NCSHA Washington Report | April 19, 2024

A Senate hearing this past Wednesday entitled “Challenges in Preserving the U.S. Housing Stock ” brought to mind longtime housing lawyer and legislative advocate Chuck Edson’s observation that congressional interest in the issue began in the late 1970s “in the countryside ” when some apartment owners exercised their contractual right in loan agreements with the Farmers Home Administration to convert federally backed properties to market-rates, “resulting in the displacement of low-income tenants.”

This week’s Senate hearing focused on preservation needs in rural communities today. Nearly 90 percent of rural counties in the U.S. have rental housing financed by the USDA, but much of it is in poor condition and more of it continues to fall out of the “assisted affordable” inventory every year.

For instance, more than 150,000 apartments financed by the department’s Section 515 program have been lost over the past 10 years, and the cost to keep the 390,000 remaining units affordable and in good condition is at least $30 billion , according to the Housing Assistance Council. No new Section 515 apartments have been built for more than a decade.

USDA’s FY 2024 budget includes a small pilot program that will support preservation of Section 515 properties with “expiring” financing through standalone Section 521 project-based rental assistance contracts. The Rural Housing Service Reform Act , a bipartisan bill introduced by Senator Smith (D-MN, who chaired the hearing) and Senator Rounds (R-SD) would expand the pilot and make a number of other improvements.

Another bipartisan rural housing priority in the Senate (and the House ) is resolving an ambiguity in the way federal tax law relates to Fannie Mae and Freddie Mac’s ability to invest efficiently in Housing Credit-supported preservation and new construction, which NCSHA began raising in 2022. Senators Warner (D-VA) and Moran (R-KS) and 18 of their colleagues are pressing the Treasury Department for a solution.

The Senate hearing didn’t only highlight areas of common ground on rural rental housing: It broadened the preservation frame to include owner-occupied homes. That’s huge because more than half of rural residents dealing with a federally defined housing “cost burden” own their homes. A new analysis by Lending Tree finds that, of the 7.4 million U.S. households living in poverty, 41 percent are homeowners and “impoverished families are more likely to be homeowners in more rural parts of the country .”

Wyoming Community Development Authority Deputy Executive Director Christopher Volzke, who testified at the hearing, pointed out almost one-third of the housing stock in his state is more than 50 years old, and local communities typically lack resources to help owners remain where they have deep roots (an issue that “hits home ” for him as a fifth-generation member of a ranching and farming family).

Wyoming Senator Lummis (R) pointed to her co-sponsorship of a home repair bill with Senator Fetterman (D-PA) as yet another example of bipartisan cooperation and suggested the time is now for a comprehensive housing bill both parties can support and the Senate should pass sooner than later.

We couldn’t agree more.

Stockton Williams | Executive Director

In This Issue

• Wyoming CDA Testifies at Senate Hearing on Affordable Housing Preservation
• NCSHA Recommends HUD Delay Build America Implementation, Broadly Exercise Waiver Authority
• NCSHA Submits Comments on Rural Housing Loan Servicing Proposals
• Todman, Thompson Testify at Senate Banking Committee Hearing
• HUD Increases FHA Multifamily Insurance Policy Deductible
• Freddie Mac Proposes Purchase of Single-Family Closed-End Second Mortgages
• USDA to Hold Symposium on Multifamily Loan and Rental Assistance Decoupling
• FHFA Sets Date for FHLB – CDFI Symposium
• Mission Report Summarizes GSE Affordable Housing Activities in 2023
• NCSHA in the News
• Looking Ahead

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