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House and Senate Tax Bills Will Decimate Affordable Housing in Vermont

Posted December 1, 2017

MONTPELIER, VT — The Vermont Affordable Housing Coalition (VAHC), a state leader in housing policy, research and advocacy, today issued the following statement on the tax bill recently passed by the U.S. House of Representatives and under consideration in the Senate:

At a time when Vermont already has a shortage of 10,866 affordable homes for extremely low income renters and the 5th highest affordability gap for renters in the country, the pending tax proposals would eliminate tax credits and financing tools that have helped create thousands of affordable apartments  in our state and made homeownership more affordable for thousands of Vermonters.

“Vermont already has an affordable housing crisis, but these bills would make it a catastrophe.  Without the tax credits and bonds that the House bill eliminates, thousands of affordable homes will not be built, and more Vermonters will be left homeless or stuck in homes they cannot afford,” said Ted Wimpey, VAHC Steering Committee Chair and Director of CVOEO’s Fair Housing Project.  “The Senate proposal is more favorable but would still substantially reduce affordable rental housing production at a time when the need is so acute.  If either of these tax bills becomes law, it will put families out on the streets and irreparably harm Vermont communities.”

Overall, Vermont could lose an estimated $15 million in housing investments every year – losses that not only directly affect Coalition members’ ability to create affordable housing for low-income and vulnerable Vermonters, but also the amount of construction and real estate activity that the state relies on to help stimulate economic development, create good-paying jobs, and improve our communities.

“We are thankful that our entire congressional delegation strongly opposes these unbelievably harmful bills and hope that they do not become law, especially those provisions that are so damaging to affordable housing,” noted VAHC Coordinator Erhard Mahnke.  “We need real tax reform that helps address our housing crisis and protects struggling low- and moderate-income people.”

THE TAX BILL PASSED BY THE HOUSE:

  • Significantly weakens the Low Income Housing Tax Credit, the nation’s largest affordable rental housing development resource. The Housing Credit is a successful public-private partnership that has become the foundation for affordable housing development across Vermont and New England. While the credit itself is retained, it would be significantly weakened due to the proposed reduction in the corporate tax. With the value of depreciation expense and interest deductions reduced, the value of the Housing Credit would drop, greatly reducing private investment in low income housing. The tax proposal contains no changes to the credit that would help address this impact.
    • The Vermont Housing Finance Agency (VHFA) estimates the state would lose $5-6 million in private investments annually as a result. Last year the Housing Credit generated $30 million in private, up-front equity for construction, acquisition and renovation of affordable housing across the state.  In recent years, the credit has helped fund an annual average of 300 rental homes.
  • Eliminates the tax exemption on Private Activity Bonds, including multifamily and homeownership housing bonds. This tax exemption allows bond-financed multifamily projects to access ‘4% Housing Credits,’ which have helped produce or preserve tens of thousands of affordable homes in New England. Developments financed with 4% Credits often serve households with extremely low incomes, and have also been used on mixed-income developments that meet demand for market rate housing.
    • 4% Housing Credits are used with tax-exempt bond financing to fund approximately 1,200 affordable rentals over the last seven years. If this provision becomes law, Vermont could lose another $6-7 million in housing investments every year and see the annual number of rental homes financed potentially cut in half.
    • Tax-exempt Mortgage Revenue Bonds finance almost half of VHFA’s safe, low-cost mortgages to first-time homebuyers and would be eliminated under the House bill.
    • Mortgage Credit Certificates would no longer be available to assist eligible home buyers.
  • Eliminates the Historic Rehabilitation Tax Credit, which is a vital tool in the creation and preservation of affordable housing in historic buildings. Historic Tax Credits (HTCs) have had an enormous impact on our communities, attracting developers to invest in vacant, deteriorated, and underutilized structures.  In Vermont, HTCs are primarily used to help fund affordable housing, whether in large old mixed-use buildings in downtowns, or multiple buildings in scattered site developments.  Without them, many new projects would never take place because they wouldn’t be financially feasible.  If HTC’s are eliminated, it will have a devastating impact on our ability to develop affordable housing in the places where it makes the most sense – our downtowns, where low and moderate income Vermonters are close to goods, services and supports and can spend less on transportation.
    • In 2017, $1.8 million in HTCs leveraged $11.8 million in total investments to help fund 65 homes in redeveloped buildings in Bennington, Brattleboro, Burlington, Fair Haven, Montpelier and Stowe.
    • From 2012 – 2017, $24 million in HTCs helped fund 643 homes in 68 projects, serving 25 Vermont communities and generating $145 million in total private investment.
  • Eliminates the New Markets Tax Credit, a key resource for community revitalization efforts in economically distressed areas. Housing and community development investments work together in revitalizing neighborhoods and improving local economies.  Neither investment can do it alone.
    • Housing Vermont’s tax credit program has used over $123 million in financing for 15 projects that invest in the economic, environmental, and social well-being of Vermont communities.
    • The many projects financed include the Enosburg Health Center, the Brooks House and Commonwealth Dairy in Brattleboro, Barre’s City Place, and Burlington’s King Street Youth Center.
  • Reforms the Mortgage Interest Deduction, which has been a long-standing priority for housing advocates and would ordinarily be a major step in the right direction. Unfortunately, instead of using the savings from this reform to better target spending on housing solutions for those with the greatest needs, the House bill funnels these and other savings to pay for highly regressive tax cuts for the richest households and corporations.
  • Increases the federal debt by $1.5 trillion over a decade, a move likely to lead to deep spending cuts to affordable housing and community development, not to mention Medicare, Medicaid, and Social Security. Unfunded tax cuts will only add pressure on Congress to enact massive budget cuts at the expense of millions of families who benefit from federal investments that help them meet basic needs.
  • Threatens to dramatically reduce charitable giving, which will have an enormous impact on all nonprofits, including Coalition members who develop affordable housing and provide a broad array of services to low-income Vermonters and those with special needs. According to Urban Institute estimates, Vermonters’ pro-rata loss in charitable gift deductions could be as much as $136 million.  Community organizations like the Committee on Temporary Shelter (COTS), which rely heavily on individual and business contributions, could immediately feel the impact of a tax bill that no longer incentivizes middle income Americans to contribute locally.

THE SENATE TAX PROPOSAL:

  • Is more favorable to affordable housing than the House bill, because it preserves Private Activity Bonds, retains both the New Market and Historic Preservation Tax Credits, and adds a number of no-cost enhancements to the Low Income Housing Tax Credit. Nonetheless, its impact on the equity raised by the Housing Credit is the same as the House bill, so it would still severely reduce affordable rental housing production at a time when Vermont and most of the nation continue to be gripped by an acute affordable housing crisis.  National tax experts Novogradac & Co. estimate that, over ten years, the Senate tax bill – which is still undergoing changes – would reduce the future supply of affordable rental housing by nearly 300,000 homes nationally and that Vermont could lose:
    • 650 rental homes,
    • 740 jobs,
    • $62,089,000 in business income, and
    • $23,881,000 million in federal, state and local taxes. 

### 

The Vermont Affordable Housing Coalition is a statewide membership organization dedicated to ensuring that all Vermonters have decent, safe and affordable housing, particularly the state’s low and moderate-income residents, elders, people living with homelessness, and people with disabilities.
For more information, visit www.vtaffordablehousing.org.

 

 



Sanders Announces Vermont Secures $3 Million For Affordable Housing

Posted May 5, 2016

BURLINGTON, Vt., May 4 – U.S. Sen. Bernie Sanders today announced Vermont will receive $3 million from the National Housing Trust Fund. The funds are part of $174 million that is being dispersed nationally to build, preserve, and rehabilitate affordable rental housing. Sanders helped lead a 15-year effort to pass and fund the National Housing Trust Fund.

“Since my time as mayor of Burlington, increasing the availability of affordable housing in Vermont has been one of my top priorities,” Sanders said. “After 15 years of fighting for the National Housing Trust Fund, I am very pleased to see all 50 states receive funds to provide housing for people who are most in need.”

The Trust Fund is the first new federal affordable housing program in decades, and the only one to provide affordable housing for extremely low-income households. According to the National Low Income Housing Coalition, more than 7.2 million low-income households spend more than half of their income on rent and utilities.

“When you spend half of your money on rent, that leaves very little for other necessities such as food and medicine,” Sanders said.

Sanders first introduced legislation to create the National Housing Trust Fund in 2001, based on the success of the Vermont Housing and Conservation Trust Fund. Congress passed the legislation in 2008, but the Trust Fund did not receive funding until now. The National Housing Trust Fund is administered by the U.S. Department of Housing and Urban Development and is funded through a small percentage of profits made by government-sponsored agencies, Fannie Mae and Freddie Mac.

Sheila Crowley, who retired recently after serving for 17 years as the president and CEO of the National Low Income Housing Coalition, said the announcement was “a great victory” for homeless and poor families. “At long last, the National Housing Trust Fund will provide states with funds to begin ameliorating the shortage of affordable housing. I am very grateful to Senator Bernie Sanders for championing the NHTF since the first days of our campaign in 2001.”

A Sanders provision in the legislation created a minimum threshold, which ensures smaller states such as Vermont receive at least $3 million from the fund.

Erhard Mahnke, coordinator of Vermont Affordable Housing Coalition, said, “This is the first new funding for affordable housing in over 25 years and will create much needed homes for the poorest, most vulnerable Vermonters. We are extremely grateful to Senator Sanders for his longtime leadership role in creating the Trust Fund, which is patterned after our own successful Vermont model.”

To read more about the announcement, click here.

 



Welch Initiative to Assist Low-Income Mobile Homeowners Passes House

Posted February 9, 2016

Last week, the U.S. House of Representatives approved an amendment introduced by Rep. Peter Welch (D-VT) that would expand the federal housing assistance program to cover previously ineligible expenses of low income mobile home owners.  The bipartisan initiative was approved as an amendment to the Housing Opportunities Through Modernization Act (H.R. 3700), which passed the House and will now go to the Senate for further consideration.

“Low-income Vermonters are struggling to make ends meet and stay in their homes,” Rep. Welch said. “This legislation will provide a much-needed boost in federal assistance to low-income mobile home owners in Vermont and across the country.”

The U.S. Department of Housing and Urban Development (HUD) Section 8 housing choice voucher program provides financial assistance to help low-income families afford reliable housing across the country. Currently, this critical housing program disadvantages mobile home owners who are only permitted to utilize the housing voucher for the cost of the land leased underneath their home. However, the land leased is only a small portion of the cost that many mobile home owners pay for their housing.

Welch’s amendment expands the scope of the housing choice voucher program to better reflect the true costs of housing for low-income mobile homeowners. It would allow the property taxes paid on the mobile home, as well as insurances, utilities, and financing, to be included as housing costs eligible for the Section 8 payment. The amendment will also provide parity between the housing vouchers received by low-income mobile home owners and those received by low-income individuals living in rental units.

In 2010, there were an estimated 22,436 mobile homes in Vermont, according to the Vermont Agency of Commerce and Community Development.

“We are extremely grateful to Congressman Welch for his leadership on this important amendment, which provides low-income mobile home owners who lease the land under their homes with comparable assistance to that of their neighbors who rent,” said Erhard Mahnke, Coordinator for the Vermont Affordable Housing Coalition. “We’ve been hoping for a fix to this unfair policy for many years and are thrilled that it has passed the House as part of a bill that makes many other crucial and long awaited reforms to the Section 8 program. This will be of great and long lasting benefit to low-income and vulnerable Vermonter mobile home owners who struggle to pay for their housing costs,” said Coordinator for Vermont Affordable Housing Coalition Erhard Mahnke.

The legislation backed by Welch is supported by the National Manufactured Home Owners Association, the National Low Income Housing Coalition, and the New England Housing Network.

For a link to this press release, click here. For more on this amendment, click here.

 



Five New England Governors Unite to Support HOME

Posted November 24, 2015

Last week, five New England governors united across party lines in support of the HOME program, which provides critical funding for rental production, rent assistance, and home ownership. Governors Baker (R-MA), Hassan (D-NH), Malloy (C-CT), Raimondo (D-RI), and Shumlin (D-VT) all signed a letter to the New England federal delegation supporting the President’s budget recommendation of $1.8 billion for the HOME program, which the U.S. House and Senate budget proposals threatened to eviscerate.

“As governors, we are particularly attuned to the problems of both housing for our workforce and for our most vulnerable citizens who in highly competitive markets across New England are too often faced with homelessness,” according to the letter. “As you consider funding priorities for Fiscal Year 2016, we speak together on a bipartisan basis in favor of an increased federal/state partnership on the issue of affordable housing,” it continues.

The HOME program was authorized in 1990 as part of the Cranston-Gonzalez National Affordable Housing Act. Targeted to low or moderate income people, the HOME program can be used to build new houses, rehabilitate existing housing, help purchase a first home, and provide rental assistance. These funds can also be used for historic rehabilitation and transit-oriented development. According to a report from the HOME Coalition, HOME funds and leveraged public and private resources have helped build or preserve nearly 1.2 million affordable homes and provide direct rental assistance to 270,000 families at risk of homelessness since 1992. HOME is a flexible program that can be tailored to the unique housing needs in each state.

HOME funding has rapidly decreased over the past few years, creating great difficulties for states in their efforts to address affordable housing needs. Between FY11 and FY15, HOME funding was cut from $1.6 billion to $900 million. Under the most recent proposals from Congress, HOME is being recommended for $66 million under the Senate Appropriations Committee proposal (which would basically eliminate the program), and $766 million in appropriated funds under the House proposal.

On behalf of the New England Housing Network, Brenda Clement, Executive Director of Citizens’ Housing and Planning Association in Boston, MA, said, “We thank the New England governors for recognizing the importance of the HOME program to the people of our region, many of whom struggle with the high costs of housing in our states. We look forward to working with Congress to increase the funding available for this program so we can address the housing needs of our most vulnerable residents, who simply can’t find places to live for themselves and their families, at prices that they can afford.”

To view the letter, click here.

 



ACTION ALERTS: Sign on Letters Regarding CDBG and Fair Housing

Posted August 31, 2015

ACTION ALERT: SIGN ON LETTER OPPOSING SENATE AMENDMENT HARMFUL TO CDBG
Tell the Senate to Reject Language Stripping CDBG Funding from Sanctuary Cities
Deadline: Tuesday, September 8th COB
Please join the Coalition in signing on to a letter urging members of the Senate Judiciary Committee to reject the Vitter-Grassley substitute amendment to the Stop Sanctuary Cities Act (S. 1814) that would strip CDBG funding from communities that have immigrant “sanctuary” laws and policies in place. The amendment will be offered during a bill mark-up tentatively scheduled for September 10.

The letter is open to national, state and local groups, so please circulate widely. To sign on, please fill out the web form located here: http://nlihc.org/issues/participation/cdbg-letter.  To read the letter, click here.  Questions? Contact Elayne Weiss at the National Low Income Housing Coalition: (202) 507-7462 or eweiss@nlihc.org.


ACTION ALERT: SIGN LETTER OPPOSING CONGRESSIONAL ASSAULT ON FAIR HOUSING
Tell the Senate to Reject the House Anti-Fair Housing Language in Spending Bills
Deadline: Friday, September 4th
Please join the Coalition, the National Fair Housing Alliance, and hundreds of organizations around the country in signing on to a letter asking the Senate to reject the House’s harmful anti-fair housing amendments in any final spending legislation.

In June, the House of Representatives approved FY 16 spending bills for the Department of Justice and the Department of Housing and Urban Development with several amendments attached that severely undercut local fair housing enforcement and prohibit the federal government from using its authority to advance the Fair Housing Act’s mission of supporting diverse, inclusive communities where everyone has access to the resources they need to succeed.  No one should be denied a home because of who they are.  We must do everything in our power to prevent housing discrimination from occurring.  Stand with us in opposition to this assault on fair housing by signing on to the letter.

Click here to read the letter and sign your organization on.  Click Here for a brief fact sheet about the House’s anti-fair housing amendments.  Questions? Contact Jorge Andres Soto at the National Fair Housing Alliance: (202) 898-1661 ext 139, jsoto@nationalfairhousing.org.

 



ALERT: Last call to sign letter v. Sequestration – deadline TODAY Fri 8/21

Posted August 21, 2015

Friends,

Please join the National Low Income Housing Coalition, Vermont Affordable Housing Coalition and many other VT organizations TODAY to help: 

STOP SEQUESTRATION NOW!!

Sign Letter Urging Congress to Replace Unfair Sequestration with a Balanced Approach to Deficit Reduction 

Sequestration in FY16 imposes deep cuts to important non-defense discretionary (NDD) programs, including HUD and Rural Housing Service housing programs. Join advocates from around the country in calling on Congress to stop sequestration. Sign your organization on by COB TODAY, Friday, August 21 at: http://nlihc.org/issues/participation/ndd_letter.

BACKGROUND
In 2011, Congress passed the Budget Control Act, which resulted in 6% across-the-board cuts to housing and most other discretionary programs in 2013. Those cuts resulted in 100,000 fewer housing choice vouchers being in use in 2014, as well as cuts to every other HUD and Rural Housing Service program.

The Bipartisan Budget Act of 2013 negotiated by Representative Paul Ryan (R-WI) and Senator Patty Murray (D-WA) provided partial, temporary relief from sequestration in FY14 and FY15. However, sequestration has returned in FY16 with a devastating impact on appropriations bills for NDD programs.

For example, the HUD spending bills either passed by the House or passed by the Senate Committee on Appropriations, which comply with the sequester spending caps, would:

  • Effectively eliminate the HOME program with a 93% funding cut (Senate bill).
  • Empty the National Housing Trust Fund in 2016 and forever after (House bill).
  • Fail to renew existing vouchers (House bill would not renew 28,000 existing vouchers, Senate bill would not renew 50,000 existing vouchers).
  • Insufficiently fund the renewal of all project-based rental assistance contracts (House bill).
  • Cut public housing capital funds (House and Senate bills).
  • Eliminate increases sought by HUD for Homeless Assistance Grants (House and Senate bills).

If Congress fails to replace sequestration with a balanced approach to deficit reduction that achieves parity in relief for NDD and defense programs, legislators will be locked into passing final spending bills with these severe cuts.

See NLIHC’s budget chart for more information about cuts to housing: http://bit.ly/1Hi0YA9

HOW YOU CAN TAKE ACTION
Join advocates from many sectors around the country by signing a letter urging Congress to replace sequestration with a balanced approach to deficit reduction. The deadline is COB TODAY, Friday, August 21.

Sign the letter at http://nlihc.org/issues/participation/ndd_letter

View the letter at http://nlihc.org/sites/default/files/NDD_Sign-On_Fall-2015.pdf

 



HOME Coalition Sign On Letter – Deadline TOMORROW Friday, July 24

Posted July 23, 2015

If you haven’t done so already, please sign onto a national letter supporting the HOME Program. As you may know, the Senate Appropriations Committee T-HUD bill virtually eliminates HOME by cutting it down to $66 million – a shocking 93% cut. The House bill provides only $767 million for HOME and also contains a highly objectionable transfer that essentially eliminates the National Housing Trust Fund—the first new housing resource since the early 1990’s—in an attempt to bring HOME up to last year’s record low $900 million level. All this comes on top of the 50% cut the program already has already sustained since 2010, when its funding was at $1.8 million.

We all know how important HOME is for developing new, and rehabbing existing, rental housing. It helps seniors, people with disabilities, low-income families with children, veterans and people experiencing homelessness access safe, decent, and affordable housing. Under the Senate bill, Vermont stands to lose $3.25 million, the six New England states a total of $52.5 million. With a 1% rental vacancy rate statewide and persistent homelessness among families with children, youth and single adults, Vermont cannot afford these drastic cuts. Without HOME, our affordable housing production will slow further and homelessness will once again increase.

This letter from the HOME Coalition has been circulated widely by several national networks, but if you haven’t yet signed on, I highly encourage you to join us in doing so! The deadline is tomorrow, Friday the 24th. Here’s a link to the letter: http://bit.ly/1Dfilul.

Also, please contact your colleagues in other states and through your own networks and ask them to let their congressional delegations know how important HOME is. We have heard repeatedly from our congressional staff and through some of our national networks that other state delegations have not heard a significant outcry against the proposed cuts.

For more information and resources, please visit the HOME Coalition’s website.

 



Proposed FY 2016 HUD Budget Stakeholder Briefing Invitation

Posted January 28, 2015


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Please join Secretary Julián Castro at a stakeholder briefing on
the U.S. Department of Housing and Urban Development
Proposed FY 2016 Budget
Monday, February 2, 2015
4:00 – 5:00 pm EST (please adjust for your local time)
U.S. Department of Housing and Urban Development
Brooke-Mondale Auditorium
451 7th St SW
Washington, DC 20410
To attend in person, please RSVP HERE before 12:00pm EST, Monday, February 2, 2015.
*For security purposes, RSVPs must be received prior to the deadline
For those unable to attend, please view the briefing via webcast HERE.
*Note the webcast link will not be active until minutes prior to the start of the event.
This briefing is for stakeholders and not for press purposes.
For additional information, contact Yvonne Hsu (Yvonne.F.Hsu@hud.gov or 202-402-2316)

 



Emergency Solutions Grants (ESG) Vermont Annual Report – State Fiscal Year 2014

Posted September 9, 2014

The 2014 Year End Report for the Emergency Solutions Grant program is now available. Vermont’s Emergency Solutions Grants program, administered by the Vermont State Office of Economic Opportunity, provides a blend of state and federal (HUD) funding to support operations, staffing and homelessness prevention and re-housing assistance at approximately 40 non-profit emergency shelter, transitional housing and prevention programs serving all regions of the state. The State Office of Economic Opportunity works in close partnership with both HUD-recognized Homeless Continua of Care – Chittenden and the Balance of State (i.e., Vermont Affordable Housing Coalition) – to consult on performance measurement, data management and developing coordinated entry and assessment systems within both systems of care. The chart below shows a breakdown of the percentage of this funding used for each program component:

emergencysolutionsgrant

 

Approximately $1.6 million in state and federal funding was awarded under the Emergency Solutions Grant program. Just over half of funds supported direct service staff, such as case managers or housing counselors. Approximately one-third of funds supported basic shelter operations, such as utilities, rent, building insurance, shelter supplies or basic maintenance. The remaining funds (approximately $300,000) provided client financial or rental assistance such as security deposit, rental or utility arrearages, or short-term rental assistance.

To view the full report, including details on the population served and analysis of performance, click here (PDF file).

 



Vermont’s housing authorities feel the impacts of sequestration

Posted June 17, 2013

Public housing authorities in Vermont are feeling the effects of sequestration on already stressed budgets. This results in fewer issued vouchers, reducing access to housing for low-income Vermonters. Representatives from several housing authorities across the state comment on limited funding and losing vouchers in articles from VTDigger and The Commons Online.

Link to VTDigger article 

Link to PDF of Full VTDigger.org article

Link to Full Commons Online Article

Update, 6/26/2013: VPR transcript and audio recording of “Housing Assistance Cuts Affect Low-Income Vermonters”, June 25, 2013

Update, 7/12/2013: St. Albans Messenger, June 20, 2013

 



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