Deals, subsidies, gossip, taxes, and sneaky fine print in the world of rental real estate, from the editors and writers of Apartment Finance Today and Affordable Housing Finance magazines.
NLIHC further reports that HUD circulated a memo on Oct. 21 about the upcoming creation of a new, separate "KDHAP-Special Needs" program to be administered through the existing local Continuum of Care structures that currently collaborate on McKinney-Vento housing grants.
HUD has a release posted with the optimistic headline, "Bush Administration Announces $17.1 billion to Rebuild Gulf Region"... but it in fact describes HUD's $2.2 billion part in the $17.1 billion of requests for recovery funds that the White House conveyed to Congress on Friday. And another document also conveyed to Congress Friday calls for a total of $2.2 billion in corresponding cuts spread over all the agencies, of which HUD's share would be $130 billion, including a proposed $100 million cut in the Sec. 811 program.
Among the things requested for HUD in Estimate #13 are $1.5 billion in Community Development Block Grant funds, apparently along the lines of the big CDBG appropriations for the Lower Manhattan recovery; $390 million to pay for "rental assistance and housing placement services" in the specially created KDHAP program; $250 million for a "homesteading" proposal to offer home purchase assistance to "low-income families" affected by Hurricane Katrina, and $70 million extra for the HOME Investment Partnerships Program. The USDA Rural Housing Service would get $10 million for rural housing repairs, $17 million for rental assistance, and up to $68.3 million for the Rural Housing Insurance Fund Program. Considerable appropriations are requested for military housing, including for military families.
Estimate #14, the rescissions document, proposes taking $130 million back from HUD and $641 million from USDA, among other actions. HUD would lose $24 million from brownfields redevelopment; $6 million from community development loan guarantees; and most of all, $100 million from "Housing for Persons with Disabilities," which LIHTC specifically identifies as meaning Sec. 811. At USDA, some heating and utility subsidies would be cut but not the actual housing programs.
So, a mixed bag of news and an interesting one. Be interesting how this all plays out in Congress.
It's Christmas morning for administrative law geeks: in today's Oct. 31 Federal Register, all the federal agencies announce their rulemaking plans. These documents appear every six months but they contain advance plans being made as much as a year ahead. They're very much worth reading for a sense of what the federal agencies plan to do next.
I won't link to very many individual files within today's FR because they're easily found through the main table of contents. Instead, the following consists of browsing instructions and a few highlights noticed quickly by a busy blogmother. There's obviously a lot more to be found in these documents.
Oddly enough, to read the upcoming regulatory plans that the agencies deem most important, you have to dig up the most obscurely placed file in the FR's electronic table of contents. It's captioned, "Introduction to Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions," under the heading, "Regulatory Information Service Center." Rulemaking plans that the agencies choose to describe here get special attention, receiving detailed rationales both under their own headings and in a prefatory "Statement of Regulatory Priorities" by each agency. You'll find the individual rule proposals cross-referenced, via low two-digit sequence numbers such as "64," in the individual agencies' files that appear elsewhere in today's FR, but the descriptions are in this special "Introduction" file.
Included in the HUD section of the "Introduction" are the continuing rewriting, "streamlining," and market-orienting of the public housing regulations "to more closely align public housing with the conventional real estate industry"... some rescue ideas for the most conspicuously wretched "chronically homeless"... a HOPWA overhaul... environmental regulation rewrites.... new rules on Ginnie Mae excess yield securities... and more.
The most directly housing-related individual files in the Table of Contents -- all with their corresponding sections in the "Introduction" I've just mentioned -- are of course those for HUD, Treasury (the main Treasury file includes tax law rulemaking), the Federal Housing Enterprise Oversight Office, the Federal Housing Finance Board, and the Agriculture Department. You have to go to the main Agriculture file, as Rural Development doesn't publish a separate regulatory agenda.
A few highlights, hardly everything: a glance into the Commerce Department agenda finds no mention of the "Strengthening America's Communities" proposal, though it says the Economic Development Administration plans to review and reissue all regs within three months of its next reauthorization.... Treasury is planning a new regulation, to be proposed somewhere around June 2006, to provide "guidance under section 45 D regarding how an entity meets the requirements to be a qualified active low-income community business for purposes of the new markets tax credit when its activities involve targeted populations."... Around December 2005, expect a new housing tax credit rule from Treasury that "will improve the administration of the low-income housing credit program by allowing all Forms 8609 to be processed at one location and reduce taxpayer burden by allowing the taxpayer to file the form one time."... Around December 2006, expect a further proposed rule, not described specifically here, "amending the low-income housing tax credit program."... a new tax rule under Sec. 141 on the allocation of private activity bond proceeds is coming around June 2006... final action is expected around the same time in a long-running rulemaking on private activity bond refunding regulations...
It's hard to summarize the HUD regulatory agenda file without filling the rest of this whole page, so if you have a stake in HUD rulemaking plans, do glance over the file yourself, especially the newer "Proposed Rule Stage" sections. Among other things there's a rule coming around next August changing the HOME Investment Partnerships Program rules regarding Community Housing Development Organizations (CHDOs).... A final rule in the existing rulemaking process for electronic grant applications is coming in December... so is a new Proposed Rule on renewals of expiring project-based Sec. 8 contracts... Amendments to the Mark-to-Market program in January... aw, just go read the thing.
I'll try and digest these agendas more thoroughly if time later. Until then, happy reading.
- The Real Estate Blog Squad has been covering the National Association of Realtors conference in San Francisco with a big assortment of insider perspectives. Not entirely our cup of tea because the focus over there is single-family, not multifamily housing, but probably worth a glance or two for information about the state of markets, etc. One expert there, for example, recommends buying condos in Jacksonville, Austin and Boise.
- The Houston Chronicle says the real estate boom anticipated in New Orleans isn't happening after all.
- The National Association of Mortgage Brokers is happy with the form in which HR 1461 passed the House. By the way, their site has Katrina relief information for the mortgage business that I think we haven't cited here previously.
[MORE: For folks who would have liked to attend the NAHRO conference earlier this month, they've posted an extensive list of handouts from the sessions, some available for free download, some available in hard copy by request.]
The law firm of Nixon Peabody is circulating an alert saying that HUD has just announced it will allow developers to continue filing paper "Previous Participation Certification" HUD-2530 forms a little longer. Nixon Peabody writes:
Effective Oct 11, 2005 all 2530s were to be submitted electronically. Many participants in HUD programs have encountered significant difficulties in accessing the on-line system. In response to this, HUD announced today that they are permitting participants to file paper 2530s through the end of November, 2005.
In this latest case of premature and glitch-ridden paperlessness (cf. Grants.gov), a fillable PDF version of the form in question is available by searching on "HUD-2530" on the HUDCLIPS Forms Library page. The form is for use by both HUD and USDA multifamily developers.
- HUD is apparently close to inviting applications for grants in the Universities Rebuilding America Partnerships: Community Design Program. Today there's a Paperwork Reduction Act notice with a short 14-day comment period to line up authorization for the future Notice of Funding Availability.
Affordable Housing Finance's Donna Kimura shares this tidbit:
At AHF Live: The 2005 Tax Credit Developers' Summit, the news leaked out that industry veteran David Sebastian has been named managing director of the low-income housing tax credit platform at GMAC. One of GMAC's subsidiaries is Paramount Financial Group, Inc.
For those of you who missed our AHF Live: The 2005 Tax Credit Developers’ Summit in Chicago this week, well, you also missed out on a great luncheon Wednesday. Not only did Richard M. Daley, the reigning mayor of the City of Big Shoulders, give an impassioned detailing of his views on how to tie together all of the services and support necessary to make affordable housing work – and you can get a taste of it from our exclusive interview with Hizzoner in the November issue of Affordable Housing Finance – but he was followed by former Milwaukee Mayor John Norquist, the featured luncheon speaker.
Norquist, who now lives in Chicago and heads the Congress for the New Urbanism, gave one of the more well-received housing speeches in recent times. He decried federal housing policy – and local zoning initiatives – that over the past century have destroyed working (albeit often poor) neighborhoods and replaced them with single-use zoning and public housing. The results were isolated housing for the poor (not to mention isolated retail and other sources of services and jobs) and increased public control over the lives of the poor. For those readers who have read his 1998 book, The Wealth of Cities: Revitalizing the Centers of American Life, much of his argument will be familiar.
One you-hadda-be-there moment: Norquist praised traditional Main Street-style retail with one or two floors of housing above it. He said that housing type was affordable housing that used no government subsidy. Too bad, he complained, that mortgage giants Fannie Mae and Freddie Mac refused to fund such housing. Sitting at the table with yours truly was Kim Griffith, Freddie Mac’s director of multifamily affordable housing. Griffith noted to those around him that it was the law that restricted Freddie and Fannie from purchasing such mortgages; change the law and they’d be happy to buy them. (Griffith and Norquist chatted after the speech, when Griffith introduced himself as representing one of those big, bad mortgage giants.)
Watch our upcoming issues of AHF magazine for an interview with Mayor Norquist.
One more note: Right after Mayor Daley's appearance at AHF Live, he flew to Houston to catch Game 4 of the World Series, in which his beloved Chicago White Sox completed their sweep of the Astros.
And if you thought I couldn’t tie that into affordable housing, well, even this Sox-fan editor can manage that feat: it turns out that the long-suffering wives of the World Series players spent some of their time away from the series to promote a Major League Baseball (MLB) initiative to create some replacement housing for the victims of Hurricane Katrina. No FEMA trailers, these: Each home will include autographs from MLB players.
- Postmortem comments are up from the NLIHC and OMB Watch folks who tried to stop yesterday's passage of HR 1461, the GSEs bill with the anti-voter-registration measure. The focus now shifts to the Senate version, S. 190. [MORE: Here's the NYT writeup of yesterday's House action.]
The National Multi Housing Council has posted a supplement to the FEMA Sec. 403 sheltering FAQ that it received a few days ago. NMHC's directory page is here, the earlier document here, the supplement, which is dated Oct. 14, over here.
HUD's Public and Indian Housing sub-page is full of new material, most prominently a notice that issues some regulatory waivers for Hurricane Rita automatically but mainly provides a menu of further waivers that local governments can request by email using a provided checklist. (HUDCLIPS also has a copy of the Rita waiver notice.) These documents are similar to a waiver-and-checklist set issued a month ago for Hurricane Katrina relief (see descriptions here and here). A note at the PIH site says the Katrina checklist from that earlier pair has been updated.
PIH further notes it has revised its regulatory impact analysis of the final rule revising the Public Housing Operating Fund Program. The document is posted with an Oct. 18 revision date. As you'll recall, the final rule appeared in September and was revised Oct. 24 by "corrections" delaying the effect of the new operating fund formula until 2007. In the regulatory impact analysis text, don't miss the p. 13 analogy between property maintenance and chocolates via the economic theory of diminishing marginal utility.
The folks at Novogradac, who have been closely following proposals for a homeownership tax credit, report today that Sens. Ensign, Kerry, Santorum and Stabenow now support including a version of the Community Development Homeownership Tax Credit Act, S. 859, in a Gulf Coast tax relief bill.
The Dept. of Labor says President Bush's suspension of the Davis-Bacon wage requirements in hurricane areas will be reversed as of November 8. Accordingly wages under federal contracts can be expected to rise back to the normally required levels.
Roll call vote on the full bill is here. Rep. Frank's "motion to recommit with instructions" failed 200-220, meaning that Rep. Oxley's Manager's Amendment did pass, the anti-voter-registration provisions included. For details of the substantive regulatory amendments see again the House floor summary and the OMB Watch narrative. The roll call from the earlier 210-205 vote to pass the Manager's Amendment is now available. THOMAS will presumably update its HR 1461 entry shortly.
....Rep. Julia Carson, D-Indiana, during a floor speech in memory of Rosa Parks, just called the voter provision "the most insidious inclusion in a housing bill that I've ever seen."
[MORE: HUD Assistant Secretary Brian Montgomery said yesterday that the House version of the bill "is not a bill the HUD can back." Don't know if any of today's amendments have changed that position at all.] [MORE: The National Association of Home Builders has issued a statement applauding the House passage of the bill and specifically praising the GSE regulatory changes and the affordable housing fund.]
See our previous item for today's earlier updates on HR 1461, the much-discussed GSE's bill that would create a new regulator for Fannie Mae and Freddie Mac. The bill contains a big affordable housing fund and the question today is whether it will pass the House with anti-voter-registration compromise language that would force nonprofit organizations -- assuredly including nonprofit housing developers -- to choose between accepting money from this fund and conducting nonpartisan voter registration as they are required to do under some state funding laws.
According to a blow-by-blow from OMB Watch, there was prolonged maneuvering earlier today over the rule for floor consideration of the bill, H. Res. 509, because it determined whether to allow consideration of Rep. Barney Frank's attempt to strike Rep. Oxley's "Manager's Amendment," which contains the anti-voter-registration language.
It ain't over. Watch this space.
[MORE: Per the updated House floor summary, the Oxley "Manager's Amendment" was offered at 1:51 p.m. and went into 20 minutes of debate... per OMB Watch, as of 2:11 p.m. they were still debating the Manager's Amendment... 2:13 p.m., House floor summary says Rep. Julia Carson, D-IN, offered an amendment and it went into 10 minutes of debate... as of 2:18 p.m., the House floor summary says two more amendments have been offered. Rep. Carson's amendment and further amendments by Reps. Davis and Leach address varying core regulatory aspects of the bill, not the affordable housing fund debate. The fur is flying so fast I'm just going to direct readers to the floor summary rather than type it all out again here... Floor summary says the Oxley Manager's Amendment -- apparently the one with the voter registration provisions -- has passed by recorded vote. It's Roll No. 541, should be available at this link soon... Amendments and debate continuing on the regulatory core of the bill... OMB Watch says that Manager's Amendment vote was close, at 210-205, and as of 3:15 Eastern time it's still not over: "The next step will be a vote on Rep. Frank's motion to recommit...." If anyone wants to follow live, C-Span has the debate in streaming video. Rep. Ron Paul's amendment to limit the ability of Fannie and Freddie and the Federal Home Loan Bank Board to borrow from the Treasury has been apparently defeated by voice vote but his request for a recorded vote has been postponed.... Brief debate on an amendment by Rep. Garrett, R-NJ, to block Fannie and Freddie from buying mortgages from more expensive homes... apparently defeated by voice vote, recorded vote to be postponed... Debate beginning on amendment by Rep. Loretta Sanchez re: alternative credit scoring... OK, the floor summary and C-Span as linked above are gonna have to keep you updated for a while. More here later when the Frank motion comes up...] [4:56 p.m. Eastern time: per the C-Span feed, Rep. Barney Frank of Massachusetts, speaking hoarsely, has made his motion to recommit. The chair has had to repeatedly gavel for order. Rep. Frank says one member inadvertantly voted against his real intention, meaning the real Manager's Amendment vote earlier was an even closer 209-206. He asks that the Manager's Amdt be adopted intact except for two sections affecting housing grants: 1) that housing not be required to be the "primary purpose" of the recipient organization, as it would bar faith-based groups under the widely recognized religious injunction that Rep. Frank paraphrases as "thou shalt have no other primary purpose above Me," and 2) that while restrictions against electioneering or political endorsements would be retained, non-partisan voter registration and non-partisan GOTV would be permitted. He's presenting it as a question of "will democracy prevail in the House?"... Rep. Oxley, in rebuttal, says faith-based groups would not be barred, the intention is only to ensure the money is used only for housing and to bar its use for political activity... Rep. Baker, R-LA, speaking emotionally, elaborates on Oxley's rhetoric, saying the purpose of the restrictions is to ensure the money goes only to needed housing... Rep. Frank offers a brief rebuttal... loudly shouted voice votes sound evenly matched from here... it goes to a 15-minute recorded vote.]
- There's a new letter this morning from 689 organizations -- a list nearly 20 pages long -- opposing the anti-voter-registration language in HR 1461, which was set for a vote today (see below for background). Several religious leaders held a press conference opposing the measure this morning.
[MORE: HR 1461 was before the House and headed into an hour of debate as of 12:40 p.m. Eastern time. Here's the House Clerk's log of floor action if you want to follow along.]
- The President's Advisory Panel on Federal Tax Reform has postponed its teleconference meeting from tomorrow to Monday, Oct. 31, at 2:30 p.m. Eastern time. As John Zipperer wrote yesterday from AHF Live, the committee is calling for an end to many tax incentives, including the low-income housing tax credit, but at least for the present its proposals are a long way from legislative reality. Watch the tax reform panel's own Web site for instructions on joining the conference call.
Some 80 advocacy groups have sent another letter to Congress opposing the anti-voter-registration language attached to the affordable housing fund proposal in the GSEs bill, HR 1461, which reportedly may go to a House floor vote tomorrow (i.e. Wednesday). Meanwhile MarketWatch recaps the bill's regulatory implications for Fannie Mae and Freddie Mac and suggests that the debate over appropriate regulation for these two GSE giants is an awfully long way from resolution.
AHF's Donna Kimura, also in Chicago at AHF Live, was just at a discussion where developers fired questions at a panel of leading tax credit syndicators and investors. She writes:
"What margins of safety are you looking for from developers?" asked an affordable housing builder and manager. One of the keys for a deal is the developer and his or her track record, responded Greg Judge of MMA Financial. Others noted that real estate fundamentals and rent advantages are also important for deals.
It was part of a candid discussion about the state of the market. Other questions involved what kind of deals investors prefer and what's keeping some deals afloat.
What margins of safety are you seeing in tax credit deals? Any new trends when it comes to underwriting?
From our own John Zipperer, who is out in Chicago at AHF Live:
The recent announcement of radical tax-reform proposals – including the deep-sixing of the low-income housing tax credit – by a presidential tax panel provided fodder for some of the politically connected affordable housing experts at AHF Live: The 2005 Tax Credit Developers’ Summit. David Gasson of Boston Capital told the attendees in downtown Chicago that the task force essentially had impossible marching orders: brainstorm tax reforms without worrying about the political impact, and any changes must be revenue-neutral. Well, they decided to do away with the alternative minimum tax (AMT), which left them with more than $1 trillion they needed to make up somewhere else, so they began whacking at everything in sight. Bye-bye LIHTC.
The good news is that the panel’s recommendations exist in a separate world of reality best reserved for science fiction. Gasson said the Congressional staffers he’s met with told him, “That’s the president’s panel with the president’s parameters. Those aren’t our parameters.” In other words, Congress will do what it darn well wants to, especially in light of the reality of President Bush’s low public opinion ratings and the other distractions facing his administration and the Republican leadership in Washington.
However, Gasson said that in the next year and a half, he does expect some sort of a tax reform package to come before the House Ways and Means Committee. The AMT is one likely candidate for some sort of curtailment, and there could be some tinkering with the basic tax rates, too. Luckily, he said, tax credits are currently in very high regard in Washington, D.C., so they’re not likely to be on the chopping block.
Jim Tobin of the National Association of Home Builders added that, despite current Washington politics, he expected President Bush to announce something tax-reform-related in his State of the Union.
Well, Orlando J. Cabrera's prepared statement is posted for the hearing on his nomination to be HUD's assistant secretary for public and Indian housing. It's mostly about his work at Florida Housing, in a disaster relief capacity and otherwise. Check back at today's hearing page to see if recordings and/or transcripts become available.
[UPDATE: Per a member of the hearing audience, questions came primarily from Sen. Martinez, the former HUD secretary, and in response the nominee said that public housing needed better management; that HOPE VI had done well overall but there had been challenges getting the units built; that regarding the proposed "State and Local Housing Flexibility Act of 2005" (S. 771) he favored greater flexibility and independence for public housing authorities; that troubled housing authorities needed more attention, and that the low-income housing tax credit was a good model for increasing affordable housing opportunities. None of the Senate Democrats attended the hearing.]
[MORE (Late 10/25): A video archive of the hearing is now available on the page.]
A look around this morning's federal announcements on housing and housing finance:
- The IRS is requesting applications for membership on its Advisory Committee on Tax Exempt and Government Entities. Open positions include one on tax-exempt bonds. The formal Federal Register notice is here.
- A Public and Indian Housing notice, No. 2005-33, today reissues and revises guidance for HUD field offices administering the Section Eight Management Assessment Program (SEMAP) to assist the full spectrum of "Troubled, Near-Troubled, and Non-Troubled Public Housing Authorities."
- HUD has posted a "Common Questions" FAQ on its hurricane recovery page. It looks to be mainly for single-family homebuyers and lenders, but at the foot of the page it does get around to making a clear statement of a distinction that was rumored to exist but quite unclearly stated by public agencies during the first several weeks of the Katrina crisis: that the SWERN.gov Web site run by Homeland Security "is designed for institutional users to post or locate large-volume type housing resources" while the privately run hurricanehousing.net/www.DHROnline.org service "is designed for public users to post or locate retail-level housing resources (Ex., a room for free; an apartment for rent, etc.)."
...and this concludes our glance around the federal announcements. Further item coming soon on today's Cabrera confirmation hearing. Wishing you a non-troubled or no worse than near-troubled Tuesday.
- HUD has just posted a study of its Family Self-Sufficiency Program, which was designed to help households leave behind subsidized housing. The study seems a bit dated, though: it was apparently completed last year, based on data from the Clinton Administration.
If any of our readers find themselves saddled with the attractive task of planning a grand opening for a tax credit building, the Affordable Housing Tax Credit Coalition is offering a step-by-step guide to same in free PDF download. They advise, for example, that project sponsors should not skimp on the quality of catering.
NLIHC also gives a full blow-by-blow of last week's HUD appropriations action in the Senate... and news from the budget reconciliation debate, including a dim outlook for "upfront grants" to preserve HUD-owned rental projects.
- Per recent FEMA releases, there's a new disaster declaration for Florida... FEMA states it had 8,706 Katrina-displaced households in travel trailers as of Oct. 19 and had assisted "hundreds" of others in finding other temporary housing... Reimbursements to local governments have been extended... and FEMA is advising that some disaster-affected Louisianans may receive denial letters without actually being denied assistance.
- The National Law Center on Homelessness and Poverty posts a more detailed summary of the Oct. 7 conference call with NLIHC et al. and FEMA in which FEMA officials answered important questions about its housing relief programs.
CNN now confirms the White House has nominated Ben Bernanke to succeed Alan Greenspan as Fed chairman.
[MORE: Bernanke made much-noted comments in July discouraging worries about the purported housing bubble. More past comments of his on the housing market here. And here.]
An important correction in the Federal Register today changes several dates in September's Public Housing Operating Fund final rule. The changes are described as making clear that the new operating fund formula is to take effect in 2007, giving housing authorities an extra year to make the necessary transitions.
[MORE: NLIHC characterizes the delay as a response to "pressure from housing authority trade groups," and says that an email, apparently from HUD to advocates, warned: “Nothwithstanding these corrections to the dates for implementation of the formula, other provisions of the rule, including the move to asset management, are not changed.”]
A committee of the National Park System Advisory Board met this past week in Washington to work on ways of improving the review process for the federal historic rehabilitation tax credit. Scroll down within the National Housing & Rehabilitation Association front page to find an account of the meeting. It says recommendations made included smoothing and speeding the review process and charging developers a fee to help pay for it. NPS has more on the committee's work and the members' backgrounds over here. The same site makes available a 36-page document from Aug. 2004 in which the Park Service responds to previous "recommendations for improvement." The site also invites further comments from the public.
NPACH's newsletter includes a reminder that in the the midst of the hurricane hullaballoo last month, Sen. Reed introduced S. 1801, a reauthorization bill that would substantially remake the McKinney-Vento homelessness relief program. McKinney-Vento is important to affordable housing because along with Emergency Shelter Grants it also funds the Continuum of Care programs: Shelter Plus Care, SRO/Mod Rehab, and the Supportive Housing program. (Further explanations of these programs here.) NLIHC posted a detailed legislative analysis of S. 1801 some weeks ago. As noted there, the bill would consolidate and relabel the housing subsidy programs.
An easily overlooked but important comment in the NLIHC analysis is that the bill would "allow HUD to renew permanent housing projects through a noncompetitive process." This might mean a resolution to the perennial problem of renewal funding for existing Continuum of Care projects. In general, residential buildings constructed with Continuum of Care funding, which serve heavily disadvantaged tenants who simply can't afford market-rate rents, have had to operate a little bit on faith. While the SRO/Mod Rehab program buildings turn to the regular Section 8 program for their operating subsidies, Supportive Housing Program projects have started with future subsidies guaranteed for as little as three years into the future, and Shelter Plus Care projects have been set up with grants covering five or ten years. At the expiration of these initial grants, the projects have depended on "renewal grants" of money from successive years' Congressional appropriations. In past years housing advocates have lobbied Congress, sometimes successfully, for separate renewal appropriations so that existing projects are not placed in competition with proposed new ones. It happens that most healthy projects have gotten their renewals, but a certain sense of precarity has attended the renewal process for some time. Currently the "Homeless Assistance Grants" section of HR 3058, the TT/HUD appropriations bill, discusses separate funding for Shelter Plus Care renewals from past years but is a little vague about whether fresh renewal money is to be appropriated in the budget currently under debate.
The prospect of a less competitive funding renewal process for these existing buildings could really be a relief to their owners, managers and tenants -- but we really don't have a lot of details yet about how the new proposal would play out.
Anyone who has heard more about either the new reauthorization proposal or the current state of renewals in HR 3058, do please drop us a note in comments below.
- Another freewheeling David Smith analysis, this time on New Orleans "Water Lining," in which he explores which homeowners did and didn't have flood insurance, and why not.
- Maybe worth a look: Pennsylvania's detailed set of forms for serving hurricane evacuees at the state level.
- Sec'y Jackson at a groundbreaking for a tax credit building near Pittsburgh.
- A sympathetic profile of Neighborhood Housing Services director Bob Garcia in the Albuquerque Tribune.
AHF's own John Zipperer and Donna Kimura have posted comments to Wednesday's item on an early-stage advisory proposal for radical tax simplifications that would include dropping the low-income housing tax credit (LIHTC). Both suggest any such plan is extremely unlikely to take effect as proposed, but Donna adds: "That said, I still would be surprised if a couple of curve balls didn't get tossed the program's way. Intentional or not. Remember the dividend-tax controversy?"
What she's talking about is a kerfuffle from 2003 that might be interesting as historical context, though Donna wants to be extremely clear that it's old news. AHF editor Cynthia Hunter summarizes: "Basically, about two years ago there was a proposal to eliminate taxes on corporate dividends on the premise that the corporation had already been taxed on its earnings, so taxing stockholders for distribution of those earnings was a form of double taxation. The fear was that LIHTCs would become less attractive investments because stocks would become more attractive with untaxed dividends." As Donna wrote at the time, a good bit of worry was relieved by the passage of a tax bill that didn't contain the measure after all.
...and then of course, there was the 1986 tax overhaul lampooned long ago by the Capitol Steps as "Baker-Packwood-Rostenkowski tax simplification..." (to a tune from "Mary Poppins"), which as we well know didn't simplify much of anything. Policy and sausage, ya don't wanna watch 'em being made...
The IRS has two press releases out that apparently interpret the federal tax relief bill for disaster victims, HR 3768 (also discussed here previously), which is now Public Law 109-73, the "Katrina Emergency Tax Relief Act of 2005." Its press release of Oct. 17 on specially authorized withdrawals of retirement benefits appears to refer to Title I of the Act. Its press release of Oct. 11 on raised loss limitations appears to refer to Sec. 402 of the Act. (Anyone who has found otherwise, please do say so in comments.)
The IRS releases refer to work in progress revising or inventing forms to handle Katrina losses. Look for a revised Form 4684 and a new Form 8915 in coming weeks.
There's lots and lots of advice around -- e.g. on that Enterprise Foundation flyer mentioned here earlier -- telling people who have heard nothing on a FEMA claim that they should follow up on their original claim rather than re-register.
However, FEMA posted a press release today noting that people who suffered losses in both Hurricane Katrina and Hurricane Rita must file separate assistance claims for each of the two disasters.
(No, the one piece of advice doesn't contradict the other. The point is to file only once for each disaster -- no more, no less.)
The Des Moines Registerhas the story. Unfortunately I'm not yet seeing this item in materials linked from the TT/HUD section of the THOMAS appropriations boxscore page but it'll probably turn up there soon.
NMHC has an item today about a recall of some 28,700 packaged gas furnace and air conditioning units made by International Comfort Products LLC, under several different brand names. It says the control boards can catch fire.
Two of HUD's four recently confirmed high officials took office at swearing-in ceremonies yesterday. Keith A. Nelson and Dr. Darlene F. Williams are now in office, respectively as Assistant Secretary for Administration and Assistant Secretary for Policy Development and Research. Confirmed by the Senate alongside these two on Sep. 30 were former Borland Software counsel Keith E. Gottfried to be HUD General Counsel, and Kim Kendrick, previously Senior Counselor to Secretary Jackson, to be Assistant Secretary for Fair Housing and Equal Opportunity. A fifth nominee, Orlando J. Cabrera of Florida Housing, goes to hearing next Tuesday, Oct. 25.
First sign today that the non-specialist press is noting civil-rights objections to the anti-voter-registration part of the reported HR 1461 housing fund compromise. The Minnesota Star Tribune calls the proposal a "Catch-22" and reports:
The same nonprofits that provide the bulk of very-low-income housing services could be cut out of the grants because they also provide voter registration services, as they are required to do under federal law. Since passage of the National Voter Registration Act in 1993, nonprofits across the United States have been required to provide voter registration services to receive housing and other social service money from the states. But they became much more active in 2002, becoming part of a voter registration drive that registered millions of new voters, many of them low-income. A bloc of conservative House members known as the Republican Study Committee has expressed misgivings about what it sees as the liberal tilt of many low-income-housing groups. They have proposed inserting language in the new funding bill that would bar any nonprofit that engaged in voter registration in the last year from participating in the Affordable Housing Fund.
The provision would reportedly deny housing fund money to non-profit groups that do voter registration even in a non-partisan manner, with their own funds, and on their own time, though for-profit companies would be exempt from the ban.
S'morning's Federal Register carries the operating cost adjustment factors (PDF here) that take effect Feb. 11. 2006 for renewals of certain Sec. 8 contracts.
Contract renewals affected include those covered by Sec. 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), which are Sec. 8 contract renewals not proceeding under Restructuring Plans through MAHRA's Mark-to-Market program, "including renewals that are not eligible for Plans and those for which the owner does not request Plans." Also affected are renewals under The Low-Income Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA).
Bendix Anderson, our man in New York, forwards an article from the Times Arts section on an intense six-day planning session for the Mississippi coast led by prominent New Urbanist planner Andrés Duany.
Here we go: one page of step-by-step instructions from FEMA for requesting a disaster relief trailer, possibly even to be placed on private property as opposed to these trailer villages they're setting up on public land.
We have an email this morning from the National Multi Housing Association, which together with the National Apartment Association has been thundering for weeks over what it views as FEMA's neglect of conventional apartment housing possibilities for Rita and Katrina evacuees. Today, now, it claims credit for what sounds like a change of direction from FEMA:
...FEMA is now revising its post-disaster housing policy and will move evacuees from hotels to more permanent housing, including apartments. On Monday, NMHC/NAA met with FEMA to begin working out the details. FEMA reports that it has two options for providing housing assistance. It can provide assistance directly to the evacuees under the Section 408 program, as it has already done by sending many people $2,358 checks to cover three months of rent. Or it can provide funding directly to the states through the Section 403 emergency sheltering program. It appears that FEMA now realizes that it will need to rely on the state and local governments to match evacuees with appropriate housing. Under the program, FEMA would provide money to each state, and the state would then contract for housing with the apartment owner. (This program is already taking place in Houston, where the city has created its own voucher program.) ...
The text will probably appear a little later at the National Multi Housing Association site. Do look at NMHC's site today in any case, as they've just posted a big group of useful articles, including an eight-page PDF fact sheet explaining the FEMA "Public Assistance" program under Sec. 403 of the Stafford Act, which would be emphasized under the change of policy NMHC is describing. Sec. 403 reimburses state and local governments for the cost of interim housing. This fact sheet goes beyond the obvious into thorny questions like who pays for the cost of transporting evacuees and how to set the price of furniture provided. Really worth reading, not just for public employees, but also for apartment owners and managers who may end up contracting with those reimbursed local governments.
- HUD has a proposed rule out today on a construction dispute resolution program for manufactured housing.
- The HUDUSER ResearchWorks publication has published a new issue with items including the latest and hence most shudder-making figures on "the housing-income gap." It also contains invitations to subscribe to a couple of listservs: HUD User News (email hudusernews@huduser.org with "subscribe" in the subject line) and a series of policy messages from HUD's "Regulatory Barriers Clearinghouse" (subscription instructions here).
- Not sure if we've yet noted this CBPP analysis calling for changes in the federal Hurricane Katrina housing response.
- The Marine Reserves have posted a useful if mainly specialized page of advice on the disaster recovery. The "Legal Issues" section includes a JAG Corps landlord-tenant law memo designed to assist Marines who are tenants of private landlords. It could therefore also help non-military folks trying to negotiate disaster-affected landlord-tenant relationships. (NOTE: we have not checked the legal advice contained in the JAG Corps memo or the rest of the Marines' site, and we're not necessarily recommending it as correct, though it might make a useful starting point for further inquiries. As with any other legal matter discussed here, readers are advised to consult their own attorneys.)
Our main site has a report posted just now on recommendations of the President's Advisory Panel on Tax Reform as discussed at an open meeting yesterday. The recommendations would eliminate the low-income housing tax credit as part of a general reduction in the number of tax incentives -- but everyone we've talked to notes that the process is at a very early stage. The panel's work is described in detail at its own www.taxreformpanel.gov site, where the resources include copies of public comments received. The panel's written recommendations are scheduled for completion Nov. 1, at which time they are to be posted on its Web site.
If the above links don't work for you, go to Nixon Peabody's main site and, within "News and Events," choose "Publications," then choose "Affordable Housing Law Alert."
- "Operation Offset" -- the Republican program of social service budget cuts to pay for hurricane relief -- goes to a vote soonish. Definitely this week, possibly tomorrow. More legislative updates available from HAC News, which is newly out today.
- Also at HAC News, the Housing Assistance Council's own analysis finds that owners of Sec. 515 rural housing are prepaying their mortgages a little less aggressively. They count 1,812 units prepaid in fiscal 2005 compared with 2,812 in the previous fiscal year. Taken by itself, such a change would be encouraging to housing advocates because a prepayment frequently means that another landlord is giving up on the subsidized housing business. However, HAC writes, "The proportion of units prepaid with restrictive use provisions protecting current tenants against rent increases also dropped, from 72% in 2004 to 47% in 2005," and "For the third straight year, prepayments exceeded new production; 783 new units were financed in 2005."
- Other HAC News highlights include grants available from the AARP Foundation for nonprofit and government entities assisting seniors among victims of "the recent hurricanes on the Gulf Coast" (this written before Hurricane Wilma's mainland landfall).
- Today's FEMA map shows the contiguous U.S. in parlous shape: disaster or emergency declarations active in every one of the lower 48 except Vermont -- and this past week yr humble correspdt saw high water and road washouts in Vermont as well. Now we've got Hurricane Wilma bearing down on Florida, and possibly bringing rain to that unstable dam above Taunton, Massachusetts. A friend in Texas says the FEMA clerks are asking newcomers, "One hurricane or two?" Now we're heading for "One, two or three?"
- The activist ACORN group has organized a new ACORN Katrina Survivors' Association to seek influence in the recovery planning and a right of return to areas such as New Orleans' Ninth Ward that some figures have suggested should not be rebuilt as before.
- One of our editors asked yesterday if the Davis-Bacon Act had been suspended for Rita-affected areas as well, and the answer is no, apparently not, or anyway not yet. HUD provides detailed guidance on the suspension of usual federal contract wage requirements in Katrina-affected areas, but nothing one way or the other on Rita recovery wages. Can't find anything on a Rita suspension on the White House site, nor in the Federal Register thus far, nor at Wage Determinations Online. Anyone who hears otherwise, do please so note in the comments section provided for yr convenience below.
NLIHC has a new document up as of yesterday with responses from FEMA to practical questions on the new hurricane benefit programs (item via the FEMAAnswers wiki.) Explanations include how to appeal a denial of benefits and the FEMA procedure for appointing a local "Authorized Agent" to inspect damaged property. Also perhaps the clearest paragraph yet explaining who gets what from which program:
Evacuees who have resided in public housing will be assisted by HUD. Renters may be assisted by FEMA with rental assistance and personal property. Personal property assistance will only be provided by FEMA if the applicant is denied an SBA loan. Homeowners may be provided with rental, repair and replacement assistance. The SBA can loan money to homeowners, renters, and business owners. Homeowners may borrow up to $200,000 for disaster related home repairs. Homeowners and renters may borrow up to $40,000 to replace disaster-damaged personal property including vehicles. The SBA may not duplicate benefits received from insurance or FEMA.
Also interesting:
Q: Will landlords receive notification that hurricane victims will receive the rental assistance for 3 to 18 mo[n]ths? A: No. It is the individual tenants who receive rental assistance, not the landlords.
...and that FEMA assistance isn't means-tested... and that those early issues of up to $2,000 on debit cards do count against later housing assistance... and that rents in high-cost areas will only be subsidized above the national average after that initial period when recipients get the standardized nationwide amount of $2,358 for three months' rent... and more.
Not everything is answered clearly. Some complex questions are answered monosyllabically or anyhow Delphically. But it's progress. Definite progress.
AP reports HUD representatives have described, but not released, an investigation that they say accuses Fannie Mae of using its regional partnership offices "primarily to lobby Congress instead of promoting affordable housing." Washington Post coverage here, Google News results here.
FEMA reports temporarily housing Hurricane Rita victims under what sounds like another ambitious travel trailer program, while NMHC, still pressing for greater relief use of conventional housing, notes a Washington Posteditorial in favor of spending government money on apartment rental vouchers instead of hotel rooms or "trailer parks destined to become dead-end 'FEMAvilles' far from urban centers and jobs."
The Post editorial poses a subtler question that readers here might want to help address: why did FEMA (well, FEMA and HUD really) choose to establish a new Hurricane Katrina rent payment program instead of expanding the existing Sec. 8 structure?
- HUDCLIPS "What's New" yesterday re-posted its HUD-9839 certification forms for participants in multifamily housing projects, and also a new HUD-9832 "Management Entity Profile" form. The posted revision dates are still from past years, however. Posted today on the same "What's New" page is the CPD Handbook 6509.2 document that went up on HUD's main site a few days ago. for future reference these can be found by category via the HUDCLIPS forms database and its library page.
- FEMA announces a new $750 million Special Community Disaster Loans Program today that is to make possible up to $1 billion in loans to local governments for disaster recovery. The publication (an interim rule with request for comments) is implementing S. 1858, the Community Disaster Loan Act of 2005, now Pub. Law 109-88. The briefly drafted new law went from introduction in the Senate to the President's signature on the same day, Oct. 7. In addition to authorizing the funds, it drops the Stafford Act's Sec. 417(c)(1) loan cancellation provision and lifts the $5 million cap on loan amounts. However, it restricts the loans "to assist local governments in providing essential services." Comments are due Dec. 19 and can be sent via the online rulemaking portals.
- The Small Business Administration sections of yesterday's and today'sFederal Registers carry yet more disaster loan announcements for the Gulf Coast states, and FEMA defines new disaster and emergency areas in today's FR.
- The Corporation for Supportive Housing's "Homefront" newsletter notes its participation in creating "a $200 million initiative, the New York Acquisition Fund, to serve as catalyst for the construction and preservation of more than 30,000 units of affordable housing citywide in the next 10 years." More from NYC's city government over here.
- The major Gulf Coast power company Entergy is now accepting applications from nonprofits for $10,000 to $20,000 grants to help groups of hurricane victims with rebuilding. (Item via LISC).
HUD's Office of Community Planning and Development has issued a couple of waivers allowing state and local entities to make use of previously funded HOME units to assist victims of Hurricane Rita. Separate waivers appear for Rita disaster areas (note special language regarding Rita areas in Texas that do not overlap the previously designated Katrina areas), and for the larger category of Rita "receiving communities." The receiving communities are authorized to alter their Consolidated Plans based on three-day public comment periods and also to skip some income and verification requirements in qualifying Rita victims for housing. Interestingly, these waiver documents bear signature stamps from Oct. 4 but seem to have been posted just this past Friday, Oct. 14.
Someone who reads this space pretty regularly asked last night if rumors were true that anyone who sheltered Katrina/Rita victims would qualify for a $500 tax deduction in 2005. Actually, what he's heard is about half true. The situation is probably worth clarifying here, since we've generically noted the passage of the new tax relief bill containing the provision, but we haven't yet gotten into these particular details.
So:
What we've got in the law so far is a $500 exemption from taxable income, and it's for Katrina only -- apparently not Rita -- and it's written to reward small-scale personal charity. Taxpayers who house Katrina "displaced individuals" other than their own spouse or dependents during the 2005 or 2006 tax year, "in the principal residence of the taxpayer for a period of 60 consecutive days which ends in such taxable year," can take $500 per person, up to $2,000 total, off their taxable income. Accepting any rent for the housing blocks the exemption, regardless of who pays the money. It's in Sec. 302 of the tax relief bill that has already passed, HR 3768, which is now Public Law 109-73. Official versions of the new law should soon appear here and here, but for the time being, click on "Text of Legislation" and go to the "Enrolled" version of the law.
This is in other words not a tax reward for housing businesses that have acted charitably, although it might from a distance have looked like one. Otherwise in HR 3768, housing professionals may wish to note Sec. 404 on special rules for mortgage revenue bonds and Sec. 405 on nonrecognition of gain. However, there's really not much for apartment landlords who have been kind about waiving or deferring rent.
- At the Brookings Institution, a meaty Katrina page organizing many studies and articles, including some from before the hurricane, on housing and other inequities made visible by Katrina. There's a Gulf Coast focus but plenty of interest to readers working elsewhere. Also at Brookings, a panel discussion -- transcript "forthcoming," it says -- on whether Census Bureau funding cuts could harm U.S. cities.
Housing owners and managers now facing the logistics of housing hurricane victims can benefit from the advice that legal aid advocates are developing for the displaced Gulf Coast residents themselves.
A site noted here by a commenter, and much worth the attention of hurricane victims' landlords, is "FEMA Answers," organized by the California Public Interest Law Project and the Sargent Shriver National Center on Poverty Law. The site is an attempt to involve advocates and the public all over the U.S. in asking and answering important questions about the workings of the hurricane disaster relief programs, prominently including housing relief. The intention seems to be politically nonpartisan, though frequently critical of FEMA's response and record.
"YOUR MILEAGE MAY VARY" WARNING: the "FEMA Answers" site is a "Wiki," meaning that it can be edited by anyone in the world. It is therefore an exercise in trust, and is dependent on the goodwill and good sense of whoever decides to add to the site. Much helpful information will likely continue to be posted there, and new readers of the page may themselves discover that they are able to help out by adding new answers and links. However, readers should always keep in mind that some of the material on any Wiki may be written by strangers both to members of the profession concerned and to the sponsors of the site. Unsupported statements made on the page should hence be double-checked elsewhere, and links posted on the page should be evaluated on their own merits.
Members of the U.S. House of Representatives have reached a compromise that will bring the Government Sponsored Enterprises (GSE) regulatory reform legislation (H.R. 1461), including the Affordable Housing Fund, to the floor of the House of Representatives for a vote the week of October 24. The National Housing Trust Fund Campaign has learned that in order to reach this compromise, lead sponsors of the bill have agreed to demands made by the Republican Study Committee, the caucus of conservative Republicans, that will prohibit non-profit and public organizations that do voter registration, with their own funds, from applying for and receiving grants from the Affordable Housing Fund to build or preserve affordable housing.
HR 1461 would create a new central regulator for government-sponsored enterprises such as Fannie Mae and Freddie Mac. It has been a disputed question whether the new regulatory bill should require these two entities to feed a percentage of their profits into a large national "Affordable Housing Fund."
- Novogradac warns that some low-income housing tax credit investors and material advisors may be affected by a new Minnesota rule requiring duplicates of Form 8264, Application for Registration of a Tax Shelter with the Internal Revenue Service, to be filed with the state government by Oct. 17. (Yep, that's Monday.)
- The "Subcontracting Information" section of that new federal "Hurricane Contracting Information Center" could turn out to be worth following, not just as a guide for potential subcontractors, but also for folks interested in following how the prime contractors' assigned tasks become defined.
- An AP poll published yesterday not only says many New Orleanians aren't planning to return, but also fills in the extent of the Gulf Coast hardships: "...Four in 10 went without food for at least a day, and almost as many went without drinking water for a day... Almost half, 44 percent, of those who had been separated from family members said they were still separated from a member or members of their family... A third said their home was either destroyed or damaged so badly they couldn't live in it.... Half of those polled said they were either living outside their own home -- either with a friend or relative in a home or apartment rented after the storm, or in a motel or shelter."
- HUDUSER has a study out on better ways of drafting survey questions to find out what kinds of housing assistance people receive. The study could influence major surveys that affect funding, such as the American Housing Survey. Apart from that, it's an interesting attempt to map the exact dimensions of the confusion under which most people labor with respect to public housing subsidies.
- Offered by way of microcosm: in Bowling Green, KY, local people on the Sec. 8 waiting list are asked to wait a little longer.
Incidentally, the KDHAP interim operating regs are still on HUD's Public and Indian Housing sub-page, where they've been since October 4, but a reorganization of the hurricane resource page makes them a little bit harder to find by clicking through, so I'm just noting the change so nobody gets lost. Oddly also, the reorganized resource page (in the "General Information" column on the right) tells landlords and multifamily property owners to post their vacant units at Homeland Security's SWERN.Gov page -- although doubts have been raised about SWERN's effectiveness for small-scale offers of housing, and FEMA has finally started promoting the privately organized hurricanehousing.net site, which has been functioning as an alternative.
Of course tax credit landlords are required to list their vacant units at SWERN to qualify for the IRS' emergency income and non-transiency rule waivers, but if anyone knows of any indication that SWERN is now more effectively handling offers of single vacant apartments (as opposed to blocks of housing and other large-scale resources) please do let us know in comments here.
The five FFIEC federal banking regulators have issued a "Statement and Order" today easing certain formal requirements for real estate appraisals in the Katrina and Rita disaster areas.
- This should be a hot ticket for housing writers tomorrow: the Center on Budget and Policy Priorities is planning a "media-only conference call briefing" on current Katrina housing relief measures.
Freddie Mac has announced plans to purchase $1 billion in state and local mortgage revenue bonds at below-market rates to assist the Katrina disaster area. Freddie's statement reads in part:
Freddie Mac decided to make the commitment immediately after Congress passed, and President Bush signed on September 23, the Katrina Emergency Tax Relief Act of 2005. That law waives the first-time homebuyer requirement on MRB loans and raises the cap on home repair loans from $15,000 to $150,000 for Katrina victims.
In the Federal Register today: a detailed rewrite of regulations (the PDF version runs 39 pages) on the project-based housing voucher program. This being the type of project-based subsidy created when a local housing authority chooses to treat part of its federal Sec. 8 voucher funding as a subsidy linked to the building, not the tenant.
- Rural Housing and allied USDA agencies issue a final rule changing their procedures for disbursement of funds. [UPDATE 10/13: there's a corresponding Procedure Notice revising Rural Development Instruction 1902-A.]
- More disaster areas defined in FEMA's and the SBA's sections of the Federal Register today.
- Sec'y Jackson attends a HOPE VI groundbreaking in his former home of St. Louis. Met by demonstrations against the project, he tells local officials: "... it is clear you must be doing something right, you've got these protesters here."
- The Department of Energy has a new test procedure out for residential central air conditioners and heat pumps.
- IRS advises of loss limitations lifted for victims of Hurricane Katrina by the new tax relief law. (Past Katrina-related IRS press releases are here.)
- Katrina analyses, mostly gloomy, from the Center on Budget and Policy Priorities.
There's a dull-looking but actually rather interesting sign of the times in the Federal Register today. It's a Paperwork Reduction Act "Notice of Submission of Proposed Information Collection," following the pattern used to approve innumerable kinds of government forms. The thing is, this notice requests comments on HUD's electronic Multifamily Financial Management Template. (The comments are due Nov. 14.) I don't quite know if this is the first time a notice of this type has been issued for an electronic form, but certainly it can't have happened all that often in HUD's part of the Federal Register thus far. In any event it means HUD has understood that it needs to invite and accept public comments on its computerized interactions with the public. So: another step taken in the fascinating trial-and-error process by which our public agencies are adapting paper-based administrative law to the new situations of the paperless office.
On the subject of computerization, by the way, GAO posted a report yesterday on the federal agencies' progress in electronic rulemaking.
When we hear about hurricane relief contractors in the news, it's mainly regarding FEMA contracting, but HUD does have its own contractors assisting with the housing end of the recovery process. HUD spokesman Brian Sullivan responded today to some questions about a couple of contracting details. Nothing earthshaking here, but offered in case it can help subsidized-housing watchers to understand how the recovery is shaping up.
First of all, there had been a mention in HUD's Katrina response summary that the Office of Public and Indian Housing "awarded a contract for general disaster assistance within three days of the hurricane." Mr. Sullivan wrote: "The contract that was let within 3 days was to M.D. Strum for assistance to local public housing authorities (PHAs) in Katrina-affected areas."
Via online searches, it looks like M.D. Strum is a frequent presenter at housing officials' conferences and professional enrichment events. The company was approved last winter to run the Durham, NC Housing Authority amid some controversy over its employment of Larry Jones, who according to the Raleigh News & Observer "was fired as executive director of the New Orleans Housing Authority in 1991." (More here.) Despite this concern, the company recently won praise for straightening out Durham's HOPE VI project. Strum has been HUD's choice to run at least one housing authority in receivership.
We had also asked HUD about the role of the FirstPic company, which is mentioned in recent documents introducing HUD's KDHAP rent payment program for Katrina victims. Mr. Sullivan writes: "The role of FirstPic is to field calls from HUD assisted Katrina affected families looking for information on HUD programs including KDHAP."
This item doesn't really match our focus on apartment housing as it has to do with home loans, but it seems worth mentioning in case some readers here are doing single-family housing work: HUD has announced a revised uniform residential loan application for use by FannieMae, Freddie Mac, the Department of Veterans Affairs, Rural HousingServices, and the FHA. The announcement is Mortgagee Letter No. 05-39, at HUDCLIPS. The form is available in the HUDCLIPS forms library and (more easily) via Fannie and Freddie.
An exceptionally newsy National Low Income Housing Coalition Memo to Members is posted this morning, so usefully that the following is a Washington update built largely on NLIHC's efforts:
Among the items in the M2M are results of NLIHC's latest weekly conference call on the housing relief effort and a number of technical details on housing aspects of the hurricane recovery, including a new analysis of the KDHAP operating guidelines.
Legislative reports in the M2M include housing aspects of three disaster relief bills passed by the House on Thursday. It says housing advocates managed to keep HR 3894 from letting higher-income hurricane victims into the Sec. 8 program -- but they regretted that the bill did not create new vouchers.... HR 3895, the Rural Housing Hurricane Relief Act, would mainly provide six-month temporary assistance... H.R. 3896 would waive the 15% restriction on use of community development block grant funds for "public services." Also, HUD begins the fiscal year with insufficient funding, Sen. Jeffords introduces S. 1834, to give matching grants for affordable housing preservation (it's not yet on THOMAS but you can search the bill number there in a day or two), and the Violence Against Women Act reauthorization passes the Senate.
Then there's a digest of last Thursday's subcommittee hearings on FEMA and Katrina. Can't find transcripts yet, but the (mostly uninformative) House Appropriations Homeland Security subcommittee site for the hearing is here. Press release from Senate Homeland Security here, downloadable RealPlayer recording of the Senate hearing here.
A further item goes over the FMR changes that that HUD released last week. It notes that NLIHC has updated its overall FMR change summary page to reflect the new figures.
- The New York Times is reporting that the political reaction to Hurricane Katrina in Washington, which at first seemed to be favoring the expansion of social spending, is now arguably running against it. (The affirmative action exemption mentioned in the article is probably this one -- link via NLIHC.)
- The National Affordable Housing Management Association has posted a copy of a memo from HUD introducing its own sparsely publicized registration site for vacant units, www.katrinahudhousing.org.... but meanwhile, at the registration site itself, a brief note appears on a mainly blank page: "This site is currently not available. Vacant unit data should be reported to the local field office until further notice. We apologize for any inconvenience."
- On the other hand, the FEMA Web site has actually given front-page space to its earlier press release promoting the DHROnline vacant unit registry service, which is the service working with www.hurricanehousing.net. A Spanish-language invitation to seek or offer vacant units has been posted among recent press releases. Wonder if this has anything to do with efforts by the National Multi Housing Association and National Apartment Association, which have issued voluble complaints (e.g. this one) about insufficient federal effort to match displaced tenants with available conventional vacant units.
- The National Association of Affordable Housing Lenders has posted a helpful group of housing-related disaster recovery links. The information on "katrinahudhousing.org" is apparently out of date (see above), but do look past that part for other materials. These include concise, useful summaries, with links, of what the major federal financial regulators have been doing to ease the recovery... a concerned letter sent back on Sep. 30 by Sen. Sarbanes about the adequacy of HUD's and FEMA's housing assistance plans and urging that FEMA funds be transferred to HUD.... News of Katrina recovery efforts by the Federal Home Loan Bank of Dallas, which include a $5 million grant program... A special $15 million Katrina recovery fund set up by the Federal Home Loan Bank of Cincinnati... and more. Go look.
Novogradac's new Property Compliance Report notes a newly IRS-issued Form 8823, "Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition," and also makes an interesting point about the Notice 2005-69 disaster housing waivers. Of course it has been widely noted that the waiver allows displaced households of any income level to stay in tax credit units provided the projects follow all procedures set out in the Notice (including listing vacant units at www.swern.gov) -- but the Novoco folks point out that "the units still need to be charged rents in accordance with Sec. 42."
Notice 2005-69 and a number of other hurricane-related waivers of tax requirements can be found in the October 3 Internal Revenue Bulletin, which was recently posted, together with the Oct. 11 edition, on the IRS' IRB directory page.
- The HUDUSER data and research folks are offering a compendium of existing research documents thought useful to the hurricane rebuilding process, including advice on housing rehabilitation and manufactured housing.
- NLIHC has spotted an updated Katrina response update document from HUD issued last Thursday, Oct. 6. Contrary to appearances in the first few paragraphs, this is more than just a PR document. It nicely summarizes regulatory waivers granted for the disaster recovery and gives a useful sense of who's doing what. Well down in the text, it states that the Housing Authority of New Orleans has received a $21.8 grant from the Capital Fund Reserve for Emergencies and Natural Disasters. It also says the Office of Public and Indian Housing "awarded a contract for general disaster assistance within three days of the hurricane," though it isn't clear to whom. New administrative details include that senior HUD employees Sam Khichi and Ghislain de Kertanguy are to assist A. Bryant Applegate in New Orleans as local representatives of HUD's in-house Hurricane Recovery and Response Center, which is headed overall by Assistant Secretary Brian Montgomery.
- A similar Rita response update includes mention of a 90-day foreclosure moratorium that may or may not affect multifamily housing. It says, "For the States of Texas and Louisiana, HUD staff has commenced preliminary damage assessments on multifamily properties via telephone," but physical inspections have been postponed.
[UPDATE: These two Katrina and Rita response summaries are linked from a redrafted "HUD's Response..." overview page that is also worth a glance.]
- Knowledgeplex has the full transcript of the Sep. 27 House subcommittee hearing with testimony by Deputy Secretary Roy Bernardi and Assistant Secretary Brian Montgomery. Some more detail here than we've had about how the disaster housing response is coordinated.
- A Jesse Jackson-organized caravan of rebuilding workers is to head back to New Orleans tomorrow morning.
[MORE: A tidy summary of the work left to be done: "President Bush has said all Gulf Coast evacuees should be out of shelters by the middle of this month. The American Red Cross on Saturday said 23,970 Gulf Coast residents displaced by Hurricanes Katrina and Rita had stayed in shelters around the country the night before."]
There's a new installment today on that Sec. 8 rent hike story from Milford, Massachusetts. It seems private landlords are joining local officials in opposing the HUD change in rent rates, and one owner of subsidized apartments has even filed a formal challenge.
- Big announcements in FEMA's corner of the Federal Register today. More official definitions of disaster areas, plus four separate announcements raising disaster relief amounts.
- The NLIHC policy responses page notes that the Washington-area Diane Rehm Show recently hosted FEMA Lead Individual Assistance Officer Mark Misczak, talking about the Katrina housing response, in a broadcast that's now available for Internet download.
- The National Multi Housing Council and the National Apartment Association are especially upset (more here) about the decision to keep housing disaster victims in hotel rooms at $8.3 million per day, per yesterday's Washington Post. As they have for the past month, the NMHC folks are sounding frustrated and mystified, saying vacant conventional apartments are available and FEMA hasn't tried hard enough to get these same displaced households into them:
We continue to work alongside officials from the Department of Homeland Security (DHS) to identify available apartments in and around the impacted areas and submit this information into the DHS/FEMA sponsored national housing registry, www.hurricanehousing.net. In addition, at the request of FEMA, housing providers continue to submit information on 'blocks' of apartments that owners would be willing to rent directly to FEMA. Despite daily conference calls with DHS and meetings with government officials, we have yet to receive any assurances that these housing units are being considered for use by evacuees. Further, FEMA has done little to promote the registry of units as a housing resource...
- The freshest items in the new HAC News are the two legislative briefs at the top of the page: housing spending reduced in the continuing resolution, H.J. Res. 68, and the introduction of a Rural Housing Hurricane Relief Act, H.R. 3895.
- USA Today looks at the New Orleans rebuilding task, with quoted parties ranging from local builder Carl Hamilton to NLIHC president Sheila Crowley. Meanwhile views from the perspective of New Orleanians who aren't going back.
- Here's local coverage of glitches affecting a FEMA trailer home project in Baker, La., including mentions of two officials possibly worth remembering as contacts: "Jimmy Screen of the Shaw Group, which has contracted with the Federal Emergency Management Agency to develop temporary housing sites..." and "Ron Sherman, FEMA's housing area command leader..." (Oddly, Sherman's title was given as "Federal Coordinating Officer" in a FEMA press release two weeks ago.)
- A new estimate puts likely Katrina insurance claims somewhere around $34.4 billion.
A local paper in the Boston suburb of Milford reports today that HUD has agreed to suspend a cut in the town's assigned Fair Market Rent figures until a random dialing survey of local rents can be conducted. It says the area lost up to $300 per unit when it was reclassified out of the Boston metropolitan area, resulting in an outcry that has been echoed by the town's representatives in Congress. HUD's 2006 "final" Fair Market Rents, published on Monday, granted FMR increases to two other Massachusetts (OK, Massachusetts/Rhode Island) metropolitan areas -- Taunton-Mansfield-Norton and Providence-Fall River -- but HUD denied an FMR increase to the New Bedford area after conducting a rent survey there.
It's interesting that Taunton, Fall River and New Bedford are not far from Milford, and all are located near each other in southeastern Massachusetts between the base of the Cape Cod hook and the Highway 95 route from Boston to Providence, R.I.
So why are rents coming up in that whole general area? Well, yr humble blogmother, being a long-absent ex-Easterner, is going to guess that perhaps Fall River and New Bedford have been brought out of their 1980s post-industrial funk by the effect of urban housing prices on urban professionals' willingness to live farther away from Boston, and by the more or less concomitant rise of Providence as an urban center. Any Massachusetts readers here want to tell us if that's right? The comments section is open...
- The Christian Science Monitor writes this week on undocumented immigrant contractors in the Gulf Coast rebuilding effort. The article appears to be a perhaps debatable take on a Sep. 6 announcement by the Department of Homeland Security that it "...will not sanction employers that hire individuals evacuated or displaced by Hurricane Katrina otherwise eligible for employment but who currently lack documentation establishing employment eligibility and identity."
- The city of New Orleans plans to lay off 3,000 city staff. Most of the city has been reopened to returning residents. Whether it's livable is of course another question.
The 25 pages of interim operating requirements still don't cite to specific authority in existing law but they do provide the much-in-demand practical details that will help local agencies, landlords and tenants do the necessary dances to get folks indoors.
Interestingly, the requirements instruct: "PHAs may notify HUD of their willingness to participate in the KDHAP by submitting an email to the following KDHAP email address..." And the address goes to the domain name "firstpic.org." That's the address of FirstPic, Inc., also referred to as FirstPic Consulting, Inc., the Maryland consulting firm whose name was on the KDHAP PowerPoint presentation last week. So perhaps HUD is giving this contractor new responsibility when it comes to organizing the disaster housing paperwork?
The Washington Post is reporting that FEMA and the Red Cross say federal payments will continue for evacuees' hotel rooms past the originally announced cutoff date of Oct. 15.
The IRS' summer Statistics of Income Bulletin includes an article on tax-exempt bonds for 1996-2002, offering detailed statistics on the uses and amounts of private activity bonds. Housing folks may be especially interested in Table 5, which appears on the 20th page of the 34-page PDF for the article but is likely to be labeled as "Page 170" in the browser. This table -- one among several -- shows the totals for new money long-term governmental bonds, by state and category, with a specific category identified for housing.
The Government Accountability Office reports today on explanations for the unusually large $7 billion credit subsidy reestimate issued by the FHA in 2003. They found the FHA had to pay more claims and absorb the effects of more prepayments than expected, thereby raising the cost of its operations for the year. The report says
FHA has taken some steps to tighten underwriting guidelines and better estimate loan performance, though it is not clear that these steps are sufficient to reverse recent increases in actual and estimated claims and prepayments or help FHA to more reliably predict future claim and prepayment activity. Increases in claim and prepayment activity are likely to continue to add risk to FHA's portfolio.
Afraid today's Federal Register isn't up yet as of this writing -- though it could appear any minute, so when you read this you might as well check the FR browse-by-date page to see if the Oct. 4 link has appeared. [UPDATE: Today's FR is up now, but there's nothing much exciting in it for housing folks. Just a handful of new disaster area definitions in the FEMA and SBA sections.] While we're waiting, some bits and pieces:
- Via NH&RA, we have another disaster housing tax bill introduced in Congress last week. This one is HR 3715, the "Affordable Housing Preservation Tax Relief Act of 2005," proposed by Reps. Ramstad and Cardin, to provide an exclusion of gain from sale of affordable housing attributable to depreciation. - A new 580-unit "trailer park community" was to open for hurricane victims in Louisiana yesterday. - Via BizNewOrleans, a link to the City of New Orleans situation report, apparently (?) to be updated at this location, but better check the main city site for reports there. - Linked from the New Orleans city site, a pretty amazing New Orleans flood map: enter an address and find an estimate of how deep the water got. - FEMA posted a summary yesterday of its Rita and Katrina responses to date.
The four HUD nominees who had hearings Sep. 15 were confirmed in their posts on Friday: Keith E. Gottfried, to be General Counsel; Kim Kendrick, to be Assistant Secretary for Fair Housing and Equal Opportunity; Keith A. Nelson, to be Assistant Secretary for Administration, and Darlene F. Williams, to be Assistant Secretary for Policy Development and Research.
Orlando Cabrera, the Florida Housing Finance Corporation chief nominated to be Assistant Secretary for Public and Indian Housing, is still awaiting his hearing.
As always, the new National Low Income Housing Coalition Memo to Members is worth reading. Today's earlier item here on the HUD Fair Market Rents announcement already quotes its analysis. Other highlights include notes of past and upcoming conference calls on nuts and bolts of the disaster housing programs. NLIHC's main site is to post materials from this past Friday's conference call, in which four high-level HUD officials "presented HUD’s current plan and future proposed actions, and answered questions from the field." Guidance in this section of the Memo includes advice on where to complain. At the very top of the memo: a complaint that
...the Bush Administration has offered up a bifurcated approach in which some displaced people are in the FEMA program, other displaced people are in a brand new HUD program, and a lot of people will not fit into either program. A report from Atlanta last Friday illustrates the pitfalls of this plan. An evacuee had been rejected as eligible for FEMA assistance and FEMA referred her to the Atlanta Housing Authority for help. But she did not fit the criteria for the HUD program, so she was out of luck.
Also included: legislative news too extensive to summarize -- best to just read what they have -- and the shape HUD is proposing for President Bush's "urban homesteading" proposal, more analysis of last week's KDHAP webcast and PIH notices, and a handful of reports on urban housing inequality.
- News from the HUD Inspector General includes a 15-arrest housing fraud sweep in Indianapolis and a rehab loan repaid by a former New Jersey state casino official following inconclusive investigations by HUD OIG and the FBI.
In HUD's part of the Federal Register today, one small new item plus developments on two major previously released regulatory announcements.
The small item first: HUD is extending the current HOPWA application deadline from Oct. 6 to Oct. 13.
In addition to that, today's issue posts formal versions of two announcements that we've already noted in other forms, one of them with an important new preamble:
- Today we have Federal Register publication of the Public and Indian Housing Katrina waiver list that was posted a few days ago on HUD's important page for "Program Guidance, Waivers and Notices In Response to Hurricane Katrina." This list grants some automatic leeway to housing authorities within Hurricane Katrina disaster areas, and invites both these and other public housing authorities to request many different types of waivers using a request checkoff form published here. The Federal Register version looks all but cosmetically identical to what we described here last Thursday. Not noted then, however, and very much worth noting: Item 12 in the list of waivers includes a possibility for housing authorities to subsidize higher rents than usual -- 120% or more of established Fair Market Rents.
- Today the Federal Register also publishes HUD's final Fair Market Rents for 2006 (full tables available in the PDF version here). These final FMRs, as we noted on Friday, were posted in advance of the statutory Oct. 1 deadline on the HUDUSER FMR data page. The new material in today's posting consists of a preamble that explains the revisions to last June's proposed figures and gives some indications of HUD's future action. It says today's figures only partly reflect HUD's Aug. 25 FMR 50th-percentile notice, which proposed major changes to the list of cities permitted to set their FMRs at the 50th instead of the 40th percentile: today's figures do include 50th-percentile FMRs for the areas that were identified in August as being newly eligible for such increases, but they do not yet show decreases for the areas where FMRs are proposed to be cut down from 50th to 40th percentile. The preamble adds:
HUD asks that areas please take special note that unless information is submitted that changes the results of the eligibility determinations issued in the August 25, 2005 notice, the proposed reductions in FMRs from the 50th to the 40th percentile for selected areas will be implemented in a subsequent notice.
The FMRs in today's notice grant six increases above the June figures based on random dialing surveys, for areas in Massachusetts, North Carolina, and Puerto Rico. HUD has declined to change the figures for several other areas based on its surveys. Fair Market Rent for a two-bedroom apartment in rural Puerto Rico rose to $352, up from $309 -- a figure amazing from the perspective of this desk in San Francisco, where FMR was left at $1536 for a two-bedroom apartment despite strenuous local protests that the figure was too low. Today's FMR notice acknowledges that its figures are based on data from before Hurricane Katrina. It says: "HUD's Office of Public and Indian Housing will be issuing a notice within the next few weeks that addresses how PHAs may obtain disaster-related exceptions FMRs to meet local needs." Not clear, however, whether this is referring to a notice that's still to come or to the PIH notice that actually appears right next door in the same Federal Register issue today.
[UPDATE: From discussion of the FMR's announcement in the new NLIHC Memo to Members, which is packed with all kinds of other major news and will get a closer look here later today:
The most significant change is that HUD has decided to revert to using a state minimum FMR. This minimum is set at the statewide median nonmetropolitan rent level and is meant to assure that voucher holders will be able to secure decent housing in rural areas that may be poorly served by rental housing. While this was the practice in the years immediately before FY05, a new wrinkle this year is that the statewide minimum is not allowed to exceed the U.S. median nonmetropolitan rent level. As a result, this change primarily affects small nonmetropolitan counties in the South with low rents.
And that's just part of the NLIHC analysis. It's very much worth a look.]
The Washington Post identifies this Friday GAO report as referring to the continuing independent counsel investigation of former HUD Secretary Henry Cisneros, a project whose expense has been questioned by members of Congress.
On Friday we summarized an IRS Private Letter Ruling that told a cautionary tale of refunded bond savings that tainted a loan to an affordable housing project, reducing its ability to qualify for tax credits. It drew this response from a knowledgable industry practitioner:
I haven't read the materials, so I know only what's in your summary, but it could be that some tax lawyers somewhere are *extremely* red-faced right now. The bond refunder sounds like a classic McKinney Act split-savings. Will be interesting to see if the owner has a claim against the lender -- this is the sort of thing that is probably the subject of a little-noticed bond rep/warranty.
Two of the several interesting things about our new hurricane housing rent programs:
- Per the explanations cited here yesterday, and FEMA's transitional housing assistance page, there seem to be two Katrina rent payment programs: one run by FEMA, one run by HUD. It appears the promised initial $2,358 payments are to come from FEMA, but then it looks as though both HUD and FEMA may make later payments. Which leaves it not quite clear which governmental pocket the money will be coming out of as time passes.
- According to the same sources, and as highlighted in HUD's advice page for displaced households, the HUD KDHAP program will assist the members of each household, wherever they choose to settle, by paying up to 100% of the local HUD-determined Fair Market Rent (FMR). This is more generous than normal Sec. 8 vouchers -- it's paying whole rent amounts, not just subsidies -- but the incentives are interestingly different. In the normal Sec. 8 voucher program, of course, housing authorities are allowed to subsidize rents up to 110% of FMR, and higher if given permission, as a way of adjusting to local shortages of affordable housing. On the other hand, KDHAP requires households to pay out of pocket for any rent amount beyond 100% of local FMR. So KDHAP compensates less for local housing pressures than the Sec. 8 voucher program does. Which creates a pretty strong incentive for displaced households to settle in towns where there's less competition for housing.
Also...
We've previously linked to the HUD press release mentioning Deputy Secretary Roy Bernardi's congressional testimony, but it seems worth revisiting his Sep. 27 prepared text because it brings us several new explanations about federal multi-agency Katrina housing coordination. To begin with, this testimony explains that HUD's Hurricane Recovery and Response Center (HRRC), established at HUD headquarters under the leadership of Assistant Secretary Brian Montgomery, is "for internal inquiries only," and that its functions have included identifying vacant multifamily housing. It also brings us word of a new entity under Deputy Secretary Bernardi's own leadership:
The White House has also created a Hurricane Katrina Task Force on Housing and Relocation Policy to lead the housing efforts through all stages, from shelters to long-term housing. I am the chair of this interagency effort that is composed of a total of 12 agencies, including USDA, VA, DOD, and SBA.
Still unclear: whether this "task force on housing and relocation policy" is a previously unannounced entity, or whether it's the same group of officials who appear in this Aug. 31 White House photo captioned with the more generic label of "Task Force on Hurricane Katrina Recovery." The phrase "housing and relocation policy" doesn't produce relevant results on the White House Web site.
Then then there's a little discussion of the Joint Housing Solutions Center in Baton Rouge, which this space tried to figure out a couple of weekends ago. The testimony states:
We have also joined with FEMA to establish the Joint Housing Solutions Center, located in Baton Rouge. The Joint Housing Solutions Center is the central location for inter-agency housing coordination and planning. The Department's lead representative at the center is Hank Williams who serves as our Deputy Assistant Secretary for Multifamily Housing.
Incidentally, Mr. Williams has been referred to as co-chair of the Joint Housing Solutions Center, but after repeated inquiries we haven't yet been able to find out who is sharing this leadership with him. However, now that we're past the first crisis, does the Joint Housing Solutions Center perhaps become less important, while this White House entity steps up as the main coordinating authority for the Gulf Coast housing recovery...?
Readers who have interpretations or information to share, please do use the comments section below.
