Congress Approves Budget Deal, Ends Brief Shutdown

After a brief government shutdown this morning, Congress approved a two-year budget deal and a continuing resolution that re-opened the government. While the budget deal includes an increase to non-defense spending for FY 2018, there is no guarantee that additional funding will be allocated to housing and community development programs- contact your legislators today to tell them to increase funding for HUD programs in the current fiscal year.

The budget deal package includes:

  • Continuing Resolution: extends government funding through Friday, March 23.
  • New budget caps for FY 2018 and FY 2019: the two-year agreement raises spending caps by $300 billion over two years. The deal does not honor parity between defense and non-defense spending changes. Non-defense spending is raised by:
    • FY 2018- $63 billion
    • FY 2019- $68 billion
  • Additional supplemental disaster relief funding: $89.3 billion for disaster relief for areas impacted by the hurricanes and wildfires of 2017. A full summary of the breakdown of funding is available from the Senate Appropriations Committee.
  • Debt ceiling suspension: Lifts the debt ceiling until March 2019.
  • Tax extenders: Continues expiring tax cuts and credits, but the bill does not include the Affordable Housing Tax Credit Improvement Act (S. 548).

Now that the spending cap for FY 2018 has been set, appropriators can get to work finalizing spending for the current fiscal year. At this point, the process basically starts over again. The chairs of the Appropriations Committee will re-allocate funding to all 12 appropriations bills, including the Transportation, Housing and Urban Development (THUD) bill.  Once the new 302(b) allocations are set, appropriators will work to finalize spending bills and assemble an omnibus spending package. All this work needs to be completed in six weeks before the expiration of the current CR on March 23.

Just because there is an additional $63 billion in funding for FY 2018 doesn’t mean THUD or HUD will necessarily see any of that increase. It’s critical that you reach out to your legislators immediately to urge them to allocate as much funding as possible to THUD and HUD.  NAHRO will also send a message to Capitol Hill next week encouraging robust funding of THUD and HUD.

Congress Creates Opportunity Zone Program

Established by the Tax Cuts and Jobs Act of 2017, Congress has created a new community development program that encourages long-term investments in low-income urban and rural communities. The Opportunity Zone Program provides tax incentives for investors to re-invest unrealized capital gains into Opportunity Funds by providing a temporary tax deferral for capital gains. Opportunity Funds are private sector investment vehicles that invest at least 90 percent of their capital in Opportunity Zones. This new program has the potential to become an important, viable program for housing and community development agencies across the country.

Governors for all U.S. states and territories, along with the mayor of the District of Columbia, are allowed to identify 25 percent of the total number of low-income census tracts in their state, territory, or federal district as an Opportunity Zone. States must conform to the Low-Income Community federal standard as a baseline for zone designations but are free to establish additional criteria to reflect local needs and priorities.

Governors have until March 22, 2018 to identify their Opportunity Zones to the Treasury Department.