Apologies for the error in both the subject line and text of last week’s post on the omnibus federal spending bill. The bill funded the remainder of FY 2018, not FY 2019. The mistake has been corrected in the subject line and in the email below. Of course this does not take away from the good news, but it’s for the current federal fiscal year, which ends September 30, 2018, not the next.
Dear Coalition members and friends,
As you may have heard by now, the Omnibus bill funding the federal government for FY 18 passed both the House and Senate over the last two days and, in spite of an early Friday morning tweet threatening a veto, President Trump has signed the bill into law. This legislation funds non-defense programs at a higher level than any year since 2010!
The news for housing and homeless funding is far better than we could have expected. Several of us were fortunate to be in DC earlier this week for the National Low Income Housing Coalition (NLIHC) conference and lobby day and got the good news first hand from our VT delegation and Senate THUD Appropriations staff. Our timing could not have been better! It’s not often one gets to bring back good news from DC these days!!
Below please find a summary of highlights from the bill from Kelsey Kobelt in Senator Leahy’s DC office. Further down are supplementary highlights from the National Council of State Housing Agencies (NCSHA). Please be sure to thank Senators Leahy and Sanders and Congressman Welch for their strong support for affordable housing and homelessness in the bill.
Have a great weekend!
Greetings Housing Advocates and Friends,
We are excited to report that yesterday, Senator Leahy and Senate and House leadership secured passage of the long-awaited FY18 omnibus with some major wins for housing programs. In these uncertain and tumultuous times, I am very encouraged that Senator Leahy was able to not only preserve these vital programs, but provide some increases made possible by the budget agreement the Senator negotiated earlier this year. Before the summary, I just want to take a moment to acknowledge the good work of Kate Ash, which is very much reflected in this final product. She fought tirelessly for each of these wins beginning about this time last year and we are only now seeing that work come to fruition.
In addition to preserving programs from the Administration’s proposed elimination, which are too many to name but include many of the programs highlighted below, the Senator was also successful in including the following requests in this final bill. It is safe to say that his work with the Vermont housing community over his career has helped shape his priorities:
$300 million increase for CDBG grants for a total investment of $3.3 billion;
$412 million increase for HOME for a total of $1.362 billion;
$130 million increase for Homeless Assistance Grants for a total of $2.513 billion including;
An increase of $88 million for a total of $2.1 billion for Continuum of Care and Rural Housing Stability Assistance Programs;
$50 million in newfunding for rapid rehousing for victims of domestic violence;
An increase of $40 million for a total of $80 million set-aside for homeless youth;
$270 million for Emergency Solutions Grants (ESG);
NeighborWorks received level funding at $140 million, as well as report language recommending increased investments to support the growth of the shared equity homeownership model;
This bill includes an $85 million increase above FY17 levels to the HUD Office of Lead Hazard Control and Healthy Homesfor a total of $230 million;
The US Interagency Council on Homelessness has been preserved at $3.6 million. Senator Leahy was also successful in including report language requiring a formal report to the House and Senate on Improving Health and Housing Outcomes across federal agencies to more adequately integrate health and housing efforts in aging communities;
$54 million for SHOP, the Section 4 Program, the Rural Capacity Building Program, and the Home Rehabilitation and Modification Pilot Program for Disabled or Low-Income Veterans.
An increase of $12.5 million for a total of $150 million for Choice Neighborhoods
An increase in $5.6 million for Rural Housing Vouchers (Department of Agriculture) for a total of $25 million
The Committee directs the Department to submit a report to the House and Senate Committees on Appropriations within 90 days of enactment of this Act describing proposals to update the FMR formula to more accurately reflect the current housing market and notes that proposals such as Small Area Fair Market Rents (FMRs) do not fully address the undervaluing of Fair Market Rents in many areas where rents have risen quickly.
Finally, the bill increases the annual per capita housing credit allocation by 12.5% for four years. This is a much needed increase in general, and even more so in light of the new tax law. Additional background on that change below.
Low-income Housing Tax Credit Allocation Increase The low-income housing tax credit program is one of the federal government’s primary policy tools for encouraging the development and rehabilitation of affordable rental housing. These non-refundable federal housing tax credits are awarded to developers of qualified rental projects via a competitive application process administered by state housing finance authorities. Developers typically raise equity capital from investors who take 99.9% ownership of the property as limited partners. The equity raised through the tax credits reduces the debt on the property, which enables rents to be lower. The bill increases the annual per capita Housing Credit allocation for the states and the small state minimum by 12.5 percent for four years. The per capita allocation was last permanently increased in 2000. The current volume cap for 2018 is $2.40 per capita with a small state minimum of $2,760,000. Currently, housing credit apartments serve renters with incomes up to 60 percent of area median income (AMI) and rents are comparably restricted. The bill creates a new test that would allow the 60 percent of AMI ceiling to apply to the average of all apartments within a property rather than to every individual Housing Credit apartment. The maximum income to qualify for any Housing Credit apartment would be increased from 60 percent of AMI to 80 percent. The higher rents that households with incomes above 60 percent of AMI could afford have the potential to offset the lower rents that households below 40 or 30 percent of AMI could afford, allowing developments to maintain financial feasibility while providing a deeper level of affordability.
All the best from the Leahy team,
Kelsey Kobelt Office of Senator Patrick Leahy Kelsey_Kobelt@leahy.senate.gov
ADDITIONAL OMNIBUS HIGHLIGHTS (excerpted from NCSHA summary)
The bill provides HUD a net total of $42.7 billion for FY 2018, an increase of $3.9 billion over its FY 2017 enacted level and more than $12 billion more than the President’s FY 2018 request. This allocation allowed the appropriations committees to fund many HUD programs at levels significantly above what was proposed in either the House or Senate FY 2018 draft bills. HUD highlights from the bill include:
$11.15 billion for project-based rental assistance (PBRA), enough to renew all existing contracts and provide $285 million for contract administration ($50 million more than FY 2017).
$22 billion to renew all Housing Choice Vouchers, including $1.76 billion for administrative fees.
$505 million for Section 811 mainstream vouchers for persons with disabilities, $385 million more than in FY 2017.
Lifts the cap on the number of public housing units that can convert under the Rental Assistance Demonstration (RAD) program from 225,000 to 455,000 and extends the program’s sunset date to 2024.
$2.75 billion for the Public Housing Capital Fund, 42 percent more than in FY 2017.
$678 million to the Section 202 Housing for the Elderly program, enough to renew all existing contracts and provide $105 million for capital advance and project-based rental assistance awards. The bill also includes language allowing Section 202 Project Rental Assistance Contract (PRAC) properties to convert under RAD.
$230 million for the Section 811 Housing for People with Disabilities program, $83 million more than in FY 2017. $82.6 million of this funding level is set aside for capital advance and project rental assistance awards.
USDA Rural Housing Programs
The FY 2018 omnibus also provides funding for USDA rural housing programs. Highlights include:
$1.1 billion for the Section 502 Single-Family Direct Loan program, a 10 percent boost over enacted FY 2017 levels. Funding for the guaranteed loan portion of the program remains the same at $24 billion.
$40 million for the Section 515 Multifamily Direct loan program, 14 percent more than in FY 2017. Funding for the guaranteed loan portion of the program remains the same at $230 million.
$1.345 billion for the Section 521 Rental Assistance program, 4 percent less than in FY 2017.
$25 million for the Section 542 Rural Voucher Assistance program, an increase of 29 percent; an additional $22 million, equal to FY 2017 funding levels, is set aside for the rental preservation demonstration.
Directs the USDA Secretary to incentivize public housing authorities (PHAs) and nonprofit organizations to take over ownership of rental housing properties and to ensure that they remain affordable by allowing these entities to receive a return on investment and asset management fee up to $7,500 per property.
Other Housing-Related Provisions
$250 million to the Treasury Department for the Community Development Financial Institutions (CDFI), $2 million more than in FY 2017.
Extends the National Flood Insurance Program until July 31, 2018.
For more information: