NMTC to get renewal through 2008?
NH&RA's online news page has spotted a provision in the Senate-passed version of S. 2020 that would continue funding the New Markets Tax Credit through 2008. Also noted on the current edition of the page: word from the CDFI Fund about how and when it will consider applicants for Community Development Entity status -- and much more. Be sure to scroll down, as fresh and interesting material sometimes appears under subject headings placed well below the top.
The THUD bill lands at the White House
HAC News has a table with some of the gory details, strongly slanted toward rural housing topics, but of interest to all multifamily housing people.
Two lawsuits trying to stop Katrina evictions
The FEMA Answers wiki was having some trouble yesterday but it's back up now, with considerable news on the litigation side of the hurricane evacuee crisis. It reports there are two separate courtroom efforts afoot to stop evictions of Hurricane Katrina victims. One resulting court order, in Sylvester v. Bossiere, has stayed evictions in New Orleans and Jefferson Parishes. Separately, attorneys in McWaters v. FEMA — the big class action filed Nov. 10 — are trying to stop FEMA's threatened evictions from the hotel program, not for love of the conditions in the hotels, but because destitute evacuees there are not being offered other housing or relief money to find their own homes. A McWaters request for a temporary restraining order was filed this past Monday (Nov. 28). The court papers, which are long on description and short on legalese, are here. (Warning: large file, slow download.) They allege that many of the evacuees still in hotels are poor, many still have not received any cash relief, and ...(iii) for those who did receive the initial, three-month Assistance benefit of $2358, none has received a single additional dollar, despite FEMA promising to provide benefits beyond the initial three-month stipend; and (iv) thousands who received Assistance and used some or all of that Assistance on bare essentials other than rent have been declared by FEMA to be ineligible for continuing Assistance, and have been ordered to reimburse the government for any money spent on anything other than rent. A separate, earlier restraining order petition sought overall changes in the way FEMA is handling its relief program, including a request that the court stop FEMA from punishing people who spent relief money for purposes other than rent. See p. 7 of the Nov. 28 document for a summary.
Mf'd housing regs, HOPWA, and a listserv
Fannie announces new conforming loan limits
Fannie Mae announced its new conforming loan limits this week. Limits for multi-unit loans in 2006 will be $533,850 for two-family loans; $645,300 for three-family loans, and $801,950 for four-family loans. The limit for second mortgages will be $208,500 in 2006. The limits will be 50% higher in Alaska, Hawaii, Guam, and the U.S. Virgin Islands -- presumably as compensation for putting up with all of the tourists. The single-family limit will rise to $417,000 in 2006, up from $359,650 in 2005, which Fannie Mae estimates will make an additional 466,326 borrowers eligible.
Who put the blog in the bloggedy blog...
Jack the very wonderful tech consultant has restored our posting capability, and I'd like to shake his hand. Folks, we once again have a fully functional weblog here. In honor of which, two more items: - Despite what SocketSite had to say (see earlier item), Sec'y Jackson is celebrating overall record new home sales in October. - There may not be enough physically sound housing or clean running water in New Orleans, but at least there's free Internet.
HUD announces Sec. 8 voucher grants
HUD has posted $202 million in Sec. 8 voucher program grants, listed by housing authority, for "housing conversion actions, public housing relocations and replacements, moderate rehabilitation replacements, and HOPE VI voucher awards." In other words, not the basic subsidy, but a lot of the extras.
Tuesday housing eclectica
A few more housing-related items: - Tax credit approvals may be suspended in Dallas, but some are going ahead in Brownsville, TX. - The sharp regional SocketSite weblog thinks San Francisco house prices have peaked, and it has been posting items all month suggesting similar conditions elsewhere in California. - This Wednesday's NLIHC press call on the Hurricane Katrina housing response will feature some of the smartest experts around on both low-income housing policy and homelessness policy. (Odd that housing and homelessness should be two separate specialties, but somehow they are.) With such a lineup, this should be one highly erudite stemwinder of a gripe session. - And here's an urban planning lesson from two Dutch cities, which the NYT's Christopher Caldwell says have done better than in the riot-riven French suburbs. He suggests that the best approach is always to build mixed-income housing of mixed types, as opposed to uniform "machines for living," because it allows people who move up economically, or who simply change their tastes as they get older, to find new kinds of homes within their own neighborhoods without feeling trapped.
Monday housing mix
Following is some food for thought, hopefully to be followed soon by a return to daily weblog coverage of breaking news in the multifamily housing industry. - See our main page for ideas to improve the low-income housing tax credit program that we gathered from our own panel of experts at AHF Live. - FEMA has posted its official announcement of the hotel deadline extension. - Proving further that there are second acts in American lives, Henry Cisneros' CityView firm could end up building a thousand-unit project in East Chicago. - David Smith says the Bush Administration has set a definite policy on New Orleans, and it consists of making the rebuilding project someone else's problem. - A Daily Dose of Architecture introduces The Archi-Tourist, a start on a worldwide guide to architectural innovation, collaboratively edited by invited contributors. There's an application page if you're interested in joining.
Slim pickings among the PLRs
(Again, apologies for the long silence. We still haven't straightened out Blogger's relationship with our new ISP.) So why is it that the IRS Written Determinations (Private Letter Rulings, Technical Advice Memoranda, and Chief Counsel advice) have been so sparse both this year and in 2004 when it comes to low-income housing tax credits and tax-exempt bonds? I mean, take a look at this week's weekly index, and the index from this time last year, and you'll see there's relatively little under Sec. 42 for tax credits, and not much either under Secs. 103 and 141-149 for bonds. Now compare this same 47th week of the year for 2003. Quite a few more items in those categories, no? Anyone got any idea why?
Half-holiday housing mix
Some interesting items at NMHC lately: First of all, they've posted the expected mixed review of yesterday's FEMA hotel rent announcement (more info here). And NMHC's Jim Arbury is recommending last night's PBS discussion with senior officials in the New Orleans recovery -- transcript available here. NMHC has also posted a copy of a letter from the Congressional Hispanic Caucus criticizing a HUD plan to make landlords translate their own documents for tenants with limited English. As the letter suggests, the disadvantages for both landlords and tenants go beyond the mere additional cost of translation work: tenants could get badly translated information potentially leading to misunderstandings or to unequal treatment of English-speaking and other tenants; landlords left without the "safe harbor" of standardized translations could be the losers if tenants are able to claim in court that they received inadequate notices. Also around the Web: - The SF Chron has a closeup of Hurricane Katrina evacuees who face, at Thanksgiving, what Mr. Paulison terms " the opportunity to become self-reliant again." [MORE: A Boston Globe story is among several explaining how evacuee tenants who are willing and able to pay the difference between a voucher amount and a landlord's rent are being prevented from doing so.] - David Smith offers one of his typically erudite and offbeat elaborations on Kelo and the future of eminent domain here and here. - Big HUD-assisted rehab/homeownership program announced for the Bronx, Brooklyn and Queens. - FHA foreclosure moratorium extended for hurricane areas. [MORE: Yes, this is a single-family form of assistance. It's formally Mortgagee Letter 2005-45.] - Habitat for Humanity is barging manufactured homes down the Mississippi. [MORE: HUDCLIPS has posted new application forms for the Healthy Homes and Lead Hazard Programs. They're out in four parts, several in a choice of fillable or printable PDF. Fillable PDF links are here... here... here... and here.]
Fed nominee echoes Greenspan on GSEs
Ben Bernanke, who is President Bush's nominee to succeed Alan Greenspan as chairman of the Federal Reserve, agrees with Greenspan that the portfolios of Fannie Mae and Freddie Mac should be capped. Bernanke said their immense size makes their investment health "important for controlling potential systemic risk," according to this article from the Associated Press. Meanwhile, House and Senate differences on how and whether to limit their portfolios continue, with no resolution expected in 2005.
FEMA will extend hotel rent payments
The Washington Post says FEMA is going to extend most of those hotel rent payments through at least Jan. 7 instead of imposing its threatened Dec. 1 cutoff. However, the National Multi Housing Council, in an email circulated this evening, is noting that hurricane evacuees outside the states of Texas, Louisiana, Georgia, Florida, Mississippi, Alabama, California, Tennessee, Arkansas and Nevada may still be required to find apartments on terms that can use the available kinds of relief payments as soon as Dec. 15. There's nothing new up at NMHC yet but might as well watch the site, as they'll probably post something about it soonish. In the note circulated this evening, NMHC's Jim Arbury writes: We remain in regular contact with FEMA officials seeking clarification on other issues raised by FEMA’s long-term housing plan, including whether the Agency will honor commitments to 12-month voucher leases in Houston and six-month leases in Dallas despite its announcement on November 15 that it plans to end all voucher funding as of March 1, 2006.
The HUD appropriations deal, and more...
The most recent edition of the NLIHC Memo to Members describes (gasp!) the conference agreement on HR 3058, the HUD appropriations bill, the Senate program cuts, the state of the impending FEMA aid cutoff, and more. Also mentioned at NLIHC is a "Questions and Answers" document posted by HUD's Office of Community Planning and Development that will impose a new testing system of "objectivees" and "outcomes" affecting recipients of CDBG, HOME, and HOPWA funding as well as Emergency Shelter Grants. Otherwise piled up in the hopper during our latest glitch-induced blog silence: - The New York Times reports on the state of New Orleans public housing and quotes Sec'y Jackson as having said, "We are not going to build traditional public housing anymore." - More distressing news of Hurricane Wilma's effect on the Florida housing market. - ACORN is bluntly calling FEMA's planned end to hotel subsidies an "eviction" likely to be "putting families out into the street," and is organizing against it. - The Housing Assistance Council has a report out on the usefulness of state-level rural housing assistance in "welfare to work" transitions. - The House Financial Services Committee has marked up and reported HR 2695, a bill that would amend the McKinney-Vento Act to protect battered women from being tracked by abusers through transitional housing and shelter reporting systems. - The IRS has posted a renewal charter for its Advisory Committee on Tax Exempt and Government Entities. - HUD has issued an information collection notice on loan servicing of its coinsurance programs, including 221(d).
IRS won't reclassify Katrina hotels
The IRS has just issued Notice 2005-89, saying hotels used for the temporary housing of Hurricane Katrina evacuees won't be reclassified as other than "lodging facilities" -- a decision that has advantages for Real Estate Investment Trust owners of such properties under IRC Sec. 856. Again, please bear with us during these difficulties with the weblog. We're able to post again this morning but there may be some further unaccustomed gaps before the problem is solved.
Advocacy news -- Katrina and more
[NOTE: As some folks have pointed out, this item was actually posted Tuesday morning, not Saturday afternoon. This was, again, due to our posting difficulties, which seem to be slowly resolving now. -- MB, Blogmother, 11-22-05] OK, we've got further highlights here on the Katrina evacuee housing situation plus a couple of other longrunning federal housing issues we've been following. And now I think this space is very nearly caught up from its unintended three days of dead air, for which, once again, my apologies. [Warning: we may have some further technical difficulties in the next day or two. If some time passes before the next post, please bear with us.] - Look over recent postings by the National Multi Housing Council for a pretty good idea of this week's efforts to sort out the Hurricane Katrina housing relief situation. Links include this one to a study from Brookings: "Housing families displaced by Katrina: a review of the federal hurricane response to date." Also, per the Houston Chronicle, thirteen Texas members of Congress have asked FEMA to extend its Dec. 1 deadline to stop paying hurricane evacuees' hotel rents, and Rep. Bennie Thompson, D.-Miss., is calling attention to a snafu that has FEMA not yet taking up Fannie Mae on a two-month-old offer of 1500 rent-free housing units. And the lefty political journal In These Times argues that not enough is being done to protect the voting rights of internally displaced Gulf Coast households. - NLIHC has posted a new lobbying letter being signed by housing, charity, religious, and labor groups asking the Senate not to follow the House in denying Fannie Mae/Freddie Mac affordable housing funds to nonprofit groups that register voters. - Scroll down in the recent CDFI Coalition newsletter for links to tables showing where and how the CDFI Fund grantmaking programs are making awards.
KDHAP answers and other agency tidbits
Here's a look at some of the federal announcements we missed during this past week's technical difficulties: - HUD says it has opened a dozen housing assistance centers to administer the KDHAP housing relief program in areas housing large numbers of evacuees from Hurricane Katrina. - Possibly more important, HUD has posted a detailed 13-page KDHAP "Questions And Answers" document with considerable detail explained. Among other "answers," it says families who before the hurricane lived in non-HUD subsidized housing, such as USDA buildings, are not eligible for KDHAP asistance. In addition it specifically says former residents of HOME-subsidized and tax credit-subsidized buildings are not eligible for KDHAP, though they may qualify for the FEMA Individual Assistance Program. There are quite a few bits of helpful-looking guidance about how to arrange continuing subsidies for households swapping from one emergency housing situation to another. - There's a new version, in fillable PDF form, of HUD's Standard Rating Criteria form for applications to the Sec. 811 disability housing program. - There's finally a guidance document out from HUD on the reinstatement of federal Davis-Bacon wage requirements, now appearing alongside HUD's extensive guidance on the earlier Davis-Bacon suspension that followed Hurricane Katrina. - HUD has posted a hurricane-induced waiver of anti-flipping rules for purchase and resale of single-family properties that appears to have been signed in late September. - Following Orlando Cabrera's confirmation by the Senate to be Assistant Secretary for Public and Indian Housing, HUD has a press release out with a fresh official bio and a welcome to the agency. - The Federal Register has published the newest HUD list of mortgage issuers barred from originating single-family FHA mortgages. - The Air Force issued a notice describing permission it has received from the Advisory Council on Historic Preservation for handling its now-historic Capeheart and Wherry Era family housing. Every once in a while these "Capeheart and Wherry" housing notices crop up in the military sections of the Federal Register. They may be worth following in places where military properties could eventually be used to help civilians in need of affordable housing. - Farmer Mac has published a proposed rule for new disclosure/reporting and risk-based capital requirements.
Back to blogging -- news we've missed
Profuse apologies for technical difficulties
Please accept our apologies for the weblog's lack of updating during the past three days. The difficulty was caused by a transition to a new ISP. Posting should be back to normal shortly. Thanks for bearing with us.
FEMA to move evacuees out of hotels
New from the National Multi Housing Council lobbying folks: FEMA is now promising to move the hurricane evacuees out of hotels and, at least in theory, into apartments, by December 1. NMHC is concerned about whether FEMA can live up to its promise on such a short timetable, but here's FEMA's press release on the plan, and NMHC has also obtained a FEMA guidance document explaining how the task is to be accomplished. Anyway looks like this will end the hotel contracts arranged by Kansas-based Corporate Lodging Consultants, which reportedly had booked some 230,000 hotel rooms for evacuees by late October.The document is signed "David Garratt, Acting Director of Recovery," a name that has appeared relatively recently in news of the hurricane aftermath. Mr. Garratt is the primary federal official quoted in today's AP coverage. The AP story, partly quoting NMHC's sister organization, the National Apartment Association, raises the question of whether the people asked to move out of hotel rooms will in fact be moving up to better housing or if they'll simply be moving... out. AP quotes the FEMA acting director, R. David Paulison, as saying, "Those affected by these storms should have the opportunity to become self-reliant again and reclaim some normalcy in their lives." Unclear however what becomes of those affected by the storms who find themselves unable to become self-reliant soon enough. How many rents will now be paid by KDHAP and the FEMA programs? Stay tuned.
Help for Sec. 515 in '06 appropriations
The Housing Assistance Council, which has found precious little to like about recent management of the Sec. 515 rural housing program, is surprisingly cheerful today over several Sec. 515 provisions in the recently signed agriculture appropriations bill. What's coming is a $9 million demonstration program with help for Sec. 515 landlords, plus $16 million to fund extra vouchers for tenants in buildings with prepaid Sec. 515 loans. It also allows USDA to pay nonprofits up to $50,000 toward the direct costs of purchasing Sec. 515 buildings. And more preservation loans for nonprofit intermediaries. Go read.
Two serious 'Alerts' from Nixon Peabody
The firm of Nixon Peabody has posted two important "Alerts" in affordable housing law. The first item notes an important change that it says appeared quietly -- perhaps too quietly -- in last month's final rule on the use of project-based Section 8 vouchers. Updating its own previous posting on the subject, it says the rule has special importance for projects subsidized by project-based vouchers that also receive extra low-income housing tax credits (LIHTC) because they are in a Qualified Census Tract (QCT) area of particularly high contrast between incomes and housing costs. It says that formerly, under PIH Notice 2002-22, such projects were allowed to charge higher rents (i.e. Sec. 8 would have paid them higher subsidies) up to the lower of two amounts: the unassisted rent for comparable units in the area, or 110% of the year's HUD-determined " Fair Market Rent" for the area. Outside QCTs, the rule was the same except that the formula-determined LIHTC rent amount had to be used instead if it was lower than the other two amounts. Nixon Peabody says the new rule, however, overrides 2002-22 -- having done so without a public comment process -- and provides that all LIHTC projects receiving project-based voucher assistance, in or out of QCTs, have to cap their rents at the formula-determined LIHTC rent amount, even if that is lower than the official "Fair Market Rent" or the rent at the similar private complex next door. The second item highlights a Nov. 1 final rule from the EPA that it says should be understood by "anyone who anticipates buying real estate." It explains that the new rule lays out stricter new definitions of the assessments and research that purchasers of property must conduct in order to show they have made "all appropriate inquiries" about previous uses and neighbors of the property -- which they must do if they want to be protected from liability from later-discovered pollution hazards. The rule is effective next Nov. 1, 2006. The "Alert" refers readers to this EPA site, which explains both the rule and the formal process that led up to it. Nixon Peabody warns, "The Rule will have far-reaching effects on most large-scale real estate transactions, including most transactions involving multifamily housing developments."
NLIHC warns of HUD appropriations cuts
Today's NLIHC Memo to Members includes insider reports that some HUD programs are getting hurt as the conference committee reconciles House and Senate versions of the Transportation/Treasury/HUD appropriations bill. The Memo has much more legislative news, including of a likelihood that the Senate won't get to its version of the GSEs bill, S. 190, in its current session -- this amid further opposition to the anti-voter-registration provisions in the House version of the bill. Also, they note the Senate confirmed Orlando Cabrera on Nov. 4 to be HUD's Assistant Secretary for Public and Indian Housing.
Monday morning in housing and hurricanes
- HUD is inviting comment (submissions are due Dec. 14) on its procedures for appealing Sec. 8 rent adjustments, and separately on HOPWA forms. I'm not sure if the Manufactured Housing Consensus Committee is of interest to readers here, but its agenda for Nov. 29-30 has just been posted. - The Commerce Department's Economic Development Administration has again delayed applying some parts of the interim final rule it published in August. The rule is a major regulatory rewrite under the Economic Development Administration Reauthorization Act of 2004. - The Small Business Administration today launches a " Gulf Opportunity Pilot Loan Program" for loans of up to $150,000 to small businesses in the Katrina/Rita hurricane zones. The pilot program takes effect right away through an interim final rule without a prior proposed-rule stage. Comments are however due Dec. 14. - The Times-Picayune reports that, if a recent Louisiana rebuilding conference is any guide, New Urbanism, love it or hate it, will have a lot to do with the future of New Orleans. Meanwhile the political organizing group ACORN offers webcast extracts from what appears to have been a separate but similarly timed rebuilding conference. And just recently ACORN's chief organizer made a delicately roundabout allusion to an interesting prospect: what if a New Orleans mayoral campaign were waged by absentee ballot among the voters of the Katrina diaspora? [MORE: A New York Times editorial asks the basic question of why the federal Katrina relief operation gave the primary housing role to FEMA rather than HUD. Come to think of it, has anyone answered that one yet?]
Palm Beach evictions: don't blame Wilma?
Financial Services Democrats rip 811 cuts
The inevitable FEMA lawsuit has been filed
(OK, full disclosure: yr humble blogmother has in the past worked indirectly for at least two of the attorneys who are bringing the following suit:)A lawsuit filed in Louisiana is seeking class-action status for its claims that FEMA did not provide aid timely and then withheld aid unfairly from hurricane victims in need. The case is McWaters v. FEMA, Case No. 05-5488, in the U.S. District Court for the Eastern District of Louisiana, filed this past Thursday, Nov. 10 by the New York firm of Schulte Roth & Zabel (acting pro bono), the Lawyers' Committee for Civil Rights Under Law, Southern University Law Center professor John K. Pierre, the Public Interest Law Project, and the Equal Justice Society. If you want to read the complaint they've posted it here. (Warning, it's a large file of 3.8 MB.) The 63-page complaint pulls no punches. It begins with a large dollop of rhetoric and many personal stories of hardships faced alone, and thence on into fifteen causes of action. The Public Interest Law Project is represented on the complaint by California attorney Steve Ronfeldt, who has experience with precisely this kind of case. Mr. Ronfeldt worked on the Jimmie Smith v. FEMA case for low-income victims of the 1989 Loma Prieta earthquake who were denied federal benefits because the homes they lost were either in residential hotels that refused to rent on a long-term basis, or shared with unrelated roommates who had already received checks. In other hurricane recovery news.... in Houston, some evacuees have emergency housing vouchers that can't be used at all because they don't cover the full rents of available apartments [MORE: House Democrats are upset about victims possibly losing housing for lack of administrative coordination.]... At FEMA, the no-bid contracts that were going to be reopened are still not reopened... and in Mississippi there's a standoff over who pays campground fees.
Empowered or otherwise?
The Star-Tribune goes over the he-said-HUD-said differences that continue to surround the Minneapolis Empowerment Zone. (The Inspector General report mentioned in the news articles is the third one down on this list.) Minneapolis has one of the "Round II" Empowerment Zones, which in theory follow the Clinton-era model of giving cash grants for economic development, but which depend on the continuing goodwill of Congress for fresh appropriations each year toward the total grant funds they've been promised. In currently debated appropriations bills, according to the Star-Tribune, the Minneapolis EZ may get no further cash assistance at all.
Catching up on the federal announcements
Yes, it's Veterans' Day, which means no Federal Register fix until Monday (sob). However, have no fear, we've still got regulatory tidbits to spare. To begin with, a nice catch by the good folks at NH&RA: the CDFI Fund has issued a new version of its allocation agreement template for the New Markets Tax Credit. Go to the NH&RA site and scroll nearly all the way down the front page for a detailed analysis of the changes. - The National Community Reinvestment Coalition recently argued before Congress that it's unfair to exempt credit unions from the kinds of requirements to serve disadvantaged areas that banks and thrifts must meet under the Community Reinvestment Act. - You probably saw already that Freddie Mac restated its profits this past week. Down by $220 million. - New errors reported at Fannie Mae yesterday. - HUD has issued a final rule governing the public release of mortgage data from Fannie and Freddie. [MORE: MarketWatch today on same.][YET MORE: HUD press release on same.] - HUD announces $18.8 million in second-round HOPWA grants yesterday.
Budget cut vote postponed in House
Per the Washington Post: " ' We weren't quite ready to go on the floor,' Majority Leader Roy Blunt, R-Mo., said five hours after recessing the House for closed-door meetings aimed a picking up votes from wavering Republicans..."
Enterprise to receive green building award
A little more of the CRA enforcement saga
The Federal Reserve, FDIC, and Comptroller of the Currency issued a notice with a request for comment today that contains proposed interpretations of this summer's major rule redesigning enforcement of the Community Reinvestment Act (CRA). It takes the form of proposed additions to the "Interagency Questions and Answers" document on the CRA, and comments are due to any or all of the respective agencies by Jan. 9, 2006. See the document itself for detailed instructions on how to submit and view comments electronically. Many of the proposed Q&As are hard to parse, but it's interesting that a lot of the areas addressed have to do with when, and how much, investments in areas affected by disasters should count toward CRA compliance goals. And this proposed language will surely excite some comment: Sec. ----.12(g)(4)-2 (proposed): When do activities that provide housing for middle-income and upper-income persons qualify for favorable consideration as community development activities when they help to revitalize or stabilize designated distressed or underserved middle-income nonmetropolitan geographies or designated disaster areas?
A2 (proposed): A bank activity that provides housing, but not necessarily for low- or moderate-income individuals, may qualify as an activity that revitalizes or stabilizes a designated distressed nonmetropolitan middle-income geography or a designated disaster area if the housing helps to revitalize or stabilize the community by attracting and retaining businesses and residents, providing benefits to the entire community, including to low- and moderate-income individuals and neighborhoods. For example, a bank activity that provides housing for middle- or upper-income individuals in a designated distressed nonmetropolitan, middle-income geography or disaster area that is part of a bona fide plan to revitalize or stabilize the community by attracting a major new employer that will offer significant long-term employment opportunities, including to low- and moderate-income individuals, qualifies as community development. A little context: you'll remember how back on Aug. 2, 2005, these same three of the four federal banking regulators that enforce the CRA issued a major rule that put a very large number of institutions in the "small bank" category for CRA purposes, allowing them to receive lighter scrutiny. The rule defined the "small bank" threshold from the former $250 million all the way up to $1 billion. In this it followed the lead of the fourth regulator, the Office of Thrift Supervision (OTS), which on Aug. 18, 2004 had already lifted its "small savings association" definition for savings and loans to the $1 billion point. However, unlike OTS, the three other institutions created a new middle level of examination strictness for a new category of "intermediate small banks," meaning the newly "small" institutions between $250 million and $1 billion. The measure was presented as a compromise decision following huge letter-writing efforts, mainly by opponents in the community development professions who said less enforcement would mean less real community investment, but also by bankers who wanted less rigid standards. Also, as the quoted Q&A above illustrates, the new regs changed some definitions of what would count as a community development activity, creating disagreements on whether banks might be allowed to meet CRA requirements by financing rich people's projects in poor, rural, or disaster-affected areas.
So FEMA's problems aren't only at the top
Philip Blackwell, senior pastor of the First United Methodist Church in downtown Chicago, recently provided an anecdote that says way too much about federal government's failures in the post-hurricane world. The story was part of a lengthy sermon, so if you aren't interested in theology, don't click here. But I'll excerpt here what Blackwell said about FEMA: About 70 laity and clergy from the Northern Illinois Conference of the United Methodist Church went south to help hurricane victims. The farthest south they could get was Laurel, Mississippi, about 100 miles short of the Gulf Coast. This was three weeks after the storm. FEMA had not arrived yet. The United Methodists, organized by the United Methodist Committee on Relief and with supplies from our Sager-Brown resource center in Louisiana, were there. ...
One small group went over to Jasper County, overwhelmingly poor, rural, African-American. They pulled trees off of houses and patched roofs all week. "Why didn't you leave?" they asked one 75-year old woman with a tree embedded in her house. There was a car sitting in the driveway. "I could not get my 95-year old mother out of bed. We just sat in the dark and listened to the wind of the hurricane and then the wind of the tornadoes that followed and prayed that none of the trees would hit where we were hiding. You're the first people we've seen who've come to help."
At the end of the week the United Methodist churches in the area invited all the people to come to a resource day. All the agencies would be there to help. Only the United Methodists showed up. Both FEMA and the Red Cross promised to be there, but they did not appear. It was found out later that the FEMA man actually drove into the parking lot of the rural church, saw all the people coming, knew he would be overwhelmed, and drove away. [emphasis added]
Um, well, at least he showed up? There's just not a positive spin one can put on that story -- as far as FEMA is concerned.
Early word on '06 LIHTC and bond amounts
Deep in the guts of Revenue Procedure 2005-70 (See Sections .07 and .15), the IRS has announced the important 2006 per-capita multipliers and the small-state minimum figures for determining each state's share of low-income housing tax credits (LIHTC) and federal tax-exempt private activity bond authority. All we need now are the official population numbers, which should appear some time around February or March 2006 in a more helpfully explanatory notice similar to this one. For LIHTC, the multiplier rises from $1.85 per state resident in 2005 to $1.90 per state resident in 2006, and the minimum tax credit ceiling for states with small populations rises from $2,125,000 in 2005 to $2,190,000 for 2006. For states getting the small-population minimum, which is good for about half a dozen new multifamily projects a year, that extra $65,000 in credits probably isn't enough for a whole additional project though it could provide some handy supplements for existing projects facing cost increases. On the other hand, the five-cents-a-head LIHTC increases for California and Texas are worth more than a million dollars in credits that can be claimed in each of ten tax years. For federal tax-exempt bond authority, the multiplier remains at $80 per state resident for 2006 but the small-state minimum rises from $239,180,000 in 2005 to $246,610,000 for $2006.
Wednesday mix: markups and more
- Sorry to be late noting the NLIHC Memo to Members that appeared Monday. Much legislative and other news including the skinny on conference negotiations for the housing appropriations bill. - Further on legislative updates, Novogradac yesterday posted the Senate Finance Committee release of the 149-page "chairman's mark" version of the "Tax Relief Act of 2005," prepared by the staff of the Joint Committee on Taxation. It would include a temporary doubling of low-income housing tax credits (LIHTC) available to Alabama, Louisiana and Mississippi -- language probably borrowed from HR 3769. The document says the Senate Committee on Finance will mark up the bill tomorrow. - In today's postings, GAO questions whether the federal government may have overpaid contractors for recovery work after hurricanes Katrina and Rita. The main example given has to do with portable classrooms, not housing, but it might be worth a look for folks following the contracting issues.
Katrina response as an indicator on Sec. 8?
Extra Sec. 8 housing vouchers were issued after the Northridge quake in '94... so why not similarly after Hurricane Katrina? New York Times discusses the change in Sec. 8's political status that may have made the difference.
FHA, Ginnie Mae audits posted
Paperwork reduction paperwork redux
Bringing back Davis-Bacon
Housing policy and the problem of evil
Monday federal housing announcements
- One of these opportunities for reading between the lines: HUD's quarterly regulatory waivers are posted today in the Federal Register. Readers who deal with HUD may want to glance over these for trends. Note that this crop of waivers is for April through June, hence nothing yet on Hurricane Katrina though earlier hurricane relief exceptions are listed. - Here's the Federal Register edition of that 8609 rule the IRS circulated on Friday. - HUD's Community Planning and Development page has new instructions for the IDIS computer system used to administer community development block grants. - HUDCLIPS has posted CPD Directives 2005-9 and 2005-10 on disability access compliance with the Rehabilitation and Fair Housing Acts in housing funded by CDBG and HOME funds.
Post-Katrina activism and economics
With the recovery from hurricane season 2005 passing its crisis days and settling in for the long slog, here's an update on some of the surrounding political activism, and a little bit about actual rebuilding. The following includes some links to political Web sites and publications. These are not necessarily endorsed at face value, but are provided as indicators of political currents that could have economic effects. After an initial freeze, evictions are now reportedly taking place in record numbers in New Orleans, while landlords seek legislative relief for their loss of September rent money. At the same time, developers are wanting more reassurances before they sink time and money into the rebuilding effort. The C.J. Peete public housing development, which officially began rebuilding this past week, has posted a request for qualifications for architectural and engineering services with responses due Nov. 28, 2005. The alternative press is full of criticisms including this one. Also this widely circulated editorial, which says HUD has locked its New Orleans public housing tenants out of their homes and implies the decision may be meant to discourage returnees. Whatever the reasons may be, the Housing Authority of New Orleans does in fact have an announcement posted stating that "HANO is not re-opening at this time due to security and safety concerns" and providing a number for tenants to call to remove "personal belongings." Both the Industrial Areas Foundation and ACORN are organizing energetically among displaced tenants and poorer homeowners. A recent report in The Nation implies there may be a sense of competition between the two entities, both of which follow their own distinctive organizing templates. This kind of ground-level organizing is of course partly concerned with returning tenants to apartments, but it is proceeding on a fairly different plane from the lobbying and policy efforts of multifamily housing groups like the National Multi Housing Council and the National Low Income Housing Coalition. Some planners are arguing that rights of return to heavily damaged areas should be granted or denied according to scientific determinations of flood safety. But the question of who returns where is hardly likely to be determined by science. On one level it's becoming knottily political. On another level, as David Smith notes, day-to-day economic and physical realities are pushing New Orleans into a new shape while the political arguing continues.
Data on the Katrina recovery structure
We've been trying for some time to understand a public/private/interagency disaster recovery entity called the Joint Housing Solutions Center, which is reportedly co-chaired by HUD's own Charles "Hank" Williams. Now from FEMA we've got a press release explaining that this Center "was designed to facilitate the coordination of re-housing ideas, innovations, strategies, solutions, and resources from all levels of government and all sectors of the society under one roof." The release gives "an example of" the participants and their efforts. This partial list of participants is an interesting one for multifamily housing people because it does not include trade organizations or nonprofits specializing in multifamily housing. The nonprofit and "faith-based" organizations named are large general-purpose relief charities except for one housing specialist, Habitat for Humanity. The "private" institutions listed are the National Association of Realtors, the National Association of Home Builders, the American Institute "For" Architects, and "Home Depot Active in Disaster." Among the general categories of "State, Parishes, Municipalities," a further "State/Local" institution listed is Louisiana State University. If homeownership ideas have been markedly emphasized in federal recovery planning, could the nature of this list have something to do with it? Or could there be multifamily people on the full list who aren't mentioned in this excerpt? The press release does provide contact information for "a complete list of JHSC participants, or for more information." The phone number given is 281-615-6086, email is HousingSolutions@dhs.gov. I'm going to write to them. If anyone else hears back first, could you drop us a note in comments below? A few anecdotal examples of ideas proposed by the Solutions Center are given. One is a good, big idea: a planning effort to lay out these emergency trailer communities like towns. Welcome news, since there were early reports of mobile homes being set up 11 feet apart.
Gulf Coast orders from the White House
New LIHTC regs from IRS
The IRS has just circulated a new final rule, scheduled for publication Monday, on the filing of Forms 8586 and 8609 for low-income housing tax credit projects. [UPDATE: It says the purpose of the change is "to reduce taxpayer burden by allowing taxpayers to file Form 8609 one time, instead of filing the form with the same information for 15 consecutive years. "] Skipping the preamble, here are the guts of the actual new reg to be inserted in 26 CFR Part 1: Par. 2. Section 1.42-1 is amended by revising paragraphs (h) and (j) to read as follows:
§1.42-1 Limitation on low-income housing credit allowed with respect to qualified low-income buildings receiving housing credit allocations from a State or local housing credit agency.
* * * * *
(h) Filing of forms. Unless otherwise provided in forms or instructions, a completed Form 8586, "Low-Income Housing Credit," (or any successor form) must be filed with the owner's Federal income tax return for each taxable year the owner of a qualified low-income building is claiming the low-income housing credit under section 42(a). Unless otherwise provided in forms or instructions, a completed Form 8609, "Low-Income Housing Credit Allocation and Certification," (or any successor form) must be filed by the building owner with the IRS. The requirements for completing and filing Forms 8586 and 8609 are addressed in the instructions to the forms.
* * * * *
Accordingly, 26 CFR part 1 is amended as follows:
(j) Effective dates. Section 1.42-1(h) applies to forms filed on or after November 7, 2005. The rules that apply for forms filed before November 7, 2005 are contained in §1.42-1T(h) and §1.42-1(h) (see 26 CFR part 1 revised as of April 1, 2003, and April 1, 2005). We'll have the Federal Register link Monday presuming it appears on schedule. [UPDATE: Here's the old Sec. 1.42-1(h) from the CFR of April 1, 2005.]
Nice appropriations digests from HAC
The newest HAC News begins with lovely comparison charts of proposed appropriation levels for the USDA and HUD housing programs in the competing House and Senate versions. (For yr convenience, I'll link to the THOMAS boxscore page again here.)
New Pub. Housing Operating Fund guidance
Up on HUDCLIPS today, a guidance document, Public and Indian Housing Notice 2005-34, setting out the timetable for the budget cuts in the Public Housing Operating Fund Final Rule we got in September (see here and here).
Public housing rebuilding starts in NoLA
Bubbles, Katrina, property rights...
From around the wires and public announcements: - The Washington Post reports on Congressional hearings regarding Katrina contracting. Related text from GAO. - Via NH&RA, notes on HR 4128 and S. 1313, bills barring the use of state eminent domain powers for economic development using federal funds. (Interesting and perhaps ironic: just maybe the mainly conservative cause of property rights could end up on the same side as the mainly left/liberal cause of permitting poor but homeowning New Orleans residents to return to the famous Ninth Ward...) - More from the Center on Budget and Policy Priorities on what it may take to return low-income Katrina evacuees to decent homes. - GAO examines the tax-exempt status of credit unions. - A big toxic-lead case against paint and pigment manufacturers goes to trial in Rhode Island. - Further from NH&RA: No, Ben Bernanke doesn't believe in the housing bubble.
New head for hurricane response
In case you missed it, Donald Powell -- who works in the federal bank-insurance agency -- has been appointed to coordinate the massive rebuilding efforts in the Gulf Coast, which was devastated by Hurricane Katrina a couple months ago and then battered by a couple lesser storms. Powell is described by the Financial Times as "a Texan ally of President George W. Bush." Goes without saying, doesn't it?
Yet more joy of tax code revision
AHI blogger David Smith's other shop, Recap Advisors, has posted a " Web Update" analysis of the new tax panel recommendations. Go read. (Again, the final report is at this link.)
HR 1461, now the House dust has settled
John modestly didn't mention he'd done a main page writeup on the passage of HR 1461 in the House. Much worth reading for a more complete perspective than our same-day blog coverage (mainly here and here).
Another sign of "green building" emphasis
The Housing Assistance Council has just brought out an edition of its journal, Rural Voices, devoted to "green building" techniques. Interesting because similar emphases are cropping up in the profiles of state LIHTC and private activity housing bond programs that we're preparing for the special December issue of Affordable Housing Finance.
The joy of tax panel politics
So the president asked his tax panel a while ago to blue-sky some recommendations for changing the complex tax code in this country. That panel did so and as we know it presented its recommendations to Treasury Sec. John Snow, who is calling it the basis for extensive changes to the tax regime. Whether that excites you or makes your stomach queasy depends on the tradeoff between how much you hate going through tax season (which we all do) and how much you really like your deductions, writeoffs, and credits (which is where different groups will have different agendas). In order to adhere to its revenue-neutral mantra, the panel had to come up with more than $1 trillion in savings to offset its removal of the Alternative Minimum Tax (AMT). But that put on the potential cutting block not only the low-income housing tax credit (just at the time when it's being seen as a model for rebuilding the Gulf Coast) but also part of the mortgage interest deduction. That last bit would seem odd, considering the homeownership craze in this country (aided and abetted by administrations of both parties). According to a report in today's Financial Times (which I think of as the Business Newspaper that Hasn't Drunk the Kool-Aid), the mortgage deduction will become a home credit "equal to 15% of interest paid, limited to mortgages in a range of $227,000-$412,000 based on regional circumstances." Ah, see, it all comes back to affordability of housing. My "regional circumstances" find me in a decidedly middle-class San Francisco neighborhood -- not ritzy, certainly not trendy or hip. The smallest two-bedroom, single-family homes in this neighborhood list at about $825,000, and they have been selling for well above that (one Realtor told me they typically are getting offers around $150,000 above asking prices). All of which makes me wonder how these proposals will play when citizens really start crunching the numbers and applying it to their own lives and businesses. The panel would appreciate everyone essentially shutting up and taking their word for it that it's for the better; the panel believes, again according to the FT, that its recommendations should be accepted whole-hog without being picked apart. It told Snow that “The effort to reform the tax code is noble in its purpose, but it requires political willpower. Many stand waiting to defend their breaks, deductions, and loopholes, and to defeat our efforts.” I think it would be a good time for debate when a high-level panel is proposing something that would make it more difficult for families to buy single-family homes AND would make it more difficult to finance the development of affordable multifamily homes. But then I live on a street of $825,000 bungalows. One could argue, therefore, that I don’t live in the same reality as other people; but does the tax panel?
Disaster housing details, grants and more
- There's a grant available today from HUD to supply extra Sec. 8-type vouchers for the "mainstream" housing of tenants with disabilities. Applications are due Jan. 3 for $10.2 million available over five years. - HUD's Public and Indian Housing (PIH) site has a new application processing guide posted for local officials connecting hurricane victims to the KDHAP disaster housing program. and HUD has published the Federal Register version of the Hurricane Rita housing program waivers that were at PIH a few days ago. - HUD has introduced a "Universities America Rebuilding Partnership" for academic participation in the hurricane rebuilding efforts. Press release here. There are separate Federal Register announcements for the Community Design Program and the Historically Black Colleges and Universities Program. Secy' Jackson introduced the program at LSU. - The folks at GAO are concerned about some agencies frequently issuing final (or "interim final," etc.) rules without first publishing proposed rules for public comment. HUD was included in the rules studied for the report though not singled out. - HUDUSER offers advice on saving energy in mobile homes.
Rating HUD and FEMA, post-hurricane
Everyone remembers former New York City Mayor Ed Koch with his famous phrase, "How'm I doin'?" I don't know how many actual New Yorkers on the street got a chance to tell their mayor to his face what they thought of his work, but at least I like the theory of direct accountability. So how have the Federal Emergency Management Agency (FEMA) and the Department of Housing and Urban Development (HUD) performed so far in the aftermath of the hurricanes that have brought so much devastation to the Gulf Coast? The National Multi Housing Council and the National Apartment Association, which frequently team up on legislative and government matters, were quite critical of the federal government last month, particularly in the way those agencies have dealt with -- even ignored -- the apartment industry. Apartment owners and managers across the country, but especially in Texas and other states directly surrounding the worst-hit areas, went above and beyond the call in providing immediate shelter to storm evacuees, often with the expectation the federal government would rely on their market expertise and available units when implementing a long-term solution. What did they get instead? * They got to watch a widely criticized effort to place refugees in mobile homes. Good for the mobile home and manufactured housing industries, yes, but a perceived slap in the face to all of the apartment owners in the area with ready-and-vacant units. * They watched the government pay millions of dollars a day to put other refugees into hotel rooms. * They watched the government announce plans to jump-start redevelopment of the storm areas with that crowd-pleaser, homeownership. So now we're hearing some apartment industry folks are wondering why they're being treated as the ugly stepchildren instead of the businesspeople on the frontlines of helping out, which is what they are. What's your experience? Are HUD and FEMA responsive to your apartment needs? And if you work for either agency, let us know what you are doing and whom our readers should contact to offer their own help and to get direction from the federal government about where this relief effort is heading. We're all in this together, after all. Either post a comment below or send me an e-mail.
Tax reform, ice cream trucks, PLRs, oh my
The final report of the President's Advisory Panel on Federal Tax Reform is posted today. Download isn't working well from here, but the report could make interesting reading for folks who can get all the files open. Per previous accounts, the report was expected to recommend doing away with most tax credit incentives, including the low-income housing tax credit (LIHTC). The BBC is calling the proposal " radical," but industry folks on our side of the pond have been noting that it's a very long way from becoming legislation. The conference call that was to have preceded the report was canceled. I haven't been able to open all the sections of the document here, but in the first section, the only reference to the LIHTC is in a "Tax Basics" sidebar in Chapter 3 that raises more questions than it answers. In an example that may be intended as entirely hypothetical, it posits the existence of a housing credit that, contrary to the current tax code, would be claimed by low-income tenants themselves. This is the text: Box 3.3. Determining Who Bears the Burden of a Tax
Imagine that the government imposed a special tax on ice cream sold from ice cream trucks. If the ice cream truck drivers are able to pass on the tax to their customers in the form of higher prices, the economic incidence of the tax would be on their customers. In this case, the price of ice cream sold from trucks would increase by exactly the amount of the tax. If customers resisted the price increase by buying their ice cream in stores to avoid the tax, and ultimately the only way the truck driver could sell ice cream was by matching the retail price at the store, then the truck driver would bear the economic burden of the tax. In this case, the legal incidence and economic incidence of the tax would be identical.
Understanding the difference between the economic and legal incidence of taxes is important in analyzing both taxes and subsidies. Take the example of tax credits for low-income housing that could be claimed by low-income taxpayers. If the price of low-income housing increases by the amount of the credit, the credit would provide no benefit whatsoever to the low-income household, but enormous value to builders of low-income housing. In this case, market forces would have passed the full benefit of the credit to builders. Hard to tell if a specific point about the existing LIHTC is intended here, but offered for your perusal in case it's interesting. [LATER THOUGHT: Wonder if they had in mind something like California's "homeowner and renter assistance" and renter's credit tax provisions, which unlike the LIHTC involve claims filed by low-income residents on their own tax returns.] Meanwhile back in the more ordinary tax world, Private Letter Ruling No. 200543010, issued this past Friday, granted a taxpayer extra time to file IRS 8693 forms and post corresponding surety bonds to avoid recapture of low-income housing tax credits after disposing of two tax credit properties. Private letter rulings may not be cited as precedent. ...and Rep. Mike Oxley, R-OH, the House Financial Services chairman, has announced he'll retire at the end of his curent term. Treasury Sec'y Snow's comments here.
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