May 19, 2022

Ahead of a two-week break, House lawmakers considered a number of bills this week addressing high profile issues ranging from rising consumer prices to baby formula shortages. 

At press time, lawmakers were slated to vote on legislation (H.R. 7688) that seeks to address record high gas prices by preventing so-called price gouging from oil and gas companies. Under the bill, the president could issue an emergency proclamation making it illegal to sell consumer fuel at an “unconscionably excessive” price. As of this writing, it is unclear if H.R. 7688 will have the necessary support to clear the chamber. A number of lawmakers have expressed concerns that the legislation would not be effective at reducing gas prices, while others are demanding to see evidence that price gouging is occurring.

Earlier in the week, the chamber voted largely along party lines to advance a bill (H.R. 7790) that would provide $28 million in emergency funding to the Food and Drug Administration (FDA) to respond to the baby formula shortage and provide tighter oversight of the industry. For their part, Democrats believe that increasing funding for inspections would help bolster supplies by expediting sourcing of formula from new domestic and international suppliers. Republicans, on other hand, believe that the bill gives a blank check to the FDA without securing an immediate boost in formula supply.

House lawmakers also overwhelmingly advanced a separate bill (H.R. 7791) that would grant emergency authority to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to relax some regulations on purchases using program benefits. It would help improve access to formula products for WIC participants during emergencies or supply chain disruptions. Unlike H.R. 7790, this measure has widespread bipartisan support.

In a related development, President Biden this week invoked emergency powers under the Defense Production Act to try and boost production of baby formula. The president also announced “Operation Fly Formula” to ship in supplies from other countries.

Across Capitol Hill, the Senate gave final approval to legislation (H.R. 7691) today that would provide more than $40 billion in emergency assistance to Ukraine. The bill, which would provide additional military, economic, and humanitarian aid to the war-torn country, exceeds President Biden’s request by nearly $7 billion. It should be noted that the administration recently indicated that it had nearly exhausted the $13.6 billion in Ukraine funding that was included in the fiscal year 2022 spending package (P.L. 117-103) enacted in March.

Cybersecurity Legislation Headed to President’s Desk

On May 17, the chamber overwhelmingly approved legislation – the State and Local Government Cybersecurity Act (S. 2520) – that would authorize the Department of Homeland Security (DHS) to coordinate with state, local, tribal, and territorial governments to enhance the cybersecurity of their information systems. Pursuant to S. 2520, DHS would assist local governments by conducting cybersecurity exercises, providing training, and notifying them of cybersecurity threats. The bill also would require the department to report to Congress on the effectiveness of its efforts. The measure, which was cleared by the Senate earlier this year, will complement new cybersecurity funding opportunities that were included in the Infrastructure Investments and Jobs Act.

Areas of High and Persistent Poverty

On May 18, the House passed a bill (H.R. 6531) that would direct federal agencies to increase the funding they target to areas of high and persistent poverty, defined as areas that are experiencing a poverty rate of at least 20 percent at the census tract or county level. Specifically, the Office of Management and Budget (OMB) would be directed to issue guidance identifying the scope and type of programs agencies can direct to high-poverty areas, the share of federal funds to be directed, and measures for tracking federal funds over time. OMB also would be directed to include a goal that the amount of funds agencies direct to targeted areas are larger than the proportion of the population in those areas relative to the population of the U.S. Finally, the bill would require OMB to submit annual reports to Congress that list the programs and amount of investments made in targeted areas, broken down by each federal agency.

Biden Administration Announces Housing Supply Action Plan

Earlier this week, the Biden administration announced a wide-ranging package of administrative, financing, and legislative initiatives designed to close the nation’s housing supply shortfall in the next five years. For the most part, the proposed Housing Supply Action Plan is a collection of administrative or financing initiatives that are either already underway or will be launched soon. The Plan also highlights and urges congressional action on the housing provisions that were included in the House-passed Build Back Better Act (BBBA) (H.R. 5376), as well as the legislative proposals contained in the Biden administration’s fiscal year 2023 budget proposal.

The Plan includes, but is not limited to:

Administrative Actions

• Reward jurisdictions that have reformed zoning and land-use policies with higher scores in certain federal grant processes.

• Ensuring the Department of Transportation will continue to include language encouraging locally driven land use reform, density, rural main street revitalization, and transit-oriented development in the Bipartisan Infrastructure Law and other transportation discretionary grant programs by providing higher scores for those efforts in the grant process.  

• Including land use within the U.S. Economic Development Administration’s (EDA) investment priorities. EDA already includes transit-oriented and infill development within its “Environmentally-Sustainable Development” priority. Over the coming year and before its next round of grants, EDA will add language to its investment priorities to encourage economic development projects that enhance density in the vicinity of the development.

• Finalizing the Low Income Housing Tax Credit (LIHTC) “Income Averaging” proposed rule. To qualify for LIHTC, developers must make commitments to create housing that is affordable to households that meet specific income thresholds.  Income averaging allows a developer to meet the same affordability goals by taking the average of the income for some households who are in the property as opposed to requiring all to meet the same threshold.

• Leveraging American Rescue Plan funds for investments in affordable housing. Treasury has urged state, local, and tribal governments to dedicate more of their American Rescue Plan funds to build additional affordable housing at lower costs for families and individuals.

• Advancing HOME as a key tool for the production and preservation of affordable rental and homeownership housing. HUD will update guidance to strengthen the HOME Investment Partnerships Program to advance and streamline the program.

• Disposing of federal properties to create affordable housing for people experiencing homelessness. Title V of the McKinney Vento Act allows for the disposition of federal property for re-use as housing for the homeless. GSA, HUD, and HHS are planning to  issue new Title V regulations this summer in order to make the disposition process easier to navigate for affordable housing developers.

• Encouraging use of CDBG for local acquisition and local sales to owner-occupants and mission-driven entities. HUD also will provide technical assistance and update guidance on the “Use of CDBG Program Funds in Support of Housing” to promote acquisition, homeownership assistance, conversion of existing structures into rental housing and “starter” homes, housing counseling, and rehabilitation and reconstruction.

Financing Initiatives

• Deploy new financing mechanisms to build and preserve more housing where financing gaps currently exist: manufactured housing (including with chattel loans that the majority of manufactured housing purchasers rely on), accessory dwelling units (ADUs), 2-4 unit properties, and smaller multifamily buildings.

• Expand and improve existing forms of federal financing, including for affordable multifamily development and preservation. This includes making Construction to Permanent loans (where one loan finances the construction but is also a long-term mortgage) more widely available by exploring the feasibility of Fannie Mae purchase of these loans; and announcing reforms to the Low Income Housing Tax Credit (LIHTC), which provides credits to private investors developing affordable rental housing, and the HOME Investment Partnerships Program (HOME), which provides grants to states and localities that communities use to fund a wide range of housing activities.

• Supporting production and availability of manufactured housing. The majority of people buying new manufactured homes rely on personal property financing (chattel lending) rather than conventional mortgages. This type of financing typically costs more than traditional mortgage financing due to higher interest rates and shorter loan terms. Freddie Mac has announced that it will complete a feasibility assessment for the requirements and processes necessary to support loan purchases of personal property manufactured housing loans.

• Scaling up Accessory Dwelling Units (ADUs) – a smaller, independent residential dwelling unit located on the same lot as a stand-alone single-family home – and piloting ADU and home renovation financing tools. Federal Housing Administration (FHA) and Federal Housing Finance Agency (FHFA) are exploring avenues to help lenders pilot and scale renovation and construction financing for ADUs—particularly for low- and moderate-income homeowners – in addition to new financing options for other single-family renovations and for 2-4-unit rehabilitation.

Legislative Proposals

• The Unlocking Possibilities Program was included in the House-passed BBBA. It would establish a new, $1.75 billion HUD competitive grant program to help states and localities eliminate barriers to affordable housing production, including permitting for manufactured housing communities. Supplementing the Unlocking Possibilities Program, the Biden 2023 Budget also includes a mandatory spending proposal that would provide $10 billion in HUD Grants to Reduce Affordable Housing Barriers for states and localities that have already adopted Housing Forward policies and practices to address challenges to housing supply production constraints.

• Provide tax credits to build and rehabilitate 125,000 homes for low- and middle-income homebuyers. The Neighborhood Homes Investment Act was included in the BBBA and would provide tax credits to encourage investment in the millions of homes that are otherwise too costly or difficult to develop or rehabilitate.

• Invest $25 billion in the proposed Grants for Affordable Housing Production program. Included in the Biden 2023 budget, these resources would be distributed to State and local housing finance agencies and their partners, territories, and Tribes, and would be focused on streamlining financing tools to reduce transaction costs and increase housing supply through multifamily and single-family housing units of modest density (up to 100 units per site). States and localities would have flexibility to design their programs to meet local needs, and the resources would be used to support renters and homebuyers with up to 150 percent of area median income in high-cost areas.

• Expanding and strengthening the Low-Income Housing Tax Credit (LIHTC) as proposed by the BBBA which would increase tax credit allocations, provide additional capacity for private activity bonds to finance affordable housing, and target tax credits for housing that serves extremely low-income Americans.

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