for his signature.

S. 3717: Repealing SEC Exemption of Information for Investment Advisers from FOIA

Both the House and Senate passed S. 3717 this week.  The bill would repeal language in the financial regulatory overhaul (H.R. 4173, P.L. 111-203: Wall Street Reform and Consumer Protection Act of 2009) that allows the SEC to exempt information about investment advisers from the Freedom of Information Act (FOIA).  Under this legislation, hedge fund managers and similar vehicles would be treated in the same manner as securities firms and investment advisers for FOIA purposes.

The legislation will now go to President Obama for his signature.

FY 2011 Appropriations

Both House and Senate Appropriations Committee staff have confirmed that funding for federal government programs will be provided by a continuing resolution (CR), and not the regular appropriations legislation, through the November mid-term elections.  This includes funding for federally-subsidized multifamily housing programs administered by USDA and HUD. 
 
Yesterday, Senate Banking Chairman Chris Dodd (D-CT) indicated at the Senate Banking Committee hearing on FHA reform that the CR would last through December, but the CR end date has yet to be confirmed by the appropriators.  We do not know what the text of the CR will contain.  We expect to have more information to include in next week’s NAHMA Washington Update.

H.R. 6179: Community Awareness Act of 2010

This week, Rep. Charles Djou (D-HI) introduced H.R. 6178, which would require nonprofits to hold public meetings regarding the establishment of special needs housing in a community when the non-profit has submitted a Section 811 assistance application to HUD.

The bill has been referred to the House Committee on Financial Services.

 

September 17, 2010

S. 3793: The Job Creation and Tax Cut Act of 2010

Yesterday, Senator Max Baucus (D-MT) introduced legislation, S. 3793, which would extend a number of expiring tax provisions.  The legislation includes the following NAHMA supported provisions: the extension of the cash-exchange program to 2010 LIHTCs and 4 percent credits, the extension placed-in-service rules for buildings in GO zones; and $1.07 billion for the Housing Trust Fund with $65 million set aside for project based voucher assistance.  However, this legislation also contains a modified version of the carried interest offset, which NAHMA opposes.

In the case of affordable multifamily housing properties, carried interest refers to the profits received by a general partner when the property is sold.  To the extent that carried interest reflects a return on invested capital, the bill would continue to tax carried interest at capital gain tax rates.  Capital gain tax rates are around 15 percent.  However, to the extent that carried interest does not reflect a return on invested capital, the bill would require 75 percent of the remaining carried interest to be treated as ordinary income for taxation purposes beginning on January 1, 2011.  Ordinary income tax rates are around 35 percent.  However, the amount of the carried interest treated as ordinary income may be reduced to 50 percent when the sold asset, in this case the property, was held for at least five years.  This proposal is estimated to raise $13.594 billion over 10 years.

NAHMA will continue to support the inclusion of the extensions of the LIHTC cash exchange program and LIHTC Go zone credit rules, as well as the inclusion of appropriations for the Housing Trust Fund, in the final bill.  We oppose the inclusion of the carried interest provision and will work for its removal from the final bill.

President’s Economic Board Proposes Eliminating LIHTC

On August 28, 2010, the President's Economic Recovery Advisory Board (PERAB) released “The Report on Tax Reform Options:  Simplification, Compliance, and Corporate Taxation” detailing potential changes for the current tax system.  The report includes an option to reduce or eliminate particular business tax credits, including the Low-Income Housing Tax Credit (LIHTC), as part of their corporate tax reform proposal. 

PERAB is an advisory panel outside of the Obama Administration that provides counsel to the President on economic recovery and enhancing the strength and competitiveness of the Nation’s economy. 

The report includes eliminating the housing tax credit as a “possible base-broadener” for business tax reform.  The report has also proposed eliminating other tax credits that aid in affordable housing development and preservation, including New Markets Tax Credit (NMTC), historic rehabilitation tax credits, and energy tax credits.

Although the PERAB tax reform report suggests eliminating LIHTCs, along with other tax credits that bolster affordable housing, they cannot require the Obama Administration or Congress to implement the change. 

NAHMA remains a strong supporter of the LIHTC program.  We will continue to support efforts by the Obama Administration and Congress to restart the low-income housing credit market and improve the effectiveness and efficiency of the program.  We will work closely with the Administration and Congress to ensure that these important programs that support affordable housing efforts are not eliminated in the future.

For more information, you may view the full PERAB report (pertinent sections are on pages 77, 79 and 80) by clicking here: http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf

House Financial Services Continues Examination of GSE Reform

Last Wednesday, the full House Financial Services Committee held a hearing on “The Future of Housing Finance: A Progress Update on the GSEs” to discuss strategies to reform Fannie Mae and Freddie Mac. Testimony was given by the Assistant Secretary for Financial Institutions for the Department of Treasury, Michael Barr, and the Acting Director of the Federal Housing Finance Agency, Edward DeMarco.

Barr repeated the Administration’s commitment to delivering a comprehensive proposal for reform of the housing finance system to Congress by January 2011.  Barr also noted a number of criteria the Administration wanted to include in their final reform plan, including: alignment of incentives; avoidance of privatized gains funded by public losses; strong regulation; standardization; support for affordable single and multifamily housing; diversified investor base and sources of funding; accurate and transparent pricing; secondary market liquidity; and clear mandates.  He called for an orderly, well thought-out transition from the GSEs to the new housing finance system with minimally disruption to the market.

DeMarco discussed the possibility of breaking Fannie Mae and Freddie Mac into smaller entities.  If Congress decides to pursue that route, they should allow the markets to decide how many firms should be able to buy and sell secondary mortgages rather than establish a limit on participation, he explained.

DeMarco also cautioned lawmakers in testimony against setting a certain number of private-sector entities that could participate in the secondary market.  Several policymakers have discussed this as a possible housing finance system reform strategy.  "In terms of how many firms there might be in the future ... I would think it's the market that should determine that, not a regulator or the government generally. I would look for a market model where there are licensing of firms to do certain things if they met certain requirements," DeMarco said.

During the hearing, House Financial Services Capital Markets Subcommittee Chairman Paul Kanjorski (D-Pa) raised the issue of licensing about 10 or 15 firms to play a role in the secondary market to prevent any one firm from becoming `too big to fail.' He explained that is what occurred with Fannie and Freddie, which dominated the secondary market because of their private-public structure as government-sponsored enterprises.

Barr said setting a parameter on the number of firms in the secondary market could not be reached until policymakers outlined the shape of the new system, such as whether the federal government will provide backstop guarantees and how to ensure financial stability and credit availability.  He also noted one major question would be whether more firms participating would actually decrease risk in the system.

 

August 6, 2010

H.R. 5872: General and Special Risk Insurance Funds Availability Act

On Wednesday, the Senate passed H.R. 5872, the General and Special Risk Insurance Funds Availability Act.  This act authorizes an additional $5 billion in commitment authority for the FHA multifamily and health care programs. 

NAHMA supports authorizing additional commitment authority for the FHA multifamily program.  We participated in several industry letters requesting Congress to authorize this additional commitment authority.

The House has already passed this legislation.  It will now go to President Obama for his signature. 

S. 3700, H.R. 3527: FHA Multifamily Loan Limit Adjustment Act
 
This week, Senator Chuck Schumer (D-NY) introduced companion legislation to H.R. 3527, the FHA Multifamily Loan Limit Adjustment Act.  The bill would increase the maximum mortgage amount limitations under the FHA mortgage insurance programs for multifamily housing projects with elevators and for extremely high-cost areas.  This proposal was also included in H.R. 5072, the FHA Reform Act.  Both H.R. 3527 and H.R. 5072 have passed the House.
 
NAHMA supports this legislation.  It has been referred to the Senate Banking Committee.

S. 1619, H.R. 4690: Livable Communities Act of 2010

The Senate Banking Committee marked-up and approved S. 1219, the Livable Communities Act this week.  The bill would establish: the Office of Sustainable Housing and Communities; the Interagency Council on Sustainable Communities; a comprehensive planning grant program; and a sustainability challenge grant program. 

The legislation would establish an Office of Sustainable Housing and Communities in HUD to:

• Coordinate Federal policies and initiatives that foster livable communities ;
• Conduct research relating to sustainable development;
• Implement and oversee the grant programs established by this bill;
• Provide guidance, information on best practices, and technical assistance to communities interested in sustainable development;
• Administer initiatives that foster livable communities; and
• Coordinate with other Federal agencies on sustainability issues.

HUD would also be required to publish reports on Housing Location Affordability Index and Incentives for Energy-Efficient Mortgages and Location-Efficient Mortgages.

The bill would also establish the Interagency Council on Sustainable Communities as an independent entity in the executive branch, to be made up of the Secretaries of HUD and Transportation, the Administrator of the Environmental Protection Agency, and any other official the President recommends.  Duties of the Council include:

• Ensuring interagency coordination of Federal policy on sustainable development;
• Creating government and private partnerships and improving knowledge relating to sustainable development;
• Coordinating Federal sustainable development research agendas;
• Establishing a clearinghouse for guidance, best practices, and other information for those seeking to implement sustainable development practices; and
• Coordinating efforts to overcome impediments to sustainable development.

Under this act, the Office of Sustainable Housing and Communities in HUD would oversee two new grant programs: a comprehensive planning grant program and a sustainability challenge grant program.
The comprehensive planning grant program would:

• Coordinate land use, housing, transportation, and infrastructure planning processes across jurisdictions and agencies;
• Identify partnerships for developing and implementing a regional plan;
• Conduct regional needs assessments to promote sustainable development;
• Develop or update a regional sustainable development plan; and
• Implement code changes necessary to implement a comprehensive regional plan and promote sustainable development.

The Sustainability Challenge Grant Program would:

• Promote integrated transportation, housing, energy, and economic development activities carried out across policy and governmental jurisdictions;
• Promote sustainable and location-efficient development; and
• Implement projects identified in a comprehensive regional plan.

The legislation will now go before the full Senate for consideration.

 

July 30, 2010

H.R. 4868: Housing Preservation and Tenant Protection Act

On Tuesday, the House Financial Services Committee approved H.R. 4868, Housing Preservation and Tenant Protection Act, with a number of amendments.  

Section 107

While Section 107, the first right of refusal, remains in the bill, the State Housing Agencies are given the right of first refusal instead of HUD through the manager’s amendment, which was accepted by a voice vote.  Chairman Barney Frank (D-MA) made this change to address cost concerns associated with a federal first right of purchase.  It is currently  unclear whether state agencies sought or even want this authority.

Reps. Shelley Moore Capito (R-WV), Randy Neugebauer (R-TX), and Michelle Bachmann (R-MN) offered an amendment to remove Section 107 in its entirety, which NAHMA has been requesting since the bill was introduced.  However, this amendment was defeated.

Section 304

The manager’s amendmentremoved the 2530 disclosure requirement from Section 304, which allows residents to access owners’ private and sensitive information on building documents, from the underlying bill.  However, the section still requires release of the owner and agents' statement of profit and loss and disclosure of contracts and property information (such as inspection reports) in the absence of a bona fide purchase offer—which NAHMA contends is contrary to standard real estate practice.  It also provides that HUD must redact any information which identifies, or could be used to identify, a resident of the property.

Rep. Capito introduced an amendment that would strike Section 304.  She asked Chairman Frank if the committee would work with her office on improving the section and ensuring property owners and agents’ proprietary information was protected.  The Chairman agreed and Rep. Capito withdrew the amendment.  NAHMA will continue to work with Rep. Capito and the Chairman on this section.

Section 302

The manager’s amendment also clarified that Section 302, which allows HUD to withhold assistance and tenants to withhold their rent contributions from landlords, would apply to projects with HAP contracts or contracts renewed under the Multifamily Assisted Housing Reform and Affordability Act  of 1997 (MAHRAA).  It prohibits owners from evicting or taking adverse action against tenants that withhold their rent.  It requires HUD to provide written notice to affected residents within 14 days of determining there are substantial or repeated violations or program requirements by the owner/agent. It also prohibits owners from evicting or retaliating against tenants for signing a petition to request an inspection or management review under this section.

Rep. Dennis Moore (D-KS) introduced an amendment that would strike the language in Section 302 which allows HUD to withhold assistance and tenants to withhold their rent contributions from landlords and put the money into an escrow account to make repairs when violations of housing standards or program requirements arise.  The amendment replaces the provision with a six-month study on the effectiveness of the escrow proposal.  This amendment was accepted by the committee.

Rep. Joe Baca (D-CA) introduced an amendment that would include a provision in Section 302 that would require HUD to give notice to tenants when a violation by an owner or agent on a property occurs.  It would also require HUD to notify tenants of their rights, including the right to withhold rent, within this situation.  This amendment was approved.  However, it is still unclear if the amendment was rendered null by the Moore amendment to Section 302.  NAHMA will provide additional information as it becomes available.

Section 303

The manager’s amendment made technical changes to Section 303—which allows tenants to enforce owners’ housing agreements with HUD through lawsuits if HUD or its designee fails to issue a determination regarding an enforcement request within 90 days after receipt of the petition.  The amendment also added a new paragraph stating that nothing in this section shall diminish other rights provided to tenants under other provisions of law.

Rep. Neugebauer introduced a solo amendment that would strike Section 303, as NAHMA has been advocating.  Unfortunately, the amendment was defeated by the committee.

Section 108

Rep. Capito introduced a second solo amendment that would strike Section 108, which provides a vague blanket exemption of state and local preservation laws from federal pre-emption.  NAHMA had requested that the committee remove this section in its entirety.  The amendment was defeated by the committee.

Chairman Frank introduced an amendment to Section 108 that would narrow the scope and circumstances of the types of state and local preservation laws that would pre-empt Federal law.  This narrowing amendment was approved.

Additional Changes

Rep. Gwen Moore (D-WI) introduced an amendment that would provide payment of exit taxes from a property’s residual funds on a case-by-case basis when the property is sold to a preservation entity.  This amendment was included in the approved version of H.R. 4868.

Rep. Tom Price (R-GA) offered two amendments during the debate.  The first contained a provision that would prohibit PHAs and federally-assisted property owners from barring gun-ownership by tenants in their properties.  Rep. Carolyn McCarthy (D-NY) offered an amendment to the provision to ensure sex offenders were still barred from bringing guns onto federally-assisted properties.  Rep. Maxine Waters (D-CA) offered an amendment to the Price amendment that would require gun owners in the property to declare they have a gun to the owners and/or managers of the properties.  The Waters’s amendment to the Price amendment was defeated.  Both the McCarthy and Price amendments were approved.

The second Price amendment would create Title IX, Housing Assistance Requirement, within H.R. 4868.  Under the amendment, potential and existing tenants would be required to show a social security card and a form of government issued photos identification in order to receive housing assistance.  Rep. Keith Ellison (D-MN) offered a substitution to this amendment that, instead, would give HUD the right to determine what identification was necessary to prove an individual’s eligibility for assistance.  The Ellison amendment to the Price amendment was voted down.  The Price amendment, unaltered, was adopted.

Rep. Jim Himes (D-CT) offered a modified version of his legislation, H.R. 4106, the Green Affordable Housing Act of 2009, as an amendment to H.R. 4868.  The amendment would authorize HUD to create a program to offer grants and loans to owners of federally assisted housing projects for costs of making green retrofit improvements.  NAHMA has been working with Himes’ staff to improve the reporting requirements in the bill.  However, the length of the reporting period was not changed within the text of the amendment, which would require properties that participated in the grant and loan program to report regularly on energy savings until the end of the estimated cost-savings period.  This amendment was adopted by the committee.

Rep. Rubén Hinojosa (D-TX) offered an amendment that would authorize the use of service coordinators in rural housing properties.  This amendment was approved for inclusion.

Rep. John Adler (D-NJ) offered an amendment that would change the rent calculations within the Section 8 housing choice voucher program.  A single-person household would receive a subsidy equal to the market cost of an efficiency apartment instead of a one-bedroom apartment.  Current tenants would be exempt from this rent allocation change unless and until they moved out of their current residence.  The amendment offers an exemption to local PHAs when there are not a sufficient number of efficiencies to house all single-person households in the area and only one-bedrooms are available.  The amendment was approved.

The legislation will now go to the House floor for consideration.  NAHMA will continue to work with Congress to remove the most offensive provisions of the legislation:  Section 107, Section 108, Section 302, Section 303, and Section 304.

H.R. 5850, S. 3644: FY 2011 Transportation HUD Appropriations

Yesterday, the House approved H.R. 5850, the FY 2011 T-HUD Appropriations.  The House-passed version of the FY 2011 T-HUD Appropriations Act contains an amendment from Rep. Marcy Kaptur (D-OH) which would eliminate all travel funding for HUD.  Kaptur and the other amendment sponsors argued that HUD officials should not travel on business until they address the nation's housing crisis.  The legislation’s companion may be considered in the Senate next week.

The legislative text of the Senate FY 20011 T-HUD Appropriations bill also became public this week.  It includes $500,000 for limited English proficiency funding.

The Senate legislation also contains a number of general provisions that would impact the multifamily housing industry.  Section 212 of the Senate bill gives HUD the authority to transfer Project-Based Section 8 rental assistance to another property.  Section 215 extends HUD’s student rule in Project-Based Section 8 for FY 2012.  Section 217 instructs HUD on managing and disposing of any multifamily property that is owned by HUD.  Section 219 requires HUD to report quarterly to Congressional appropriators on their use of all sole-source contracts, including terms of the contracts, cost, and a substantive rationale for using a sole-source contract.  Section 226 requires HUD to report quarterly to Congress on the status of all Section 8 project-based housing, including the number of all project-based units by region as well as an analysis of all federally subsidized housing being refinanced under the Mark-to-Market program.  Section 229 allows refinancing and prepayment of certain Section 202 loans if the project sponsor agrees to operate the project until the maturity date of the original loan and the prepayment may involve refinancing of the loan.  Section 232 allows the Disaster Housing Assistance Programs to be considered a HUD program for the purpose of income verifications and matching.

H.R. 5814: Public Housing Reinvestment and Tenant Protection Act of 2010

On Tuesday, the House Financial Services Committee approved H.R. 5814, the Public Housing Reinvestment and Tenant Protection Act of 2010.  This legislation contains authorizing language for HUD’s Choice Neighborhoods Initiative, one-for-one replacement for public housing units, an additional HUD loan program to help public housing leverage additional capital for preservation and rehabilitation, and a pilot program to train public housing residents to provide home-based health services.

The Choice Neighborhoods Act would expand the demolition and reconstruction of distressed housing activities in high poverty areas beyond public housing to other federally-assisted buildings and community assets.  The program, which is intended to replace HUD’s HOPE VI program,  would allow both non-profit and for-profit entities to participate in demolishing and rebuilding distressed housing in these areas and improving communities.  Developers must ensure one for one unit and bedroom replacement.  Tenants must be involved in the planning process as well and allowed to return to the new residences once they are completed.

This legislation will now go to the House floor for consideration.

H.R. 476, House Fairness Act of 2009

On Wednesday, the House Financial Services Committee approved H.R. 476, the Housing Fairness Act. 

H.R. 476 would require nationwide testing of the enforcement of policies to combat housing discrimination, authorize $52 million to fund the Fair Housing Initiative Program, and create a competitive matching grant program for nonprofit organizations to examine the causes and effects of housing discrimination.  

The legislation will now go to the House floor for consideration.

 

July 23, 2010

H.R. 4868: Housing Preservation and Tenant Protection Act

The House Financial Services Committee plans to mark-up H.R. 4868, the Housing Preservation and Tenant Protection Act, this Tuesday, July 27, at 10 AM EST.

At this point in time, the House Financial Services Committee has not removed the provisions NAHMA opposes from the legislation. 

We urge NAHMA and AHMA members to contact your Congressional Representatives that sit on the House Financial Services Committee, and tell them you oppose H.R. 4868 as long as it contains the following provisions:

• Section 107, the federal right of first refusal which would allow HUD or its assignee multiple opportunities to purchase an assisted property before it could be sold to a third party;
• Section 108, providing a vague blanket exemption of state and local preservation laws from federal pre-emption;
• Section 302, which allows HUD to withhold assistance and tenants to withhold their rent contributions when violations of housing standards or program requirements arise;
• Section 303, which allows residents to enforce housing agreements with HUD through lawsuits; and
• Section 304, which allows residents to access owners’ private and sensitive information, including 2530/APPS filings, on building documents.

Please urge your Representative to ask Committee Chairman Barney Frank to remove these harmful sections from the bill.  Please call today July 23 or Monday July 26.  The legislation is being considered by the Committee on Tuesday, July 27, morning.

When you call, please request the staff member that handles housing issues and ensure you get their name.  Please request them to follow up with you on the Representative’s position.

For talking points on H.R. 4868, please see: http://www.nahma.org/Leg%20area/HR%204868%20one%20pager.pdf

For a copy of a grassroots letter to your representative detailing your opposition to the legislation with the offensive provisions, please click here: http://www.nahma.org/Leg%20area/HR%204868%20NAHMA%20Member%20Grassroots%20Letter.doc

If you have any questions on contacting your Representative, please email or call Lauren (lauren.eardensohn@nahma.org or 703-683-8630 x. 16) for more information.

For more information on the mark-up, please click here: http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1340

For the live webcast, please click here on Tuesday, July 27, at 10 AM EST: http://financialserv.edgeboss.net/wmedia-live/financialserv/16489/300_financialserv-qwertyuiop_070131.asx

For information on contacting your representatives, please click here: http://www.house.gov/writerep/

H.R. 4213: Unemployment Compensation Extension Act of 2010

This week, Congress passed HR. 4213, the Unemployment Compensation Extension Act.  This legislation provided an extension of unemployment benefits and insurance.  The act, as passed, did not include any of the tax extenders that were previously included in the bill that NAHMA supports or the carried interest provision NAHMA opposes.

The provisions NAHMA supported on previous incarnations of the bill, that were not included in the final bill as passed by Congress, included:

• The extension of the LIHTC cash-exchange program to 2010 housing credits;
• Funding for the Housing Trust Fund; and
• An extension of the placed-in-service day for GO Zone LIHTCs.

President Obama signed this legislation into law yesterday.

NAHMA will continue to work with Congress to get the NAHMA supported provisions, as well as the five-year carry back and the expansion of the LIHTC investor pool proposals, on the first available legislative vehicle.

FY 2011 T-HUD Appropriations

This week, both the House and Senate Appropriations Committees approved their versions of the FY 2011 T-HUD Appropriations bills.  While both Committees increased funding for both tenant-based and project-based Section 8, they flat-funded or made cuts to the majority of the other multifamily housing programs.  Both Committees have rejected the Administration’s call to cut new construction funding for Section 202 and 811.  In addition, the Committees have decided not to fund the Obama Administration’s Transforming Rental Assistance Initiative.  The Committees’ leadership has said they want to focus on stabilizing existing programs rather than pursue new initiatives. 

The proposed funding amounts for the multifamily accounts are as follows:

• Tenant-Based Section 8
• House FY 2011 Appropriations: $19.4 billion

• $17.1 billion for contract renewals

• Senate FY 2011 Appropriations: $19.5 billion

• $17.2 billion for contract renewals

• FY 2011 Budget Request: $19.6 billion

• $17.3 billion for contract renewals

• FY 2010 Appropriations enacted: $18.2 billion

• $16.3 billion for contract renewals

• Project-Based Section 8
• House FY 2011 Appropriations: $9.4 billion

• $8.7 billion for contract renewals; and
• $400 million as an advanced appropriations for FY 2012

• Senate FY 2011 Appropriations: $9.4 billion

• $9.1 billion for contract renewals

• FY 2011 Budget Request: $9.4 billion

• $9 billion for contract renewals

• FY 2010 Appropriations enacted: $8.5 billion

• $8.3 billion for contract renewals; with
• $393 million as an advanced appropriation for FY 2011

• Section 811
• House FY 2011 Appropriations: $300 million

• $210 million for new construction; and
• $90 million for contract renewals

• Senate FY 2011 Appropriations: $200 million
• FY 2011 Budget Request: $90 million, no new construction funding
• FY 2010 Appropriations enacted: $300 million
• Section 202
• House FY 2011 Appropriations: $825 million

• $491 million for new construction
• At least $234 million for PRAC renewals
• Up to $90 million for service coordinators, with up to $40 million of the funds used for conversion grants; and
• $20 million for development grants

• Senate FY 2011 Appropriations: $825 million
• FY 2011 Budget Request: $274 million, no new construction funding
• FY 2010 Appropriations enacted: $825 million
• Hope VI
• House FY 2011 Appropriations: $200 million
• Senate FY 2011 Appropriations: $0
• FY 2011 Budget Request: $0
• FY 2010 Appropriations enacted: $135 million
• Choice Neighborhoods (The Obama Administration’s alternative to Hope VI)
• House FY 2011 Appropriations: $0
• Senate FY 2011 Appropriations: $250 million
• FY 2011 Budget Request: $250 million
• FY 2010 Appropriations enacted: $65 million
• CDBG
• House FY 2011 Appropriations: $4.35 billion
• Senate FY 2011 Appropriations: $3.99 billion
• FY 2011 Budget Request: $4.38 billion
• FY 2010 Appropriations enacted: $4.45 billion
• HOME
• House FY 2011 Appropriations: $1.83 billion
• Senate FY 2011 Appropriations: $1.83 billion
• FY 2011 Budget Request: $1.65 billion
• FY 2010 Appropriations enacted: $1.83 billion
• Limited English Proficiency
• House FY 2011 Appropriations: $0
• Senate FY 2011 Appropriations: Not available
• FY 2011 Budget Request: $0
• FY 2010 Appropriations enacted: $500,000
• TRA/PETRA
• House FY 2011 Appropriations: $0
• Senate FY 2011 Appropriations: $0
• FY 2011 Budget Request: $350 million

The House and Senate bills contain a few other notable provisions.  Section 212 of the House bill gives HUD the authority to transfer Project-Based Section 8 rental assistance to another property.  Section 215 extends HUD’s student rule in Project-Based Section 8 for FY 2012.  Section 217 instructs HUD on managing and disposing of any multifamily property that is owned by HUD.  Section 227 allows refinancing and prepayment of certain Section 202 loans if the project sponsor agrees to operate the project until the maturity date of the original loan and the prepayment may involve refinancing of the loan.  Section 230 requires HUD to consider industry standard appraisal practices, including the cost of repairs needed to bring the property into such condition as to satisfy minimum State and local code standards and the cost of maintaining the affordability restrictions when determining the market value of a multifamily property for a non-competitive sale to a State or local government entity.  Section 231 allows the Disaster Housing Assistance Programs to be considered a HUD program for the purpose of income verifications and matching.

While the Senate FY 2011 T-HUD Appropriations legislative text was not available at press time, Senator Kit Bond (R-MI) announced during the mark-up that the Committee has included a provision that would require HUD to follow new transparency guidelines for projects receiving grants from HUD, similar to those used for Congressional special projects and earmarks.  He said that HUD would need to make a comprehensive list of the grant receivers, amounts, and the planned use of the grant which would be made available to the public on hud.gov.

The next step is for both chambers of Congress to approve their respective bills.  However, because the drafting and consideration of these bills occurred so late in the year, there is a possibility that there may be a continuing resolution after September 30, 2010 to provide funding for Transportation and HUD program.  NAHMA will keep members updated as information develops.

S. 3606: FY 2011 Agriculture Appropriations

Last week, the Senate Appropriations Committee passed their version of the FY 2011 Agricultural Appropriations.  In comparison with FY 2010 appropriations levels, both Section 515 and Section 538 were flat-funded, while rental assistance received cuts.  However, the Senate did propose increasing funding for the Multifamily Preservation Demonstration program in comparison with FY 2010 appropriations levels and the FY 2011 budget request. The proposed funding for the multifamily accounts are as follows:

• Section 515: $69.5 million
• FY 2010 Appropriations: $69.5 million
• FY 2011 Budget Request: $95 million
• Section 538: $129 million, no interest subsidies
• FY 2010 Appropriations: $129 million, no interest subsidies
• FY 2011 Budget Request: $129 million, no interest subsidies
• Rental Assistance: $971.6 million
• FY 2010 Appropriations: $980 million
• FY 2011 Budget Request: $966 million
• Multifamily Preservation Demonstration Program: $44 million; $25 million for the preservation demonstration program, $16.4 million for vouchers, $2.7 million for revolving loans demonstration program
• FY 2010 Appropriations: $43 million
• FY 2011 Budget Request: $18 million for vouchers only

The next step is for the full Senate to vote on this legislation.  The House Appropriations Committee has yet to announce when they will mark-up their companion bill.

Senate Appropriations Committee Membership

Senator Sherrod Brown (D-OH) has been appointed to the Senate Appropriations Committee, taking over the seat that was held by Senator Robert Byrd (D-WV), who passed away earlier this month.

 

July 16, 2010

H.R. 4173: Wall Street Reform and Consumer Protection Act of 2009

Yesterday, the Senate passed the conference report for H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009.  The legislation would provide financial regulatory reform, protect consumers and investors, enhance Federal understanding of insurance issues, and regulate the over-the-counter derivatives markets.  

However, the report includes two provisions of interest to the multifamily housing industry.  First, the bill would extend the Protecting Tenants at Foreclosure Act (PTFA) for two years.  PFTA was included in S. 896, Helping Families Save Their Homes Act, which was signed into law last year.  PTFA allows renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease, unless the property is sold to someone who will occupy the home.  It also provides similar protections to housing voucher holders but requires purchasers of foreclosed buildings who receive Section 8 HAPs to honor the existing lease unless they plan to live in the building.  If the new owners plan to use the building as primary residence, they must give 90 days notice to the tenant under PTFA.  This section would also clarify that any lease or tenancy created prior to the change of title as a result of foreclosure is protected by PTFA.

Second, the bill includes a provision that would require the HUD Secretary to develop a program to provide sustainable financing for multifamily properties facing foreclosure. This financing would have to be an amount sufficient to protect tenants and successfully operate the property based on its current rent structure.

The legislation will now go to President Obama to sign into law.

S. 3606: FY 2011 Agricultural Appropriations

Yesterday, the Senate Appropriations Committee passed S. 3606, the FY 2011 Agricultural Appropriations.  The bill includes $22.839 billion in discretionary budget authority—which includes funding for rural housing service programs—a $296 million decrease below the FY 2010  appropriations and $27 million below the President's request. 

The bill includes $2.768 billion in discretionary budget authority for rural development programs—the account where funding for RHS resides—which is a decrease of $168 million from the FY 2010 appropriations and an increase of $85 million above the President's request.  The Senate Appropriations committee has provided increases for both direct and guaranteed single family housing loans. 

No information on the multifamily programs has been made available yet.  The text of the legislation was not available at press time.  NAHMA will provide more information on the line item multifamily accounts next week when it becomes available.

FY 2011 T-HUD Appropriations

The Senate Appropriations Committee is expected to mark-up their version of the FY 2011 T-HUD appropriations as early as next week. 

The House Appropriations Committee is expected to mark-up their version of the FY 2011 T-HUD appropriations next week.

NAHMA will provide additional information on these bills in the July 23 NAHMA Washington Update.

Obama Nominates Lew to be OMB Director

This week, President Obama nominated Deputy Secretary of State for Management and Resources Jacob Lew to head OMB. If confirmed, Lew would replace OMB Director Orszag, who is stepping down this month.

OMB assists the President in overseeing the preparation of the federal budget and supervises the budget’s administration in Executive Branch agencies, like HUD, Treasury, USDA, etc.  OMB also evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities.  Furthermore, the OMB ensures that agency reports, rules, testimony, and proposed legislation are consistent with the President's Budget and with Administration policies.

Lew served as President Clinton's OMB director from 1998 to 2001 and was a member of the National Security Council.

 

July 9, 2010

NAHMA Staff Participates in White House’s “Aligning Federal Rental Policy” Discussions

This week, NAHMA staff participated in a meeting at the White House to discuss harmonizing rental assistance programs.  This is the beginning of the Obama Administration’s dialog with HUD, Treasury, and USDA on opportunities to administratively improve the overlap of federal funding streams.  NAHMA has been requesting the agencies to meet and discuss ways they can streamline the operation of their rental assistance programs for quite some time now.

NAHMA participated in the break-out group which discussed tenant rules across the rental assistance programs.  Potential areas of tenant rules alignment across HUD, RHS, and Treasury included:

• Tenant selection policies (income, household type, students, etc.);
• Income (gross versus adjusted, assets, etc. and income verification);
• Preferences for admission (e.g. homelessness or local preferences);
• Rent calculations and recertifications (income disregards, deductions, etc.);
• Next available unit rules for over-income tenants;
• Tenant grievance procedures, hearing rights, and tenant associations;
• Affirmatively furthering fair housing marketing plans;
• Tenant lease requirements;
• Tenant application requirements; and
• Tenant certification forms.

NAHMA staff also participated in a later break-out group which discussed project supervision and operations compliance.  Potential areas for project supervision and operations alignment across HUD, RHS, and Treasury included:

• Setting of rents;
• Setting of utility allowances;
• Annual site inspections, supervisory visits, and REAC scores;
• Budget reviews and submission of financials;
• Reserve account requirements;
• Servicing fees;
• Differing treatment of services for operating cost calculation; and
• Students

NAHMA will continue to participate in these discussions going forward and keep our members up-to-date on additional information as it becomes available.

FY 2011 Agriculture Appropriations

Last week, the House Appropriations Agriculture Subcommittee passed their legislation for the FY 2011 Agriculture Appropriations.  While the text of the legislation is still unavailable, we do know that the Subcommittee approved $1.3 billion for RHS programs.  This is $101 million below the FY 2010 Agricultural Appropriations level and $72 million above the FY 2011 USDA RHS budget request.

NAHMA will provide additional line item information as it becomes available.

H.R. 4173: Wall Street Reform and Consumer Protection Act

Last week, the House passed the conference report for H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009.  The legislation would provide financial regulatory reform, protect consumers and investors, enhance Federal understanding of insurance issues, and regulate the over-the-counter derivatives markets.  

However, the report includes two provisions of interest to the multifamily housing industry.  First, the bill would extend the Protecting Tenants at Foreclosure Act (PTFA) for two years.  PFTA was included in S. 896, Helping Families Save Their Homes Act, which was signed into law last year.  PTFA allows renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease, unless the property is sold to someone who will occupy the home.  It also provides similar protections to housing voucher holders but requires purchasers of foreclosed buildings who receive Section 8 HAPs to honor the existing lease unless they plan to live in the building.  If the new owners plan to use the building as primary residence, they must give 90 days notice to the tenant under PTFA.  This section would also clarify that any lease or tenancy created prior to the change of title as a result of foreclosure is protected by PTFA.

Second, the bill includes a provision that would require the HUD Secretary to develop a program to provide sustainable financing for multifamily properties facing foreclosure. This financing would have to be an amount sufficient to protect tenants and successfully operate the property based on its current rent structure.

The Senate will consider the conference report beginning next week.

 

July 2, 2010

FY 2011 Budget and H.R. 4899: Emergency Supplemental Appropriations

This week, the House continued their consideration of H.R. 4899, which would make emergency supplemental appropriations for disaster relief and summer jobs for FY 2010.  House Democrats have proposed including, as an amendment, a rule on their budget measure that would set FY 2011 discretionary spending—which includes spending for HUD, Treasury, and USDA—at $1.121 trillion, $7 billion less than the amount President Obama proposed in his FY 2011 budget request.

The provision would also call upon Congress to identify reforms to eliminate waste, duplication, and inefficiencies in their areas of jurisdiction; endorse the goals of the president's deficit commission; and reiterate a commitment to vote on the commission's recommendations.

The amendment is still awaiting a House vote at this time.

FY 2011 Transportation-HUD Appropriations

Yesterday, the House Appropriations Transportation-HUD Subcommittee approved their mark-up of the FY 2011 Transportation-HUD Appropriations along party lines (8-5 vote).  The bill would provide $67.4 billion in discretionary spending for FY 2011—$500 million less than the FY 2010 appropriations level and $1.3 billion below what the president requested in the FY 2011 budget request.  In terms of affordable multifamily housing programs, the legislation includes:

• $19.5 billion for tenant-based Section 8 voucher with $17.23 billion set aside for renewals
  - This amount is $85 million below the FY 2011 budget request and $886 million above the FY 2010 appropriations level;

• $9.38 billion for Project-Based Section 8
  - This amount is the same as the FY 2011 budget request and $830 million above the FY 2010 appropriations level;

• $825 million for Section 202 elderly housing, which includes funding for new construction
  - This amount is $552 million above the FY 2011 budget request, which removed all funding for new construction, and flat funded in comparison with the FY 2010 appropriations level.
  - The legislation also instructs HUD to take administrative action to improve the functioning of this program;

• $300 million for Section 811 special needs housing, which includes funding for new construction
  - This amount is $210 million above the FY 2011 budget request, which removed all funding for new construction, and flat funded in comparison with the FY 2010 appropriations level.
  - The legislation also instructs HUD to take administrative action to improve the functioning of this program;

• $200 million for HOPE VI
  - This amount is $65 million above the FY 2010 appropriations level and no funding was requested for HOPE VI in the FY 2011 budget request, rather the Administration requested Congress fund the Choice Neighborhoods Initiative instead;

• $0 for the Choice Neighborhoods Initiative
  - This amount is $65 million below the FY 2010 appropriations level and $250 million below the FY 2011 budget request. 
  - The House Appropriations T-HUD Subcommittee has said they would like to focus on improving and strengthening existing programs rather than embarking on new initiatives;

• $0 for the Transforming Rental Assistance Initiative
  - This is a new Administration initiative so it was not funded in FY 2010.
  - This amount is $350 million below the FY 2011 budget request. 
  - The House Appropriations T-HUD Subcommittee has said they would like to focus on improving and strengthening existing programs rather than embarking on new initiatives;

• $4.35 billion for CDBG
  - This amount is $30 million below the FY 2011 budget request and $100 million below the FY 2010 appropriations level;

• $1.825 billion for HOME
  - This amount is $225 million above the FY 2011 budget request and flat funded in comparison with the FY 2010 appropriations level;

Because the legislative language is not publically available yet, NAHMA does not know if the Subcommittee provided funding for both LEP and the Big Buy.  We will provide additional information on the funding levels as they become available. 

The bill will now go before the full Committee for consideration.

Orszag Leaving OMB

This week, the White House confirmed reports that Office of Management and Budget (OMB) Director Peter Orszag will be leaving his post this month.  No decisions have been made on a replacement director at this time.

OMB assists the President in overseeing the preparation of the federal budget and supervises the budget’s administration in Executive Branch agencies, like HUD, Treasury, USDA, etc.  OMB also evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities.  Furthermore, the OMB ensures that agency reports, rules, testimony, and proposed legislation are consistent with the President's Budget and with Administration policies.

 

June 18, 2010

H.R. 4213: American Workers, State, and Business Relief Act of 2010

This week, the Senate continued their consideration of H.R. 4213.  The Senate failed to end debate on H.R. 4213 by a vote of 56-40.  Sixty votes are required to end debate on legislation and put it to a final vote.

The Senate is considering a manager’s amendment that would trim the cost of the legislation, modify the carried interest provision, and include GO Zone LIHTCs as eligible for the cash-exchange program.  The provisions NAHMA supports—the extension of the LIHTC cash-exchange program to 2010 housing credits, funding for the Housing Trust Fund, an extension of the placed-in-service day for GO Zone LIHTCs—would remain in the legislation if the amendment is accepted.

Under the modified carried interest provision, to the extent that carried interest reflects a return on invested capital, carried interest would continue to be taxed at capital gain tax rates, 15 percent.  However, to the extent that carried interest does not reflect a return on invested capital, this provision would require investment fund managers to treat 75 percent of the remaining carried interest as ordinary income beginning on January 1, 2011.  The amount that will be treated as ordinary income is reduced to 50 percent for carried interest on assets held for five or more years that does not reflect a return on invested capital.

Consideration of H.R. 4213 by the Senate is expected to continue next week.  They hope to pass the legislation before the July 4th recess.

H.R. 5297: Small Business Lending Fund Act of 2010 (SBLF)

Yesterday, the House approved H.R. 5297, the Small Business Lending Fund Act of 2010 (SBLF).  The legislation would create the Small Business Lending Fund Program, which would allow Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses.  The bill would provide $30 billion for a small business lending fund to invest low cost capital for up to 10 years in qualifying banks and Community Development Financial Institutions (CDFIs).  CDFI loan funds are eligible for $300 million from the new fund.

The National Association of Affordable Housing Lenders believe this legislation will help address the need for loans in American communities, support economic recovery, and create new jobs nationwide.

The legislation has been referred to the Senate for consideration.

 

June 11, 2010

H.R 4213:  American Workers, State, and Business Relief Act of 2010

Before the Memorial Day recess, the House of Representatives passed H.R. 4213.  The conferenced version of the legislation included the extension of the LIHTC cash-exchange program to 2010 housing credits, funding for the Housing Trust Fund, an extension of the placed-in-service day for GO Zone LIHTCs, and the carried interest provision.  The “carried interest” provision has been modified from the original proposal in the House’s version of H.R. 4213, the Tax Extenders Act, passed last December.  It will no longer tax all carried interest as regular income.  Rather, if the carried interest reflects a return on invested capital, it will continue to be taxed at the capital gains rate, 15 percent tax rate.  However, if the carried interest does not reflect a return on invested capital, 75 percent of carried interest will be taxed at ordinary income, a 35 percent tax rate.  The remaining 25 percent will still be taxed as capital gains.  The legislation also includes a transitional period, where only 50 percent of the carried interest will be taxed as ordinary income until January 1, 2013. 

The Senate is now considering the legislation with amendments.  One of the amendments includes a modified version of the carried interest proposal that would reduce the carried interest tax on assets held for more than 7 years in comparison with the existing legislation. 

The Senate Republicans have offered an alternative bill to H.R. 4213, which would still contain the extension of the LIHTC cash-exchange program to 2010 housing credits, funding for the Housing Trust Fund, and an extension of the placed-in-service day for GO Zone LIHTCs.  This alternative does not contain any carried interest provision and is projected to cut the deficit by $54.9 billion over a decade, according to CBO, by cutting spending by $113.1 billion. 

The GOP proposal includes about $45 billion in savings associated with unspent appropriations, the sale of $15 billion in unused government property, a salary freeze for government workers and a $100 million nick to congressional office expenses.  It also drops provisions in the Democrats' proposal such as $24 billion for state Medicaid funds, $4 billion to extend Build America Bonds, $2.5 billion for state Temporary Assistance for Needy Families budgets; agriculture disaster assistance and settlement funds for Native American and black farmers.

Passage of H.R. 4213 by the Senate is expected some time next week.

OMB Looking at Possible FY 2012 Budget Cuts

Earlier this week, OMB Director Peter Orszag requested non-security federal agencies, including HUD, to submit a list of their bottom 5 percent of discretionary programs that do not further the agency's mission.  This is the latest of the White House’s proposals in order to attempt to try to keep discretionary spending flat in FY 2012. 

“The President's absolute insistence on a freeze for non-security agencies while funding priority areas, we are asking non-security agencies to specify how they would reduce their budgets by 5 percent, which will give us the ability to achieve the overall non-security freeze even while meeting inevitable new needs and priorities," Orszag added.

Orszag stressed that this "budget guidance" - which was also sent out last year -- would not result in a 5 percent cut for non-security agencies, but "would [create] the room to plus up some [programs, while] reducing others," under the freeze

 

May 28, 2010

HFSC Hearing on HUD’s Transforming Rental Assistance Initiative

Last Tuesday, the House Financial Services Committee held a hearing on HUD’s draft Preservation, Enhancement, and Transformation of Rental Assistance Act of 2010 (PETRA) legislation.  PETRA, as submitted to Congress, is based on HUD’s Transforming Rental Assistance (TRA) initiative proposed in the FY 2011 budget request.  Testimony was given by HUD Secretary Shaun Donovan and a number of industry stakeholders.  Both Republicans and Democrats on the Committee had serious concerns with the draft legislation, specifically regarding treatment of public housing in the case of foreclosure and the overall cost of the conversions.  All of the industry stakeholders—which included PHAs, privately-owned affordable housing, and tenants groups—were also gravely concerned with the legislation as written.

At the hearing, Secretary Donovan testified that PETRA would help owners voluntarily convert PHA and privately owned RAP, Rent Supp, and old Mod Rehab properties to long-term project-based rental assistance, which includes a resident mobility feature.  Donovan also reiterated that the intentions of the bill include helping the properties sustain operations and leverage private financing to address immediate and long-term capital needs and implementing energy-efficiency improvements.

Rep. Nydia Velasquez (D-NY) asked the Secretary if HUD was planning on adding additional programs to the conversion in the future.  Donovan explained that the PHAs and the three privately owned orphan programs were HUD’s initial focus and that HUD was not proposing an expansion at this time.  Rep. Velasquez reminded the Secretary that PETRA did contain language that would allow HUD to expand the conversion to Section 8, Section 202, and Section 811, among other programs, with future notice.  Donovan said that HUD thought if the initial PETRA conversion was successful other programs would want to participate.

The Committee members and industry stakeholders also discussed their concerns about the fairness of HUD’s proposed resident mobility feature.  Under the legislation, 1/3 of the housing choice vouchers that are turned over would be given to residents wishing to move to another property, allowing them to jump ahead of those who are already on the waiting list. 

National Leased Housing Association President Terri Preston Koenig testified that she believed the TRA proposal, as written, was unrealistic and ill-conceived.  She also discussed how true streamlining of the rental assistance programs could not occur if the conversions are voluntary.  Koenig suggested the Committee pursue Section 101 of H.R. 4868, the Housing Preservation and Tenant Protection Act, which would allow privately owned RAP and Rent Supp contracts to be converted to Section 8 under MAHRA instead of the PETRA proposal. 

During the hearing, Rep. Kenny Marchant (R-TX) submitted an industry letter, which NAHMA drafted on behalf of the signers, stating our grave concerns regarding PETRA for the hearing record.

H.R. 476: Housing Fairness Act of 2009

Yesterday, the House Financial Services Housing and Community Opportunity Subcommittee passed H.R. 476, the Housing Fairness Act of 2009.  H.R. 476 would require nationwide testing of the enforcement of policies to combat housing discrimination, authorize $52 million to fund the Fair Housing Initiative Program, and create a competitive matching grant program for nonprofit organizations to examine the causes and effects of housing discrimination.  It will now go before the full committee for consideration.

H.R. 5361: Responsible GSE Affordable Housing Investment Act of 2010

Last week, Rep. Carolyn Maloney (D-NY) introduced H.R. 5361, the Responsible GSE Affordable Housing Investment Act of 2010.  The legislation would ensure multifamily mortgages purchased by Fannie Mae and Freddie Mac would help the GSEs meet their special affordable housing goals, i.e. increasing and/or preserving the number of low-income housing units available to Americans.

The legislation has been referred to the House Financial Services Committee.

 

May 21, 2010

H.R. 4213: American Jobs and Closing Tax Loopholes Act

Yesterday, the House and Senate released their conference version of H.R. 4213, the American Jobs and Closing Tax Loopholes Act, formerly the Tax Extenders Act.  The conference bill is the final agreement and cannot be amended during the voting process.  The legislation is intended to provide needed tax cuts and support for American workers through the end of 2010.  The conferenced legislation includes:

• The extension of the 9 percent LIHTC cash exchange program to 2010 housing credits;
• An extension of the GO Zone LIHTC placed in services date through December 31, 2012 (does not include the disaster credit eligibility for the cash-exchange program);
• $1 billion for the Housing Trust Fund;
• $65 million in project-based vouchers to be used in conjunction with grants from the Housing Trust Fund; and
• A modified version of the “carried interest” provision.

The “carried interest” provision has been modified from the original proposal in the House’s version of H.R. 4213, the Tax Extenders Act, passed last December.  It will no longer tax all carried interest as regular income.  Rather, if the carried interest reflects a return on invested capital, it will continue to be taxed at the capital gains rate, 15 percent tax rate.  However, if the carried interest does not reflect a return on invested capital, 75 percent of carried interest will be taxed at ordinary income, a 35 percent tax rate.  The remaining 25 percent will still be taxed as capital gains.  The legislation also includes a transitional period, where only 50 percent of the carried interest will be taxed as ordinary income until January 1, 2013. 

The legislation does not include the following provisions which NAHMA and the A.C.T.I.O.N. coalition support and requested:

• Allowing GO Zone and 4 percent LIHTCs to be eligible for the cash-exchange program;
• A five-year carry-back for LIHTCs for new and existing construction; and
• An expansion of the LIHTC investor pool.

A copy of the summary of H.R. 4213 can be found here: http://waysandmeans.house.gov/media/pdf/111/America_Jobs_Summary.pdf

A copy of the full text of H.R. 4213 can be found here: http://waysandmeans.house.gov/media/pdf/111/HWC_711_xml.pdf

NAHMA is disappointed with the overall package, despite the necessary LIHTC cash-exchange program extension, due to the inclusion of the “carried interest” proposal.  We will continue to work to get the LIHTC provisions that were not included on the first available legislative vehicle.
The House will begin considering this legislation Monday and plans to vote on it as early as Tuesday.  NAHMA will continue to follow up on the status of this legislation and keep our members informed as new information is available.

 

May 14, 2010

HUD’s Transforming Rental Assistance (TRA) Initiative

On Wednesday, HUD released its draft legislation for its Transforming Rental Assistance (TRA) Initiative, the Preservation, Enhancement, and Transformation of Rental Assistance Act of 2010 (PETRA).  According to HUD, PETRA would help owners voluntarily convert PHA and privately owned RAP, Rent Supp, and old Mod Rehab properties to long-term project-based rental assistance, which includes a resident mobility feature.  HUD has stated the intentions of the bill include helping the properties sustain operations and leverage private financing to address immediate and long-term capital needs and implementing energy-efficiency improvements.

However, NAHMA is extremely concerned with several key aspects of this bill.  First, a right of first purchase has been included in this legislation.  Properties who convert their contracts under this legislation would be required to offer their building for purchase to HUD or its assignee at the end of the contract or if the owner decides not to renew its contract with HUD. 

HUD will also require PHAs that convert to accept an affordability extension of 30 years or more from the date of executing the rental contract and privately owned housing that converts to accept an affordability extension, which is the greater of the remaining term of their existing contract or the term of the new contract.

Furthermore, all conversions would be subject to one for one unit/bedroom replacement requirements under this legislation and must ensure there is no reduction in families receiving assistance.  Replacements could be made off-site but may not occur in minority concentrated areas or decrease the number of units available to disabled individuals.  Tenant-Based vouchers could be used to replace units in areas with a large supply of affordable rental housing.

PETRA also lays out the resident mobility feature discussed in TRA in more detail.  First, residents may move at any time after residing in a converted property for two years and continue to receive rental assistance.  However, PHAs will create a waiting list for families who want to exercise this option.  Under this proposal, PHAs could only allow up to 1/3 of housing vouchers available—due to turn over—to families who want to exercise resident mobility.  It is important to note that waiting lists that exist prior to the property conversion can still be used.  In addition, the legislation would require more tenant education materials to be provided on the resident mobility feature.  NAHMA is concerned about how effective this feature will be when implemented, especially in light of existing waiting lists and limited funding.

For the section-by-section summary of the legislation, please click here: http://www.nahma.org/Leg%20area/PETRA%20-%20Sectional%20Analysis%202010-05-11.pdf

For the full text of the bill, please click here: http://www.nahma.org/Leg%20area/PETRA%20-%20Billl%20Text%202010-05-11.pdf

NAHMA staff is attending a series of briefings on PETRA at HUD later in the next several days.  We will provide more details as they become available.  NAHMA staff is also working on a NAHMAnalysis on the proposed TRA legislation that will be available to NAHMA members in the coming weeks.

 

May 7, 2010

S. 3326: Job Creation and Affordable Housing Act of 2010

Yesterday, Senator Maria Cantwell (D-WA) introduced S.3326, the Job Creation and Affordable Housing Act of 2010.  The legislation contains some of A.C.T.I.O.N.’s LIHTC stabilization proposals that NAHMA supports.  A.C.T.I.O.N. (A Call To Invest in Our Neighborhoods) is a group working to ensuring that families have access to affordable housing. 

The bill would provide a 5-year carry-back for LIHTCs.  The 5-year carry-back for LIHTC would apply existing 2008 and 2009 LIHTCs and to new investments using 2010 and 2011 LIHTCs.  The legislation also provides grants in lieu of 4 percent credits for 2010, similar to the American Recovery and Reinvestment Act’s Section 1602 LIHTC cash-exchange program for 9 percent credits.  The bill also allows the 4 percent credits that have been exchanged for grants to be used with existing 9 percent LIHTCs.  Finally, the act would allow LIHTCs to offset up to 100 percent of federal tax liability. 

This legislation has been referred to the Senate Finance Committee.

 

April 16, 2010

H.R. 4868: Housing Preservation and Tenant Protection Act

NAHMA has learned that the House Financial Services Committee will be holding a mark-up of H.R. 4868, the Housing Preservation and Tenant Protection Act, on Wednesday May 5.

We have been meeting with House Financial Services Committee members’ offices and staff to discuss NAHMA’s opposition to five major provisions, the two major provisions being Section 107, the first right of refusal, and Section 304, the disclosure of property information.

If your Congressional Representative sits of the House Financial Services Committee (for a list please visit: http://financialservices.house.gov/members.html), please contact them and let them know you oppose the legislation as written.  NAHMA is also working on a grassroots letter detailing our concerns on the preservation legislation for our members to send to their Representatives.

For a copy of NAHMA’s talking points on H.R. 4868, please visit: http://www.nahma.org/Leg%20area/HR%204868%20one%20pager.pdf

For information on contacting your Representative, please visit: http://www.house.gov/writerep/

Secretary Donovan Testifies on FY 2011 Budget Proposals before Senate Banking Committee

Yesterday, HUD Secretary Shaun Donovan Testified before the Senate Banking Committee on HUD’s FY 2011 Budget Request’s legislative proposals.

During his testimony, the Secretary discussed HUD’s progress in dispersing funding from the American Recovery and Reinvestment Act of 2009.  HUD has obligated 98 percent of the $13.6 billion in ARRA funds and disbursed $3.7 billion.  He said that some of HUD's obligated, but not yet expended, funds were already generating jobs to revive stalled LIHTC projects, stabilize neighborhoods, and renovate public and assisted housing,

Donovan also discussed HUD’s proposed cuts for FY 2011, specifically the elimination of capital advances for the Section 202 and 811 programs. “Project sponsors no longer receive enough funding per grant for the 202 and 811 programs to be a "one-stop shop" to capitalize and sustain a project, yet they are subject to a level of bureaucratic oversight that suggests they are,” he said.  He explained that HUD is taking administrative steps and pursuing legal reforms in order to modernize the 202 and 811 programs and allow them to work more effectively with other financing streams.

The Secretary praised the FY 2011 budget request, saying it would enable HUD rental assistance programs to reach nearly 5.5 million households, over 200,000 more than at the end of fiscal year 2009.

Donovan also re-emphasized HUD’s need to focus on improving affordable rental housing.  He called for Congress to provide $1 billion to capitalize the National Housing Trust Fund, which would increase development of housing affordable to the nation's lowest income families.  He talked about HUD’s proposal to significantly increase funding for both the project-based and tenant-based Section 8 rental assistance programs.  Donovan said, “The Budget request continues the Department's commitment to provide full 1-year funding for contract renewals and amendments [of the Project-Based Section 8 program].” 

He also discussed the Transforming Rental Assistance initiative.  The first phase of TRA would provide $350 million to voluntarily convert PHA and privately owned RAP, Rent Supp, and old Mod Rehab properties to long-term project based rental assistance that includes a resident mobility feature.  The Secretary explained that TRA is intended to simplify and streamline the delivery of rental assistance to tenants to reduce the costs of operating the programs, make the programs easier to use, encourage leveraging of private capital, and encourage resident choice and mobility. The Secretary said the Obama Administration would transmit proposed legislation on TRA by the end of April.

H.R. 4988: Housing Non-Discrimination Act of 2010

Last month, Rep. Joe Sestak (D-PA) introduced H.R. 4988, the Housing Non-Discrimination Act.  The legislation would amend the Fair Housing Act to prohibit discrimination on the basis of sexual orientation and gender identity. 

The bill has been referred to the House Judiciary Committee.

 

March 26, 2010

House Financial Services Housing and Community Opportunity Subcommittee Holds Hearing on Preservation Bill

On Wednesday, the House Financial Services Housing and Community Opportunity Subcommittee held a hearing on H.R. 4868, the Housing and Tenant Protection Act of 2010.  HUD, USDA-RHS, and industry stakeholders offered testimony on the legislation.  George Caruso, Executive Vice President of Edgewood Management, testified on behalf of NAHMA.  Michelle Norris, Senior Vice President of Acquisitions and Development for National Church Residences and immediate Past-President of NAHMA, testified on behalf of AAHSA.

While all witnesses supported the goals of preservation, the largest point of contention surrounded Section 107 of the legislation, the first right of refusal.  Support for the measure fell along party lines with the Democrats generally supporting and the Republicans opposing the section.  

HUD Multifamily DAS Carol Galante said the Department was concerned about the mechanics of Section 107.  She stated that there were severe implementation and legal challenges to the language as written.  She also said if HUD were able to overcome the implementation and legal challenges there would be a challenge in creating a fair “bidders group,” if HUD decided to assign an organization the right of first refusal.

Galante was very supportive of Section 106 because of its flexibility with implementation.  The provision would create a voluntary preservation exchange program to allow the transfer of preservation projects to purchasers who agree to maintain the projects as affordable housing.  Ranking Member Shelly Moore Capito (R-WV) supported Section 106 of the legislation over Section 107, saying that incentives to preserve a property were much more effective than the mandates contained in the right of first purchase.  Capito also said that the right of first purchase would further challenge HUD staff who are already struggling with technology updates to existing programs. 

Chairwoman Waters asked Caruso for his thoughts on how to protect tenants despite NAHMA’s opposition to most of the tenant requested provisions.  Caruso discussed the impact of Section 107 on the investment community.  In order to purchase a property, he said, one needs money and the confidence to complete the transaction.  The language of Section 107 includes a lengthy timeframe to complete the deal which would deter investors from participate. 

Rep. Al Green (D-TX) said he would like to work with both HUD and the industry to create new language for Section 107 that would be easy to implement, acceptable to property owners, and still allow tenants to maintain their residence as affordable.  He also stated tenants should have a right to participate in the program in order to consider their property an investment in themselves. 

When Chairwoman Maxine Waters (D-CA) asked DAS Galante about HUD’s position on third party beneficiary status for tenants, Galante said the department has no formal position at this time.

Chairwoman Waters said the Committee would welcome language from the industry that would address their concerns with Section 304, which would give tenants access to building information.  Raymond James, Partner of Coan and Lyons testifying on behalf of the NLHA, said the industry was concerned with the release of information traditionally considered confidential such as the building’s financial information and the personal information on owners and agents usually contained in the documents.  He said a fair amount of information on the property without the confidential items is currently available to the tenants.

For a copy of the testimonies or to watch the archived webcast, please click here: http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr_031710.shtml

HUD Hosts Section 202 Reform Stakeholder Meeting

This week, NAHMA participated in an industry stakeholder meeting on proposals to reform the Section 202 program at HUD.  In the Administration’s FY 2011 budget request, HUD requested no new funding for Section 202 capital advances for new construction.  The Administration wants to redesign and reform the Section 202 program in order to ensure that future projects are more cost effective and well-targeted.

During the meeting, participants discussed six questions regarding potential areas of reform:

1. Should HUD require that 202 projects leverage LIHTC equity in order to reduce per unit capital advance amounts?

• The general consensus of the stakeholders was that HUD should not require but encourage the use of levering additional funding sources, including LIHTC equity, to finance 202 projects.
• Some audience members also discussed the possibility of using the 202 funds as a form of gap financing for elderly housing.
• Certain stakeholders also requested additional regulatory flexibility to ensure multiple funding sources could be use to house low-income seniors.

2. Should HUD block grant 202 funds to states for allocation and administration of funds (similar to HOME)?

• This provision was the most controversial among the industry stakeholders.
• Some felt it was an easier way to quickly distribute funding. 
• There was a strong worry by many stakeholders that providing 202 funding via a block grant from the states would result in different priorities and different requirements for funding use for each state.
• A few industry members reminded HUD that the statute would need to be completely rewritten to accomplish this reform.

3. Should HUD provide 202 funding only to projects that are substantially ready to proceed (i.e. have local approvals, funding commitments, and underway with work drawings)?

• Some industry stakeholders worried that this requirement would add additional costs to starting a 202 project and would limit who could participate in the program to larger organizations with significant capital.
• A few audience participants also noted this would be difficult to accomplish based on the current methods used by state and local governments to distribute money.
• One audience member suggested HUD provide definite time lines in order to shape project proposals to meet shorter completion periods.

4. Should HUD provide 202 funding only to sponsors that have significant track records in developing similar housing?

• Many audience members worried this provision would also limit who could participate in the program.
• A number of stakeholders suggested HUD look into providing incentives for co-sponsorship, which would pair larger, more experienced organizations with smaller ones and provide expertise in the 202 program and mixed financing to make the projects work effectively.
• Currently, co-sponsorships cause issues on the 2530/APPS process and stops larger organizations from developing 202 projects due to unit caps.  A few audience participants requested HUD to examine ways to eliminate this co-sponsorship disincentive.
• Several stakeholders also suggested examining requirements for organizations to be able to leverage capital effectively rather than just examining track records.

5. Should HUD provide 202 funding only for projects that reserve some or all supported units for frail seniors?

• For the most part, the majority of the audience felt HUD should provide incentives rather than require 202 projects to provide some or all units for frail seniors.
• Many stakeholders stated that flexibility in service and accommodation provisions were a more appropriate way to address the needs of the frail elderly.
• A few industry members discussed the importance of flexibility to orchestrate the delivery of services between departments and organizations and the need to share those services in communities to make them more cost effective.

F.  Should HUD provide 202 funding through a national competition?

• The majority of the audience agreed there was a need to support larger allocation areas, but there was no definitive agreement on what those areas should be.

Multifamily DAS Carol Galante concluded the meeting by saying HUD would accept further industry comments on 202 reform through next week and would follow up with another industry stakeholder meeting in May after thorough review.

If you would like to provide your opinions on the Section 202 reform discussion items to be included in NAHMA’s comments to HUD, please submit them to me (Lauren.Eardensohn@nahma.org) by COB Monday March 29.

H.R. 4849: Small Business and Infrastructure Jobs Tax Act of 2010

This week, the House passed H.R. 4849, the Small Business and Infrastructure Jobs Tax Act.  The legislation would provide tax incentives for small business job creation, extend the Build America Bonds program, and provide other infrastructure job creation tax incentives.

Section 204 of the legislation includes a provision authorizing the inclusion of 4 percent tax credits in the TCAP and cash exchange programs of the American Recovery and Reinvestment Act.  This provision is included in the number of LIHTC improvement proposals by the A.C.T.I.O.N. coalition that NAHMA supports.  The legislation does not include the five-year carry back or the extension of the cash-exchange program to 2010 9 percent housing credits, which are being considered in H.R. 4109, the Low-Income Housing Credit 5 Year Carry-Back, and H.R. 4213, the Tax Extenders Act, respectively. 

The legislation has been referred to the Senate Finance Committee.

House Financial Services Committee Holds Hearing on GSE Reform

The House Financial Services Committee held a heading on GSE Reform this week.  Treasury Secretary Tim Geithner gave testimony.  At the hearing, Geithner said that the two government-sponsored enterprises could not continue their existing government-private sector hybrid structure.  The Obama Administration, he said, is taking “a fresh, cold, hard look at the core problems in our system” and will deliver a “comprehensive reform proposal” to Congress, but did not specify a timeline.  Geithner indicated the Administration was waiting for the economy to stabilize before deciding on a reform plan.

"Government has a key role to play in that new [housing mortgage] system, but its role, and the role of the GSEs in particular, will be fundamentally different from the role played in the past," he said.

Chairman Barney Frank (D-MA) said that his panel would be working on two tracks: unwinding both Fannie and Freddie while overhauling the entire housing finance system.  Frank also signaled at the hearing he would push to get more assistance for rental housing.  "When you put people into decent rental housing, you do not confront the problems we have seen putting people inappropriately into homeownership," he said.

H.R. 4889: GSE Bailout Elimination and Taxpayer Protection Act

This week, Rep. Jeb Hensarling (R-TX) introduced legislation that would set up conditions for Fannie Mae and Freddie Mac to re-enter the housing mortgage market without a government charter after a three-year conservatorship period.  The bill repeals the GSEs affordable housing goals and limits their portfolio to no more than $850 billion and then decreasing that amount over time, as they transition into the private market.

The bill has been referred to the House Financial Services Committee.

 

March 19, 2010

H.R. 4868: Housing Preservation and Tenant Protection Act of 2010

On Wednesday, House Financial Services Committee Chairman Barney Frank (D-MA) formally introduced the Housing Preservation and Tenant Protection Act of 2010 into the House as H.R. 4868.  The legislation contains provisions that would:

• Help preserve federally financed and state-financed affordable housing at risk of conversion to market-rate housing;
• Restore housing at risk of loss due to deterioration;
• Protect residents of affordable housing;
• Preserve troubled projects facing foreclosure;
• Maintain housing affordability;
• Create an affordable housing database; and
• Reform the section 202 and rural housing programs.

Last weekend, the NAHMA membership voted to oppose the legislation until specific provisions are removed, but express support for a number of helpful specific provisions in the bill.

NAHMA opposes:

• Section 107, the federal right of first refusal;
• Section 108, providing a vague blanket exemption of state and local preservation laws from federal pre-emption;
• Section 302, which allows HUD to withhold assistance and tenants to withhold their rent contributions when violations of housing standards or program requirements arise;
• Section 303, which allows residents to enforce housing agreements with HUD through lawsuits; and
• Section 305, which allows residents to access owners’ private and sensitive information on building documents.

Nonetheless, NAHMA continues to support:

• Section 406, which requires HUD to pay an interest penalty on late HAP payments;
• Section 501, extending the Mark-to-Market Program;
• Section 508, providing budget-based rent adjustments;
• Section 512, increasing the Mark-to-Market cap on exemption rents;
• Title VII, the Section 202 Supportive Housing for the Elderly Act;
• Section 801, 802, and 803 of Title VIII, providing for rural housing preservation; and
• Other provisions which will help preserve affordable housing.

NAHMA has been invited to testify in the House Financial Services Housing and Community Opportunity Subcommittee hearing Wednesday, March 24 on the legislation.  George Caruso, the Executive Vice President of Edgewood Management, will be representing NAHMA as our witness for the hearing. 

NAHMA sees the preservation legislation as a rare opportunity to move the goals of preserving existing affordable housing forward.  We will continue to work with the House Financial Services Committee to maintain and/or include additional provisions we feel are necessary for the preservation of the portfolio and remove those elements of the legislation that we view as detrimental to the goal of preserving affordable housing.

For a copy of the bill, please click here: http://www.nahma.org/member/Leg%20Materials/Housing%20Preservation%20and%20Tenant%20Protection%20Act%20of%202010.pdf

For a copy of the section by section summary, please click here: http://www.nahma.org/member/Leg%20Materials/Section%20by%20Section%20(2).pdf

H.R. 4849: Small Business and Infrastructure Jobs Tax Act of 2010

This week, the House Ways and Means Committee marked up H.R. 4849, the Small Business and Infrastructure Jobs Tax Act of 2010.  The legislation would provide tax incentives for small business job creation, extend the Build America Bonds program, and provide other infrastructure job creation tax incentives.

Section 204 of the legislation includes a provision authorizing the inclusion of 4 percent tax credits in the TCAP and cash exchange programs of the American Recovery and Reinvestment Act.  This provision is included in the number of LIHTC improvement proposals by the A.C.T.I.O.N. coalition that NAHMA supports.  The legislation does not include the five-year carry back or the extension of the cash-exchange program to 2010 housing credits, which are being considered in H.R. 4109, the Low-Income Housing Credit 5 Year Carry-Back, and H.R. 4213, the Tax Extenders Act, respectively.  The proposal to expand the investor pool has also not been included in this bill.  However, the Senate Finance Committee minority staff has informed us they are interested in an amendment that would expand the investor base and are looking for vehicles to attach an amendment to.

The legislation will now be considered by the full House.

S. 3141: Low Income Housing Tax Credit Recovery Act of 2010

Yesterday, Senator Jeff Bingaman (D-NM) introduced legislation that would provide a five-year carry-back for current and future low-income housing tax credit investments.  These provisions are included in the number of LIHTC improvement proposals by the A.C.T.I.O.N. coalition that NAHMA supports.  The legislation would also allow LIHTCs to offset 100 percent of federal tax liability.  The bill does not contain the proposal to expand the investor base.

The legislation has been referred to the Senate Finance Committee.

A copy of the legislation may be found here:  http://bingaman.senate.gov/policy/lihtc.pdf

 

March 12, 2010

Housing Preservation and Tenant Protection Act of 2010

NAHMA has obtained an advanced copy of House Financial Services Committee Chairman Barney Frank’s (D-MA) Housing Preservation and Tenant Protection Act of 2010.  The bill is intended to help prevent the loss of affordable housing units in the U.S. 

It appears Chairman Frank has included a “right of first refusal” provision that would require owners to sell their affordable housing property to HUD or a HUD assignee before they could sell it to another party.  Owners could accept offers from 3rd parties, which HUD or its assignee would have the right to match,

This legislation also includes previously introduced legislation to reform the Section 202 (S. 118: The Section 202 Supportive Housing for the Elderly Act) and USDA rural housing programs (H.R. 2876: Rural Housing Preservation Act of 2009). 

NAHMA is currently reviewing the legislation and will have more information available at our Winter Meeting this weekend.

The legislation is expected to me introduced next week.  The Committee will hold a hearing on the legislation on Wednesday March 24.  NAHMA has been invited to testify.  We will continue to work with the House in order to remove the “right of first refusal” provision. 

A copy of the legislation can be found by clicking here: http://www.nahma.org/member/Leg%20Materials/Housing%20Preservation%20and%20Tenant%20Protection%20Act%20of%202010.pdf

A copy of the legislative summary can be found by clicking here: http://www.nahma.org/member/Leg%20Materials/Section%20by%20Section%20(2).pdf

H.R. 4213:  The Tax Extenders Act

This week, the Senate passed H.R. 4213, the Tax Extenders Act.  The Senate version of the legislation, also referred to as the American Workers, State, and Business Relief Act of 2010, contains the extension of the LIHTC cash-exchange to 2010 housing credits, as well as two amendments affecting GO Zone LIHTCS.  The first amendment, from Senator Mary Landrieu (D-LA), would extend the placed in service deadline for existing GO Zone LIHTCs for two years.  It will cost $357 million.  The second amendment, from Senator Evan Bayh (D-IN), would clarify that GO Zone LIHTCs are eligible for the American Recovery and Reinvestment Act (ARRA) of 2009 cash-exchange program. 

The bill does not include the carried interest provision of the House bill, which would increase the tax rate on carried interest for general managing partners from 15 to 35 percent.

However, House Democrats and the Obama Administration are objecting to some of the partial tax offsets the Senate included in H.R. 4213 because the Administration would like to use them in its healthcare reform proposal.  The House would like to reintroduce the “carried interest” provision, which would increase the taxes on profits earned by general partners of entrepreneurial enterprises, including real estate partnerships like those used in multifamily housing development.  This would effectively increase the tax on profits received when a multifamily property is sold.  The new Chairman of the House Ways and Means Committee, Sander Levin (D-MI), supports the “carried interest” proposal, but has indicated he will not hold up the legislation on the basis of “carried interest.”  Levin has indicated he would like to include the provision in future tax legislation.

The legislation has been transferred back to the House for their consideration.

H. R. 4687: Low Income Housing Tax Credit Exchange Expansion and Job Creation Act of 2010

In late February, Rep. Linda Sanchez (D-CA) introduced legislation that would extend the LIHTC cash- exchange program for 2010 9 percent tax credits (Section 1602 from ARRA) and expand the program to include 4 percent LIHTCs.

This legislation encompasses one of the three recommendations made by the A.C.T.I.O.N. group for stabilizing and restarting the LIHTC market.  It does not include the other two A.C.T.I.O.N. proposals: the five-year carry-back for LIHTCs and expanding the LIHTC investor base.  NAHMA will continue to advocate for inclusion of these proposals on the first available legislative vehicle.

The bill has been referred to the House Ways and Means Committee.

Senate Appropriations T-HUD Subcommittee Hearing on HUD’s FY 2011 Budget

This week, the Senate Appropriations Subcommittee on Transportation, Housing-Urban Development held a hearing to examine proposed budget estimates for FY 2011 for HUD.  Secretary Shaun Donovan provided testimony.

Chairwoman Patty Murray (D-WA), Ranking Member Kit Bond (R-MO), and Senator Patrick Leahy (D-VT) all voiced their disappointment over the FY 2011 HUD Budget’s proposal to cut capital advance funding for the Section 202 and 811 programs.  Donovan said HUD had to make difficult choices in the budget and that they prioritized their efforts on serving existing households and primary rental assistance programs like tenant- and project-based Section 8 programs.  Donovan also spoke about the difficulty many communities experience when trying to develop 202 and 811 properties the way the programs currently operate.  He said the Department wanted to reform the program and make it work will before constructing more units.

Chairwoman Murray also voiced her concerns over the Transforming Rental Assistance (TRA) proposal.  She asked the Secretary how HUD intended to provide mobility to tenants in developments that do not use vouchers.  Secretary Donovan said there were a number of technical issues HUD still needed to work out and were discussing strategies with stakeholders.  He said HUD wanted to link properties without vouchers to programs that do use vouchers to provide additional mobility and that HUD would be bringing a number of options to Congress for discussion.

S. 3079: Building Star Energy Efficiency Act of 2010

Last week, Senator Jeff Merkley (D-OR) introduced a bill to assist in the creation of new jobs by providing financial incentives for owners of commercial buildings and multifamily residential buildings to retrofit their buildings with energy efficient building equipment and materials.

The legislation authorizes the Department of Energy to create a “Building Star Energy Efficiency Rebate Program” that would issue rebates to building owners to offset a portion of the cost of purchasing and installing qualifying equipment or materials or undertaking qualifying services to enhance the energy efficiency of existing commercial buildings and multifamily residential buildings.

This legislation has been referred to the Senate Energy and Natural Resources Committee.

 

March 5, 2010

Rep. Rangel Steps Down as House Ways and Means Chairman

Rep. Charlie Rangel (D-NY) has stepped aside from his position as Chairman from the House Ways and Means Committee due to growing pressure from Democrats who have asked to step aside while ethics allegations against him are investigated. 

Media reports indicate that Rep. Sander Levin (D-MI) will take over as Chairman for the Committee in the meantime.  NAHMA will keep our members informed as the situation develops.

H.R. 4213: The Tax Extenders Act

This week, the Senate continued their consideration of H.R. 4213, which would extend several expiring tax provisions.  The legislation includes an extension of the LIHTC cash exchange program to 2010 housing credits.  The Senate is considering an amendment to the legislation from Senator Mary Landrieu (D-LA) that would also extend the GO Zone LIHTCs.  No decision on the amendment had been made at press time.  

The Senate is expected to vote on the legislation early next week.  After it is voted on, it will go back to the House for approval.  If the House passes the bill without amendments, it will be sent to President Obama to be signed into law.

House Financial Services Committee Approves Views and Estimates of the FY 2011 Budget

This week, the House Financial Services Committee approved their Views and Estimates of the FY 2011 Budget.  The document discusses their positions on the Obama Administration’s funding requests for programs the committee authorizes, which include programs in HUD’s jurisdiction. 

The Committee supports the FY 2011 budget funding increases for the Project-Based and Tenant-Based Section 8 programs.  The Committee registered their disappointment over proposed cuts to HOME, Section 202, and Section 811.  The Committee committed to working to ensuring funding would be provided to programs that “serve lower income people and our most vulnerable seniors and disabled persons.”  The Committee also wrote that they expect to work with the Administration on the authorization language of the Choice Neighborhoods Program, which HUD has proposed to replace the HOPE VI program. 

The Committee also discussed their intention to begin examining the need to reorganize housing finance mechanisms, including the Government Sponsored Entities (GSE) of Fannie Mae and Freddie Mac.  They plan to monitor the foreclosure crisis and its impact on the GSEs.  They want the housing market and GSE reforms to “provide stable, long-term financing mechanisms for the housing finance markets and affordable and appropriate single- and multi-family housing in the United States.” The Committee is expected to begin their hearings on GSE reform later this month.

A copy of the Views and Estimates can be found here: http://www.house.gov/apps/list/speech/financialsvcs_dem/comm._print--budget_views_and_estimates_2-26-10.pdf

S. 1619, H.R. 4690: Livable Communities Act of 2010

Last week, Rep. Ed Perlmutter (D-CO) introduced companion legislation to S. 1619, H.R. 4690—the Livable Communities Act.  The bill would establish: the Office of Sustainable Housing and Communities; the Interagency Council on Sustainable Communities; a comprehensive planning grant program; and a sustainability challenge grant program.  NAHMA staff also attended a meeting held by the White House on the Livability and Sustainable Communities legislation this week.

The legislation would establish an Office of Sustainable Housing and Communities in HUD to:

• Coordinate Federal policies and initiatives that foster livable communities ;
• Conduct research relating to sustainable development;
• Implement and oversee the grant programs established by this bill;
• Provide guidance, information on best practices, and technical assistance to communities interested in sustainable development;
• Administer initiatives that foster livable communities; and
• Coordinate with other Federal agencies on sustainability issues.

HUD would also be required to publish reports on Housing Location Affordability Index and Incentives for Energy-Efficient Mortgages and Location-Efficient Mortgages.

The bill would also establish the Interagency Council on Sustainable Communities as an independent entity in the executive branch, to be made up of the Secretaries of HUD and Transportation, the Administrator of the Environmental Protection Agency, and any other official the President recommends.  Duties of the Council include:

• Ensuring interagency coordination of Federal policy on sustainable development;
• Creating government and private partnerships and improving knowledge relating to sustainable development;
• Coordinating Federal sustainable development research agendas;
• Establishing a clearinghouse for guidance, best practices, and other information for those seeking to implement sustainable development practices; and
• Coordinating efforts to overcome impediments to sustainable development.

Under this act, the Office of Sustainable Housing and Communities in HUD would oversee two new grant programs: a comprehensive planning grant program and a sustainability challenge grant program.

The comprehensive planning grant program would:

• Coordinate land use, housing, transportation, and infrastructure planning processes across jurisdictions and agencies;
• Identify partnerships for developing and implementing a regional plan;
• Conduct regional needs assessments to promote sustainable development;
• Develop or update a regional sustainable development plan; and
• Implement code changes necessary to implement a comprehensive regional plan and promote sustainable development.
  

The Sustainability Challenge Grant Program would:

• Promote integrated transportation, housing, energy, and economic development activities carried out across policy and governmental jurisdictions;
• Promote sustainable and location-efficient development; and
• Implement projects identified in a comprehensive regional plan.

The legislation has been referred to the relevant authorizing Committees.

H.R. 4766: Permanently Protecting Tenants at Foreclosure Act of 2010

Yesterday, Rep. Keith Ellison (D-MN) introduced H.R. 4766, which would permanently extend the Protecting Tenants at Foreclosure Act of 2009.  This legislation was included in S. 896 (P.L. 111-22), the Helping Families Save Their Homes Act of 2009, signed into law last May.  The current tenant protection requirements expire on December 31, 2012.

The tenant protection provisions of S. 896 allow renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease, unless the property is sold to someone who will occupy the home.  

The law also provides similar protections to housing voucher holders but requires purchasers of foreclosed buildings who receive Section 8 HAPs to honor the existing lease unless they plan to live in the building.  If the new owners plan to use the building as primary residence, they must give 90 days notice to the tenant.

The legislation has been referred to the House Financial Services Committee.

FY 2011 HUD Budget Request for Section 202 and 811 Cuts

NAHMA, in conjunction with the Elderly Housing Coalition, meet with offices of members of the Senate Appropriations Committee and committee staff this week to discuss our opposition to the proposed elimination of capital advances within the Section 202 and 811 accounts.  Based on our initial contacts, it appears that appropriators also oppose zeroing out funding for Section 202 and 811 capital advances and want to ensure FY 2010 funding levels in the FY 2011 appropriations. 

NAHMA will continue to meet with appropriators in both the House and Senate to discuss our opposition to the FY 2011 HUD budget cuts to Section 202 and 811, as well as our support for increased funding to the Project-Based Section 8 program, as the appropriations process moves forward.

 

February 26, 2010

House Appropriations Transportation and HUD Subcommittee Hearing on the FY 2011 HUD Budget

This week, HUD Secretary Shaun Donovan testified before the House Appropriations Transportation and HUD Subcommittee on the FY 2011 HUD Budget.

In Subcommittee Chairman John Olver’s (D-MA) opening statement, he relayed his concern over HUD’s decision to cut funding for elderly and disabled housing programs.  He stated, “The Subcommittee has made it a priority to invest in housing for senior and disabled populations and does not believe continued investments and program reform are mutually exclusive goals.  It is my understanding that many, if not most, of the reforms necessary in the 202 and 811 programs can be made administratively.” 

Olver also voiced his unease over the Transforming Rental Assistance program.  While he appreciated the Department’s innovation, he was concerned about beginning new programs that have not gone through the normal authorization process.

Donovan said the Department made the difficult to choice to prioritize core rental and community development programs, like providing full funding to Section 8 tenant based and project based rental assistance.  The Secretary also acknowledge the need for HUD’s Section 202 and 811 partners to access private and public sources of capital as HUD and the federal government are under severe resource constraints.  According to Donovan, the programs are in desperate need of modernization in order to improve the efficiency of the funding available.

During Committee questioning on the FY 2011 HUD Budget, Olver was concerned HUD was cutting funding for new construction in programs that still had long waiting lists for senior and disabled housing and rapidly growing populations.  Donovan said that despite the waiting lists, openings in senior and disabled housing units in some parts of the country often go unfilled.

Donovan also discussed the Transforming Rental Assistance (TRA) Initiative.  He stated the Administration is seeking to streamline and simplify HUD programs so that they would be less costly to operate and easier to use at the local level.  He also suggested HUD and its partners, as part of TRA, should leverage capital from other sources to help offset the growing cost of providing housing to Americans.  Finally, he discussed the need to combine the best features of the tenant-based and project-based programs to encourage resident choice and mobility.  The first phase of TRA would provide $350 million to voluntarily convert PHA and privately owned RAP, Rent Supp, and old Mod Rehab properties to long-term project based rental assistance that includes a resident mobility feature.  HUD has estimated this conversion will allow these properties to leverage over $7.5 billion in other public and private sector capital investment. The Administration expects to transmit proposed language that would authorize TRA to the relevant Congressional committees this Spring.  Finally, Donovan called on Congress to enact the Section 8 Voucher Reform Act as part of the efforts of the TRA Initiative to streamline HUD’s rental assistance programs.
The Senate Appropriations Transportation and HUD Subcommittee has postponed their hearing on the FY 2011 Budget.  At press time, the hearing has not been rescheduled.

H.R. 2847: Jobs for Main Street Act (Senate Jobs Bill)

This week, the Senate passed Majority Leader Reid’s modified version of the Senate Jobs bill, the Hiring Incentives to Restore Employment Act.  The provisions in the bill are estimated to cost $15 billion and include payroll tax breaks, bond-financing for state and local infrastructure projects, a small-business expensing provision, and an extension of federal highway programs. 

This legislation does not include the tax extenders provisions, including the expansion of the LIHTC cash-exchange program to 2010 housing credits.  Extension of the cash-exchange was part of the original Senate Finance Committee proposal.  The Senate jobs bill will now be considered in the House.  The tax extender’s portion of the Senate jobs bill will be considered as a manager’s amendment to H.R. 4213, the Tax Extenders Act.

Speaker of the House Nancy Pelosi wants to rework the language of the Senate jobs bill to fix a highway and transit funding formula disparity between House and Senate jobs bills before the House considers the legislation.

H.R. 4213: Tax Extenders Act

Yesterday, Reid introduce language to amend H.R. 4213, the Tax Extenders Act, which contained the tax extenders portion of the Senate Finance Committee’s Senate jobs bill that was not passed this week.  This legislation includes language to extend the LIHTC cash-exchange program to 2010 housing credits, part of the A.C.T.I.O.N. agenda that NAHMA supports.  The bill does not contain the “carried interest” provision that would increase the tax rate on the profits received to a multifamily real-estate partnership when a building is sold, which NAHMA opposes. 

However, the offsets to fund the tax extenders are also being considered by the White House as offsets to pay for portions of the Obama Administration’s healthcare overhaul plan, which could complicate the passage of the legislation.
The Senate will begin considering their amended version of H.R. 4213 on Monday.

GSE Reform and H.R. 4653: the Accurate Accounting of Fannie Mae and Freddie Mac Act

This week, Treasury Secretary Tim Geithner testified before the House Budget Committee on the FY 2011 Treasury Budget.  At the hearing, he said that the Obama administration will offer proposals next year for overhauling Fannie Mae and Freddie Mac, instead of in the next few months as originally reported. 

However, Rep. Scott Garrett (R-NJ) has introduced legislation (H.R. 4653, the Accurate Accounting of Fannie Mae and Freddie Mac Act) that would require OMB to account for losses at Fannie Mae and Freddie Mac, just as CBO already does, in the meantime.  The bill also would force Congress to raise the debt ceiling to reflect Fannie and Freddie's $1.6 trillion corporate debt.  At the Budget hearing, Geithner said it was important to wait until more time had passed from what he called the worst housing crisis in a generation.

The House Financial Services Committee has postponed their March 2 hearing on GSE reform.  It had not been rescheduled at press time.

HUD’s Transforming Rental Assistance Initiative

This week, NAHMA joined our industry colleagues in sending a letter to HUD Secretary Shaun Donovan detailing our concerns on the “Transformation Rental Assistance” (TRA) initiative proposed in the FY 2011 budget.

The letter addressed the industry’s concerns over moving from a well-established project-based rental assistance program to an undefined hybrid of housing choice vouchers and project-based assistance. 

H.R. 4099: Energy Efficiency Modernization Act of 2009

Yesterday, NAHMA sent a letter of concern to Rep. Mary Jo Kilroy’s (D-OH) regarding provisions of H.R. 4099, the Energy Efficiency Modernization Act of 2009. 

We stated that we believe H.R. 4099 represents a good-faith effort to advance the dialog on improving energy efficiency in the HUD portfolio, but our concerns prevent us from supporting the bill in its current form (as introduced on November 18, 2009).  Specifically, we addressed the problems the burdensome new utility information collections would place on affordable properties and streamlining and simplifying the language regarding the use of residual receipts to help improve the energy efficiency of multifamily rental housing.

NAHMA concluded the letter saying that we would like to continue the discussion on the best ways to improve energy efficiency in the federally-subsidized multifamily portfolio through the least burdensome means.

 

February 12, 2010

Senate Jobs Bill Unveiled

Yesterday, the leadership of the Senate Finance Committee, Senators Max Baucus (D-MT) and Chuck Grassley (R-IA), unveiled the Senate’s draft jobs bill, the Hiring Incentives to Restore Employment Act (HIRE).  Senator Majority Leader Harry Reid (D-NV) has announced he will break the legislation into two parts, bringing the jobs-related incentives to a vote on Feb. 22. The remaining measures would move later as a separate bill.

Senator Benjamin Cardin (D-MD) said that Reid settled on the slimmed-down package because many Democrats felt Republicans would either oppose or delay passage of the larger Finance bill by attempting to add additional provisions. Media reports have indicated the decision was a surprise to senators in both parties who have been heavily engaged in the discussions.

The larger bill includes one of the A.C.T.I.O.N. coalition LIHTC stimulation proposals that NAHMA supports. In Section 521, the bill extends the Section 1602 cash-exchange program to 2010 housing tax credits.   It does not include the other two A.C.T.I.O.N. proposals: the five year carry-back for LIHTCs and expanding the LIHTC investor base.  NAHMA will continue to advocate for inclusion of these proposals in the HIRE bill, or on the first available legislative vehicle.

The bill does not include the carried interest provision of the House bill,  which would increase the tax rate on carried interest for general managing partners from 15 to 35 percent.

The streamlined bill would include:

• Incentives for hiring and retaining unemployed workers
• Which would exempt companies from paying Social Security taxes for the remainder of 2010 on every new worker who had been unemployed for at least 60 days.
• It is estimated cost of $13 billion over 10 years;
• An increase in expensing of certain depreciable business assets;
• A refundable credit for certain qualified tax credit bonds; and
• An extension of current surface transportation programs.

Reid said the Senate will turn to the tax extenders, including the LIHTC cash-exchange extension, after the Presidents Day break separately from the streamlined jobs bill.

In the meantime, NAHMA urges our members to contact their Congressional representatives and ask them to support and/or include the A.C.T.I.O.N. LIHTC proposals on the first available legislative vehicle.  In order to stimulate investor demand in the Low Income Housing Tax Credit, NAHMA has recommended:

• Supporting the extension of the Section 1602 LIHTC cash-exchange program created by ARRA for one-year and
• Including a provision that allows 4% credits to also be exchanged;

2.Including a provision allowing up to a 5-year carry-back of the LIHTC for new and certain existing credits (for tax years 2008-10); and

3.Including a change to the passive loss laws which will help expand the LIHTC investor base to Limited Liability Companies, closely held C corporations and S corporations

• Provided these companies have $10 million in annual gross receipts, were not created solely to invest in the LIHTC program, and have a state-approved asset management plan.

For information on contacting your Senator, please visit: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

A copy of the full bill can be viewed here: http://finance.senate.gov/sitepages/leg/LEG%202010/021010%20HIREACT%20draft.pdf.

February 5, 2010

FY 2011 Budget Request

This week, the Obama Administration submitted its $3.8 trillion FY 2011 Budget Request to Congress.  The budget includes a three year freeze on non-security discretionary spending, although some programs will receive increases offset by decreases to others. Funding requests for affordable multifamily rental programs were a mixed bag of increases to some programs, cuts to others, and very few receiving flat funding in comparison to the FY 2010 Appropriations.

Funding Summary in FY 2011 Budget for Specific Multifamily Housing Programs:

HUD:

Tenant-Based Section 8: $19.6 billion total funding; $17.3 billion for contract renewals
- Increase of $1.4 billion over FY 2010 Appropriations

Project-based Section 8: $9.4 billion total; $9.04 billion for contract renewals
- $900 million increase over the FY 2010 Appropriations
- Includes $400 million request for FY 2012 advanced appropriation

Transforming Rental Assistance Initiative (TRA):  $350 million
- New initiative to begin voluntarily consolidating its 13 separate rental assistance programs
- TRA would offer PHAs and private owners of RAP, Rent Supp, and old Mod Rehab properties the option of converting to long-term project based rental assistance that includes a resident mobility feature.
-This initiative would require statutory changes to implement. Although HUD is asking for the legislative changes to begin the first phase of the proposed transition, key policy questions about the details (such as how the tenant mobility would be provided without removing the subsidy from the property) remain unanswered.
-Additional information about this proposal will be provided in the forthcoming NAHMAnalysis about the FY 11 budget request.

Section 202: $274 million
- $550 million cut over FY 2010 Appropriations
- Terminates new construction funding and funds only PRACS and service coordinators

Section 811:  $90 million
- $210 million cut under the FY 2010 Appropriations
- Terminates new construction funding and funds only contract renewals
- Section 811 vouchers moved to Tenant-Based Section 8 account

HOME: $1.65 billion
- $175 million cut under the FY 2010 Appropriations

HOPE VI: $0  
- Shifts all funding to Choice Neighborhoods Initiative
- $200 million cut over FY 2010 Appropriations

Choice Neighborhoods Initiative: $250 million
- $65 million allocated in the HOPE VI account for Choice Neighborhoods in FY 2010 Appropriations

Community Development Fund: $4.4 billion; $3.99 billion for the Community Development Block Grant (CDBG)
- Flat funded CDBG in line with FY 2010 Appropriations

Limited English Proficiency (LEP) Program: $0
- $500,000 cut under the FY 2010 Appropriations

Affordable Housing Trust Fund: $1 billion
- No funding allocated for this account from FY 2010 Appropriations

Energy Innovation Fund: $0
- $50 million cut under the FY 2010 Appropriations
- HUD believes the FY 2010 appropriations will fund significant pilot program activity through 2011, therefore no funding requested

IRS/Treasury:

LIHTC Cash-Exchange Program
- Proposes legislation to extend the LIHTC cash-exchange program to 2010 housing credits
- States would also be required to use their cash-exchange funds by December 31, 2012 under this proposal

USDA-RHS:

Multifamily Housing Revitalization Program: $18 million
- For vouchers only
- Does not include funding for preservation and demonstration programs

Section 515 Multifamily Housing Direct Loans:  $95 million
- $25 million increase over FY 2010 Appropriations

Rural Rental Assistance:  $966 million
- $14 million decrease under FY 2010 Appropriations

Section 538 Multifamily Housing Loan Guarantees:  $129 million
- Requested flat-funding in line with FY 2010 Appropriations

Submission of the budget begins a process, which, if it runs smoothly, will be resolved before October 1, with all of the annual appropriations bills signed into law.  NAHMA will continue to monitor the budget process as it moves forward in Congress.  We will continue to support full funding for the Project-Based Section 8 program, funding for the LEP line-item, new construction funding for the Section 202 and 811 accounts, and the inclusion of an interest subsidy for Section 538 in the FY 2011 Appropriations.

GSE Reform Hearing Scheduled

The House Financial Services Committee will be holding a hearing on March 2 regarding reforming Fannie Mae and Freddie Mac.  Treasury Secretary Geithner and HUD Secretary Donovan have been invited to testify on the Obama Administration's proposal to overhaul the mortgage finance industry.   The proposal was not included in the FY 2011 budget request as was anticipated.  The Administration expects to release the proposal later this month.

H.R. 4581: Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act of 2010

This week, Rep. Judy Biggert (R-IL) introduced legislation that would require the Federal Housing Finance Agency Inspector General to submit quarterly reports on the GSEs to the Congress during the government conservatorship of Fannie Mae and Freddie Mac.  The report will contain information on liabilities, bonuses and salaries paid to GSE officials, foreclosure mitigation and mortgage fraud prevention activities, investments and holdings, capital levels and portfolio descriptions, and a description and analysis of the underwriting standards for all mortgages loans.  This information would also be made available to the public.

The legislation has been referred to the House Financial Services Committee.

 

January 29, 2010

State of the Union

This week, President Obama gave his State of the Union address to Congress.  The speech focused mostly on domestic issues.  In the address, Obama proposed a freeze of non-security discretionary spending for the next three years (beginning in his FY 2011 budget request) in order to help reduce the U.S.’s debt by $250 billion over the next 10 years.  HUD and USDA affordable housing programs’ funding could be affected by this proposal.  However, the President said the freeze would not be across the board for all programs.  Some domestic non-security programs will be increased. The complete FY 2011 budget request will be released Monday, February 1.  NAHMA plans to have a NAHMAnalysis available on the budget request within two weeks of the release. 

Obama also spoke of the need to complete the “Jobs bill,” or H.R. 2847, the Jobs for Main Street Act of 2010, “without delay.”  The House has already passed H.R. 2847.  The legislation included $1 billion for the Housing Trust Fund, with $65 million set aside for project-based vouchers.  The Senate proposal, slated to be released on Monday, is said to include $12.5 billion to retrofit homes, commercial buildings, low-income housing developments and manufacturing plants to help make them more energy efficient.  Already, 25 Senators have signed onto a “Dear Colleague” letter requesting $1 billion to capitalize the National Housing Trust Fund and $65 million for project-based vouchers to be included in the “Jobs bill.”  NAHMA requested the three A.C.T.I.O.N. LIHTC proposals be included in the Senate Jobs bill.  In order to stimulate investor demand in the Low Income Housing Tax Credit, NAHMA has recommended including:

1. Extending the Section 1602 LIHTC cash-exchange program created by ARRA for one-year and allow 4% credits to also be exchanged;
   
   
2. Allowing up to a 5-year carry-back of the LIHTC for new and certain existing credits (for tax years 2008-10);
   
   
3. Changing to the passive loss laws which will help expand the LIHTC investor base to Limited Liability Companies, closely held C corporations and S corporations, provided these companies have $10 million in annual gross receipts, were not created solely to invest in the LIHTC program, and have a state-approved asset management plan.

NAHMA members are encouraged to contact their Senators to support these proposals.  For information on contacting your Senator, please visit: http://www.senate.gov/general/contact_information/senators_cfm.cfm

There is a possibility the Senate will also include several tax extenders on the legislation. 

The President also stated he would not continue tax cuts for investment fund managers and preventing financial “recklessness that nearly brought down our entire economy.”  Here, Obama was alluding to the “carried interest” proposal currently contained in H.R. 4213, the Tax Extenders Act.  The proposal would eliminate the capital gains treatment of carried interest on entrepreneurial activities, which Congress believes contributed to the risky financial decision making that led to economic collapse in 2008, and taxing it as regular income.  The tax rate on carried interest would increase from 15 to 35 percent on several entrepreneurial activities, including real-estate partnerships like those used in affordable multifamily rental properties.  NAHMA opposes this proposal and will continuing working with our industry colleagues and Congress to ensure it is not included on any legislative vehicle.  We have communicated our opposition to the “carried interest” language to the Senate Finance Committee.

Obama also laid out several of his priorities for the next year in the address.  He called for the passage of financial sector reform, climate change legislation, health care reform, the pending trade agreements, education reform, and earmark reform.  With such high priority items on the agenda, NAHMA will continue pressing Congress to pass the Section 8 Voucher Reform Act and the affordable housing preservation bill this year.

Chairman Frank Calls for the Overhaul of GSEs

Last week, House Financial Services Chairman Barney Frank called for an overhaul of the nation's housing finance system, including Fannie Mae and Freddie Mac, in comments at a hearing on executive compensation at financial firms.  Frank believes the current public-private structure of Fannie and Freddie as government sponsored enterprises (GSE) does not work.  According to Frank, Nationalization or privatization of the GSEs seems politically untenable in the political environment and shaky housing market.

"We're sorting out the function of promoting liquidity in the market and also the secondary market in general, and also doing some sort of subsidy for affordability. I do not think they should be necessarily combined," Frank said.

Frank said the Committee will examine the future of both GSEs within a broader range of revamping the nation's housing finance structure, including the role of the Federal Home Loan Bank system and Ginnie Mae.

 

January 22, 2010

NAHMA Participates in Multifamily Industry Meeting at HUD

On Wednesday January 20, NAHMA participated in a multifamily industry stakeholder meeting at HUD HQ. The meeting was led by Deputy Assistant Secretary for Multifamily Housing Carol Galante. Senior HUD program staff were also present. Highlights of the meeting are summarized by topic.

Budget & Appropriations

• The President’s budget request for FY 2011 will be sent to Congress (and made available to the public) in the first week of February.
• HUD continues to support full funding for 12 month HAPs at the time of renewal.
• With the technology appropriations HUD received in FY 10, Multifamily will improve budget forecasting for project-based Sec. 8 and PRAC contracts and improve FHA processing technology.
• Other areas of discussion/recommendations
• The advanced appropriation for Sec. 8 has been helpful in mitigating late HAPs between fiscal years, would be helpful to have one for PRACs

2530 & REAC

• Multifamily will issue a notice changing the protocol for properties with below 60 REAC physical inspection scores.
• No 2530 flag will be placed the first time a property scores below 60. The O/A will have 60 days to self-certify problems have been fixed. If the deficiencies are not fixed in 60 days, you can get a flag. The regulations for below 30 properties (automatic referral to the Enforcement Center) will not change.

• The revised Chapter 6 (conducting management reviews) of the 4350.1 handbook is in clearance. The requirement to automatically fail properties on the MOR if they fail REAC will be removed from the new version of Chapter 6.

FHA Multifamily Issues

Major changes are forthcoming to FHA multifamily insurance programs in response to rising defaults.

• HUD will “tighten and target” underwriting, risk management, processing and performance measures for HQ and field offices. HUD’s top priorities are to:
• Tighten underwriting for new deals going forward;
• Create better work-out disposition strategies for deals with problems; and
• Expedite mortgage processing.

• Preliminary proposals should be available the first week of February.

Preservation

• HUD is in communication with House Financial Services Chairman Barney Frank about the affordable housing preservation bill. Some things HUD would like in the bill include:
• More incentives for preservation sales instead of the first right of purchase for “preservation entities”;
• NAHMA editiorial note:  Chairman Frank has assured NAHMA and industry partners the first right of purchase will not be included in the bill when it is introduced. However, the tenants’ groups continue to push for this and other troublesome provisions. NAHMA will continue objecting to any effort to include the first right of purchase in the bill upon introduction or as an amendment.
• More flexibility for use of “new regulation properties’” residual receipts.

• HUD is also taking initiative on preservation actions it can implement through administrative authority.
• Creating a preservation database;
• Revisions to the Section 8 renewal guide such as:
• Using Sec. 8 rents when underwriting with LIHTC, nonprofit equity, post rehabilitation rents;
• Field offices will receive a notice which suggests they request waivers until the renewal guide is released;
• HUD has 30 pages of policy items that the DAS wants to implement.

Contract Administration

• In the rebid for the performance-based contract administration contracts, HUD wants to “target and tighten” the work required and improve the cost-effectiveness of the program.
• Original term of the contracts will be 24 months with two additional option years.
• HUD staff will not be eligible to compete for the contracts.
• HUD still expects to have the new PBCA contracts in place January 1, 2001.
• HUD is sticking to its 90-day transition period, claiming it has experience with the program, it will create a list of documents to be transferred and will put upfront time into the data transfer.
  
  

• NAHMA editorial note:  Past experience with PBCA transfers gives our members serious concerns about providing only 90 days for the “ramp up.” Also, a number of our members have experienced increased administrative burdens during such transfers when they were placed in the position of providing documents to the new PBCA which the old contract administrator failed to transfer.

EIV Implementation

• Per the final rule on Rent and Income Determination, mandatory use of EIV begins January 31.
• 5000 contracts are not in EIV.

• HUD is issuing a clarifying notice on EIV policies.

• HUD will hold a question and answer webcast on Feb. 3, 2010 from 11AM EST to 1 PM EST. 
• NAHMA will provide a link to this webcast when it becomes available.

Retroactive Recapture of HUD-Approved Residual Receipt Expenditures

• HUD’s acceptance of the Inspector General’s findings (that the expenses were improper and must be repaid) during the previous Administration is complicating the current options for addressing these situations.

• The DAS wants to conduct additional research in order to renegotiate with the IG.

Communication and Operations

• The DAS will seek additional opportunities for public input on HUD policies, to the extent such communications are permitted under the laws and ethics rules governing HUD.

Management Agent Handbook Policies Governing 401(K) Treatment For Front-Line Rotating Management Staff

• NAHMA requested a change to the handbook with would allow hours to be aggregated across the different properties.

• The change is necessary to comply with ERISA and the Internal Revenue Code.

• Asset management staff are finalizing a notice which should fix the problem by March 1.

Insurance Losses

• NAHMA requested that HUD reinstate 24 CFR 207.260 for insurance losses (which removed the requirement of obtaining the HUB Director’s signature on loss settlement drafts).

• Asset management staff are researching the issue.

H.R. 476: Housing Fairness Act of 2009

This week, the House Financial Services Subcommittee on Housing and Community Opportunity heard testimony from HUD, industry partners, and academics on H.R. 476, the Housing Fairness Act of 2009, which was introduced by Rep. Al Green (D-TX) last year.  The Subcommittee heard testimony from:

• John Trasviña, the HUD Assistant Secretary for Fair Housing and Equal Opportunity;
• Shanna Smith, the President and CEO of the National Fair Housing Alliance;
• NAACP Legal Defense & Educational Fund’s Director Leslie Proll;
• David Berenbaum, the National Community Reinvestment Coalition’s Chief Program Officer;
• Jeanne McGlynn Delgado, the Vice President of Business and Risk Management Policy for the National Multi-Housing Council/National Apartment Association; and
• Professor Brian Gilmore, the Director of the Fair Housing Clinic at Howard University School of Law.

H.R. 476 would authorize $52 million in annual funding for HUD’s Fair Housing Initiatives Program (FHIP), which was funded at $42.5 million for FY 2010.  It would also authorize $20 million for each of the next five years to allow HUD to test for discrimination in home buying, renting, or financing.

While the majority of panelists supported H.R. 476, Delgado voiced several concerns about the legislation.  Congress, she said, has already approved a significant increase in funding for the Fair Housing Assistance Program (FHAP) and the Fair Housing Initiatives Program (FHIP) in FY 2010 to test and investigate instances of housing discrimination.  She also recommended that before creating another testing program, as H.R. 476 would do, “HUD should conduct a comprehensive review of the existing testing programs to measure their effectiveness, efficiencies and fairness, especially relative to dismissed cases.”  Delgado also suggested HUD should consider alternative approaches to current testing protocol and Congress should help expand industry education and outreach efforts to lower instances of housing discrimination.  She explained that the industry already invests a significant amount of time and effort to educate their staff on Fair Housing laws.

Assistant Secretary Trasviña testified that the FHAP and FHIP had become more capable and efficient in their capacities for investigating fair housing discrimination.  However, he emphasized the need for accuracy rather than speed to ensure a thorough and correct outcome when investigating discrimination.  Trasviña also said HUD was reviewing the coverage and processes of H.R. 476. He said the Department supports the direction of the legislation and noted that “an effective program to properly administer it is essential to its success.”

S. 2897, H.R. 4099: Energy Efficiency Modernization Act of 2009

Senator Michael Bennet (D-CO) has introduced a Senate companion bill to H.R. 4099, S. 2897, the Energy Efficiency Modernization Act of 2009.  The bills would create a green dividend program to help improve energy efficiency in federally subsidized housing and allow the use of residual receipts as loans to make energy efficient improvements/retrofits.  HUD would develop the benchmarks for energy efficiency under this act.  There would be reporting requirements on the level of energy and resource reduction achieved after the improvements and retrofits are in place.  All HUD subsidized multifamily properties, regardless of their participation in the green retrofit programs, would also be required to report regularly to HUD regarding project consumption of electricity, water, gas, and other utilities for a larger annual report.

The bill was referred to the Senate Banking Committee.  NAHMA opposes this legislation as written due to its onerous reporting requirements.

 

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