Senate Passes the Farm Bill
On Monday June 10, the Senate passed S. 954, the Agriculture Reform, Food and Jobs Act of 2013 with a final recorded vote of 66 to 27. This substantial reform legislation was first introduced on May 14 by Senator Debbie Stabenow (D-MI). The bill includes a measure to amend the definition of a rural area in the Housing Act of 1949. Currently, the population threshold for an area to be considered rural is 25,000 and the USDA certifies this through the use of census data from the year 2000. At the beginning of FY 2014 (Oct. 1 2013), the USDA will begin to use population data from the 2010 census – this may cause areas to lose their rural definition status because of populations decreases/increases.
In order to maintain rural status for areas at risk of losing USDA assistance, S.954 would use the population data from the 2010 census in the USDA’s evaluation of a rural area, but it would allow rural areas that had previously been defined as rural to maintain this status until the 2020 census. Below is an excerpt from S.954:
“any area deemed to be a ‘rural area’ for purposes of this title under any other provision of law at any time during the period beginning January 1, 2000, and ending December 31, 2010, shall continue to be so classified until the receipt of data from the decennial census in the year 2020.”
Furthermore, the bill would increase the population threshold from 25,000 to 35,000. This will further assist areas in keeping their rural status. Certain communities must also be “rural in character,” meaning they are not part of a metropolitan statistical areas (MSA), which is defined as a county or counties associated with a city or urbanized area that has a population of at least 50,000.
However, the bill must also pass the House of Representatives before it could become law and protect rural areas from losing USDA assistance. Congressman Frank Lucas (R-OK) introduced H.R. 1947, the House equivalent of S.954 on May 13. While Lucas’ bill does include similar language that would allow current rural areas to maintain their status until the year 2020, his bill does not extend the population threshold to 35,000. You can read S.954 by following
this link.
House Appropriations Committee Passes FY 2014 Agriculture Appropriations Bill
On Wednesday, June 13, the House Appropriations Committee passed the FY 2014 Agriculture Appropriations bill through a voice vote. As mentioned in a previous Washington Update, the bill provides a total of $2.2 billion for rural development (RD) programs, which is equal to the FY 2013 enacted level. You may view the appropriations bill
here.
Nebraska Congressman Jeff Fortenberry introduced an amendment which bars funding from this appropriations bill to be used for the reclassification of rural areas which were already classified as of June 1, 2013. The amendment was adopted through a voice vote.
Below are the specific appropriations present in this bill:
- Section 521 Rental assistance is slated to receive $1.01 billion in funding for FY 2014 (this amount is $128 million higher than the FY 2013 appropriated amount before sequestration);
- Section 515 rental housing is budgeted at $28,432,000;
- $150,000,000 is pegged for section 538 guaranteed multi-family housing loans;
- The Multifamily Housing Revitalization Program would receive $27,084,000 and of this amount:
- $9,749,000 would be available for rural housing vouchers
- $17,335,000 shall be available for a demonstration program for the preservation and revitalization of section 514, 515, and 516 multi-family rental housing properties
The House of Representatives has yet to schedule a floor vote for this bill. House Appropriations Chairman Hal Rogers said “I applaud the Committee approval of this bill today. From keeping our food and drug supply the safest in the world, to supporting our farmers and ranchers who create millions of American jobs, to helping our most vulnerable families put meals on the table, the funding in this bill is critical to our nation’s economy,”.
NAHMA remains concerned about the rental assistance (RA) contract shortfalls that will occur in September of FY 2013. According to the Rural Housing Service (RHS), rental assistance is receiving a $65 million cut in FY 2013, with a limited impact to the month of September. So if a contract runs out of money in August, no funding will be available in September, and RA not received in September will never be received.
NAHMA strongly urges Congress to take legislative action at the earliest opportunity to either restore funding in time to avoid the RA shortfall or to provide funds in FY 2014 to compensate owners for the lost RA in FY 2013. NAHMA forwarded this request to all members of the Appropriations committee.
House Financial Services Committee Hearing Focuses on the Government’s role in Housing Finance
On Wednesday, June 13, the House Financial Services Committee held a full committee hearing titled
“Beyond GSEs: Examples of Successful Housing Finance Models without Explicit Government Guarantees”. Witnesses included real estate financing professionals and academic professors who specialize in economics and law. In the five separate witness testimonies, affordable multifamily housing was mentioned in passing by two witnesses. The rest of the dialogue was centered on non-federally assisted single-family housing.
The witness Lawrence J. White, Professor of Economics at New York University, was critical of the government’s role in housing finance, specifically through the FHA and government sponsored enterprises (GSEs) like Ginnie Mae and others. He stated that subsidy programs tended to have only marginal effects on home ownership rates, and that rental subsidy programs tended to have the opposite effects.
Overall, the witnesses were sharply critical of the government’s heavy involvement in housing finance and they would prefer to see a stronger private-market. This hearing was similar to a previous
hearing in the House Financial Services Committee in which the FHA and the housing finance GSEs were sharply criticized.
