Congress passes the Housing Opportunities through Modernization Act
NAHMA is pleased to share that after months of delay, the Senate has finally passed H.R.3700, the Housing Opportunities through Modernization Act (HOTMA). This housing reform legislation was first introduced in October of 2015, and was later passed by the House unanimously with a final vote of 427-0 in February, 2016. However, the Senate Baking, Housing and Urban Affairs Committee failed to advance the bill.
NAHMA members and industry partners then lead an advocacy campaign in the Senate to persuade all lawmakers to support the bill and fast-track its passage. Senators Tim Scott (R-SC) and Robert Menendez (D-NJ) also helped bring attention to the legislation by introducing a companion bill in the Senate (S.3083). Ultimately our efforts have been successful – in another rare event for the nation’s gridlocked Congress, H.R.3700 was passed in the Senate with “unanimous consent”, a process in which a bill may bypass the procedural committee passage route and be sent to the president as long as no Senator objects. This bill has garnered the support of every single lawmaker and will now become law.
In review, H.R. 3700 will reform rental assistance programs through the following changes:
- HUD will more closely examine what income deductions may be used when determining a tenant’s rent responsibility, such as excluding a student’s earned income and tuition assistance, as well as the amounts in their educational savings accounts. The deduction for an elderly or disabled family would be increased to $525, from $400 and the deduction for dependents would be increased to $525 from $480. Dependents with disabilities would need to be certified as disabled and unable to work by the public housing agency (PHA). HUD will also be required to provide financial hardship exemptions for the requirements related to health care and child care expenses.
- Income reviews will be conducted when a family’s income or deductions result in a 10 percent increase in annual adjusted income. The family may request a review if their annual adjusted income is expected to decrease by 10 percent. A PHA or property owner would be directed to use estimates of family income for the upcoming year when determining eligibility for initial occupancy or housing assistance. For annual reviews, where applicable, income from the preceding year would be used. Families receiving certain federal housing assistance are permitted to deduct all reasonable childcare expenses when calculating adjusted income, and HUD’s Disaster Housing Assistance Program would be subject to income verification requirements
- For project-based vouchers, a PHA may use as much as 20 percent of its voucher allocation for project-based assistance, instead of 20 percent of the funding available for vouchers. An additional 10 percent would be allowed for units for individuals or families that are homeless, veterans, disabled or elderly. Project-based voucher assistance has an income-mixing requirement that restricts assistance to 25 percent of dwelling units in a project. The measure would allow it to be used for 25 percent of units or 25 units, whichever is greater. The allowable contract term for project-based vouchers will be increased to 20 years from 15 years.
- The bill will allow the U.S. Department of Agriculture to delegate its authority to approve and execute loan guarantees under the single family housing loan guarantee program to certain preferred lenders, according to standards established by the department.
- Property taxes paid on mobile homes, insurance payments, utilities and financing to be included as components of the housing costs eligible for Section 8 payments.
- HUD will be required to publish model guidelines for minimum heating requirements for units operated by PHAs receiving federal assistance.
NAHMA would like to thank its members and other industry groups for joining together in advancing this legislation. Our combined efforts demonstrate the importance of grassroots advocacy. We sincerely appreciate the passage of H.R.3700 and look forward to your continued support in our collective goal of providing quality affordable housing.
Affordable Housing Credit Improvement Act
On Thursday, June 14, Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT) introduced the Affordable Housing Credit Improvement Act of 2016. This is their second bipartisan bill introduced together that concerns the Low-Income Housing Tax Credit (LIHTC).
In May, Senator Cantwell and Hatch introduced legislation to expand the LIHTC by 50 percent. Their bill introduced yesterday builds on the proposed expansion with new program provisions which aim to preserve more properties in the portfolio and better align LIHTC assistance with people experiencing homeless and extremely low-incomes.
The bill contains many proposed program changes for the LIHTC, which include:
- A purchase option that will allow a non-profit or government sponsor to acquire properties when the current 15 year compliance period expires. With this change, the Senators believe that more affordable units may be preserved;
- New incentives for projects that target homeless or extremely low income individuals and families. These projects will be eligible to receive a 50 percent credit boost in order to assist them with the financial need of these tenants;
- Properties would be able to claim clean energy credits such as the Energy Efficient New Homes Credit, the Energy Efficient Commercial Building Deduction, and the Energy Investment Tax Credit. All of these tax credits are currently unavailable to LIHTC properties;
- States would be required to consider the needs of Native American communities during allocation and provide additional support to projects located in Indian areas by automatically making them eligible for an additional 30 percent credit boost if necessary for financial feasibility;
- Standardization of tenant income limit rules for projects in rural areas;
- Clarification that property owners may claim LIHTCs after casualty losses to ensure a reasonable amount of time for repair and reoccupy after damage. This provision is maintained regardless of whether the damage results from a presidentially declared disaster;
- Aligns the LIHTC student more closely with the HUD student rule; this change is similar to a previous bill introduced by Senator Al Franken in May of 2015 (Housing for Homeless Students Act); and
- The name of the tax credit would be changed from the Low-Income Housing Tax Credit to the “Affordable Housing Tax Credit”.
NAHMA will actively pursue expansion of LIHTC.
A
press release concerning the bill was released by Senator Cantwell
Florida Senators introduce the Housing Accountability Act of 2016
On Thursday, July 14, Florida Republican Senators Marco Rubio(R-FL) and Bill Nelson (D-FL) introduced the Housing Accountability Act of 2016. This bill would require HUD to survey tenants twice a year about property conditions and management performance. New penalties for property owners who repeatedly fail the tenant surveys would also be enforced.
Along with the tenant surveys, HUD would be required to gather a report regarding the “adequacy of capital reserves” for property receiving Section 8 assistance. This bill comes after a recent visit by Senator Rubio to an affordable housing property that had neglect and mismanagement issues.
NAHMA will review and monitor this legislation. While we understand the need to address poor preservation and maintenance practices, lawmakers should acknowledge industry efforts to abide by high standards.
Secretary Castro Appears before House Financial Services Committee
On Wednesday, July 13, HUD Secretary Julian Castro appeared before the House Financial Services Committee to discuss the recently announced proposed changes to the Department’s Distressed Asset Stabilization Program (DASP).
DASP began in 2010 as a direct sale pilot program that allows pools of Federal Housing Administration (FHA) mortgages headed for foreclosure to be sold to qualified bidders. Committee Chairman Jeb Hensarling (R-TX) and other members have great expressed concern over a proposed change to offer lower-priced “preferential bidding options” to nonprofits and local governments. Republican lawmakers saw this change as an egregious attempt to remove the private market from the process.
Much of the hearing focused on this issue and the single-family programs offered by HUD. However, there was some discussion on other current topics related to multifamily housing and federal funding. Representative Randy Hultgren (R-IL) asked Secretary Castro if HUD will issue any additional Fair Housing Act rules, guidance, or clarification during the remainder of 2016.
The Secretary noted the release of guidance on the affirmatively furthering fair housing rule as well as the guidance from HUD’s Office of General Counsel (OGC) regarding applicants and tenants with criminal backgrounds. On this subject, he commented that HUD will:
“continue to work on, for instance, guidance around reentry. We have let housing providers know that they should generally avoid blanket restrictions on someone — anyone who has any kind of criminal record, any kind of conviction. That’s not to say that they can’t consider that in whether they — they offer a housing opportunity to someone, but that they need to take a more tailored approach which takes into account the link between that restriction and community safety.”
Hultgren did not follow up with his questions on fair housing, and returned to the discussion on DASP. Later, Representative Keith Ellison (D-MN) asked Secretary Castro to comment on the general state of housing affordability for renters: “Mr. Secretary… I just want to note that we’ve got about 11 million families that cannot afford their rent. Families earning under $30,000 a year can barely pay for anything else…Would you care to offer any of your thoughts on the rental crisis in our country? How serious is it? What should Congress be doing?”
Secretary Castro replied that the Government must pay attention to only large cities like Boston and New York, but to small communities as well where people experience rent burdens. To overcome the affordability crisis, he suggested enhancing the Low-Income Housing Tax Credit (LIHTC) to expand development of more affordable units. He further commented that Congress should be increasing funding for the HOME program, Housing Choice Vouchers, lifting the cap on the Rental Assistance Demonstration program (RAD), and successfully implementing the National Housing Trust Fund.
Summer Recess Begins
The six week congressional work period begins today, July 15. The Senate and House will be adjourned until after Labor Day. During this time, all lawmakers will be in their Congressional Districts and states to work on local issues.
The summer recess is an excellent time for members to engage in advocacy activities at the district level. NAHMA encourages members to reach out to their elected officials to schedule meetings and property site visits. This is a great opportunity to build relationships with offices and educate Congress on the important roll affordable housing plays for their constituents.
Please visit our grassroots advocacy page to learn more about becoming involved. Additionally, NAHMA staff is eager to assist you in reaching out to offices and beginning the conversation. Contact NAHMA Government Affairs staff if you would like assistance.
