Housing Briefs - November 3, 2011
State Updates
Patrick-Murray Administration and Legislature Support Supplemental Budget to Address High Demand for Emergency Shelter and Short-Term Rental Assistance
Since launching reforms to change the Commonwealth’s response to homelessness, over 2,500 families have sought access to Emergency Assistance or HomeBase, the Commonwealth’s new alternative to shelter, each month. Approximately 38% of these families have been deemed eligible to receive benefits. Neither program is budgeted to meet that level of demand.
Consequently, the Administration requested $21 million in supplemental funds for Emergency Assistance and $18 million for HomeBase, and proposed to alter eligibility for these resources. The Legislature has approved a supplemental budget to maintain access to Emergency Assistance, but eliminate the option for homeless families that apply for assistance after October 28th to receive rental assistance through HomeBase. The supplemental budget text calls on the Legislature and Administration to work together to craft programmatic changes to ensure the continued and sustainable operation of the state’s emergency assistance and short term housing assistance programs and release recommendations by December 9th.
The Senate version of the supplemental budget also creates a trust fund and funds it with $10,000,000 for LIHEAP fuel assistance as the winter begins and the state awaits funding from federal HHS. The fund would be repaid once federal funds arrive. This and a handful of other differences will have to be resolved before the supplemental budget bill is enacted and sent to the Governor for approval.
Senate President Murray Addresses CHAPA Annual Dinner
On Tuesday, October 25th, Senate President Therese Murray offered remarks on a range of housing and homelessness issues at CHAPA’s 44th Annual Dinner, attended by more than 1,300 people. The Senate President stressed the importance of both a strong housing market and an ample supply of affordable housing, highlighting several legislative accomplishments to help meet both objectives. She also indicated the need to reform land use and zoning laws and commented on family homelessness reforms, noting the need to take a data-driven approach to this challenging issue.
We appreciate Senate President Murray’s commitment to affordable housing and look forward to continuing to work with her to address the Commonwealth’s affordable housing challenges.
Governor Patrick Approves Significant Increase in State Low Income Housing Tax Credit Allocations
Last week, Governor Patrick signed legislation to double the amount of state Low Income Housing Tax Credits available for 2013 and 2014 from $10 million to $20 million. We are very appreciative of the additional resources to help fund affordable rental housing developments and want to thank Governor Patrick and the Legislature for their dedication to make housing more affordable.
Committee on Revenue Holds Hearing on Tax Credit Expansions that Benefit Community Development
Chairman Jay Kaufman, Chairwoman Gale Candaras and other members of the Committee on Revenue heard legislation to create or expand tax credits, including MACDC’s top priority, the Community Development Partnership Act and legislation to expand the historic tax credit. As they study these proposals, the Committee Chairs are also taking part in a Commission studying the Tax Expenditure Budget, the document that tracks all tax incentives. CHAPA has submitted testimony in support of the historic tax credit and the Community Development Partnership Act and is monitoring the work of the Tax Expenditure Budget Commission.
Housing Committee Hears Testimony on Importance of Affordable Housing Law, Potential Reforms
Last month, advocates for affordable housing submitted positive testimony before a sparsely attended hearing on the Comprehensive Permit Law – Ch. 40B. Most of the testimony related to the importance of maintaining a strong law to produce affordable housing. The only legislative proposal to attract in-person testimony was to count mobile homes as affordable on the subsidized housing inventory. Click here to access CHAPA’s testimony and click here to access an updated fact sheet.
Greater Boston Housing Report Card Released
On October 25, Northeastern University’s Dukakis Center for Urban and Regional Policy, The Boston Foundation, CHAPA, and The Warren Group issued the annual Greater Boston Housing Report Card, examining trends in the housing market.
It finds that the housing market in Massachusetts and in Greater Boston has fared better than many other states and that the Commonwealth’s economic growth had returned to its pre-recession level by Spring 2011. However, it notes that there is great uncertainty regarding the state of the economy going forward locally and nationally. It notes that new housing construction activity is at record low levels, while rents and housing affordability problems for renters are rising and federal support for housing programs appears likely to fall.
In addition, on October 26, CHAPA posted an update on state housing trends, including income and poverty trends, home price and rent trends and housing needs data, on its website.
Patrick-Murray Administration Announces Affordable Rental Housing Development Awards
On October 17th, the Patrick-Murray Administration announced $64.5 million in funding commitments to build and preserve 1,071 rental housing units, 977 of which will be affordable to households with low or moderate incomes. Developments are located in Acton, Arlington, Beverly, Boston, Cambridge, Chicopee, Danvers, Gloucester, Lee, Lunenburg, Mashpee, New Bedford, Somerville, Springfield and Worcester.
Title Issues Remain for Some Foreclosed Properties After Supreme Judicial Court Decision
In October, the Massachusetts Supreme Judicial Court (SJC) released a much-anticipated decision related to acquisition of foreclosed properties: Bevilacqua v Rodriguez.
The decision addresses the issue of whether a bona fide purchaser of a property that was subject to an improperly executed foreclosure by a lender and invalid under the SJC’s Ibanez decision can bring an action in Land Court to establish clear title to the property.
The SJC ruled that Bevilacqua did not own the property because the faulty foreclosure was void and therefore the subsequent transfer to Bevilacqua was void as well. The court left open the possibility that Bevilacqua could reestablish the proper chain of title by properly conducting a new foreclosure. However, the SJC did not provide clear guidance on this remedy, and it will be up to subsequent legal proceedings to offer clearer guidance to purchasers of improperly foreclosed properties.
Legislature Working to Resolve Whether Gaming Bill Includes Funding for the Community Preservation Act
A Conference Committee has been appointed to negotiate House and Senate versions of legislation on expanded gaming in the Commonwealth. The House chose to include 2% of licensing fees and 5% of ongoing tax revenues to the Community Preservation Trust Fund to fund CPA projects, but the Senate rejected Senator DiDomenico’s amendment to fund CPA projects with gaming revenues. This is one of several issues the Conferees will need to decide in the coming weeks.
If included, this will increase funding for CPA projects significantly, with the House projecting a $15 million boost to the program. Legislative leaders have indicated a desire to finalize this legislation prior to the Legislature recessing for the holidays on November 16th.
Housing Committee Advances Legislation
On November 1st, the Housing Committee offered a favorable report to four bills:
1) H. 363, filed by Representative Honan, directs DHCD in coordination with division of banks and other agencies to develop an apprentice training program to rehab foreclosed properties;
2) H. 364, also filed by Representative Honan, requires DHCD to submit an annual report containing various data, including the number of annual housing starts needed to meet the needs of the Commonwealth;
3) H. 367, filed by Representative Honan, exempts child and foster care payments in excess of $480 per child for the purposes of computing rent and determining eligibility for admission/occupancy in state aided public housing;
4) S. 595, filed by Senator Hart, which requires DHCD to give priority to persons granted a stay of judgment and execution when allocating state public housing resources.
CHAPA Gearing Up for Welcome Home Massachusetts Campaign
In follow-up to last year’s successful No on 2 campaign (defeat of the repeal of Chapter 40B), in early 2012, CHAPA will be launching a new Welcome Home educational campaign to advance affordable housing at the local level throughout Massachusetts.
The planning for this campaign has included: holding 14 community meetings across the state attended by approximately 350 people; developing a comprehensive online guide on local housing strategies with the Massachusetts Housing Partnership; launching a new web site to provide timely information and support to grassroots volunteers and municipal officials around the state; and providing new communications tools to gain greater local support for affordable housing. If you are interested in learning more about the initiative, please contact Carol Marine at cmarine@chapa.org
Federal Updates
Senate Approves Deep Cuts to HUD in FY2012 “Minibus” Bill
On November 1st, the Senate approved (69 to 30) a FY2012 “minibus” bill that combines three appropriations bills, including the Transportation, Housing and Urban Development (T-HUD). The minibus (H.R. 2112) is almost identical to the T-HUD bill approved by the Senate Appropriations Committee in September, providing the same funding levels (except for a small increase to Fair Housing), rescissions, and administrative language (including authorization for Section 8 reforms and the Rental Assistance Demonstration). Overall, the bill reduces HUD’s budget by 10% ($4.1 billion), twice the reduction from FY2011 discretionary non-security spending required by the Budget Control Act passed in August. The National Low Income Housing Coalition has posted a detailed budget chart on its website.
CHAPA has sent a letter to the Massachusetts Congressional delegation urging them to support changes in the FY2012 HUD budget as negotiations move forward, including fully funding Section 8 housing choice voucher and project-based contracts renewals, funding the Housing Counseling Program, and approving House-proposed funding levels where better, including CDBG and HOME.
The Senate “minibus” also restores the old high-cost loan limits for loans purchased by Fannie Mae and Freddie Mac. It would keep the old limits in effect through December 31, 2013 and adds a new “premium loan fee” equal to 15 basis points on the unpaid principal balance. This would return upper limit to $729,750 (it dropped to $625,500 on October 1).
House Subcommittee Issues Revised Section 8 Savings Act (SESA) Draft
On October 6, the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity released a second discussion draft of its proposed Section 8 Savings Act (SESA) to reform the voucher program. It held a hearing on the proposal on October 13.
As reported by the National Low Income Housing Coalition (NLIHC), the second draft includes a new provision that would allow certain public housing agencies (PHAs) and voucher landlords to increase minimum rents, currently capped at $50 a month, to the greater of $75 or 12% of fair market rent (FMR). NLIHC has posted a section-by-section summary of the new draft on its website.
FHFA Announces Changes to HARP Program to Help Underwater Owners Refinance
On Oct. 24, the Federal Housing Finance Agency (FHFA), in conjunction with Freddie Mac and Fannie Mae, announced changes to the Home Affordable Refinance Program (HARP) to help more borrowers reduce their housing costs or loan balances by refinancing their ‘underwater’ mortgages.
Eligibility is limited to borrowers with a mortgage owned or guaranteed by Fannie Mae or Freddie Mac (purchased on or before May 31, 2009) who have been current on their mortgage payments for at least six months with no more than one late payment in the prior year. Applications are expected to become available in December or later, depending on the lender.
The changes expand eligibility and reduce refinancing costs by as much as half by eliminating the current 125% loan to value (LTV) ceiling for fixed-rate refinances, drops the requirement for a new appraisal if an automated model is available, and eliminates certain credit checks. Fees will also be reduced, especially for those who refinance into shorter-term mortgages, since a shorter term will reduce the loan balance more quickly and could move borrowers out of underwater status more quickly.
Based on a review of outstanding GSE mortgages, economist Mark Zandi estimates that the changes could lead to an additional 1.6 million refinances between now and the end of 2013. However, he cautions that reaching this number will require aggressive outreach to borrowers by loan servicers and the GSEs.
White House Issues Report on “Creating Pathways to Opportunity”
On October 17, the Obama Administration issued a report, “Creating Pathways to Opportunity” that reviews the steps it has taken to improve the economic situation of American households through tax policy, and federal investments in education, job training, foreclosure prevention and infrastructure programs and detailing the rationale for its proposed American Jobs Act.
Recent Research
Report Finds Massachusetts First in Nation in Energy Efficiency
In an October 2011 report, the American Council for an Energy-Efficient Economy rated Massachusetts first in the nation in energy efficiency. The report compared states across six categories to determine rankings for promoting energy efficiency. Massachusetts scored well in all categories, including state Building Code requirements, alignment of transportation and land use policy, and energy efficiency incentives.
Policy Brief Calls for REO “Rehab to Rent” Program to Revive Housing Market
The Center for American Progress (CAP) issued a policy brief in October examining the potential costs and benefits of a federal program to put vacant “real estate owned” (REO) properties held by lenders as a result of foreclosure back into use. It argues against a recent proposal to provide private investors with up to $10 billion special tax incentives to undertake this, noting the economics are sufficiently rewarding as is. Instead, it recommends that federal funds be used to provide technical assistance and direct funding to help finance mission-driven non-profits take on rehab-to-rent programs, in exchange for some affordability restrictions.
Brookings Study Finds Growing Suburbanization of the Housing Choice Voucher Program
A new study by Brookings, The Suburbanization of Housing Choice Voucher Recipients, has found that metropolitan area voucher holders increasingly live in suburban communities. Looking at voucher holders in the 100 largest U.S metropolitan areas, it found that almost half (49.4%) lived in suburban areas in 2008, up from 47.3% in 2000.
White HCV recipients were still more suburbanized than their black or Latino counterparts, though the gap shrunk. However, about half of the suburban HCV recipients in 2008 lived in low-income suburbs and HCV recipients were more likely than the overall suburban population and poor suburban residents to live in low-income suburbs with inferior access to jobs. The study outlines steps policymakers can take to give HCV recipients access to a broader range of communities, such as creating incentives for suburbs to create multifamily housing.
NAR Community Preference Survey Finds Support for Smart Growth
A 2011 survey by the National Association of Realtors (NAR) on the types of places people would like to live found that “more people want to live in a neighborhood characterized by smart growth than one characterized by sprawl.” It also found that while a majority of those surveyed ranked space and privacy as their top priorities, many will consider smaller houses on smaller lots to shorten their commute. They also cite walkability as a major consideration in deciding where to live. Preferences varied by household characteristics, including age, wealth and household composition.