National Association of Housing and Redevelopment Officials

1
The Millennial Housing Commission's Report -- A
Vision for Our Nations' Housing
National Association of Housing and Redevelopment
Officials June 5, 2002
2
Todays Moderator

• James M. InglisNAHRO Senior Vice President and
  NAHRO, Inc. ChairmanExecutive DirectorLivonia
  Housing CommissionLivonia, MI

3
Panelists

• Conrad Egan Staff DirectorMillennial Housing
  CommissionWashington, DC
• Ophelia B. Basgal
• Member, Millennial Housing CommissionExecutive
  DirectorHousing Authority of Alameda
  CountyHayward, CA

4
Agenda

• Introduction
• Background
• Recommendations
• Public Housing
• Section 8
• Other Affordable Housing
• Questions and Answers
• Wrap Up

5
Objective
In todays AudioShort, our panelists will provide
you with an a summary with an emphasis on public
and assisted housing as well as a discussion of
the Millennial Housing Commissions Report
released on May 30, 2002.
6
Introduction Background

• In December 2000, Congress pursuant to
  legislation established the bipartisan Millennial
  Housing Commission.
• The Commission consisted of 22 individuals drawn
  from across the country and from across the
  spectrum of housing ideologies and experience.
• The Commission was charged with examining,
  analyzing and exploring three areas

7
Three Areas of Exploration

• The importance of affordable housing to the
  infrastructure of the US
• Possible methods for increasing private sector
  involvement
• Whether existing HUD programs work in conjunction
  with each other and how if needed can these
  programs be improved to meet the overall purpose
  of providing better housing opportunities.

8
Millennial Housing Commission Sought Answers to
These Questions

• Is the nation getting the housing outcomes it
  expects and desires for individuals, families,
  and communities? Are there better ways to meet
  these needs?
• Are existing housing programs living up to their
  potential? Which need reform or significant
  restructuring?
• What are the critical housing needs and are new
  programs needed to address these needs?

9
Gathering the Answers

• The Commission held five public hearings,
  conducted numerous focus group meetings,
  commissioned papers and asked for input on policy
  positions and program recommendations from a
  diverse group of individuals and organizations.

10
Fundamental Precepts of Agreement

• Housing is linked to access to jobs and healthy
  communities. The failure to achieve adequate
  housing leads to significant costs to society.
• A multiple of factors arranging from community
  opposition to high-density development to the
  fast growth of new families requiring housing
  created an inadequate supply of affordable
  housing.

11
The Commissions Vision

• Produce and preserve more sustainable, affordable
  housing in healthy communities to help American
  families progress up the ladder of economic
  opportunity.

12
Basic Principles

• Strengthen Communities
• Devolve decision-making to states and local
  governments, but within a framework of federal
  standards and performance objectives.
• Commission recommends that Congress pay special
  attention to assigning appropriate roles and
  responsibilities to each level of government.

13
Basic Principles (continued)

• Provide the private sector with effective
  incentives to help produce and preserve
  affordable housing.
• Design programs to sustain the stock of
  affordable housing over the long term.

14
Public Housing
15
Recommendations Public Housing

• One of the major reforms recommended by the
  Commission is to transform the public housing
  program. This should not be confused with
  proposals to convert public housing into a
  tenant-based program but, rather the Commission
  affirms the importance of maintaining a permanent
  inventory of housing for people with extremely
  low incomes.

16
Recommendations Public Housing (continued)

• Specifically the Commission is recommending a
  gradual transition to project-based accounting,
  with subsidies flowing to specific properties
  based on their rents once restored to market
  condition.

17
Recommendations Public Housing (continued)

• Under this recommendation, public housings
  physical inventory and population would shift to
  the project-based Section 8 model. This would be
  converting operating and capital funding to a
  long-term Section 8 type contract linked to the
  property instead of the PHA.

18
Recommendations Public Housing (continued)

• Benefits of this Conversion
• Reliable funding to cover operating costs
• Debt service on loans for capital costs
• Replacement reserves
• Debt Service Insurance
• Subsidy levels would be based on each propertys
  market rent.

19
Recommendations Public Housing (continued)

• To be eligible, PHA would pledge to retain some
  specified income targets for the property.
• Timeframe Voluntary at first, with a period of
  7 to 10 years for completion.
• Transitioning HUD would still have to provide
  oversight on those PHAs who choose not to convert
  some or all of their housing stock.

20
Recommendations Public Housing (continued)PHA
Inventory Viability

• Converting of public housing would follow the
  Mark to Market Process conduct a market study
  and market-based physical and financial
  assessment for each property in the PHAs
  portfolio to determine feasibility of conversion
  approach.

21
Recommendations Public Housing (continued)

• If the assessment reveals that the property is
  severely distressed but is located in a good area
  and therefore warrants investment, then a HOPE VI
  revitalization, mixed-income approach would be
  considered feasible.
• When the property being revitalized is completed
  only then will it move to a project-based voucher
  contract.

22
Recommendations Public Housing (continued)

• If the property is severely distressed and is not
  well located, not viable, it will be demolished.
  A local market assessment must be completed to
  determine what housing resources are available to
  any families that must be relocated.

23
Inventory Conversion (continued)

• Once the feasibility stage is completed, we must
  ensure that the conversion is thoughtful and
  orderly. Transition steps
• Assess the capital, operating, and asset and
  property management needs of each property to
  determine the best debt and reserve structure.
• Prioritize Convert the properties in the best
  condition and location FIRST.

24
Inventory Conversion (continued)

• Set up each property as an individually owned
  entity with its assets outside the Annual
  Contributions Contract (ACC).
• Possibility You could make each property or
  entity a subsidiary nonprofit corporation of the
  public housing authority with freestanding assets
  to facilitate debt financing of capital
  improvements.

25
Inventory Conversion (continued)

• Establish clear and widely accepted standards for
  redesign, unit and site amenities, and physical
  condition so that the properties are attractive
  to a wide range of eligible families.
• Anticipation that this would serve to reduce the
  concentration of the very poorest of families.

26
Inventory Conversion (continued)

• Upon turnover, permit PHAs to admit a percentage
  of market-rate tenants to properties when
  income-mixing is feasible.
• Use of tenant-based subsidies in areas with
  inadequate supply, or project-based subsidies for
  units in other locations.

27
Inventory Conversion (continued)

• Replace the Annual Contributions Contract with a
  Housing Assistance Payment (HAP) contract as each
  property moves to the project-based assistance
  model.
• This reduces the regulatory burden of the PHA and
  HUD oversight requirements and eventually
  eliminates the oversight.
• Properties that elect not to seek project-based
  assistance would move to a housing choice
  voucher-type HAP.

28
Inventory Conversion (continued)

• Use a Section 8 administrator to avoid conflict
  of interest if the PHA is the owner/manager, set
  rent levels, and perform housing quality
  inspections.
• Many jurisdictions have this in place already.

29
Inventory Conversion (continued)

• Involve the residents in future planning about
  the conversion. Residents and managers must be
  aware of each others desires, opinions and
  goals.
• Throughout this process, input and participation
  from public housing residents and other important
  stakeholders should be actively sought and
  considered. Residents should have access to
  training and TA necessary to make their
  involvement informed and productive.

30
Conversion of Severely Distressed Properties
(continued)

• Utilize the HOPE VI as a preservation and
  production tool providing a comprehensive
  approach to eliminate blighted conditions
  physical deterioration of properties, and social
  pathology characteristic of high-poverty areas--
  higher unemployment rates, longer average
  tenancy, low education levels, high crime rates,
  poor school performance.

31
Conversion of Severely Distressed Properties
(continued)

• First, HOPE VI must be utilized to provide
  relocation, demolition, site remediation and
  construction costs. HOPE VI leverages
  non-public housing costs which make up the larger
  share of the development budget.

32
Debt Financing of Capital Needs
33
Debt Financing of Capital Needs

• Capital Improvements would be financed through
  private tax-exempt loans secured by a mortgage
  and backed by FHA mortgage insurance.
• No additional guarantees should be necessary for
  the majority of public housing properties, whose
  market rents would fully support the debt service
  to bring the property to acceptable quality
  standards.

34
Debt Financing of Capital Needs Scenario 1

• Properties that potentially have sustainable
  rents but do not initially meet quality
  standards...
• Would have a limited time to rehabilitate or
  replace inadequate units.
• Rents during the planning and rehab period could
  be pegged to what the units would command after
  renovation.
• Additional credit enhancements/other HUD
  guarantees would be necessary in cases where the
  propertys condition will require financing
  exceeding the propertys market value.

35
Debt Financing of Capital Needs Scenario 2

• PHA decides not to replace or rehabilitate a
  property
• Rents would be based on market value and
  replacement reserves would continue to accrue.
• Some properties may not need new capital
  investment while other properties do not warrant
  any additional investment and are good candidates
  for demolition -- these units can be replaced
  with hard units or vouchers.

36
Advantages of Debt Financing

• Long-term costs of this capital improvement
  approach would likely be lower than the current
  approach.
• Improvements can occur quickly.
• Debt financing provides another level of
  operational oversight from lenders thereby,
  substituting standard real estate practice for
  HUD oversite and regulations.

37
Debt Financing Not For Everyone Small Properties

• For small properties, the ratio of transaction
  costs to overall debt makes this type of
  financing impractical.
• More suitable approach would be to use existing
  capital grant programs or to front-load direct
  grants.

38
Debt Financing Not For Everyone Capital Needs
Exceed FMRs

• For properties whose capital needs require rents
  substantially above market levels, you can
• Use the HOPE VI program to revitalize the
  properties that are well located but in poor
  condition or otherwise obsolete.
• Grant PHAs full access to all housing development
  tools including debt financing and tax credits,
  as well as new loan and grant programs.

39
Challenges

• Alternative approaches may add to the already
  tight competition for tax credits.
• Success of endeavor depends on the credibility of
  the PHA and its partners as asset and
  construction managers.
• Congress should consider increasing the
  allocation of the Low Income Tax Credit so it can
  be used to revitalize the public housing stock
  without diminishing its availability for other
  uses.

40
Challenges (continued)

• Congress should direct HUD through the PHA to
  work with the private sector and different
  bond-rating agencies to structure a guarantee
  based on the proposed Section 8 project-based
  appropriations. Such a guarantee would enable
  PHAs to leverage private-sector investment for
  constructing or rehabilitating units.

41
Simplify the Rating of PHAs
KISS, please?!
42
Simplify the Rating of PHAs Current Situation

• HUD uses various systems to assess PHAs that
  focus on process compliance rather than outcomes.
• Evaluation systems have become pointlessly
  complex.
• System needs to be simplified.

43
A Simplified Rating System Should Must

• Related to the quality of housing that residents
  experience and be simple enough to enable PHAs or
  other administrators to judge how they are doing.
• Past public housing assessment systems provide
  insight to design an approach that accurately
  gauges quality of housing and its management.

44
A Simplified Rating System Should Must

• Prevent PHAs that do not meet minimum standards
  from converting to the proposed project-based
  program.
• If such a PHA owns some properties that do meet
  standards, those properties could be converted
  under some form of ownership that provides
  opportunities for resident participation and does
  not give the PHA complete control.

45
A Simplified Rating System Should Must

• Require agencies with competency problems to
  accept alternative management.
• Such as other PHAs acting as administrators,
  state or procured competitively from the public,
  nonprofit, or for-profit sectors.
• If alternative management measures do not work,
  troubled PHA would have to report to an
  administrative or judicial receiver.

46
Test New Rent-Setting Approaches
Rent Model
Incentives
Threshold
47
Test New Rent Approaches

• Congress should consider funding a research
  demonstration of alternative rent models.
• Rigorous research is necessary to ensure that
  public housing residents who are elderly or
  disabled are not forced to pay too high rents in
  the name of simplicity.

48
Test New Rent Approaches (continued)

• The rent structure should incorporate incentives
  for residents to seek economic opportunities.
• Establish an income threshold below which
  residents are subject to full verification and
  pay a simplified income-based rent.
• Families with incomes above the threshold would
  pay a higher fixed rent based on their unit size
  and subject to annual adjustment. Such an
  approach creates real economic incentives.

49
Test New Rent Approaches (continued)

• Another approach would be to set rents at 30
  percent of income for the first year and then
  step up the level every year thereafter. This
  creates an incentive to work, but gives families
  a full year to access services and achieve some
  stability.

50
Exempt Small PHAs ...

• From unnecessary and burdensome reporting
  requirements.

51
Exempt Small PHAs (continued)

• The Commission recommends that PHAs with fewer
  than 250 units have a simplified contract that
  establishes basic standards for physical
  conditions and operations, but strictly limits
  paperwork and reporting. Thereby, freeing the PHA
  to concentrate on physical management.
• PHAs geographically isolated or face high staff
  turnover will need ongoing technical assistance.

52
Streamlining the Housing Choice Voucher Program
53
Recommendation

• Expand and strengthen the housing choice voucher
  program to improve the access of extremely
  low-income households to the private housing
  stock.
• The Commission believes housing vouchers should
  continue to be the linchpin of a national policy
  providing very low income renters access to
  privately owned housing stock.

54
Housing Choice Voucher Program Recommendations

• The Commission recommends appropriation of
  additional funds for substantial annual
  increments of vouchers to address the housing
  problems of extremely low- and very low-income
  families without access to other housing
  assistance.

55
Housing Choice Voucher Program Recommendations
(continued)

• The Commission also supports expanded use of
  vouchers for homeownership to help low-income
  families build assets.
• The Commission recommends specific refinements
  that would increase the programs efficiency and
  effectiveness.

56
Improve Utilization and Success Rates

• HUD needs to diagnose the reasons for the limited
  success of the voucher program at some PHAs and
  offer targeted technical assistance.
• Voucher units should be reallocated from
  low-utilization PHAs to entities serving the same
  geographic area and households.

57
Improve Utilization and Success Rates (continued)

• Where reallocation is not feasible, the PHA could
  be required to contract with another entity to
  administer the unused vouchers.
• In all cases, households on the original PHA
  waiting list should have priority for the unused
  vouchers.

58
Improve Utilization and Success Rates (continued)

• The Commission recommends that HUD also make two
  simple administrative changes
• (1) Expand the resources devoted to rent surveys
  so that published FMRs do not lag actual rents.
• (2) Quickly approve exception payment standards
  when census data demonstrates that average rents
  are at the level of the exception sought.

59
Increase Landlord Participation

• HUD and PHA should develop consensus standards
  for shortening the inspection and lease approval
  process and for providing better service to
  landlords. Standards should be based on
• Review of PHA performance
• Feedback from both landlords and voucher holders
• Review of all standards that affect landlord
  participation such as lease approval,
  inspections, etc.

60
Increase Landlord Participation (continued)

• The Commission also recommends that HUD provide
  technical assistance to PHAs for improving
  landlord participation, disseminate best
  practices information to program administrators,
  experiment with giving PHAs greater flexibility
  in applying the HQS to attract owners into the
  program, and change the cap on the family rent
  contribution for newly rented voucher units to 40
  percent of gross income.

61
Link Vouchers Housing Production Programs
62
Linking Vouchers to Housing Production Programs

• The Commission recommends that HUD strengthen and
  enforce the requirement that owners of housing
  produced under federally funded programs accept
  households with vouchers.
• This effort enables extremely low-income families
  to live in rental housing produced with other
  subsidy sources which would otherwise be
  unaffordable.

63
Linking Vouchers to Housing Production Programs
(continued)

• In the interests of promoting mixed-income
  housing, the Commission also recommends that
  owners of developments of 50 or more units be
  able to limit the share of voucher households to
  20 percent or 30 percent, subject to local market
  conditions.

64
Linking Vouchers to Housing Production Programs
(continued)

• Extremely low-income households would receive
  special vouchers for units produced under capital
  subsidy programs such as the LIHTC, HOME, CDBG.
• Payment standards would equal the operating cost
  rather than base them on FMR.
• These vouchers could be targeted to places where
  the tenant-based voucher program has had little
  success.

65
Linking Vouchers to Housing Production Programs
(continued)

• In addition state and local housing plans would
  be required to take into account voucher success
  rates and barriers to voucher use when
  determining the use of HOME and CDBG funds.

66
Linking Vouchers to Housing Production Programs
(continued)

• PHAs should be allowed to designate a portion of
  available housing vouchers for first use in a
  particular housing project. This would
  supplement the current system of project-based
  vouchers, but not guarantee the owner a specific
  number of voucher holders over time.
• Allowed in neighborhoods with access to jobs and
  decent schools or as part of a comprehensive
  revitalization project.

67
Linking Vouchers to Work Opportunity and
Self-Sufficiency Initiatives
Vouchers
Work Opportunity
Self-Sufficiency Initiatives
68
Linking Vouchers to Work Opportunity and
Self-Sufficiency Initiatives (continued)

• The current voucher program does not make
  mobility of tenants a primary goal. The voucher
  program is more effective than any other kind of
  housing assistance in improving recipients
  opportunities, long-term self-sufficiency,
  employment savings, etc.

69
Linking Vouchers to Work Opportunity and
Self-Sufficiency Initiatives (continued)

• The ability of the voucher program to help
  families become more self-sufficient may depend
  on its ability to assist families in moving to
  neighborhoods with access to good jobs and good
  schools.
• Moving to Opportunity (MTO) demonstration --
  mobility counseling is expensive.
• Competes with other program objectives

70
Linking Vouchers to Work Opportunity and
Self-Sufficiency Initiatives (continued)

• Another way the voucher program can help families
  is to build in opportunities for employment and
  savings.
• The Family Self-Sufficiency (FSS) program shows
  particular promise for this initiative.

71
Linking Vouchers to Non-Housing Programs
72
Linking Vouchers to Non-Housing Programs

• HUD should allow other agencies to compete for
  special allocations of vouchers for certain
  populations, but require the PHA to perform key
  operations such as housing inspections,
  rent-setting, and payments to landlords.
• The functions of this initiative would be
  monitored as part of the PHA overall voucher
  program.

73
Linking Vouchers to Non-Housing Programs

• Housing vouchers can also work effectively with
  other types of assistance programs for
  special-needs populations.
• States expand community-based housing options,
  vouchers will be looked at as the way to provide
  permanent housing for persons with disabilities.
• This will require establishing stronger
  partnerships between PHAs and other providers of
  supportive services.

74
Flexible Use of the Section 8 Project-Based Units

• In addition to expanding the tenant-based housing
  choice voucher program, the Commission proposes
  certain improvements to the project-based Section
  8 program.

75
Linking Vouchers to Non-Housing Programs
(continued)

• Currently treatment of project-based Section 8
  units are inflexible -- subsidies can not be
  transferred from deteriorated properties.
• Though Mark-to-Market can assist properties in
  good condition, economically it is better to
  demolish and replace some obsolete or poorly
  located properties.

76
Linking Vouchers to Non-Housing Programs
(continued)

• Better use of funds to transfer project-based
  section 8 and other subsidies to other locations
  as part of mixed-income housing development.
  Companion use and affordability restrictions
  would also be transferred.

77
Linking Vouchers to Non-Housing Programs
(continued)

• Benefits
• The transfer of subsidies and resources would
  help preserve existing affordable housing.
• Provide new preservation options for property
  owners who are considering to opt out of their
  contracts.
• Enable other properties assisted by shallow
  subsidy programs (LIHTC and HOME) to serve some
  very low-income renters.

78
Linking Vouchers to Non-Housing Programs
(continued)

• HUD currently has the authority to transfer
  project-based Section 8 contracts to other
  developments however, statutory issues
  apparently exist in
• existing contracts to new replacement housing
  construction projects, and
• in transferring companion use restrictions in
  other buildings under the Mark-to-Market
  transactions.

79
Linking Vouchers to Non-Housing Programs
(continued)

• Commission recommends
• that the administrators of these project-based
  contracts be permitted and encouraged to allow
  the transfer of assisted units to aid in the
  preservation of affordable units in high-quality
  properties and to improve income diversity.
• Congress remove any statutory obstacles to using
  transferred project-based Section 8 subsidies for
  replacement housing.

80
Commission Recommendations Other New Tools
81
Flexible Tax Credit

• Allocate a flexible new tax credit to stimulate
  production of affordable properties suitable for
  homeownership.
• A new homeownership tax credit to be allocated to
  the state housing finance agencies to help lift
  low-income and minority homeownership rates.

82
Exit Tax Relief

• The Commissions proposed preservation tax
  incentive is intended to reduce the number of
  project-based units lost from the affordable
  housing stock by giving current owners an
  incentive to transfer ownership to new owners who
  commit to the long-term preservation of
  affordability.

83
Exit Tax Relief (continued)

• The Commission cites the risk of rent escalation
  within the conventionally financed inventory as a
  compelling reason both to preserve as many
  privately held units as possible and to recognize
  the preservation of affordable housing as a
  critical public policy goal.

84
Exit Tax Relief (continued)

• It is critical that the nation adopt a
  preservation philosophy to guide its housing
  policy going forward.
• A new underwriting standard for long-term
  sustainability.
• Efficient use of federal resources and a
  recognition of the broader benefits of
  preservation
• Recognition of an entitys unique nature and
  needs in expanding affordable units through
  preservation

85
Exit Tax Relief (continued)

• Because of the immediacy of the problem, any
  proposed tools or approaches that can quickly and
  efficiently preserve housing should receive
  priority from the federal government.
• The proposed preservation tax incentive(PTI) be
  adopted and enacted quickly.

86
Exit Tax Relief (continued)

• The Commission recommends that states be given
  the authority to allocate exit tax relief, via a
  preservation tax incentive to stimulate the
  transfer of properties to preservation entities.

87
Production of New Affordable Housing

• Provide capital subsidies for the production of
  units for occupancy by extremely low-income
  households.
• Commission recommends that Congress address the
  housing needs of extremely low-income households
  through a 100 capital subsidy for construction,
  rehabilitation, or acquisition of units earmarked
  for extremely low-income households.

88
Attract Private Capital to the Production of
Mixed-income, Multifamily Rental Housing

• Commission recommends that the limits be taken
  off states ability to issue tax-exempt debt for
  specific multifamily properties, with the
  condition that eligible properties must restrict
  rents on at least 20 of the units to levels
  affordable to families with incomes below 80 of
  AMI.

89
Facilitate Strategic Community Development

• Commission recommends creation of a new, more
  potent community development tool that builds on
  the lessons of successful projects while unifying
  funding and regulations.

90
Facilitate Strategic Community
Development(continued)

• This proposal would allow state governors to
  reserve up to 15 of their federal block grant
  funds (including TANF, CDBG, HOME, Workforce
  Investment Act (WIA) funds, Social Services Block
  Grants, Child Care Block Grants and
  transportation funding) to support comprehensive
  redevelopment projects sponsored by local
  governments.

91
Other Major Reforms to Existing Programs
92
Federal Housing Administration

• Restructure FHA as a wholly owned government
  corporation within HUD
• FHA and Ginnie Mae be combined into a single
  entity.

93
Federal Housing Administration (continued)

• Provide for more flexible multifamily operations
• Combine all mutlifamily programs in the General
  Insurance and Special Risk Insurance Fund into a
  single program
• Permit FHA to vary the terms or other aspects of
  its mutlifamily insurance programs

94
Federal Housing Administration (continued)

• Grant FHA broad authority to pursue pool
  insurance and offer adjustable-rate insurance
  products.
• Index multifamily mortgage limits to a
  construction cost index and give FHA greater
  flexibility to increase limits in high-cost
  areas.
• Allow FHA to insure construction-only loans.
• Build on the success of the 221(d)(4) rental
  production program

95
Federal Housing Administration (continued)

• Provide for more flexible single-family
  operations
• Expressly authorize FHA to initiate single-family
  risk-sharing demonstration programs
• Authorize FHA to set its own standard for
  selecting business partners.
• Expressly authorize FHA to introduce new products.

96
Federal Housing Administration (continued)

• Urge FHA to use sophisticated private-sector
  techniques to prevent mortgage defaults and, when
  defaults are unavoidable, reduce their cost.
• Expand FHAs home improvement lending activities.
• Expand FHAs small investor lending activities.

97
End Chronic Homelessness

• The Commission strongly endorses a program to end
  chronic homelessness within 10 years through
  provision of additional supportive housing.
• The tools are already in place.
• The Commission recommends that this set-aside be
  made permanent as a way to ensure the addition of
  15,000 incremental units of permanent supportive
  housing each year.

98
End Chronic Homelessness (continued)

• A related recommendation is to transfer renewal
  funding for expiring rent and operating subsidies
  to permanent supportive housing to HUDs Housing
  Certificate Fund.

99
End Chronic Homelessness (continued)

• A successful end homelessness policy must
• Provide sufficient public and private funding for
  a full continuum of interventions targeted to
  various homeless sub-populations.
• Infuse this continuum of interventions with the
  high expectation, incentives and supports needed
  to encourage homeless households to participate
  in treatment programs, work productively and
  engage in constructive behavior.

100
Link Housing Assistance with Work Requirements

• The Commission recommends that federal housing
  assistance programs encourage and facilitate
  expanded economic opportunity, recognizing that
  working-age families living in assisted housing,
  like other able-bodied people, have an obligation
  to contribute to society as well as accept its
  help.

101
Link Housing Assistance with Work Requirements
(continued)

• The Commission recommends over time the housing
  assistance system require residents who are not
  elderly or disabled work as a condition of
  receiving aid.

102
Streamlining of Existing Programs
103
HOME and the Low Income Housing Tax Credit
Programs

• Both LIHTC and HOME have helped to build the
  capacity of state and local jurisdictions to
  engage in housing development.
• The LIHTC and HOME programs represent a true and
  strong paradigm shift away from some of the less
  effective federal policies and programs of the
  past.

104
Recommendations to Improve the Low Income Housing
Tax credit Programs

• Allow sponsors of tax credit properties in
  low-income rural areas to set rent caps based on
  statewide median income.
• Remove impediments to the use of tax credits for
  preservation.

105
Recommendations to Improve the Low Income Housing
Tax credit Programs (continued)

• Remove the prohibition against combining LIHTC
  with assistance under the moderate rehabilitation
  program.
• Clarify what project costs can be included in
  eligible costs.

106
Recommendations to Improve the HOME Investment
Partnerships Program

• Given the widely recognized success of the HOME
  program, enact a substantial increase in HOME
  funding for both states and local jurisdictions.
• Allow the use of HOME funds to capitalize a
  long-term project reserve account.

107
Recommendations to Improve the HOME Investment
Partnerships Program

• Permit Participating Jurisdictions to use HOME
  funds to refinance certain low-income housing
  mortgages.
• When rental housing is financed with both HOME
  and CDBG funds, HOME rules should govern.
• Improve lead hazard evaluation and control by
  incorporating lead safety into general housing
  rehabilitation activities.

108
Recommendations to Eliminate Barriers to
Combining LIHTC and HOME and Other Programs

• Make both new construction and substantial
  rehabilitation expenditures eligible for the 9
  tax credit.
• Allow a Basis boost for tax credit developments
  in high-poverty, high-cost areas, even when they
  also receive HOME assistance.

109
Recommendations to Eliminate Barriers to
Combining LIHTC and HOME and Other Programs
(continued)

• Delegate subsidy-layering reviews for tax credit
  properties to state allocating agencies.
• Allow states to use Temporary Assistance to Needy
  Families (TANF) funds for onetime grants to
  existing tax credit properties.

110
Expand States Ability to Use the Mortgage
Revenue Bond Program

• The Commission recommends repeal of the Mortgage
  Revenue Bond programs 10-year rule, thereby,
  increasing the resources available to states for
  homeownership.

111
Revise Federal Budget Laws

• The Commission recommends that Congress make a
  serious effort to address the issues raised by
  the HAP condition to preserve the existing stock
  of government-assisted affordable housing.

112
Supporting Recommendations
113
Increase Funding for Housing Assistance in Rural
Areas

• The Commission recommends that Congress and the
  Administration should increase appropriations for
  low-income housing in rural America.
• Congress should provide adequate funding for core
  RHA housing programs, including 515 rental
  housing, Section 521 rental assistance and
  housing assistance for farm workers.

114
Increase Funding for Native American and Native
Hawaiian Housing

• The Commission recommends that Congress increase
  funding for the Native American Housing
  Assistance and Self-Determination Act (NAHASDA)
  block grant.

115
Establish Individual Homeownership Development
Accounts

• The Commission recommends that the 401 (k) and
  IRA statutes be amended to allow financial
  institutions to monitor IHDA deposits for
  Community Reinvestment Act credit.

116
Allow Housing Finance Agencies to Earn Arbitrage

• The Commission recommends that Congress repeal or
  liberalize federal restrictions on housing
  agencies ability to earn arbitrage on mortgage
  bond proceeds. This measure would increase the
  amount of federal assistance available to support
  low-income housing without additional annual
  appropriations.

117
Exempt Housing Bond Purchasers From the
Alternative Minimum Tax

• The Commission recommends that housing bond
  purchasers be exempt from the Alternative Minimum
  Tax.

118
Undertake A Study of the Davis-Bacon Act
Requirements

• Evidence presented to the Commission suggests
  that wage levels set under this Davis-Bacon are
  higher than actual wages paid. Hence, the
  Commission recommends that Congress undertake a
  study of the Davis-Bacon requirements and make
  improvements in such areas as the accuracy of the
  wage data, the applicability threshold and the
  reporting requirements.

119
Address Regulatory Barriers

• Address the regulatory barriers that either add
  cost of or effectively discourage housing
  production.
• Federal agencies to include a housing impact
  analysis as part of the rule-making process
• Establish a demonstration program to provide
  planning grants to localities committed to
  combining land-use regulations into a
  comprehensive balanced growth code that has
  workforce housing affordability as a key
  ingredient.

120
Streamline State Planning Requirements for CD
Programs

• The Commission recommends that Congress encourage
  states to develop plans that establish basic
  principles such as the importance of
  sustainability, define housing needs and target
  areas, list priorities, outline a menu of
  resources, and request project proposals that
  offer solutions.

121
Expand Financing Options For Small Multifamily
Properties

• Create an FHA small multifamily pool insurance
  program.
• Streamline FHAs existing small multifamily whole
  load insurance.
• Encourage the government-sponsored enterprises
  and leaders to make loans for small multifamily
  properties.

122
Expand Financing Options For Small Multifamily
Properties (continued)

• Fund national data collection on multifamily
  lending and promote standardization of lending
  practices.
• Commission recommends a national data collection
  effort to analyze the risks of multifamily
  lending.

123
Foster a Secondary Market for Development and
Construction Lending

• To develop a secondary market for development and
  construction loans, the Commission recommends
  that Congress
• Encourage the Federal Home Loan Bank System to
  launch a pilot program establishing a private
  secondary market for construction loans.

124
Foster a Secondary Market for Development and
Construction Lending

• Urge the Treasury Department to publish detailed
  guidance on the use of Financial Asset
  Securitization Investment Trusts
• Permit FHA to issue construction-only insurance.
• Grant government-sponsored enterprises express
  authority to purchase construction-only loans.
• Require banking regulators to collect, report on
  and publish sufficient detail on the activity and
  performance of real estate loans.

125
Launch A Demonstration For Comprehensive
Community-Based Work

• The Commission recommends combining the interest
  and resources of large private foundations with
  the funding from the federal government.
• Funding decisions would be made by
  representatives of private foundations and public
  agencies.
• Localities apply to the board for funding.

126
Improve Customer Education About Home Mortgage
Lending

• The Commission recommends that Congress enact
  regulatory changes to educate and protect
  consumers in mortgage transactions, as well as
  assure loans are made at fair and reasonable
  credit costs.

127
Improve Access of Manufactured Home Buyers and
Owners to Capital Markets

• The Commission recommends that
• Congress (a) affirm that Fannie Mae and Freddie
  Mac can purchase manufactured home loans
  classified as personal property (b) encourage
  support of a secondary market in such loans if
  they are determined to be sound, and (c)
  establish performance goals for manufactured home
  loan purchases.

128
Improve Access of Manufactured Home Buyers and
Owners to Capital Markets (continued)

• FHAs Title I and II programs be promoted and
  loan limits be increased.
• Ginnie Mae approve more lenders as
  issuers/servicers, or instruct current issuers to
  make and service loans for manufactured homes.

129
Affirm the Importance of the Community
Reinvestment Act

• Affirms the importance and benefit of CRA to the
  goals of expanding homeownership and producing
  and preserving affordable housing.
• Acknowledges the need for periodic reassessment
  of the rules governing CRA compliance, assignment
  and use of grades.
• Acknowledges the need for periodic reassessment
  of CRAs coverage of mortgage lending activity.

130
Affirm the Importance of the Government-Sponsored
Enterprises

• In light of the demonstrated value of the GSEs,
  as well as their potential to help their partners
  expand homeownership opportunities among
  immigrants, minorities, and low-income
  households. The Commission

131
Affirm the Importance of the Government-Sponsored
Enterprises

• Affirms the ongoing importance of the GSEs
• Supports the current regulatory system for Fannie
  Mae and Freddie Mac
• Recommends that Congress and HUD support, full,
  safe and sound GSE activity in subprime,
  manufactured housing, home improvement, small
  multifamily, and development and construction
  lending.

132
Roundtable Discussion

• Questions will be taken from the audience.
• Press 1 on your handset to enter into the
  question queue.
• Questions will be answered in the order in which
  they are received.

133
Wrap-Up

• NAHROs Network Central for further discussion
  and information sharing on this and other topics
  at http//www.nahro.org/members/connects/index.cf
  m
• NAHROs DirectNews for up to date news on HUD
  NOFAs, regulations, PIH notices, guidebooks,
  studies and reports at http//www.nahro.org/membe
  rs/connects/index.cfm

134
Wrap-Up (continued)

• Programs and Policies NAHROs Section 8
  programs and policies web page for a veritable
  cornucopia of information on all things Section 8
  at http//www.nahro.org/programs/rent_s8/index.cf
  m

135
Conclusion

• Thank you for participating in the NAHRO
  AudioShort Program.
• Remember to fax or email your evaluation forms to
  NAHRO.
• NAHROs Summer Conference will be in New York
  City, on July 11-14.