Weekly update from the National Housing Conference
September 5, 2018
President's Message I By David M. Dworkin

Last week, Comptroller of the Currency Joseph Otting released an Advanced Notice of Proposed Rulemaking (ANPR) on the Community Reinvestment Act of 1977 (CRA), the first step in what is likely at least a yearlong regulatory process. 

While the Office of the Comptroller of the Currency (OCC) can act alone, it is only one of three regulators that enforces CRA, along with the Federal Reserve Board of Governors and the Federal Deposit Insurance Corporation. Ultimately, real reform must have the support of all three regulators along with the communities that CRA is meant to serve. The OCC’s ANPR is an important start to a process that if done right, can make CRA more effective. But if it’s done wrong, it could be devastating to many underserved communities and the organizations, both for-profit and nonprofit, that create much-needed affordable housing.

I have been very clear to both Comptroller Otting and other Treasury Department officials involved in CRA modernization that effective and sustainable reform must meet four fundamental tests. It must:

  • Increase investment in communities that are currently underserved;
  • Benefit more low- and moderate-income people, particularly people of color, who live in those communities;
  • Ensure that CRA lending and investment does not lead to displacement of the very people it is meant to help; and
  • Make both bank performance and government enforcement more transparent and predictable.

Most banks have long ago learned to appreciate the value of CRA, though they are often frustrated by the how it is applied, as are many affordable housing advocates. We want CRA compliance to be fair, timely and accurate, and so do they. I am optimistic that this process will result in a strengthening of the effectiveness of CRA through sensible improvements if we do it right.

NHC has convened a CRA Working Group made up of interested members. It’s not too late for you to participate. If you are not an NHC member, you can join now at a reduced rate. Just contact Amanda Mitchell at amitchell@nhc.org to learn more about joining, or to sign up for the CRA Task Force if you are already a member.

I’d also like to remind you that we are holding our Solutions for Affordable Housing 2018 convening on November 27-28, just three weeks after the election. Solutions will include an Advocacy Day on Nov. 28 while both current and newly elected members of Congress are in town. The agenda will include A-list speakers and panels on housing production, CRA modernization and housing finance reform, among others. We are especially grateful to JPMorgan Chase, Bank of America and Wells Fargo for their significant support of this important convening. Several outstanding sponsorship opportunities remain available.

Thank you for your support of NHC and your commitment to affordable housing.

David M. Dworkin
President and CEO
News from Washington I By Kaitlyn Snyder & Nathan Park
NHC joins major housing groups to call for end to GSE conservatorship

A coalition of 30 major housing organizations released a letter calling for an end to conservatorship combined with legislation that locks in recent reforms for Fannie Mae and Freddie Mac, the two government sponsored enterprises (GSEs) that have been under government control for 10 years this month.The statement, which NHC helped draft, urged policy makers to “protect taxpayers, provide liquidity and promote stability while taking care not to roll back aspects of the GSEs’ operations that are supporting the foundation of the housing market.” The statement was signed by a broad range of organizations including the National Housing Conference, the Mortgage Bankers Association, the National Association of REALTORS®, the National Association of Home Builders, LISC, Enterprise Community Partners and the Center for Responsible Lending, among others. It makes clear that any effort to change the existing role of the GSEs “must also include enforceable mechanisms to serve the entire market of renters and qualified homebuyers, including underserved markets and manufactured housing.” Copies of the statement were sent to the White House, the Office of Management and Budget, the Treasury Department, the Federal Housing Finance Agency and the bipartisan leadership of Congress as well as the leaders of the Senate Banking Committee and the House Financial Services Committee.
Shutdown countdown begins

Funding for the federal government is set to expire on Sept. 30, and all eyes are on the House and President Trump to avert a government shutdown during a midterm election. The House has just 10 legislative days to pass bills to fund the government, which must then be signed by President Trump. The Senate has passed three funding bills ( H.R 5895, H.R. 6147 and H.R. 6157), which fund nine of the 12 appropriations subcommittees. The holdouts are Commerce-Justice- Science, Homeland Security and State-Foreign Operations. Funding for the Homeland Security bill could prove politically tricky since that’s where President Trump’s proposed border wall would be funded. Much more on a potential shutdown in this Politico article
Federal Financing Bank Multifamily Risk Sharing Program could end Oct. 1

In FY 2014, HUD and the Federal Financing Bank (FFB) launched the risk sharing initiative to provide financing for multifamily mortgage loans insured by FHA under its Risk Sharing programs on an interim basis until Sept. 30, 2020. But President Trump’s FY 2019 budget called for the program’s elimination at the end of FY 2018. Thirty-seven state and local housing finance agencies have participated in Risk Sharing (including 14 with FFB) and others have expressed interest. The program is particularly effective at financing smaller rural multifamily projects.

It’s not clear why the Office of Management and Budget decided to terminate FFB funding for Risk Sharing loans, as it makes money for the federal government and has 50 percent lender participation. One concern may be purely ideological – that FFB is federal funding, potentially displacing the private capital market. But private capital markets are not being displaced and without the program, many smaller rural deals will not be funded at all. NHC has joined other proponents of the FFB Multifamily Risk Sharing Program to seek a reversal of this decision by the White House.
HFS hearings on multifamily development and GSE reform

Today, the Housing and Insurance subcommittee of the House Financial Services (HFS) committee held a hearing entitled “ The Cost of Regulation on Affordable Multifamily Development.” The hearing took place in the Rayburn House Office Building, room 2128, and via webcast. Witnesses included:
  • Sue Ansel, Gables Residential, on behalf of the National Multifamily Housing Council
  • Erika Poethig, The Urban Institute
  • James Schloemer, Continental Properties Company, Inc.
  • Steven Lawson, The Lawson Companies, on behalf of the National Association of Home Builders.

Tomorrow at 10 a.m. EDT the full HFS committee will hold a hearing entitled “ A Failure to Act: How a Decade without GSE Reform Has Once Again Put Taxpayers at Risk.” The hearing will take place in the Rayburn House Office Building, room 2128, and via webcast. Witnesses will include:
  • Ed DeMarco, Housing Policy Council
  • Dr. Phillip Swagel, University of Maryland School of Public Policy
  • Nikitra Bailey, Center for Responsible Lending
  • Edward Pinto, American Enterprise Institute.
HUD's new Landlord Task Force

HUD Sec. Ben Carson has established a new Landlord Task Force, part of a campaign to improve landlord participation in the Housing Choice Voucher (HCV) Program. HUD created the task force in response to the findings of two new studies on HCV, the nation’s largest rental subsidy program. The first study, sponsored by HUD and conducted by the Urban Institute, found that voucher recipients have difficulty finding landlords who accept their vouchers, especially in higher-opportunity neighborhoods. The second study, conducted through Johns Hopkins University, found that landlords are most commonly frustrated by required HCV inspections and by how housing authorities handle tenant disputes. These studies will be presented at landlord forums across the nation as part of the HUD landlord engagement campaign. The task force will then provide Sec. Carson with policy recommendations for increasing landlord HCV participation.
GSE to shut down single-family rental pilots

The Federal Housing Finance Agency (FHFA) recently announced that both Fannie Mae and Freddie Mac will shut down their single-family rental pilot programs, effectively ending their participation in the single-family rental market. In the last year, the government-sponsored enterprises (GSEs) expanded into the single-family rental market to measure support for growing the market. Some market participants opposed the expansion, citing concerns that such moves would affect affordability for low-income homebuyers. FHFA has recognized that the market does not require the GSEs and now notes the need for a more expansive understanding of the potential impact of GSE expansion into the single-family rental market on such issues as homeownership and long-term affordability.
Fact sheet: Cutting housing assistance negatively impacts women

A joint fact sheet from the National Low Income Housing Coalition and the National Women’s Law Center expounds on the ways in which cutting federal housing assistance negatively impacts women and families. Female householders are significantly more likely to live in HUD-assisted public housing and use housing vouchers than their male counterparts. Moreover, the report points to the positive impact of housing assistance for women of color, domestic violence survivors, LGBTQ women, families experiencing homelessness, children and women with disabilities. Cuts to housing assistance in the FY 2019 budget would cause significant challenges for women and families, such as rising rents, difficulty paying for basic necessities and discrimination and harassment in the low-wage job sector.
New reporting on Area Agencies on Aging

The National Association for Area Agencies on Aging has released two new reports on challenges and demographic changes in their communities. The first report examines how housing and homelessness are impacting older adult communities around Area Agencies on Aging (AAA) and the innovative partnerships that allow AAAs to effectively and efficiently respond to community needs. The second report compiles and reviews challenges AAAs in rural communities face, such as smaller budgets and fewer staff as compared to non-rural AAAs. The two reports highlight creative approaches to allowing older adults to age in their own homes and communities.
FEMA's Transitional Sheltering Assistance to end this month

A recent ruling from District Judge Timothy Hillman ending FEMA’s Transitional Sheltering Assistance (TSA) program, which has been responsible for providing temporary housing for hundreds of Puerto Ricans in the wake of Hurricane Maria. A class action lawsuit brought on by LatinoJustice PRLDEF prolonged the end of TSA several times through a restraining order, which Hillman extended in August. Hillman’s most recent order denies the request for a preliminary injunction, citing multiple legal constraints. Puerto Ricans living on the U.S. mainland through TSA must now find alternative housing by Sept. 13, when the TSA program is set to terminate.
The National Housing Conference has been defending the American Home since 1931. Everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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