CARH Broadcast Email—Legislative Update

1)  Congress’ Latest Response to the COVID-19 Pandemic

On July 1, 2020, the House of Representatives passed H.R. 2, the INVEST in America Act, which, if enacted into law, would provide $1.5 trillion for infrastructure spending for communities as they recover from the COVID-19 pandemic. On May 15, 2020, the House passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act which would provide an additional $3 trillion in stimulus funding to state and local governments, individuals, and businesses as COVID-19 continues to hamstring the economy. Both bills are currently pending in the Senate. While it is unlikely that the Senate will take up either bill in their current form, both bills contain markers that could be used for the next coronavirus relief bill that passes Congress.

Housing Provisions in H.R. 2, the INVEST in America Act:

 CARH is pleased to be part of the Rebuild Rural Coalition which was organized to bring focus to the infrastructure needs of rural America. We have supported the efforts of the Coalition and agree that infrastructure legislation by Congress should specifically address the unique needs of agriculture and rural communities. Roads and other infrastructure needs that have been identified are very important, but it is also important to include housing – rental or any other kind of building development. This is exactly the infrastructure needed to house people who are the end users of all infrastructure in rural communities. CARH and the Coalition have, for the last three years, advocated that Congress is not addressing all rural communities’ needs if housing is not included in an infrastructure package.

H.R. 2 would provide $1 billion for Rural Development’s (RD’s) Multifamily Preservation and Revitalization (MPR) demonstration program, a major increase in what has been appropriated for the program since its inception. This additional funding would begin to address the backlog of the preservation needs of the existing Section 515 portfolio. Some of the other provisions in the bill that would provide direct funding for housing programs include the following:

• $70 billion to fully address the capital needs backlog for nearly 1 million public housing homes;
• $1 billion to support mitigation efforts that can protect communities from future disasters and reduce post-disaster federal spending;
• $5 billion for the Housing Trust Fund to support the creation of nearly 60,000 new units of housing that would be affordable to the lowest income households;
• $100 million to help over 13,300 low income elderly households in rural areas to age in place;
• $1 billion for the Native American Housing Block Grant Program to create or rehabilitate over 8,800 affordable homes for Native Americans on tribal lands;
• $10 billion for a CDBG set-aside to incentivize states and cities to eliminate impact fees and responsibly streamline the process for development of affordable housing;
• $5 billion for the HOME Investment Partnerships Program to fund the construction, purchase, or rehabilitation of over 136,600 affordable homes for low-income people;
• $2.5 billion for the Supportive Housing for the Elderly program (Section 202) to create over 54,800 new homes affordable to low income seniors;
• $2.5 billion for the Supportive Housing for Persons with Disabilities program (Section 811) to create 27,000 new homes affordable to low income individuals with disabilities; and,
• $2.5 billion to the Capital Magnet Fund for competitive grants to Community Development Financial Institutions to create or preserve nearly 450,000 affordable homes

In addition to the funding provisions in H.R. 2, the legislation would also include many of the provisions CARH strongly supports from H.R. 3077, the Affordable Housing Credit Improvement Act, including enacting a permanent minimum 4 percent Housing Credit rate, lowering the “50 percent test” for bond-financing, and providing up to a 30% basis boost to properties in rural area if needed for financial feasibility by qualifying rural areas as Difficult Development Areas (DDAs). This bill also includes provisions CARH has opposed, which would remove Qualified Contracts from future Housing Credit developments and retroactively amend Qualified Contract rights and provisions to cap property valuations at tax credit rent levels.

Housing Provisions in H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act:

 As was reported in CARH’s broadcast email on May 15^th, H.R. 6800 contains several provisions which would provide funding for affordable housing programs. RD’s Section 521 Rental Assistance (RA) program would receive an additional $309 million. Funds could be used for residents currently receiving RA as well as for non-RA residents. As CARH members will recall, the last COVID-19 related legislation (CARES Act – Public Law 116-136) passed and signed into law by the President, did not provide additional funding for the Section 521 program. At that time, it was thought that program was funded at a high enough level that additional relief was not needed. However, as time has progressed and COVID-19 has spread across the country, it is apparent that the current budget for Fiscal Year (FY) 2020 will not be sufficient because residents incomes continue to decrease, requiring more RA for existing recipients and income needs of non-RA residents. In the past, budget restraints have interfered with funding for non-RA rent overburdened residents. This additional funding will help those individuals, especially as they deal with continued loss of income and the impact of COVID-19 in their communities.

H.R. 6800 would also provide $100 billion for an Emergency Rental Assistance program that would allocate funding to states, territories, counties, and cities to help renters pay their rent and utility bills during the COVID-19 pandemic and help rental property owners of all sizes continue to cover their costs. This program would be administered by the Department of Housing and Urban Development (HUD) through the Emergency Solutions Grants Subtitle B of Title IV of the McKinney-Vento 8 Homeless Assistance Act. While rural communities could access the funding, it would be difficult for residents of properties financed through RD to receive funds in an expedited fashion. Therefore, it has been key to have assistance flow through RD to the Section 521 program and rural vouchers. In addition, $75 billion would go to states, territories, and tribes to address the ongoing needs of homeowners for by assistance with mortgage payments, property taxes, property insurance, utilities, and other housing related costs.

H.R. 6800 would also amend the eviction moratorium and multifamily forbearance provisions in the CARES Act. The legislation further extends the moratorium to all renters retroactively to when the CARES Act was enacted and extends the time period for the moratorium to 12 months after the enactment of the CARES Act. It also extends the multifamily property forbearance allowances for 1-4 unit properties as well as all multifamily properties—not just those with federally backed mortgages or federal assistance and aligns the timeframe for forbearance to that of the eviction moratorium (12-months). Forbearance and eviction prohibitions that were authorized in the CARES Act would remain in effect until the end of 2020. CARH has been working hard to extend rent subsidy benefits to renters so that rent moratoria are unnecessary. CARH opposes rent moratoria as a shift of government financial burdens to property owners. This shift is unsustainable without rental subsidy because owners have employees, venders, and lenders they must pay, and a rent moratorium simply shifts the financial burdens to those citizens.

Senate Outlook:

 The outlook in the Senate is unclear at this point. There had been a general thought that the Senate would take up a bill before the election, perhaps as a “final” stimulus. There has been some speculation that Congress would not pass any bill until September (the House and Senate will be in recess from the end of July until the first part of September). However, with a large number of states experiencing a spike in the number of individuals testing positive for the coronavirus, coupled with business, particularly restaurants, that had reopened, now closing again, there is a growing sense that something needs to be done prior to the next recess. In addition, the Pandemic Unemployment Insurance (PUI) boost of $600 a week for unemployed workers also expires at the end of July.

Rent receipts have been unexpectedly better than anticipated across the rental housing industry. There remains concern that this is temporary as it appears more renters are paying with credit cards. Rent payments sustained by consumer borrowing is unsustainable and burdens renters. It appears stimulus programs such as checks to households, payments through the Paycheck Protection Program and the PUI program have helped residents pay their rent during the past three months. H.R. 6800 would extend this $600 weekly increase under the PUI program into January 2021. There have been discussions that the Senate could extend those benefits and add incentives for individuals to return to work. In addition, the Senate could also add provisions from H.R. 6800 which provides additional rental assistance. From a rural perspective, CARH has advocated that the additional $309 million for the Section 521 RA program needs to be included.

At the same time pressure mounts for a further rent moratorium, possibly with further loan forbearance. We understand that many Section 515 owners have sought forbearance protection due to anticipated or actual declines in tenant paid rent.

 2)  Status of FY 2021 Appropriations Bills

While Congress continues to grapple with funding for the COVID-19 pandemic, Congress is beginning to consider FY 2021 funding bills, but on a separate track. The full House Appropriations Committee favorably reported the Agriculture, Rural Development, Food and Drug Administration and Related Agencies bill as well the Transportation, Housing and Urban Development and Related Agencies bills this week. Click here to see the funding chart for USDA housing programs and click here for HUD’s chart. Of note for USDA’s RD programs, is that funding remains primarily at FY 2020 levels, with a slight increase in the Section 521 RA and the Section 542 voucher programs. The total for the RA accounts would be $1.450 billion. Language from the FY 2020 Appropriations Act for 20 year RA contracts would be retained.

As proposed by the Administration in its FY 2021 budget request, the rural housing voucher program would be funded under the Section 521 RA account rather than from the MPR account. For budget purposes all rental assistance and vouchers would be under one account. For FY 2021, rural housing vouchers could also be used by residents who live in a property where there is a maturing mortgage and owner has paid-off the mortgage. Current law only allows for vouchers to be used when there is a prepayment or foreclosure on a property.

The Section 515 program would be funded at $40 million; the MPR program at $30 million and the Section 538 program would have $230 million in budget authority.

The Transportation and HUD House Appropriations Subcommittee has also moved forward.  Overall, the bill proposes to increase discretionary spending broadly. Tenant-based rental assistance would increase $1.9 billion from FY 2020 enacted levels to $25.8 billion. Project-based rental assistance would increase to $13.4 billion. HOME would increase to $1.7 billion. Basically, all funding categories are proposed for increase—Native American funding, homeless assistance, community development, public housing. There is also proposed $250 million for Choice Neighborhoods and $100 million for HUD cyber-security and technology.

It is unlikely that the Senate will consider any appropriations bills for FY 2021 until after returning from the August recess. In fact, it appears likely that there will be a Continuing Resolution that will provide funding for the government through the November Congressional and Presidential elections.

3) What CARH Members Can Do to Ensure Funding for Affordable Rural Housing Programs

The good news is that housing has become a major part of discussion surrounding the COVID-19 pandemic. Funding for rural housing has gained traction in the discussion after the CARES bill did not provide additional monies, especially for the Section 521 RA program. CARH continues in our advocacy for funding for many of HUD’s programs. However, the rural portfolio and residents are unable to truly benefit from funding provided at HUD since the rural programs are administered through USDA, not HUD. It is important for CARH members to continue that discussion with their members of Congress. The following are suggestions. CARH members should target the Senate for purposes of grassroots at this time but should also contact their Representatives so that when a final package emerges, rural housing needs are included:

1. H.R. 2: When discussing H.R. 2, the INVEST in America Act, it is important to remind your members of Congress that housing is part of a communities’ infrastructure. Congress should provide $1 billion for RD’s MPR program. Funding for this portfolio will not only provide for the extremely low-income families and elderly residents but will also improve infrastructure and create jobs throughout rural America. For each 100 apartment units, 116 jobs (plus an additional 32 recurring local jobs) are created, generating more than $3.3 million in federal, state, and local revenue. Moreover, many rural areas are facing worker shortages due to the lack of available affordable housing near rural jobs.

   The various housing programs that would receive direct funding from various provisions in H.R. 2, as well as the many enhancements that would be made to the Housing Credit and Housing Bond programs, are evidence of the success of the private-public partnership that has provided safe, decent and affordable housing throughout rural America. The flat 4% Housing Credit, the rural basis boost and related enhancements to the Housing Credit and Housing Bond programs are integral to furthering preservation and enhancing the infrastructure throughout rural America.

2. H.R. 6800 – HEROES Act: While Congress did not provide funding for the Section 521 RA program in the CARES bill, the HEROES Act as passed by the House would provide RA funding for this vulnerable segment of the rural population. CARH believes there needs to be an additional $309 million for the Section 521 program that can be used for existing RA recipients as well as to assist those renters who do not currently receive RA. RD’s current budget cannot cover the existing portfolio plus RA to previous non-RA recipients who need assistance due to COVID-19 related job losses. Helping renters to pay their bills is the best way to avoid needing a further rent moratorium or loan forbearance.

3. FY 2021 Funding Bills: It is important that Congress continue to fund affordable housing programs, especially at USDA at or above the FY 2020 level of funding. With all of the uncertainty surrounding the COVID-19 pandemic and the impact on the economy, the most vulnerable need assurance that affordable housing will continue. Hopefully, there will be some form of full year funding bills.

To contact your Senators to express these issues noted above, click here and click here to contact your Representatives.

While it is unlikely that during the COVID-19 pandemic you will be able to get your Senator, Representative, or their staff to visit your properties, you may be able to schedule a virtual tour. It is important for members of Congress and their staff to truly understand how rural housing in their districts and states make a difference in the lives of the residents who live in your properties.

If they have any questions, please contact CARH at carh@carh.org or 703-837-9001.