Housing Briefs - August 1, 2013

STATE UPDATES

$1.4 Billion Housing Bond Bill Passes Legislature

On Tuesday, July 30^th, the Senate passed CHAPA’s top priority, the housing bond bill (H.3492). The bill authorizes $1.4 billion in capital spending over the next five years and extends the Low Income Housing Tax Credit at $20 million per year through 2020.

Although the legislation invests significantly in affordable housing production and preservation, both the House and Senate versions contain provisions amending the Affordable Housing Law, Chapter 40B. While the language is different, both the House and Senate versions would allow communities to deny 40B proposals in tax increment financing (TIF) zones. The Senate version also contains a provision for housing developments that do not meet all of the statutory criteria, but were considered affordable by DHCD prior to 2007 to counting on the subsidized housing inventory.

A conference committee is likely to be appointed to work out the differences between the two bills. CHAPA will work to have provisions unrelated to the bond programs removed.

Both the Senate and House bills include:

• $500 million for repairs and improvements to public housing;
• $305 million for the Affordable Housing Trust Fund, used to create and preserve affordable housing for households at or under 110 percent of the area median income;
• $100 million to the Capital Improvement and Preservation Trust Fund, which assists in the preservation and improvement of existing privately owned, state or federally assisted affordable rental developments;
• $135 million to the Housing Stabilization and Investment Trust Fund, which provides funding for the acquisition, preservation, and rehabilitation of affordable housing, including foreclosed and distressed properties. HSF also creates homeownership opportunities through new construction and rehabilitation of 1-6 family homes in Gateway Cities and communities that can be characterized as “weak markets;”
• $80 million to the Housing Innovations Trust Fund to support innovative and alternative forms of rental housing, including single person occupancy units, transitional and permanent housing for homeless people, domestic violence shelters, supportive housing for seniors and veterans, and housing for substance abuse recovery;
• $55 million for the home modification program, which assists physically disabled individuals with home improvements to ensure they can live at home;
• $50 million for a public housing demonstration program to utilize innovative and replicable public housing finance tools to reduce ongoing capital costs.
• $47 million for the Facilities Consolidation Fund, which provides community-based housing for clients of the Department of Developmental Services and the department of Mental Health;
• $45 million for the Commercial Area Transit Node Housing Program, which produces housing in commercial areas served by transit. Language was added to the program to include funding of commercial space in mixed-use buildings;
• $45 million for the Early Education and Out of School Time Capital Fund, a newly created program which will offer a dedicated source of funding for non-profit providers serving low-income children. The program will provide resources to build new facilities or renovate existing buildings in order to provide children and teachers with safe, healthy environments; and
• $38 million for the community-based housing program which assists persons with disabilities to live in the least restrictive settings possible.

CHAPA thanks the Legislature for their strong investment in affordable housing production and preservation. Special thanks go to the following Senators for their votes to preserve the Affordable Housing Law: Senator Jamie Eldridge (Housing Bond Bill Senate sponsor), Senator Michael Barrett, Senator Gale Candaras, Senator Sonia Chang-Diaz, Senator Katherine Clark, Senator Cynthia Stone Creem, Senator Sal DiDomenico, Senator Benjamin Downing, Senator Barry Finegold, Senator Linda Dorcena Forry, Senator Robert Hedlund, Senator Michael Knapik, Senator Richard Ross, Senator Bruce Tarr, and Senator Dan Wolf.

More work is needed in coming weeks to ensure the swift passage of a housing bond bill that makes a significant investment in affordable housing and fully preserves the Affordable Housing Law.

FY’2014 Budget Includes Strong Investments in Housing and Homelessness Prevention

The FY2014 budget contains approximately $17 million in increases over FY2013 for housing and homelessness prevention programs. The budget includes increased funding for the Massachusetts Rental Voucher Program (MRVP), Residential Assistance for Families in Transition (RAFT), the Housing Consumer Education Centers, Home and Healthy for Good, and the Tenancy Preservation Program (TPP), while maintaining level funding for public housing, the Alternative Housing Voucher Program (AHVP), foreclosure counseling, and the MassAccess Housing Registry. The budget also includes options CHAPA and the Building Blocks Coalition advocated for to help 5,400 families, whose temporary HomeBASE rental assistance will soon end, to remain stably housed. In addition to funding existing housing and homelessness prevention programs, the budget also creates a new housing preservation and stabilization trust fund, which will provide DHCD with $10 million to use flexibly.

State Announces Award of $31 million in CDBG Funds to 61 Localities

On July 26, Governor Patrick announced the award of $31 million in federal Community Development Block Grant (CDBG) funds to 38 cities and towns to support projects and activities in 61 communities.  The grants will support a wide range of activities, including housing rehabilitation, loans to homeowners, infrastructure repair or replacement, public facilities, neighborhood improvement, social services, planning and architectural barrier removal.  They are funded from the annual formula grant the State receives from HUD to assist communities that do not receive annual CDBG grants directly from HUD.  (In Massachusetts, 37 larger “entitlement” cities and towns receive direct annual grants from HUD.)  The winning applicants were selected through a competitive application process overseen by the Department of Housing and Community Development (DHCD). 

DHCD to Hold Hearing on Proposed Changes to Chapter 40R Regulation on August 13

DHCD has scheduled a hearing on proposed changes to the Smart Growth Overlay District (40R) regulation (760 CMR 59.00).  As detailed in the public notice, the hearing will be held on Tuesday, August 13, 2013 at DHCD’s offices in Boston from 10:00 AM to 12:00 PM and DHCD will also accept written comments.

The proposed changes include revised definitions of “infrastructure” (substituting “pedestrian and vehicular access” for transportation) and “highly suitable location” (requiring evidence of suitability). Another change allows conditional approval of districts in communities that want to zone for housing growth but have neither adequate existing infrastructure nor plans for adequate infrastructure.  This change would allow a community to adopt 40R zoning, interest a developer, and then work out an infrastructure plan, with no zoning incentive payments made until an infrastructure plan is ready and DHCD-approved.  The proposal also revises the definitions of “underutilized land” and “mixed use density.”

DHCD Announces "Hold Harmless" Income Limit Policy

DHCD has adopted a new "hold harmless" income limit policy for developments that do not have federal subsidies.  (Low Income Housing Tax Credit and Tax-Exempt Bond-financed projects are already protected under a HUD hold-harmless policy.)  As outlined in a memo dated July 22, the policy will apply to both rental and homeownership developments placed in service prior to December 11, 2012, or at the discretion of the funding agency,  new developments that received funding commitments prior to December 11, 2012.

FEDERAL UPDATES

HUD Affirmatively Furthering Fair Housing (AFFH) Rule Issued for Comment

On July 19, HUD issued its long-awaited proposed rule on Affirmatively Furthering Fair Housing (AFFH). The deadline for comment is September 17.  According to HUD's summary, the new rule provides HUD program participants with better tools to meet their obligation to act proactively to overcome historic patterns of segregation, promote fair housing choice, and foster inclusive communities for all.  The National Low Income Housing Coalition has published a detailed summary of the proposed rule and the National Housing Conference is holding a forum and live webinar on the rule on Monday August 5^th.  

Among other things noted in the NLIHC summary, the rule would replace the current Analysis of Impediments (AI) – for which no standard guidance exists – with a standardized Assessment of Fair Housing (AFH) that must be submitted to and approved by HUD in advance of a Consolidated Plan or PHA Plan.  The rule also encourages Regional AFHs (i.e. a single AFH prepared by two or more program participants).   HUD will provide states, local governments, insular areas, and public housing agencies with data sets they can use to assess fair housing issues and set fair housing priorities and goals. The data sets will provide information on:

• patterns of integration and segregation;
• racially and ethnically concentrated areas of poverty;
• access to education, employment, low-poverty, transportation, and environmental health, among other critical assets;
• disproportionate housing needs based on the classes protected under the Fair Housing Act; and
• data on individuals with disabilities and families with children; and discrimination.

HUD Issues Final HOME Program Rule

On July 24, HUD published its revised Final Rule for the HOME program in the Federal Register, more than 19 months after it issued a draft revised rule for comment in December 2011.   Key changes to the 2011 draft rule include:  extending the time for selling homebuyer units to 9 months, clarifying the definition of "commitment" of funds, allowing CHDOs to use consultants to demonstrate capacity but only for the first year of their participation as a CHDO, revising the definition of homeownership to explicitly permit ground leases of 50 years or more for community land trusts, establishing a 2-month time frame for income documentation, eliminating the requirement for separate written standards for methods and materials in new construction projects, and eliminating the requirement for a minimum 15-year useful life of major systems (a system of replacement reserve contributions is required instead). The National Low Income Housing Coalition has published a preliminary summary of the changes and a HUD summary is on the OneCPD website.

UPCOMING EVENTS

Boston Mayoral Candidate Forum on Housing - August 6, 2013, 5:30-8:00 p.m.

Chapter 40B Training – Re-Emerging in a Recovering Market – September 20, 2013

CHAPA 46th Annual Dinner  - October 29, 2013, 5:30 p.m.

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