State Updates
State Legislature Passes FY’12 Budget
Today, the Massachusetts legislature finalized its FY’12 budget. The Conference Committee adopted level funding for every affordable housing and homelessness prevention program, with the exception of MRVP.
The Committee decided not to include the Senate budget requirement to transfer over $8 million in funding from MassHousing to MRVP. As a consequence, MRVP will be funded at $1 million less in FY’12 than FY’11 funding. At a lower funding level for MRVP, it will continue to be difficult for households with extremely low incomes that are at risk of homelessness to find affordable rental housing.
Despite this setback, we are pleased with the overall outcomes of housing program funding in this very difficult budget year. We would like to thank the Massachusetts House and Senate for their support and partnership in providing affordable housing for Massachusetts residents with modest incomes.
Governor Patrick has ten days to approve the budget and can veto specific line item language and appropriations that he does not support.
Final Legislative Decisions for HomeBase
As expected, the final state budget includes a major reform to the way the Commonwealth assists homeless families. The Conference Committee Report includes several components for the HomeBase program (7004-0108) including, but not limited to:
- Families that face homelessness and are served with HomeBase short-term rental assistance may secure rental housing with the help of the regional nonprofits and Central Massachusetts Housing Alliance. These families will pay no more than 35% of their income towards rent and utilities when they are enrolled in the program. Families could also receive assistance of up to $4,000 to avoid homelessness if they don’t need continuous rental assistance. HomeBase assistance is capped at three continuous years.
- HomeBase-eligible families can earn no more than 115% of the federal poverty level, but if they are successful in increasing their incomes while utilizing the program, families could earn up to 50% of area median income without being terminated from the program.
- Families utilizing HomeBase will be assigned a stabilization worker and receive stabilization services. The program administrators will be able to subcontract with other service providers to assist with stabilization services.
- Families that seek HomeBase assistance must be provided with temporary housing or shelter while they wait to secure an apartment.
For more details on the program, please click here.
Overall, we are pleased with the fine work of the legislature to finalize the initial HomeBase language. We continue to have concerns about the need to provide flexibility on the maximum amount of rental assistance a family facing homelessness can receive in this tight rental market. We are also worried that the funding amount provided is limited compared to the tremendous demand and expectations. Despite those concerns, we are optimistic that this new program will be extremely helpful to families facing homelessness and a more cost-effective alternative to shelter.
The final HomeBase language demonstrates a willingness among homeless families, legislators, the Patrick-Murray Administration and advocates to work together tirelessly to reduce and ultimately end homelessness, even when the challenges are daunting. That partnership will be critical to implementing the program in the next several months, and it won’t be an easy task. We want to thank all of our partners for their tremendous efforts to launch this new program and for their commitment to helping families that struggle with the high cost of housing in Massachusetts.
Massachusetts Foreclosure Deeds and Petitions Drop Again in May
On June 30, the Warren Group reported that foreclosure activity in May dropped compared to the prior month, with 454 foreclosure deeds filed and 699 foreclosure petitions filed, down 65% and 67% respectively from a month earlier. Overall, a total of 2,566 foreclosure deeds have been recorded during the first five months of 2011, down 58% from the same period in 2010, when over 6,100 were recorded. Year to date, a total of 4,426 petitions have been filed (January through May), down 60% from the same period in 2010 (11,118).
Federal Updates
HUD Issues Second Round of Sustainability Grants
On June 21, HUD announced that $67 million will be available for a second round of Sustainable Communities Regional Planning Grants. The Funds will be used to encourage regional planning efforts that integrate housing, land use, economic and workforce development, transportation, and infrastructure development. Of the $67 million, at least $17.5 million will be awarded to regions with populations of less than 500,000.
HUD launches Emergency Homeowners' Loan Program
On June 20, HUD, in conjunction with NeighborWorks America, announced The Emergency Homeowners’ Loan Program (EHLP), which provides emergency mortgage relief to homeowners at risk of foreclosure in 27 states and Puerto Rico. Under EHLP, $1 billion in funding is available with a $61,036,001 set-aside for Massachusetts. It is estimated that 1,260 homeowners will be assisted by this program in Massachusetts.
Specifically, EHLP is designed to provide mortgage payment relief to eligible homeowners experiencing a drop in income of at least 15% resulting from involuntary unemployment or underemployment due to adverse economic conditions and/or a medical emergency. EHLP will pay a portion of an approved applicant’s monthly mortgage, including missed mortgage payments or past due charges as well as principal, interest, taxes, insurance, and attorney fees. The average loan is expected to be approximately $35,000.
Homeowners who meet the criteria specified under the program are encouraged to apply by July 22, 2011 to a local EHLP affiliate. The Consumer Rights Unit of Greater Boston Legal Services has created an eligibility tool for homeowners that can be found here, and CHAPA has created an informational page to assist homeowners and EHLP affiliates with the process.
HUD Estimates $26 Billion Needed for Federal Public Housing Capital Needs
On June 24, HUD issued its 2010 study of the capital needs of 1.12 million public housing units, finding a current (‘backlog”) need of $25.6 billion and projecting future (“accrual”) needs at $3.4 billion a year over the next 20 years as current systems wear out (averaging $3,155 per unit per year). In addition to systems replacements, the backlog estimate also includes the cost of making at least 5% of each PHA’s units accessible, lead paint removal and $4 billion in moderate upgrades to improve energy and water efficiency. The 2010 report updates a 1998 HUD study and yielded a backlog estimate that is 3% lower in real dollars than the 1998 estimate, primarily as a result of a 9% decrease in the public housing inventory and a change in the estimation process to allow over-age systems to remain in place longer.
The 2010 study estimated an average capital need of $23,365 per unit, with much lower needs in developments that recently underwent extensive renovation. Average capital needs for family units were almost twice those of elderly units ($22,000 v. $11,646).
House Subcommittee Hearing Held on Section 8 Savings Act (SESA)
On June 23, the Housing Financial Services Subcommittee on Insurance, Housing and Community Development held a hearing on its draft bill to revise some administrative requirements of the Section 8 program. (A webcast of the hearing is also available). As detailed in a comparison posted by the Center on Budget and Policy Priorities, SESA includes much, but not all, of the language included in the December 2010 SEVRA bill and would also extend eligibility for FSS to tenants in developments with project-based contracts. SESA would also re-authorize the Mark to Market program to October 1, 2015.
Among the SEVRA provisions excluded are expanding the Moving to Work program, allowing PHAs to use abated Section 8 funds for repairs, raising the percentage of funds PHAs can use for project-based vouchers and allowing PHAs to set rents at up to 120% of FMR as a reasonable accommodation without prior HUD approval. The subcommittee has not yet announced a schedule for markup of the bill. No Senate companion bill has been filed yet.
