Solutions for a New Landscape
The New York Housing Conference (NYHC) promotes the affordable housing industry as an engine of employment and a force for stabilization, and we champion affordable housing as more than a low-cost home and explain why it’s just as important to a city or a town as a road or a bridge.
With these objectives in mind, we have developed the NYHC 2011-12 policy priorities which are summarized within this document. This is our agenda for our education and advocacy work before Congress, the New York State and City Legislature, the Administration and Executive Departments. We believe the following to be a vital part of the solutions for a new landscape:
Federal Housing Administration
NYHC supports the strengthening of the Federal Housing Administration’s capacity, staffing and flexibility to meet the nation’s housing financing needs. We support the FHA Multifamily Loan Limit Adjustment Act of 2009 to raise FHA multifamily mortgage limits. In addition, we support regulatory reforms necessary to make all the 220 Loan Programs more compatible with the Federal Low Income Housing Tax Credit program and to allow subordinate financing.
Federal Low Income Housing Tax Credit Proposals
NYHC supports the proposals to make the tax credit program more flexible. We support the proposal to allow income-averaging so that projects will serve households whose average income is not greater than 60 percent of the area median income (AMI) and with no individual household above 80 percent, so long as the income-average calculation is to be done on an overall project basis. This is a change from the current cap, which restricts tax credit apartments to households earning no more than 60 percent of the AMI. NYHC also supports making the 4 percent tax credit eligible for a 30 percent basis boost.
We support changes to the state and city Qualified Allocation Plans and tax credit allocation processes to increase per-unit and per-project caps so that affordable housing projects can more fully benefit from the eligible basis available under federal law and to cover the added expense of state program and design requirements.
NYHC calls for adequate funding to renew all authorized vouchers and to provide for new vouchers to help meet the growing demand by families in need. We support Section 8 Voucher Reform, in particular provisions that will reduce the program’s administrative burdens on Public Housing Authorities and compensate them fairly for their administrative costs. We support a new program proposed by HUD to convert public housing and privately owned Section 8 moderate rehabilitation, rent supplement, and Section 236 rental assistance program projects to project-based vouchers with long-term contracts and a resident mobility feature.
Government Sponsored Enterprises (GSEs)
NYHC supports the reform of the GSEs to minimize systemic risk while ensuring support for affordable housing and reliable access to long-term multifamily financing, which is essential to preserving liquidity in multi-family rental housing.
HUD Designated Difficult to Develop Areas (DDAs)
Nassau-Suffolk, NY metropolitan area has not continually been designated by HUD as a DDA because the definition HUD uses to determine the designation is based on Fair Market Rents. The Nassau-Suffolk area is commonly considered one of the most difficult to develop areas in terms of high land, construction and utility cost and we urge HUD to re-examine their definition and formula to determine if some other measure of the cost statistic might be available for unique circumstances such as Long Island, NY.
Operating Cost Adjustment Factors (OCAFs)
OCAFs are annual factors used to adjust Section 8 rents renewed under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997. OCAFs for 2008 through 2010 were calculated as average percentage changes in OCAF-covered operating costs using FHA Annual Financial Statement Data of properties using the most recent two years of available data. The Federal Register for 2011 explains the HUD perceived weaknesses in this methodology. HUD has reverted back to pre-2008 methodology for the current year. FY2011 OCAFs are calculated as the sum of weighted average cost changes for 9 cost component groups using publicly available indices. For New York it means a severe reduction, from an average of 3.6% (for the last ten years) to 0.3% for 2011. NYHC calls for a review and for the establishment of a fair and balanced methodology.
NYHC calls for increased federal funding for the HOME and CDBG programs. In addition, we urge HUD to make regulatory changes that will improve the HOME program’s efficiency and flexibility, in particular so that the program can be used more easily with the Federal Low Income Housing Tax Credit program.
We support changes to the New York State HOME Program regulation and funding process to increase per-unit and per-project caps so that affordable housing projects can more fully benefit from the eligible funding available under federal law and to cover the added expense of state program and design requirements.
New York State Low Income Housing Tax Credit Proposal
NYHC supports State legislation to strengthen the State Low Income Housing Credit program (SLIHC) by allowing for the bifurcation of the state and federal credits when the programs are used in tandem on the same project. By bifurcating the credits, investors would be permitted to purchase either the state tax credits or the federal tax credits, or both as they are now required. When similar measures were enacted in other states, the results included an increase in market demand, an expansion of the investor pool and an increase in the price paid for the tax credit. S.4758 introduced by State Senator Catharine M. Young and A.7404 introduced by State Assemblyman Vito J. Lopez are widely supported by the affordable housing industry and if passed and signed into law would increase the demand for and leveraging ability of the state tax credit program while not requiring any increase in funding.
Prevailing Wage Rates on Affordable Housing Construction
NYHC opposes mandating the payment of so-called “prevailing wage rates” on those affordable housing projects which are not otherwise currently subject to them by virtue of their receipt of certain types of federal subsidies. Particularly in this difficult fiscal environment, where subsidies for the construction and rehabilitation of affordable housing have been reduced, any new rules which drastically raise the cost of affordable housing will only result in substantially fewer units of desperately needed housing being developed, because as a result of the strict rent and income guidelines, affordable housing cannot absorb additional costs without additional subsidies.
All affordable housing developments should be subject to the strictest work safety standards and we do support the enforcement of all other applicable fair labor standards.
Repeal State FY 2010-11 Measures that Reduced Subsidy Sources
A new charge on bond activity through the NYC Housing Development Corporation, and the three year deferral of state tax credits earned by private investors under the State Low Income Housing Credit program only serve to add unnecessary financial burden to low-income families and the elderly. These programs are critical to affordable housing development and these budgetary gimmicks serve to weaken the effectiveness of these important financial resources. We also call for the repeal of the deferrals of tax credits earned by private investors under the state’s Historic Rehabilitation Tax Credit and Brownfield’s Tax Credit programs.
NYS Private Housing Finance Law - Article 5
Many Section 8 projects have tax abatements under Article 5 of the Private Housing Finance Law. The maximum term authorized by that law is 40 years. NYHC calls for legislation to extend the term similar to the extension provided under Article 2.
NYHC calls for the full funding of the supportive services programs necessary to ensure that the State and City meet their commitments under NY/NY III.
NYHC calls for the state and federal governments to update and improve the Rural Housing Initiative/Leveraged Loan Program. The Leveraged Loan Program was created as a unique collaboration and has been highly successful in leveraging millions of dollars in preserving and creating thousands of units of much needed affordable multi-family housing for the neediest of New Yorkers living and working in our rural communities.
Sub Metering of Utilities or Conversion to Direct Metering
NYHC calls for the State Housing Agencies, together with the Public Service Commission and NYSERDA, to develop a joint policy on sub metering of real estate, so that property owners and tenants are incentivized to conserve energy usage.
The New York Housing Conference (NYHC) was established in 1973 by Clara Fox, an icon in the affordable housing industry. In 1975 NYHC became an affiliate of the National Housing Conference (NHC) to strengthen our capacity to advocate for affordable housing policy in Washington DC as well as in New York State. NYHC advocates for the housing needs of all New Yorkers through education and positive change in public policy. Through our broad-based coalition of nonprofit and private developers, owners, managers, professionals, and funders of affordable housing, we promote adequate resources, workable regulations and public awareness of the need for and benefits of affordable housing.
Our ability to respond to and help create solutions to meet the challenges of today is rooted in the history of our organization, the committed leadership within and the enduring partnerships that have been formed with government, business and other industry leaders. These policy initiatives have been developed in consultation with board members, the National Housing Conference, government officials, and other national and state housing organizations and stakeholders. We believe these policy initiatives we will propose to the leaders in Washington and New York, together with our educational programs and the continued growth of our Young Leadership Council will be vital in helping to stabilize what continues to be a complicated housing market.
We could reach for any number of adjectives to describe the challenges we face: but none would serve to convey the true dimensions of the crisis that thousands of families are facing at this moment. Considering the following facts, it is time for deep concern and even deeper reflection.
We will be prepared to make the case that our stewardship of precious resources is having the intended impact and substantiate that the creation of affordable housing is more than a patch on the social fabric. We will link housing to the prospect of a sustainable economic recovery by the following: