The House approved a $1.5 trillion infrastructure package on July 1. The Investing in a New Vision for the Environment and Surface Transportation in America Act or INVEST Act features a five-year surface transportation authorization bill and support to other public infrastructure and facilities. The legislation includes $100 billion for affordable housing under the Housing is Infrastructure Act. For HUD Community Planning and Development (CPD) programs, the bill would authorize $5 billion to the HOME Investment Partnerships (HOME) program, $5 billion to the Housing Trust Fund, and establish a $10 billion competitive grant program through the Community Development Block Grant (CDBG) program. Local, state, and tribal governments would be eligible to apply to this competition. Awards would be provided based on an applicant’s recent activities to improve affordable housing such as changes to zoning policies and impact fees.
The Senate Environment and Public Works Committee approved its five-year $287 billion surface transportation reauthorization bill on July 19, 2019. The current authorization on transportation programs is set to lapse later this year. It is unlikely that the Senate will go beyond the committee-approved bill to take up a larger and more expansive package.
Federal Relief Efforts on COVID-19
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27 in response to the COVID-19 pandemic. The $3 trillion package provides a multitude of resources across federal programs. Housing and Urban Development programs received $12.4 billion to address housing and community-based needs. Among these programs, the Community Development Block Grant (CDBG) and Emergency Solutions Grant (ESG) were provided supplemental funding.
Provisions for distributing $5 billion through CDBG include:
- Funding provided may be used to reimburse allowable costs incurred by state and local governments regardless of the date when costs were incurred
- FY19 and FY20 consolidated and action plan deadlines are extended from August 16, 2020 to August 16, 2021
- HUD is permitted to waive requirements it deems necessary to facilitate or expedite distribution of funding (except for requirements on labor, environmental, nondiscrimination, and fair housing)
- Grantees are given the option of suspending in-person public hearings and instead holding virtual public meetings with notice of at least 5 days
- The 15% cap on Public Services is suspended
CDBG funds are allocated as follows:
- $2 billion is allocated using the FY20 formula (allocations made within 30 days of enactment)
- $1 billion is provided to states for response measures in both entitlement and non-entitlement communities using a new formula based on public health, transmission risk, number of cases compared with national average, economic and housing market disruptions, and other factors determined by the HUD secretary (allocations made within 45 days of enactment)
- $2 billion is allocated to states and local governments based on impact of COVID-19 on jurisdictions using a new formula determined by the HUD secretary with priority on transmission risk, cases compared to the national average, and economic and housing disruptions from coronavirus (allocations made on a rolling basis)
Provisions for distributing $4 billion provided to ESG include:
- Assistance eligibility is extended to very low income individuals (as determined by HUD) at risk of homelessness
- Funding can be used to cover or reimburse allowable costs related to coronavirus response including costs incurred before enactment of the legislation
- Regular procurement standards can be waived in procuring goods and services in coronavirus response
- Grantees may use 10% of funds for administrative costs
- Citizen participation and match requirements do not apply in distributing funds
- Temporary shelters are eligible expenses including property leases, temporary structures, and other activities, and minimum period of use standards do not apply
- Environmental review standards do not apply in utilizing temporary shelters
- Funds are eligible to be used for infectious disease prevention and mitigation training, and hazard pay for staff in coronavirus response; these activities are allowed expenses outside of the 10% administrative cap
- HUD is permitted to waive regulations or statutes in program implementation necessary to facilitate coronavirus response (except for fair housing, nondiscrimination, labor standards, and environmental unless otherwise previously noted)
Additional supplemental spending is being considered by congressional leaders in continuing response to COVID-19. The House passed the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) on May 15. The $3 trillion package dedicates significant resources to housing needs including support for emergency rental assistance and homeless assistance. Emergency rental assistance is funded at $100 billion through ESG. Another $11.5 billion is provided to ESG for homeless assistance. Additionally, similar to the CARES Act, the bill includes $5 billion for CDBG. The Senate though is not expected to consider the HEROES Act. Instead, discussions continue on further emergency relief amid the pandemic’s ongoing impact.
COSCDA is supporting the following funding levels for CPD programs in FY21:
- CDBG: $3.8 billion ($375 million above FY20)
- HOME: $1.6 billion ($250 million above FY20)
- Homeless Assistance: $3 billion ($223 million above FY20)
COSCDA’s FY21 funding priorities are available here.
As a start to the annual appropriations process, the president released his FY21 budget request on February 10. As with previous years, the president is seeking the elimination of CDBG and HOME citing ineffectiveness and duplication of assistance with other programs. The administration asserts these initiatives are better addressed by state and local governments. Homeless Assistance Grants are maintained in the budget with a proposed spending level of $2.8 billion.
Once the president’s budget is received, Congress determines policies and procedures to establish the annual appropriations process. Last year, Congress reached an agreement for FY20 and 21 which was signed into law in August 2019. The two-year budget deal sets top-line spending numbers for discretionary programs above scheduled limits determined by 2011 Budget Control Act (BCA). Non-defense programs are approved under the deal for $626.5 billion in FY21, an increase of $71.6 billion over the BCA limit. The BCA ends after FY2021; Congress has suspended BCA’s budget limits each year since the law’s enactment. For more details on the budget process, click here for an overview by The Washington Post.
The fiscal year begins on October 1. Appropriators will need to approve a final spending bill before this date, or extend funding under the current year levels, to avoid a federal shutdown.
COSCDA has joined with other national associations to advocate for CPD programs in FY21. Outreach is underway to support these programs in united efforts. Both the CDBG and HOME coalitions have issued appropriations requests to advocate for additional funding to programs. Also, COSCDA is working to organize and lead ongoing meetings with key congressional offices. State and district-specific information is being disbursed to Senate and House offices as well. COSCDA staff will connect with individual states to obtain further information to showcase program results.
Before the holiday break, Congress approved a final fiscal year (FY) 2020 appropriations bill with the president signing the legislation into law on December 20. The $1.4 trillion package includes funding levels for the following U.S. Department of Housing and Urban Development – Community Planning and Development programs:
- Community Development Block Grant (CDBG): $3.425 billion, $125 million above FY19 (COSCDA’s FY20 request: $3.8 billion)
- HOME Investment Partnerships (HOME): $1.35 billion, $100 million above FY19 (COSCDA’s FY20 request: $1.8 billion)
- Homeless Assistance Grants : $2.777 billion, $141 million above FY19 (COSCDA’s FY20 request: $3 billion)
The Housing Trust Fund is set to receive $326.4 million this year according to the Federal Housing Finance Agency. The program received $247 million in FY2019. Available funds are determined by an annual assessment of 4.2 basis points from Fannie Mae and Freddie Mac.
Within the $3.425 billion dedicated to CDBG, $25 million is reserved for a recovery housing pilot program as a part of the federal response to the opioid crisis. The five-year pilot was established in the 2018 SUPPORT Act. Twenty-five states and the District of Columbia are eligible to receive funds based on a formula allocation announced by HUD in April 2019. The legislation establishes states as funding grantees.
For HOME, the legislation suspends a 24-month commitment deadline set by statute.
Under Homeless Assistance, $290 million is reserved for Emergency Shelter Grants and $2.35 billion is dedicated to the Continuum of Care and Rural Housing Stability Assistance programs. Funding is also available to support Rapid Re-Housing for Victims of Domestic Violence ($50 million), National Homeless Data Analysis ($7 million), and Youth Homeless Demonstration ($80 million – of this, $10 million is reserved for technical assistance).
HUD announced FY20 formula allocations on February 14. Click here for the allocations.
Recent Legislation: CPD Programs
Reforming Disaster Recovery Act of 2019
In July 2019, the Reforming Disaster Recovery Act of 2019 was introduced to permanently authorize the CDBG-Disaster Recovery program (CDBG-DR). The bill would also insert measures to improve expediency and accountability of federal resources. At the core of the program’s challenges are cumbersome administrative procedures which have delayed funds to impacted areas and impeded long-term recovery efforts.
The House version was approved with bi-partisan support on November 18. The vote was 290-118. Bill text is available here.
Two similar bills have been introduced in the Senate which would also codify CDBG-DR. Sens. Todd Young (IN) and Brian Schatz (HI) are co-sponsoring their version of the Disaster Recovery Reform Act of 2019. A key difference with the legislation from the House version is a provision establishing an office within HUD to lead recovery and resiliency efforts. Sens. Tom Tillis and Richard Burr (NC) are also co-sponsoring the Ensuring Disaster Recovery for Local Communities Act of 2019. The bill proposes allowing local governments and tribes to directly administer disaster aid with HUD.
The Young-Schatz bill is can be found here. The Tillis-Burr legislation is available here. COSCDA’s working group on DR reform legislation developed recommendations for the Young-Schatz bill (S.2301), available here. The recommendations have been shared with bill co-sponsors and COSCDA plans to continue its advocacy to further state priorities in the final legislation.
COSCDA recently established a subcommittee on disaster recovery. The subcommittee is considering how the reform legislation will impact state administration of CDBG-DR and will develop recommendations in response to proposed reforms. General reform priorities can be found here.
Housing is Infrastructure Act of 2019
The Housing is Infrastructure Act of 2019 authorizes funding to increase the number of affordable housing units nationwide. The bill authorizes $70 billion for the Public Housing Capital Fund to address backlog of repairs while reinforcing various other programs under HUD and USDA.
The bill also authorizes $10 billion for CDBG to establish a competitive grant program for affordable housing and Department of Transportation-linked projects. The bill sets up a grant competition with states, localities, and tribes eligible to receive funds. Grants would be awarded based upon the state or local applicant’s recent adoption of policies to promote affordable housing such as the elimination of so-called impact fees on new housing construction.
Additionally, the legislation authorizes $5 billion for both HOME and HTF.
Bill text can be found here and a summary is available here. The legislation was introduced by Rep. Maxine Waters, Chairwoman of the House Financial Services Committee. Sen. Kamala Harris introduced a companion bill in the upper chamber.
COSCDA joined with national stakeholders to submit comments on the bill’s impact. Members of the CDBG Coalition sent a letter to Chairwoman Waters in response to including the program in the legislation. In the letter, members of the coalition express support for including CDBG in the legislation to advance affordable housing units. However, the group argues that the insertion of a competitive grant program as well as emphasis on DOT-funded projects complicates the reach of funds to housing needs. Instead, it is proposed that additional resources be applied through the CDBG formula program. The letter is available here.
The HOME Coalition also submitted feedback in support of including HOME in the legislation; the coalition was successful as HOME was featured in the latest bill.
COSCDA has endorsed the legislation and will follow-up with congressional offices to provide additional comments.
Ending Homelessness Act of 2019
The Ending Homelessness Act of 2019 applies $13.27 billion across emergency relief grants, vouchers, outreach services, and technical assistance. Additionally, included in this amount is $1 billion applied annually to the Housing Trust Fund. Bill text is available here.
Sen. Kamala Harris has introduced a similar bill in the Senate.
HOME Act of 2019
The Housing, Opportunity, Mobility, and Equity Act of 2019 (HOME Act) was introduced by Rep. James Clyburn, House Majority Whip, in October 2019. The legislation would direct CDBG and Surface Transportation Block Grant recipients to create plans on increasing the affordable housing stock through inclusive zoning policies. The bill would also establish a credit for low-income renters to better access quality housing.
Bill text is available here. A companion bill was introduced in the upper chamber by Sen. Cory Booker.
COSCDA shared comments with co-sponsors on through a letter submitted on January 13 and has connected directly with the House co-sponsor to communicate concerns with the legislation. Click here for the letter.
The Yes in My Backyard Act (YIMBY Act) would require CDBG grantees to report on land use policies with emphasis on addressing affordable housing needs. Grantees would need to provide an update over a five-year basis.
Bill text is available here. In the House, the legislation is being co-sponsored by Reps. Heck (WA), Hollingsworth (IN), Clay (MO), Foxx (NC), Quigley (IL), and Herrera Beutler (WA). The Senate version is being co-sponsored by Sens. Todd Young (IN) and Brian Schatz (HI).
COSCDA sent a letter to co-sponsors on January 13 and also connected directly with co-sponsor offices to communicate concerns with the legislation. The letter is available here.
The House approved its version of the bill on March 2. It is to be determined when the Senate may act on its introduced version or consider taking up the House bill.