The 21st Century ROAD to Housing Act – a generational, bipartisan legislation package – recently became law nationwide. To celebrate, here are nine of the new housing policies we’re most excited about for our communities in Virginia.
1) CDBG Funds for New Housing Construction
For decades, Community Development Block Grants (CDBG) have been one of the most flexible federal funding tools available to cities and counties. However, localities were not allowed to use CDBG funds for new construction of affordable housing – until now. Under this new legislation, cities and counties will be able to set aside up to 20% of their Section 204 CDBG funding to build new affordable housing.
2) Strengthening the HOME Program
HOME – more formally known as the HOME Investment Partnerships Program – is a U.S. Department of Housing & Urban Development (HUD) initiative that provides grants to state and local governments for the creation of affordable housing. In Virginia, HOME is one of the most commonly-utilized sources of funding for affordable housing opportunities. As a result of this new legislation, the HOME program is now authorized indefinitely – which means that advocates will no longer have to fight to reauthorize the program in the budget each year. The acceptable uses of HOME funding have also been expanded to include homeownership – for example, purchasing or rehabilitating a residence – and the program will now be able to assist households earning up to 100% of the federal poverty level (FPL). Going forward, HUD will also be required to provide regular reporting to Congress around the HOME program.
3) Expanded Opportunities for Rural Housing
The 21st Century ROAD to Housing Act also makes some important strides towards improving funding and programs that serve rural communities. These include changes to regulations for both single-family and multifamily housing under U.S. Department of Agriculture (USDA) programs. For instance, properties financed with a USDA mortgage (Section 515) will now be eligible for continued rental assistance (Section 521), even after the USDA mortgage has been satisfied. Affordable housing properties will also be able to accept HUD fair market rent (FMR) rates, which are generally higher than the rent levels previously set by USDA – thus bolstering the financial stability of affordable housing developments in rural areas.
4) Support for Manufactured & Modular Housing
Across much of the country, as well as in Virginia, manufactured and modular homes have been an often-overlooked aspect of affordable housing supply. However, these types of homes are increasingly being recognized as viable options for lower-cost housing. The 21st Century ROAD to Housing Act removes the requirement that manufactured housing be constructed with a permanent chassis, which will help to provide additional, more affordable options for purchasing these homes. Furthermore, the Act reauthorizes HUD’s Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program – which provides grant funding for health and safety improvements, weatherization projects, and accessibility measures in manufactured housing – for the next seven years.
5) Tools for Local Planning & Housing Supply
As part of efforts to boost housing supply, the 21st Century ROAD to Housing Act will require HUD to research and publish reports on best practices for state and local zoning frameworks, which can then be used by municipal or state governments as they seek to update zoning and land use regulations. Localities that are especially successful in implementing such tools to increase housing supply may also be eligible for “bonus” incentives, such as additional CDBG funding.
6) Increased Investments in Affordable Housing
Under the new legislation, several new sources of funding for affordable housing and related community development activities will be established. For example, HUD has been directed to create a competitive grant program to award money to localities and state governments to support planning and implementation around affordable housing and community development objectives. Another provision, the Community Investment and Prosperity Act, will allow banks to use up to 20% of their surplus and capital on “public welfare investments” – a term that covers a wide variety of community development activities, ranging from investments in Low Income Housing Tax Credit (LIHTC) properties, to small business loans, to financial literacy programming.
7) The Choice in Affordable Housing Act
The Choice in Affordable Housing Act – which was enacted as part of the 21st Century ROAD to Housing Act – aims to balance the need for safe and dignified housing with the reduction of “red tape” that can delay or entirely prevent a household from successfully leasing an affordable home or using a housing voucher. This law allows landlords to seek preemptive inspections in advance of renting to a voucher recipient. It also introduces cross-inspection, which is the process of allowing rental assistance inspection requirements to be satisfied through previous inspections (within the prior year) conducted for other programs – such those required of LIHTC properties or USDA-assisted housing.
8) Updates for Homelessness Funding
This landmark law also has implications for homeless services providers, as well as the communities and individuals they serve. Section 503 of the Act – Incentivizing Local Solutions to Homelessness – will allow states and localities receiving Emergency Solutions Grant (ESG) funding to apply for waivers on how they can use these funds, thereby allowing for increased flexibility for communities as they seek to address and end homelessness. In addition, new regulations around service benefit and income calculations for disabled veterans are expected to help a greater number of former service members experiencing homelessness in accessing supportive housing resources through the HUD-VASH program.
9) New Disaster Recovery Provisions
Under the Reforming Disaster Recovery Act, HUD’s Community Development Block Grant – Disaster Recovery (CDBG-DR) program will be authorized for three years. CDBG-DR money is granted to areas that have experienced a presidentially-declared disaster; these funds can be used to help rebuild affordable housing, reconstruct infrastructure, provide emergency rental assistance, conduct economic recovery projects, and more. Are you interested in the intersections between disaster recovery and affordable housing? Check out the work of the National Low Income Housing Coalition’s Disaster Housing Recovery Coalition.
Want to Learn More?
This blog post only highlights a portion of what was included in the full legislation. For additional information on the 21st Century ROAD to Housing Act, check out these great resources and analyses from our partners: