Despite all the noise we are making progress in Washington with our affordable housing agenda.  If only we had a president that was a pro-housing as Governor Newsome but that is a decision for voters in 2020.  As for present day, we are very excited about the reintroduction of the Affordable Housing Credit Improvement Act (AHCIA).  Senator Cantwell and her staff, along with the finance committee staff and the ACTION steering committee, have been working diligently to get to a final product.  We hope to have the bill introduced by Senator Cantwell and her lead co-sponsors in the near future. 

The centerpiece of the legislation will be the fixed 4% LIHTC and the increase in the 9% LIHTC per capita allocation.  We are also working on resolving the General Public Use issue for veterans housing produced with the 4% LIHTC and bonds.  The provision will be included in the AHCIA and we are also working with the Treasury Department to see if the issue can be addressed through a clarification/regulatory process.  The issue was raised by Senator Catherine Cortez Masto (D-NV) to Treasury Secretary Mnuchin last week at a Finance Committee hearing.  Secretary Mnuchin indicated his staff would work with the Finance Committee to address the issue so one way or another, I am confident we will successfully address the issue.  There are a number of other provisions in the AHCIA that I will wait to address with you until the legislation is in final form. 

The White House also released the President’s FY2020 budget request and as was the case last year, it included significant cuts to the HUD budget and other housing programs.  Specifically, the request cut 16% from the FY2019 request, or $9.7 billion.  The budget would eliminate the HOME Investment Partnerships program, CDBG and the Public Housing Capital Fund among other programs.  It would also eliminate the National Housing Trust Fund ($36,616,277 to CA in 2018) and the CDFI managed Capital Magnet Fund.  The budget also eliminated and reduced funding to a number of programs at USDA.  All in all, not a strong endorsement of the administration’s support for affordable housing.  The good news is the budget, as is often the case, is largely a symbolic document as Congress will determine the funding levels for these and other programs and we feel we are on a good course with the current makeup of the House and Senate appropriations committees.  That does not mean we are out of the woods as Congress must come to an agreement on how to deal with the budget caps mandated by the Budget Control Act of 2011 (sequestration) that are set to kick-in on October 1, 2019.  In addition, another government shutdown may be in the works as the administration has upped the ante on the boarder wall by requesting $8.6 billion for FY2020, a significant increase from the $3.5 billion from FY2019 that caused the 35 day shutdown earlier this year.  And then there is the annual drama to increase the debt ceiling.  Nonetheless, I am excited about what the future holds for affordable housing as the recognition in Congress that there is a national housing crisis is sparking increased support for our collective efforts.  And this is before the advent of serious conversations in Washington on infrastructure.  I will have more to report to you next month and look forward to seeing you in person in May.