Recent updates on legislative actions (as of July 12, 2019):
Congress has moved forward in the appropriations process however obstacles exist to approving federal funds in fiscal year (FY) 2020. The House of Representatives has signed off on ten of twelve spending bills through the end of June. In the chamber, funding has been approved for U.S. Department of Housing and Urban Development (HUD) programs through the Transportation-HUD appropriations bill.
The House passed the following funding levels for HUD programs related to COSCDA members:
- Community Development Block Grant (CDBG): $3.6 billion, an increase of $300 million from FY2019
- HOME Investment Partnerships (HOME): $1.75 billion, an increase of $500 million from FY2019
- Homeless Assistance: $2.8 billion, an increase of $164 million from FY2019
The Housing Trust Fund received $247 million for FY2019. Funding is determined by an annual assessment of 4.2 basis points from Fannie Mae and Freddie Mac.
COSCDA has joined with national stakeholder groups to advocate for increased funding across HUD programs. For FY2020, COSCDA is promoting $3.8 billion for CDBG, $1.8 billion for HOME, and $3 billion for Homeless Assistance. Additionally, COSCDA is also monitoring potential funding for the SUPPORT Act provision on housing assistance for individuals in recovery. The provision within the newly passed law authorizes a five-year program under CDBG to provide assistance to housing assistance for addiction recovery. States are established the administrative authority to receive and distribute funds from HUD.
No timeline has been set for the appropriations process in the Senate. The chamber’s majority leadership has resisted establishing top-line spending numbers until a budget deal is reached with the White House. The administration is seeking increases to defense spending while cuts to non-defense programs. House Democrats aim to increase spending for both defense and non-defense programs through parity or equal increases to both sides.
Spending caps are also set to return following temporary reprieve during the last two appropriations cycles. The Budget Control Act of 2011 (BCA) set caps for a ten-year period through FY2021. Without a budget agreement and lift of spending caps, automatic cuts will automatically take effect across defense and non-defense programs also known as sequestration. At the same time, the federal government will exceed spending beyond the debt ceiling by late September or early October. A budget deal will need to be reached between Congress and the White House to move the appropriations process forward and may include action on raising the debt ceiling as well.
Rep. Maxine Waters (D-CA), Chair of the House Financial Services Committee, introduced separate bills recently to address the shortage of affordable housing and homelessness crisis:
Housing is Infrastructure Act of 2019
The Housing is Infrastructure Act of 2019, promotes resources 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 in support of affordable housing and Department of Transportation-related 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 the Housing Trust Fund.
The Housing is Infrastructure Act of 2019 can be found here.
In response, 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 a final bill.
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.
Legislation introduced in the last congressional session addressing housing and community development needs:
American Housing and Economic Mobility Act
In the closing weeks of the last legislative session, Senator Elizabeth Warren (D-MA) introduced legislation aimed at promoting affordable housing through investments in new housing development and strengthening lending laws. The American Housing and Economic Mobility Act (S.787) seeks to invest over $500 billion in various programs supporting housing, including the Housing Trust Fund and Capital Magnet Fund. The bill also encourages local governments to revise zoning laws which currently raise construction costs; if changes are made, local governments would be eligible to apply for a new $10 billion grant program which funding can support infrastructure, schools, parks, and roads. Additionally, the legislation provides assistance to historically impacted groups, expands eligible financial institutions under the Community Reinvestment Act, and reinforces anti-discrimination laws. To finance the bill’s cost, the legislation would reinstate estate tax limits at levels during the end of the Bush Administration instituting a progressive rate over the limits. Bill text is available here. A summary of the bill can be found here.
In January, Senator Mike Crapo (ID), Chairman of the Senate Banking, Housing, and Urban Affairs Committee announced committee priorities for the 116th Congress. On affordable housing, the Committee will review recent proposals to reform housing finance. Specific oversight will include assessing the status of Fannie Mae and Freddie Mac and HUD’s actions on enhancing the Family Self Sufficiency program as well as steps to streamline compliance with smaller Public Housing Authorities (PHAs). In preparation for reauthorizing transportation programs, the Committee will also examine ways to further infrastructure priorities such as promoting creative solutions to public transportation and ensuring safety in public transit. Further details on the Committee’s agenda are available here.
Senator Crapo released an outline for housing finance reform legislation. The outline includes a proposal to replace existing affordable housing goals with a new fund to advance housing in low-income communities. The outline also recommends increasing the basis points for the total annual loan volume guaranteed by the guarantor under the Housing Trust Fund, Capital Magnet Fund, and Market Access Fund. Click here for the Banking Committee announcement; the outline is available here.
Representative Maxine Waters (CA), Chairwoman of the Financial Services Committee, also issued committee’s issues to explore in the new Congress. The committee seeks to reaffirm support for the Consumer Financial Protection Bureau, engage women and minority candidates in the financial services sector, provide renewed focus on international sanctions, and promote accountability in the International Monetary Fund.
On housing, Chairwoman Waters indicated the lack of affordable housing and rise of homelessness as two of the most critical issues facing Americans. Rep. Waters seeks to address these problems through new legislation introduced in the committee: the Housing is Infrastructure Act of 2019 and Ending Homelessness Act of 2019. Each bill would invest additional resources to existing programs and promote new funding streams to address the lack of affordable housing units and homelessness services. Both bills have been discussed in committee hearings this spring and further consideration by the House is expected in the coming months.