On November 28 and 29, the National Rural Housing Coalition (NRHC) convened for its Board of Directors Meeting and Annual Business Meeting in Washington, D.C. As a part of these meetings, NRHC invited officials from the U.S. Department of Agriculture (USDA) Rural Development (RD) Rural Housing Service (RHS), staff from the Federal Housing Finance Agency (FHFA), and facilitated a panel on issues facing the rural rental housing market.
Attendees received a legislative update from NRHC Executive Secretary Bob Rapoza. In addition, the Coalition hosted a reception on Capitol Hill, where rural housing champion Representative Jim Costa (D-CA) spoke about the importance of USDA’s housing programs for rural Americans.
Assistant to the Secretary for Rural Development Anne Hazlett joined the NRHC Board for its meeting on November 28, along with several staff members from the RHS, including Acting Administrator of RHS Rich Davis; Acting Deputy Administrator for Single Family Housing Programs Cathy Glover; Direct Loan Division Director Barry Ramsey; Deputy Administrator for Multifamily Housing Joyce Allen; Finance and Loan Analyst for Multifamily Housing Preservation and Direct Loan Division Mirna Reyes-Bible.
Ms. Hazlett shared her vision for RD and the rural housing programs going forward. Although she has only been in the Assistant to the Secretary role for six months, she is familiar with USDA from her time on the Senate Committee on Agriculture, Nutrition and Forestry. However, she stated that she is still coming up to speed on rural housing programs, but emphasized her view that “housing is not just a roof over someone’s head, it can be an anchor that brings stability.” Priorities for the Administration include infrastructure, building partnerships, and identifying innovative solutions to the challenges facing rural America.
Each member of the RHS team also presented on their particular areas of work. Ms. Glover and the Single Family Housing staff members discussed the status of the Section 502 Direct Intermediary packaging program, Mutual Self-Help rehab for both acquisition rehab and owner-occupied rehab; and updates to their electronic filing system. November 28 was Joyce Allen’s fist day as the Deputy Administrator of Multifamily Housing programs (she had previously been the Deputy Administrator of Single-Family Housing programs).
The USDA presenters also left time at the end of their session for questions and answers from the audience. This gave NRHC Board members the opportunity to seek additional information or clarification. Specifically, Ms. Hazlett was asked to address the hiring freeze, which remains in effect. She took this opportunity to emphasize the importance of innovating and evaluating. She said that they are looking at their programs to identify potential partners, like with the Section 502 Direct program. They are also evaluating how USDA RD staff in the field spend their time.
On the Rural Economic Infrastructure Grant proposal, which the Coalition has expressed opposition to, Board members had the opportunity to tell Ms. Hazlett why grouping Section 504 Grants and Housing Preservation Grants is short sighted because it will reduce the availability of predictable resources for rural housing rehabilitation and preservation. NRHC was also able to recommend increasing Section 504 grants to $15,000 per grant (double the current limit).
Reception on the Hill
On the evening of November 28, NRHC hosted a reception on the Hill in recognition of the importance of rural housing programs. This event, which was sponsored by Senator Brian Schatz (D-HI), who led the Senate appropriations sign-on letter earlier in the year, gave NRHC members a chance to engage Hill staffers about these important programs.
In addition, NRHC welcomed Representative Costa, who co-led the House Appropriations sign-on letter with Representative Sean Duffy (R-WI) in the spring. Rep. Costa, who is a champion for rural issues and rural housing programs on the Hill, discussed his appreciation for the work that NRHC member organizations do to ensure that rural families have access to safe and affordable housing.
Shiv Rawal, a Policy Analyst with the Office of Housing and Community Investment at the FHFA, gave an update on the Duty to Serve Rule and the 2017 plan development process and status. Under the Housing and Economic Recovery Act of 2008, Fannie Mae and Freddie Mac have a Duty to Serve three underserved markets – manufactured housing, affordable housing preservation, and rural housing – in a safe and sound manner for residential properties that serve very low-, low-, and moderate-income families.
NRHC has commented on the Duty to Serve rule several times, including the proposed rule, which was issued in December 2015 and Fannie and Freddie’s proposed Underserved market plans this summer. Mr. Rawal informed attendees that FHFA has be working with the Enterprises to update their Underserved Markets Plan incorporating both public input and FHFA feedback. The plans, which should be released any day, go in to effect on January 1, 2018.
Rental Housing Panel
On November 29, NRHC hosted a panel featuring Tanya Eastwood, the President of Greystone Affordable Development, Richard Price, a Partner at NixonPeabody, and David Lipsetz, the Executive Director of the Housing Assistance Council (HAC) (click here for the presentations).
The panel also featured a review of the Coalition’s findings in the 2017 Review of Federal Rural Rental Housing Programs, Policies, and Practices. USDA rental housing is frequently the only affordable rental housing available in rural communities. The average income for tenants is $12,729 annually, many (around 44 percent) are elderly or persons with disabilities and 70.9 percent are female headed households. USDA estimates that $5.596 billion in additional funding is needed over the next 20 years to preserve USDA’s rental housing portfolio. Renovation of these developments is particularly important because USDA no longer provides loans for the financing of new rental housing developments in rural America.
Richard Price presented first, and discussed where things stand currently on the Hill and with the Administration on addressing the maturing mortgage issue. He identified several challenges facing the portfolio, including the state of Rural Development under the new Administration, and addressing issues related to processing times and the complexity of transfer applications.
Tanya Eastwood presented on Greystone’s success in preservation of Section 515 properties. In total, Greystone has purchased 269 Section 515 properties, totaling 10,500 units. The total cost of these preservation projects was $1.3 billion. Greystone’s model is a portfolio approach, where projects across a state are grouped together. This allows a developer to take the fixed cost of preservation deals and spread them across multiple projects, making the cost of a 4 percent Low-Income Housing Tax Credit (LIHTC) deal less expensive than a 9 percent deal.
Greystone recently completed a portfolio renovation deal in Florida, which involves 24 properties. This was completed with deferral of Section 515 payments. Sixty-two percent of the units receive rental assistance. After the project was completed, the rent-per-unit decreased an average of $23 a month. Ms. Eastwood emphasized that the portfolio approach not only benefits the tenants by keeping rents affordable, but also spurs economic growth and investment in rural communities, in the form of jobs as well as infrastructure advances (such as new sidewalks or bus stops).
David Lipsetz provided insight from both his experience as the Associate Administrator for Rural Housing and Community Facilities at USDA and as the new Executive Director of HAC. In particular, he highlighted the data improvements at USDA.