Government Accountability Office Issues Report on the LIHTC
On July 23, the Government Accountability Office (GAO) issued a report on the Internal Revenue Service’s (IRS) oversight of the Low-Income Housing Tax Credit (LIHTC) program. The report was critical of the IRS oversight of the 56 state housing finance agencies (HFA), which administer and oversee the program at the state level. The GAO recommended that HUD and the IRS share joint administrative oversight of the LIHTC program.
The report begins by noting that the IRS has conducted only since seven audits of HFAs since 1986, the year of the LIHTC’s inception. Due to the limited audits, the GAO claims that the IRS cannot determine the extent of noncompliance and other issues at HFAs. Highlighted in the report is a lack of oversight of Qualified Action Plans (QAPs), which limits the IRS’s ability to determine if the HFAs appropriately awarded credits to projects. The GAO blames this lack of oversight on the IRS’s view that the LIHTC is a peripheral program in terms of its mission and priorities for resources and staffing.
Moreover, the GAO found that the IRS has not set goals or assessed performance for the program and data in the IRS’s Low-Income Housing Credit database is not complete and reliable for assessing compliance. The report cites an IRS summary report of all HFA audits conducted from 2003 to 2014 in which the IRS stated that it generally selected which HFAs to audit based on press accounts and HFA self-reporting about lack of adherence with compliance requirements.
The GAO believes that joint administration with HUD could better align program responsibilities with each agency’s mission; the IRS could retain responsibilities consistent with its mission such as enforcing taxpayer compliance (as it does in the other two tax credit programs), and HUD could further leverage its experience in administering affordable housing programs and working with HFAs. However, the report notes that the GAO does not know level of resources that would be needed to perform an adequate level of oversight of HFAs.
To view the GAO’s report of the LIHTC program, please click here
Senate Bill would Create Energy Savings Demonstration Program for HUD-Assisted Properties
This week the Senate energy committee approved the Energy Policy Modernization Act with a bipartisan vote of 18-4. Among numerous other changes to US energy policy, this bill would create a demonstration program under which the Secretary of HUD may enter into agreements with multifamily property owners that result in a reduction in energy or water costs. The demonstration would be open for up to 20,000 multifamily units in properties assisted through Project-Based Section 8, Section 202 and Section 811. This bill is similar to H.R. 2997, the Private Investment in Housing Act of 2015, which passed the House on July 14, 2015. NAHMA supports legislative action to create the pay for success demonstration.
Additionally, the Committee approved in the bill a provision that would grant property owners more time to develop an agreement on a workable non-weatherized gas furnace efficiency standard. This relates to a new Department of Energy (DOE) standard that would require the furnaces to be at 92 percent annual fuel efficiency (AFUE) by 2021.
HUD Celebrates 50 Years
This week, NAHMA staff participated in a ceremony with HUD Secretary Julian Castro to celebrate the Department of Housing and Urban Development’s 50th anniversary. The ceremony “A Year of Progress: Building a Stronger HUD for the Next 50 years” included remarks by Secretary Castro on HUD’s ongoing priorities and featured statements by residents who were or are currently participating in HUD programs as well as Katherine O’Regan, Assistant Secretary of HUD’s Office of Policy Development and Research.
A webcast of the ceremony is available here
Hearing on the State of Veteran’s Homelessness
On Wednesday, July 29, the Senate Committee on Veterans’ Affairs held a hearing entitled “Ending Veteran Homelessness.” Testimony was delivered by Jennifer Ho, Senior Advisor to the Secretary of HUD.
In her testimony, Jennifer Ho highlighted the Department of Veterans and HUD’s collaborative efforts to eliminate veterans’ homelessness: “From 2010 to 2014, there was an estimated 33 percent drop in the number of Veterans experiencing homelessness on a single night according to HUD’s 2014 Point in Time count (from just under 75,000 in 2010 to just under 50,000 in 2014).” She also noted that over 57,300 Veteran families are being housed through the Veterans Affairs Supportive Housing program.
There are still challenges to ending veterans’ homelessness. Jennifer Ho stated that the lack of affordable housing availability creates numerous hurdles for veterans and HUD:
“Many HUD-VASH recipients still face a limited supply of affordable housing, particularly in high-cost markets. Once a Veteran has a housing voucher in hand, there is no guarantee that there will be enough affordable housing available in his or her community. While we can help communities better engage private landlords and incentivize landlords to prioritize housing Veterans experiencing homelessness, addressing the shortage of affordable housing requires commitment from local governments and housing developers to prioritize affordable housing for this population. The Administration is working with local actors in areas where this problem is most acute to help incentivize the availability of affordable housing for Veterans experiencing homelessness.”
The Administration and Congress are still actively working on ending homelessness amongst US veterans, including a new HUD-VASH demonstration project which is targeted to veterans living on tribal lands.
To watch an achieved webcast of this hearing, please click here
Legislation Seeks to Block Affirmatively Furthering Fair Housing Final Rule
On Thursday, July 30, Senator Mike Lee (R-UT) introduced the “Local Zoning Decisions Protection Act” (S.1909), a bill which would prevent any federal funding for implementing HUD’s recently issued final rule “Affirmatively Furthering Fair Housing.”
Senator Lee’s bill would also prohibit any funds from being used for HUD’s “Fair Housing” database in an effort to prevent disparate theory investigations. In a statement, Senator Lee said “Every American should be free to choose where to live, and every community should be free to zone its neighborhoods and compete for new residents according to its distinct values.” He also added “A better debate would be about how Americans could better spend the money that is wasted every year by the dysfunctional Community Development Block Grant Program.”
A similar bill was introduced in the House of Representatives in April by Representative Paul Gosar (R-AZ). Essentially, Lee and Gosar want local governments to act on their community’s fair housing issues rather than the federal government.
The “Local Zoning Decisions Protection Act” currently has five cosponsors and has been referred to the Senate Committee on Banking, Housing, and Urban Affairs. It is highly unlikely that this bill will be enacted because the Obama Administration would veto legislation which would prevent implementation of the Affirmatively Furthering Fair Housing final rule.