House Passes Build Back Better Act
Today, the House of Representatives voted to approve the Build Back Better Act, President Biden’s $1.75 trillion economic recovery package. The bill includes $150 billion in housing investments, with $26 billion for Housing Choice Vouchers and Project Based Rental Assistance, and $15 billion to increase the supply of affordable housing through the national Housing Trust Fund and HOME Investment Partnerships program. Specifically, the bill would provide:
- $1 billion for Project-Based Rental Assistance, which can be combined with capital investments through the national Housing Trust Fund and other programs to ensure that newly developed properties are affordable for households with the lowest incomes for at least 20 years. The bill also provides an additional $1.6 billion for the revitalization of distressed properties receiving Section 8 Project-Based Rental Assistance.
- The Section 811 and 202 programs for people with disabilities and seniors, respectively ($500 million each). These investments can be used for capital funds and project-based rental assistance to create more supportive housing.
- $24 billion for Housing Choice Vouchers and includes $7.1 billion devoted to serving families and individuals experiencing homelessness or at imminent risk of homelessness and survivors of domestic violence and human trafficking. The rest of this funding would target households with extremely low incomes — below 30 percent of median income — who struggle to afford housing and frequently find themselves at risk of eviction. The funds will help them avoid housing instability, homelessness, evictions and related crises, and disruptive moves that can interrupt children’s educational progress. Some vouchers will be paired with capital investments to ensure newly developed units are affordable to extremely low-income households.
- The 300,000 new vouchers will be phased in over five years, with funding to maintain them through 2029. This includes providing support to help households with vouchers find units in neighborhoods where they want to live and incentives for landlords to accept vouchers.
- $65 billion to repair and renovate public housing.
Additional affordable housing proposals include:
- $5 billion to address lead paint and other health hazards in the housing stock.
- $3 billion for a new Community Restoration and Revitalization Fund that would provide grants to local partnerships to conduct affordable, accessible housing activities and neighborhood revitalization.
- $2 billion for rural rental housing, including construction, preservation, and improvements for energy and water efficiency, climate resilience, or to remove health and safety hazards.
- $2 billion for grants to improve energy or water efficiency, or climate resilience of affordable housing.
The Build Back Better Act also includes investment in the Low-Income Housing Tax Credit, which could finance nearly 812,000 additional affordable homes. Specifically, the bill includes:
- Lowering the bond-financing threshold from 50 percent to 25 percent for five years, from 2022 to 2026.
- Increasing the annual Housing Credit allocation at a rate of 10 percent per year plus inflation from 2022 to 2024, which amounts to a roughly 41 percent increase over current levels in 2024, followed by inflation adjustments after 2025.
- Providing a permanent 50 percent basis boost for properties serving extremely low-income (ELI) households, along with an 8 percent minimum set-aside for properties taking advantage of the ELI basis boost, as well as a limitation on the amount of allocation and volume cap that can be used for properties receiving the ELI boost.
- Providing a permanent 30 percent basis boost for properties in Indian areas.
- Curtailing the use of Qualified Contracts by repealing the option for buildings receiving allocations after January 1, 2022, and, for existing properties, changing the price for the low-income portion of a property to fair market value, determined by the allocating agency considering the rent restrictions required to continue to satisfy the minimum set aside requirements. This provision would raise $457 million in revenue from 2022 to 2031.
- Making several modifications to the Right of First Refusal (ROFR) by (i) converting the right to a purchase option for agreements entered into after passage, (ii) allowing the inclusion of partnership assets related to the building in the definition of property; (iii) allowing the option holder to exercise the right of first refusal without requiring the approval of an investor or requiring a bona fide third party offer; and (iv) changing the purchase price to only debt and not debt plus exit taxes. The changes are not intended to change any express provision in an existing agreement. It is estimated that this provision would raise $553 million in revenue from 2022 to 2031.
The Build Back Better Act will now be considered by the Senate after the Thanksgiving Day holiday. NAHMA will continue to engage Congress to make sure affordable housing investments are included in the final bill.
To view a section-by-section summary of the Build Back Better Act, click here.
Task Force on Property Appraisal and Valuation Equity Convenes
On Thursday, HUD Secretary Marcia Fudge and Domestic Policy Advisor Susan Rice convened a meeting of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE). The Task Force, which was created by President Biden in June, consists of senior leaders from the Cabinet and independent agencies within the federal government and is tasked with addressing the persistent misevaluation and undervaluation of properties owned by families and communities of color.
Since the first meeting of the Task Force in August, members of the Task Force have received input from a diverse set of stakeholders, including the housing industry, civil rights organizations, advocacy groups, academic institutions, and philanthropic organizations. That feedback informed the discussion on updating appraisal standards and guidance, synchronizing regulatory action, and sharing data between agencies to support policy development, monitoring and enforcement of fair housing laws, among others. Members considered both near- and long-term opportunities for government agencies to ensure the methods used in property valuation are fair and do not discriminate against communities of color.
The Task Force will deliver a final action report to the President in early 2022 that (1) describes the extent, causes, and consequences of misevaluation and undervaluation of properties, and (2) proposes a set of policy recommendations and consumer-facing actions that participants can take to advance racial equity in the appraisal process.