State Roundup
New DHCD Public Housing Budget Guidelines Increase Funding and Flexibility
DHCD issued new budget guidelines in August for local housing authorities (LHAs) for their state-funded public housing programs for FY2008. The guidelines increase the allowed per-unit non-utility expense levels (ANUEL) by 12%. Last year they were increased by 7%, after a four-year freeze. They also state that DHCD will be developing new initiatives later this year to achieve rapid savings in water/sewer and utility costs.
The new guidelines give LHAs greater spending flexibility, increase funding for tenant association activities, provide a 7% increase for administrative salary costs, and allow LHAs to use program funds to provide small, one-time bonuses to employees to reward new initiatives or program improvements. They adjust the executive director salary factors to make it easier for small LHAs to share a director and allow LHAs to request permission from DHCD to recertify senior housing tenants every two years rather than annually.
State Budget Process for FY09 Underway
CHAPA testified in support of significant increases in state rental assistance and public housing funds as its top two priorities at a FY09 budget hearing convened by the Executive Office of Housing and Economic Development on August 29. CHAPA's testimony stressed the need for an increase in both tenant-based and project-based rental assistance to serve households below 30% of area median income as well as an increase in the administrative fee to $40 per unit per month.
CHAPA and MassNAHRO also joined together in advocating for an increase in state public housing operating subsidies from $60 million to $85 million, which would bring the program more in line with funding levels for federal public housing.
Census Data Shows Rents and Housing Cost Burdens Continued to Rise in 2006
Newly released Census Bureau data from the 2006 American Community Survey (ACS) show that housing cost burdens continue to rise both in Massachusetts and across the nation.
In Massachusetts, the estimated median gross rent statewide rose by 20.5% between 2001 to 2006 (from $774 to $933) while median renter household incomes declined by 1.5%. Almost half (49%) of Massachusetts renter households were estimated to be paying 30% or more of their income for housing in 2006 (up from 36% in 2001) and the percentage paying half or more rose from 17% to 24%. Nationwide, the ACS estimated the 2006 percentage of renters paying 30% or more to be 46%.
Median homeowner costs in Massachusetts also rose more rapidly than owner incomes between 2001 and 2006. While median homeowner incomes rose by 15.4%, median monthly owner costs rose by 31% for households with mortgages (from $1,468 to $1,965) and by 40% for those without mortgages (from $440 to $616). Nationwide, 37% of homeowners with mortgages paid more than 30% of their income for housing, compared to 41.8% in Massachusetts.
Attorney General Certifies Ballot Initiative to Repeal Chapter 40B
A ballot initiative to repeal Chapter 40B was one of 13 questions certified by the Attorney General this month. Proponents have until December 5, 2007 to gather and file the signatures of 66,593 registered voters. If they succeed, the proposal goes to the Legislature in January for possible enactment. If not enacted by early May 2008, proponents must gather 11,099 more signatures by early July 2008 to place the question on the November 2008 ballot.
Chapter 40B has been a primary tool for producing and preserving affordable housing in Massachusetts for more than three decades. It has been used to create 70-80% of all new affordable housing outside the major cities over the past five years. Efforts to repeal this law represent a serious threat to progress on meeting the housing needs of Massachusetts residents.
To learn more about the repeal proponents, visit their repeal 40B web site.
DHCD Issues Grant Alert for Housing Development Support Program (HDSP)
DHCD has announced that it is accepting applications from cities and towns for HDSP grants of up to $500,000 for small rental development and rehab projects (less than 8 units). Eligibility is limited to communities that do not receive Community Development Block Grant entitlement funds. Interested communities must submit a Notice of Intent by Thursday, September 27, and final applications are due November 15. The grant alert also includes information on key dates for the February 2008 funding round.
Federal Roundup
House and Senate Banking Committee Pass FHA Reform Bills
On September 18, the full House overwhelmingly (348-72) approved the "Expanding American Homeownership Act of 2007" (H.R. 1852). The bill authorizes the use of up to $300 million a year from FHA surplus funds for affordable housing (via the National Housing Trust Fund if enacted). It also enables the Federal Housing Administration (FHA) to serve higher risk but qualified borrowers and to provide refinancing opportunities to struggling borrowers. Other provisions increase funding for HUD housing counseling programs and raises multifamily and single family loan limits. It raises the single family limit to the lower of either 125% of the local area median home price (rather than 95%) or 175% of the national GSE conforming loan limit.
On September 19, the Senate Banking Committee also approved a "FHA Modernization" bill (bill number not yet available). Details on the approved bill are not yet available.
HUD Notifies Owners of Funding Shortfall for Section 8 Project-Based Contracts
A number of owners of properties with project-based Section 8 contracts with anniversary dates in the last quarter of FY2007 (July 1-September 30, 2007) experienced delays in receiving payments because HUD lacks funds for the 12 month cost of those contracts. The delays were due in part to a decision by the federal Office of Management and Budget that HUD's practice of funding some renewals from anticipated appropriations violates federal law. In September, OMB agreed to a compromise but there is concern that this problem may recur in 2008, as Congress has been unable to determine FY2008 funding needs for project-based renewals.
Senate Approves HUD FY2008 Budget Bill
The full Senate approved a FY2008 appropriations bill (H.R. 3074) for Transportation, Housing and Urban Development and Related Agencies on September 12. The Senate bill differs from the version passed by the House in July in numerous ways and observers do not expect a conference committee bill until after October 1 (the White House has threatened to veto both bills as too expensive). The House may propose a long-term continuing resolution to keep programs operating in the interim.
Key differences between the Senate and House bills, summarized in a National Low Income Housing Coalition budget chart , include the following:
- Section 8 Project Based Rental Assistance The Senate bill cuts funding for project-based Section 8 renewals to $5.5 billion, providing 5% less than the FY2007 budget and $700 million less than the House bill. The cut reflects frustration with HUD's failure to provide detailed information on the amount needed to fully fund renewals (some estimates range as high as $7.5 billion). The bill orders HUD to provide detailed estimates for FY09 and requests data for FY07 and FY08.
- Housing Choice Vouchers The Senate bill provides more funding for incremental vouchers, adding $30 million for new Family Unification vouchers. Like the House, it also provides funds for 1,000 new vouchers for homeless veterans in supportive housing. It funds voucher renewals based on the most recent 12 month data available (the House funding is based on calendar year 2007 costs).
- The Senate bill provides small increases to several programs that the House bill level funds, including the public housing capital fund and homelessness assistance grants. Like the House, it requires HUD to pay public housing agencies prior year performance bonuses.
- CDBG and HOME formula grants The Senate bill cuts CDBG formula grants by 1%, while the House provides a 6% increase. It also slightly reduces HOME formula grants (the House bill provides a 0.7% increase) because it sets aside $25 million for the American Dream Downpayment Initiative (the House provided $0).
- Housing Counseling and Foreclosure Mitigation The Senate bill triples funding for the Housing Counseling program ($150 million vs. $48 million in the House bill). It also authorizes a new $100 million foreclosure mitigation program, not in the House bill, under which HUD can provide grants to public, private or non-profit entities, including NeighborWorks and state housing finance agencies, to assist owner-occupants of single family homes with mortgages in default or at risk of foreclosure. Potential activities by grantees include counseling, mortgage purchases, refinancing, workouts and assistance with pre-foreclosure sales. Entities may be required to provide up to a 25% match.
- Tenant Protection Language The Senate bill also has a new provision, not in the House bill, to protect residents in HUD-owned and HUD-held multifamily properties that have Section 8 contracts. It requires HUD to either maintain the assistance or, in consultation with tenants, transfer it to another property.
OCC Issues Primer on Employer Assisted Mortgage Programs
The Office of the Comptroller of the Currency (OCC) has issued a report on the potential benefits of employer assisted mortgage programs. "Understanding Employer Assisted Mortgage Programs: A Primer for National Banks" discusses the ways in which programs can be structured, benefits in terms of business volume and the Community Reinvestment Act, regulatory considerations and risks, and how banks can implement programs for their own employees and through work with other local employers.
HOPE VI "Improvement and Reauthorization" Bill Re-introduced
Representative Barney Frank and others introduced a new bill (H.R. 3524 - the HOPE VI Improvement and Reauthorization Act) in the House on September 11, replacing legislation they had introduced in July. The new bill would authorize the program through 2015, with funding of $800 million a year and and establish "mandatory core components" for the program.
It would require applicants to provide evidence documenting the physical and non-physical distress of proposed revitalization sites. It would also require one-for-one replacement of all units through acquisition, new development or project-based assistance and requires that at least one third of the replacement units must be public housing absent a waiver. The replacement units must be located inside the jurisdiction of the PHA.
The bill requires ongoing tenant consultation, with first notices starting at least a year before an application is submitted. It also requires comprehensive relocation assistance, sets deadlines for the provision of replacement housing and raises from 15% to 25% the amount of grant funds that can be spent for community and supportive services.
Upcoming Events
CHAPA Breakfast Forum on Employer Assisted Housing, Monday, September 24, 9:00 a.m. at MassHousing, One Beacon Street, Boston.
CHAPA 40th Annual Dinner, Tuesday, October 16, 5:30 p.m., South Boston Convention Center. The keynote speaker is Governor Deval Patrick.
Urban Land Institute and MACDC Panel Discussion on 40R Panel discussion on 40R in the Commonwealth: Opportunities and Lessons in Policy, Politics and Development, Tuesday, September 25, 5:00 p.m., Hyatt Regency, Boston. It will include case studies from two communities.
DHCD Training on Community Based Housing (CBH) Program DHCD has scheduled a training and information session on the Community Based Housing program for current program participants and people applying or considering applying for CBH funding. The training will be held on September 28, 10:30 a.m. to 12:30 p.m., at DHCD in Boston. Pre-registration is recommended (617-573-1305).
MassDevelopment Seminars on Recent Changes in Brownsfield Programs Mass Development, the state Department of Environmental Protection (DEP) and the state Department of Revenue (DOR) will be holding a series of free morning seminars around the state to discuss recent changes in brownsfield incentive programs. Seminars will be held on September 18 (Springfield), September 25 (Adams), October 2 (Taunton), October 16 (Fall River), October 23 (Andover), October 30 (Boston) and November 13 (Worcester).
