Housing News Roundup: February 2, 2017
Affordable Housing Investment Slows with the Promise of Corporate Tax Reform
Expectations that Congress will lower corporate tax rates have created uncertainty about the value of low-income housing tax credit (LIHTC) investments. In anticipation of future tax liabilities, investors in LIHTC housing pay up front for 10 years of tax credits. The developer then uses these funds to support the development’s up-front costs, reducing the number of other financing sources needed to achieve its rent levels. Though investors remain interested in the credits, the current uncertainty appears to have slowed activity, though not as much as during the 2008–09 recession period. “It is still troubling for a lot of developers. It causes problems for developers who need to close their deals soon,” says Peter Lawrence, director of public policy and government relations at Novogradac.
Advocates Worry about the Future of Fair Housing Enforcement
With the change in administration, advocates for the nation’s fair housing laws are concerned about the future of federal fair housing funding, guidelines, and enforcement. The National Fair Housing Alliance estimates that up to four million cases of prohibited housing discrimination occur every year. Fifty-five percent of the nearly 28,000 reported cases in 2015 involved people with disabilities, and approximately 20 percent were related to racial discrimination. Nonprofit fair housing organizations are at the forefront of investigating and pursuing apparent violations of federal, state, and local fair housing laws. Their efforts rely on federal funding and enforcement. John Logan, a sociology professor at Brown University, notes that vehement anti-integration sentiments have historically limited federal efforts to promote housing equality. “While some may say, ‘Oh, the sky is falling, because the Trump administration is so terrible,’ my view is that it will be terrible, like all the others,” said Mr. Logan. Since Congress convened, a bill has been introduced to shut down the Affirmatively Furthering Fair Housing assessment tool, created by the US Department of Housing and Urban Development under the Obama administration.
Source: New York Times
Legislation in Hawaii Hopes to Classify Homelessness as a Medical Condition
A bill introduced in the Hawaii legislature would designate homelessness as a medical condition and redirect Medicaid funds to pay for housing. State senator Josh Green, the sponsor of the legislation and an emergency room doctor, says, “The single best thing we can do today is to allow physicians and health care providers in general to write prescriptions for housing.” In 2015, 53 of every 10,000 residents in Hawaii were homeless, the highest rate in the nation. This bill joins a larger effort by state officials to combat homelessness, which includes allocating a record amount of money to homeless support services last year and issuing $2 billion in bonds for constructing and renovating affordable housing, public housing, and homeless shelters. According to Scott Morishige, a homelessness official in the governor’s administration, “The state realizes there’s a strong intersection between housing and health care, and I think that really is a critical component of our efforts to address homelessness here locally.” If this bill becomes law, Hawaii would become the first state in the nation to use Medicaid funds to directly pay for housing; although, over a dozen states already redirect Medicaid funds for supportive services related to housing.
Source: KCBY Coos Bay Oregon
Extreme Case of Lead Poisoning in Washington, DC, Exposes Flaws in Federal Housing Inspection Guidelines
Insufficient federal guidelines for public housing inspections contributed to the lead poisoning of 2-year-old Heavenz Luster in Washington, DC. Heavenz was found to have 120 micrograms of lead per deciliter of blood, the highest level for a District resident in at least 20 years (any level over 5 micrograms of lead per deciliter of blood can lead to problems with a child’s cognitive development). The Luster family moved to the District four years ago, and because of employment and health difficulties, they became homeless and were placed into Targeted Affordable Housing. City officials inspected the Luster’s home before the family moved in, but the “[visual] check for peeling paint and deteriorating conditions,” which is all that federal guidelines mandate, did not reveal the lead dust or paint chips later found in the house. Other cities with aging housing stock, such as Baltimore, have created stricter inspection guidelines. According to Ruth Ann Norton of the Green & Healthy Homes Initiative, a leading expert on this topic, “We started in Maryland with visual inspections and came to the conclusion that…you need to add lead dust–clearance testing.”
Source: The Washington Post
New Study Demonstrates the Potential Costs of Evictions for City Governments
A new Urban Institute study reveals that two-thirds of New York City households have less than $2,000 in liquid savings, leaving these residents vulnerable to eviction if they experience a financial shock, such as an income disruption or an unexpected expense. According to the study, this could cost New York City $280 million to $646 million annually in expenses related to evictions, including homelessness services and lost property tax revenue. Researchers from the Urban Institute examined 10 large cities with various population sizes and amounts spent on homeless services, causing a wide range of cities’ potential costs. But the large proportion of households susceptible to eviction because of a financial shock was a common theme across all the cities. This report, which also provides policy solutions, echoes the calls from housing advocates in New York City for the city government to allocate money to cover legal fees for households experiencing eviction, noting that it is cheaper to pay for a lawyer than for homeless services.
Low-Income and Black Residents Feel the Pressure of Gentrification in Nashville
Nashville’s recent growth and development is leaving some residents and neighborhoods behind, with residents in the predominantly black neighborhoods downtown especially affected. In the past few years, the average home price in Nashville has increased nearly $100,000 from $167,500 to $255,408, and monthly rents have similarly risen sharply, from an average of $872 to $1,396. While city officials express excitement about the city’s direction, the Metro Planning Commission has acknowledged that housing affordability was their primary concern for the region. Residents mention that developers and realtors regularly contact them with offers to buy their houses, and the article notes that increases from the 2017 quadrennial assessment for property taxes may force many longtime residents to move. Neighborhood activists and academics have noted that this is not the first time low-income black residents have been displaced. “The city hasn’t learned from this long history,” said Ansley T. Erickson, a professor who recently published a book on school desegregation in Nashville. “There’s still more investment in the idea of growth than in trying to address inequality. It’s clear that there’s discrimination in urban Nashville.” This article is the first in a series that the Tennessean is doing on growth, housing, and displacement in Nashville.
Source: The Tennessean