Housing Briefs - December 12, 2013
STATE UPDATES
Upcoming Hearings
There are three budget and housing hearings coming up this week and next:
- A&F Budget Hearing December 13 - The Executive Office Administration and Finance is holding a public hearing at 10:00 am at 1 Ashburton Place, 21st floor, Boston.
- Homelessness Oversight Hearing December 18th – The Legislature’s Housing Committee is holding an oversight hearing to address the increase in family homelessness. The hearing will be from 10:00 until 2:00 in Room B-2 at the State House. Testimony at the hearing is by invitation. The Housing Committee is welcoming the public to submit written testimony.
- EOHED Budget Hearing December 19th - The Executive Office of Housing and Economic Development is holding a public hearing on the FY15 budget from 10:00 am – 12:00 pm in Room 437 at the State House.
Governor Announces 2014 Bond Cap
The Administration announced the FY2014 Capital Budget and Five Year (FY2014-2018) Plan last week. The Budget maintains the bond cap for Housing programs at $179.5 million, the same overall total as in FY2013, but $10 million higher than planned in last year’s Five Year Plan. The cap was reduced for the Housing Stabilization Fund, the Housing Innovations Fund, and Public Housing for a combined total of $10 million. DHCD was given $10 million to spend flexibly between bond programs for “Affordable Housing for Priority Populations.”
Governor Signs Housing Bond Bill - November 14, 2013
On November 14, Governor Patrick signed H.3492, “An Act Financing the Production and Preservation of Housing for the Low and Moderate Income Residents.” The bill provides a total of $1.4 billion over 5 years for 11 capital funding programs and extends the State Low Income Housing Tax Credit at $20 million per year for 5 years. The bill adds new language allowing the Commercial Area Transit Node Housing Program (CATNHP) to be used for commercial spaces within mixed use buildings, focuses homeownership dollars within the Housing Stabilization Fund for small multifamily developments in weak markets, and creates a new bond program for child care facilities, the Early Education and Out of School Time Capital Fund, that provide care to low income children.
State Announces over $73 Million in Rental Housing Awards to Build or Preserve 1,145 Housing Units
On November 14, Governor Patrick announced over $73 million in affordable housing resources and tax credits for 24 projects in 17 communities across the state. The projects will create 1,145 units of housing and an estimated 1,935 construction jobs.
DHCD Issues $8 Million NOFA for Supportive Housing
On November 27, the Department of Housing and Community Development (DHCD) issued a Notice of Funding Availability (NOFA) to develop supportive housing units for low-income tenants. It offers $8 million for development costs and requires sponsors to arrange for supportive services funding. Eligibility is limited to experienced developers of supportive housing units with projects that can proceed to construction in 2014. The units must serve populations that require support services and DHCD will give preference to units for individuals or families that face multiple barriers to obtaining permanent housing. The program is part of the State’s effort to create 1,000 supportive housing units by the end of 2015 and is funded from the state Housing Preservation and Stabilization Trust Fund (HPSTF) which received a $10 million allocation from the FY2013 budget surplus. Interested applicants must schedule a conference call with DHCD prior to December 16, file a pre-application by December 23 and submit a full application between January 3 and January 17, 2014. Award announcements are expected in mid-March.
DHCD Issues RFQ for Self Sufficiency Program for State Public Housing and MRVP Tenants
DHCD has issued a Request for Qualifications (RFQ) to identify qualified providers of services to support income growth and job advancement at selected housing sites under a new program called Learning, Employment and Assets Program (LEAP). The RFQ will be used to identify qualified service providers. It will hold a bidders’ conference on December 16 and responses are due January 9, 2014. DHCD will issue a separate Request for Responses (RFR) inviting qualified housing agencies (local housing authorities and the eight regional non-profits) to apply for 5-year program funding in partnership with pre-qualified providers. DHCD expects make $1.7 million available for the purchase of services and to fund 4-8 housing agencies, depending on funding and program costs. Tenant participation will be voluntary.
$25 Million Increase for CPA Trust Announced; Minimum Match rate rises to 52%
The state Department of Revenue (DOR) released the Community Preservation Trust Fund distribution amounts for CPA municipalities on November 15. Communities will receive a 52.23% match in round one, almost double last year's first round match (26.83%). The increase is due primarily a one-time $25 million addition to the CPA trust fund from the state's FY13 budget surplus. Communities with a full 3% local property tax surcharge will receive additional revenue in rounds two and three. See the Community Preservation Coalition website for additional information and a link to DOR’s funding data by community.
Massachusetts Housing Units Permitted Up 47.5%
According to new Census Bureau estimates, 12,082 housing units have been permitted to date (through October) in Massachusetts, up 47.5% from the 2012 estimate (8,190) for the same period. By comparison, the national increase in permitted units year to date was 20% and the increase in the Northeast overall was 26.8%. The number of permitted units in single unit structures (5,814) rose compared to 2012, but the single family unit share of total permitted units fell to 48.1%. Units in 2-4 unit buildings accounted for 5.4% (653 units) of the estimated 2013 units permitted to date, while units in larger (5+ units) multifamily buildings totaled 5,615 (46.5% of the total).
FEDERAL UPDATES
Senate Confirms Watt as FHFA Director
On December 10, the Senate confirmed Representative Mel Watt (D-NC) as the director of the Federal Housing Finance Agency (FHFA), replacing Acting Director Edward DeMarco. The FHFA oversees the government sponsored entities (GSEs) Fannie Mae and Freddie Mac. Housing advocates hope that Mr. Watt will make several key policy changes, including allowing principle write downs to help underwater borrowers and lifting the suspension on contributions to the National Housing Trust Fund and the Capital Magnet Fund.
Budget Conference Committee Reaches Deal to Reduce Sequestration in FY2014 and FY2014
The Budget Conference Committee, chaired by Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI), reached agreement on discretionary spending caps for FY2014 and FY2015 this week. As summarized in a Committee press release, the agreement (the Bipartisan Budget Act of 2013) sets the FY2014 non-discretionary funding level at $1.012 trillion (about halfway between the $967 million and the $1.057 trillion, respectively, recommended by the House and Senate earlier) and eliminates $63 billion in sequester cuts over the next two years, split equally between defense and non-defense spending. This raises the cap on FY2014 non-discretionary spending by $22 billion (4.8%). Once Congress approves the agreement, House and Senate appropriations committees will have to allocate the funds among the 12 subcommittees charged with writing individual appropriations bills. Advocates see this process as an opportunity to persuade members of Congress to address HUD funding issues. The current Continuing Resolution expires on January 15.
HUD Eliminates Regional Set-asides for Rental Assistance Demonstration (RAD) for Public Housing
HUD has received applications to convert almost 109,000 federal public housing units to project-based Section 8 contracts under the RAD program as of the end of November, far more than the 60,000 units currently authorized. HUD has asked Congress to raise the cap to 150,000 units as part of its FY2014 budget, but in the meantime, announced in early November that it will approve applications first come, first serve without regard to the regional set-asides contained in the program notice (PIH 2012-32 – page 51). The loss of regional set-asides will hurt the Northeast most, if the cap is not raised, because HUD won’t be able to test the usefulness of the Demonstration across all geographies, as required by the authorizing language. Only 947 of the 20,991 public housing units approved as of late October were in the Northeast (5% of the 19,375 unit regional target), including just 143 units in New England (all in Connecticut). In addition, projects filed later risk receiving less subsidy, as HUD’s policy of setting the rental assistance contract rents based on FY2012 public housing subsidy levels (pre-sequestration) applies only to applications filed by December 31, 2013.
HUD Seeks Comments on new Small Multifamily Building Risk Share Initiative
On November 4, HUD issued a notice/request for comment on a proposed new “Small Multifamily Building Risk Share Initiative” intended to give owners of small rental properties (5-49 units) access to longer term, fixed rate financing for rehabilitation and refinancing. It would achieve this by allowing qualified Community Development Finance Institutions (CDFIs) and other “mission motivated” financial institutions or lending consortia to participate in HUD’s Risk Sharing Program when making (1) loans to owners of small multifamily rental and co-op properties (5-49 units) or (2) small loans (up to $3 million) on properties of any size. The loans would be eligible for HUD mortgage insurance and any default losses would be shared 50/50 with HUD. The proposal reflects recommendations by a number of housing groups in 2012. HUD intends to invite CDFIs and others to apply to participate once comments are received and any revisions to the notice are made. The National Housing Conference will hold a call on December 16 from 2 to 3pm to gather input from members before submitting comments – persons interested in participating in the call can contact Liza Getsinger (lgetsinger@nhc.org). The comment deadline is January 3, 2014.
Currently, the Initiative is restricted to properties with an affordable component but HUD may drop this requirement. As detailed by the National Low Income Housing Coalition, the draft notice requires that at least 20% of units be rent restricted and occupied by households <50% of AMI (or 40% <60% of AMI).
Mt. Holly Disparate Impact Case Settled
The Supreme Court will not be hearing a case on a key tenet of fair housing law, “disparate impact,” after all. The Mt. Holly et al v. Mt. Holly Gardens Citizens in Action case was to be argued on December 4, but the Township and plaintiffs announced a settlement agreement on November 13. The agreement will allow families displaced by a neighborhood renewal program to return. The New York Times stated that the settlement was welcomed by civil right groups who feared an unfavorable Supreme Court decision.
Federal District Court Finds Zoning Decision in Garden City, NY Violated Fair Housing Act
In a “historic” December 6 decision, Federal District Judge Arthur Spatt found that the Village of Garden City in Long Island, New York violated the federal Fair Housing Act and other civil rights statutes by enacting a zoning ordinance in 2004 for the purpose of keeping minority households out. The decision found both discriminatory intent and disparate impact. As reported in a summary by the Lawyers Committee for Civil Rights under the Law, the Judge found that the Village “discriminated on the basis of race and national origin against minorities in Nassau County, Long Island and perpetuated deep-seated segregation, which has allowed Garden City to remain an overwhelmingly white enclave surrounded by predominantly minority neighboring towns.” The case was filed after the Village rejected a zoning proposal to permit multifamily housing on a site the County wanted to sell for mixed-income housing, following opposition at public meetings. The Village adopted low-density zoning for single family homes and townhouses instead, making affordable units infeasible. The plaintiffs must submit a proposed plan to the court within 30 days, detailing steps Garden City should take to remedy the effects of the discrimination.
HUD Finds City of Dallas Use of Federal Housing Funds Promote Segregation
On November 22, HUD issued a letter of findings in November that demonstrated, as reported by the Dallas Observer on December 2, that “Dallas City Hall has Promoted Racial Segregation in Housing Projects for Years,” in violation of its obligation as a recipient of CDBG and other federal funds to comply with civil rights laws and despite a 1990 consent decree. Additional Dallas Observer blogs on December 4 and December 6 provide more detail on the violations and show that City actions in the past decade reversed a 25 year increase in desegregation. By law, HUD typically resolves through a Voluntary Compliance Agreement (VCA) with the violator. The HUD letter recommends a VCA that commits the City to at least nine specific actions, including adopting a ban on the source of income discrimination. Dallas could reportedly lose over $100 million in future HUD funds if it cannot agree on VCA terms.
NYC to Admit Ex-Offenders to Public Housing in Pilot Program to Reunite Families, Reduce Shelter Use
On November 14, the New York Times reported that the New York City Housing Authority (NYCHA) will become one of only a handful of PHAs in the nation to respond to a 2011 HUD letter reminding them of their discretion in admissions policies to help ex-offenders to re-unite with their families. NYCHA’s Family Re-Entry demonstration program will place 150 former inmates in public housing over two years and provide intensive case management, working with the Vera Institute and the Corporation for Supportive Housing, to help them find employment and meet other requirements. Eligibility will be limited to persons released in the prior 18 months or soon to be released, including some former tenants and persons with relatives living in public housing. The City’s Department of Homeless Services will fund the program’s estimated cost of $700,000.
RECENT RESEARCH AND REPORTS
HUD 2013 Report Finds National Decline in Homelessness, but Large Increases in MA, Other States
HUD issued its 2013 Annual Homeless Assessment Report to Congress in November, using point in time counts conducted by HUD-funded Continuums of Care (CoC) in January 2013. HUD reported a 4% drop in the count of 610,042 people nationwide compared to 2012 and a 9% drop from the 2007 count. In Massachusetts the count was 19,029, up 8.7% (1,528 persons) compared to 2012, giving it one of the highest rates of growth among states. However, it also had one of the strongest records for sheltering its homeless, with the second lowest rate of unsheltered families among all states (0.2% of the 12,335 persons in 5,500 homeless families) and the fourth lowest rate of unsheltered homeless overall (4.5% or 4,157 persons). Nationwide, 35% of homeless persons weree in unsheltered locations (rather than emergency shelters or transitional housing).
HUD found significant variation in homelessness trends by state and metro area. Twenty states had increases between 2012 and 2013 and five states (CA, NY, FL, TX and MA) accounted for over half of the nation’s homeless population. New York City had the highest homeless count (64,060) among CoCs.
Study Finds Neighborhood Economic Segregation Hurts Generational Economic Mobility
A December 2013 study from the Pew Charitable Trust, Mobility and the Metropolis, has found that while economic segregation is on the rise overall, it varies considerably among metro areas, with some having a relatively high or low share of their neighborhoods characterized by concentrated wealth or concentrated poverty. It also found that children growing up in more economically segregated metro areas experience less upward mobility (in terms of their place on the economic ladder relative to that of their parents). It concludes that poor children growing up in a very economically segregated metro area, such as New York, will end up with incomes that are even further behind the average than poor children growing up in a more economically integrated metro area, such as Greater Boston.
Study of Neighborhood Transformation Effort in Baltimore finds Mixed Results
A November 2013 study, Sandtown-Winchester – Baltimore’s Daring Experiment in Urban Renewal: 20 Years Later, What are the Lessons Learned, examines the effort spearheaded by the City of Baltimore, the Enterprise Foundation, and others to improve one of Baltimore’s poorest neighborhoods through a concentrated investment in housing, the schools, employment and health services beginning in the 1990s. The study compares community indicators before and after, both in the target neighborhood and three “control” neighborhoods that were similar to Sandtown in 1990. The authors found some indicators improved (homeownership, poverty, crime) while others did not (e.g. school performance), and note that the “control” neighborhoods experienced similar or strong gains in some respects. They recommend further work to develop usable methods for evaluating neighborhood transformation strategies, including ways to separate outcomes that are attributable to the transformation program as opposed to broader social or economic trends (e.g. declining crime rates).
USICH Issues Web-Based Guidebook on Ways PHAs can help Reduce Homelessness
The U.S. Interagency Council on Homelessness (USICH) has developed an on-line “guidebook” on steps public housing agencies (PHAs) can take to support efforts to prevent and reduce homelessness, through policies (decisions on preferences, admissions policies, use of project-based vouchers) and by participating in Continuum of Care planning efforts.
HUD Issues CHAS Table Generator for Easier Access to Housing Needs Data
A new HUD data query tool, launched by HUD on November 15, now makes it easy to access and download basic Comprehensive Housing Affordability Strategy (CHAS) data using 5-year ACS data (2006-2010) at the national, state, county, minor civil division and census place level. It generates a profile (counts) of household incomes, tenure, housing problems and housing cost burden. Background information on CHAS data is also available on HUD’s website.
Integrating Housing Counseling into the Residential Marketplace
The Homeownership Preservation Foundation has issued a report, Integrating Housing Counseling Into the Residential Marketplace, outlining how housing counseling can be used more effectively to expand opportunities for homeownership and funded more sustainably. It concludes that the solution is to improve current counseling practices and to integrate counseling into the mortgage delivery system. It recommends making counseling available for the life of a loan, instituting counseling performance tracking and working closely with lenders and servicers to develop infrastructure that facilitates communication with counselors. It recommends a broad based, sustainable funding mechanism for counseling using consumer, mortgage origination and servicer fees and underwriting that provides incentives for homebuyers to engage in counseling.
Impact of Foreclosures on Boston Public School Student Performance
Two new studies by a trio of researchers at the Federal Reserve Bank of Boston examine the effect of loss of a home to foreclosure on school performance: Do Foreclosures Affect Boston Public School Student Academic Performance and The Effect of Foreclosure on Boston Public School Student Academic Performance. The studies find that foreclosures (for renters and owners) are associated with slightly lower test scores and attendance, but that both the foreclosure event and the diminished student outcomes stem from underlying economic stress within the family. They note a strong negative association between a child's performance and changing schools during the school year, though a causal relationship is not certain. They find that adopting policies that decouple residential moves from school changes during the school year may help to mitigate foreclosure impacts, but also that “policies aimed at improving student performance should address family stressors that jointly cause decreased academic performance and foreclosures.”
Policy Paper Outlines Ways to Improve the Housing Finance System Administratively
A policy paper by the Opportunity Agenda, the National Fair Housing Alliance, and the National Association of Real Estate Brokers finds that many of the goals of housing finance reform can be achieved administratively while waiting for GSE reform. While We Wait for Housing Finance Reform Legislation—Let’s Reform Housing Finance lists ten goals and steps the FHFA and others could take to address each, including expanding access to credit though new underwriting criteria for Fannie and Freddie, implementation of their “duty of serve” obligation and adoption of higher affordable housing goals. Other recommendations include making contributions to the National Housing Trust Fund and Capital Magnet Fund, undertaking new pilot financing programs and affirmatively furthering fair housing.
HUD and DOT Unveil new Housing and Transportation Cost Calculator (Location Affordability Portal)
On November 12, the U.S. Housing and Urban Development Secretary Shaun Donovan and U.S. Department of Transportation Secretary Anthony Foxx announced the release of the Location Affordability Portal (LAP), a tool that estimates housing and transportation costs for neighborhoods across the country. The LAP hosts two data tools. The Location Affordability Index (LAI) is a map-based database of predicted annual housing and transportation costs for a particular area in terms of eight household types based on family size, household income and number of commuters and shows the affordability landscape for each type across a region. The My Transportation Cost Calculator (MTCC) allows users to customize data for their own household and potential residential locations. A commentary by Jeffrey Lubell discusses way this data should and should not be used.
Study Identifies Metrics to Guide Proposed “Healthy Neighborhood” Investments
The Metropolitan Area Planning Council (MAPC), the Conservation Law Foundation (CLF) and the Massachusetts Department of Public Health (DPH) have published a study identifying measures that public agencies and socially conscious investors – including the proposed Healthy Neighborhoods Equity Fund (HNEF) - can use when choosing among projects for investment. The HNEF is a $30 million private equity fund proposed by CLF and the Massachusetts Housing Investment Corporation (MHIC) that would invest in projects that have the potential to transform neighborhoods, improve health and environmental conditions and promote regional equity as well as providing financial returns. The proposal reflects concern over the rise in obesity and chronic disease in Massachusetts and in low-income neighborhoods. The measures were developed by conducting Health Impact Assessments (HIA) of three transit oriented development projects in Boston, creating a common set of likely impacts for comparison and identifying potential data sources to measure conditions over time. DPH also uses HIA to evaluate proposed State infrastructure investments.
UPCOMING EVENTS
Housing Lobby Day
January 29 – Housing Lobby Day – Wednesday, January 29th, 2014, 9:00 a.m. -2 p.m. Great Hall, State House, Boston. This event will bring together CHAPA members to generate visibility for housing programs and share constituent resources with legislators.