The House Financial Services Committee voted today to approve landmark legislation investing $327 billion in affordable housing as part of a $3.5 trillion infrastructure and economic recovery package. Below is an in-depth analysis of the updated bill text, which was released on September 12:
Rental Assistance
The bill includes $90 billion for rental assistance, including $75 billion for Housing Choice Vouchers and $15 billion for Project-Based Rental Assistance.
Of the total amount provided, $48.46 billion is for tenant-based rental assistance for extremely low-income households, $24 billion is for rental assistance for households experiencing or at risk of homelessness, survivors of domestic violence, and victims of trafficking, $750 million will be used for mobility-related services for voucher families, including families with children, $500 million is set aside for tenant protection vouchers, and $500 million for landlord outreach and recruitment in areas with lower poverty rates. The HUD Secretary may exempt vouchers funded through the bill from the cap on project-based vouchers, and the funds cannot be used under Moving To Work programs.
When awarding Project-Based Rental Assistance, the HUD Secretary must give priority to housing located in “high opportunity” areas, areas experiencing economic growth or rising housing prices to prevent displacement, and projects serving people experiencing homelessness or that integrate units accessible to people with disabilities.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to tenant rights and protections, rent setting, fair housing, nondiscrimination, labor standards, and the environment, if necessary to expedite or facilitate the use of funds.
Public Housing
The bill provides $80 billion to preserve public housing. Of this amount:
- $10 billion is for the Public Housing Capital Fund;
- $66.5 billion is targeted to “priority investments,” as determined by the HUD Secretary, to repair, replace, or construct public housing;
- $2.75 billion is for competitive Section 24 grants for resident and community services, community development and revitalization, and affordable housing needs in the community.
These funds are exempted from the Faircloth amendment, which limits any net increase in the number of public housing units owned by a public housing agency (PHA). The bill directs grantees to address health, safety, and environmental hazards, including lead, fire, carbon dioxide, mold, asbestos, radon, pest infestation, and other hazards.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to tenant rights and protections, fair housing, nondiscrimination, labor standards, and the environment, if necessary to facilitate the use of funds.
Housing Trust Fund
The bill provides $36.77 billion for national Housing Trust Fund activities, though these funds are directed through the HOME Investment Partnerships program. These funds will be allocated using the HTF formula to HTF grantees and used for HTF activities. No more than 10% of the funds can be used to support homeownership activities, and no more than 15% can be used for administrative and planning costs.
The bill waives the commitment deadline, matching requirements, and set-aside for Community Housing Development Organizations (CHDOs) for the HOME/HTF programs.
The bill allows the HUD Secretary to recapture “certain amounts remaining available to a grantee…or amounts declined by a grantee” and reallocate funds to other grantees to ensure fund expenditure, geographic diversity, and the availability of funding to communities within the State from which the funds have been recaptured.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to fair housing, nondiscrimination, labor standards, and the environment, if necessary to expedite or facilitate the use of funds.
HOME
The bill provides $34.77 billion for the HOME Investment Partnerships program, with $25 billion set-aside for HOME grantees under the formula used in fiscal year (FY) 2021. No more than 15% of funds can be used for administrative and planning costs.
The bill allows the HUD Secretary to recapture “certain amounts remaining available to a grantee…or amounts declined by a grantee” and reallocate funds to other grantees to ensure fund expenditure, geographic diversity, and the availability of funding to communities within the State from which the funds have been recaptured.
The bill waives the commitment deadline, matching requirements, and set-aside for Community Housing Development Organizations (CHDOs) for the HOME/HTF programs.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to fair housing, nondiscrimination, labor standards, and the environment, if necessary to expedite or facilitate the use of funds.
Housing Investment Fund
The bill creates a “Housing Investment Fund (HIF)” within the Community Development Financial Institutions (CDFI) Fund and funds the program at $9.64 billion.
The HIF is directed “to the extent possible” to increase the affordability, accessibility, and quality of housing, to improve energy efficiency and resiliency of affordable, accessible housing, locate affordable housing near transit and employment and education opportunities, to help address the increase in demand for housing to benefit existing residents and prevent displacement, and to further fair housing.
Under the new program, the CDFI Fund will make grants to increase investment in the development, preservation, rehabilitation, financing, or purchase of affordable, accessible housing “primarily” for low-, very low-, and extremely low- income families, and for homeowners with incomes up to 120% of AMI.
CDFIs and nonprofit housing developers are eligible for these funds, which can be used to capitalize acquisition and financing funds and to provide loan loss reserves.
Community Development Block Grants
The bill includes $8.5 billion for Community Development Block Grants and sets aside $1 billion to address housing and infrastructure needs in Colonias and $500 million for manufactured housing communities.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to fair housing, nondiscrimination, labor standards, and the environment, if necessary to expedite or facilitate the use of funds.
Community Restoration and Revitalization Fund
The bill includes $7.5 billion for a competitive Community Restoration and Revitalization Fund “for community-led projects that create civic infrastructure to support a community’s social, economic, and civic fabric, create fair, affordable and accessible housing opportunities, prevent residential displacement, acquire and remediate blighted properties, and promote quality job creation and retention.” Of the amounts provided, $500 million is set aside for supporting community land trusts and shared equity homeownership.
The funds are targeted to programs at the neighborhood, county, census tract, or census tract level where: home sales prices are less than the cost to acquire and rehabilitate or build a new home; there are high vacancy rates due to foreclosure, eviction or abandonment; low rates of homeownership; racial and ethnic disparities in homeownership; high and persistent rates of poverty; and other indicators of economic distress.
Eligible grantees include local organizations focused on anti-displacement, community development corporations, CHDOs, CDFIs, local governments, tribes, land banks, fair housing enforcement organizations, public housing agencies, and philanthropy.
Planning grants can be used for planning related to fair housing and anti-displacement, community outreach, neighborhood engagement, and predevelopment activities, among other activities. Implementation grants can be used for new construction of housing, demolition of abandoned or distressed structures, rental housing affordable to households at or below 80% of the Area Median Income (AMI), facilitating homeownership for households at or below 120% of AMI, or supporting land banks.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to fair housing, nondiscrimination, labor standards, and the environment, if necessary to expedite or facilitate the use of funds.
Energy Efficiency and Climate Resilience Grants
The bill proposes $6 billion to fund direct loans and grants to improve the energy or water efficiency, implement green features, including clean energy generation or building electrification, electric car charging station installations, or address climate resilience of multifamily properties under HUD’s Section 202, Section 811 or Project-Based Rental Assistance programs.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to tenant rights and protections, rent setting, fair housing, nondiscrimination, labor standards, and the environment, if necessary to facilitate the use of funds.
Revitalization of Distressed Properties
The bill proposes $4 billion to preserve distressed properties under HUD’s Section 8, Section 202, Section 811, and Section 236 programs.
Lead Hazards and Healthy Housing
The bill provides $10 billion to address health and safety in housing.
Rural Housing
The bill proposes $4.8 billion for rural rental housing. Of this amount, $4.36 billion is set aside for new construction and preservation of USDA’s Section 515 and Section 514/516 rental housing properties, $200 million is allotted for rental assistance, and $240 million for the administration of these funds.
Additional funds are provided to support rural homeownership. A total of $70 million is provided to support Section 502 Direct Homeownership Loans, $95 million is proposed to repair owner-occupied homes in rural communities under USDA’s Section 504 program, and $25 million is set aside for Section 523 Self-Help Housing.
Unlocking Possibilities Zoning Program
The bill creates a new competitive “Unlocking Possibilities” program, funded at $4.5 billion. This new program is designed to provide planning and implementation grants to help communities improve housing strategies, reform zoning and streamline local regulations, and address sustainability and fair housing.
Tribal Housing
The bill includes $2 billion to support tribal housing needs, including $784 million for formula funding under the Native American Housing Block Grant program and $784 million for competitive funds to be allocated based on need and capacity. An additional $334 million is provided for Indian Community Block Grants.
The bill prevents any tribe from accessing these funds if the tribe is not in compliance with treaty obligations as it relates to the inclusion of descendants of Freedmen.
Section 811 and Section 202
The bill provides $1 billion for Section 811 for capital advances and rental assistance for supportive housing for people with disabilities, and for project assistance contracts under the Section 202 Housing for the Elderly program. The bill also proposes $2.5 billion for the Section 202 program.
The HUD Secretary may waive any or specify alternative requirements or regulations, other than requirements related to fair housing, nondiscrimination, labor standards, and the environment, if necessary to facilitate the use of funds.
Fair Housing
The bill includes $1.25 billion to support fair housing activities.
Down Payment Assistance
A total of $10 billion is proposed to provide down payment assistance to first-generation homebuyers, and an additional $500 million to help build wealth.