- The Federal Housing Administration (FHA) has announced relaxed requirements, effective immediately, for condominium project approval. The move is intended to increase options for affordable housing for 1st time and low income homebuyers. Among the changes are streamlining project recertification, expanding the definition of owner occupancy, and expansion of the eligible condominium project insurance coverage.
- The Federal Housing Finance Agency (FHFA) has released its 2015 Annual Performance and Accountability Report which describes its regulatory activities with regard to the Federal Home Loan Bank and as conservator of Fannie Mae and Freddie Mac
- American Bankers Association Urges CFPB to Take Down Mortgage Calculator
- Enterprise Community Partners: Enterprise’s Comprehensive Overview and Budget Chart of Affordable Housing and Community Development Proposals in the FY 2016 President’s Budget
- National Association of Realtors Pushing for Commercial Use of Drones
- National Low Income Housing Coalition: Housing Wage Calculator
- Urban Institute: FHFA’s Federal Home Loan Bank Members Proposal Overshoots the Mark
The National Low Income Housing Coalition has posted Aligning Federal Low Income Housing Programs with Housing Need. The Executive Summary goes right to the heart of the matter:
The number of renters in the United States has steadily increased since 2006 and will continue to rise as new households form in the post-recession economy. In 2012, one out of four renter households had incomes at or below 30% of the area median income (AMI) for a total of 10.3 million households categorized as extremely low income (ELI). In the same year there were just 3.2 million units affordable and available to ELI households, creating a shortage of 7.1 million rental units affordable to these households.
- Developers layer multiple funding sources while adapting to rapidly changing political and fiscal environments. Many also rely on non-traditional resources, such as private donations, to fill funding gaps.
- Reducing or eliminating mortgage debt is critical to be able to serve ELI households.
- Cultivating strong local partnerships is a key factor affecting developers’ ability to serve ELI households. Often, local jurisdictions that have prioritized affordable housing are willing to donate land or property at a low cost.
- Cross-subsidization is an important strategy used by many developers committed to inclusive properties that serve ELI households. This strategy incorporates units affordable to ELI households into projects containing other units occupied by households with a broader mix of incomes. The rents paid by higher income households supplement the overall operating expenses of the project, compensating for the lower rents that ELI households can afford.
- While the case studies highlighted some very effective strategies for serving ELI households without the use of vouchers, there is not one model that can be easily replicated. (iii-iv)
None of this is particularly earth shattering, but it is useful to to look into this topic in a systematic way. The Coalition hopes that this report “will contribute to the broader conversation about simplifying the process of financing affordable housing developments, refining existing programs so that they incentivize developers to serve ELI households, and finding ways to fund the ongoing operating costs of units that do serve ELI renters.” (iv)
As an off-the-cuff response, I wonder if the nation’s affordable housing agenda is benefited from such a complex funding environment for housing for extremely low income households. Can it just be funded more comprehensively, acknowledging the reality that it requires deep subsidies from the get-go? What is the opportunity cost of requiring developers to devote so much time to creating such complicated deal structures? In the current political environment, I doubt that affordable housing advocates have the stomach to raise these questions, lest Congress decides to cut back affordable housing subsidies even further. But in the long term, these are questions worth asking.