Housing and the 2016 Appropriations Act

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President Barack Obama signed on Dec 18, 2015 the $1.1 trillion Consolidated Appropriations Act of 2016 which included funding for low income housing and related programs. This “omnibus” provides funding for 12 federal agencies that did not have their annual appropriations handled separately before the first continuing resolution (CR) had to be passed (ensuring FY15 level funding through Dec 11). A second CR was issued through Dec 16. The omnibus funds the government through September 30, 2016.

While there was not any expansion of housing programs, the gains should fill any gaps in renewal of existing rental subsidy programs on the multifamily and the public housing side. Rural rental assistance shortfalls were addressed, and HOME and the Housing Trust Fund also came out much better, too.

In separate legislative action, the low income housing tax credit (LIHTC) scored a major victory when the 9% credit was made permanent as part of the Tax Extenders bill. And, 3 year certifications for persons on fixed incomes were adopted when provisions made it into a Transportation bill. Both were also signed into law.

Here are some additional details on these highlights:

HUD FY16 appropriations: The fiscal year 2016 Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations bill provides a total of $57.301 billion in discretionary budget authority – $3.53 billion more than fiscal year 2015 and $1.65 billion more than the Senate Committee mark that was considered before the Bipartisan Budget Act of 2015 was passed and signed into law. However, given reduced offsets stemming from a $1.1 billion decline in Federal Housing Administration receipts and a $2.3 billion increase in the cost of preserving existing rental housing assistance, the bill is only $131 million more than the fiscal year 2015 funding level.

 

  • Section 202 housing will receive $432.7 million, a $12.7 million increase over 2015 funding.
  • Service Coordinators will have $77 million (including renewal of existing congregate housing services program CHSP grants).

 

With carryover balances and residual receipts, the funding should be sufficient for all renewals and amendments of project-based rental assistance contracts, senior preservation rental assistance contracts, and existing congregate services grants.

Housing Trust Fund (HTF) and HOME funding: The bill does not eliminate resources for the HTF or redirect its mandatory resources to increase resources for the HOME program, as included in the House bill. The HTF was authorized in 2008 as a mechanism for states to create affordable housing for extremely low- and very low-income families, and this provision would have eliminated the HTF as a resource for state and local jurisdictions to build and preserve affordable homeownership and rental opportunities for those families.

HOME Investment Partnerships Program (HOME): The bill restores funding for the HOME program to $950 million, $884 more than the Senate bill. This level is $50 million more than fiscal year 2015 and results in the production of more than 35,000 affordable housing units for fiscal year 2016. The HOME program helps states and local governments increase housing affordability through the building, buying, or rehabilitation of affordable housing. This funding level creates affordable housing opportunities where units are otherwise limited or unavailable to low-income families and individuals.

Tax extenders: The legislation makes permanent the 9% rate for new construction under the low-income housing tax credit. The extenders package makes permanent the tax-free rollover of IRA funds to charitable organizations, a potential fundraising mechanism for our members. This tax break now will not expire every year, as it has in the past, so donors will have the security of knowing that the rollover always will be available.

Rural Development: The bill provides $1.39 billion for Rural Development rental assistance (Section 521), which is $301 million more than the fiscal year 2015 level. This increase reflects the growth in expiring agreements that will need to be renewed in fiscal year 2016. Without this funding, many low and very low income rural households, generally occupied by elderly, disabled, or female-headed families would face rent increases they could not afford. Almost 300,000 households will receive assistance this fiscal year. The bill also removes a provision that previously blocked renewing agreements in less than 12 months if the needed funding had been underestimated.

The bill provides $37 million for multi-family housing revitalization and preservation, which is $13 million more than the fiscal year 2015 level. Housing vouchers received $15 million, an increase of $8 million, while the preservation program received $22 million, an increase of $5 million. This funding will jointly address the issues of the deteriorating physical condition of the multi-family housing stock, and the looming problem of maturing mortgages. Almost 4,000 low and very low income rural households will be assisted by these vouchers.

Transportation Bill/FAST: In the weeks leading up to passage of the Omnibus, provisions of past bills known as SEVRA, AHSSIA, etc. were rolled up this year into a bill HR3700 that was expected to be passed separately. But a last minute issue arose that prevented that from happening. As a result portions of the bill related to certain tenant income verification relief (such that “for tenants where 90 percent or more of the income of the family consists of fixed income, and such sources of income have not changed since the previous year, public housing agency and owners shall conduct a review of each such family’s income not less than once every 3 years”) were added to the Surface Transportation bill then revised and included into the FAST Act which was ultimately signed into law.

Additionally provisions related to LIHPRHA and Private Investment in Housing, a budget-neutral demonstration for energy and water conservation improvements at multifamily residential units, also made it into law.

 


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