Housing Briefs - June 26, 2013

Post date
June 26, 2013
Publication Date: 
Wednesday, June 26, 2013

State Updates

State Budget Update

The House and Senate have each passed their budget proposals and are now working in a Conference Committee to reconcile the differences and report a compromise bill to the House and Senate for a final vote. Both the House and Senate budgets make new investments in housing:

  • The House establishes and funds a flexible trust fund, the Housing Preservation and Stabilization Trust Fund, at $10 million, increases Home and Healthy for Good by $400,000 and level funds public housing at $64.4 million.
  • The Senate proposes investing nearly $20 million through an increase of $15.5 million to MRVP as well as increases to RAFT, the Housing Consumer Education Centers, and the Tenancy Preservation Program. The Senate budget also opens up options for families, whose temporary HomeBASE rental assistance will soon expire, allowing families to maintain a homelessness preference for subsidized housing, have access to RAFT and HomeBASE household assistance, and ensure access to shelter.

CHAPA appreciates the efforts of the Legislature and continues to reach out to Conference Committee members, Senator Stephen Brewer, Senator Jennifer Flanagan, Senator Michael Knapik, Representative Brian Dempsey, Representative Stephen Kulik, and Representative Vinny deMacedo.

 

Housing Bond Bill Update

The Housing Bond bill was passed by the House earlier this month and referred to the Senate Bonding Committee, which held a hearing for the bill on June 20th.

The bill filed by Housing Committee Chairs Representative Kevin Honan and Senator Jamie Eldridge, An Act financing the production and preservation of housing for low and moderate income residents, H. 3492, summarized below, also incorporates language changes from the Governor’s proposal that removes burdensome repayment and refinance language that had previously been required of a small number of programs:

  • Extends the Low Income Housing Tax Credit at $20 million per year for 5 years
  • $500 million for Public Housing
  • $305 million for the Affordable Housing Trust Fund
  • $135 million for Housing Stabilization Fund
  • $100 million for Capital Improvement and Preservation Trust Fund
  • $80 million for Housing Innovations Fund
  • $55 million for Home Modification
  • $50 million for Public Housing demonstration program
  • $45 million for Commercial Area Transit Node Housing Program with language to include funding commercial space in mixed use developments
  • $45 million for Early Education and Out of School Time Capital Fund
  • $47 million for Facilities Consolidation Fund
  • $38 million for Community Based Housing

During the House debate, the following amendments were adopted:

  • Allowing housing expenditures in MassWorks to be within ½ of a mile, rather than ¼ of a mile, from transit.
  • Allowing communities to turn down 40B permits if a tax increment financing zone (TIF) is in place.
  • Denying public housing preferences to undocumented immigrants or families with mixed status.

In addition, before the bill moved to the House floor for a vote, a change was made by the House Bonding Committee to the weak markets homeownership provision of the Housing Stabilization Fund allowing for a further reduction in the deed restriction from 10 years to 5 years and requiring that the subsidy be used for residential buildings containing 2 to 6 units.

 

Zoning Reform Update

The Boston Globe editorialized in support of An Act promoting the planning and development of sustainable communities.  H. 1859, sponsored by Senator Daniel Wolf and Representative Stephen Kulik, would update Massachusetts land use laws and is vital to meeting the state's needs for workforce housing, reduced commutes, and the preservation of farmland and forests. The bill provides benefits to municipalities across the state through statewide reforms and offers enhanced incentives and tools to communities that choose to opt in by changing select local regulations in order to meet economic development, housing, and natural resource protection goals. These reforms will equip cities and towns with the tools they need to shape their futures while providing more certainty to landowners and developers. The bill was heard by the Joint Committee on Municipalities and Regional Government on May 14th.

 

DHCD Announces $750,000 in Community Investment Tax Credit Grants

On June 25, the Department of Housing and Community Development announced the award of $750,000 in Community Investment Tax Credit (CITC) grants to 28 community organizations across the state.  Twenty-seven CDCs received awards of $25,000 each and the Massachusetts Association of Community Development Corporations (MACDC) received an award of $75,000.  The grants will support the development or refinement of community investment plans for community development.  As detailed by MACDC, the program authorizes the award to state Community Investment Tax Credits to CDCs with the strongest plans (up to $150,000 per year for 3 years) to attract private investment starting in 2014.  The cost of the credits is capped at $3 million in 2014 and $6 million from 2015 through 2019 (it sunsets in December 2019). 

 

DHCD Issues NOFA for 2013 Rental Housing Round

On June 24, the Department of Housing and Community Development (DHCD) issued its 2013 Notice of Funding Availability (NOFA) for affordable rental housing developments.  Applications are due no later than August 2.  Available resources include, for the first time, Massachusetts Rental Voucher Program (MRVP) project-based “value” vouchers (rent limits are capped at 60% of maximum allowable rents).  The NOFA makes up to 100 of these MRVP project-based vouchers and up to 100 Section 8 Housing Choice Vouchers available.  Eligibility is limited to projects approved by DHCD through its pre-application process as of June 2013.  For more information on the NOFA and the 2013 Qualified Allocation Plan, click here.

 

Governor Sets First Time Homebuyer Goal of 10,000, Announces new MHP “ONE” Program

On June 10, the Governor announced a new “homeownership compact” between the state and six banks with the goal of providing 10,000 mortgage loans over the next five years to homebuyers with household incomes below the area median income.  The loans will be made by lenders through a new Massachusetts Housing Partnership (MHP) program (the ONE program) and through MassHousing mortgage programs.  MHP’s ONE program will gradually replace the 22-year-old Soft Second program, providing a single mortgage rather than two, making it simpler for borrowers to understand and for lenders to underwrite.  The new program will also make it possible to sell the loans on the secondary market.  As detailed in a Banker and Tradesman article, the ONE program will continue to allow low down payments (3-5%) and avoid the need for private mortgage insurance.

 

State Housing, Transportation and Environment Agencies Unveil “Common Vision for Growth” 

On June 5 at a “Multi-Family Summit”, representatives from the Executive Offices  of Housing and Economic Development (EOHED), Transportation and Environmental Affairs, described their Common Vision for Growth and the importance of DHCD’s multi-family housing production goal (10,000 units a year between 2013 and 2020)  to state transportation goals (tripling walking, biking, and transit travel) and environmental goals (reducing greenhouse gas emissions by 25% by 2020 relative to 1990).  EOHED Secretary Bialecki also announced the formation of a new Committee to advise DHCD on building support for new multi-family housing. 

 

Federal Updates

House Appropriations Subcommittee Proposes Deep Cuts to HUD Budget in FY2014

To date, the House and Senate have failed to agree on a budget resolution setting total spending for FY2014. The Senate has proposed spending $1.058 trillion, consistent with the Budget Control Act (BCA) of 2011, while the House proposes $967 billion and would shift the split between defense and non-defense allocation, providing more for defense than the BCA allows and less for non-defense.  As a result, the House and Senate have begun developing appropriations bills based on quite different allocations to their subcommittees.  On June 19, the House Appropriations Subcommittee approved an FY2014 appropriations bill for Transportation and HUD (T-HUD) that cuts or underfunds many HUD programs, including Section 8 Housing Choice Voucher renewal funds, HOME (cut by another 26% relative to FY2013), CDBG (cut by 44%) and Housing Counseling.  On June 25, the Senate Appropriations subcommittee marked up its HUD bill quite differently, providing level funding or modest increases to most – though not all – programs.  The National Low Income Housing Coalition (NLIHC) has posted a budget chart comparing the two proposals, as well as a summary of the House subcommittee bill.

 

HUD Data shows Rising Renter Affordability Problems in Massachusetts

The National Low Income Housing Coalition has compiled the most recent five-year American Community Survey data (2006-2010) on the renter cost burdens and the supply of affordable units available at various income levels by county and census place.  Overall, the data showed an increase in total renters and an increase in renters with cost burdens.  Massachusetts had an estimated 904,075 renter households on average during that period, including 555,600 (61%) low or moderate income households (incomes at or below 80% of the area median income (AMI) adjusted for household size).  Half of those low and moderate income households were extremely low income (280,335), another 148,000 had incomes between 31% and 50% of AMI, and just over 127,000 had incomes between 51% and 80% of AMI. 

Overall, an estimated 201,000+ renter households paid more than 50% of their income for housing costs, up by about 6,000 from the 2005-2009 estimates, including 149,339 extremely low-income, 43,400 very-low income households (31 to 50% of AMI)  and 8,889 households with incomes between 51% and 80% of AMI.  The data found there were about 130,000 rental units affordable and available to those extremely low income renters, for a shortfall of 151,000+ units.

 

National Mortgage Settlement Monitor Reports Compliance Problems at Many Big Banks

The monitor for the National Mortgage Settlement agreement, Joseph Smith, has found that major servicers are failing to fully comply with the mortgage servicing standards.   As detailed in a June 19th press release by the Office of Mortgage Settlement Oversight, recent tests of five of the nation's largest banks found that four  - including Bank of America, Citigroup, JP Morgan Chase and Wells Fargo -  failed at least one of the 29 metrics used to measure compliance. The servicers must implement plans to correct the problems and could be fined if the problems recur within six months.  Background information on the settlement, a summary of the recent finding and the reports for each servicer can be found on the Office of Mortgage Settlement Oversight website.

 

Recent Research and Reports

State of the Nation’s Housing 2013

On June 26, Harvard’s Joint Center on Housing Studies released its annual report on the State of the Nation’s Housing.  The report finds that while the housing market is recovering, affordability problems remain.  In addition, affordability problems for renters are rising, outpacing federal housing assistance resources.

 

New Study Finds Transit Oriented Development Benefits due More to Policies Unrelated to Transit

A recent study, Does TOD Need the T, summarized in an article on the Atlantic Cities, found that rail access plays a relatively small role in the lower rates of car ownership, auto community and frequency of grocery trips found among households near rail stations.  Instead, it found that housing type and tenure, local and sub-regional density, bus service, and particularly off- and on-street parking play a much greater role in reducing car use.  Given the high cost of rail, the author recommends that planners broaden their efforts to achieve transit oriented goals by incentivizing the development of mixed use housing, with more small units and more rental units and lower on- and off-street parking, in walkable locations with better bus service and higher sub-regional employment density.

 

HUD Study Finds Rental Housing Discrimination Continues, though in Less Blatant Forms

On June 11, the U.S. Department of Housing and Urban Development (HUD) released its most recent study of trends in discrimination against racial and ethnic minorities in rentals and home sales.  The study, using paired testers in 28 metropolitan areas, examined discrimination against blacks, Hispanics and Asians, and how it compared with findings in earlier HUD studies.  Overall, Housing Discrimination Against Racial and Ethnic Minorities 2012 found that while “well-qualified minority homeseekers” were just as likely to get an appointment and learn about at least one available housing unit as white homeseekers but were more likely to be told about and shown fewer homes and apartments. It found no particular difference in the incidence of discrimination among the metropolitan areas but did report differences among ethnic and racial groups and different levels of recent progress.  Overall, it found that black and Hispanic homeseekers were more likely to experience discrimination than Asian homeseekers.  It notes that while current forms of discrimination are less blatant, they still raise housing search costs for minority households and restrict housing choices.  Given the increased subtlety of discrimination, it recommends that local fair housing organizations make testing part of their fair housing enforcement strategy, rather than relying entirely on complaints.

 

New Paper Urges Inclusion of Affordable Housing Funding in Housing Finance Reform

On June 5, the Center for American Progress and the National Center of La Raza issued a white paper, Making the Mortgage Market Work for America’s Families, examining the significant influence of the secondary mortgage market and the Government Sponsored Enterprises (Fannie Mae and Freddie Mac) on the availability of single-family mortgages and multi-family financing, on liquidity, and in supporting market innovation and affordable housing goals.  To ensure these functions continue, it recommends that any housing finance reform proposal include creation of a Market Access Fund (MAF), financed through a small fee on securitized mortgages.  The Fund would support four activities: (1) making grants and loans to promote product innovation that would expand the market for sustainable homeownership and unsubsidized affordable rental properties; (2) providing credit enhancement for products that support sustainable homeownership and unsubsidized affordable rental housing, such as loans for energy retrofits, housing counseling and biweekly mortgage products; (3) capitalizing the Capital Magnet Fund authorized under HERA, and (4) capitalizing the National Housing Trust Fund. It also recommends requiring any successor secondary market entity (or entities) to develop a strategic plan that among other things that identifies market gaps and unmet needs and ensures compliance with fair housing laws and to require performance reports to regulators.