On July 27, HUD and the Biden Administration announced a series of actions to boost the supply of affordable housing and support renter protections. These announcements build on the administration’s May 2022 Housing Supply Action Plan and January 2023 Blueprint for a Renters Bill of Rights.
ACTIONS TO LOWER HOUSING COSTS & BOOST SUPPLY
- Establishing HUD’s Pathways to Removing Obstacles to Housing (PRO Housing)program which allocates $85 million for competitive grant funding for the identification and removal of barriers to affordable housing production and preservation. The program will help communities further develop, evaluate, and implement housing policy plans; address restrictive zoning, land use, or regulatory policies; improve housing strategies; and facilitate affordable housing production and preservation. Grants to local governments, states, metropolitan planning organizations (MPOs), and multijurisdictional entities will range from $1 million to $10 million.
- Streamlining financing for the creation of affordable housing.HUD announced that it will allow larger loans to participate in the agency’s Low Income Housing Tax Credit (LIHTC) Pilot Program, which increases the number of apartment sites eligible for a program that streamlines financing. HUD also updated guidelines to allow public housing authorities (PHAs) to more easily use housing vouchers and mixed-finance transactions to create or preserve housing.
- Reducing land-use restrictions and improving transportation access to housing. The Department of Transportation’s new program, Reconnecting Communities and Neighborhoods (RCN) program, will provide up to $3.16 billion for improving connections to affordable housing, fostering equitable development, and increasing housing supply through zoning reform.
- Encouraging the improvement of land use in Economic Development Administration (EDA) grant programs. Through its newly updated “Investment Priorities,”, the EDA will more explicitly incentivize projects that include an emphasis on density in the vicinity of the project – which can in turn encourage greater housing supply and allow people to live closer to work and services they need.
- Providing new financing for affordable, energy efficient, climate resilient housing and clean energy investments.This month, the Environmental Protection Agency (EPA) announced its $27 billion Greenhouse Gas Reduction Fund (GGRF), which will mobilize private capital and provide financing for thousands of clean energy projects, including cost-saving retrofits of existing homes and buildings, construction of zero emissions buildings, and commercial to residential conversions.
- Making it easier to build and rehabilitate apartments with FHA-insured mortgages.HUD announced new guidelines that increase the dollar amount threshold at which a multifamily loan is considered a large loan and is subject to additional underwriting requirements from $75 million to $120 million. This change will simplify underwriting and reduce development costs for large multifamily properties financed with FHA-insured mortgages without presenting undue risk to FHA, significantly expanding commitments for affordable housing financing.
- Repairing and expanding affordable housing.HUD published new guidance for public housing authorities and multifamily housing owners participating in the Rental Assistance Demonstration, providing them with additional tools to repair and build deeply affordable housing.
- Empowering homeowners to be part of the solution by increasing financing for onsite housing units. In April, FHA proposed updates that, if implemented, would make it easier to finance accessory dwelling units (ADUs), which are additional onsite housing units.
- Leveraging federal funding and other tools to support conversions.The White House will lead a new interagency working group to develop and advance federal funding opportunities that support the conversion of commercial properties to housing, and leverage climate-focused federal resources to create zero emissions and affordable units.
- Funding research that supports commercial to residential conversions.This week, HUD announced new funding to support research on office-to-residential conversions, including producing a new guide for state and local policymakers on how to make these projects more economically viable. Building on a public convening held this week on office-to-residential conversions, HUD will release a policy brief on this topic later this year.
ACTIONS TO PROTECT TENANTS
HUD announced that it will undertake a series of new actions to protect tenants. These actions are complemented by the Biden Administration steps announced that build on its Blueprint for a Renters Bill of Rights and crackdown on junk fees in the rental housing market.
- Ensuring fair tenant screening practices.The U.S. Department of Housing and Urban Development (HUD), the S. Department of Agriculture (USDA), and three independent agencies, the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC) and the Federal Housing Financing Agency (FHFA) are each releasing guidance or best practices to landlords, operators, and stakeholders who rely on tenant screening reports when evaluating applications from renters.
- Funding tenant education and outreach.HUD is announcing $10 million in new funding for tenant education and outreach in properties it supports.
- Providing more time for tenants to avoid eviction. HUD has committed to issue a notice of proposed rulemaking that would require that tenants of public housing and properties with project-based rental assistance receive a written notice at least 30 days prior to lease termination for nonpayment of rent.
- Increasing resident engagement requirements.HUD published new guidance for public housing authorities and multifamily housing owners participating in the Rental Assistance Demonstration, strengthening resident protections through updated resident engagement requirements and enhanced HUD oversight tools, including active monitoring of additional information that demonstrates resident engagement.
- Announcing major private sector and state and local action.In January, the White House announced its Resident-Centered Housing Challenge, a call to action to housing providers and other stakeholders to strengthen practices that improve quality of life for renters.
Encourage transparency and fairness in the rental market. HUD’s Office of Policy Development and Research released a Policy & Practice research brief on public and private strategies to encourage transparency and fairness in the rental market, such as allowing prospective renters to provide their own reusable screening reports containing information on income, rental history, credit history, and criminal history, or allowing a single application fee to cover multiple rental applications.