Policy News from the Administration

HAC CEO Statement on Biden-Harris Housing Supply Action Plan

by David Lipsetz

The Biden-Harris Administration released a Housing Supply Action Plan on May 16 that can bring the cost of housing back in line with families’ incomes. This is particularly important in small towns where incomes remain stubbornly low, while the cost of buying or renting a place to live is soaring. The Housing Assistance Council (HAC) applauds the Administration for designing and including several provisions specifically with rural markets in mind.

The Plan includes administrative and legislative proposals to improve existing housing finance mechanisms. It establishes new housing production programs. It calls for changes to the Low-Income Housing Tax Credit that will attract private investment in affordable rental housing. It provides grants—such as the HOME Investment Partnerships Program—to states, cities and towns to do what locals know will be best for their local housing market.  It calls on Congress to establish a Housing Supply Fund and incentivize zoning reform to accelerate the building of more housing across the Nation.

Critically, the Administration proposes reforms that prioritize homeowners living in the homes that they own. This is a welcome change for rural Americans who need high-quality affordable homes in which to live far more than they need high-priced vacation homes. For rental housing, the Administration focuses investment on small-scale 2–4-unit buildings instead of high-rise apartment complexes. It calls for new rentals where few are being built and recognizes the urgency of preserving affordable rentals that already exist. And for the first time in decades, an Administration released a housing plan that calls for improved financing for manufactured housing, an important resource in rural places.

The shortage of affordable housing in rural America is a serious issue. Rental units are being lost at an alarming rate. Single-family homes are significantly older than elsewhere in the Nation. The Administration’s framework recognizes the unique need for affordable housing and proposes solutions built to work in small town and rural America.

Many of the Administration’s actions just announced reflect HAC’s policy priorities. But it remains critical that these actions be complemented by initiatives to address another essential factor in improving housing for rural Americans—building the capacity of local organizations to improve their own communities. Because rural places often have small and part-time local governments, they often find it particularly difficult to navigate the complexities of federal programs and modern housing finance, and to compete for government resources. Philanthropy has not stepped in to address this inequity built into our systems, instead concentrating its resources in already-prosperous high-cost regions. Targeted capacity building through federal investments in training and technical assistance is how most local organizations build skills, tap information, and gain the wherewithal to do what they know needs to be done.

Rural communities hold vast potential to drive economic growth and improve the quality of life for all Americans. Access to quality, affordable housing is key to jumpstarting that potential. Building and preserving homes creates jobs, improves education and health outcomes, and provides much-needed financial and physical stability to families in need. We look forward to working with the Biden-Harris Administration and Congress to ensure that these initiatives move us closer to the day when every American has access to a safe, decent, and affordable place to call home.

Policy News from Congress

HAC Supports a Variety of Rural and Tribal Housing Funding Priorities

HAC’s Fiscal Year 2023 Appropriations Priorities

As the Fiscal Year (FY) 2023 appropriations process gets underway, HAC is supporting a variety of rural and tribal housing funding priorities. This year, we saw the most robust Administration’s Budget for rural housing in recent memory, and we are hopeful that this will contribute to some momentum in the appropriations process. Among others, HAC supports the following rural housing funding priorities. (This list is not exhaustive and for Rural Housing Service programs not specifically mentioned, HAC supports the funding levels in the Administration’s FY23 Budget.)

USDA Multifamily Preservation:
  • $1 billion for USDA’s Multifamily Housing Preservation & Revitalization Demonstration (MPR) program
    • The cost to preserve the current USDA rental portfolio over the next 30 years is estimated to be over $30 billion. MPR is USDA’s most effective, and many times only feasible preservation funding tool. Applications have, however, been closed for four years as the Agency works through its waiting list, which is projected to take another four years.
  • $200 million for USDA Section 515, including new construction
    • This funding would allow for new construction to resume and is expected to be accompanied by a commensurate increase in Section 521 rental assistance to cover new units.
  • $350 million above the level needed for renewals to extend USDA Section 521 rental assistance to currently unassisted households
    • This funding would allow for the extension of rental assistance to cover all currently unassisted units. An estimated 67,000 households in USDA rental housing do not receive rental assistance from USDA, HUD or state sources (not including those that were covered by the American Rescue Plan). With an average annual income of only $13,500, these households are uniformly low income and often very or extremely low income. The vast majority also pay more than 30% of their income for rent. Providing this assistance will not only help families in need, but also shore up the finances of many developments, encouraging preservation.
  • $2 million for USDA Multifamily Housing Transfer & Prepayment Technical Assistance Grants
    • HAC is seeking to ensure that these funds support both transformational preservation research and the provision of technical assistance to improve transaction-level preservation deal flow.
  • $3 million for USDA’s Multifamily Housing Preservation Revolving Loan Fund Demonstration Program (PRLF)
    • PRLF was funded through appropriations for several years between 2005 and 2011 and provided loan capital to private non-profit organizations and state and local housing finance agencies to provide revolving loans for preservation.
Capacity Building:
  • $12 million for the Rural Community Development Initiative at USDA
    • The Rural Community Development Initiative (RCDI) is the sole capacity building resource provided through USDA’s Rural Development, and facilitates community development efforts in rural areas. Grants are competitively awarded to nonprofit housing and community development organizations, low-income rural communities and federally recognized tribes in order to support housing, community facilities, and economic development projects in rural areas.
  • $10 million for the Rural Capacity Building Program at HUD
    • The Rural Capacity Building Program (RCB) is a powerful and flexible program funded by HUD to build capacity of nonprofits and tribes to undertake affordable housing and community development activities in rural areas. Participating organizations are offered a suite of services for a comprehensive, customized approach of technical assistance, training, information products and resources, and low-cost rural housing development loans.
Rural & Tribal Homeownership:
  • $20 million for the Self-Help Homeownership Opportunity Program at HUD
    • Created in 1996, the Self-Help Homeownership Opportunity Program (SHOP) is a small but unique program that helps low-income families achieve homeownership through sweat equity. Competitively awarded SHOP funds from HUD go to a network of local nonprofits, distributed via intermediaries. SHOP funds can be used to acquire land, purchase foreclosed or abandoned properties, and improve the infrastructure of homes for lower-income homeowners. Often these are some of the most difficult items for local nonprofits to finance. Families invest a minimum of 100 hours of sweat equity into the construction of their homes, but many families invest much more — often in excess of 500 hours.
  • $50 million for the Section 502 Single Family Housing Direct Loan Relending Program for Native Americans
    • In 2018, the USDA and two Native community development financial institutions (Native CDFIs) in South Dakota implemented a successful $2 million demonstration which sought to improve the deployment rate of the 502 direct program in Native communities in South Dakota. The pilot made Native CDFIs eligible borrowers under the 502 direct loan program and enabled them to relend to qualified families for the construction, acquisition, and rehabilitation of affordable housing on trust land. Through this demonstration, the two Native CDFIs in partnership with USDA made nearly double the number of loans on these two reservations than USDA deployed on its own on the same two reservations during the previous ten years. The President’s FY 2023 Budget request includes funding for the continuation and expansion of the Native American 502 home loan relending program as part of the existing USDA 502 single family housing direct loan program.
Policy News from the Administration

Budget Requests Increases in Most Rural Housing Programs

The Biden Administration’s budget for fiscal year 2023 proposes funding increases for almost every U.S. Department of Agriculture rural housing program, along with some important program changes for preservation of aging rental housing.

The March 28 budget release is only the first step in the process of developing federal appropriations for the fiscal year that begins on October 1, 2022. HAC held a webinar to review the budget’s contents and what to expect over the coming months; view the slides and recording here.

— HAC’s analysis of the HUD portion of the budget is available here.  —

Rental Housing

The USDA budget proposes to quadruple Section 515 rental housing from $50 million in FY22 to $200 million in FY23, with the funds to be used for preserving existing Section 515 properties. The Multifamily Preservation and Revitalization program, which finances efforts to upgrade and maintain aging units constructed with Section 515 financing or the Section 514/516 farmworker housing program, would jump from $34 million this year to $75 million in FY23.

Farmworker housing loans and grants would almost double, with $6 million in Section 521 Rental Assistance set aside for new Section 514/516 units. The Section 538 loan guarantee program would see a large increase as well. (Details are provided in the table below.)

The $1.564 billion requested for Section 521 Rental Assistance renewals “will enable 272,000 existing contracts to be renewed, including making permanent the approximately 27,000 units that were brought into the program by the American Rescue Plan Act supplemental funding,” according to USDA’s budget explanation. The same document states, however, that RA assisted 284,194 tenant households in FY21.

The budget also asks Congress to “decouple” Rental Assistance from Section 515. Currently the programs are linked: RA cannot be made available to a property unless it has a USDA Section 515 or 514 loan. Separating them, so that RA could be offered after a property pays off its USDA mortgage, would help keep properties affordable for their tenants.

To protect tenants whose properties leave the USDA portfolio without decoupling, the administration proposes to provide $20 million in HUD Tenant Protection Vouchers. Based on the assumption that decoupling and the availability of HUD vouchers will eliminate the need for new USDA vouchers, the budget requests only enough Section 542 funding to renew existing assistance.

Homeownership

The budget proposes to increase funding for all USDA’s homeownership programs. It would also provide $20.8 million to expand the Native American Section 502 Relending pilot program. The pilot has enabled Native Community Development Financial Institutions to assist Native American homebuyers in tribal communities of South Dakota and North Dakota.

Rural Partnership Program

Pursuing an idea proposed in the Build Back Better Act, which has not been passed by Congress, the budget proposes $39 million for the Rural Partnership Program. In a statement about the budget, Agriculture Secretary Tom Vilsack described it as “a renewed and expanded initiative to leverage USDA’s extensive network of county-based offices to help people in high poverty counties, including energy communities.”

Placemaking

The budget would provide $3 million for the Rural Placemaking Innovation Challenge “to provide planning support, technical assistance, and training to foster placemaking activities in rural communities.” [NOTE: This sentence was corrected on March 29 to say $3 million. When this post was published, it stated incorrectly that the amount was $3 billion.]

Energy Efficiency and Climate Resilience

All USDA housing production would be required to “improve energy or water efficiency, indoor air quality, or sustainability improvements, implement low-emission technologies, materials, or processes, including zero-emission electricity generation, energy storage, building electrification, or electric car charging station installations; or address climate resilience of multifamily properties.”

USDA Rural Dev. Prog.

(dollars in millions)

FY21 Final Approp. Amer. Rescue Plan Act FY22 Admin. Budget FY22 Final Approp. FY23 Budget
502 Single Fam. Direct $1,000 $656.6 $1,500 $1,250 $1,500
502 Single Family Guar. 24,000 30,000 30,000 30,000
504 VLI Repair Loans 28 18.3 28 28 50
504 VLI Repair Grants 30 30 32 45
515 Rental Hsg. Direct Lns. 40 40 50 200
514 Farm Labor Hsg. Lns. 28 28 28 50
516 Farm Labor Hsg. Grts. 10 10 10 18
521 Rental Assistance 1,410 100 1,450 1,450 1,564
523 Self-Help TA 31 32 32 40
533 Hsg. Prsrv. Grants 15 15 16 30
538 Rental Hsg. Guar. 230 230 250 400
Rental Prsrv. Demo. (MPR) 28 32 34 75
542 Rural Hsg. Vouchers 40 45 45 38
Rental Prsrv. TA 2 0 2 0
Rural Cmnty. Dev’t Init. 6 6 6 12
Community Facil. Loans 2,800 2,800 2,800 2,800
Community Facil. Grants 32 32 40 52
      Tribal Colleges CF Grts 5 10 10 10
Community Facil. Guarantees 500 500 650 500

 

 

HAC Names Jonathan Harwitz Director of Policy

Housing Assistance Council Names Jonathan Harwitz Director of Policy

Contact: Dan Stern
(202) 842-8600
dan@ruralhome.org

Housing Assistance Council Names Jonathan Harwitz Director of Policy

Jonathan will manage HAC’s policy initiatives.

Washington, DC, March 1, 2022 – The Housing Assistance Council (HAC) is pleased to announce the hiring of Jonathan Harwitz as HAC’s new Director of Policy. He brings years of experience working with policymakers on affordable housing issues. Jonathan will spearhead and expand HAC’s place as the national source for independent, non-partisan policy solutions for rural housing and community development.

Jonathan joins HAC from his role as Director of Housing Community Development and Insurance Policy for the House Financial Services Committee.  Prior to that he served as Managing Director of Federal Policy and Government Affairs at the Low Income Investment Fund, a large national Community Development Financial Institution.  Earlier in his career, Jonathan served as: Deputy Chief of Staff for the US Department of Housing and Urban Development; Counsel to the Housing and Community Opportunity Subcommittee of the House Financial Services Committee; Professional Staff to the Housing and Transportation Subcommittee of the Senate Appropriations Committee; and in various policy-related positions at the Corporation for Supportive Housing. Prior to entering the field of federal policy, he clerked for two federal District Court judges and was a lawyer in private practice.

Jonathan was born and raised in Buffalo, NY. He earned a Bachelor’s degree with honors from Yale College, and a JD from Harvard Law School. He currently resides near Washington, DC with his wife and kids.

“Federal policy has an important and lasting impact on rural places,” said HAC CEO David Lipsetz. “We are incredibly excited to have Jonathan join the HAC team and help us make the case for equitable investment in rural areas across the country.”

For the last 50 years, HAC has been the voice for the poorest of the poor in the most rural places. HAC’s policy priorities are focused on the importance of capacity building, access to capital, and geographic equity in federal policymaking – with a specific lens on persistently poor and high-needs regions like the Mississippi Delta, rural Appalachia, farmworker communities, the Southwest border colonias and Indian Country. Our independent and non-partisan policy work ensures the most vulnerable rural populations have improved access to safe and affordable housing opportunities.

To learn more about HAC’s policy work, visit https://ruralhome.org/our-work/policy/.

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