Housing Briefs - February 28, 2013

Post date
February 27, 2013

State Updates

Governor Patrick Releases FY2014 Budget Proposal

The Patrick-Murray Administration has released its FY2014 budget proposal. The Governor’s proposal maintains level funding for most of CHAPA’s top housing priorities. The Governor also proposes a new Housing Stabilization and Preservation Trust Fund to invest DHCD savings into effective housing and homelessness prevention programs.

CHAPA applauds the Governor for his commitment to a robust set of programs for low-income households.

CHAPA Announces FY2014 Legislative Priorities; Housing Bond Bill Top Priority

CHAPA’s legislative priorities for the 188th General Court aim to address challenges which impede working families, persons with disabilities, seniors, and low-income households from affording the high cost of owning or renting a home in Massachusetts. If enacted, these proposals will reduce homelessness and housing instability, help persons with disabilities obtain accessible housing, create jobs, and increase efficiency.

Our top priority is to pass An Act Financing the Production and Preservation of Housing for Low and Moderate Income Residents, sponsored by Housing Committee Chairs Representative Kevin Honan and Senator Jamie Eldridge. This housing bond bill would recapitalize DHCD bond-funded programs and invest $1.4 billion in public housing modernization, housing options to help disabled residents remain in their homes and communities, neighborhood stabilization, and the development of housing units in commercial areas served by public transit. The bill also adds funding for mixed-use development to the Commercial Area Transit Node Housing Program (CATNHP) and creates a new program to build and improve facilities for early childhood education and out-of-school time programs.

The bill also contains an important provision to extend the Massachusetts Low Income Housing Tax Credit (LIHTC) at $20 million per year. The LIHTC encourages private investment in affordable housing. Since its inception in 1999, the LIHTC, in combination with other programs, has created a total of 8,213 homes across the Commonwealth, of which 6,372 are affordable to households at or below 60% of the area median income (AMI). It has also created 10,549 jobs.

CHAPA and Building Blocks Coalition Announce FY2014 Budget Priorities

Now that the new legislative session is underway and Committee Chairs and members have been named, CHAPA and the Building Blocks Coalition have identified and are promoting budget priorities aimed at reducing homelessness and housing instability and increasing housing opportunities for low- and moderate-income households across the Commonwealth.

CHAPA’s Budget Priorities

  • Increase funding for the Massachusetts Rental Voucher Program (MRVP) to $60 million. MRVP is the most effective tool to immediately address the overwhelming need to help people who are homeless or at risk of homelessness to secure affordable housing. Increased funding would assist an additional 1,400 households.
  • Increase funding for public housing to $71 million. Public housing funding is significantly shy of the $115 million appropriation DHCD and Harvard University independently identify as necessary to adequately maintain this asset.
  • Increase funding for the Alternative Housing Voucher Program to $4.5 million. AHVP provides rental assistance to over 400 very low income households that have an individual with a disability as a member. Increased funding would help approximately 100 more people obtain stable and affordable housing.
  • Increase funding for the Tenancy Preservation Program to $700,000. TPP prevents homelessness among people with disabilities by working with landlords and tenants, and providing clinical consultation services to Housing Court. Additional funding could provide TPP services to 140 additional disabled households and consultation services to an additional 420 households.
  • Increase funding for Housing Consumer Education Centers to $3 million. The HCECs are an essential element in the delivery systems for other state-funded housing resources, such as RAFT and HomeBASE, and help families facing immediate housing crises to assess their circumstances and refer them to available resources.
  • Increase funding for Home and Healthy for good to $2.2 million. Home and Healthy for Good is a critical Housing First Program. Since its start in 2006, only 17 people out of 638 former chronically homeless people returned to homelessness.
  • Create a new Resident Services Coordinator program for $2.5 million. The funding would provide services in 50 new or existing developments to help tenants with modest incomes maintain housing stability and maximize their independence.
  • Maintain funding for Residential Assistance for Families in Transition at $8.7 million. RAFT enables families who experience homelessness to maintain their current housing or move into their next home. In FY13, RAFT helped more than 900 families avoid homelessness at an average cost of $2,357 per family.
  • Maintain funding for the Massachusetts Access Affordable Housing Registry at $80,000. The registry is an online tool that consumers and housing search workers use to find affordable and accessible housing for persons with disabilities. More than 82,000 people used the site in 2012 to search for housing.
  • Maintain funding for Foreclosure Prevention Counseling at $2.6 million. Counseling grants help to achieve the best possible outcomes for many struggling homeowners.

CHAPA is also working with a subcommittee of our Building Blocks Coalition to develop a strategy for the more than 6,000 households whose HomeBASE rental assistance will soon end. 78% of the families across the state will pay more than 100% of their incomes to rent when the program ends. The program, initially proposed as a three year program, was reduced to two years, leaving little time to help families increase their incomes and stabilize their housing. We are working to determine the menu of options that should be offered to these households in order to ensure they do not become homeless again.

Budget Hearings

The House and Senate Ways and Means Committees are currently holding hearings for members of the Governor’s Administration to present the budget proposal. DHCD will be testifying on housing programs on Thursday, March 7th at 10:00 am at Everett High School Library (100 Elm Street, Everett). The Joint Committee on Ways and Means will hold a public hearing on Friday, March 8th at 10:00 am in Gardner Auditorium at the State House. The hearing will provide the housing community with the opportunity to demonstrate the need for a deeper investment in MRVP, AHVP, Housing Consumer Education Centers, and all of our housing programs.

Next Steps in the Budget Process

The House Ways and Means Committee will release the House budget in April.  The Senate will release their proposed budget in May.

CHAPA will work with our partners in the Legislature, Administration, and across the housing and homelessness community to refine proposals where necessary, and advocate for sufficient funding for affordable housing and homelessness prevention during this time of unprecedented demand. 

Governor Announces $67 million Investment in Housing

Earlier this month, the Patrick-Murray Administration announced $67 million in affordable housing resources and tax credits for 23 developments in 21 communities across the Commonwealth. The projects will create 1,326 homes and 1,710 jobs. This announcement demonstrates the importance of the state’s low income housing tax credit and bond-funded programs, all of which are up for reauthorization in the bond bill introduced this session by Representative Kevin Honan and Senator Jamie Eldridge.

Federal Updates

Sequestration Looms; Continuing Resolution Expires March 27

Absent Congressional action, sequestration is scheduled to go into effect on March 1, generating across the board funding cuts of 5.1% for HUD programs.  On February 14th, HUD Secretary Shaun Donovan testified before the Senate Appropriations Committee that implementation will require shrinking the housing choice voucher program by 125,000 households and assisting 100,000 fewer homeless households.   According to Center on Budget and Policy Priorities (CBPP) estimates, almost 4,000 Massachusetts households will lose Section 8 Housing Choice Voucher assistance, housing authorities will lose $9.9 million in operating and capital assistance, homelessness assistance grants will be cut by $3.7 million and state and local CDBG and HOME grants will fall by $2.2 million and $670,000 respectively.

At least 8 bills have been introduced in the House and Senate providing alternative routes to deficit reduction but action before March 1 is unlikely.  In addition, the FY2013 Continuing Resolution will expire on March 27, meaning Congress will have to again address final FY2013 appropriations.  Some expect that both sequestration and FY2013 appropriations will be addressed in one bill.

House Ways and Means Committee Announces Bipartisan Working Groups on Tax Reform

On February 13, the House Ways and Means Committee announced the formation of 11 working groups to study 11 “issue areas” within the tax code, including real estate.   According to the announcement, each working group will review current law in its designated issue area and “identify, research and compile feedback” from stakeholders, academics and think tanks, practitioners, the general public and House colleagues.  The information from the groups will be compiled in a report by the Joint Committee on Taxation to the full Committee, due by April 15, 2013, on current law in each issue area. 

Massachusetts Receives 100 Vouchers for Persons with Disabilities under Section 811 Demonstration

Massachusetts is one of 13 states nationwide awarded project-based rental assistance vouchers under the new HUD Section 811 Project Rental Assistance (PRA) demonstration program.  HUD announced the award of 3,520 vouchers nationwide on February 12, including 100 to Massachusetts.  The demonstration represents a new strategy to provide “integrated supportive housing opportunities for people with the most significant and long term disabilities” as well as a way to create more units with limited funding.  In the past, Section 811 was used primarily for construction grants, combined with ongoing rental assistance, and Massachusetts received funding for an average of 12-13 new units per year.  Most new funding under the FY2012 PRA demonstration will be used as project-based rental assistance attached to set-aside units built under other Federal housing programs including Low Income Housing Tax Credits, HOME, and others.

The Massachusetts vouchers will be targeted to persons in institutions and persons living in the community who receive services through a waiver.  They will serve people with a range of disabilities and service needs throughout the state, with half of the units expected to be in Greater Boston area.

HUD Reports Record Rise in Worst Case Needs

On February 22, HUD reported that the number of renter households with “worst case needs” (incomes below 50% of area median income who pay more than half their income for housing or live in severely inadequate housing) has risen by more than 19% since 2009 and 43.5% since 2007, reaching 8.48 million in 2011.  While the full report has not yet been released, the summary issued on February 22 reported that this trend was found in all geographic regions, demographic groups and household types.  The summary cites a number of causes, including an increase in the number of renter households (including those who have lost their homes to foreclosure), rising rents due to increasing demand, falling incomes, and a failure of housing assistance program growth to keep pace with rising need.

HUD Issues Rule on “Disparate Impact” under Fair Housing Law; Applicability to Land Use Policies

On February 15, HUD issued its long-awaited final rule on disparate impact.  As stated in its summary, HUD issued the rule to formalize the recognition, upheld by all 11 federal appeals courts that the Fair Housing Act prohibits “practices with an unjustified discriminatory effect, regardless of whether there was an intent to discriminate.”  It also adds language specifying that prohibited practices include discriminatory land use rules and policies.

Recent Research and Reports

New Report on How State Qualified Allocation Plans (QAPs) can create Housing Opportunity

The Poverty and Race Research Action Council (PRRAC) has published a new report, Creating Balance in the Locations of LIHTC Development, examining how state "qualified allocation plans" (annual plans outlining how federal low income housing tax credits are awarded) can better support housing opportunity.  It discusses incentives to encourage the location of new tax credit developments in high opportunity communities as well as the importance of coordinating housing investment in lower opportunity communities with broader community planning, including other forms of non-housing investment.  

Assessment of HUD’s Fair Housing Efforts in the First Obama Term

The Poverty and Race Research Action Council (PRRAC) recently published a “report card” on HUD’s progress in affirmatively furthering fair housing during the first term of the Obama administration.  In Affirmatively Further Fair Housing at HUD, the report examines positive developments and areas for improvement in each of nine HUD program areas, including the Housing Choice Voucher program, as well as the LIHTC program.  It expresses modest optimism for the second term, while finding that “the task of reforming HUD’s own programs has been painstakingly slow.”   It also discusses the ongoing delay in releasing a proposed Affirmatively Furthering Fair Housing rule, now expected in April 2013.