CHC Industry Insight

Industry Insight - July 2020

A Note From Our Executive Director

As strange and unsettling as this summer holiday is shaping up to be, I hope you are able to take a break and enjoy the July 4th weekend with your families.

Normally, at this stage of the legislative session—with the budget finalized and the Legislature out on recess—I would share some perspective on the progress we’ve made this year and offer a preview of what’s next for affordable housing in July and August.

CHC certainly has a lot to be proud of, and our June Member Update highlights some of our successes —from maintaining affordable housing funding in the 2020-21 budget to advancing bills in the “production” packages moving through the Senate and Assembly .

In the midst of a resurgence of the COVID-19 pandemic, though, it doesn’t feel appropriate to declare victory or celebrate our accomplishments.

We are working hard in Sacramento to support the state’s efforts to respond to this crisis—and to be team players as circumstances evolve and the Governor and Legislature are required to shift their focus.

We will continue our work to protect and promote affordable housing when the Legislature reconvenes next week, and you can count on us to maintain our efforts until the session ends in August.

In the meantime, please stay safe, and wear a mask.

Sincerely,

Ray Pearl

In Case You Missed It

CHC's sponsored bill, AB 3107 (Bloom), which would authorize affordable housing development in commercial zones, passed out of the Assembly last month and will now head to the Senate Housing Committee. If you haven't already, please submit a support letter:
Sample letter
Email to Marina or submit online

The Legislature is continuing to focus on ways to assist tenants during the COVID-19 emergency, with two complementary bills being considered:
AB 1436 (Chiu), which would prohibit landlords from evicting tenants due to nonpayment of rent during the state of emergency and give tenants up to 15 months to repay the past due rent
SB 1410 (Caballero), which would provide rent relief to the tenant in the form of a tax credit to the landlord that could be claimed between 2024 and 2034

The Legislature passed and Governor signed the FY 2020/2021 state budget, which, among other things:
Exempts state LIHTCs from the $5 million annual cap on business credits
Maintains an additional $500 million in state LIHTCs in 2021
Maintains Prop 1 and Cap and Trade allocations to housing programs
Maintains funding housing programs from the SB 2 document recording fee
Makes last year's budget allocations to the CalHFA Mixed-Income Loan Program and 2019 IIG Program contingent on the state receiving at least $14B in additional federal stimulus funds.

Affordable Housing in the News

This month in affordable housing news, a final list of 12 measures qualified for the November ballot, including three major housing proposals. The first of the housing measures—now titled Proposition 15—seeks to revise the state’s property tax rules for commercial property by requiring more regular reassessments that reflect current market value, raising as much as $12.5 billion per year in property tax revenues. Another housing measure, Proposition 19, was added to the ballot last week by the state Legislature: Supported by the California Association of Realtors, the measure would allow homeowners who are 55 or older—as well as those who are severely disabled or are victims of a wildfire or natural disaster—to keep the taxable value of their previous home when they purchase a new home that serves as their primary residence. Finally, a third measure, Proposition 21, seeks to narrow state limits on rent control, allowing cities and counties to apply rent control to housing more than 15 years old , except for single-family homes. CHC is opposing this measure. A similar measure, Proposition 10, was defeated at the ballot in 2018.

Federal Update from David Gasson, Boston Capital

Well so much for the election year doldrums. Rarely do we see this much legislative activity in a non-election cycle but far be it for me to complain as our affordable housing agenda is getting a lot of attention.

By my count, Treasury Secretary Mnuchin has now been asked about the LIHTC in some form (fixed 4% rate, regulatory fixes, expanding the 9% allocation and the volume cap) 14 times in congressional hearings. I may have missed a few but there is no doubt he and the administration are aware of the support that exists for increasing the production of affordable housing.

Layer on the conversations Ways and Means Chairman Richard Neal (D-MA) and the Secretary have been having regarding infrastructure, coupled with the package the House passed on July 1, and you get a proverbial smack in the face announcing the priority affordable housing has within the Democratic agenda. Not only does H.R. 2, The Moving Forward Act, include many of our AHCIA proposals, it also includes an increase in the PAB volume cap, a larger than expected increase in the 9% LIHTC allocation, reduces the 50% bond threshold for 4% developments to 25%, provides for regulatory relief from some of the deadlines affected by the pandemic and provides an additional $1 billion in affordable housing infrastructure funding, just to name a few.

The 4% fixed LIHTC remains our immediate priority and while the infrastructure package is aspirational, it is unlikely to make it past Senator McConnell in the current Congress. That said, we still see a few avenues to securing the fixed 4% LIHTC, either in the Senate version of the COVID-19 package which we expect to be voted on late in July. Senator Wyden (D-OR) is leading this effort and we are working to corral bipartisan support. We are happy that Senator Feinstein finally signed on to the AHCIA and thank you for your work in that regard. The other potential vehicle for the fixed 4% rate, and possibly other AHCIA provisions, is the Lame Duck session post the November 3rd election. The results of the election will determine the agenda for the Lame Duck but Chairman Neal has indicated the 4% fixed LIHTC is high on the House agenda for consideration at the end of the year. Either way, we are working diligently to get this agenda item checked off our list for the industry. Your advocacy efforts with Reps. Gomez, Panetta, Sanchez, Chu and Thompson have been significant and we ask that you maintain your outreach to these members as the COVID-19 package, infrastructure and eventual Lame Duck tax package progress.

It is an exciting and active time and while the noise can be deafening, we remain focused on our agenda with the goal of securing another win for affordable housing.

CHC Member Spotlight

Congrats to the following CHC Members who's California projects are finalists in Affordable Housing Finance’s 16th annual Readers’ Choice Awards , recognizing the best developments from 2019 and 2020.