On September 30, the House Committee on Financial Services held a hearing on “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response.” Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell testified before the full committee. Sec. Yellen’s testimony focused on America’s economic recovery from the pandemic, the Emergency Rental Assistance Program (ERAP), and the debt ceiling. On ERAP, Sec. Yellen stated:

“Prior to the pandemic, there was essentially no national infrastructure to get money from government coffers to renters and landlords. Building that infrastructure has been a massive undertaking for states, localities, and tribes. The program is scaling up quickly, with 1.4 million payments made to help struggling renters keep a roof over their heads.”  

Chairwoman Rep. Maxine Waters (D-CA) questioned Sec. Yellen about the ongoing improvements Treasury is making to ERAP. Rep. Waters promoted her Expediting Assistance to Renters and Landlords Act of 2021 bill to ensure ERAP funding gets to renters at risk of eviction. Ranking Member Rep. Patrick McHenry (R-NC) felt that the oversight hearing should have happened months ago but commended both witnesses for their work during the challenges of the pandemic.

Though the hearing covered several topics, a few committee members questioned Sec. Yellen about ERAP. Rep. Ann Wager (R-MO) cited August 2021 data showing that more than 83% of ERAP funds remain unspent while “millions of renters and property owners remain in limbo.” Rep. Nydia Velazquez (D-NY) also pressed Sec. Yellen to explain how Treasury will accelerate ERAP spending.

In response to both members, Sec. Yellen reiterated the challenges of implementing ERAP as a new program. She explained that Treasury and HUD are providing technical assistance to grantees and have updated ERAP guidance to reduce program barriers. Sec. Yellen also talked through a few options for reallocating ERAP funds from grantees who are unable to spend them down.  

The full hearing and witness statements are available on the House Financial Services Committee website. The Senate Committee on Housing, Banking, and Urban Affairs held a similar hearing with Sec. Yellen and Chairman Powell earlier in the same week, which is also available online.

On September 27, HUD’s Office of Community Planning and Development published a new memorandum, effective as of September 30, that updates and revises the memorandum, Revision, Extension and Update of April 2020 Memorandum Availability of Waivers and Suspensions of the HOME Program Requirements in Response to COVID-19 Pandemic, issued on December 4, 2020. The new memo extends certain statutory suspensions and regulatory waivers for the HOME Program that were issued to enable HOME Participating Jurisdictions (PJs) affected by the COVID-19 pandemic to use HOME funds to address immediate housing needs and to help prevent spread of the virus. Prior, all waivers were set to expire on September 30, 2021.

Specifically, the memo revises the matching contribution waiver to include FY 22. The memo also revises the maximum per unit subsidy limit waivers to restrict its applicability to projects that are currently underway or projects to which HOME funds will be committed on or before March 31, 2022. The memo also extends the waiver to perform onsite inspections of HOME-assisted rental housing and annual re-inspections of units assisted with HOME TBRA to December 31, 2021 and extends the timeframe to physically inspect units that would have been subject to on-going inspections during the waiver period from 120 days from September 31, 2021 to 180 days from December 31, 2021. Finally the Insular Areas waiver is revised to clarify the timing of the required written notification and the project completion day.

During the August recess, NAHRO members in three states hosted Congressional staff members at in-person and virtual site visits. The staff learned about the agencies’ properties, their programs, and the potential for Congress to provide additional support. Site visits give Congressional offices a chance to see how housing and community programs work “on the ground” and understand how their decisions impact households in their state.

The August Advocacy site visits included:

• Senator Mike Rounds (R-SD): A legislative aide from Sen. Rounds’ office visited the Housing and Redevelopment Commission of Pierre at the Midtown Apartments property.
• Senator John Hickenlooper (D-CO): Staff visited two properties in the Denver area:
  • Maiker Housing Partners
  • Metro West Housing Solutions
• Senator Mark Kelly (D-AZ): A regional director for the office attended a virtual site visit with the South Tucson Housing Authority and the City of Tucson Housing and Community Development Department.
• Senator Krysten Sinema (D-AZ): Two staff members from the office met with the Tucson agencies listed above and the Phoenix Housing Department for a virtual site visit.

Any agency can host a site visit to build a relationship with legislators and inform them about local affordable housing programs. To host a visit, reach out to the NAHRO Congressional Relations team at thembree@nahro.org or jhampton@nahro.org for support. The team will contact your legislator’s office on your behalf and work with you to schedule a visit.

On September 13, HUD issued Notice PIH 2021-27 (HA) titled “Updates to Flat Rent Submission Requirements.” The Notice supersedes and replaces previous guidance on flat rents, clarifies HUD’s interpretation of the statutory amendment related to flat rents, and updates flat rent exception and extension requirements, including review criteria for HUD Form 5880. The Notice applies to PHAs that operate a Public Housing program and families residing in, or applying to, the Public Housing program. MTW agencies continue to have the flexibility to establish alternative requirements to flat rent requirements.

Previous Appropriations Act established that PHAs are allowed to establish flat rents that are set at no less than the lower of 80 percent of the applicable Fair Market rent (FMR) or 80 percent of such other applicable FMR established by the Secretary that more accurately reflects local market conditions based on an applicable market area that is geographically smaller than the applicable market area (such as the applicable Small Area Fair Market Rent (SAFMR) or unadjusted rent). For areas where HUD has not determined a SAFMR or an unadjusted rent, PHAs must set rents at no less than 80 percent of the FMR or apply for an exception flat rent.

To apply for an exception flat rent, PHAs must provide a market analysis that demonstrates specific market conditions. PHAs have 90 days after the effective date of their fiscal year to submit an exception request. If a PHA submits an incomplete flat rent exception request or incomplete supporting market analysis, HUD will provide the PHA two opportunities to cure deficiencies before disapproving the request. The PHA may extend the exception flat rent so long as the market study accompanying the previously approved request is no more than two years old, the market conditions remain unchanged, and the PHA submits the extension within 90 days after the effective date of the final FMRs are published by HUD.

On Friday, September 10, the House Committee on Financial Services held a hearing on “Protecting Renters During the Pandemic: Reviewing Reforms to Expedite Emergency Rental Assistance.” During the hearing, members considered two bills that aim to improve the Emergency Rental Assistance Program (ERAP) – one sponsored by Chairwoman Maxine Waters (D-CA) and the other sponsored by Ranking Member Patrick McHenry (R-NC). In her opening statement, Chairwoman Waters remarked:

“I am very concerned about data showing that state and local governments have only used 11 percent of the $46.6 billion in emergency rental assistance funds that are available… That is why I have introduced new legislation, the ‘Expediting Assistance to Renters and Landlords Act of 2021,’ which is designed to make sure that individuals and families are not put out of their homes while this virus continues to harm communities across the county.”

Witnesses from Community Legal Services, the Oregon Housing and Community Services Department, the National Multifamily Housing Council, the National Low Income Housing Coalition, and Winn Companies provided expert testimony. Although they spoke from different perspectives, the witnesses agreed that Congress must improve ERAP so that the funding reaches landlords and tenants who are most in need.  

For example, David Schwartz, Chair of the National Multifamily Housing Council, asked the committee to streamline document requirements, remove the 18-month limit on arrearages, allow ERAP to reimburse rental property owners even if the renter has moved, and to make other potential improvements. The two proposed bills received a mix of criticism and praise from the witnesses.

The hearing lasted several more hours after the testimonies, as 32 committee members questioned the witnesses. Several Republican members, including Rep. Andy Barr (R-KY) and Rep. French Hill (R-AR), expressed their frustration that Treasury Secretary Janet Yellen did not attend the hearing, despite the Dept. of Treasury’s responsibility to administer ERAP. Rep. Ann Wager (R-MO) and many other members spoke about their concern for vulnerable renters and small, “mom and pop” landlords.

Rep. Joyce Beatty (D-OH), Rep. Bill Foster (D-IL), and Rep. Ayanna Pressley (D-MA) discussed the impact of evictions. Rep. Beatty shared her concern about racial equity in housing, as the data shows that households led by Black women represent the majority of those who have applied for ERAP or are at risk of eviction. Rep. Bill Huizenga (R-MI) attempted to summarize where the two parties agree and where they diverge on ERAP, stating:

“I think we all agree that there was a failure to get money out the door that not only put renters at risk of eviction, but it also hurt mom and pop landlords who are more likely to own and operate affordable rental units…”

The committee plans to markup the Expediting Assistance to Renters and Landlords Act of 2021 on Monday, September 13^th. The recorded hearing and written witness testimonies are available here on the House Committee on Financial Services website.

On September 1, the White House released a Fact Sheet on the Biden Administration’s efforts to increase the affordable housing supply by creating, preserving, and selling nearly 100,000 additional affordable homes to homeowners and non-profits. The Administration is working with federal agencies to boost the supply of quality, affordable rental units, boost the supply of manufactured housing and 2-4 unit properties, make more single-family homes available to individuals, families, and non-profit organizations, and work with state and local governments to boost housing supply.

In order to boost the supply of quality, affordable rental units, the Administration plans to relaunch the Federal Financing Bank and HUD Risk Sharing Program, increase Fannie Mae and Freddie Mac’s Low-Income Housing Tax Credit Investment cap by $700 million, and strongly encourage the development of affordable housing under the next Capital Magnet Fund NOFA.

The Administration will also make financing allow Fannie Mae to accept loan delivery for manufactured housing and revise certain mortgage eligibility requirements for 2-4 unit properties.

The Administration will work to make more single-family homes available to individuals, families, and non-profit organizations – rather than large investors. The Administration will do this by prioritizing homeownership in the sale of FHA-insured properties by providing guidelines over the next year that include an exclusive listing period for governmental entities, non-profits, and owner occupant buyers for Second Chance sales. The Administration will also promote the sale of distressed HUD properties to non-profits by increasing the amount of FHA-insured mortgage notes offered to non-profit and community organizations. HUD and Fannie Mae and Freddie Mac will also expand the exclusivity period for Real Estate Owned (REO) sales, and will improve outreach to non-profits for REO sales.

Lastly, the Administration will work with state and local governments to boost housing supply by leveraging federal funding to spur state and local action, and exploring federal levers to partner with states and local governments to reduce exclusionary zoning.

The fact sheet can be found here.