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4366 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations
<br /> The combination of a large number of in higher-income neighborhoods that Treasury Response:Eligible Activities:
<br /> higher-income households who have would allow residents to live closer to The final rule clarifies eligibility of
<br /> weathered the pandemic without jobs and well-resourced schools. affordable housing development for
<br /> significant income losses,low interest Additionally,as noted above, recipients;these uses were eligible
<br /> rates,and housing supply constraints Treasury is finalizing the rule with some under the interim final rule,but
<br /> exacerbated by the pandemic,have changes to the treatment of affordable Treasury is providing further guidance
<br /> driven a sharp increase in the sale price housing development designed to to enhance clarity and respond to
<br /> of homes.153 Meanwhile,many low- clarify that permanent supportive recipient and commenter questions.
<br /> income renters and homeowners are housing or other programs or services to As with all interventions to address
<br /> struggling with lost employment and improve access to stable, affordable the negative economic impacts of the
<br /> income and are behind on their housing housing among individuals who are pandemic,affordable housing projects
<br /> payments.154 homeless,and the development of must be responsive and proportional to
<br /> Public Comment:Affordable Housing affordable housing to increase supply of the harm identified. This test may be
<br /> Outside of Low-Income Geographies:A affordable and high-quality living units, met by affordable housing development
<br /> major theme in comments was that are responsive to individuals and projects—which may involve large
<br /> affordable housing interventions, households that were impacted by the expenditures and capital investments—
<br /> especially development of affordable pandemic in addition to those that were if the developments increase the supply
<br /> housing,should be allowed outside of disproportionately impacted. This shift of long-term affordable housing for low-
<br /> QCTs,as concentrating the supply of is in line with commenters' income households.While there may be
<br /> affordable housing in low-income recommendations and consistent with less costly(or non-capital)alternatives
<br /> geographies can have the effect of the facts described above,which to affordable housing development, a
<br /> increasing both concentrated poverty demonstrate that lack of supply of comprehensive response to the
<br /> and racial and economic segregation, affordable housing units contributed to widespread housing challenges
<br /> while locking lower-income households the pandemic's impact on housing underscored by the pandemic will
<br /> in need of housing support out of high- insecurity and unsustainable housing require the production of additional
<br /> opportunity neighborhoods with access cost burdens and that these impacts affordable homes,and targeted
<br /> to employment and amenities. were experienced broadly across the affordable housing development is a
<br /> Treasury Response:Affordable country. cost-effective and proportional response
<br /> Housing Outside Low-Income Public Comment:Eligible Activities: to this need.
<br /> Geographies:As previously stated, Many commenters asked for clarity on For purposes of this test,Treasury
<br /> affordable housing is not confined to what types of activities (e.g., land will presume that any projects that
<br /> low-income geographies under the acquisition,construction,pre- would be eligible for funding under
<br /> interim final rule. As discussed construction costs,operating costs,etc.) either the National Housing Trust Fund
<br /> elsewhere,the interim final rule are eligible uses of SURF, and what (HTF) or the Home Investment
<br /> presumed that QCTs,as well as affordability criteria must be applied to Partnerships Program(HOME) are
<br /> communities served by Tribal affordable housing development. eligible uses of SURF funds. Note that
<br /> governments,were disproportionately Commenters encouraged Treasury to these programs use different income
<br /> impacted for administrative allow the full array of affordable limits than the definition of low-and
<br /> convenience,but recipients may housing activities,including particular moderate-income adopted by Treasury.
<br /> identify other populations,households, requests for broad flexibility for Tribal Given the severity of the affordable
<br /> or geographic areas with disparate communities,and to specify that housing shortage,and the ways in
<br /> impacts of COVID-19 and provide "development" should include which the pandemic has exacerbated
<br /> affordable housing services to them. For construction,preservation, the need for affordable,high-quality
<br /> example,under the interim final rule, a rehabilitation,and operation. Other dwelling units,Treasury has determined
<br /> city could determine that its low- commenters requested clarification that the households served by these
<br /> income residents faced disproportionate about permissible program federal housing programs have been
<br /> impacts of COVID-19 and develop administration approaches for impacted by the pandemic and its
<br /> affordable housing targeted to these affordable housing, such as contracting negative economic impacts and that
<br /> households. Such a scenario could methods and distribution of funds. development of affordable housing
<br /> include,for example,affordable projects Some commenters asked that consistent with these programs is a
<br /> Treasury require SURF funds to be related and reasonably proportional
<br /> (March 2020),https://files.consumeFfinance.govlfl focused on the lowest-income response to those impacts.Additionally,
<br /> documents/cfpb_Housing insecurity_and_the_ households,who suffer the most severe affordable housing projects provided by
<br /> COVID-19_pandemic.pdf rent burdens and risks of housing a Tribal government are eligible uses of
<br /> 153 Joint Center For Housing Studies Of Harvard instability,and whose housingsituation SURF if the would be eligible for
<br /> University,The State of the Nation's Housing(June y g
<br /> 2021),https://Www.jchs.harvard.edu/sites/default/ has left them particularly vulnerable to funding under the Indian Housing Block
<br /> files/reports/files/Harvard jCHS-State—Nations— COVID-19.For example, one Grant program,the Indian Community
<br /> Housing 2021.pdf. commenter argued that SURF funds Development Block Grant program, or
<br /> 154 Davin Reed and Eileen Divringi,Household should only be used to support the Bureau of Indian Affairs Housing
<br /> Rental Debt During COVID-19:Update for 2021, affordable housing for households Improvement Program.Alignment with
<br /> Federal Reserve Bank of Philadelphia(2020),
<br /> available at:https://www.philadelphiafed.orgl making 50 percent of AMI or less and these programs,which define
<br /> community-development/housing-and- that recipients should be required to set "affordable housing"in a manner
<br /> neighborhoods/household-rental-debt-during-covid- aside significant portions of any consistent with a proportionate
<br /> 19-update for-2021.Further,some research suggests
<br /> that liquidity may be a more important predictor of developments for renters making 30 response to the affordable housing
<br /> default than other factors,including income or percent of AMI or less and persons with challenges faced by low-and moderate-
<br /> equity.See Trading Equity for Liquidity(June physical and sensory disabilities. Other income households as a result of the
<br /> 2019),available at https://www.jpmorganchase. commenters requested a more flexible negative economic impacts of the
<br /> com/con ten t/dam/jpm c/jpm organ-ch ase-an d-co/
<br /> institute/pdf/institute-trading-equityfor- approach to affordable housing pandemic,is intended to give recipients
<br /> liquidity.pdf. definitions. comfort and clarity as they design a
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