Weekly update from the National Housing Conference
September 15, 2019
President's Message I By David Dworkin
Dear Friend,

The past 10 days have seen some major milestones in the debate over housing finance reform. After more than a decade of starts and stops, the United States is finally on a clear path to complete the unfinished business of the 2008 housing crisis. The Treasury Department has provided a map that lays out many roads, some of which are well-worn and bad for consumers and taxpayers alike. But the road less traveled, the road to truly bipartisan housing reform, is now apparent – and if we choose to take it, it will make all the difference.

The most important thing the hearing accomplished is that it has reinvigorated the debate on housing finance reform after 11 years of conservatorship and established a path forward that requires both Congress and the administration to get right. Housing finance reform does not require the invention of an entirely new mortgage finance system and broad bipartisan agreement is not easy, but it is achievable, as I said in the Washington Post last Friday. Here at NHC, an ideologically diverse working group developed a detailed paper on how to move forward. Several of us had significant differences on a few of its key points, but there was broad agreement on most of its most important principles.

The most important new development is how much agreement there is between the positions of most housing advocates and key elements of the Trump administration plan. There are some major differences to be sure, and housing advocates including NHC, many of our most active members, and the broader civil rights community will and should continue to fight hard for adherence to the compromises reached in the Housing and Economic Recovery Act known as HERA. As I shared  with the American Banker , “I think of this as a roadmap and not a blueprint, because there are a lot of paths they can take, but they pretty clearly signal the ones they like and the ones they’re giving lip service to. I expect them to move forward incrementally on the administrative reforms, so that Congress has time to make adjustments in the statute.” Let’s take a look at how that took shape last week.

As Treasury Secretary Steven Mnuchin made clear in his testimony before the Senate Banking Committee, the way forward is based on four essential elements that have broad bipartisan support. It must maintain access to the 30-year fixed rate mortgage; ensure enough private capital is in place to protect taxpayers; seek to provide the stability and liquidity to withstand future financial crises; and improve transparency and standardization that ensures that community banks and credit unions will have equal access to the benefits of the secondary mortgage market. These principles have been explicitly embraced by both House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and Senate Banking Committee Chairman Mike Crapo (R-Idaho).

In fact, Chairwoman Waters specifically listed these principles in her press release last week. After excoriating the Trump administration’s proposals on affordable housing policy, she also listed these issues as high on her priority list. A masterful negotiator, she has made clear she will fight hard for her priorities but has also signaled where there is agreement without appearing to negotiate with herself. As a diplomat during the one of the most eventful periods of change and negotiation in recent history, I have learned to recognize a great negotiator at work and be sure that Chairwoman Waters is one of them.

But she is not alone. Secretary Mnuchin ran the mortgage backed securities desk at Goldman Sachs, and then went on to run a major bank that acquired one of the worst actors of the housing crisis, where he had to navigate the Treasury Department’s often counterproductive “waterfall” of conditions to keep homeowners out of foreclosure. Like him or hate him, this makes him the only Treasury Secretary in history who is a legitimate expert in both the primary and secondary mortgage markets. But he was also a Hollywood producer, where he had to negotiate with other Hollywood producers, who are not exactly known for their gentle personalities.

This brings us to the most contentious issue – affordable housing goals. I have been crystal clear about where NHC stands on this important issue. We are 100 percent behind this vital component of the housing finance system. It is true that Treasury’s report regurgitates the widely disproven false myth that the housing goals caused or contributed to the housing crisis that have been widely discredited by nearly every knowledgeable expert including the Federal Reserve and the Financial Crisis Inquiry Commission.

David Dworkin
NHC President and CEO
News from Washington I By Tristan Bréaux and
Quinn Mulholland
Senate Banking Committee holds hearing on housing finance reform

It was a whirlwind week in the world of housing finance reform. On Friday, Sept. 6, one day after the White House GSE reform plans were released, a federal court ruled that Fannie Mae and Freddie Mac investors were allowed to pursue claims that the Treasury sweep of the GSEs’ profits is illegal. Then, last Monday, Treasury Secretary Steven Mnuchin said in an interview with Fox Business that he expects to reach an agreement soon to allow the GSEs to retain their earnings to help them build capital. On Tuesday, the Senate Banking Committee convened a hearing on next steps for housing finance reform, at which Mnuchin, HUD Secretary Ben Carson, and FHFA Director Mark Calabria testified. At the hearing, lawmakers expressed an interest in taking up legislative action on the issue, in tandem with the Trump administration’s proposed administrative reforms. In a statement on the hearing, NHC President and CEO David Dworkin said, “Today’s hearing made significant progress on the path to housing finance reform. While there was plenty of disagreement, there was also important alignment around essential issues of a bipartisan deal that has eluded Congress in the past.” The day after the hearing, Calabria said at a credit union conference that the Trump administration could take action based on the plans by the end of the year. Calabria then announced a revised cap structure for Fannie and Freddie’s multifamily businesses on Friday during his remarks at the National Multifamily Housing Council’s 2019 Fall Meeting.
House passes several housing-related bills

The House of Representatives passed three housing-related bills offered by House Financial Services Committee members on Tuesday. One was the Homebuyer Assistance Act of 2019, introduced by Representative Brad Sherman (D-Calif.), which would help authorize state-licensed appraisers to conducts appraisals for FHA mortgages. Another was the Strategy and Investment in Rural Housing Preservation Act of 2019, introduced by Representative Lacy Clay (D-Mo.), which would permanently authorize USDA’s Multifamily Housing Preservation and Revitalization Program and authorizes $1 billion for the program. The third was the Safe Housing for Families Act of 2019, introduced by Representative Jesus “Chuy” Garcia (D-Ill.), which would require carbon monoxide detectors in federally-assisted housing.
HUD faces criticism over handling of aid for previous disasters as Dorian’s effects ripple

A group of Democrats on the House Appropriations Committee said they plan to hold a hearing on HUD’s failure to meet a deadline in allocating disaster relief for Puerto Rico in the wake of Hurricane Maria, according to The Hill. HUD also recently published its guidelines on the dispersal of disaster relief for the U.S. Virgin Islands after facing criticism from Delegate Stacey Plaskett for delaying it. And according to a recent New York Times article, the Trump administration has spent less than a third of the $107 billion allocated by Congress for relief for disasters that happened in 2017 and 2018. Meanwhile, many communities are still reeling from the effects of Hurricane Dorian, with over 1,000 people still listed as missing in the Bahamas. The Trump administration recently released $7.5 billion in funds for localities impacted by natural disasters to protect against the effects of climate change. Separately, the USDA also released $150 million to help rural communities impacted by disasters.
Congressional Black Caucus Foundation holds legislative conference

Last week, the Congressional Black Caucus Foundation held its annual legislative conference, a five-day series of workshops and networking sessions which covered a wide range of issues, including housing. The first day of the conference featured a panel discussion on black homeownership including NHC Policy Director Tristan Bréaux, who discussed the importance of addressing the issue of housing affordability for older black millennials are struggling not only with their own student debt, but also the cost of sending their children to college. At an event on the third day of the conference, the National Association of Real Estate Brokers (NAREB) released its 2019 State of Housing in Black America report. “Statistics show that there are 1.7 million Black millennials making $100,000 or more and could improve their financial futures with homeownership or participation in real estate investment opportunities,” NAREB President Donnell Williams told the Washington Informer. “NAREB is determined to reach them with messages that rebut, yet improve, some of their current lifestyle choices.”
Chart of the Week
Every major metro area is building less housing than before the recession

A recent article from CityLab explores the results of a study from Apartment List showing that home building has slowed across the country since the Great Recession, in many cities by a significant amount. Despite the overall deceleration of homebuilding, though, multifamily home construction has increased, according to the report.
What we're reading
A recent Harvard Joint Center for Housing Studies blog post examined how state and local governments are responding to the housing affordability crisis. The blog post examines local strategies including raising funds to build and preserve affordable housing, reducing constraints on development by getting rid of onerous zoning regulations, and increasing funding for homelessness services. Read the blog post here.

According to a recent Washington Post article, most new hires of prime working age are people of color for the first time. According to the article, women are driving this trend, as women of color have poured into the labor market since 2015. Read the article here.

In a piece for Jacobin, researcher Brian Hennigan examines why anti-homeless laws that criminalize homelessness exist. Hennigan argues that welfare agencies and charitable organizations under a capitalist system are oriented not around individuals’ well-being but around their capacity to work, which is why those experiencing homeless are stigmatized. Read the article here.
The week ahead
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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