White House Announces Plan to Boost Housing Supply
The White House today announced a Housing Supply Action Plan that it said would ease restrictive and costly land use and zoning rules, expand financing for energy efficient housing, and promote commercial-to-residential conversion opportunities.
As part of this plan, HUD is unveiling an $85 million federal program called the Pathways to Removing Obstacles to Housing whereby the agency will award grants of up to $10 million to jurisdictions that are working to remove barriers to housing production.
Funding can be used to allow for higher-density zoning and rezoning for multifamily and mixed-use housing, streamlining affordable housing development, and reducing requirements related to parking and other land use restrictions. The administration will also be allocating funds to increase housing supply through zoning reform.
The White House plan will provide new financing for affordable, energy efficient, climate resilient housing and clean energy investments.
Of note to multifamily builders and developers, the administration has made it easier to build and rehabilitate apartments with FHA-insured mortgages by increasing the threshold at which a multifamily loan is considered a large loan (and therefore, subject to additional underwriting requirements) from $75 million to $120 million. This change will simplify underwriting and reduce development costs for large multifamily properties financed with FHA-insured mortgages without presenting undue risk to FHA.
HUD also announced that it will allow larger loans to participate in the agency’s Low-Income Housing Tax Credit (LIHTC) Pilot Program, which increases the number of apartment sites eligible for a program that streamlines financing. HUD also updated guidelines to allow public housing authorities (PHAs) to more easily use housing vouchers and mixed-finance transactions to create or preserve housing.
Separately, the White House announced a series of new actions to protect renters. Of particular interest to NAHB multifamily members, the administration is proposing new actions to ensure fair tenant screening practices.
Specifically, five agencies – HUD, the U.S. Department of Agriculture, the Consumer Financial Protection Bureau, the Federal Trade Commission and the Federal Housing Finance Agency – will each be releasing guidance or best practices to landlords, operators, and stakeholders who rely on tenant screening reports when evaluating applications from renters.
The White House says this guidance communicates the administration’s expectations on informing renters of what information in their screening report is responsible for their application being denied. This information will help renters by giving them an opportunity to correct errors in their reports and address issues that impact their applications.
A common theme among agency announcements is when a housing provider denies a rental application they should provide written adverse action notices to applicants and provide applicants a copy of any consumer screening report relied on when making an adverse action determination.
Also of note, HUD announced $10 million in new funding for tenant outreach and education, including tenant organizing in project-based Section 8 properties, and a commitment to propose a rule requiring that tenants in public housing and project-based Section 8 properties receive a written notice at least 30 days prior to lease termination for nonpayment of rent.