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State and Local Fiscal Recovery Funds (SLFRF)
New guidance for the ARP’s efforts made it easier for recipients of SLFRF to use remaining funds to construct affordable housing. In practice, this redirects unspent recovery money toward supply.
The affordable housing initiatives the White House released on February 29 follow last year’s Housing Supply Action Plan and Blueprint for a Renters Bill of Rights. They aim to boost the availability of affordable housing options, prioritize transparency and fairness for tenants, and involve collaboration among federal agencies. A further Treasury Department announcement expanded several existing programs to fund affordable housing with HUD. Industry groups generally applauded the effort, with some disagreement about how it can best be accomplished.
In its February 29 press release, the White House shared eight efforts to achieve its affordable housing goals. They range from financing and funding to tenant protections. They involve HUD, the IRS, the Department of Defense, and a group of consumer-protection agencies. Taken together, the affordable housing initiatives split into two kinds of action. Some measures add or preserve supply. Others change the rules of the landlord-tenant relationship.
The split matters for reading the rest of the package. The supply measures work through capital: cheaper financing, faster program access, and tax credits that can be deployed more widely. The tenant measures work through operating rules. They govern which fees can be charged, when an eviction can proceed, and how screening has to be conducted. These are the same two levers named in the earlier Blueprint for a Renters Bill of Rights, now attached to specific agency actions.
Several days after the initial White House announcement, the Treasury Department released its own additional initiatives. The White House package introduced new actions. The Treasury measures mostly unlock money that already existed under the American Rescue Plan (ARP). Three items stand out.
New guidance for the ARP’s efforts made it easier for recipients of SLFRF to use remaining funds to construct affordable housing. In practice, this redirects unspent recovery money toward supply.
New clarifications to the ARP’s program made it clear that qualifying recipients can use remaining funds on a broad range of uses to fund affordable housing serving very low-income families.
An extension of the FFB’s financing support for a risk-sharing initiative between HUD and state and local housing finance agencies. The purpose is to lower the cost of creating and preserving affordable housing.
The FFB extension appears in both announcements, which signals how central financing cost is to the whole package. Risk sharing between HUD and state housing finance agencies lowers the cost of capital for affordable projects. Lower capital cost is the most direct lever the federal government has on whether a marginal affordable project gets built or preserved.
Industry groups support the Administration’s desire to bolster desperately needed affordable housing units in the United States. There is some disagreement, however, as to how these efforts can best be accomplished. In response to the announcement, both the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC) released statements outlining their perspectives on behalf of their members and the industry they represent.
The NAA generally supports the Housing Supply Action Plan, particularly the extension of FFB Risk Sharing. However, the NAA expressed concern regarding potential federal overreach in landlord-tenant relations. It cited proposals that may conflict with existing state regulations and complicate compliance for housing providers.
The NMHC had similar feedback on the measures, stating “[w]e applaud efforts such as the Biden Administration’s Housing Supply Action Plan that demonstrates a focus on increasing housing supply, including support for expansion of the Low-Income Housing Tax Credit and the newly announced additional Federal investments in increasing housing supply.”
NMHC also expressed its disagreement with the initiatives’ limitations on certain industry fee for services options. It stated that “[t]hese efforts are concerning because they will hurt renters by undermining the Administration’s objectives of lowering housing costs, driving new housing development and creating more affordable rental housing.”
Both associations welcomed the supply-side financing and objected to parts of the tenant-side rules. That is not a contradiction. Financing measures lower the cost of building, which the industry wants. Fee limits and eviction rules change operating economics and, where they diverge from state law, add a compliance layer. The associations argue the second set of measures can work against the first.
The newly released affordable housing initiatives are commendable for addressing the pressing need for affordable housing in the United States. There is still a delicate balance to strike with the demands of housing providers. The efforts to protect tenants, though well-intentioned, may inadvertently impose burdens on the industry, potentially hindering the very goal of increasing affordable housing supply.
Concerns about potential federal overreach in landlord-tenant relations add another layer of complexity. The risk of conflict with existing state regulations could complicate compliance for housing providers. That makes it even more challenging to navigate the regulatory landscape. For a portfolio that spans several states, that means one more set of rules on top of the ones that already differ by jurisdiction. Screening criteria, fee schedules, and eviction procedures are exactly the operating details that vary state to state today.
As with all regulatory efforts, the ultimate impact of these initiatives on affordable housing availability is uncertain. It is crucial to monitor their effects closely. The intended outcomes should be achieved without imposing undue costs on the industry or compromising the quality of housing provided. Monitoring is not a passive exercise. It requires knowing, property by property, which programs a portfolio participates in. It also means knowing which fees, screening steps, and lease terms the new rules touch.
To truly enhance affordable housing availability, a balanced approach is needed. It should safeguard tenant rights while also fostering an environment conducive to development, investment, and innovation in the housing sector. That balance is easier to argue for with evidence. Owners who can show what the affordable housing initiatives actually did to occupancy, turnover, and operating cost will have the strongest voice in the next round. The broader question of how regulation should treat technology-enabled operators is explored in who governs the digital landlord.
This article was written from the following announcements and statements, as published at the time.
The affordable housing initiatives announced by the White House on February 29 included an indefinite extension of FFB Risk Sharing, a streamlined HOME program, and $115 million for senior housing. They also covered tax credit relief, fee prohibitions in HUD programs, a Tenant Bill of Rights on military bases, eviction protections, and renter screening guidance. The Treasury Department followed with SLFRF and ERA clarifications and its own FFB extension. They built on the earlier Housing Supply Action Plan and Blueprint for a Renters Bill of Rights.
Supply-side measures such as FFB risk sharing, HOME streamlining, and tax credit flexibility lower the cost of creating and preserving affordable units, which industry groups welcomed. Tenant-side measures on fees, screening, and evictions change operating rules and may conflict with existing state regulations, which complicates compliance. The net effect on affordable housing availability was uncertain at the time and needs to be monitored closely.
The NAA generally supported the Housing Supply Action Plan, particularly the FFB Risk Sharing extension, but expressed concern about federal overreach in landlord-tenant relations. The NMHC applauded the focus on increasing supply and expanding the Low-Income Housing Tax Credit, while disagreeing with limitations on certain fee for services options, which it argued would hurt renters by undermining the goal of lower housing costs.
The February 29 measures were a follow-up to the Housing Supply Action Plan and the Blueprint for a Renters Bill of Rights released the year before. The blueprint set out principles on transparency and fairness for tenants; the new affordable housing initiatives attached specific agency actions to those principles, including fee prohibitions, eviction protections, and screening guidance.
Consistent operating and financial data across every property is what turns a regulatory debate into evidence you can act on and advocate with.
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