The HUD/Washington Report

MODERATOR PANELISTS

Peter Lawrence David Gasson Emily Cadik Novogradac & Company LLP Boston Capital Affordable Housing @NovocoPolicy @DSGasson Tax Credit Coalition @EmilyCadik

Orlando Cabrera Shannon Ross Arnall Golden Gregory Housing Partnership Network @rosssm02 Agenda

The 116th Congress Advocacy 2019 Legislation Outlook for Tax Legislation HUD Update GSE Reform, FHFA and CRA Happenings in Congress CONGRESSIONAL LEADERSHIP SENATE HOUSE

Sen. McConnell Sen. Schumer Rep. Pelosi Maj. Leader Min. Leader Speaker R - KY D - NY D - CA

Sen. Thune Sen. Durbin Rep. Hoyer Rep. McCarthy Maj. Min. Whip Maj. Leader Min. Leader R - SD D - IL D - MD R - CA

Rep. Clyburn Rep. Scalise Maj. Whip Min. Whip D - SC R - LA Senate Committee Leadership

BANKING, HOUSING & FINANCE APPROPRIATIONS URBAN AFFAIRS THUD

SEN. GRASSLEY SEN. SHELBY SEN. CRAPO SEN. COLLINS Chair of Chair of Chair of Chair of THUD Finance Appropriations Banking Subcommittee R-Iowa R-Alabama R-Idaho R-Maine Senate Finance Committee Roster

DEMOCRATS REPUBLICANS , OR, Ranking Member , IA, Chairman , MI , VA , ID , PA , WA , RI Pat Roberts, KS , SC , NJ , NH Mike Enzi, WY , LA , DE , NV , TX , OK Ben Cardin, MD , SD , MT , OH , NC , IN , CO Johnny Isakson, GA Bob Casey, PA , OH

HASSAN CORTEZ MASTO LANKFORD DAINES YOUNG Senate Finance Committee Roster Up for Election in 2020

DEMOCRATS REPUBLICANS Ron Wyden, OR, Ranking Member Chuck Grassley, IA, Chairman Debbie Stabenow, MI Mark Warner, VA Mike Crapo, ID Pat Toomey, PA Maria Cantwell, WA Sheldon Whitehouse, RI Pat Roberts, KS Tim Scott, SC Bob Menendez, NJ Maggie Hassan, NH Mike Enzi, WY Bill Cassidy, LA Tom Carper, DE Catherine Cortez Masto, NV John Cornyn, TX James Lankford, OK Ben Cardin, MD John Thune, SD Steve Daines, MT Sherrod Brown, OH Announced Richard Burr, NC Todd Young, IN Michael Bennet, CO retirement Johnny Isakson, GA Bob Casey, PA Rob Portman, OH House Committee Leadership

FINANCIAL W&M SERVICES APPROPRIATIONS THUD

REP. NEAL REP. WATERS REP. LOWEY REP. PRICE Chair of Ways Chair of Financial Chair of THUD & Means Services Appropriations Subcommittee D-Mass. D-Calif. D-N.Y. D-N.C. House Ways and Means Committee Roster

DEMOCRATS REPUBLICANS , MA, Chairman , TX, Ranking Member John Lewis, GA Suzan DelBene, WA Devin Nunes, CA Jackie Walorski, IN Lloyd Doggett, TX Judy Chu, CA Vern Buchanan, FL Darin LaHood, IL Mike Thompson, CA Jimmy Panetta (CA) Adrian Smith, NE Brad Wenstrup, OH John B. Larson, CT Gwen Moore (WI) Kenny Marchant, TX ______Earl Blumenauer, OR Dan Kildee (MI) Tom Reed, NY ______Ron Kind, WI Brad Schneider (IL) Mike Kelly, PA Bill Pascrell, NJ Steven Horsford (NV) George Holding, NC Danny K. Davis, IL Stephanie Murphy (FL) Jason T. Smith, MO Linda Sánchez, CA (VA) Tom Rice, SC Brian Higgins, NY Brendan Boyle (PA) , AZ Terri Sewell, AL Dwight Evans (PA) Tom Suozzi (NY) Potential Additions to the House Committee on Ways and Means

DEMOCRATS REPUBLICANS

Rep. Fudge Rep. Kildee Rep. Richmond Rep. Jeffries Rep. Arrington Rep. Ferguson D – Ohio D – Mich. D – La. D – N.Y. R – Tex. R – Ga. Turnover in the House and Senate THE NEED FOR EDUCATION Incoming Congress – January 2019 45 2 53 235 199 DEMOCRATS INDEPENDENTS REPUBLICANS DEMOCRATS REPUBLICANS 1 undecided Who has been in office since January 2013? 76% of Senate 71% of Congress 70% of House 39 2 35 151 153 DEMOCRATS INDEPENDENT REPUBLICANS DEMOCRATS REPUBLICANS Who has been in office since January 2009? 46% of Senate 32% of Congress 28% of House 25 1 20 65 60 DEMOCRATS INDEPENDENT REPUBLICANS DEMOCRATS REPUBLICANS Advocacy Resources www.taxcredithousing.com

Legislation in 2019 NEXT ITERATION OF Affordable Housing Credit Improvement Act

50 percent increase HR ______S ______about 20 other provisions CANTWELL ?HATCH Income- averaging and possible + new provisions Minimum 4 percent rate

NEAL ?CURBELO NEXT ITERATION OF Affordable HousingProjected IncreaseCredit inImprovement Affordable Rental Act Homes Due to 50% LIHTC (9 Percent) Allocation Increase

Status Quo Projected 9% Units FY18 omnibus temporary 12.5% allocation increase Assumed 12.5% allocation increase is made permanent 50% increase 50 percent 100,000 264,000 additional homes over 10 years increase HR ______90,000 S ______80,000 about 70,000 20 other Income- provisions 60,000 CANTWELL ?HATCH averaging and 50,000 + possible 40,000 new Rental Homes Rental provisions 30,000 Minimum 4 20,000 percent rate 10,000

0 homes55,300 2019NEAL2020 2021?CURBELO2022 2023 2024 2025 2026 2027 2028 NEXT ITERATION OF Affordable Housing Credit Improvement Act

50 percent increase HR ______S ______about 20 other provisions CANTWELL ?HATCH Income- averaging and possible + new provisions Minimum 4 percent rate

NEAL ?CURBELO NEXT ITERATION OF Affordable Housing Credit ImprovementProjected Increase in Affordable Act Rental Homes Due to Minimum 4 Percent Rate

Status Quo Projected 4% Units 4% Floor (Additional Units) Note these assumptions: 90,000 65,500 additional homes over 10 years • Assumed that states will increase 50 percent their tax-exempt bond issuance for 88,000 increase HR ______multifamily 86,000 • SAssumed ______the absolute amount of about soft subsidies going to tax exempt 84,000 20 other bond properties would remain 82,000 provisions CANTWELL ?HATCH Income- unchanged and 80,000 averaging • To the extent that there is less possible Rental Homes Rental + deferred developer fee, that is offset 78,000 new provisions with more taxable bond financing 76,000 Minimum 4 74,000 percent rate 72,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 NEAL ?CURBELO INFRASTRUCTURE

What about infrastructure? Earl Blumenauer D-Oregon HUD Budget % Change FY18 President’s House Senate Omnibus HUD Budget FY19 Omnibus – Enacted FY19 Request FY19 Bill FY19 Bill FY19 Bill Note: amounts in millions FY18 Housing Choice Vouchers $22,015 $20,550 $22,476 $22,781 $22,781 3.5%

Project-Based Section 8 $11,515 $11,047 $11,747 $11,747 $11,747 2.0%

Public Housing Operating Fund $4,550 $3,279 $4,550 $4,756 $4,756 4.5%

Public Housing Capital Fund $2,750 $0 $2,750 $2,775 $2,775 0.9%

Section 202 $678 $601 $678 $678 $678 0%

Section 811 $230 $140 $154 $154 $154 -32.9%

HOPWA $375 $330 $393 $375 $375 0%

CDBG $3,235 $0 $3,300 $3,300 $3,300 2.0%

HOME $1,362 $0 $1,200 $1,362 $1,362 0%

Homeless Assistance $2,513 $2,383 $2,546 $2,612 $2,612 3.9%

Choice Neighborhood Initiative $150 -$137 $150 $100 $100 -33.3%

Overall (gross) $52,748 $41,240 $53,188 $54,049 $54,049 2.5% Areas of Possible Contention Between the House And Senate • Section 8 Reform • RAD Expansion • Public Housing Reform • Moving to Work • GSEs and Conservatorships Change at the FHFA

Mel Watt Joseph Otting Previous New Acting Director of the FHFA Director of the Comptroller of the Currency FHFA

Mark Calabria Chief Economist for VP Pence Nominated to be next permanent Director of FHFA Change at the FHFA

• Important Policy Direction • GSE Reform • Housing Trust Fund • Capital Magnet Fund Housing Trust Fund and Capital Magnet Fund Housing Trust Fund and Capital Magnet Fund Allocations 2019 is Preliminary Novogradac Estimate

$300,000,000 $266,775,403 $262,000,000 Housing $250,000,000 $219,168,374 Trust Fund

$200,000,000 $173,591,160

$150,000,000 $142,000,000 $141,000,000 $120,043,656 Capital Magnet $91,472,163 $100,000,000 Fund

$50,000,000

$0 2016 2017 2018 2019 Housing Trust Fund Update: Top 20 State Allocations of 2018

2017 2018 % Change 2017 2018 % Change California $23,228,115 $36,616,277 +58% Massachusetts $4,604,660 $5,720,333 +24% New York $14,790,240 $22,171,681 +50% Georgia $4,427,950 $5,705,499 +29% Texas $8,858,738 $12,279,085 +39% Washington $4,129,304 $5,197,313 +26% Florida $7,658,948 $10,442,914 +36% $3,821,341 $4,672,562 +22% Illinois $7,163,487 $9,812,230 +37% Wisconsin $3,481,414 $4,117,505 +18% Pennsylvania $5,863,425 $7,759,948 +32% Arizona $3,317,255 $3,997,777 +21% New Jersey $5,599,220 $7,726,903 +38% Missouri $3,357,775 $3,970,270 +18% Ohio $5,511,230 $6,971,712 +27% Indiana $3,367,317 $3,937,462 +17% Michigan $4,851,072 $6,004,558 +24% Tennessee $3,160,279 $3,688,511 +17% North Carolina $4,433,361 $5,874,191 +32% Oregon $3,143,231 $3,654,189 +16% OCC CRA Advance Notice of Proposed Rulemaking

• On August 28, the office of the Comptroller of the Currency released an Advanced Notice of Proposed Rulemaking • Key LIHTC issues addressed in ANPR: • Revising Regulations to a Metric based Framework. • Redefining Communities and Assessment Areas. • Expanding CRA Qualifying Activities • Record Keeping and Reporting • Over 1,500 letters were submitted by November 19th

November 19 Mid- 2020 2021 When Public hearing on Regulations comments proposed may be in were due regulations effect • Regulators • Potentially reviewing public regulators will comments issue a proposed • Talking amongst rule rewriting the Potentially themselves on regulations regulators will how to put 60-day issue together proposed public a final rule rule reform comment rewriting the First half of 2019 Second half of 2019 period regulations

2019 2020 2021 Questions?

MODERATOR PANELISTS

Peter Lawrence David Gasson Emily Cadik Novogradac & Company LLP Boston Capital Affordable Housing @NovocoPolicy @DSGasson Tax Credit Coalition @EmilyCadik

Orlando Cabrera Shannon Ross Arnall Golden Gregory Housing Partnership Network @rosssm02