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Housing Briefs - August 1, 2012
Submitted by admin on Wed, 08/01/2012 - 3:51pm
Massachusetts 2011-2012 Legislative Session Ends
At 12:12 this morning, the Legislature adjourned for the 2011-2012 formal legislative session. CHAPA would like to thank Speaker Robert DeLeo, Senate President Therese Murray and the entire Legislature for their work to enable thousands of working families, persons with disabilities, and seniors who struggled to keep a roof over their head to now have access to safe, affordable housing. Notable affordable housing accomplishments from this legislative session include: doubling the state Low Income Housing Tax Credit, passing legislation to increase supportive housing opportunities, updating the Community Preservation Act, and increasing funding for affordable housing programs by $100 million over the last two budgets. While this biannual deadline marks the end of debate on most legislation until next year, noncontroversial bills without any legislative opposition are still able to pass in informal sessions for the remainder of the year.
Economic Development Bill with Community Development Tools Advances to Governor’s Desk
On the last day of formal legislative sessions, the General Court enacted a sweeping economic development bill that includes several community development provisions. The bill creates the Community Investment Tax Credit beginning in 2014 to expand public-private resources for the implementation of Community Development Corps plans that expand housing and economic opportunities and a 1-year $1.5 million CDC grant program.
Other key provisions of the legislation include:
- Expanding the state historic tax credit from $50 million to $60 million per year
- Extending the sunset on the brownfields environmental response tax credit until 2015
- Providing $4 million for the Smart Growth Housing Trust Fund for Ch. 40R payments
- Codifying the MassWorks Infrastructure program
- Allowing localities to adopt Ch. 43D expedited permitting for residential development
- Allowing most state and local permits granted between August 2008 and August 2012 to be automatically extended for another two years. Comprehensive Permits are not included.
Governor Patrick has not committed to signing these community development tools into law. Please contact his office ASAP by calling 617-725-4005 or submitting an email at: http://www.mass.gov/governor/contact-us.html with a simple message:
Please support all of the community development tools included in the Economic Development bill. These tools will help make our neighborhoods stronger and expand housing and job opportunities for residents of the Commonwealth. Thank you for your support.
Foreclosure Prevention Legislation Clears Legislature
Last week, the Legislature approved H. 4323 to take additional steps to prevent foreclosures. The bill requires financial institutions to conduct a net present value test for loans that meet certain criteria and are headed toward foreclosure and also requires the lender to modify the loan if the modification would be “commercially reasonable” compared to the anticipated recovery from foreclosure. The requirement will go into effect for any homeowner that receives a right-to-cure notice upon the bill’s effective date immediately upon the Governor’s approval.
The legislation also requires proper documentation prior to foreclosure, codifying court decisions. Some advocates are concerned by a provision in the bill that limits the ability to bring a legal claim against a third party purchaser who purchases a property from a financial institution that wrongfully foreclosed upon the property. Unlike the Senate bill, the final bill does not require homeowners to go through mediation prior to foreclosure and instead establishes a commission to study mediation, the feasibility of judicial foreclosure and how to prevent unnecessary vacancies in foreclosed properties.
Housing Legislation that Fell Short on July 31st
Two other bills related to housing made a late surge this week but came up short of passage. An Act Relative to Housing Rights for Victims of Domestic Violence, Rape, Sexual Assault and Stalking, S. 2402 originally filed by Senator Creem, was passed by the Senate and was favorably reported by the House Committee on Ways and Means but did not clear the full House. The legislation provides tenants who have been victims of domestic violence to break a lease or request that locks be changed in order to protect themselves from their alleged perpetrator.
An Act Relative to Creating a Statutory Housing Restriction and Providing Remedies Related to Statutory Housing, S. 2399 filed by Senator Eldridge cleared the Senate and is pending before House Ways and Means. The legislation aims to promote consistent use, interpretation, and durability of affordable housing restrictions.
In addition, efforts to secure an appropriation to continue the distressed property rehabilitation work that had been funded under the Neighborhood Stabilization Program were not successful. Although it is far from certain, any of these proposals may advance in informal sessions later this year.
Advocates urge Governor Patrick to Increase Capital Funding for Housing
Each year, Governor Patrick and the Executive Office for Administration and Finance craft a plan that establishes capital spending for programs with general obligation bond bills funding authorization, including housing capital programs. Last year, A&F allocated approximately $178 million for housing, including a much-appreciated $10 million mid-year increase. Over 40 organizations recently wrote to the Governor to advocate for $195.5 million for the FY’13 capital budget. We anticipate the capital budget’s release in early fall and encourage others to request A&F to commit more capital housing resources.
DHCD Proposes Emergency Assistance Regulation Changes
DHCD recently provided notice of proposed regulatory changes to the Emergency Assistance program. These changes will implement the narrowing of eligibility envisioned in the FY’13 budget that has raised concerns among some advocates. The majority of the changes will go into effect as emergency regulations on September 17th, while regulations that relate to the determination of a health and safety risk for families exiting unsafe doubled-up situations and entering shelter will go into effect on August 2nd. The FY’13 state budget also includes increases in homelessness prevention and re-housing funding and those program expansions are gradually being rolled out this summer.
Gateway Cities Housing Planning Grants Available
Nonprofits in 18 Gateway Cities are eligible to apply for housing planning grants from DHCD. Applicants must submit initial applications by August 20th. Click here for more information.
Federal Reserve Bank of Boston Extends Independent Foreclosure Review Deadline
The Federal Reserve Bank of Boston is encouraging borrowers who were financially harmed in the mortgage foreclosure process in 2009 and 2010 to request an independent review. If the review finds errors in the foreclosure, the borrower may be eligible for compensation. Borrowers have until September 30, 2012, to submit a request. More information is available at www.independentforeclosurereview.com
MHP Issues July Foreclosure Monitor
MHP’s Foreclosure Monitor recently examined distressed property resolutions in Massachusetts over a two-year period to explore investor purchasing patterns. The findings are very interesting. Click here to read the report.
Commonwealth Moves Forward with Social Innovation Financing Initiatives
Mass. Housing and Shelter Alliance (MHSA), in partnership with the Corporation for Supportive Housing, Third Sector Capital Partners, and the United Way of Mass. Bay and Merrimack Valley, were selected through a competitive process to negotiate a first-in-the-nation pay for success contract with the Commonwealth to reduce homelessness among chronically homeless individuals. Click here to learn more.
HUD Issues Notice Implementing Rental Assistance Demonstration (RAD) Program
On July 26, HUD announced the issuance of its final notice implementing the Rental Assistance Demonstration (RAD) program. RAD is a 5-year demonstration intended to promote the preservation of federal public housing units and units assisted (or formerly assisted) under certain older programs (Mod Rehab, Rent Supp and RAP). It allows PHAs and owners to convert their current assistance to project-based rental assistance under long term contracts, potentially making it easier to finance capital improvements. Interested owners have 90 days from the publication of the notice to apply to participate. HUD is accepting applications for the non-competitive portion of the program immediately (Mod Rehab, RAP and Rent Supp) and will accept applications for the competitive component (60,000 public housing and Mod Rehab units) from September 24 through October 24.
HUD Issues Interim Rule for Continuum of Care (CoC) Homeless Program
On July 31, HUD published an interim rule in the Federal Register revising HUD’s Continuum of Care grant program. The new rule implements changes required by the 2009 HEARTH Act, which amended and reauthorized HUD’s homelessness assistance programs and will go into effect on August 30th. The notice also seeks comments by October 1 on a number of specific items in the interim rule. HUD has also posted a summary (“crosswalk”) of the changes and a webinar. Publication of the rule enables HUD to release the FY2012 CoC Notice of Funding Availability (NOFA).
The HEARTH ACT consolidated the three subprograms (Supportive Housing, Shelter Plus Care and Section 8 Mod Rehab SRO) authorized under the CoC into a single program. The interim rule replaces the previously separate regulations, codifies many elements included in previous NOFAs and details the planning and operational requirements local Continua must meet. It also undoes the 2011 re-definition of “chronically homeless,” dropping “where each homeless occasion was at least 15 days.”
Changes to RHS Eligible Areas May Hurt 66 Massachusetts Communities
The U.S. Department of Agriculture (USDA) has identified 66 communities in MA likely to lose eligibility for its Rural Housing Service (RHS) programs on October 1, 2012, when it updates its list of eligible areas based on 2010 Census data. To prevent eligibility losses in 1990 and 2000, Congress passed legislation that grandfathered all previously eligible communities with populations up to 25,000. However, it has yet to do so for the 2010 update. Most (61) of the 66 Massachusetts towns will lose eligibility due to the expiration of grandfathering rather than population increases.
The National Rural Housing Coalition is spearheading efforts to obtain at least one-year grandfathering for the affected 900 communities nationwide through an amendment to the FY2013 Agriculture, Rural Development, and Food and Drug Administration appropriations bill when it comes to the House floor. The Senate included similar language in its FY2013 appropriations bill, passed in April.
Senate hearing on SEVRA/AHSSIA
The Housing Subcommittee of the Senate Banking Committee held a hearing this morning on "Streamlining and Strengthening HUD's Rental Housing Assistance Programs." The Center on Budget and Policy Priorities (CBPP) reports that witnesses have been asked to provide their views on provisions in drafts of two voucher reform bills (SEVRA and SESA/AHSSIA) which would simplify program administration and reduce program costs.
CBPP Proposes Federal Tax Credit for Low Income Renters
In response for the need for new strategies to assist extremely low income renters, The Center on Budget and Policy Priorities (CBPP) has released a proposal calling for the creation of a federal tax credit for landlords willing to charge rents not exceeding 30% of income to lower income households. The proposal would have an estimated annual cost to the Treasury of $5 billion a year, a small fraction of the potential savings from modifying the federal mortgage interest deduction. The non-refundable credit would be taken by the property owner, rather than the tenant (or the owner’s lender if the owner lacked sufficient tax liability). States would be responsible for allocating the credits to individual owners and lenders and could design their own criteria. Massachusetts could assist 11,000 to 15,000 households under various credit design options. CBPP is interested in feedback on its proposal and is holding a webinar on August 2 from 11:30 to 12:30 on the proposal (click here for registration information).
FHFA Rejects Principal Reduction for Fannie Mae/Freddie Mac Loan Modifications
On July 31, Edward DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), announced in a letter to Congress that his agency had once again decided it would not allow servicers to offer principal reductions on loans the GSEs guarantees, despite requests by Congressional Democrats and the Administration. FHFA is an independent agency charged with overseeing the conservatorship of Fannie Mae and Freddie Mac. It again concluded the cost to taxpayers of a principal forgiveness program for up to 248,000 likely borrowers potentially outweighed the benefits, though it did not examine the impact lowering debt would have on the overall economy. Instead, it announced that it will encourage more refinancing by opening the HARP program to some borrowers with loan-to-value ratios below 80% and will encourage new lending by further limiting the circumstances under which lenders will have to buy back loans they sell to the GSEs in cases of default.
CEDAC and CHAPA will host a training on two technical topics: project-basing enhanced vouchers and the Rental Assistance Demonstration rules on September 24th at 2:30 at Boston Private Bank and Trust in Boston. Please save the date if you are interested in attending this in-depth training.
CHAPA and several partners will co-host a training on the latest development in the Comprehensive Permit Law on September 28th from 7:30 am to 1:00 pm in Randolph. Please click here for a save the date notifcation.
Tables are filling up for CHAPA’s annual dinner on October 24th at the Boston Convention Center. Please contact Odessa Walton-Peele if you are interested in sponsoring a table today.
The Patrick-Murray Administration, under the leadership of Undersecretary Gornstein, will hold a State Housing and Community Development Conference on November 13th in Worcester. More details will be forthcoming.
The New England Housing Network will hold its annual all-day conference on Friday, December 7th at the Sheraton in Framingham.
CHAPA is seeking a new Program Manager to manage the Massachusetts Homeownership Collaborative and HUD Housing Counseling Program. (Current Senior Program Manager Katy Trudeau is being promoted to a new position: Director of Special Projects.) The deadline for responses is Friday, August 10th. Please click here to view the job description.