Federal Update
Tax Extenders Package Released – Includes LIHTC Provisions
Last night, House Ways and Means Committee Chairman Kevin Brady (R-TX) released a tax package. The bill, which is expected to pass the House later this week, would renew expired tax provisions, make technical fixes to the Tax Cuts and Jobs Act, provide incentives for retirement savings, and offer tax relief for natural disaster victims.The tax package also includes a number of provisions related to the LIHTC including the clarification of the exemption for veterans from the LIHTC general public use rule and aligns the multifamily housing bond program general public use requirement with the LIHTC general public use requirement.
Senators Hatch and Kaine Introduce Bipartisan Fair Housing Improvement Act
Senator Orrin Hatch (R-UT) and Senator Tim Kaine (D-VA) have filed the The Fair Housing Improvement Act of 2018 (S.3612). The bill amends the anti-discrimination provisions of the Fair Housing Act to make it unlawful to discriminate against an individual based on their source of income or veteran status in real estate-related transactions. Recent research by the Urban Institute has shown that voucher refusal rates are significantly higher in areas that have not enacted local protections.
Modernizing the Community Reinvestment Act
In August, the OCC released an advance notice of proposed rulemaking (ANPR) asking the public to submit comments on possible regulatory changes to the Community Reinvestment Act (CRA) by November 19. CRA was enacted in 1977 largely as a response to “redlining,” the discriminatory practice in which banks denied loans to residents living in neighborhoods that they deemed hazardous, often solely based on the presence of large minority populations. The law requires financial institutions to meet the credit needs of the communities in which they operate, including low- and moderate-income (LMI) communities. CRA has produced substantial benefits for these communities and their residents, particularly by helping drive financial institution investments in nonprofit organizations, LIHTC properties, Community Development Financial Institutions (CDFI), and other critical activities benefiting LMI communities and residents. The OCC is now reviewing the more than 1,300 public comment letters.
HUD releases 2019 DDAs and QCTs
HUD has released its 2019 lists of designated Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs). A Housing Credit development located in a DDA or a QCT is eligible for a 30 percent increase in its tax credit basis. To be designated a QCT, an area must have at least 50 percent of households with incomes below 60 percent of the Area Median Gross Income (AMGI) or have a poverty rate of at least 25 percent. To qualify as a DDA, an area must have high land, construction, and utility costs relative to AMGI.
State Update
Special Session Begins With Another Disaster Recovery Bill
On Tuesday, the North Carolina General Assembly gaveled into a special session called primarily to pass enabling legislation for the constitutional amendments approved by voters earlier this month. On the first day of the session, the Senate filed the Hurricane Florence Supplemental Act (S.823). The bill allocates an additional $299,800,000 of the $849,430,477 set aside by lawmakers in a previous special session for disaster recovery, mostly for the state’s agricultural needs. The bill passed the Senate yesterday and should pass the House later this afternoon.
The bill included $5 million for the Back@Home North Carolina program run through the Department of Health and Human Services. This program is targeted towards families experiencing homelessness in disaster impacted areas. However, the bill included no new money for housing production.
$10 million was allocated to the North Carolina Housing Trust Fund for new housing production in the initial disaster recovery bill signed into law by the Governor on October 16. This was well short of the $50 million requested by the Coalition. There remains an additional $94.7 million left for the General Assembly to allocate.
Reports
This paper emphasizes the need for more affordable rental housing in rural communities, highlighting that in 2014, 21 percent of rural renters (more than one million households) spent more than half of their incomes on rent. It also notes that the Low Income Housing Tax Credit (Housing Credit) has been an important and resilient tool for the development of and preservation of affordable housing in rural communities. The ACTION Campaign has previously released a fact sheet that highlights the Housing Credit’s benefits for rural communities, showing that the Housing Credit has been used to develop and preserve more than 270,000 homes across 7,600 developments in rural communities nationwide.
Brookings Institution: The devaluation of assets in black neighborhoods: The case of residential property
Majority-black neighborhoods hold $609 billion in owner-occupied housing assets and are home to approximately 10,000 public schools and over 3 million businesses. We find that in the average U.S. metropolitan area, homes in neighborhoods where the share of the population is 50 percent black are valued at roughly half the price as homes in neighborhoods with no black residents
Freddie Mac Multifamily:
- Mixed-Income Housing in Areas of Concentrated Poverty
- Affordable Housing in High Opportunity Areas
- Opportunity Incentives in LIHTC Qualified Allocation Plans
As part of its Duty to Serve plan, Freddie Mac Multifamily is releasing a series of reports to highlight the opportunities and challenges to providing affordable multifamily housing in underserved markets across the country.
