The Washington Report

Transcription

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2 The Washington Report MODERATOR PANELISTS Michael Novogradac Novogradac & Company Rick Lazio Jones Walker David Gasson Boston Orlando Cabrera Squire Patton Boggs

3 The Washington Report Looking Ahead to 2016 (and 2017) 2016 Elections Upcoming Legislation Advocacy Efforts GSEs

4 So, what should we expect for the remainder of 2016?

5 So, what should we expect for the remainder of 2016?

6 Sep. 29 Today Sep. 30 Fiscal year end Nov. 8 Presidential election Dec. 31 Various extenders expire, including ITC for certain technologies, 45L, 179D Jan. 20 Presidential inauguration Mar. 15 Debt limit extension expires President-elect transition period SEP OCT NOV DEC JAN FEB House in Session 18 days left in session for MAR 26 days left in session for 2016 Senate in Session

7 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON Includes housing as part of her policy platform Calls to increase supply of affordable rental homes by expanding annual LIHTC allocations for areas most in need Plans to create incentives at state and local level to enact effective land use rules and other regulations to promote development of new rental housing TRUMP

8 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON Includes housing as part of her policy platform Calls to increase supply of affordable rental homes by expanding annual LIHTC allocations for areas most in need Plans to create incentives at state and local level to enact effective land use rules and other regulations to promote development of new rental housing TRUMP

9 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON Includes housing as part of her policy platform Calls to increase supply of affordable rental homes by expanding annual LIHTC allocations for areas most in need Plans to create incentives at state and local level to enact effective land use rules and other regulations to promote development of new rental housing TRUMP

10 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON TRUMP Has not stated a position However, his father developed a substantial amount of unsubsidized affordable rental housing in NYC

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12 November 2016 Republican Democrat Democrat

13 November 2016

14 November 2016 Republican Republican Republican

15 November 2016 PROTECTING OURSELVES SEEKING RESOURCES The Defensive Path The Offensive Path

16 Low-Income November Housing 2016 Tax Credits Ensuring LIHTC is retained in all future tax reform bills The Defensive Path Pushing for a 50 percent increase and Cantwell-Hatch improvements The Offensive Path

17 Low-Income Housing HUD Tax Credits Minimizing cuts The Defensive Path Trying to restore more HUD funding and eliminating RAD unit cap The Offensive Path

18 GSEs HUD Retaining some form of government involvement in mortgage finance The Defensive Path Increasing GSE multifamily activity The Offensive Path

19 Direction of the Country 28.4% Right Track Wrong Track 65.1% Source: RealClearPolitics.com (9/28/16)

20 2016 Senate Race Source: centerforpolitics.org

21 Clinton v. Trump Hillary Clinton 46.7% Donald Trump 44.4% Clinton v. Trump v. Johnson v. Stein Hillary Clinton 43.1% Donald Trump 41.5% Gary Johnson 7.4% Jill Stein 2.4% Source: Real Clear Politics 9/28/16

22 Current Polls Trump v. Clinton Source: Real Clear Politics 9/28/16

23 Recent Presidents Who Had Major Tax Bills the Year of their Inauguration OBAMA BUSH CLINTON BUSH REAGAN CARTER

24 Current House and Senate Leadership HOUSE SENATE REP. RYAN Speaker Wis. - 1 REP. PELOSI Minority Leader Calif SEN. MCCONNELL Majority Leader Kentucky SEN. REID Minority Leader Nevada

25 Potential future Current House and Senate Leadership HOUSE SENATE REP. RYAN Speaker Wis. - 1 REP. PELOSI Minority Leader Calif SEN. MCCONNELL Majority Leader Kentucky SEN. SEN. SCHUMER REID Minority Leader New Nevada York

26 Legislation and Advocacy

27 S Affordable Housing Improvement Act of 2016 Announced May 19, 2016 Sen. Cantwell D-Washington Sen. Hatch R-Utah Sen. Wyden D-Ore. Sen. Schumer D-N.Y.

28 S Affordable Housing Improvement Act of 2016 Announced May 19, 2016 Sen. Cantwell D-Washington Sen. Hatch R-Utah Sen. Wyden D-Ore. Sen. Schumer D-N.Y.

29 Affordable Housing Improvement Act of 2016, Part 2 S Sen. Cantwell D-Washington Sen. Hatch R-Utah

30 Affordable Housing Improvement Act of 2016, Part 2 S New, expanded bill includes provisions in first LIHTC bill, S. 2962: 50 percent increase Income-averaging Minimum 4 percent rate Sen. Cantwell D-Washington

31 Affordable Housing Improvement Act of 2016, Part 2 S Sen. Cantwell D-Washington Additional Resources Give states discretion to provide 30% basis boost for bondfinanced projects Repeal QCT population cap Relocation costs included in eligible basis No basis reduction for certain energy tax incentives Indian areas generally treated as DDAs

32 Affordable Housing Improvement Act of 2016, Part 2 S Sen. Cantwell D-Washington Financial Feasibility 50% basis boost for ELI units Modify student occupancy rules Codify increased tenant income guidance Modify 10-year rule Limits apply to acquisition basis Adopt uniform income eligibility for rural projects

33 Affordable Housing Improvement Act of 2016, Part 2 S Sen. Cantwell D-Washington Other Simplify the LIHTC student rule Clarify the ability to claim LIHTCs after casualty losses Replace the ROFR with a purchase option Add Native American projects as QAP selection criterion

34 Affordable Housing Improvement Act of 2016, Part 2 S Sen. Cantwell D-Washington Other Modify the rent-setting rule Clarify the community revitalization plan Prohibit local approval or contribution requirements Change the official name of the LIHTC to Affordable Housing Tax Credit

35 Affordable Housing Improvement Act of 2016, Part 2 S Sen. Cantwell D-Washington Largest impact on equity for bond deals: Minimum 4 percent State discretionary boost of up to 30% in areas outside of DDAs/QCTs Repealing population cap on QCTs Automatic DDA for Indian areas

36 Middle Income Housing Tax Credit Each state would receive $1 of MIHTCs per capita, minimum annual ceiling of $1,140,000 Any credits not allocated by the states to middle-income projects are carried forward and added to the state s annual allocation of LIHTCs Maximum credit for each project: 50 percent of PV of qualified basis Comments due December 21 Sen. Wyden D-Ore.

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42 GSEs

43 GSEs Capital Requirement and Investment Portfolio Mel Watt Federal Housing Finance Agency Director 2008 Agreement with Treasury - GSE bailout Capital Reserve Quarterly Dividend Net Worth over Capital Reserve Fannie Mae and Freddie Mac will have no Capital Reserve by 1/1/2018 Wind down Investment Portfolio $250 billion by 12/31/2018

44 Housing Trust Fund Mel Watt Federal Housing Finance Agency Director In calendar year 2015, contributions were set aside by Fannie Mae & Freddie Mac Watt December 11, 2014 letters to Fannie Mae, Freddie Mac Grants for affordable rental housing that targets extremely low-income individuals and households HUD released interim rule on January 30, 2015 HUD announced HTF state allocations on May 5 Once state HTF allocation plans are approved, states can award HTF grants to developments

45 Housing Trust Fund 2016 State Housing Trust Fund Allocations Housing Trust Fund Capital Magnet Fund $174M $93M HUD/Treasury Reported Amounts Top 10 State HTF Allocations California $10,128,143 New York $7,013,963 Texas $4,778,364 Florida $4,598,821 Illinois $4,302,012 Pennsylvania $3,862,285 Ohio $3,740,578 New Jersey $3,733,566 Michigan $3,522,622 Massachusetts $3,419,

46 Housing Trust Fund Preliminary 2017 estimate using 1st and 2nd quarter of Q filings from Fannie/Freddie Housing Trust Fund Capital Magnet Fund $229M $123M Preliminary Estimate Top 10 State HTF Allocation Estimates California $22,865,917 New York $15,015,342 Texas $8,507,776 Florida $8,012,636 Illinois $7,328,040 Pennsylvania $6,119,943 Ohio $5,831,075 New Jersey $5,596,635 Michigan $5,133,827 Massachusetts $4,919,

47 Housing Opportunity Through Modernization Act of 2016 ( HOTMA ) Passed on July 29, 2016 Revises the calculation of annual and adjusted income After the initial year of assistance, prior-year income use is mandatory. Adjustments will be available to reflect current income Unless net assets exceed $50,000, exclusion of imputed asset income Increased the allowance for elderly and disabled families from $400 to $525 Allows the deduction from income calculation for medical expenses which exceed 10 percent of annual income (changed from 3 percent) Hardship exemptions are now required (not passive)

48 Housing Opportunity Through Modernization Act of 2016 ( HOTMA ) Changes impacting the public housing and HCV programs Requires a preference or priority for financial assistance to U.S. citizens or permanent resident before any alien who is otherwise eligible for assistance Revises the inspection requirements for the HCV program, including authorization for permitting families to occupy a unit prior to inspection (where the unit has been inspected within the past 24 months and no life-threatening deficiencies were found) Creates an asset cap of $100,000 Allows the termination of tenancy for public housing residents whose annual income exceeds 120 percent of fair market rent for two consecutive years Changes to law and regulation governing interim reexaminations Interim rent increases or decreases required only if rent will increase or decrease by 10 percent or more

49 Housing Opportunity Through Modernization Act of 2016 ( HOTMA ) Other HOTMA changes Provides Housing Authorities with the option to increase the allowable percentage of project-based vouchers (PBVs) and to extend PBV contract terms Requirements for HUD to provide PHAs with Data on local utility consumption for use in determining utility allowances Guidelines for minimum heating requirements in public housing

50 HUD Budget Note: amounts in Millions FY 2015 Enacted FY 2016 Enacted President s FY 2017 Proposed Senate FY 2017 THUD Bill House FY 2017 THUD Bill Housing Choice Voucher $19,304 $19,628 $20,854 $20,431 $20,189 Project Based Section 8 $9,730 $10,620 $10,816 $10,901 $10,901 Public Housing Operating Fund $4,440 $4,500 $4,569 $4,675 $4,500 Public Housing Capital Fund $1,875 $1,900 $1,865 $1,925 $1,900 Section 202 $420 $433 $505 $505 $505 Section 811 $134 $150 $154 $154 $154 HOPWA $330 $335 $335 $335 $335 CDBG $3,000 $3,000 $2,800 $3,000 $3,000 HOME $900 $950 $950 $950 $950 Homeless Assistance $2,135 $2,250 $2,664 $2,330 $2,487 Choice Neighborhood Initiative $80 $125 $200 $80 $100 Overall $45,372 $46,978 $48,911 $48,434 $47,955

51 The HUD Budget 8 PB 8 CDBG HOME PHOF PHCF President $18.45B $10.8B $2.8B $950M $4.57B $1.87B Senate $18.35B $10.9B $3.06B $950M $4.68B $1.93B House $18.12B $10.9B $3.06B $950M $4.5B $1.9B

52 The Washington Report MODERATOR PANELISTS Michael Novogradac Novogradac & Company Rick Lazio Jones Walker David Gasson Boston Orlando Cabrera Squire Patton Boggs