May 2022 Legislative Update
By Aaron Zappia, Senior Government Relations Manager
Revenue soars with Legislature set to return to session May 23rd prepared to tackle state budget
Both chambers are scheduled to reconvene on May 23rd. State budget negotiations for FY 2022-23 are going to begin in earnest the end of this month in anticipation of the June 30th passage deadline. As the Housing Alliance works towards raising the cap on PHARE funding, passing a Whole Home Repair bill, and encourage the use of American Rescue Plan state discretionary funding for housing, all are encouraged by the state’s strong fiscal position being recognized by both parties.
On Monday, May 2nd, the Independent Fiscal Office reported General Fund collections exceeded the April estimate by $2.00 billion (44.4%) and are $5.04 billion (14.2%) above estimate for the fiscal year-to-date (FYTD). The monthly overage was largely due to very strong personal income tax (PIT) and corporate net income tax (CNIT) payments. Leading other tax revenue categories, the overage was driven primarily by realty transfer tax (RTT) which is $28.6 million (58.3%) over the April estimate. Year-to-date, RTT revenue is $137.2 million over estimate, or 24.3%.
These numbers present a very strong case for raising the RTT cap on PHARE and dedicating a recurring revenue source for SB 1135, Whole Home Repair. With the state’s fiscal health the best it’s been in recent history, the legislature is well positioned to make meaningful investments to address the housing crisis and fund successful programs.
Rally and Press Conference for Whole Home Repair May 24th
On Tuesday, May 24th at 10:45am, the Housing Alliance will join advocates from across the state for a rally and press event on the front steps of the State Capitol in Harrisburg to call for the passage of SB 1135 creating a Whole Home Repair Fund within the PA Department of Community and Economic Development. All are welcome to attend the event and help build momentum for this important housing initiative. Aaron Zappia, Housing Alliance of PA Senior Government Relations Manager will speak at the event joining Senators Nikil Saval, David Argall, and Vincent Hughes along with Representatives Sara Innamorato and Jordan Harris.
To attend the rally and press event, RSVP here.
American Rescue Plan Dollars for Housing
$2.25 billion in American Rescue Plan (ARP) funds remain to be spent at the discretion of the Legislature by the end of 2024. Last year, the Legislature allocated $50 million to the Pennsylvania Housing Finance Agency’s Construction Cost Relief Program (CCRP) for affordable rental housing production. The Housing Alliance recognizes that construction costs have increased substantially due to multiple factors including supply chain issues, lumber availability, oil prices, and labor shortages. This year, the Housing Alliance is asking the Legislature to dedicate an additional $100 million in ARP funding toward LIHTC development projects as follows:
- $45 million for year 2021 9% LIHTC projects
- $45 million for year 2022 9% LIHTC development projects
- $10 million for future 4% LIHTC development projects
With many competing interests for this one-time, historic funding, HAP and advocates are keeping housing in the conversation and in negotiations as the Legislature moves closer to a plan for spending ARP. Proposals include funding emergency rental assistance, seeding the Whole Home Repair Fund, and re-entry housing support.
New Report Reveals Severe Shortage of Affordable Housing in Pennsylvania—Need for Increased Investment
The Gap: A Shortage of Affordable Homes, a new report released by the National Low Income Housing Coalition (NLIHC) and the Housing Alliance of Pennsylvania, finds a national shortage of 7 million affordable and available rental homes for the lowest-income households. There are just 36 affordable and available rental homes for every 100 of the lowest-income renter households nationwide. Seventy-one percent of the poorest renter households are severely cost burdened, spending more than half of their incomes on housing, with little left over for other necessities. Pennsylvania is among the most severely affected states with only 39 affordable homes available for every 100 extremely low-income households.
“In the wake of the pandemic, Pennsylvania finds itself struggling to address longtime housing challenges due to deindustrialization and the corresponding blight eating away at both our small towns and large cities,” said Aaron Zappia, Government Relations Manager for the Housing Alliance of Pennsylvania. “We’re a state with an aging population, very old housing stock, and coping with a shift in our economy. Increased investments in affordable housing are needed to help Pennsylvania recover.”
The Housing Alliance of Pennsylvania is working to address the housing shortage by advocating for historic investments in PHARE, the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund which has been instrumental in bringing affordable housing to market in every county in Pennsylvania and preserving existing homes. Likewise, the Legislature is positioned to consider a Whole Home Repair bill, SB 1135, that can utilize remaining American Rescue Plan dollars to start a state fund to make grants and forgivable loans to small landlords and low-income homeowners to address basic habitability concerns such as roofing, HVAC, electrical and weatherization to reduce energy bills. The measure is designed to preserve homes, allow seniors to age in place, and prevent blight.
Pennsylvania faces a shortage of 221,744 affordable and available homes for those earning 50% and below of Area Median Income (AMI)—25% of these households are severely cost burdened. For those meeting the threshold of extremely low income, the state faces a shortage of 266,618 available and affordable units, with 70% of these renters severely cost burdened.
The report shows how these lowest-income renters were uniquely positioned to suffer disproportionately from the effects of lost income and housing insecurity during the pandemic. Although the federal government took unprecedented actions to protect the lowest-income renters, these actions were temporary. Most eviction moratoriums have been lifted and resources such as federal emergency rental assistance are running out. Longer-term state and federal investments in affordable housing are needed to combat the underlying shortage of affordable housing that exposed so many low-income renters to housing instability.
For additional information on the The Gap report, visit: https://nlihc.org/gap