AffordableHousing

Interactive Tool Shows the Challenges in Affordable Housing Development

~ Jenny Hsu ~ Leave a comment

The Urban Institute and National Housing Conference have published an interactive and educative tool, “The Cost of Affordable Housing: Does It Pencil Out,” that demonstrates the huge gap between what it costs to build and maintain affordable housing and the affordable rent that low-income families can pay, making it difficult to finance affordable housing without additional subsidy. Aimed at policymakers and those new to the affordable housing world, users can play with the tool by changing specific variables on development costs and see how a development’s funding gap can be closed. The tool spotlights the importance of federal programs that support affordable housing, such as the Low-Income Housing Tax Credit (LIHTC) – which is the largest source of capital supporting the affordable housing inventory in the United States.

The formidable gap in financing affordable housing development is why it is important for the public to call on Congress to pass Sen. Maria Cantwell’s (D-Wash.) and Sen. Orrin Hatch’s (R-Utah) Affordable Housing Improvement Act of 2016. This legislation would expand the overall LIHTC allocation authority by 50 percent and make permanent the 4 percent Housing Credit rate. For more information on this legislation, visit NAHRO’s Community Development Resource Center (log-in required) to access a one-pager on the bills.

HUD Publishes Housing Trust Fund Income Limits and Guidance on Environmental Provisions

~ Jenny Hsu ~ Leave a comment

In May 2016, HUD announced the first-ever National Housing Trust Fund (HTF) allocations to states, amounting to nearly $174 million in available funds for FY 2016. HUD recently published the HTF Income Limits for FY 2016, which are calculated using the following methodologies:

  • The formula that HUD uses for calculating the income limits for the Section 8 program, in accordance with Section 3(b)(2) of the U.S. Housing Act of 1937, as amended. These limits are based on HUD estimates of median family income, with adjustments based on family size.
  • The Federal Poverty Line as determined by the U.S. Department of Health and Human services, published annually in the Federal Register.

In years in which the total amount available for allocations is below $1 billion (as is the case for FY 2016), the income limit reports will only display the limit for extremely low income families or families with incomes at or below the poverty line (whichever is greater) and will not include the very low income limit. The HTF FY 2016  Rent Limits are also available online, both limits became effective on July 1, 2016.

Additionally, HUD has made available new guidance entitled, “Requirements for Housing Trust Fund Environmental Provisions.” This notice describes the Environmental Provisions for new construction and rehabilitation that are required for HTF projects under the Property Standards at 24 CFR § 93.301(f)(1) and (2).