House Financial Services Committee’s Historic Housing Package Signals Policy Priorities

By Kevin Donnelly, VP of Government Affairs, Technology and Strategic Initiatives, NMHC

Kevin Donnelly is Vice President, Government Affairs, Technology and Strategic Initiatives, with responsibility for representing the interests of the multifamily industry before Congress and federal agencies

On June 21, Congresswoman Maxine Waters (D-CA), the Ranking Member on the House Financial Services Committee, introduced a legislative package aimed at addressing the affordable housing crisis, ending homelessness and eliminating homeownership gaps in the United States. Several of the bill’s themes have been previously outlined in the Biden Administration’s Build Back Better Act.

As the country suffers from a housing affordability crisis, these bills would represent the single largest investment in affordable housing in the U.S. But in a divided Congress, it is unlikely that this legislation will move forward in its current form. Despite this unlikelihood, the legislation serves as an important marker for Committee Democrats’ priorities this Congress. The package included the following bills of particular note to the apartment industry.

Responding to the Housing Crisis

Affordability has been a longstanding problem in housing. Currently, 36.9% of all households are cost-burdened (paying over 30% of their income on housing). And in more and more communities, hard-working Americans are unable to rent homes due to increased cost driven by a lack of supply, barriers to development and regulatory hurdles.

The Housing Crisis Response Act of 2023 aims to address this affordability crisis, chronic undersupply of housing, and bolster the economy by providing over $150 billion in critical investments to support the creation and preservation of affordable and accessible housing, and equitable community development. NMHC continues to express the industry’s support for the following programs included in this bill. The bill’s current draft outlines:

$24 billion to fund the Section 8 Housing Choice Voucher Program and supportive services. Notably, the bill’s Section 8 provisions do not include key reforms and concerns from the industry. NMHC believes, if properly reformed, this voluntary program could be the nation's most effective affordable housing and community development tool.
$1.75 billion in grants to States and local governments to incentivize the elimination of exclusionary, restrictive zoning and land uses to advance fair housing and support the creation of affordable housing in every community. This provision is encouraging given that outdated land-use policies and zoning laws often prevent communities from embracing smarter growth plans that meet today's housing needs.
Several funding provisions to ensure the resilience of the National Flood Insurance Program, including $20.5 billion to forgive debt carried by the NFIP, $600 million toward updating and modernizing flood maps, and $600 million for FEMA to create a new affordability program for low-and-median income NFIP policyholders.
$10 billion in funding for the HOME program to create or preserve 173,000 homes for low-income renters and homeowners. $15 billion would be used to construct or preserve 141,000 rental housing units for the lowest-income families.
$3.05 billion in Community Development Block Grants (CDBG) funding for affordable housing and community infrastructure upgrades, creating approximately 88,000 homes for low-income families.

Programmatic Changes

Another notable bill for the industry in this package is The Ending Homelessness Act of 2023. During the pandemic, Democrats secured several new programs to address housing insecurity through relief packages. This bill aims to ensure long-term solutions to these programs. Although its main goal is reducing homelessness and addressing housing insecurity, several of its provisions will affect the day-to-day operations of the apartment industry. Most notably it would:

Expand and alter the Section 8 Housing Choice Voucher program into a federal entitlement that would be phased in over eight years. This provision increases funding for the program, alters qualifications for eligible households, and requires the use of small area fair markets to determine payment standards.
Amend the Fair Housing Act of 1968 to add source of income and veteran status as protected classes and provides $137 million to increase enforcement capacity of this. NMHC continues to stress to the Committee the importance of the Housing Choice Voucher Program’s voluntary nature because of the regulatory burdens associated with it and is in need of critical reforms, like those included in the NMHC supported Choice in Affordable Housing Act. Without reform, the Section 8 program will continue to be held back by burdensome and costly red tape that deters housing provider participation and ultimately harms renters in need of rental housing.
Provide $10 billion in funding over 5 years for the Housing Trust Fund and limits the rent contribution residents can make to 30 percent of adjusted income within the program.

Looking Ahead

NMHC is encouraged by the Ranking Member Waters’ continued commitment to making bold investments to improve housing affordability across the country. We know it is all too common that nurses, teachers, firefighters and other vital members of our communities are unable to find housing that is affordable. The apartment industry stands ready as a partner in addressing our country’s lack of housing supply, barriers to development and regulatory hurdles. This legislative package includes initiatives that could make meaningful changes in our residents’ lives by increasing our housing supply at all price points and improving affordability.

Kevin Donnelly kdonnelly@rettc.org