Last week, the U.S House of Representatives released an amended version of the Senate’s 21st Century ROAD to Housing Act that notably removes a provision the housing industry said would effectively eliminate the production of build-to-rent single-family housing. That’s not the only important change between the two versions of the major bipartisan housing legislation, however.
The updated bill is set to come up for a House vote this week ahead of the Memorial Day holiday, Politico reported. If the legislation passes, it will move back to the Senate. The White House previously told Multifamily Dive that “there may be serious policy concerns or implementation challenges” with the House’s version, but did not respond to another request for comment by publication time.
Besides the build-to-rent forced sale provision, here is a look at some of the other differences the two chambers will need to iron out.
HUD funding changes
The House’s latest version of the bill increases Federal Housing Finance Agency-insured multifamily loan limits and indexes them for future gains.
“Loan limits have remained static for 12 years and do not reflect market conditions,” the National Association of Homebuilders said in a May 15 analysis of the bill. “Increasing multifamily loan limits and indexing them for future gains aligns with real construction costs and helps stimulate new apartment development.”
There are other major differences regarding HUD program funding, Francis Torres, director of the Bipartisan Policy Center’s housing and infrastructure projects, told Multifamily Dive.
“The provision on the Rental Assistance Demonstration program permanence included in the Senate bill is out, so for public housing authorities that have serious capital needs, that's a significant omission,” Torres said.
Also cut from the House’s version is a measure to permanently fund the agency’s Community Development Block Grant Disaster Recovery program. Currently, Congress appropriates these funds to HUD on a supplemental basis to help cities, counties, tribes and states recover from disasters, especially in low-income areas.
“The Senate bill permanently authorized HUD's CDBG disaster recovery program, which is a key funding source for disaster-impacted communities to be able to rebuild after natural disasters, and that's no longer included in the new House version,” Torres said.
Permitting updates
The latest House version of the bill makes several changes to existing permitting requirements for multifamily projects. Section 207 streamlines National Environmental Policy Act requirements for a variety of HUD-funded activities, including 221(d)(4) loans, which developers and investors can use to build or rehabilitate a multifamily property. Certain housing projects with U.S. Department of Agriculture funding would also be exempt from environmental impact studies or reports.
“Federally supported projects often trigger additional review,” according to Torres. “The bill explicitly adds infill projects of residential housing units to a list of categorically excluded activities, meaning they would get no federal environmental review.”
Changes to HUD’s HOME Investment Partnerships Program, which provides grants to states and localities to create affordable housing for low-income households, would broaden eligible uses for the funding and also streamline environmental reviews.
The bill also directs HUD to offer competitive grants for pilot programs to help it develop guidelines around single-staircase residential buildings. The issue has gained traction in recent years in an effort to reduce construction costs: In April, for example, a California lawmaker sponsored a bill directing the state housing agency to propose new building standards allowing single-staircase buildings up to six stories high, instead of requiring two staircases.
Other changes
The House version still bans major institutional investors with 350 or more homes from purchasing certain single-family homes, but now requires those investors to report details of their housing portfolio to HUD.
The latest House version of the bill creates an eviction helpline to provide tenants of covered federally assisted rental dwelling units with counseling, resources and referrals related to eviction-related matters. Housing operators must post information about the helpline in common areas.
The House also added a requirement for state and local governments receiving Community Development Block Grants to maintain a database of undeveloped publicly owned land.
Both chambers seem to want to pass a housing bill ahead of midterms, but are trying to do so thoughtfully, according to Torres.
“Given the interest in legislating around the institutional investor activity that we've seen from members of Congress, I think there's still a kind of general recognition that they have to take a scalpel and not a hammer to make sure that they're not disrupting, or overly disrupting, different aspects of the housing industry,” Torres said.
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