The Affordable Housing Industry's Top 10 Stories of 2019

December 27, 2019                                By: Christine Serlin

AHF, industry leaders count down the news events of the year.

2019 was a relatively quiet year for the affordable housing industry, unlike the previous several years when effects of tax reform and the 2016 presidential election dominated the news. Even so, the year brought us new trends and notable changes.

Affordable Housing Finance, with help from its Editorial Advisory Board members, takes a look at 10 news events for the industry from the past year.

1. Growing Focus on Affordable Housing

The affordability crisis made national and local headlines during 2019.

“There’s increased national interest in increasing the supply of affordable housing,” says Bart Mitchell, president and CEO of The Community Builders. “Everyone is talking about it, from presidential candidates with housing plans to more congressional sponsors to increase low-income housing tax credit (LIHTC) resources than ever before.”

Affordable housing has been a key talking point for 2020 Democratic presidential contenders, even coming front and center during a primary debate in November. It also was a hot topic in local elections across the nation this past fall.

The LIHTC continues to receive broad bipartisan support in Congress. The Affordable Housing Credit Improvement Act (S. 1703 and H.R. 3077) has 197 co-sponsors in the House—125 Democrats and 72 Republicans—and 37 co-sponsors in the Senate—24 Democrats, 11 Republicans, and two Independents. One of the bill’s provisions, the permanent 4% LIHTC rate, was in play up to the last minute in budget negotiations in mid-December but was abruptly pulled at the last minute....................Read More

The Affordable Senior Housing Challenge

December 5, 2019                             By: Sibley Fleming

Developers and service providers are grappling with the affordable senior housing dilemma.

By 2029, 54 percent of the nation’s 14.4 million middle-income seniors won’t be able to afford private-pay seniors housing options for long before they exhaust their resources and become eligible for Medicaid. Out-of-pocket costs for assisted living will be $60,000 by then. Those telling—and sobering—statistics are key findings of a study released this past spring by the University of Chicago’s National Opinion Research Center and sponsored by the National Investment Center for Seniors Housing & Care, a Washington, D.C.-based research organization. The key takeaway? There is a huge need for affordable senior housing and care for middle-income seniors.

Pearlon Oyster Bay

“If you think of this as multifamily housing in the workforce world, this is workforce housing, but for seniors,” said Beth Burnham Mace, NIC chief economist and director of outreach.

The study sent a shot over the bow of the senior housing industry, which has to date been most prolific at providing seniors housing solutions in the form of continuing care retirement communities for the top 20 percent of the market and the government-subsidized bottom 20 percent.

Providing this much-needed housing and related services has become the talk of seniors housing conferences, policy and finance summits. “Everybody is paying attention to this market. But nobody has quite figured out how to get their arms around this market, what it’s going to look like,” said John Cochrane, CEO of Pleasanton, Calif.-based HumanGood, which owns and operates 21 continuing care communities serving primarily the upper income demographic as well as 96 affordable senior housing communities......................Read More

BIG CITIES ARE TAKING ON HOUSING AFFORDABILITY, BUT EVEN THE LARGEST WILL NEED HELP

November 4, 2019                            By: Daniel McCue

The nation’s largest cities are at the forefront of the battle against high housing costs. In efforts described in our latest State of the Nation’s Housing report and in previous blogs, several big cities have come forward to revise zoning and land use regulations to open up land and allow higher densities of housing development. Some have also made permitting procedures faster or less cumbersome, others have reduced requirements such as those for allocated parking to lower development costs, and a few have legalized less costly housing options such as accessory dwelling units. Many have also dedicated local funds to build and preserve affordable housing.

But how far can these big-city actions go to alleviate large-scale, regionwide challenges of high housing costs? A quick look at the Census Bureau’s latest population estimates suggests that cities can only go so far in solving affordability issues because even the largest cities are home to just a fraction of their metro area populations.

As shown in Figure 1, cities in the US make up just a small portion of the population within their overall metropolitan areas. Some cities make up a surprisingly low share. The cities of Miami and Atlanta, for example, are each home to just 8 percent of the populations in their respective metro areas. Washington, DC, despite its relatively high population density, is also home to just 11 percent of its metro area population. The city of Boston, which is part of a particularly fractured metropolitan area that includes dozens of small New England cities and towns, is home to just 14 percent of the population in the Boston-Cambridge-Newton metropolitan area...............Read More

FIGURE 1: EVEN THE LARGEST CITIES MAKE UP JUST A SMALL PORTION OF THEIR METRO AREA POPULATIONS

Tax-Exempt Loan Helps Structure NYC RAD Deal

October 24, 2019                              By: Multifamily Executive

$192.2 million public housing project demonstrates the power of creative teamwork.

Brought to you by Freddie Mac Multifamily

The Hope Gardens NYCHA development in Brooklyn, NYC | Courtesy: Hunt Companies (Photo: Michael Ratliff)

The story and great lesson of the $192.2 million Hope Gardens portfolio acquisition and renovation can be summarized in seven words: Where there’s a will, there’s a way.

The ”way” involves the enabling Rental Assistance Demonstration (RAD) conversion of 1,321 New York City public housing units to clear the way for an ambitious and desperately needed renovation program. The immediate list of improvements includes everything from new boilers and wiring to updated kitchens and bathrooms. Longer term, the conversion ensures Hope Gardens residents in Brooklyn’s Bushwick neighborhood gain the permanent stability and peace of mind of housing affordability.

The federal RAD program seeks to improve and preserve at-risk public housing developments by allowing the properties to convert to long-term Section 8 rental assistance contracts. This is critical because it puts the housing authorities in better position to leverage additional financing to perform needed improvements.

Still, the road to closing was a challenge, requiring an impressive array of creative strategies and tools— tax-exempt loans, low-income housing tax credits and other funding sources; rent blending; and judicious risk taking by all players factored into the deal............................Read More

Wells Fargo to Donate $1 Billion to Affordable Housing and Homelessness Across America

October 23, 2019                                        By: Good News Network

In June, Wells Fargo announced a new philanthropic strategy that will address the key issues of housing affordability and small business revitalization with one billion dollars in grants and support.

The bank that serves one in three households in the United States said it is committing $1 billion over the next six years to support nonprofits and private entities that demonstrate ability to create positive outcomes in homelessness, available and affordable rentals, transitional housing and home ownership.

Last year, the Wells Fargo Foundation donated $444 million to more than 11,000 nonprofits to help address economic and social needs in underserved communities—and yesterday it announced $9 million in grants to more than 60 nonprofits, such as Habitat For Humanity and Covenant House, in support of housing affordability solutions. (See the full list below)

Bringing more than 30 years of experience in public and private philanthropy, Brandee McHale stepped in to take over the helm at the Foundation in August, after being the head of Corporate Citizenship at Citigroup. and president of the Citi Foundation, and previously working at the Ford Foundation.

To address challenges in construction, financing, and support services for low- and moderate-income families, the elderly and the homeless, Wells Fargo hopes to ease the cost burden for housing across the country, “from Alaska to Florida.”..............Read More

Facebook announces $1 billion investment package to bolster affordable housing

October 23, 2019                                              By: Kate Bradshaw/Almanac

Facebook, the social media behemoth headquartered in Menlo Park, announced Tuesday, Oct. 22, that it plans to invest $1 billion over the next decade toward affordable housing in California and elsewhere, including some existing commitments.

Facebook has temporarily subsidized rent for 22 local teacher households, including that of Konstance Kirkendoll, a teacher at Beechwood Elementary School in Belle Haven, as part of an ongoing pilot program. Last week, the company announced a $25 million commitment toward housing for those teacher and others in San Mateo and Santa Clara counties, just one of a number of major investment commitments toward affordable housing Facebook announced Oct. 22. (Photo by Michelle Le | 2016.)

In an announcement posted on the company's newsroom website, Facebook's Chief Financial Officer David Wehner stated that the funds will go toward creating up to 20,000 new housing units "to help essential workers such as teachers, nurses and first responders live closer to the communities that rely on them."

These job types typically represent what policymakers refer to as the so-called "missing middle," or middle-income earners who don't qualify for existing subsidy programs but are increasingly not earning enough to live in the Bay Area.

Wehner announced a new $250 million investment from Facebook for a partnership with the state of California aimed at developing mixed-income housing on excess state-owned land "in communities where housing is scarce."

(This refers to areas where affordable housing and a housing supply are scarce compared with the demand, not necessarily rural areas where there is a low housing supply overall, a Facebook spokesperson confirmed via email.)

As part of the press release, Gov. Gavin Newsom said, “State government cannot solve housing affordability alone, we need others to join Facebook in stepping up – progress requires partnership with the private sector and philanthropy to change the status quo and address the cost crisis our state is facing. Public-private partnerships around excess land is an important component in moving us forward.”.....................Read More

How Lenders are Supporting Affordable Housing Construction

October 7, 2019                              By: Kelsi Maree Borland

Capital is recognizing the need and opportunity in affordable housing development and LIHTC-backed rehab projects.

Anand Kannan

Demand for affordable housing is growing across the country, including in emerging markets like Denver. However, capital is catching on to the need for affordable housing, both on new development projects and LIHTC-backed rehab projects. This capital has been an important aspect of bringing more affordable housing to markets suffering from a housing shortage.

“Investors such as banks and insurance companies are realizing that there is incredible value in LIHTC-backed rehab projects,” Anand Kannan, leader of the preservation and development teams at Community Preservation Partners, tells GlobeSt.com. “In addition to offsetting tax burdens and providing a yield that is competitive to market-rate investments, an affordable housing investment comes with significantly lower risk of vacancy.”

It isn’t only the financial benefits, but capital is also attracted to social impact benefits of affordable housing. “Investors also enjoy the derivative impact of deploying capital with a purpose, which generates value in the form of PR and employee productivity,” says Kannan. “The rehab model, particularly, supports intangible value through environmental sustainability because no property is cleaner than the one that’s already built. All of this ROI adds up to an enticing proposition for those in charge of capital investments.”.........Read More

Bernie Sanders lays out an ambitious plan on affordable housing

September 14, 2019                                  By: Chelsea Janes

LAS VEGAS — A few days after reports surfaced that President Trump is considering a crackdown on homelessness, Sen. Bernie Sanders (I-Vt.) issued an unofficial rebuttal, outlining his national housing plan in an address to a crowd of 100 at the local chapter of a plumbers and pipe fitters union.

Sen. Bernie Sanders said he will pay for the policy by establishing a wealth tax on the top one-tenth of 1 percent — or, according to his estimate, the wealthiest 175,000 families. (Jason Bean/AP)

Sanders railed against Trump’s housing policies and explained his own plan, which calls for federal investment of $2.5 trillion over the next decade and a national rent control standard. He said he will pay for the policy by establishing a wealth tax on the top one-tenth of 1 percent — or, according to his estimate, the wealthiest 175,000 families.

“Instead of expanding federal housing programs, Trump is proposing to cut them by $9.6 billion or 18 percent,” Sanders said. “Instead of working to substantially reduce the outrageously high price of housing, Trump is proposing to triple what some of the poorest senior citizens and persons with disabilities in America are paying for rent today.”

The Sanders campaign said a full outline of the plan will “be released in the coming weeks,” but Sanders did provide some details Saturday. He proposed a national rent control standard that would cap rent increases at no more 1½ times the rate of inflation or 3 percent, whichever is higher. He promised to promote legal protections for fair housing and take steps to eliminate racial discrimination in loan practices....................Read More

Administration Releases Housing Finance Reform Proposals

September 6, 2019                                           By: Donna Kimura

Affordable housing leaders raise concerns about potential changes to GSE goals and other moves.

The Trump administration has released wide-ranging plans for housing finance reform that call for replacing the statutory housing goals of Fannie Mae and Freddie Mac with a new system and giving the Federal Housing Administration (FHA) more autonomy.

Affordable housing leaders are keeping a close eye on these proposals and others outlined in two separate plans released by the Treasury Department and the Department of Housing and Urban Development (HUD).

“It’s really a road map to government-sponsored enterprise (GSE) reform rather than a blueprint,” says David Dworkin, president and CEO of the National Housing Conference. “It includes a mix of ideological red meat for conservatives and practical suggestions and concessions to moderates and liberals. There are different paths you can take. I expect the strategy is to move forward incrementally with Congress as opposed to acting unilaterally, which the administration has enormous power to do.”

However, some moves require congressional approval, including changing the affordable housing goals of the GSEs with a more accountable mechanism...............Read More

Department of Housing and Urban Development News Briefs - August 2019

August 6, 2019                                                  By: Novogradac Journal of Tax Credits Volume 10 Issue 8

The U.S. Department of Housing and Urban Development (HUD) published a notice June 12 announcing the monthly per-unit fee rates used to determine administrative fees for each public housing agency that administers certain HUD programs. The fees involve the Housing Choice Voucher and Moderate Rehabilitation programs for calendar year 2019 (CY 2019). HUD provided two charts: one for the first 7,200 voucher units leased in CY 2019, the second for the remainder of the units. The notice is available at www.hudresourcecenter.com.

***

President Donald Trump signed an executive order June 25 to establish a White House Council on eliminating Barriers to Affordable Housing Development. The group will consist of members from eight federal agencies and the chairman will be Ben Carson, secretary of the U.S. Department of Housing and Urban Development. The council is tasked with measuring how federal, state and local regulations affect affordable housing, with the goal of reducing regulatory barriers.

***

The percentage of cost-burdened renters dropped slightly, but there remains a significant gap in affordable housing, according to the State of the Nation’s Housing 2019 report issued June 27 by the Joint Center for Housing Studies at Harvard University. The annual report says that 1.5 million units of housing should be built each year, which is 260,000 units more than were built in 2018. According to the report, 31.5 percent of American households spend more than 30 percent of their income for housing, the standard for being cost-burdened. It was the seventh-straight year that figure declined, but the share of renters who are cost-burned is 47.4 percent. The report highlights that the low-income housing tax credit (LIHTC) remains the primary provider of assisted rental affordable housing in the United States, having produced 2.5 million homes since 1987.

***

HUD awarded $63 million to 85 Native American communities throughout the country June 18 to improve housing conditions and stimulate community development for residents. Funding was provided through HUD’s Indian Community Development Block Grant program to support a wide range of community development and affordable housing activities. Award amounts ranged from $400,000 to $2 million.................Read More

City looks to boost affordable housing by changing how it doles out $60M in tax credits

August 6, 2019                                 By: Fran Spielman

The new “Qualified Application Plan” targets the greatest areas of need in the city while giving developers clear ground rules, officials said.

Housing Commissioner Marisa Novara talks to a housing advocate after Novara's confirmation hearing in June.

 | Fran Spielman for the Sun-Times

Mayor Lori Lightfoot’s administration is changing the rules for how the city allocates federal low-income housing tax credits to confront an affordable housing crisis that has left Chicago 120,000 units short.

Homeless advocates and their City Council allies have been pressuring Lightfoot to deliver on her campaign promise to raise Chicago’s real estate transfer tax on high-end home sales by a whopping 160% to reduce homelessness and bankroll affordable housing.

Instead, Lightfoot wants to reserve that potential windfall — as high as $150 million — for reducing Chicago’s massive budget shortfall.

The new “Qualified Application Plan” for up to $60 million in low-income-housing tax credits does not include any additional revenue to solve an affordable housing crisis that has contributed to Chicago’s shrinking population.

The rules target the money to the greatest areas of need and income while giving developers clear ground rules for the awarding of tax credits that represent roughly two-thirds of city spending on affordable housing...................Read More

How much affordable housing is too much?

August 2, 2019                                      By: Greg Hinz

It's a tough question to answer, but it's one City Hall must get right as it weighs proposals that could either make Chicago more livable for many or stifle residential construction altogether.

Getty Images

Nervous Chicago business folks won a modicum of reassurance last month when a compromise work-notice ordinance finally was crafted. The deal admittedly had some aspects of a shotgun marriage, but business groups pulled enough concessions out of Mayor Lori Lightfoot that they ended up signing off on the new law.

Now, a much bigger test of business's relationship with the new mayor has begun. At stake literally is the health of the city's entire residential market, both rental and homeowner-occupied.

My reference is to a series of pending proposals to expand the city's stock of affordable housing—or at least to prevent it from shrinking amid a central-area economic boom that's sparking a gentrification wave. Get it right and lower-income people will get new options to stay in town without having to starve their kids. Get it wrong and both new and renovated residential construction will dry up.....................Read More

Congress Considering Retroactive Changes Affecting Low-Income Housing Tax Credit Property Owners

July 24, 2019                          By: Dirk Wallace, Michael Novogradac

Two bills recently introduced in Congress would retroactively alter rights of existing owners of low-income housing tax credit (LIHTC) properties: One bill changes the terms of rights of first refusal (ROFR) and the other alters qualified contract exit price calculation. Part I of this blog post reviews rights of first refusal. Part II will address qualified contracts.

Rights of First Refusal

Under current law, Section 42(i)(7)(A) specifies that “No [federal] income tax benefit shall fail to be allowable to the taxpayer with respect to any qualified low-income building merely by reason of a right of 1st refusal held by … a qualified nonprofit organization …. after the close of the [15-year] compliance period for a price which is not less than the minimum purchase price ….” The minimum purchase price is generally the outstanding debt on the property, plus all tax liability arising on the sale.

The Section 42(i)(7) right of first refusal was enacted in 1989 after a task force convened by Sens. George J. Mitchell, D-Maine, and John C. Danforth, R-Mo., recommended that the safe harbor allow for non-profits to hold a below-market purchase option. Following the task force recommendation, Mitchell and Danforth sponsored a bill in Congress in 1989 (S.980) that would have provided that “the determination of whether any qualified low-income building is owned by the taxpayer shall be made without regard to any option by a qualified nonprofit organization (as defined in subsection (h)(5)(C)) to acquire such building at less than fair market value after the close of the compliance period.”...................Read More

Bill Seeks to Eliminate, Modify Qualified Contract Option

July 12, 2019                     By: Donna Kimura

The legislation aims to preserve LIHTC properties.

Legislation has been introduced to modify the qualified contract option for low-income housing tax credit (LIHTC) properties.

LIHTC developments generally must remain affordable for at least 30 years—a 15-year compliance period and a 15-year extended-use period. However, owners are permitted to pursue a qualified contract, a process that can allow properties to convert to market rate after just 15 years.

Introduced by Sens. Ron Wyden (D-Ore.), Todd Young (R-Ind.), Ben Cardin (D-Md.), and Sherrod Brown (D-Ohio), the Save Affordable Housing Act (S. 1956) seeks to eliminate the option for future projects. In addition, it would alter the statutory qualified contract price formula and require existing properties to be sold at a fair-market price.

The legislation seeks to prevent the premature loss of affordable housing and ensure that housing credit properties remain affordable for at least 30 years. Many states have set longer affordability requirements..........................Read More

Housing Leaders Blast HUD Plan to Ban Mixed-Status Families

July 2, 2019                            By:  Donna Kimura

They say the move will increase the nation's homelessness crisis.

Thousands of American children will be at risk of homelessness under a controversial proposal by the Department of Housing and Urban Development (HUD), according to public housing leaders.

The plan, which would evict families in which a member is undocumented from obtaining subsidized housing, threatens the housing stability of 25,000 mixed-immigration status families, including 55,000 children who are U.S. citizens or otherwise eligible for HUD assistance, say officials who are fighting the move.

The proposal is a major change from a long-standing rules that allow families of mixed-immigration status to reside in subsidized housing as long as one family member is a legal resident.

Opponents of the new proposal stress that housing subsidies do not support undocumented immigrants. These individuals are permitted to live with their families, but the rents are prorated to ensure that subsidies do not assist with the undocumented immigrant’s portion of the rent.......Read More

Seizing the Opportunity for Affordable Housing Nationwide

July 16, 2019                       By: Emily Cadik

AHTCC's Emily Cadik says it's a critical time to advocate.

Emily Cadik

Advocates of affordable housing have an important opportunity in today’s political climate. Despite legislative gridlock and deep partisan conflict, affordable housing has emerged as one of the few topics met with bipartisan support.

Rent is skyrocketing in nearly every corner of the United States. From rural farm regions to our densest cities in red and blue states alike, paying the rent has become increasingly burdensome. Rental rates soar as wages slowly creep, still below prerecession benchmarks in many states. As a result, over 10 million American households pay more than half their monthly income on rent. For particularly vulnerable demographics, including people with disabilities, veterans, and senior citizens, the situation can be even more dire.

And while white-hot housing markets in urban centers continue to make headlines, housing affordability challenges extend far beyond metro regions, where rents are driven upward by scarcity and rising demand. As the crisis spans more and more of the U.S., so has the recognition among members of Congress that something must be done to address it................Read More

5 Lessons from Cities on Affordable Housing

July 22, 2019                   By: Bill Duryea                             Illustrations By: Matt Chinworth

In America’s fast-growing cities, the need for new housing isn’t keeping up with the demand. A handful of cities have found some new policy ideas to address a problem that doesn’t have a silver-bullet solution. Five big lessons from cities across the country—and a surprise.

1.  Single-family housing can be un-zoned

The middle-class dream of a single-family home is the biggest impediment to affordable housing, according to some housing activists—it keeps prices up by preventing new and denser developments, and NIMBY homeowners can be a potent political obstacle to change. But not always: In Minneapolis, the city council abolished single-family zoning in December. On lots where only one home could be built, now developers can put duplexes and triplexes.

2.  Veterans have a secret weapon

In Arlington, Virginia (outside Washington, D.C.) one American Legion post has partnered with a local affordable housing non-profit to build 160 affordably priced apartments on its property, about half of which will go to veterans. The Legion has thousands of posts across the country, a huge inventory of convertible locations...........................Read More

Cities Need Affordable Housing, but Builders Want Big Profits. Can It Work?

July 9, 2019                               By: Eugene L. Meyer

Using government subsidies, tax credits and zoning changes, municipal leaders are encouraging developers to incorporate affordable housing into mixed-use projects.

The Wharf, a $2.5 billion development in Washington. The city negotiated with developers to include a certain percentage of

 affordable housing.   Al Drago for the New York Times

WASHINGTON — The Wharf is a gleaming, $2.5 billion development that has transformed a long-stagnant waterfront into a major destination in the nation’s capital.

Along a mile of the Potomac River is an array of high-end hotels, entertainment venues, shops, restaurants and apartments. They include the 6,000-capacity Anthem concert venue, an InterContinental hotel and Vio, a luxury condominium where prices have soared up to $2.9 million.

But the city has also required the developer to include affordable housing on the project’s 24 acres. Of the 761 units in the first phase of the development, 26 percent are listed as affordable, and more are promised in the second phase.

From Washington to San Francisco, municipal leaders are facing increased pressure to provide affordable housing. Using a combination of government subsidies, tax credits and zoning changes, they are encouraging developers to incorporate affordable units into mixed-use projects....................Read More

A New Approach on Housing Affordability

July 7, 2019 
               

Some Democratic presidential candidates are emphasizing the need to build more housing. That could make a big difference.

Lisk Feng

A growing number of Americans are struggling to cope with the high and rising cost of rental housing in the United States. On any given night last year, more than half a million Americans were homeless. Nearly 11 million households managed to keep a roof over their heads only by spending more than 50 percent of their income on rent, sharply curtailing their spending on food, health care and other needs. Millions more cannot afford to live in the neighborhoods where children are most likely to thrive, or in the cities where jobs are concentrated.

Democratic presidential candidates are promoting industrial-strength plans to ease the pain. The ideas come in two flavors: subsidies for renters, and efforts to increase construction.

The focus on construction is a welcome development. The United States is in the depths of a decade-long construction drought that is driving up the cost of existing homes. Builders added about 1.2 million units last year; Harvard’s Joint Center for Housing Studies estimates the nation needs another quarter-million units a year to keep pace with population growth. A key reason for the shortfall is that local governments are impeding construction...........Read More

Meeting America's Affordable Housing Needs Requires GSE Reform, and More

July 8, 2019                          By: Michael Stegman

Much of the writing that I will undertake in my fellowship year at the Joint Center for Housing Studies will address the Trump administration’s and Congress’s administrative and legislative efforts to reform the secondary mortgage market, including determining the fate of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, which were taken over by the federal government in the midst of the housing market crash in 2008, and where they remain today.

To put the financial crisis in perspective: between the fourth quarter of 2006 and the first quarter of 2009, home prices, which had not declined nationally since the Great Depression, collapsed by nearly a third. By the end of 2009, nearly one in four homeowners owed more on their mortgage than their home was worth. By early 2010, mortgage delinquencies had more than doubled from pre-crisis levels, and nearly one in ten single-family loans was seriously delinquent or in foreclosure. Between the end of 2006 and 2010, over $6 trillion—more than a quarter—of Americans’ housing wealth was lost.

Consistent with a forty-year career of teaching graduate courses in housing finance and public policy, conducting research, and writing, data and evidence will continue to guide my work as a fellow, but based upon nearly five years working in the Obama administration, I will continue to view the opportunities and challenges of housing finance reform through a Democratic lens. As Counselor for Housing Finance Policy to the Secretary of the Treasury, I helped move a bipartisan reform bill (commonly referred to as Johnson-Crapo) out of the Senate Banking Committee in 2014 but failed to garner a large enough bipartisan majority to move it to the floor for a full Senate vote.....Read More

10 Ways Cities are Tackling the Global Affordable Housing Crisis

June 10, 2019                                     By: Alice Charles & Dilip Guna

Research finds that only 10% of cities worldwide are affordable.

The unprecedented rate of urbanization across the world has led to increased demand for good, affordable housing.

A recent survey revealed that of 200 cities polled around the globe, 90% were considered unaffordable when applying the widely-used standard of average house prices being more than three-times median income.

Affordability is not just about the ability to buy or rent a home, but also about being able to afford to live in it. This definition of affordability goes beyond meeting expenses related to operations and maintenance, taking into consideration transport, infrastructure and services. If a home is economical enough to buy and maintain but located too far from work or school, it cannot be said to be affordable.

The factors contributing to a lack of affordability vary from city-to-city, but broadly include housing costs rising faster than incomes, the supply of houses not keeping up with demand, scarcity of land, and demographic changes such as population growth, ageing and shifts in household composition....................Read More

We're in a 50-Year Affordable Housing Crisis

May 6, 2019                              By: Alice Carr, Head of Community Development Banking, CHASE

A broad overview of where Chase was, where they are today, and how industry players can work together to address the growing affordable housing crisis.

The American Dream has been defined, in part, as the ability to afford a decent roof over your head. Half a century ago, that aspiration seemed more or less attainable for a broad portion of the country. Fast forward to today and that dream has become significantly harder to realize. Since the Great Depression, federal housing assistance programs have been necessary to help address a growing shortage of affordable housing.

Today, in the 50 largest metropolitan areas, only 37 affordable rental homes are available for every 100 low-income renter households, according to the National Low Income Housing Coalition (NLIHC). With homelessness increasing and rent prices soaring, we are facing a shortage of more than 7 million (NLIHC) affordable and available rental homes in the U.S.—and that number is growing.

It’s a start, but it’s not enough

The mission to provide low-income people with quality, affordable places to live through public housing started with the U.S. Housing Act of 1937. For years, the federal government and private entities have created various programs to promote fair housing, attract private investors and create new affordable rental housing.......................Read More

What's Eliminated in Trump's 2020 Budget Plan

March 22, 2019                                By: Donna Kimura

HOME, CDBG, Housing Trust Fund, and other key housing programs are proposed to be cut.

The Trump administration is once again proposing to eliminate or reduce key housing programs in its fiscal 2020 budget proposal.

The approximately $44.1 billion spending plan for the Department of Housing and Urban Development (HUD) is about $9.6 billion, or 18%, below the fiscal 2019 enacted level.

Here are 10 key takeaways:

· The HOME Investment Partnerships program would be eliminated. No funding is proposed for HOME, which received $1.25 billion in fiscal 2019;

· The Community Development Block Grant program would be eliminated. No funding is proposed for the grants, which received $3.3 billion in the final 2019 budget;

· The National Housing Trust Fund, which was authorized by the Housing and Economic Recovery Act of 2008, would be eliminated. The president’s budget seeks to eliminate the assessments on Fannie Mae and Freddie Mac that support the Housing Trust Fund. HUD anticipates receiving approximately $245 million from the calendar year 2018 collection, which will be distributed to the states in fiscal 2019;..........................Read More

Ben Carson says HUD will give preference to developers who build affordable housing in Opportunity Zones

March 12, 2019                     By: Keith Larsen

In an interview with The Real Deal, Carson also said he's now open to staying on as HUD secretary for a second term

HUD Secretary Ben Carson and a map of Opportunity Zones (Credit: Getty Images)

Housing and Urban Development Secretary Ben Carson said the agency will give preference to developers and investors who build affordable housing in federal Opportunity Zones when it comes to certain grants.

In an interview with The Real Deal on Tuesday, Carson said HUD will give added weight to proposed affordable developments in the Opportunity Zones, looking to make that construction a more competitive option for builders. But he acknowledged the agency could not mandate the construction of affordable housing in the 8,700 designated Opportunity Zones nationwide.

“If you are doing a project within an Opportunity Zone and you are applying for one of our grants, you get some preference,” Carson said during the interview. “So that, along with the tax advantages, will drive people to look at those (areas). We are also offering very specific technical assistance to help them coordinate their efforts.”................Read More

The Des Moines metro needs 11,848 affordable units for low-income renters, a new study says

March 15, 2019                                   By: Kim Norvell, Des Moines Register

Extremely low-income families cannot afford to live in 60 percent of central Iowa rental units, according to a new study released Friday.

To fill the gap in affordable housing, the Des Moines metro needs to add 11,848 homes for those renters, according to the National Low Income Housing Coalition.

The organization also found that 85.15 percent of those families — a family of four earning $25,100 a year or less — spend more than half of their income on rent.

"For rent" sign. (Photo: KaraGrubis, Getty Images/iStockphoto)

In Des Moines, that family would need to earn $31,226 a year to not be "rent burdened" in a 2-bedroom house — a term experts use to describe families who spend more than 30 percent of their income on housing.

"This crushing financial burden leaves little left for necessities such as food, transportation and health care," said Eric Burmeister, executive director of the Polk County Housing Trust Fund, who partnered on the study...............Read More

The Need for an Affordable Housing Reboot

February 28, 2019                                     By: Richard F. Burns & Robert Friant

Leaders at The NHP Foundation and CSH call for news ways to think about housing and health care.

How can the affordable housing industry—and our partners—ensure the right housing is built for those who will benefit from it now and in the years to come? We offer five steps to create an “affordable housing reboot” that addresses this question and the many societal concerns that go along with it.

1. Redefining Who Affordable Housing Helps

Typically, housing providers plan for residents who can pass stringent standards for employment, criminal background checks, etc., and do not coordinate with other sectors when considering perspective tenants. But to truly reduce the number of very low-income people facing homelessness, the affordable housing industry should change this dynamic by establishing referral relationships with health-sector partners, creating set-asides for people with special needs, and reducing all but the most significant barriers with a screen-in, rather than a screen-out, approach.

In some places, health-care partners are already stepping up to the plate and implementing much of this direction.

For example, the University of Illinois Hospital leads the “Better Health Through Housing” initiative, which has provided 42 homeless individuals with affordable supportive housing. Since the program began in November 2015, UI’s research has revealed significant benefits for hospitals to house the homeless. Their efforts have resulted in a 21% decrease in health-care costs, a 67% drop in emergency department visits, and a similar reduction in in-patient hospitalizations.................Read More

A Tough Road Ahead

November 1, 2018                                By: Donna Kimura

Interest rates, costs continue to rise for developers.

All eyes will be on interest rates as the calendar turns to 2019.

The Federal Reserve raised its benchmark interest rate a quarter point, to a range of 2% to 2.25% near the end of September, the third hike this year. Additional increases are also expected in the months ahead.

Columbia Residential recently opened Columbia Renaissance Square, a mixed-income development in Fort Worth, Texas. The first phase has 140 units, and a second phase contains 120 units of seniors housing. The Atlanta-based firm owns approximately 8,000 housing units.

“Interest rates have continued to increase, and the yield curve has flattened,” says Richard Gerwitz, co-head of Citi Community Capital. “Those are the two outstanding changes in the capital markets this year. While we’re still in a relative low point if you look over the last 30 years or more, rates have climbed and there’s certainly concern that the trend will continue.”

He points out that the 10-year Treasury is cracking 3%, compared with about 2.3% a year ago, a 70–basis point increase...............Read More

Trump Administration FY 2020 Budget Blueprint Proposes $9.6 Billion Cut to HUD, Eliminates CDFI Fund Grant Funding

March 11, 2019                            By: Peter Lawrence

The Trump administration today released its $4.7 trillion fiscal year (FY) 2020 budget request, which includes $750 billion in defense spending including overseas contingency operations and other adjustments and $567 billion for nondefense spending including adjustments. The proposed base nondefense discretionary spending cap is $543 billion, a cut of $54 billion from FY 2019 spending cap.

Of the nondefense discretionary budget, the administration requested $44.1 in gross U.S. Department of Housing and Urban Development (HUD) spending, a $9.6 billion (18 percent) cut from the amount appropriated in FY 2019, but $2.9 billion more than the FY 2019 request.

Highlights of the FY 2019 HUD budget blueprint follow.

Program eliminations

As with previous budget requests, the blueprint proposes to eliminate the Community Development Block Grant, HOME Investment Partnership and Public Housing Capital Fund programs. The programs received $3.3 billion, $1.25 billion, and $2.8 billion respectively.

Rental Assistance renewal funding

The FY 2020 blueprint provides $37.9 billion “to maintain services to all currently assisted low-income families,” which presumably covers HUD’s rental assistance programs, such as the Section 8 Housing Choice Voucher, Project-based Rental Assistance, Public Housing Operating Fund, expiration of Sections 202 and 811 rental assistance, McKinney-Vento Homeless Assistance Grants, and Housing for People With AIDS (HOPWA). However, the blueprint continues to propose to reforms to require “work-able” individuals to pay more and subject them to work a minimum of 20 hours a week or participate in training or educational activities. The Republican-controlled Congress considered these reform proposals in the past two budgets and rejected them.................Read More

Affordable Housing: 11 Ways The Real Estate Industry Can Help

February 21, 2019                     By: Forbes Real Estate Council

A lack of affordable housing remains a serious issue. Many Americans are being priced out of the cities they work in, and families are struggling to provide shelter for their children.

This is not just a personal issue: It’s a social one — and one with long-term impact. To find out some steps that can be taken to tackle the problem, we asked the experts of Forbes RealEstate Council how people in the real estate industry can make a positive impact on the housing market in order to help address the issue of housing affordability. Here's what they had to say.

Members discuss making a positive impact.  PHOTOS COURTESY OF THE INDIVIDUAL MEMBERS.

1. Partner With Other Affordable Housing Stakeholders

Local officials are looking for ways to maintain and preserve affordable housing. You may be able to take advantage of subsidies to help underwrite your efforts. You could also meet with a local affordable housing developer or active not-for-profit organization to learn and discuss partnerships. Also, consider partnering with large institutions in your area, such as universities and hospitals. - Deborah Rabbino Bhatt, Vesta New York................Read More

What the federal budget deal means for affordable housing

February 15, 2019                          By: Jeff Andrews

Rental-assistance programs and public housing see increased funding

Months of political gamesmanship over the federal government’s budget came to an end Friday when President Trump signed a bipartisan compromise that will keep the government open through the rest of the year.

The issue at the core of the impasse—a barrier wall along the southern border—has yet to be resolved as Trump declares a national emergency to obtain funds for it. But the budget deal ends a period of alarm and uncertainty for people who rely on federal assistance to pay for housing, and in fact gives the programs that provide that assistance a funding boost.

Corbis iva Getty Imgaes

For 2019, tenant-based rental assistance, including Section 8 rental vouchers, got a 2.65 percent increase in funding to $22.5 billion. Project-based rental assistance got a 1 percent increase to $11.7 billion.

The public housing capital fund—which is used to make repairs and improvements on public housing units—saw a modest increase of $25 million in funding to $2.7 billion. Likewise, the public housing operating fund got a 2.26 percent increase in funding to $4.6 billion. Given that the funding increases are modest, it’s unlikely they will go toward any new initiatives.........Read More

Trust in Public Housing at Stake Over Looming Government Shutdown

February 12, 2019                         By: Amanda Abrams

As the previous shutdown lingered, officials worried what running out of money could mean for 1.1 million low-income households.

The 35-day government shutdown wreaked havoc on millions of Americans lives and livelihoods as fewer food inspections took place, parks went uncleaned, museums shut their doors, airport lines grew longer, and whole agencies ground to a halt. The experience was especially distressing for those who depend on the federal government for their basic needs, including food and shelter.

The Farragut Houses, a public housing project in Brooklyn, New York. The 35-day government shutdown was especially distressing for those who depend on the federal government for their basic needs, including food and shelter. (Photo by Spencer Platt/Getty Images)

Thousands of furloughed employees—many living paycheck to paycheck—found themselves in line for free meals at pop-up kitchens and food pantries.

Recipients of SNAP assistance worried whether their monthly benefits would end.

And contractors with the Department of Housing and Urban Development and their tenants agonized over what a shutdown meant for them.

“We work really, really hard to have good relationships with local landlords. And if there’s the slightest hint that they won’t get their subsidy payments as promised, it erodes trust,” said Kurt Wiest, executive director of the Bremerton Housing Authority in Washington state. “And this program operates on trust.”............Read More

How Affordable Housing Can Improve the American Economy

February 5, 2019                                  By: Richard Florida

Building more affordable housing units in the metros that are centers of innovation will increase demand for the wares that fill houses, and increase productivity.

Housing is a big part of America’s story of innovation, productivity, and economic growth. For much of the industrial 20th century, housing helped to drive the economy by stimulating demand. Building more housing—especially in the suburbs—stoked the demand for more cars, washing machines, and other durable goods from America’s factories, creating good jobs for American workers and setting in motion a virtuous circle of economic growth.

In Miami, around 45 percent of households are cost-burdened, meaning residents spend more than 30 percent of their income on rent. //Carlos Barria/Reuters

But housing plays a very different role in today’s knowledge economy, where innovation and growth stimulate the clustering of knowledge, talent, and ideas. As a growing chorus of economists point out, the problem today is that we do not have enough housing—especially affordable housing—in the expensive and productive locations that drive the economy. The economic consequences often mean unskilled workers are unable to access good jobs in these cities, which costs the economy a huge amount in lost productivity...........................Read More

Zoning Reform Alone Won't Make Housing Affordable: Noah Smith

February 4, 2019                   By: Bloomberg

A new paper finds that zoning reform in big cities makes land more expensive without necessarily creating more housing units.

(Bloomberg Opinion)—During the past few years, it has become clear that housing affordability is a major challenge facing the U.S. Rent is consuming an increasing percentage of consumers’ paychecks:

The problem has become especially acute in big cities and technology hubs like San Francisco:

One of the most popular solutions being proposed is zoning reform. Rules that limit density — especially single-family zoning — restrict the amount of housing available near a city center, and make it difficult for people of modest means to live near transportation hubs and employers. When Minneapolis recently voted to end single-family zoning, it was hailed as a victory for racial and economic justice. Meanwhile, presidential candidate, Senator Elizabeth Warren, has made zoning reform a centerpiece of her housing affordability bill. Even Housing and Urban Development Secretary Ben Carson has vowed to attack restrictive zoning...........................Read More

Multifamily Groups Press for Shutdown Solution

January 22, 2019                           By: Gail Kalinoski

NMHC, the Council of Large Public Housing Authorities and other organizations lobby for an end to the crisis, citing the impact on areas like rental assistance programs and affordable housing projects.

With the partial federal shutdown now in its 32nd day and Democrats and Republicans in Washington, D.C. seemingly far apart on a deal to end it soon, multifamily industry experts—along with representatives of affordable housing non-profits and commercial real estate groups—are calling on Congress and President Donald Trump to find a solution.

Sunia Zaterman

In addition to lobbying, many multifamily owners and property managers are announcing deferred rent plans for furloughed federal workers.

“This shutdown is having a very real impact on multifamily residents, communities and companies across the country. As the shutdown continues into its second month, the resulting challenges and unfortunate circumstances will only grow,” Cindy Chetti, senior vice president of government affairs at the National Multifamily Housing Council, told MHN.

On Friday last week, the NMHC was among hundreds of business groups that signed a letter from the U.S. Chamber of Commerce addressed to the president and members of Congress urging them to “to immediately take steps to restore the full operation of the federal government.” The groups—which include the National Apartment Association, National Retail Federation, American Bankers Association and CCIM Institute—stated that the shutdown “is causing significant and in some cases lasting damage to families, businesses and the economy as a whole.”.................Read More

The Government Shutdown Could Decimate America's Subsidized Housing Programs

January 22, 2019                 By: Sophie Kasakove

The contracts of over 1,000 Section 8 units have already expired, putting in jeopardy the housing of tens of thousands of people enrolled in the subsidy program. Should the shutdown continue, things could get much, much worse.

The government shutdown has hit the one-month mark, and subsidized housing programs are reeling.

Between December and January, the contracts of 1,150 Section 8 units expired, putting in jeopardy the housing of tens of thousands of people enrolled in the project-based rental assistance subsidy program (over half of whom are elderly or disabled). Another 500 contracts are set to expire if the shutdown continues into February.

Section 8 housing in the South Bronx. The shutdown may force landlords to put necessary home repairs on hold.     (Photo: Wikimedia Commons)

As administered through the Department of Housing and Urban Development (HUD), the project-based rental assistance program allows for HUD to "directly contract with private landlords to provide affordable homes to low-income tenants at certain properties," according to the National Housing Law Project, an advocacy group. More specifically, the program allows landlords to charge market rates, with tenants paying 30 percent of their income and HUD picking up the rest.

So far, it seems that many property owners have been able to make do by dipping into reserve funds, but within a few weeks these savings may start to dry up. This could force landlords to put necessary repairs on hold. Or, in the case of the not insignificant minority of units owned by non-profit developers—that is, community development corporations and housing organizations that aim to provide for those who are unable to obtain housing through the private market—it could mean cutting off additional services like afterschool and workforce programs. At worst, the funding cuts could lead landlords to demand that tenants pay the full rent themselves, or else face eviction....................Read More