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Home > Newsroom > February 2009 Newsletter
National Housing Trust Newsletter
February 2009
In this issue:
Preservation Commentary >>
Shaun Donovan Confirmed as HUD Secretary >>
More Resources for Preservation in Georgia>>
Acquisition Financing Critical for Preserving Seneca Terrace>>
NHT Advances Shared Equity Housing through New Affiliate>>
News from D.C. >>
Preservation Commentary
An agreement on an economic recovery bill is expected this week. House and Senate leaders are meeting now to decide the bill's final shape.
Please call Senate and House leaders (click here for the list) and urge them to support:
1. the Senate's proposal to provide $2.1 billion to fully fund Section 8 contracts.
2. the House's proposal to provide $2.5 billion for energy retrofits of HUD housing.
Now is the time to fully fund the project-based Section 8 program. The program's current funding shortfall puts affordable housing in jeopardy at a time when our communities desperately need stable affordable homes. Without this funding, properties cannot be refinanced or secure investment due to the perceived risk of loss of the Section 8 subsidy. The Senate's proposal includes the necessary $2.1 billion to fully fund Section 8 contracts, while the House's proposal failed to include this funding.
An investment to retrofit HUD assisted homes would create immediate jobs and improve housing conditions for many low income families and seniors-while reducing HUD's $5 billion annual energy bill. The Senate bill would provide significantly less funds for such an investment-only $118 million compared to $2.5 billion in the House.
Please contact Senate and House conferees and urge them to support these two provisions-$2.1 billion to fully fund Section 8 contracts and $2.5 billion for green energy retrofits of HUD assisted housing. A list of all House and Senate members who will be negotiating the final economic recovery bill can be found here.
Stay Tuned,
Michael Bodaken
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| Shaun Donovan Confirmed as HUD Secretary
   The National Housing Trust congratulates Shaun Donovan on his confirmation as HUD Secretary.
In selecting Mr. Donovan to lead HUD, President Obama chose someone with the right experience, judgment and leadership ability to restore a vision to the department that recognizes the critical role that affordable housing plays in the well-being of millions of working families and the elderly.
At his confirmation hearing on Jan. 13th, Secretary Donovan demonstrated a commitment to returning HUD to the role of valued partner to those involved in providing affordable housing throughout the U.S. According to Donovan: "HUD does not build homes; our partners do. They share our passion, and have the talent and capacity to do this work." He outlined several issues that he plans to address at HUD, including ensuring the timely renewal of Section 8 contracts and fostering a culture of excellence and innovation at the department.
Mr. Donovan also made clear that he believes government can incentivize the private and non-profit sectors and remove barriers to affordable housing development. As an example, he cited the New York City Acquisition Fund, which was established by the city with contributions from foundations and private banks. The fund enables mission driven housing developers to acquire at risk housing in a very competitive housing market. (NHT previously interviewed Mr. Donovan about the Acquisition Fund's recent Harvard Innovation Award... Click here.)
As a National Housing Trust board member since 2003, Mr. Donovan provided invaluable leadership to the Trust. We wish him all the best in his new role.
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| More Resources for Preservation in Georgia
 Georgia joined many other states by its recent decision to reserve a portion of its low income housing tax credit allocation to finance affordable housing preservation. The Georgia Dept. of Community Affairs (DCA) just set aside $1.5 million in federal tax credits specifically for affordable housing providers who seek to rehabilitate and preserve existing affordable housing.
Georgia now becomes the 25th state to prioritize preservation in the competitive tax credit program through a set aside. (Click on the map to see which other states set aside tax credits for preservation.)
Georgia also made changes to its tax credit allocation policies in order to help developers facing tax credit equity shortfalls. The agency set aside an allocation of tax credits to be used, among other things, for affordable housing providers who face significant financing gaps as a result of declining tax credit prices.
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| Acquisition Financing Critical for Preserving Seneca Terrace
 The Network for Oregon Affordable Housing (NOAH) has announced the first preservation agreement through the Oregon Housing Acquisition Fund. Northwest Housing Alternatives (NHA) has purchased and will renovate Seneca Terrace, 32 affordable apartments in the Portland suburb of Milwaukie, Oregon.
A short term, low interest acquisition loan enabled NHA to quickly acquire the Section 8 property, while giving NHA time to pursue permanent financing. Had short term acquisition financing not been available via NOAH, another buyer could have acquired the property and converted it to market rate housing. The property's federal rental subsidy contract expires next year.
"The Oregon Housing Acquisition Fund provided NHA access to the financing we needed to acquire Seneca Terrace at a time when the capital markets have halted most traditional lending activities," said NHA Executive Director Martha McLennan. "It [the short-term loan] has allowed us to take immediate ownership of the property and provides us the time required to pursue resources for the needed renovation and permanent preservation."
The Oregon Housing Acquisition Fund embodies the type of public-private-philanthropic partnership that is crucial to preserving affordable housing. Investments in the fund by the state of Oregon and foundations such as the Meyer Memorial Trust and the Collins Foundation have totaled $7 million. These low-cost funds will leverage capital from participating Oregon commercial lenders to create a $35 million revolving acquisition loan program.
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| NHT Advances Shared Equity Housing through New Affiliate
 Community land trusts and other forms of shared equity homeownership are tools that build the assets of lower income families while adding to the stock of permanently affordable homes. The National Housing Trust is pleased to announce that it is now in the business of advancing these tools through its new affiliate, the Institute for Community Economics (ICE) Revolving Loan Fund.
Since 1967, ICE has played a fundamental role in promoting community land trusts and shared equity housing by lending more than $44 million to community organizations seeking to provide permanently affordable homes. These loans have leveraged the development of more than 4,500 affordable homes.
We are excited that our partnership will continue the important work of the ICE Revolving Loan Fund in supporting the development of permanently affordable homes. Visit www.iceclt.org for more information about the loan fund.
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| News from D.C.
 HUD Deputy Secretary nominee announced. President Obama announced he intends to nominate Ron Sims, County Executive of King County, Washington, to become the Deputy Secretary at HUD. Sims is considered a visionary urban leader and is well known for advancing sustainability initiatives as King County executive. Read on...
Oregon Senators urge use of Residual Receipts for preservation. U.S. Senators Ron Wyden (D-Ore.) and Jeff Merkley (D-Ore.) have sent a letter to Sec. Donovan requesting HUD allow Residual Receipts to be used or transferred when affordable housing properties are sold or conveyed to a new owner who intends to keep the property affordable for residents. Use of Residual Receipts would help finance affordable housing needs at a time when a lack of gap financing is making it harder to raise sufficient funds to complete essential repairs. Read on...
This recommendation was also made by the Preservation Working Group in a memo submitted to the Obama Administration outlining policy changes that could be made to facilitate affordable housing preservation. Click here for the memo.
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