House Financial Services Committee Releases its Portion of a Nearly $330 Billion Reconciliation Bill with Historic Amount of Housing and Community Development Spending
Today the House Financial Services Committee released its nearly $330 billion portion of the $3.5 trillion reconciliation legislation, focused on supplemental housing and community development spending, mostly administered by the U.S. Department of Housing and Urban Development (HUD). The committee also released an accompanying memo. The committee is scheduled to consider the legislation Monday. The following summarizes the most of the funding that would be made available under the bill.
- $90 billion for Housing Choice Vouchers and Project-Based Rental Assistance,
- $80 billion to preserve public housing,
- $72 billion for the Housing Trust Fund and the HOME Investment Partnership Program,
- $10 billion for lead hazard remediation and healthy housing funding,
- $10 billion for a new Community Development Financial Institutions (CDFI) Fund-administered Housing Investment Fund structured similarly to the Capital Magnet Fund,
- $10 billion for a new HUD-administered program for first-generation downpayment assistance and housing counseling,
- $9.5 billion for Community Development Block Grants (CDBGs),
- $7.5 billion for a new HUD-administered Community Restoration and Revitalization Fund,
- $6 billion for loans and grants to finance green preservation of HUD multifamily housing,
- $5.1 billion for U.S. Department of Agriculture (USDA) rural housing programs,
- $5 billion for the Federal Emergency Management Agency’s National Flood Insurance Program (while also forgiving $20.5 billion in existing debt),
- $4.5 billion for a new HUD-administered Unlocking Possibilities zoning and land use reform program to promote affordable housing and coordination with transportation investments,
- $4 billion to address health and safety concerns in HUD multifamily housing,
- $3.1 billion for the Minority Business Development Agency,
- $2.5 billion for Section 202 Housing for the Elderly,
- $2 billion for Native American housing, and
- $1 billion for Section 811 Housing for Persons with Disabilities.
While these funding amounts would be made available over time (for the most part, over four years), it would still be a big challenge for HUD (and to lesser extent the CDFI Fund) to administer and oversee this historic amount of funding. As such, the bill also would provide a significant amount of administrative and technical assistance funding.
Further details on some of these funding amounts follow.
HUD Rental Assistance
Of the $90 billion total for HUD’s two main rental assistance programs, the bill would provide $75 billion for Housing Choice Vouchers and related funding. Such funding is primarily targeted to extremely low-income households (those earning at or below 30% of the area median income, or the federal poverty line, whichever is greater), and includes the following other specifications:
- $25 billion in new incremental vouchers for households currently experiencing or at risk of homelessness
- $750 million for HUD administrative funding
- $500 million to PHAs for mobility related services for voucher households
- $500 million for tenant protection vouchers
- $40 million for technical assistance
The remaining $15 billion would be provided for Project-Based Rental Assistance (PBRA) and the bill directs the HUD secretary to competitively award PBRA contract authority roughly “in proportion to each state’s annual low-income housing tax credit (LIHTC) allocation, giving priority to properties in “higher opportunity areas” as defined by HUD. If unused, PBRA authority would be recaptured and reallocated to states that used of their PBRA authority. The bill also specifies the following set-asides:
- $348 million for technical assistance, and
- $40 million for HUD administrative funding
Of the $80 billion total for public housing funding, $66.5 billion would be targeted to “priority investments,” as determined by the HUD secretary, to repair, replace or construct public housing, including properties converting to project-based assistance (e.g., via the Rental Assistance Demonstration (RAD) program), and $10 billion would be for the Public Housing Capital Fund. The bill would exempt newly created units from the Faircloth limits on the number of public housing units each public housing agency is authorized to administer.
- $2.75 billion would be provided for competitive Section 24 grants (a.k.a. Choice Neighborhoods Initiative) for resident and community services, community development and revitalization, and affordable housing needs in the community, and
- $750 million would be provided for HUD administrative funding to implement the supplemental public housing funding
Housing Trust Fund (HTF) and HOME Investment Partnership Programs
Of the $72 billion total, $37 billion would be provided for the national Housing Trust Fund and $35 billion would be provided for the HOME Investment Partnership Program.
- $25 billion would be set aside for HOME grantees under the fiscal year (FY) 2021 formula,
- $300 million would be provided for HUD administrative funding to implement the supplemental HTF and HOME programs, and
- Up to $50 million could be used for technical assistance
Housing Investment Fund (similar to Capital Magnet Fund)
Of the total $10 billion for a new Housing Investment Fund administered by the CDFI Fund and structured similarly to the Capital Magnet Fund (CMF), $9.64 billion would be grants to CMF-eligible entities and $360 million for CDFI Fund administrative funding.
Community Development Block Grant funding
The $9.5 billion in CDBG funding under the bill would be allocated as follows:
- $7.5 billion for CDBG formula grants
- $1 billion to address housing and infrastructure needs in the Colonias
- $1 billion for CDBG Disaster Recovery (CDBG-DR) grants
- $500 million for manufactured housing communities
- $300 million for HUD administrative funding
- $100 million for technical assistance
Community Restoration and Revitalization Fund
The bill would create a new $7.5 billion HUD-administered program to restore and revitalize distressed communities. Eligible grantees would include community development corporations, Community Housing Development Organizations (CHDOs), CDFIs, local governments, tribes, land banks, fair housing enforcement organizations, public housing agencies and philanthropy. Of the total available, $500 million would be set aside for supporting community land trusts.
Green Preservation to of HUD Multifamily Housing
Similar to a program established in the American Reinvestment and Recovery Act of 2009, the bill would provide $6 billion for loans and grants to finance energy or water efficiency improvements, clean energy generation or building electrification, electric car charging station installations, or address climate resilience. Eligible properties would include those financed by HUD’s Section 202 Supportive Housing for the Elderly, Section 811 Supportive Housing for People with Disabilities, or Project-Based Rental Assistance programs. Of the total available, the bill would provide the following set-asides:
- $360 million for property climate risk, energy or water assessments, due diligence and underwriting,
- $250 million energy and water benchmarking of eligible properties, and
- $76 million for HUD administrative funding
USDA Rural Housing
The bill would provide $5 billion for new construction and preservation of USDA Section 515 Rural Rental Housing and Section 514/516 Farm Labor Housing programs and $100 million for the Section 504 Very Low-Income Housing Repair program.
Native American housing
Of the total $2 billion available for Native American and Native Hawaiian housing program, the bill would provide:
- $900 million for Native American housing competitive grants,
- $750 million for Native American Housing Block Grants distributed by formula, and
- $350 million for Indian Community Development Block Grants
The House Financial Services Committee is scheduled to consider the reconciliation bill Sept. 13. If approved, this bill would be combined with reconciliation bills from the other committees into one reconciliation bill by the House Budget Committee later that week. If reported by the Budget Committee as expected, House leadership is currently planning to bring up the reconciliation bill to the Rules Committee and the House floor during the week of Sept. 20. However, some rank and file House Democrats, especially moderates in the Problem Solvers and Blue Dog caucuses, are concerned about voting for spending totals and the proposals to pay for such spending that are likely to be cut by the Senate. Therefore, House leadership may need to wait until there is an agreement with Senate Democrats on the total levels of spending and pay-fors before bringing the combined reconciliation bill up for a House floor vote. Given that reality, it is very likely that the funding amounts in the Financial Services Committee portion of the reconciliation will need to be reduced to conform to the lowered level of total spending. Despite this likely reduction, the bill will still likely represent the largest infusion of housing and community development spending in a single piece of legislation ever. Stay tuned.