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| National Housing Trust Newsletter |
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Greetings!
As we begin to seriously consider housing finance reform, it would be a mistake to neglect the central role rental housing plays in so many peoples' lives. Over 100 million Americans, or one-third of our nation's families and seniors, depend on quality rental housing. Stable rental housing is more important now than ever: 10 million renters pay more than 50% of their income on rent. And rental demand continues to rise: the number of renter households grew 11% since 2005, outpacing overall household growth.
Notably, Fannie Mae and Freddie Mac played an essential role in supporting the affordable multifamily rental market before, during, and after the Great Recession. In 2009, Fannie Mae and Freddie Mac provided critical liquidity in the multifamily market, purchasing over 84% of multifamily mortgages as private lenders drastically reduced their multifamily investments. It's clear that without the GSEs, the rental housing mortgage market would have frozen altogether, further dampening construction activity and job growth.
Further, over the past few years, unlike the single family business, the GSEs' multifamily business performed profitably and supported housing affordable to low- and moderate-income families. As of October, 2010, 74% of apartments financed by Fannie Mae were affordable to working families and seniors with incomes at or below 80% of the area median income. Further, in contrast to CMBS and commercial banks, less than 1% of Fannie Mae and Freddie Mac's multifamily loans are in serious delinquency. (See Fannie Mae and Workforce Rental Housing, Jan. 2011).
Housing finance reform is both necessary and inevitable. As we consider housing finance reform, let's remember that any viable, sustainable, and fair housing finance system must address both affordable homeownership and liquidity and stability in the affordable rental housing market.
Stay tuned,
Michael Bodaken |
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Photo by HUD |
HUD Sec. Donovan, Other Dignitaries Visit Poppleton Cooperative to Highlight Energy Efficiency Innovation in Affordable Housing
Secretary Donovan, U.S. Senator Benjamin L. Cardin (D-MD), Representative Elijah Cummings (D-MD), and Baltimore Mayor Stephanie Rawlings toured the 86-unit Baltimore property which is receiving major energy efficiency improvements thanks to federal stimulus funding. Secretary Donovan made the visit to highlight how the development is supporting President Obama's goal of helping America "Win the Future" by creating jobs and promoting energy efficiency innovation.
Click here to continue reading about the visit.
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Preservation and Sustainability Incentives Prominent in Housing Tax Credit Policies
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Click on the map to see how states have deployed their 9% tax credits to preserve affordability. |
An analysis of state low income housing tax credit (LIHTC) policies and practices reveals that state policymakers continue to deploy limited resources to save and improve existing affordable rental housing. This trend suggests that state policymakers view affordable housing preservation as an appropriate housing strategy during a time of challenging state budget shortfalls. The analysis also indicates that state housing agencies are increasingly valuing sustainability as reflected by energy efficiency and transit proximity incentives in their tax credit policies.
For the past 8 years, the National Housing Trust has completed a review of state LIHTC policies and practices to learn how policymakers are approaching the challenge of preserving affordable rental housing. LIHTC policies vary by state and are constantly evolving, but nearly every state housing agency incentivizes the preservation of affordable rental housing in some manner.
Click here to learn more about how states use the LIHTC program to incentivize preservation, green building, sustainable communities, and transit-oriented developments |
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Dept. of Energy to States: Do Not Exclude Multifamily from Weatherization Plans
The Dept. of Energy (DOE) has issued new policy guidance informing states that they are not to exclude multifamily housing in their plans for spending Weatherization Assistance Program (WAP) funds. According to DOE, states that expressly exclude multifamily buildings from their WAP plans are acting contrary to the intent of the program which is to provide energy saving services to low-income persons who live in all types of housing.
The National Housing Trust and our partners have urged DOE to recognize the importance of multifamily weatherization and reduce obstacles to multifamily participation in the WAP program. Historically, many state WAP agencies and providers have failed to undertake multifamily weatherization.
In this new guidance, DOE explicitly endorses the benefits of multifamily weatherization, stating:
"Multi-family buildings, including rental housing, offer opportunities for energy efficiency upgrades that are a cost effective approach to lowering operating expenses, maintaining affordability for low income households, and creating healthier, more comfortable living environments for low income families."
DOE also acknowledged that it will provide technical assistance to state WAP agencies and providers with little or no previous experience in multifamily weatherization.
Click here for the new guidance. |
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Congress Continues to Debate Spending for Housing Programs
On February 19, the House of Representatives approved approximately $60 billion in cuts to the current FY 2011 budget, including more than $4 billion from HUD programs. While project-based Section 8 housing funds are not currently targeted for cuts, all HUD programs are truly at risk as Congress works toward agreement on final funding for FY 2011 and begins work on the FY 2012 federal budget. House and Senate negotiators will attempt to reach agreement before current funding expires on 3/18.
Section 8 funding provides housing for some of the most vulnerable households in America. Program cuts will create a housing crisis for those least equipped to respond. For every 1,000 Section 8 units terminated, 530 seniors and 170 disabled individuals will face the loss of their home. The average annual income of Section 8 residents is just $11,400. |
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Innovative Partnership between Utility Provider and State Housing Finance Agency Detailed in New Paper
New Jersey's largest utility, PSE&G, and the New Jersey Housing and Mortgage Finance Agency (NJHMFA) have collaborated to develop an innovative multifamily housing energy retrofit program. PSE&G's Residential Multifamily Housing Program provides upfront interest-free financing and grant incentives to cover the cost of eligible energy efficiency improvements.
A recently published paper details the program design. PSE&G worked closely with NJHMFA to develop strategies to address the unique needs of affordable multifamily housing. Highlights of the program include the following:
- Incentives eliminate or significantly reduce the owner's contribution to the construction costs. Owners have the option of repaying the zero interest loans through energy savings and on their utility bill. A repayment period of 10 years guarantees that owners will see immediate utility bill relief.
- Participating owners who may be unfamiliar with how to procure energy efficiency services receive ongoing guidance and technical assistance for soliciting contractor bids. PSE&G contractors perform a comprehensive energy audit to ensure that the most cost- effective energy efficiency improvements are targeted.
- To gain access to potential customers, PSE&G relied on NJHMFA's help to reach multifamily owners. The program has been fully prescribed to date.
Click here to download PSE&G's paper and read more about how the program is structured. |
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