On March 13, U.S. Senator Elizabeth Warren (D-Massachusetts) reintroduced the American Housing and Economic Mobility Act. This comprehensive legislation aims to address our nation's affordable housing crisis by producing more than 3 million new housing units, a 10 percent rent reduction, and the generation of 1.5 million new jobs. It also aims to promote home ownership and reverse discriminatory housing policies such as redlining and restrictive zoning.

In addition to the aforementioned goals, the American Housing and Economic Mobility Act aims to protect low-income seniors, people with disabilities, families with children, and persons without housing by:

• Creating a new $10 billion grant program that enables communities to build infrastructure, parks, roads, or schools if they reform land use rules that make new affordable housing projects needlessly expensive;
• Providing down payment grants to first-time homebuyers living in low-income, formerly redlined, or officially segregated areas in an effort to close the racial wealth gap;
• Strengthening the Community Reinvestment Act (CRA) to cover more financial institutions (excludes credit unions in the re-introduced bill) in an effort to promote investment activities in poor-and-middle-class communities;
• Supporting families whose wealth sustained substantial damage due to the 2008 financial crisis and still have negative equity on their mortgages;
• And making it easier to use housing vouchers in areas with good schools and jobs for residents.

To learn more about the American Housing Economic Mobility Act, click on the following links to read letters of support discussing the potential impact of the bill on families and communities: 

• Read Letter of Support from the U.S. Conference of Mayors
• Read Letter of Support from Massachusetts Mayors
• Read Letter of Support from Civil Rights Groups
• Read Letter of Support from the National Rural Housing Coalition
•  Read Letter of Support from Credit Union National Association

President Trump released his 2020 budget request today and unfortunately, as in his FY18 and FY19 requests, the proposal again calls for dramatic cuts to housing programs that aid low-income households. Those cuts disproportionately affect seniors, those with disabilities, families with children, and veterans.

Overall, the administration proposes to cut HUD by an astounding $9.6 billion or 18% below 2019 enacted levels, imposing deep cuts to affordable housing and community development programs. In addition to the cuts, the proposal revisits policy suggestions previously proposed by Secretary Carson to implement rental increases on the lowest-income households and work requirements that have not been shown to increase family or self-sufficiency.

The budget also incorporates draft legislation, known as the “Making Affordable Housing Work Act,” proposed by the administration last year that would increase rents on most non-elderly, non-disabled families receiving HUD assistance by requiring that they pay 35% of their gross incomes, compared to 30% of their adjusted incomes. Due to that calculation, the very poorest elderly and disabled families would also see their rents triple as it eliminates income deductions for medical or childcare expenses. The proposal allows housing providers to broadly impose work requirements, without any resources to help people gain the skills they need for livable wage jobs.

Data shows 46 percent of Indiana renters are cost-burdened and 86 households experience evictions every day in our state. This is not the time for draconian cuts that will undermine essential housing and community development programs like the national Housing Trust Fund, the HOME Investments Partnership program, and public housing capital repairs. We are actively communicating with our Indiana Congressional Delegation, urging them to not only reject this proposal’s cuts, but significantly expand the investments in affordable homes that Hoosier families and communities need to prosper.

See the table below for specifics on the proposed budget:

On March 11, Prosperity Indiana and the Indiana Assets & Opportunity Network were joined by dozens of military and veterans’ groups, faith-based organizations and churches, social service providers, community organizations, concerned citizens, and more at the Statehouse for a Reject Senate Bill 613 press conference. 

Advocates stood in unity to discuss the devastating consequences SB 613 would have for consumers and communities. They implored House leaders to reject this piece of harmful legislation. If passed, SB 613 would rewrite the definition of criminal loansharking and open the door for high-cost lending in Indiana by permitting larger, longer-term loan products outside of the current 72 percent cap. It would also increase the allowable cost on various consumer loans, including auto and installment loans.

Prosperity Indiana and its members were represented by Mark Lindenlaub, Executive Director of Thrive Alliance in Columbus. He voiced concern regarding the increased workload social service agencies would encounter from families seeking relief from predatory loans should SB 613 pass, stating that, “adding larger, longer-term and higher-rate loans to vulnerable families will only make their lives, and our work, more difficult.”

Iraq War veteran Steven Bramer, Jr., a former payday borrower, shared his experience of getting caught in the vicious payday lending cycle. “I got myself in a horribly expensive cycle,” he shared before adding, “I protected you at one point. Now, it’s time for you to protect me.”

Click here to view a recorded live stream of the press conference and please contact your House Representative to urge him/her to oppose this bill!

TESTIMONY REGARDING HB 1495
KATHLEEN LARA, POLICY DIRECTOR
HOUSE FINANCIAL INSTITUTIONS COMMITTEE HEARING
JANUARY 23, 2019

Thank you Chairman Burton and Members of the Committee. My name is Kathleen Lara and I serve as the Policy Director for Prosperity Indiana.

Our member network of nearly 200 organizations is working in every region of the state to ensure all Hoosiers can enjoy equal economic and social opportunities and live in thriving communities. Our members are working hard to address the deficit of affordable housing and homeownership opportunities, particularly for low-income households. They are focused on empowering individuals and families to build assets so they can climb the economic ladder.

That is why I stand here today to offer our strong support for this bill, HB 1495, a bill that takes on a pervasive practice undercutting those goals and affecting consumers and communities of all sizes and geographies — the lack of strong state policy regarding land contracts for homeownership.

As you have heard, in states that were hardest hit by the foreclosure crisis, particularly those in the Midwest, thousands of homes became vacant and prime investment opportunities for buyers. Significant portions of this housing stock, however, were blighted, abandoned properties with low appraisals and often severe habitability issues.

Subsequently, we started to see an explosion in the number land contract agreements for these homes where would-be homeowners enter into alternative purchase agreements with companies and the title is transferred at the end of the mortgage, rather than the beginning as you would see with traditional mortgages.

Land contracts are not inherently problematic when interests are aligned. In fact, they have been a viable alternative homeownership model utilized by many non-profits, faith-based organizations, home builders with excess supply, and average Hoosiers selling homes to neighbors, family or friends.

The problem lies in the increasingly common predatory model we have seen where interests are not aligned. In this model, sellers regularly churn would-be owners in and out of properties. These borrowers invest thousands in repairs to the homes only to be evicted when the borrower is inevitably unable to keep up with habitability repairs required for code compliance in addition to loan costs and loses all of their equity.

We have seen these land contracts used to exploit a loophole in state code, subverting state landlord-tenant habitability obligations as well as protections afforded to borrowers with traditional mortgages. In short, the seller makes more when the borrower fails.

In HB 1495, we do not aim to prevent anyone from entering into a land contract for homeownership. We do, however, aim to empower consumers by putting into place protections that increase the transparency of these products for borrowers. These are basic disclosures that are far less extensive than what would be required for a traditional mortgage, but provide enough information to help borrowers understand the basic habitability of a property and more clarity regarding the terms of the contract.

We want to foster affordable avenues to housing stability and homeownership, but ones that allow borrowers to be informed and empowered. I want to express our sincere appreciation to Representatives Summers, Clere and Fleming for taking on this important issue. I urge the members of this committee to support HB 1495 and enact common sense protections for Hoosiers.

With work at the Statehouse well underway early in this long budget session, Prosperity Indiana is working to advance key member priorities, as outlined in our in our 2019 State Policy Priorities.

Our network is pushing for ambitious agenda and we hope our members will register to attend our Statehouse Day on Tuesday, January 29, as we urge their lawmakers to take action on critical community development legislation. Prosperity Indiana will set up all legislator meetings for members and provide you with key talking points to make the process as simple as possible.

Please review the key bills and updates highlighted below to help us move these priorities forward!

ASK YOUR REPRESENTATIVE TO CO-AUTHOR/SUPPORTHB 1616 (bill link pending) THAT WOULD CREATE/FUND NEW TAX CREDITS FOCUSED ON EXPANDING AFFORDABLE HOUSING AND HOMEOWNERSHIP, COMPLEMENTING THE EXISTING NEIGHBORHOOD ASSISTANCE PROGRAM AND HB 1234 THAT WOULD CREATE/FUND A STATE LOW INCOME HOUSING TAX CREDIT PROGRAM)
(BOTH SPONSORED BY REPRESENTATIVE JIM PRESSEL)

ASK YOUR SENATOR TO CO-AUTHOR/SUPPORTSB 524 AND SB 422 WHICH WOULD ADDRESS SERIOUS HABITABILITY CONCERNS AND INCREASE TENANT PROTECTIONS TO HELP CURB THE EVICTION CRISIS (SPONSORED BY SENATORS EDDIE MELTON AND MIKE BOHACEK, RESPECTIVELY)

ASK YOUR SENATOR TO CO-AUTHOR/SUPPORT SB 104 AND YOUR REPRESENTATIVE TO SUPPORT HB 1098 TO PUT A 36% CAP ON PAYDAY LOANS AND CUT DOWN ON PREDATORY LENDING THAT TRAPS LOW-INCOME CONSUMERS IN DEBT (SPONSORED BY SENATOR GREG WALKER AND REPRESENTATIVE CAREY HAMILTON, RESPECTIVELY)

**URGENT BILL UPDATE**
We anticipate this bill will be heard in the Senate Insurance and Financial Institutions Committee next Wednesday, January 23, so please help us stop the debt trap in the Hoosier State by signing on in support of the measure. Click here to sign our letter.

Tracker Lists

We are still combing through final bill lists that are still updating as I type to review measures we will advocate for or against on behalf of our members in this legislative session. Stay posted to our policy blog as we will post our bill tracker lists and details by the end of the week!

As the longest government shutdown in U.S. history continues, more than 1,500 units of federally assisted housing supporting low-income seniors, people with disabilities, and families with children throughout Indiana are in jeopardy. As outlined in the chart below, Prosperity Indiana has noted the 1,578 units of Project-Based Rental Assistance (PBRA) contracts that expired in December or stand to expire this month or next as the Department of Housing and Urban Development (HUD) is unable to renew them and is scrambling to fund rental assistance in the short-term without an end in sight to the federal shutdown.

How did we get here?

National advocates had previously received word from HUD that the agency had the budget authority to renew PBRA contracts through January. As a Jan. 6 Washington Post article revealed, however, that was not the case. The article quotes HUD spokesman Jerome Brown as saying that “[HUD] budget and contract staff are ‘scouring for money’ to figure out how to fund the contracts on an interim basis.” The piece outlined how 1,500 landlords received letters from the agency on January 4 in order to try and prevent the eviction of tenants after certain HUD officials had allegedly not realized had expired on Jan. 1. Those letters apparently outlined what activities will take place during the first 30 business days of the shutdown and how to prevent the eviction of thousands of tenants who live in homes covered by the Section 8 Project-Based Rental Assistance program or Section 202 (for the elderly) and Section 811 (for people with disabilities) programs.

According to the National Housing Trust, HUD shared that 1,150 contracts were not renewed in December affecting approximately 70,000-85,000 low-income households. Additionally, HUD has indicated that will be unable to renew 500 contracts that expire in January, affecting another 30,000-40,000 low-income households.  While HUD has expressed it is working within currently obligated funds at its disposal to cover most rental assistance payments, but if the shutdown continues, 550 more contracts are set to expire in February without HUD in a position to renew these contracts or obligate funds. HUD has indicated that Section 202 owners are expected to rely on their reserves, but advocates have concerns that budget reserves are not sufficient to meet the rental payments. HUD has also stated it plans to use funds carried over from prior years to fund these contracts for December and January, but beyond that, the agency may have to figure out a way to fund these contracts on a short-term basis.

In rural housing, the USDA shutdown plan indicates that direct loan programs will not issue any additional funds, including Section 504, 514, and 502.  Further, the guidance noted that banks are unlikely to close on these loans until the government shutdown ends, delaying homeownership. At present, it is not clear if USDA will continue paying rental assistance or vouchers for low- and very low-income tenants.

Click here for the NLIHC breakdown of the shutdown’s impact on major housing programs.

Congressional Call to Action

Prosperity Indiana is urging Congress to pass clean FY19 Transportation Housing and Urban Development and U.S. Department of Agriculture budgets so that thousands of extremely low-income families, seniors and the disabled are not denied critically needed housing assistance. Short-term renewals are destabilizing for private owners of PBRA properties. They limit the owners’ ability to supportive services to their tenants, delay property rehabilitation, and could potentially increase rent burdens on fixed-income populations. The average income of a household receiving PBRA is less than $12,000 and 56 percent of these households have someone who is elderly or someone with a disability, so they can certainly not afford to shoulder this burden imposed by the shutdown. 

Guidance for Owners

HUD has shared that owners experiencing delays in payments can request access to replacement reserves, but should not do so without approval. Those requests should be directed to the Director of the Multifamily Hub or Satellite office, all of whom should be working as essential employees.

Today, Nov. 20, the Indiana General Assembly is convening at the Statehouse for Organization Day, the ceremonial start of the 2019 legislative session. The day allows for legislators to meet with fellow lawmakers to arrange committees, swear in new members and generally, roll out key legislative agendas. When lawmakers officially reconvene in early January, it will be for a long session – when the General Assembly creates a two-year budget.

Prosperity Indiana has already been working with state legislators to advance key member priorities, but on this occasion of Org Day, we present to you our formal 2019 State Policy Priorities. Based on member feedback and engagement, this year's priorities are focused on expanded tax credit resources for affordable housing and community development, working to enhance tenant protections for renters and expanding consumer protections to help more low-income households build assets.

These priorities will help ensure Hoosiers can enjoy equal economic and social opportunities and live in thriving communities. Click on the images below to read the full list of priorities and review critical affordable housing data illustrating the need to implement these policies.

Also, please register to join us on Tuesday, January 29 for our Statehouse Day as we connect members with their legislators to share why these priorities are so critical to our network and our communities.

For questions on these priorities or getting engaged more actively in advocacy at the state or federal level, contact our policy director, Kathleen Lara, at klara@prosperityindiana.org.

We will keep you updated and engaged throughout session, but please be aware all hearings and session meetings are publicly available to stream live at www.in.gov/iga.

Thank you to our members who took time to comment on proposed changes to the Community Reinvestment Act (CRA) over the last month! Extensive grassroots advocacy is required to lift up urgently needed reforms and defend tools that address equity in lending, access to credit, and investments in underserved communities.

As we outlined in our Action Alert, Prosperity Indiana has concerns that changes regulators have proposed via an Advanced Notice of Proposed Rulemaking (ANPR) may substantially weaken the law. On behalf of our member network, Prosperity Indiana submitted comments outlining our concerns and offering ideas to strengthen CRA moving forward that can be found here: https://www.regulations.gov/document?D=OCC-2018-0008-0260

For questions, contact Kathleen Lara at klara@prosperityindiana.org.

According to the National Housing Preservation Database, 3,067 public

housing units in Indiana are in need of immediate investment and 4,472 publicly supported rental housing units face an expiring affordability restriction over the next five years.

With 158,322 extremely low-income Hoosier households (those earning at or below 30% of area median income pay already more than half of their income on rent and a 134,998 deficit of rental homes affordable and available to these households, Indiana must expand affordable housing, not lose ground on the already insufficient supply. 

The 2018 Preservation Profile lists these facts as well as an updated number assisted rental homes in Indiana with expiring affordability restrictions by funding stream as well.

That profile shows that a substantial portion of this portfolio, two-in-five or 41,397 assisted units, in our state receive Low-Income Housing Tax Credits (LIHTC). 

A new report, Balancing Priorities: Preservation and Neighborhood Opportunity in the Low-Income Housing Tax 

Credit (LIHTC) Program Beyond Year 30, from the National Low Income Housing Coalition and the Public and Assisted Housing Research Corporation found that by 2030, nearly half a million current LIHTC units, or nearly a quarter of the total stock will reach the end of all federally mandated rent-affordability and income restrictions nationwide.

The report highlights the fact that many of these units will be lost in conversion to market-rate rents, but others will be lost due to physical deterioration unless new capital investment is available for 

rehabilitation. The report also makes the case that scarcity in resources for affordable housing have led to the dilemma of whether to prioritize resources for preserving existing units or focusing on new resources to increase mobility instead of focusing on building a broader housing safety net.

It also lists units with expiring affordability nationwide by neighborhood desirability and opportunity, broken down by educational opportunity, transit access, labor market access and health environment.

For a link to the full Indiana 2018 Preservation Profile, click here.