New Developments: Keeping the Mission in Mind
By Thom Amdur
4 min read
Barack Obama famously told House Republicans in 2009 that “elections have consequences.” While we do not know what the results will be once the polls close on November 3 (or even when we will know who actually won) we do know that this particular election will be very consequential. There is need for immediate solutions on a wide range of national emergencies, including wildfires raging across the Western United States, a hurricane season that is predicted to be among the most intense in history, nationwide protests against police brutality in the streets and the dual economic and public health crises arising from the ongoing COVID-19 pandemic. Whether Joe Biden or Donald Trump wins the Presidency and whether the House of Representatives and/or Senate flip party control, I think it is fair to assume that they will have their work cut out for them.
While there have been several attempts to pass a scaled down Coronavirus relief legislation (including the Senate Republican so-called $650 million “skinny” Coronavirus relief package, as well as a compromise proposal from the House “Problem Solvers Caucus”) the failure for either measure to advance are strong indicators that further significant legislative action is unlikely to succeed before the November elections. This leaves a lot on the plate for legislators to chew on in a post-election lame duck session of the 116th Congress and even more for the 117th Congress to begin to address in January.
My colleague Kaitlyn Snyder recently organized a fantastic discussion for NH&RA members to highlight how affordable housing providers are facilitating civic engagement within their communities and effectively engaging with elected officials under today’s social distancing constraints (see coverage in this issue), which I encourage all of our members to read.
Resources are scarce and with so many individuals, communities and industries suffering, it is critical that affordable housing advocacy and community development keep up the pressure and help focus the attention of legislators and politicians to ensure that affordable housing must be part of future disaster responses and that we focus on solutions that will be most impactful for the residents and communities we serve.
For starters, we need to dramatically ramp up production to meet today’s amplified need for affordable housing and to achieve this we need Congress to fix the four percent Low Income Housing Tax Credit at a flat four percent and a flat four percent. This is critical as part of our emergency response, in part, because historically low interest rates have caused the floating rate to also drop to historic lows (3.07 percent in October), which in turn has created financing gaps that threaten to scuttle previously underwritable projects. Fixing the four percent LITHC would generate much-needed additional tax credit equity and also create a more predictable funding environment. Taken together, this will allow affordable housing developers to take advantage of historically low interest rates and expand affordable housing production into markets that previously were not viable for bond financing. A recent analysis conducted by Novogradac & Company predicts that this provision alone would result in the financing of an additional 137,000 affordable units over a ten-year period.
Fixing the flat four percent rate would be incredibly impactful on its own, but it also would be significantly enhanced further if Congress paired this expansion with a provision to lower the 50 percent test to 25 percent and enhanced bond recycling options. Taken together, these changes would stretch the private-activity bond cap significantly, which will be needed if we are going to make significant strides in increased production.
However, we cannot focus exclusively on production. In light of massive economic dislocation across the country and the failure of Congress to pass emergency relief legislation this fall, America’s renters and apartment community owners are standing on the edge of a precipice. While the CDC’s temporary eviction moratorium will keep people in their homes during the course of the public health crisis, without immediate Congressional action to fund supplemental assistance for renters and landlords, this unilateral executive action is an unfunded mandate that simply puts a Band-Aid on a gaping wound. Rent deferred is still rent owed and unless we provide emergency financial support for impacted families there will be an eviction crisis for millions of renters and a financial crisis that threatens long-term stability of the nation’s apartment industry.
There are many potential legislative vehicles for affordable housing to slot into during the lame duck session or early 117th Congress, including natural disaster response legislation, year-end tax legislation, infrastructure legislation or even community policing and justice reform. Safe, sanitary, affordable housing is an essential part of the Coronavirus recovery effort and it is our job to keep on reminding our legislators on its role and what they can do to get results.
