NLIHC Sends Letter to Treasury Calling for Additional Guidance on State and Local Fiscal Recovery Funds

NLIHC President and CEO Diane Yentel sent a letter on September 17 to Treasury Secretary Janet Yellen urging the department to issue clear guidance on how communities can use the Coronavirus State and Local Fiscal Recovery Funds (Fiscal Recovery Funds) authorized in the American Rescue Plan Act (ARPA; see Memo, 6/7) to meet the housing needs of the lowest-income renters most severely impacted by the affordable housing crisis and the COVID-19 pandemic. NLIHC previously weighed in on Treasury’s Interim Final Rule governing the implementation of Fiscal Recovery Funds through a comment submitted on June 17 (see Memo, 6/21).

Treasury’s Interim Final Rule allows Fiscal Recovery Funds to be used to develop affordable housing for “populations, households, or geographic areas disproportionately impacted by the pandemic.” The NLIHC letter urges Treasury to require or encourage recipients to target housing investments to eligible populations and households – rather than geographic areas – disproportionately impacted by COVID-19, including people with the lowest incomes and Black, Indigenous, and other people of color. Concentrating affordable housing investments only in communities disproportionately impacted by the pandemic could retrench racial segregation. Treasury should allow states and localities to use Fiscal Recovery Funds for affordable housing investments in any community – not just Qualified Census Tracts – if the homes are affordable to households with the lowest incomes.

Moreover, without clear guidance on how states and localities can demonstrate “disproportionate impact,” recipients may shift resources away from affordable housing development, choosing instead to focus resources on other allowable uses to avoid any missteps that could result in funds being clawed back by the federal government. The letter asks Treasury to issue guidance explicitly stating that the development of any rental housing affordable to households with incomes below 30% of the area median income (AMI) is presumed to meet the statutory requirement to assist “households disproportionately impacted by the pandemic.” NLIHC’s letter points to research indicating the lowest-income renters have been disproportionately harmed by the economic downturn resulting from the COVID-19 pandemic.

Read the letter at: