May 17, 2007

State Roundup

Senate Ways and Means Matches House Budget for Housing Programs

On Wednesday, the Senate Committee on Ways and Means released its proposed budget for FY '08. In most respects the committee's budget for housing matches that passed by the House last month. Funding for public housing operating subsidies is at $60 million. The only significant difference in the housing line items is that the SoftSecond program would receive an additional $250,000 under the Senate proposal. In examining the Department of Housing and Community Development (DHCD) line items, the Senate has proposed $125.9 million in spending, and the House passed $127.3 million. CHAPA anticipates that a variety of earmarks will be added by the Senate, which will br! ing the two numbers closer together. Unfortunately, the Senate did not choose to increase the Alternative Housing Voucher Program for people with disabilities or the Massachusetts Rental Voucher Program above the House level.

As part of its job growth initiative, the Senate has proposed, in outside section 11, to provide $12.5 million for the Affordable Housing Trust Fund and $12.5 million for the Smart Growth Housing Trust Fund. This funding, however, is contingent upon an adequate budget surplus at the end of the fiscal year and therefore unpredictable. However, it's a new approach to funding these items, and CHAPA appreciates Senate President Murray recognizing the link between jobs and affordable housing and her willingness to bring forward this mechanism.

Budget amendments are due on Friday, and the Senate will begin its debate on Monday, May 21.

Policies to Address Rising Foreclosures Take Center Stage

Foreclosures remain in the news in Massachusetts and across the country, and several bills to address the issue are pending at the State House.

On March 27, the Joint Committee on Housing heard bills sponsored by Housing Committee Chairman Kevin Honan and Boston Mayor Thomas Menino (H.1237) as well as Senator Jarrett Barrios (S.747) and Representative David Torrisi (H.1290).

At the Massachusetts Association of CDCs lobby day on April 25, Governor Patrick declared his support for many of the items contained in the bills and indicated that he would file a bill soon in addition to implementing recommendations from the Division of Banks.

After the hearing, CHAPA, MACDC, the Massachusetts Affordable Housing Alliance (MAHA), and others worked with the City of Boston and the Attorney General's Office to craft a compromise bill that was submitted to the committee. The committee is finalizing the text of the bill and is expected to release it soon.

While we wait for a bill, the education effort continues. On May 3, CHAPA and MAHA, MACDC, and the Massachusetts Non-Profit Housing Association, with the sponsorship of Chairwoman Susan Tucker and Chairman Kevin Honan, held a legislative briefing on foreclosure prevention. Approximately 70 legislative offices were represented at the briefing. One of the items distributed at the hearing was a guide to foreclosure prevention resources.

Employer Assisted Housing Legislation Advances

Earlier this week, the Joint Committee on Housing issued favorable reports on three employer assisted housing bills. Chairman Kevin Honan's bill (H.3786) was reported to the House, and Senator Jarrett Barrios' bill (S.746) was reported to the Senate. The House version of S.746 (H.1729), which is sponsored by Representative Robert Spellane, was included as part of the Honan bill. The Senate bill calls for $5 million which would leverage $10 million from employers. The text of the bill and a fact sheet are available on our web site.

Changes to 2007 State Qualified Allocation Plan (QAP) in the Offing

The Department of Housing and Community Development (DHCD) held a question and answer session on May 9th to preview two proposed changes in the state's Qualified Allocation Plan (QAP) and solicit comments. The agency expects to hold a formal hearing on the changes just after Memorial Day (date to be announced). One change modifies the approval process for 4% credits by requiring DHCD to approve the provision of tax credits before a project receives final approval for tax-exempt bond financing (in the past, DHCD approval has not been necessary). DHCD plans to limit its review to consistency with the QAP.

The second change increases the important of green design in applications for 9% credits. It adds several green criteria (conformity with state and local water conservation regulations, ensuring compliance) to basic thresholds. It also gives more weight to green design in project scoring and clarifies some of the green criteria. Overall, DHCD proposes raising the maximum score for green design from 12 points out of a total maximum score of 82 points to 20 out of 82.

Federal Roundup

All HUD SuperNOFA Deadlines Re-Opened and Extended

HUD announced in a May 11th Federal Register notice that it is extending the application deadlines for all programs under its SuperNOFA, including those that had already passed, because it discovered errors in the Logic Models posted to grants.gov. The new deadlines vary by program and extensions range from one week to over a month. The Housing Assistance Council has a table summarizing deadline and section changes by program.

The notice also adds supplementary information and corrections to the general section of the SuperNOFA and to many of the program sections. The notice recommends that all applicants who have already submitted applications submit new applications using the corrected Logic Model. The complete notice is also available.

HUD Issues Proposed Rule on Project Based Voucher Rents in Tax Credit Properties

HUD has issued a proposed rule (Federal Register, May 1) that would end the policy of capping the rents on Section 8 project-based voucher (PBV) units at the tax credit rents in LIHTC properties. The cap went into effect on November 14, 2005 as part of a comprehensive final rule governing the PBV program. The proposed rule reinstates the prior policy of allowing rents to be set at up to the higher of 110% of Fair Market Rent (FMR) or tax credit rents. It would also allow owners affected by the 2005 cap to request a re-setting of their rents under the reinstated policy. &! nbsp; HUD has also decided not to enforce the current cap until rulemaking is complete on the proposed rule. Comments are due by July 2, 2007.

Section 8 Voucher Reform Bill Expected to Advance

The House Financial Services Committee, with support from members of both parties, introduced a bill (H.R. 1851) on March 29th to improve the Section 8 program. The first major Section 8 legislation since 1998, the Section 8 Voucher Reform Act (SEVRA), would, among other things:

• Establish a stable funding renewal formula until 2012, reward agencies with high utilization rates, and allow public housing agencies (PHAs) to borrow from future funds to use allocated funds more fully.

• Remove barriers to portability by requiring receiving PHAs to absorb voucher holders from other jurisdictions (any needed funds would be provided from recaptured unused funds from other PHAs).

• Simplify the calculation of resident rents for working households by replacing the current complex set of income deductions with one simple deduction and by basing their rents on the prior year's actual earnings.

• Allow PHAs to recertify incomes for households on fixed incomes every 3 years rather than annually and to reduce the frequency of housing quality inspections to every two years rather than annually.

• Improve HUD reporting on high rent burdens and geographically concentrated voucher use.

Mark-up of the bill is expected in late May or early June and a number of potential amendments are under discussion, including authorization for up to 100,000 new incremental vouchers, reversal of HUD's current policy of providing tenant protection vouchers only for units occupied at the time of conversion, rather than for all units, expansion of the Moving to Work (MTW) pilot and a new funding source for the Family Self-Sufficiency (FSS) program.

GSE Reform Bill/ Affordable Housing Trust Fund Moves to the House Floor

The House Financial Services Committee approved a bill - the Federal Housing Finance Reform Act of 2007 (H. 1427) - on March 29th that would transfer oversight of three government sponsored enterprises (GSEs) – Fannie Mae, Freddie Mac and the Federal Home Loan Banks – from HUD to a new entity and also create an affordable housing trust fund. The bill is expected to be debated on the House floor today. Companion legislation has yet to be introduced in the Senate.

The bill would establish a new agency--the Federal Housing Finance Agency (FHFA)-- to regulate the GSEs. FHFA would be headed by a director, appointed by the President and confirmed by the Senate, for a five year term. FHFA would be advised by a 5-member board composed of the Secretaries of HUD and Treasury, the FHFA director and two presidential appointees. The bill would also make it easier for GSEs to serve areas with high housing costs (median home prices above the conforming loan limit) by allowing high cost area loan limits up to the lower of the median area home price or 150% of the conforming limit.

The bill also alters the composition of the boards of the GSE, and revises their Affordable Housing Goals and use of Affordable Housing Funds. It establishes a five-year $2.5 billion off-budget "Affordable Housing Fund" to be managed by FHFA and funded by contributions from Fannie Mae and Freddie Mac equal to 1.2 basis points on their outstanding mortgages each year from 2007 through 2011. Three quarters of the money must be used for affordable housing fund purposes, and 25% is allocated to the federal government to keep the bill deficit neutral. The fund is expected to provide $500 million a year, with all first year funds targeted to extremely-low and very-low income families in Gulf Coast communities hurt by hurricanes Katrina and Rita. Thereafter, funds would be allocated to the states using a formula to be devised by HUD.

States would use the funds to address priority housing needs identified in allocation plans they devise. All of money would have to be to benefit very low and extremely low income families. States could use the funds for rental housing, homeownership (at least 10%) and related public infrastructure activities (at most, 12.5%).

The bill also provides that these funds be reserved for a future National Housing Trust fund if and when enacted (a National Housing Trust Fund bill is expected to be introduced in May). Separate FHA reform legislation (see below) would provide up to another $300 million for the Trust. The House Budget Resolution passed on March 29th also allows a deficit-neutral Affordable Housing Fund for fiscal years 2007-2017, five years longer than the Senate Budget Resolution allowed.

House Approves FHA Reform Bill

On May 4th, the House approved the Expanding American Homeownership Act of 2007. The bill reforms FHA lending practices, raises loan limits for FHA-backed loans and loan limits in high cost areas and allows more flexible premium pricing to better serve lower income borrowers. To better serve lower income families who might otherwise be forced to turn to subprime lenders, it authorizes zero down-payment loans and directs FHA to underwrite loans to borrowers with higher credit risk than it currently serves.

The bill also authorizes the appropriation of about $250 million of an estimated $300 million in FHA surplus funds (savings from the permanent elimination of the current statutory volume cap on FHA reverse mortgage loans) for use for grants for affordable rental and ownership housing. Up to $50 million of the $300 million would be used to ensure the solvency of the single-family housing mortgage program. Another $58 million would be used to increase funding for the Homeownership Counseling program. The housing funds would go to the National Housing Trust Fund, if created.

HUD Releases Updated Low Income Housing Tax Credit (LIHTC) Database

HUD has released an updated version of its national database on LIHTC projects. It now contains data on more than 25,000 rental projects (over 1.4 million housing units) placed in service between 1987 and 2004. Users can download the entire database or use a query system to extract information on subsets of projects (e.g. Massachusetts projects placed in service in 2000).

CHAPA Roundup

Housing Institute for Municipal Officials Slated for June 14 and 15

In an effort to provide community officials with intensive affordable housing training, the Massachusetts Housing Partnership, DHCD, CHAPA, and MassAPA, are co-sponsoring a Massachusetts Housing Institute on June 14 & 15 at the Marlborough Conference Center.

The two-day event will provide concentrated training and the opportunity to network with other communities and housing experts. It is geared for local officials, housing committee members, community preservation committee members, and other working to produce affordable housing. Topics include: the development process, finance, how to collaborative effectively with partners, assessing permitting and zoning option, and design.

Participation is limited to the first 65 registrants. To register, download this form, and fax it to Connie Kruger at 617-330-1919. For more information, contact Connie Kruger at 617-330-9944 x.281 or by email at ckruger@mhp.net.

Affordable Housing Competition Awards Announced

The 7th Annual Greater Boston Affordable Housing Development Competition recently concluded. Winners were announced at a well-attended ceremony in the Back Bay on April 26. This year, eight student teams partnered with local developers to produce an amazing array of proposals.

Cash awards were provided to both the student teams and the project sponsors. First place and $10,000 was awarded to Preservation of Affordable Housing, Inc. for United Front Homes; second place and $6,000 went to Nuestra Comunidad Development Corporation for Dudley Crossing; third place and $2,500 to Lawrence Community Works for Shawsheen Corner; and the Jamaica Plain Neighborhood Development Corporation received an honorable mention for Arbor Green at Forest Hills.

Sponsored by CHAPA, the Federal Home Loan Bank of Boston, the Greater Boston Chamber of Commerce, and Kevin P. Martin and Associates, the competition provides students the opportunity to combine classroom experience with real-world practice in affordable housing development. Visit www.fhlbboston.org/compete to read more about the competition and to view proposals.

Three New CHAPA Reports Released

Three new reports are now available from CHAPA:

The Fiscal Impacts of Mixed Income Housing Developments in Massachusetts Municipalities by Eric Nakajima of the UMass Donahue Institute was released May 10th. It examines the fiscal impact of eight developments and whether property taxes paid by these developments cover the cost of locally-funded municipal services. Using a "fair share" methodology that measures revenues and costs over the lifetime of a unit, it found that about half the developments generated a net fiscal benefit and half a net fiscal loss. The benefits and losses generally ranged between $1,000 per unit positive or negative. The study also found the majority of unsubsidized residential units in most communities had similar fiscal impacts.

Update on 40B Housing Production, completed in March 2007 by Bonnie Heudorfer, provides extensive information on housing production under Chapter 40B, especially since 2000. Some 884 developments with over 48,000 units (54% affordable) have been permitted under Chapter 40B since the enactment of the law in 1969 and 95 more developments with just under 6,000 units have received final approval but have not yet broken ground. The law has played an increasingly important role since 2000 in housing production statewide. The number of developments (480) approved under 40B since 2000 nearly matches the number approved in the prior 30 years. Units approved under Chapter 40B accounted for 30% of all new housing permitted in Greater Boston area towns between 2002 and 2006 and nearly 80% of all new rental housing.

Aging in Place Successfully with Affordable Housing and Services, a report by the Coalition for Senior Housing of Massachusetts, examines how the availability of support services affects the ability of older residents in subsidized senior housing to age in place in Massachusetts. It also describes state and federal strategies that do or could increase the availability of long-term community-based care as well as open policy questions.

New England Housing Network Makes Capitol Hill Visit

CHAPA led the New England Housing Network on a trip to Washington, DC in early May to talk with federal policymakers about the Network's legislative and budget priorities. Advocates from all six New England states joined with congressional staff for discussions of upcoming reforms to the Section 8 program, public housing, homelessness, housing trust fund proposals, CDBG and HOME, and several other housing and community development programs. Network members also met with staff from several key committees, including Senate and House appropriations and authorization subcommittees dealing with housing policy and finance.

Congressman Barney Frank will be the keynote speaker at the New England Housing Network regional conference on Monday, September 10 (location TBD). The conference will feature updates on key federal legislation and budgetary issues.

Upcoming CHAPA Events

• May 30, Boston Regional Meeting, 9:30 a.m. – 11:00 a.m., Greater Boston Chamber of Commerce, 75 State Street, 2nd Floor, Boston. Click here to register.

• June 6, Cape Cod Regional Meeting, 9:30 a.m. – 11:00 a.m., Cape Cod Community College, Science Building, Lecture Hall A, West Barnstable. Click here to register.

• June 8, Stakeholders in the Future of Public Housing, 8:30 a.m. – 2:30 p.m., Radisson Hotel Plymouth Harbor, 180 Water Street, Plymouth. Click here to register.

• June 12, Central Mass. Regional Meeting, 9:30 a.m. – 11:00 a.m., Homeownership Center of Worcester, 674 Main Street, Worcester. Click here to register.

• June 22, 40B Training, 8:00 a.m. – 2:30 p.m., Bentley College, The Conference Center, 175 Forest Street, Waltham. A registration brochure will be posted on our calendar four weeks before the event.