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Federal Housing Policy Response to America's Housing Crisis- Key Takeaways from the National Housing Task Force Report

The National Housing Crisis Task Force, a bipartisan coalition of practitioners and policymakers, has released a comprehensive federal policy agenda to address America's deepening housing crisis. The report, released in November 2024, and titled "From Crisis to Transformation: A Federal Housing Policy Agenda," outlines 40 specific policy recommendations organized around five key themes. It calls for immediate federal action to address acute and structural housing challenges. The report is intended to serve as a roadmap for the incoming Trump administration s approach to the affordable housing crisis. The Scale of the Crisis According to the report, the housing crisis in America has reached critical levels: Home prices have doubled in the last decade Nearly half of all renters are cost-burdened Homelessness has hit record highs The median house is now 45 years old, with significant maintenance needs Housing construction is down 60%, while population has grown 65% Core Policy Recommendations The Task Force organizes its recommendations into five strategic areas: 1. Lead and Focus the Nation Create a Housing Crisis Council in the White House Develop national housing production goals Implement real-time housing market data tracking Address the property insurance crisis Ensure Fair Housing Act compliance 2. Reduce Barriers to Production and Eliminate Complexity Modernize HUD programs for faster housing production Unlock Department of Transportation and Energy programs for housing Reform housing choice voucher programs Streamline federal land disposition for affordable housing Update building codes and regulations 3. Mobilize Federal Capital for Production & Preservation Authorize new financing mechanisms through Fannie Mae and Freddie Mac Provide low-cost debt for mixed-income housing developments Expand access to financing for housing agencies and CDFIs Create grants for adaptive reuse of buildings Reform and expand the Low-Income Housing Tax Credit The recommendations related to the Low-Income Housing Tax Credit (LIHTC) include: Expand the 9 Percent Credit: Increase the 9 percent LIHTC available nationally to address rising housing costs and build more affordable homes. Exempt Affordable Housing from the State Private Activity Bond Cap: Lift the artificial limit on the number of tax-exempt Private Activity Bonds (PABs) issued in each state to finance affordable housing projects. Increase the "Basis Boost" for Difficult Development Areas: Authorize an increase in the Basis Boost for DDAs, Native American housing, Extremely Low-Income housing, and rural areas from 30 percent to 50 percent. Streamline Income Verification: Simplify the income verification requirements for prospective tenants of deed-restricted affordable units to reduce administrative burdens and increase accessibility. The provision also recommends excluding the Basic Allowance for Housing (BAH) for all military members. Strengthen Cost Oversight Provisions: States should be required to consider cost reasonableness as part of their selection criteria when determining which developments will receive LIHTC allocations each year. These recommendations aim to adapt and expand LIHTC to effectively meet the current housing crisis. 4. Innovate with an Industrial Policy Lens Develop a national housing industrial strategy Create a Housing Innovation Unit within HUD Establish national building codes for modular housing Support construction workforce development Research and implement cost-reducing building practices 5. Provide a Housing Safety Net Make housing choice vouchers available to all eligible households Invest in immediate homelessness solutions Create tax credits for rent-burdened households Provide $100 billion for affordable housing rehabilitation Implement new affordability measures Implementation Timeline The Task Force proposes a one-year roadmap with specific actions: Day One Executive Actions: Including creating the Housing Crisis Council and ordering the development of a national housing strategy First 100 Days Legislative Priorities: Including emergency appropriations and authorization legislation Year One Administrative Actions: Including regulatory reforms and program modernization Tax Reform Priorities: Including expanding housing tax credits and creating new incentives The Federal Role The report emphasizes that the federal government is uniquely positioned to address the housing crisis through: Coordinating across multiple agencies and departments Providing substantial capital resources Setting national standards and goals Creating incentives for state and local action Protecting vulnerable populations Looking Forward The Task Force emphasizes that while immediate action is crucial, creating lasting change requires: Permanent commitment to housing as a national priority Partnership with state and local governments Engagement with private and civic sectors Focus on both supply expansion and affordability Investment in innovation and workforce development The report concludes that treating the housing crisis like a true crisis requires immediate federal action and long-term structural reforms. Success will require coordination across all levels of government and sectors of society, with the federal government playing a crucial leadership role in driving transformative change in America's housing ecosystem.

USDA Rural Development Announces Passbook Savings Rate Change for Multifamily Housing

USDA Rural Development has announced a change in the Multifamily Housing Passbook Savings Rate. Effective January 1, 2025, the rate will be adjusted to 0.45%. What This Means for You This change will impact how asset income is calculated for net family assets. Property owners and management agents must use the new rate for all tenant certifications effective on or after January 1, 2025. Key Points to Remember: The new passbook savings rate is 0.45%. This rate will be in effect until the Department of Housing and Urban Development (HUD) publishes a new rate. The change impacts calculations for imputed asset income. For More Information Please refer to the full announcement on the USDA Rural Development website for detailed information and guidance. If you have specific questions about your property, please get in touch with your assigned Servicing Specialist. Stay Informed We encourage you to stay updated on USDA Rural Development announcements by subscribing to their updates.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing - December 2024

During December 2024, A. J. Johnson will partner with the MidAtlantic Affordable Housing Management Association for two live webinar training sessions for real estate professionals, particularly those in the affordable multifamily housing field. Following the webinars, AJ will review testable areas and in-person administration of the Housing Credit Certified Professional (HCCP ) exam. The following sessions will be presented: December 10: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included, as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements for setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. December 11: Advanced LIHTC Compliance - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making concerning how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. Individuals who take both training days will be provided with study materials and a practice exam to assist in preparation for the HCCP exam, which will be administered on December 12. December 12: Review of testable areas and administration of the Housing Credit Certified Professional (HCCP ) exam (In-person exam in Richmond, VA). After two days of intensive and comprehensive LIHTC training, AJ will review program requirements and administer the HCCP exam in person. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA and is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

Impact of the Election on Affordable Rental Housing Production

While it is too early to predict with any certainty what the election of Donald Trump will mean for the affordable housing industry, we can make some assumptions based on the policy positions he has outlined so far. Trump s election will likely significantly influence the development of affordable rental housing in the United States. His administration s policies will likely focus on deregulation, immigration control, and using federal lands for housing development. Deregulation and Housing Development Trump has consistently advocated for reducing regulatory barriers to stimulate housing construction. He argues that excessive regulations increase construction costs and impede affordable housing development. By streamlining permitting procedures and relaxing zoning laws, the administration will encourage private developers to build more housing units, potentially increasing the supply of affordable rentals. Immigration Policies and Housing Demand The administration has linked housing affordability issues to immigration, suggesting that reducing the number of immigrants will decrease housing demand and, consequently, lower prices. This perspective claims that mass deportations could free up housing units, making them more accessible and affordable for American citizens. However, such measures may disrupt the construction industry, which relies heavily on immigrant labor, potentially exacerbating housing shortages and increasing costs. Utilization of Federal Lands Trump has proposed opening federal lands for large-scale housing construction, aiming to address housing shortages by increasing the availability of land for development. This initiative would create zones with reduced taxes and regulations to incentivize builders to develop affordable housing projects. While this approach could expand the housing supply, its effectiveness would depend on the implementation details and the willingness of developers to participate. Potential Challenges While the goal of these policies would be to increase the supply of affordable rental housing, they are likely to face several challenges: Labor Shortages: Immigration restrictions could lead to labor shortages in the construction industry, slowing housing development and increasing costs. Environmental and Community Concerns: Utilizing federal lands for housing will almost certainly encounter opposition due to environmental concerns and community resistance to large-scale developments. Market Dynamics: Deregulation alone may not ensure affordability. Developers may prioritize higher-end projects for greater profits, leaving a gap in affordable rental options. In summary, the incoming Trump administration s affordable rental housing development approach focuses on deregulation, immigration control, and leveraging federal lands. While these strategies aim to increase the housing supply and reduce costs, their success will depend on careful implementation and consideration of potential economic and social impacts.