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NAHRO's CD Edge
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NAHRO's Homepage Amendments to HUD's Environmental Regulations; Proposed Rule (Sept. 12, 2007): According to HUD, "This proposed rule would update HUD's environmental regulations to implement statutory changes and make environmental compliance easier." The proposed rule would also amend Consolidated Plan requirements in order to encourage jurisdictions to consult with non-profit and for-profit organizations and PHAs that receive HUD grant awards, in order to facilitate compliance with environmental review requirements. Comments due Nov. 13, 2007. Community Development Block Grant Program; Small Cities Program; Final Rule (Aug. 17, 2007): This new final rule amends HUD's regulations governing the CDBG program for non-entitlement areas in the state of Hawaii, which were formerly part of the Small Cities Program. The rule also updates and streamlines the regulations, particularly with regard to the HUD-administered Small Cities program in New York. The final rule takes effect Sept. 17, 2007. HUD Memorandum: Return of Excess Program Income - Community Development Block Grant (CDBG) Entitlement Program (Aug. 3, 2007): Electronic file copy of a memorandum to field office directors, signed by the Deputy Assistant Secretary for Grant Programs. This memorandum contains instructions for grantees on how to return excess program income to their account, and on how to make drawdown requests when they expend these funds. Federal Register Daily Digest (NAHRO Members): last 30 days of Housing and Community Development issues published in the Federal Register. NAHRO Resources NAHRO's Legislative
Agenda: A comprehensive overview of NAHRO's current legislative and regulatory
positions. Making a Difference: The Importance of Restoring Federal Community Development Funding: A new resource designed to help you make the case for increased funding for HUD's community and economic development programs, including the Community Development Block Grant (CDBG) program. This publication discusses the recent decline in funding and the impact funding cuts have had on the efforts of states and local governments to build stronger communities. CHDO Survivor's Training: Free HOME technical assistance for existing and prospective CHDOs. Thursday, Sept. 20, 2007, in Washington, DC. NAHRO Staff Saul Ramirez, Executive Director NAHRO |
September 17, 2007
Welcome to NAHRO's CD Edge, our new free e-newsletter focused on federal community development programs. Please feel free to forward this newsletter to your colleagues. If you're not already subscribed to NAHRO's CD Edge, click here to subscribe. To view past issues, click here. In This Issue: NAHRO Continues Push for Formula-Driven Affordable Housing Fund NAHRO Continues Push for Formula-Driven Affordable Housing Fund
NAHRO has renewed its push for the creation of a new formula-driven production
program for affordable rental and homeowner housing. In a letter
to Senate Banking Committee Chairman Christopher Dodd (D-Conn.), NAHRO urged quick action on Government Sponsored Enterprise (GSE) regulatory reform legislation.
The House passed its own version of GSE reform legislation on May 22. That bill
(H.R. 1427) would create an affordable housing fund financed through mandatory
GSE contributions. H.R. 1427, "The Federal Housing Finance Reform Act," would require
Fannie Mae and Freddie Mac to capitalize an affordable housing fund that would provide in excess of $2 billion for the construction, rehabilitation and preservation of affordable rental and homeowner housing over the next five years. During the fund's first year, 75 percent of the available funding would go to Louisiana and 25 percent would go to Mississippi to address affordable housing needs resulting from the 2005 hurricane season. In subsequent years, funds would be allocated directly to the states (but not local governments) according to a formula to be developed by HUD. In its letter to Chairman Dodd, NAHRO urges the Banking Committee act quickly to approve H.R. 1427. NAHRO in its letter contends that swift passage of H.R. 1427 will "ensure that a new and needed funding source is right around the corner for those Gulf Coast communities with persistent needs while also ensuring the availability of a new funding source to help states and localities across the nation expand housing opportunities for low-income Americans." NAHRO has long been on the record in favor of the creation of a new federal program for the production of new, affordable units of rental and homeowner housing. Additionally, NAHRO has consistently advocated a production program in which resources would be allocated according to a formula under which 60 percent of funds would go to local governments and 40 percent of funds would go to states. In its letter to Chairman Dodd, NAHRO expresses its hope that any new affordable housing production program that advances in the Senate will distribute funding according to NAHRO's preferred methodology in order to guarantee direct formula allocations to local governments. Another important consideration involved in NAHRO's ongoing support for H.R. 1427 is the fact that the national housing trust fund that would be created under H.R. 2895, the National Affordable Housing Trust Fund act of 2007, would rely in large part on the revenues generated under H.R. 1427's affordable housing fund for capitalization. NAHRO has endorsed H.R. 2895, although its support for the inclusion of a formula-driven affordable housing fund within GSE reform legislation predates that endorsement. NAHRO Members: Review NAHRO's previous coverage of congressional efforts to create a new affordable housing production program.
The Senate passed S. 1789, the FY 2008 Transportation-HUD (THUD) appropriations bill, on Sept. 12. The House previously approved its own version (H.R. 3074) of the FY 2008 THUD spending bill in July. As approved by the Senate, S.1789 provides just $3.708 billion for CDBG formula grants. H.R. 3074 includes $3.936 billion (including insular areas) in CDBG formula funding. Recall that CDBG formula grants were funded at $4.110 billion for FY 2005 and $4.331 billion for FY 2004. NAHRO has consistently
called upon Congress to provide $4.5 billion in formula grant funding. The president's FY 2007 budget requested just $2.775 billion for CDBG formula grants. Economic Development Programs: The Senate bill provides $6 million for the Section 108 loan guarantee program, an amount that would subsidize roughly $275 million in guaranteed community development loans. The bill also includes $10 million for the Brownfields Economic Development Initiative and $17 million for the Rural Housing and Economic Development Program. The administration's FY 2008 budget argued that these programs are duplicative of CDBG and proposed eliminating all three. NAHRO continues to advocate increased funding for these important economic development programs. NAHRO members can access a full summary of H.R. 3074 and S. 1789 (including an overview of funding levels for the HOME Program, Homeless Assistance Grants, and HOPWA) by clicking here. NAHRO members: For ongoing FY 2008 HUD appropriations coverage, be sure to visit NAHRO's Direct News. Direct News is NAHRO's members-only email service providing breaking news and information on federal housing and community development programs.
In the last issue
of the CD Edge, NAHRO reported on a recent Government Accountability Office (GAO) briefing during which GAO officials reviewed the preliminary results a year-long evaluation of the CDBG formula. Although the GAO's study is separate from a HUD review of the formula released in February 2005, much like the 2005 HUD study the GAO examination involved the creation of a community development needs index for entitlements. Using a statistical technique known as factor analysis, GAO translated individual variables into a single community development needs score for each entitlement community. GAO then worked to develop alternative formula factors that produced allocations that correlate closely with the scores produced by the needs index. During the Aug. 13 briefing, GAO officials did not provide a list of the individual variables that make up the needs index. NAHRO and other public interest groups requested that GAO furnish that information as soon as possible. In a recent email to public interest groups, GAO provided the following complete list of the variables used in the creation of the needs index, along with the data source for each variable: Female-headed households with related children under 18, no husband present in cost-of-living adjusted poverty (Census special tabulation of 2000 SF-3 data) Percent of persons in cost-of-living adjusted poverty excluding people ages 15 to 24 enrolled in college or graduate school (Census special tabulation of 2000 SF-3 data) Ratio of per capita income to metropolitan per capita income (Census 2000
SF-3 data) Change in per capita income over past 10 years(Census 2000 SF-3 data and
HUD values using 2002 CDBG geography from Census 1990 data) Percent of population ages 25 to 64 without a high school diploma or equivalency
(Census 2000 SF-3 data) Percent of labor force ages 16 or older in workforce that is unemployed
(Census 2000 SF-3 data) Percent of population ages 16 to 64 that is employed (includes those with and without disability) (Census 2000 SF-3 data) Percent of all occupied housing units that are pre-1970 and occupied by a cost-of-living adjusted poverty renter (Census special tabulation of 2000 SF-3 data) Percent of all occupied housing units that are pre-1950 and occupied by a cost-of-living adjusted poverty household (Census special tabulation of 2000 SF-3 data) Percent of occupied housing units overcrowded (Census 2000 SF-3 data) Percent of poverty persons in families or elderly households in 40 percent or higher poverty census tracts (Census 2000 SF-3 data) Percent change in population since 1960 (loss only; absolute value) (Census
2000 SF-3 data and HUD data for 1960 values using 2002 CDBG geography) Percent change in population since 1990 (loss only; absolute value) (Census
2000 SF-3 data and HUD data for 1990 values using 2002 CDBG geography) 3-year average (1999-2001) number of murders per 100,000 persons (FBI Uniform
Crime Reports) Population density (number of persons per square mile) (Census 2000 SF-3 data) Percent of rental units with a household rent burden of 35% or higher (Census
2000 SF-3 data) Moderate income: percent of population with incomes between 100 and 200 percent of the cost-of-living adjusted poverty line (Census 2000 special tabulation of SF-3 data) Percent of housing units with inadequate kitchen facilities (Census 2000
SF-3 data) For the 3-year average number of murders per 100,000 persons, GAO provided this footnote: "Since this variable was not available for all communities, we ran two factor analyses to generate a needs index score. The first applied to the 802 entitlement communities with data for all 18 variables. To generate a needs index score for communities lacking murder rate data, we ran a second factor analysis for all 1024 entitlement communities and backfilled the needs index score generated by this analysis into the score from the first analysis."
HUD has posted summaries for FY 2006 Section 108 projects. The recently updated Section 108 webpage states, "HUD approved thirty-seven Section 108 Guaranteed Loan commitments in the aggregate amount of $223.12 million" in FY 2006. In its FY 2008 budget proposal, the administration argues that communities can undertake activities traditionally supported by the Section 108 program using CDBG funds, even as the budget proposal seeks to slash CDBG formula funding by 25 percent. According to the appendix to the FY 2008 budget proposal, "as part of the reforms" contemplated for the CDBG program, "HUD programs such as Brownfields Economic Development Initiative, Community Development Loan Guarantee Program (Section 108), and Rural Housing and Economic Development are proposed for termination" Meanwhile, HUD's own website states, "The Section 108 Loan Guarantee Program provides local governments with a highly attractive option for financing a wide range of community and economic development activities," and that, "generally, the financial demands of these activities exceed available local government resources, including HUD funds available through the Community Development Block Grant program" (emphasis added). Demand for Section 108 guaranteed loans continues to be strong. According to a high-ranking HUD official, the Department expects to commit "almost all of the remaining available Section 108 loan guarantee funds" by the end of FY 2007 (Sept. 30). NAHRO has called upon Congress to appropriate at least $7 million for the Section 108 program for FY 2008, a funding level that would support approximately $275 million in loan guarantees.
The Department of the Treasury has published a Notice of Funds Availability
(NOFA) for the FY 2008 funding round of the Community Development Financial Institutions (CDFI) Program. The notice appeared in the Aug. 31, 2007 Federal Register. Under the CDFI program, the Treasury Department's CDFI Fund makes awards to certified CDFIs that have formulated comprehensive plans for making a "demonstrable community development impact" within their respective target areas. Technical assistance grants are also available. The NOFA states that the CDFI Fund "expects that it may award approximately $26 million in appropriated funds" during the FY 2008 funding round. The actual amount of available funding depends upon congressional appropriations. Depending on the type of award sought, existing CDFIs may apply for up to $2 million in Financial Assistance (FA) grants and up to $100,000 in technical assistance. CDFIs use FA awards to support activities focused on economic development; including job creation, business development, and commercial real estate development; affordable housing; and community development financial services, such as provision of basic banking services to underserved communities, financial literacy training, and predatory lending alternatives. An "Emerging CDFI", defined as an entity that can satisfactorily demonstrate a reasonable plan to become a certified CDFI, may apply for technical assistance funding only. TA grants are used by Emerging CDFIs to build their capacity to serve their target market through the acquisition of goods and services such as consulting services, technology purchases, and staff or board training. The application deadline for the CDFI Program's FY 2008 funding round is Oct. 31, 2007. For more information, view the NOFA here.
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