NCSHA Washington Report | September 6, 2024
A couple of weeks ago, HUD commemorated the 50th anniversary of the Housing and Community Development Act of 1974. Even among housing scholars, the law seems underappreciated, generating less attention than the sweeping housing acts of the ’30s, ’40s, and ’50s and less analysis than more recent large-scale legislative responses to the subprime mortgage crisis and Covid. But it was a big deal.
HUD’s acknowledgement focused on the law’s establishment of the Community Development Block Grant and Housing Choice Voucher and Project-Based Rental Assistance programs, which remain vital today. The rental assistance program originally provided various forms of financial support for existing affordable apartments and for the construction of new properties. It was a break from what had been done before, and it reflected the first serious advocacy effort by a start-up trade association called the Council of State Housing Agencies.
The 26 state housing finance agencies in existence at the time had formalized their collaboration in early 1974 on the advice of lawyer Chuck Edson. He later recalled the group’s “furious lobbying ,” with the National Association of Home Builders and others, to capitalize on an opportunity for HFAs to expand the reach of their tax-exempt funding for multifamily developments by harnessing long-term federal financing Congress would authorize in what became Section 8 of the bill.
Soon after the Housing and Community Development Act became law, the council convinced HUD to reserve a share of subsidy for HFA-backed properties, expedite applications for funding, and align contract financing with HFA bond terms. The program proved catalytic for the nascent HFA network: 14 states and Puerto Rico created agencies shortly after its enactment to capitalize on the new program. HFAs would finance 38 percent of all the Section 8 units built and rehabbed during the 1970s, upwards of 400,000 units.
By the time Congress repealed the authority to fund new construction with Section 8 financial contracts in 1983, as part of the Reagan Administration-led retrenchment in federal support for housing production, state HFAs had scaled their bond financing capacity and created hundreds of additional programs to support apartment construction and preservation. The HFA-financed multifamily portfolio today consists of roughly 25,000 properties containing 1.9 million homes, and the agencies will finance 60,000 more this year.
Housing scholar R. Allen Hays observed that the Section 8 program, created by the Housing and Community Development Act of 1974, marked “the beginning of substantial state involvement in assisted housing production , a role that would continue to be vital in the ensuing decades.” State HFAs’ first organized advocacy effort on Capitol Hill through their professional association would show similar vitality over the following 50 years as well.
We’ll celebrate some of that history and look forward to what’s next for housing finance agencies during NCSHA’s annual conference in a few weeks. There’s still time to register to join us in Phoenix.
Stockton Williams | Executive Director
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