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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted:	January 23, 2020 12:54 PM
From:	Senator Vincent J. Hughes
To:	All Senate members
Subject:	New Deal for Housing

Pennsylvania is in need of a bold and aggressive plan to address the Commonwealth’s affordable housing crisis. The New Deal for Housing is a multi-year effort to transform housing opportunities and conditions for struggling individuals and families across the Commonwealth. This comprehensive plan focuses on addressing housing issues for domestic violence survivors, homeless veterans, people living in houses with toxic conditions, victims of housing discrimination and individuals and families seeking affordable housing options. According to information from the National Low Income Housing, the Commonwealth has a shortage of more than 279,000 affordable rental homes. In order to afford a two-bedroom rental at the HUD Fair Market Rent Rate in Pennsylvania, a family must have an annual income of more than $40,000, more than double the annual salary of an individual working at a minimum wage job for 40 hours a week, 52 weeks a year. I hope you will join me in supporting these proposals.

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Document #1

Description:

Allowing Redevelopment Assistance Capital Program (RACP) to fund certain housing projects Under this proposal, the limit on the amount of money from RACP that can be used for housing will be removed.  In addition, a minimum of ten percent of the maximum amount available for RACP will be dedicated for housing that serves victims of domestic violence, homeless veterans, accessible housing and/or is affordable.

Document #2

Description:

Step Up Pennsylvania Homeownership is important to fighting wealth inequality across the Commonwealth.  Recent reports have shed light on the historical barriers to homeownership in parts of the Commonwealth.  Fueled by past housing policies, significant barriers to homeownership have been created.  Communities across the Commonwealth are victims of these polices, and individuals in both urban and rural areas are struggling to maintain homeownership levels of generations past.  According to data from the U.S. Census Bureau, the homeownership rates in Pennsylvania have dropped nearly 6% since its high in the late 1990s.  While the most recent data shows homeownership is trending upward, the Commonwealth is still trailing its historic highs. This proposal would provide up to $10,000 in down payment and closing cost assistance to individuals purchasing homes in a census tract that has been designated as a qualified opportunity zone by the federal Tax Cuts and Jobs Act of 2017.  The program, to be known as STEP UP PA, will be administered by the Pennsylvania Housing Finance Agency (PHFA).  There will be income thresholds for individuals to qualify, and the assistance will be securitized against the property in question.  If an individual stays in the home for at least 10 years, the assistance will be in the form of a grant. If the individual sells the property before 10 years from the date of purchase, the assistance will have to be repaid.  Individuals participating in the program will be required to complete financial counseling before being given assistance.  An initial appropriation will be given to get the program off the ground.

Document #3

Description:

State Low Income Housing Tax Credit (LIHTC) By enacting a State LIHTC, the Commonwealth can provide gap funding and additional benefits to expand investments and increase access to affordable rental options.  Sixteen states currently have a state LIHTC to compliment the federal LIHTC and enhance investment in affordable rental housing options.  It is time for Pennsylvania to join these other states and commit to a bold investment to expand access to affordable rental housing.  Since its inception the Federal LIHTC has supported the renovation of more than 45,000 properties and nearly 3,000,000 housing units nationally.  Pennsylvania has not been immune to an alarming national trend of dwindling access to affordable rental options.  The lack of access to affordable rental opportunities drives people from their communities and forces families to make the difficult decision between paying for necessities like food or housing. My proposal aims to close a gap in funding that often exists with the Federal LIHTC by providing $50 million annually for a state LIHTC.  The Pennsylvania Housing Finance Agency (PHFA), who is the designated agency to administer the federal LIHTC, would be responsible for administering the state LIHTC.

Document #4

Description:

Increasing PHARE funding to $100 million In the 2019-2020 budget, the General Assembly increased the annual contribution to the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund (PHARE) from $25 million to $40 million.  While this was admirable, it is not enough to meet the housing needs of our Commonwealth.  Under my proposal, I would increase the contribution to PHARE to $100 million.  With this increased funding, the Pennsylvania Housing Finance Agency (PHFA), who administers PHARE, will be able to increase its ability to leverage other public and private funds to: invest in new rental units, invest in new single-family homes and assist homebuyers among other things.  An investment of $100 million in PHARE could create and preserve up to 2,000 affordable housing units annually and help approximately 800 new home buyers defray costs associated with purchasing a home.