HAND member United Bank has promoted its own Joseph LeMense to Managing Director of its Community Development & Non-Profit Banking Group. In his capacity, LeMense will lead the Bank’s non-profit business development and lending initiatives throughout the District, Maryland and Virginia. His primary focus will be on providing personalized financial solutions to mission-based organizations involved in community development, affordable housing, education, social services and trade associations.

“Joe’s knowledge of the Greater Washington non-profit community and his understanding of their unique banking needs make him a great asset, not only to United Bank’s non-profit group, but to our clients,” said Ross Draber, chief operating officer of United Bank. “His vision and dedication will be invaluable as United Bank continues serving local academic, religious, social and affordable housing organizations.”

LeMense brings nearly 35 years of local commercial lending experience to this role.  Most recently he served as United Bank’s Senior Vice President of Commercial Banking. LeMense’s areas of expertise include tax exempt bond finance, tax increment finance, Property Assessed Clean Energy (“PACE”) financing and Low Income Housing Tax Credit (“LIHTC”) and New Market Tax Credit (“NMTC”) financing.

Photo courtesy of Alexis Lewis

By Lisa A. Sturtevant, PhD

Nearly 400,000 renter households in the Washington DC region—about half of all renters—are cost burdened, spending 30 percent or more of their income on housing costs. For many individuals and families paying high housing costs can mean there is too little for other essentials, such as food and health care. In the Washington DC area, more than 12,000 homeless individuals were identified in this year’s point-in-time homelessness count, though we know the number of people without stable housing is much higher. Despite the efforts of countless housing advocates, non-profits, and local governments, the housing affordability challenges in the DC region continue to grow. What can local jurisdictions do to stem the rising affordability challenges?

Housing is a growing concern in the region. According to data from the U.S. Census Bureau, in 2000, about 220,000 renter households in the Washington DC metropolitan area were cost burdened. In 2015, that number had grown to about 380,000, an increase of 160,000 households. In 2000, 33.2 percent of renters were cost burdened. In 2015, that share was 48.5 percent. The overall number of cost burdened renters has increased in jurisdictions throughout the region. For example, there were about 25,600 more cost burdened renters in DC in 2015 than there were in 2000. In Montgomery County, the number of cost burden renters grew by more than 31,000 over the 15-year period between 2000 and 2015. Fairfax County added 24,200 new cost burdened renter households over the same period.

These increases are not because local jurisdictions have ignored the problem. Just in the last few years, DC has dedicated $100 million to its Housing Production Trust Fund. Montgomery County has increased efforts to use public land for affordable housing. The City of Alexandria continues to look for opportunities to partner with developers to expand mixed-income housing. Fairfax County has made housing affordability a key component of its Strategic Plan to Facilitate Economic Success. Arlington County is working to adopt at Notice of Funding Availability (NOFA) process to more efficiently and effectively allocate local housing resources.

But, as the cost burden numbers show, it hasn’t been enough. And things probably are not going to get easer in 2017. Even without specific affordable housing proposals, the new Presidential administration could weaken key Federal programs that local jurisdictions have come to count on for the production and preservation of housing affordable to lower-income individuals and families.

Tax reform. No specific proposals have been discussed by the incoming Trump administration related to the Low-Income Housing Tax Credit (LIHTC) program. It seems very unlikely that the credit itself will be eliminated since there is generally broad bipartisan support for the program. However, there has been a lot of talk about the likelihood of tax reform under the new Trump administration. Some affordable housing finance experts have suggested that there could be “substantial” indirect effects of proposed tax reforms on the LIHTC, making the tax credit less valuable to investors. Reduced capacity of the LIHTC could mean a growing need for local resources to fill financing gaps and to make projects feasible.

Cuts in Nondefense Spending. President-elect Trump has indicated that he intends to cut nondefense spending, at one time saying he wanted cuts of one percent every year. This would mean cuts to key HUD programs that serve some of the lowest-income and most vulnerable individuals and families in our communities—programs like the Housing Choice Voucher Program and CDBG and HOME. Historically a target of cuts, these programs could be at significant risk under a President who has indicated little interest in supporting HUD programs. Even now, federal housing programs currently serve only about a quarter of eligible households. Reductions in federal funding would means that local jurisdictions will lose critical resources to support a wide range of housing and community development programs and the losses would disproportionately impact the lowest-income and potentially the most vulnerable households.

Rising housing challenges and declining federal resources are not new phenomena; local jurisdictions have been taking on increasingly active roles in housing policies and funding for decades. However, in 2017, the role for local action on housing will be even more critical in our region. What can local jurisdictions to do differently to move the needle?

Communication is key:

Make the case. Throughout our communities we need to continue to make the case for why housing is important. And there is not just one argument. Whether it’s because increasing housing supply is good for the local economy. Or that education and health outcomes are better for families with access to safe and affordable housing. Or that poor children who live in higher-opportunity neighborhoods go on to make more money—any pay more taxes—than those left behind.

Document the need. At the local level, it is important not only to quantify housing needs in the community, but also to relate those numbers to actual people. Combining hard data with descriptions of hypothetical—or real—individuals and families is important for demonstrating the need.

Explain how housing finance works. Make sure that the community understands why government is necessary when it comes to building housing affordable to lower-income households. Tools like the Urban Institute’s affordable housing simulator can help show in black and white that gap that often needs to be filled by public resources.

Communication can be hard but other important steps are even harder:

Prioritize housing. Public resources are limited and local jurisdictions have competing demands on those resources. In general, however, local communities have not been explicit about prioritizing housing, and then about prioritizing particular goals within housing programs and policies. Prioritization—linked to specified and dedicated funding sources—seems especially important to having an impact.

Innovate on the funding side. To meet housing needs when federal resources are on the decline, it is going to be necessary to identify new sources of funding. Local jurisdictions need to commit to looking for innovative funding sources and partners.

Recently BisNow featured HAND Member, Dantes Partners, in an article titled, “How a Nigerian Immigrant Became One of DC’s Most Active Affordable Housing Developers.” Founded by Buwa Binitie, the development firm has five projects in the pipeline, which will bring a total of 783 affordable units to the region’s housing market.

Binitie was born in Nigeria, and attended New York University, after which he pursued an IT startup. When the company didn’t grow as planned, he switched paths to real estate, and started Dantes Partners in 2005. Since then, he has gone from redeveloping one and two unit homes to the 462 – unit Bruce Monroe/Park Morton project he is working on now with The Community Builders, also a member of HAND.

The Office of the Deputy Mayor for Planning and Economic Development‘s communications director, Joaquin McPeek, was also quoted in the piece: “We are always encouraged to see local CBE’s and minority-owned businesses succeed in the District.” He continued, “It is equally satisfying when projects place an emphasis on affordable housing and addressing community needs—two priorities of this administration when it comes to DC development.” You can read the entire article here.

Klein Hornig partner, Steve Paul is pleased to provide the 2016 Edition of the Low-Income Housing Tax Credit booklet, which has been distributed for more than 20 years.

Klein Hornig senior counsel, Katie Day and associates, Emily Blumberg, Rebecca Melaas and Sara Silverstein are gratefully recognized as contributors.

To read the entire booklet, click here.

Photo courtesy of the NAACP Legal Defense and Educational Fund, Inc.

By Lisa A. Sturtevant, PhD

Fair housing never emerged as an issue in the presidential election; however, the new President and his HUD secretary and Attorney General will have responsibility for overseeing the enforcement of new fair housing laws, including the Affirmatively Furthering Fair Housing (AFFH) rule and the disparate impact court decision. There is uncertainty about what a Trump Presidency will mean for housing nationally, but given his selection of Ben Carson as HUD Secretary, it seems more important than ever to re-commit to working regionally to support the goals of fair housing and access to opportunity here in the Washington, DC metro area.

It has been over a year since the U.S. Department of Housing and Urban Development published the Affirmatively Furthering Fair Housing (AFFH) rule that established a new housing needs assessment process (replacing the analysis of impediments) with the Assessment of Fair Housing (AFH). The AFFH rule lays out a new procedure for local jurisdictions to assess areas of concentrated poverty, to identify disparities in access to good schools, transit and other amenities, and to evaluate unmet housing needs among certain subpopulations, including racial and ethnic minorities and persons with disabilities. In addition, for the first time HUD is providing a trove of local data to help localities identify patterns of demographic change. The goal of the AFFH rule is to bring greater guidance to localities for “affirmatively furthering fair housing” as mandated in the Housing Act of 1968.

Despite some of the rhetoric, the new regulations reflect only an incremental change to HUD’s approach to enforcing fair housing and is designed to encourage a more intentional assessment of whether the goals of the Fair Housing Act are being met. However, the AFFH rule has been castigated as a vast overreach by the Federal government into local autonomy, and the change in leadership at the Federal level will likely give broader voice to those claims.

During the campaign, President-elect Trump said he wanted to dismantle the AFFH rule. Donald Trump’s company has been sued by the Justice Department for violating fair housing laws in New York. In the 1970s, Trump’s father was arrested in Prince George’s County while allowing an apartment complex he owned fall into disrepair and for subjecting African American tenants to deplorable housing conditions. It’s not likely that a President Trump will take the lead on promoting fair housing from the White House. Trump’s pick for HUD Secretary, Ben Carson, has given every indication that he will not be a champion for fair housing at the Federal level either. He has called the Affirmatively Furthering Fair Housing Rule a “mandated social-engineering scheme” and a policy indicative of a “communist” country.

The Region Should Be a Leader in Promoting its Own Fair Housing Goals

With likely backpedaling on AFFH at the Federal level, the Washington DC metropolitan area should remain committed to advancing fair housing in the region. Now, more than ever, local elected officials need to be leaders for promoting access and opportunity for all members of our community.

Regional discussions about AFFH are already underway. Last spring, the Metropolitan Washington Council of Governments partnered with Enterprise Community Partners and the National Housing Conference to host a full-day training and information sharing session around the AFFH rule. The primary objective of the convening was to discuss the data component of the assessment tool but the conversation shed light on the entire AFH process. At the meeting, we had representatives from HUD, as well as from the Baltimore area, which recently completed a regional housing plan.

This meeting led to further discussions among local Housing Directors at the Metropolitan Washington Council of Governments (MWCOG), but momentum around AFFH slowed over the summer. Given the road ahead, now seems like a good time to re-energize regional partners around fair housing. The lack of Federal leadership is one important reason for mobilization. But there is increasing evidence that regions that are more racially and economically integrated have stronger, more resilient local economies.

There are several things we can do now which would not only help support housing options and integration throughout the region but could also allow us to act proactively—to do something!—in the wake of the unprecedented Presidential election:

Produce data on housing needs and opportunities more efficiently. We learned in our March AFFH meeting that HUD is providing a tremendous amount of data to localities, but jurisdictions are advised by the new rule to make use of locally-generated data. Rather than each jurisdiction analyzing its own data, MWCOG should facilitate a regional data analysis exercise that can help with local housing plans but also help jurisdictions connect regionally.

Consider a regional assessment of fair housing. HUD recommends, though does not really incentivize, a regional approach to assessing housing needs and developing strategies. While each local jurisdiction in the Washington DC area will still develop its own financial, land use and other tools to meet local housing needs, there may be some degree of regional assessment that could be undertaken. Local elected officials, along with housing and planning directors, should become better informed about what it would take to do a regional assessment of fair housing, and whether some type of regional approach is possible.

Share best practices. At the very least, local jurisdictions in the Washington DC region need to do a better job at sharing best practices for expanding housing options. In the last few years, many jurisdictions in the region have conducted housing studies that have led to the development of policy recommendations. The policies and plans should be shared across jurisdictions through MWCOG or another regional body so that jurisdictions can learn from each other and possibly help promote consistency in policies and regulations throughout the region.

Focus on community engagement. There is no silver bullet that we have yet to discover that will solve our region’s housing challenges. Jurisdictions in the Washington DC region are among the most innovative communities in the country in terms of affordable housing tools. We know what needs to be done. The major obstacle that remains is building political will and responding to community opposition to housing, particularly multi-family housing and housing affordable to low-income individuals and families. We should work together to solve the NIMBY (not in my backyard) issue by figuring out how to respond to concerns about density, schools, and parking; how to provide elected officials with education and information they can use at public meetings; and how to have conversations that promote inclusion and tolerance.

On that last point, I think there would be a lot of people in our region who would want to be part of that conversation right now.