State Updates
Legislature Considers Veto Overrides; Public Housing Operating Subsidy and RAFT Funding Still Uncertain
The Legislature has begun to consider veto overrides for items that the Governor vetoed from the FY 2010 budget. CHAPA has advocated for overrides of partial vetoes to the Public Housing Operating Subsidy and Residential Assistance for Families in Transition (RAFT) appropriations. We encourage supporters of these programs to contact their Representatives and Senators to request a veto override.
In addition, we continue to seek technical changes to the tax credit disclosure language in Outside Section 40 to clarify that the developer is the party responsible for reporting the benefits of a tax credit. This language is unclear and problematic in both the language enacted by the Legislature that was vetoed and in the Governor's suggested amendment that he returned as part of his veto message.
This week, the Legislature did override a veto of Outside Section 129, which requires MassHousing to contribute to the Massachusetts Rental Voucher Program (MRVP) and the 13A mortgage subsidy program, and the Massachusetts Housing Partnership to contribute to the SoftSecond Loan Program and 40B technical assistance.
DHCD Assumes Responsibility for Emergency Shelters
Effective July 1st, DHCD assumed responsibility for the emergency shelter system. Robert Pulster has changed roles from Executive Director of the Interagency Council on Housing and Homelessness (ICHH) to become Associate Director of the newly created Division of Housing Stabilization. A new ICHH Director will be hired shortly.
According to the Department, the new Division will be comprised of five regional areas staffed by former DTA supervisors and case managers. Within the regions, former DTA field staff will serve as DHCD workers, located in designated DTA offices to accommodate applicants and outgoing clients applying for and receiving EA benefits from DHCD. Under the plan, Boston DTA's Boston Family Housing office and the homeless units associated with the North Shore and Holyoke Transitional Assistance Offices will be dissolved. Their caseloads will be reassigned to other transitional assistance offices. For more information, please contact the Division of Housing Stabilization at (877) 418-3308.
Legislation That Redefines Lobbying Signed into Law
On July 1st, Governor Patrick signed into law Ch. 28 of the Acts of 2009, An Act to Improve the Laws Relating to Campaign Finance, Ethics and Lobbying. The new law redefines and significantly broadens what constitutes state "lobbying."
Under the new law, executive and legislative "lobbying" includes "any act to promote, oppose, influence, or attempt to influence the decision of any officer or employee" of the legislature, executive branch (including constitutional offices) or an authority concerning the introduction, sponsorship, consideration, action or non-action with respect to any legislation for the legislative branch and concerning legislation or the adoption, defeat or postponement of a standard, rate, rule or regulation, policy or procurement for the executive branch."
Furthermore, the definition of "lobbying" includes "strategizing, planning, and research if performed in connection with, or for use in, an actual communication with a government employee". Anyone who engages in these activities for 25 hours during a period of time between January through June or July through December; and (ii) receives $2,500 during this period must register and report as a "lobbyist".
Registration requires a $1,000 fee per entity and $100 per individual "lobbyist", mandatory training, and reporting of "lobbying" expenditures. If required to register, "lobbying" expenditures may also impact the 501(c)(3) status of nonprofits.
It is unclear how the thresholds and requirements will impact nonprofit boards, advisory committees, public comment responders, consultants and how the new inclusions of strategizing, planning and research will be managed. Under Section 4 of the new law, the State Secretary is responsible for issuing regulations and advisory opinions on the requirements of lobbying registration and disclosure. These new provisions become effective September 29, 2009.
Massachusetts Application for Tax Credit Exchange Grants Approved
On July 10, the U.S. Treasury Department announced that it had approved DHCD's application to exchange unused low-income housing tax credits for $50.8 million in grant funds. The grants can be used to assist in the development and preservation of affordable rental developments that meet the income and affordability requirements of the tax credit program. DHCD has not yet announced an application process for the funds.
On July 9, the Treasury Department published a "Questions and Answers" document to respond to requests for clarifications on the Tax Credit Exchange Program ("Section 1602"). It intends to update the document periodically.
Neighborhood Stabilization Program Draws Numerous Applications
At least eight entities – including the Department of Housing and Community Development (DHCD), MHIC and MHP in conjunction with DHCD, Boston, Worcester, Brockton, Chelsea/Revere/Everett, Boston Community Capital, and Community Action for Better Housing (CABA) have published notices indicating they plan to apply for a total of about $190 million in Neighborhood Stabilization Program funding (NSP2) to deal with foreclosed properties in Massachusetts. Two national nonprofits – The Community Builders and the National Development Council – have also submitted multi-site applications that include Massachusetts locations (Springfield and Worcester) The deadline to apply is July 17 and a total of $1.93 billion is available nationwide.
MassHousing Offers First-Time Homebuyer Tax Credit Loans
On July 14, Governor Patrick announced that MassHousing would begin offering loans of up to $8,000 to first-time homebuyers in advance of receiving their federal tax credit for homes purchased with a MassHousing loan. These loans will allow homebuyers who are eligible for the First-Time Homebuyer Tax Credit through the federal Housing and Economic Recovery Act (HERA), claimed when homebuyers file their 2009 tax return, to use the funds for up-front costs, such as a down payment or closing costs. Borrowers must be first-time homebuyers receiving a MassHousing mortgage, live in the property as their principal residence for a minimum of three years and purchase a 1-4 family home prior to November 30, 2009. The loan will be deferred until June 1, 2010. If not repaid at that time, the loan will amortize over 10 years at the same interest rate as the first loan on the property.
Court Rules Affordability Restrictions Have Priority Over Condominium Association Lien
The Appellate Division of the District Court's Southern District recently ruled in Board of Trustees of the Sea Glass Village Condominium v. James S. Bergquist and others that an affordability restriction created by a comprehensive permit (Chapter 40B), regulatory agreement and deed rider takes priority over a condominium association's lien pursuant to Ch. 183A.
Because the comprehensive permit and regulatory agreement constitute an encumbrance and are recorded prior to the condominium's master deed, the affordability restrictions supersede liens subsequently placed on the property by the condominium association for unpaid common area fees and fines arising under Ch. 183A, Section 6(a).
CEDAC Releases Update to State Expiring Use Inventory
On July 13, the Community Economic Development Assistance Corporation (CEDAC) issued an updated version of its inventory of expiring use properties in Massachusetts and explanatory notes.
The inventory lists assisted developments in Massachusetts that have subsidized mortgages under major programs and/or HUD project-based rental assistance contracts, details the types of subsidies they receive and whether they are at risk of losing affordability by December 31, 2012 due to expiration of affordability restrictions (e.g. expiration of the project-based Section 8 contract, maturation of their subsidized mortgage). It also lists projects that have lost affordability already. It indicates that 23,242 of the 109,459 units in such properties are at risk through 2012, while 5,883 units have been lost to date.
Community Preservation Coalition Launches New Webpage on CPA legislation
The Community Preservation Coalition has recently launched a new webpage to provide information on An Act to Sustain Community Stabilization, which would modernize and bolster the Community Preservation Act. CHAPA, MAHA, and MassNAHRO all support the legislation.
CPA has been used to bolster housing development and planning across the Commonwealth. It is a growing resource for local housing authorities as they look to creative funding solutions to manage the shortfall in public housing modernization and operating subsidies. To date, 50 cities and towns have used over $8 million in CPA funds to preserve, replace, support and rehabilitate more than 200 existing housing authority units, to create nearly 250 new units to be managed by local housing authorities, and to fund other housing authority programs that support community housing.
For more information or to endorse the bill, please visit: http://www.communitypreservation.org/CPALegislation.cfm
Federal Home Loan Bank of Boston Announces Affordable Housing Program and Equity Builder Funding Round
On June 29, the Federal Home Loan Bank of Boston (FHLBB) announced that it is accepting applications for $3.5 million in funding returned from prior awards. Of this, it is allocating a minimum of $2 million for the Affordable Housing Program (AHP). It is also allocating a minimum of $1 million to its Equity Builder Program (EBP) to help first-time homebuyers, including through IDA programs. Application deadlines are September 25 and July 24 respectively.
Building Permit Activity in Massachusetts Down 33% Compared to 2008
According to Census Bureau estimates released last month, building permit activity has fallen to historic lows in Massachusetts. Permits were issued for a total of 2,721 units in the first five months of 2009, down 33% from the 4,089 units permitted during the same period in 2008. Only 525 units were permitted in May, 48% below the May 2008 figure (1,019). Nationally, the May 2008 to May 2009 decline was 47%. Single family homes (1,399) made up 51% of the units receiving permits in Massachusetts this year while units in multifamily structures (5+) made up 42% (1,142).
Federal Updates
House Appropriations Subcommittee Increases Proposed HUD FY2010 Budget by $1.57 Billion
The House Appropriations Subcommittee on Transportation, HUD and Related Agencies marked up its proposed appropriations bill on July 13. As detailed in a summary chart and statement issued by the subcommittee, the mark-up provides $1.57 billion (3%) more for HUD than the President's request budget and $5.5 billion more than the FY2009 enacted budget, with small percentage to most programs and larger increases to a few including Section 202 and 811. It includes $150 million for the Sustainable Communities Initiative to coordinate housing and transportation planning.
The full Appropriations Committee is scheduled to mark up the bill on Friday, July 17 at 9:00 a.m. The Senate is expected to begin working on its bill the week of July 20.
House Subcommittee Hearing Held on Preservation Bill
The House Committee on Financial Services Subcommittee on Housing and Community Opportunity held a hearing this week (July 15) on a draft bill (the Housing Preservation and Tenant Protection Act of 2009) to preserve federal- and state-assisted housing. The hearing included testimony from Vince O'Donnell, President of CHAPA's Board, as well as representatives from other national and state organizations.
The draft bill updates existing preservation tools to continue affordability and/or tenant protections when restrictions (and some rental assistance contracts) end automatically at mortgage maturity or due to prepayment. Among other things, it would:
- require owners to give preservation-minded purchasers priority to purchase the property;
- extend protections to certain state- and housing finance agency-assisted properties;
- require HUD to work harder to preserve foreclosed subsidized properties;
- allow the transfer of project-based Section 8 contracts to other properties under some circumstances;
- ban federal pre-emption of stronger state and local notice requirements; and
- provide tools to make it easier to finance capital improvements.
House Committee Begins Mark Up of Section 8 Reform Bill
The House Committee on Financial Services began its mark up of H.R. 3045, the Section 8 Voucher Reform Act ("SEVRA 3"), on July 8 and 9, after agreeing to defer consideration of amendments related to the Moving to Work program until July 13 or later. Amendments to prohibit gun restrictions in federally assisted housing and to require household members to provide identification cards passed.
As reported in the National Low Income Housing Coalition's Memo to Members (July 10), a number of other amendments passed, including one to make it easier to use a higher payment standard for households with disabilities and one requiring PHAs to report on the effectiveness of their voucher programs in reducing racial segregation.
"TARP for Main Street" Bill Introduced to Fund National Housing Trust and NSP
The House Committee on Financial Services held a hearing on July 9 on H.R. 3068 (TARP for Main Street Act of 2009). The bill, introduced by Representative Barney Frank, would use unexpended Troubled Asset Relief Program (TARP) funds as well as dividends paid by financial institutions that received TARP assistance to finance a number of housing activities. Specifically it would authorize the use of:
- $1 billion in dividends to capitalize the National Housing Trust Fund;
- $1.5 billion in dividends for new Neighborhood Stabilization Program (NSP) formula grants;
- $2 billion in TARP funds to restart the Emergency Mortgage Relief Program (loans to homeowners at risk of foreclosure due to income or job loss); and
- $2 billion in TARP funds for a new HUD program to stabilize multifamily properties (5+ units) that are in default or have recently been foreclosed.
The National Low Income Housing Coalition reports that the government had received $6.2 billion of TARP dividends as of early June and also had $329 billion in unexpected TARP funds. Companion Senate legislation has not yet been introduced nor has the House Committee markup been scheduled.
House Climate Change Bill Includes Funding for HUD Housing Energy Retrofits
On June 26, the House passes a climate change bill (H.R. 2454), known as the Cap-and-Trade Climate bill. Among other things, it provides funds to states for a national building energy efficiency retrofit program and requires them to spend at least 10% of that funding on retrofits of public and assisted housing. Owners must agree to extended affordability. The National Housing Trust estimates that 10% minimum would amount to about $100 million a year. The amendment adding the assisted housing requirement was sponsored by Rep. Maxine Waters (D-CA).
Supreme Court Rules National Banks Must Follow State Fair Lending and Consumer Protection Laws
On June 29, the U.S. Supreme Court ruled 5-4 that states can enforce their anti-discrimination and consumer protection laws against national banks. The decision, Cuomo v. Clearing House Association, struck down a regulation issued by the federal Office of the Comptroller of the Currency (OCC) that pre-empted the states' power to enforce those laws against national banks. Click here for background on the case.
National Organizations Begin National Affordable Rental Housing Campaign
Enterprise Community Partners and other national and local organizations have joined together to start the A.C.T.I.O.N campaign to advocate for increased investment in affordable rental housing.
The campaign's goal is restore the amount of affordable rental housing built, rehabilitated and preserved annually, in the face of reductions in low income housing tax credit unit production due to the weak economy. It estimates that the current economic crisis has reduced production and preservation activity by 60,000 units and calls on "industry and Congress to restart, expand and develop investment in affordable rental housing."
Recent Research
HUD 2008 Homeless Report Finds Family Homelessness Rose 9%
HUD issued its 2008 Annual Report on Homelessness this month. The report estimates the incidence of homelessness in 2008 using local point-in-time data surveys (the number of persons found to be homeless on a specific night in January) as well as the number of people using shelters or transitional housing at least one night during 2008. A total of 664,414 persons were counted as homeless (living in shelters or on the street) in the January 2008 point in time survey and about 1.6 million persons used shelters or transitional housing between October 1, 2007 and September 30, 2008 (one in 190 U.S. residents including 1 in 66 city residents). These counts exclude homeless individuals and families who double up but do not enter the shelter system.
Overall, the number of homeless families rose by 9% over the prior year, while the number of homeless individuals (not in family households) declined, while homelessness among individuals (measured by shelter use) remained relatively unchanged. While homelessness is higher in cities, the report found it increased most dramatically in suburban and rural communities, due to more intensive use of existing shelter beds rather than increases in system capacity. The report includes extensive information on the characteristics of homeless individuals and families, their housing situation prior to entering shelter, and lengths of stay.
HUD Begins Quarterly Reporting on Homelessness
HUD has begun tracking homelessness trends on a quarterly basis, using data collected from nine Continuums of Care across the U.S. This month, HUD issued its first quarterly Homelessness Pulse Project report. The authors noted that while the participating Continuums of Care do not constitute a representative sample nationwide, they provide an indication of trends. Overall, the first report found significant variation in trends by location.
