Deal Reached on Reconciliation Package (Inflation Reduction Act of 2022)
Senator Schumer and Senator Manchin reached an agreement on a reconciliation package that will address climate change, taxes, health care and inflation. The Inflation Reduction Act of 2022 comes after Senator Manchin reportedly withdrew support for all priorities besides lowering prescription drug prices and extending insurance subsidies.
The bill released this week invests approximately $300 billion in deficit reduction and $369.75 billion in energy security and climate change programs over the next 10 years. It also extends Affordable Care Act expansions passed during the pandemic and allows Medicare to negotiate lower drug costs directly with pharmaceutical companies.
The framework includes provisions to ensure corporations and the wealthiest Americans can’t use loopholes to avoid paying taxes. There are no new taxes on families making $400,000 or less and it does not include any new taxes on small businesses.
More details are available in this one page bill summary.
The Inflation Reduction Act includes $1 billion for affordable housing energy upgrades, but excludes public housing as an eligible use of funds. This is significantly reduced from investments in Build Back Better, which included more than $150 billion in much-needed housing investments.
Although timing is tight with Congress planning to adjourn for August recess in the next two weeks, Senator Schumer plans to start votes on the bill next week. Democrats need yes votes from all 50 Senators to pass the reconciliation bill.
New Treasury Guidance Released for SLF Recovery Funds
The Treasury Department released new guidance that removes barriers to using State and Local Fiscal Recovery Funds (SLFRF) for housing financing. This guidance addresses a final Treasury rule published in January that inadvertently prevented recovery funds from being used for LIHTC loans with maturities beyond 2026.
The new guidance incorporates measures from the LIFELINE Act into Treasury policy. Recovery funds can now be used to fund the full principal amount of loans that finance long-term affordable housing investment, including for loans with maturities beyond 2026.
The list of presumptively eligible uses of funds was also expanded to include housing that meets core requirements of HOME, the National Housing Trust Fund, the Housing Credit, public housing capital funds, Section 202, Section 811, project-based rental assistance, and USDA multifamily preservation.
North Carolina was one of approximately 20 states that allocated a portion of SLFRF to affordable housing by appropriating $170M to the Workforce Housing Loan Program. Due to the Treasury barrier, these funds were not able to be deployed and the General Assembly swapped out the recovery funds with state funds. The General Assembly plans to return in November to reallocate the unspent State and Local Fiscal Recovery Funds, which can now be used for LIHTC under Treasury’s new guidance.
Further details are available in the Coalition’s analysis.
HUD Budget Bill Passed in the House
The House is hoping to vote on all 12 of its 2023 budget bills before August recess. As of the beginning of the week, lawmakers had passed six of the 12, including the Transportation, Housing and Urban Development budget. The T-HUD bill would substantially increase federal investments in housing.
Although the House is moving forward on its version of next year’s budget bills, the chamber’s spending levels are not set in stone and must be conferenced with the Senate’s versions. House and Senate appropriators have not reached an agreement yet on funding totals for the FY2023 budget, so a continuing resolution will likely still be needed in October.
Affordable Housing Hearing Held by Senate Finance Committee
Affordable housing experts, advocates, and stakeholders testified at a Senate Finance Committee hearing on the impact of tax incentives on affordable housing last week. The two-hour committee hearing covered topics like the housing supply shortage, increased costs to build new or rehabilitating old homes, the Low Income Housing Tax Credit (LIHTC), and rising rent and home prices. A transcript is available below the video of the hearing.
NC Budget Signed Into Law
After the NC General Assembly passed the 2023 budget earlier this month, Governor Cooper signed it into law citing support for education and workforce spending, as well as ongoing negotiations about Medicaid expansion. The budget was passed with bipartisan votes in the NC General Assembly and includes increased funding for affordable housing.
The NC General Assembly is set to return for a brief work session this week for administrative meetings, but lawmakers won’t be holding votes. The quick meetings signal that no agreement has been reached yet on legislation that would expand Medicaid.
Lawmakers are planning to return again in the fall, likely after the November election, to take up negotiations on Medicaid expansion and reallocate State and Local Fiscal Recovery Funds that were swapped out for state funds in the budget.
Zoning Changes Considered by City of Charlotte
The City of Charlotte is considering zoning changes to its Unified Development Ordinance (UDO) that would allow duplexes and triplexes to be built in areas currently zoned as single family neighborhoods. Quadruplexes would also be allowed on arterial streets in these zoning districts if there is an affordable housing unit. The city held a public hearing on the second draft of the UDO last week, where there was both support and opposition to the plan. A draft is scheduled to be released on August 15.
Housing Bond Planned for Greensboro
Greensboro voters will see five bonds on their ballots this November, including $35 million in funding for affordable housing. The majority of candidates running for Greensboro City Council say the housing bond is the most important.
Higher Rates of Evictions Predicted in Central NC
As federal pandemic relief money runs out, evictions across central North Carolina are beginning to increase. Housing advocates say relief money is a key element in preventing evictions and there is concern that evictions will soon return to pre-pandemic rates.
Relief Funds Allocated to Housing Projects in Buncombe
Buncombe County Commissioners approved more than $18 million in American Rescue Plan funding last week. The funds were distributed across 24 projects by local organizations and nonprofits, including Asheville Area Habitat for Humanity and a domestic violence shelter.
Charlotte Reworking Enforcement Piece of Housing Discrimination Policy
While the City of Charlotte passed a policy banning source of income discrimination in city-funded properties, the enforcement of the new measure is being reworked. The council is expected to vote on the policy’s enforcement at its August meeting. You can read more about the new policy in the Coalition’s analysis.
Durham Housing Building Named for Medical Pioneer
Durham Housing Authority officials will name a new downtown affordable housing community for Joyce Thorpe Nichols, the first woman and the first Black woman to graduate from Duke University’s physician assistant (PA) program. She was the first African American female PA in the country. She once lived in the city’s oldest public housing complex and served on the board of the Durham Housing Authority’s (DHA) Board of Commissioners. The planned four-story building is expected to be completed by spring of next year and will serve seniors with incomes between 30-80% of the area median income.
Durham Emergency Shelter Reached Capacity
Every bed is currently full at the Durham Rescue Mission’s emergency housing shelter for women and children. Many people staying at the shelter are working on a full-time basis, but still cannot find an affordable place to live.
First Affordable Housing Plan Launched in Cornelius
The Town of Cornelius created its first Affordable Housing Plan, aimed at helping town employees afford to live where they work. According to the town’s new plan, 90 percent of the people who work in the town do not live there. Leaders think by providing more affordable housing options, they’ll improve traffic, the economy, and the overall culture of the town.
Transit Plans Raise Gentrification Concerns from Raleigh Residents
As planning for Wake County’s new Bus Rapid Transit system continues, Raleigh residents say a rezoning proposal with density bonuses in transit corridors won’t be enough to combat gentrification.
Reports, Events, Resources
NLIHC – Resource: HoUSed August Recess Toolkit
Harvard Joint Center for Housing Studies –
- Affordability Gaps Widened For Renters In The First Year Of The Pandemic
- Report: Nowhere To Live: Profits, Disinvestment, And The American Housing Crisis
- Report: Funding And Delivery Models Of Resident Services In Affordable Housing
- Record-High Rent Is Still More Affordable Than Buying a Starter Home
- Is the Key to the Affordable Housing Crisis More Capitalism?
- Video: Is Affordable Housing Without Gentrification Possible?
- Home-Sale Cancellations Jumped in June As Buyers Backed Away
The Real Deal – The great AMI debate: Are the critics clueless?
Associated Press – Some schools build affordable housing to retain teachers
Smoky Mountain Times – National study reveals depth of housing underproduction
Spectrum News 1 – Increasing rents and the struggle for student housing
Wilmington Biz – Accounting For Wilmington’s Rising Rents
City of Charlotte – New Policy Protects People With Vouchers Seeking City-Supported Housing