Weekly update from the National Housing Conference
February 6, 2019
President's Message I By David M. Dworkin
Dear Friend,

This month is designated to celebrate African-American history, yet it started with a chilling reminder of the ugly side of American history as the governor of Virginia has been confronted with his racist past, once again focusing our attention on the pervasive legacy of our nation’s original sin. In some ways it is fitting that our unique creed that “all men are created equal” was written by a man who himself owned the families of the men and women who built his wealth. Our attitudes about race and equality are burdened by self-serving exceptions. Last year, we recognized the 50th anniversary of the Fair Housing Act, yet African-American homeownership today is lower than it was when this landmark legislation was signed into law in 1968. Our quest for a more perfect union progresses, but we have far to go.

The National Housing Conference also shares a mixed legacy. No one is immune. Recently, we found a box of presidential signing pens in a closet, including the creation of the Department of Housing and Urban Development in 1965, which we fought for over 10 years, and the Housing and Community Development Act of 1968. But we also were the leading proponent of the National Housing Act of 1949, which was intended to build 800,000 units of affordable housing. Nowhere near that number of units were built, but hundreds of African-American communities were leveled in the name of slum clearance, and later paved over with National Highway Act funds in the 1950s. The law of unintended consequences is never repealed.

This week, I’m in California to meet with NHC members and attend an outstanding ULI conference on affordable housing hosted by one of our Board members, Christopher Ptomey. California is ground zero in the affordable housing crisis, where a quarter of the nation’s homeless live on the street, in cars and in tent cities. A recent article in the LA Times notes that in 1950, Californians voted to amend the state constitution to make it harder for poor people to find a place to live. Article 34, which has survived several attempts at repeal, requires voter approval before public housing is built in a community. The campaign unabashedly appealed to racist fears about integration. “We know the roots of where it came from,” Los Angeles Mayor Eric Garcetti told the LA Times. “It’s a white supremacist chapter in the state’s history.” Garcetti is behind a new effort to ask voters to repeal Article 34, but it’s future remains unclear. And that’s not history. It’s right now. 

This year, NHC begins a broad, national conversation with our members on a new National Housing Act, which we believe is needed to modernize and expand the policy and funding tools currently available to build affordable housing for the 21st century. Closing the minority homeownership gap and ending homelessness are essential objectives. We also need to build millions of units of rental housing that are affordable to people at nearly every income level. Rents are unaffordable for half of all Americans, and we lose over 100,000 affordable housing each year as rents continue to rise. A recent Zillow study found that just 42 percent of rental listings were within financial reach of median-income U.S. households–just 16 percent for median African-American family income and 27 percent for the median Latino household. We can and must do better.

NHC has identified five areas that we will convene our members to develop concrete policy and legislative proposals: Homeownership, Affordable Rental Housing, Ending Homelessness, Climate Change Disaster Relief and Community Development. To sign up for one or more of these working groups, please reach out to Nathan Park at npark@nhc.org. We look forward to working with you to make a real, tangible and lasting difference.

Sincerely,
David M. Dworkin
President and CEO
National Housing Conference
News from Washington I By Tristan Bréaux
NHC signs onto letter urging for agreement on FY 2019 spending

More than 1,000 organizations, including NHC have called on Congress and the president to reach an agreement on FY 2019 spending and avert another government shutdown. The letter also urges congressional leadership and the president to lift the spending caps for FY 2020, which would lead to severe cuts to housing and community development programs like HOME Investment Partnerships, Community Development Block Grants, Housing Choice Vouchers and Project-Based Rental Assistance.
Crapo announces housing finance reform plan

Senate Banking Chairman Mike Crapo released a three-page outline last week detailing the contours of his proposal to turn Fannie Mae and Freddie Mac into private companies. This outline comes in the wake of Politico publishing a recording of acting FHFA Director Joseph Otting indicating that the White House would be announcing a plan to end government control of Fannie and Freddie, which the White House subsequently walked back. Crapo’s outline would cap the market share of Fannie and Freddie and transform the FHFA from a single-director structure to being run by a bipartisan board. NHC has weighed in on the outline, releasing a statement supporting Crapo’s objectives but relaying a concern that the outline “carries too much transition risk and may leave too many Americans behind.” Senate Banking Committee ranking member Sherrod Brown also released a statement in response to Crapo’s outline saying “any efforts to reform the housing market start by addressing the affordability crisis.”
Freddie Mac forecasts turnaround in housing market

Freddie Mac released its January Forecast last week, in which it reported that the housing market remained steady in January, citing lower mortgage rates and slow home price growth. “Despite the weakening of the housing market in 2018, early 2019 data signals a possible turnaround for the year to come,” Freddie Mac Chief Economist Sam Khater said. This dovetails with a recent report from the National Association of REALTORS® that home sales were not significantly damaged by the government shutdown. HUD and the Census Bureau also belatedly released new home sales data from November last week, which showed that November new home sales rose 16.9 percent from the previous month, but were still down 7.7 percent from November 2017.
Save the Date!
LIHTC prices remain steady

Worries that LIHTC prices would drop as a result of the recent tax overhaul did not pan out as they remained stable in 2018. Although LIHTC prices dropped after the 2016 election in anticipation of congressional Republicans reducing the top tax rate to 25 percent, they don’t appear to have dropped after the final tax reform bill was passed, which reduced the top rate to 21 percent. And investors are confident about LIHTC prices moving forward—Cohn Reznick partner Cindy Feng told the National Real Estate Investor that in 2019, “the market is going to be very strong.”
HUD announces agreement with NYCHA

Last Thursday, HUD announced an agreement with the New York City Housing Authority (NYCHA) to address issues with public housing conditions, including exposure to lead paint. As part of the agreement, a federal monitor will be appointed to oversee the authority and Mayor Bill de Blasio committed the city to spend $2.2 billion over the next decade to repair the city’s public housing complexes. House Financial Services Committee Chairwoman Maxine Waters issued a statement prior to this announcement opposing what the congresswoman described as “HUD’s efforts to take over” NYCHA. Public housing residents and advocates also expressed their concern with the plan.
Waters to re-introduce bill to address homelessness

House Financial Services Committee Chairwoman Maxine Waters will soon reintroduce the Ending Homelessness Act, which she originally introduced in 2016. The bill would, among other things, provide $1 billion in emergency relief grants and $500 million in rental assistance for individuals experiencing homelessness, as well as an additional $1 billion for the Housing Trust Fund. NHC strongly supports this bill, and we are working with members of Congress on both sides of the aisle to advocate for its passage. As NHC President and CEO David Dworkin said, “Our increasing homeless population is an indictment of our failure to address our growing affordable housing crisis. We strongly support Chairwoman Waters bill and look forward to working with her and her colleagues to end homelessness in America once and for all.”
Study finds that zoning change may lead to higher housing prices, no increased supply

A new study of zoning changes in Chicago casts some doubt on claims that reforming zoning codes to allow for greater density lowers housing costs by increasing the housing supply. The study, by Massachusetts Institute of Technology doctoral student Yonah Freemark, makes the counterintuitive claim that upzonings in Chicago actually had no effect on housing supply and resulted in increased housing prices, perhaps because developers took advantage of the new zoning codes to simply build more luxury housing. As Freemark cautioned to CityLab, however, the study does not show that “increases in the number of housing units won’t eventually lead to lower prices overall.” Yet it does add some complexity to the debate around zoning policy, in the wake of Minneapolis taking the unprecedented step of upzoning the entire city, and the state of Oregon considering doing the same.
OCC announces new senior deputy comptroller for bank supervision policy

On Feb. 5, the Office of the Comptroller of the Currency (OCC) announced Grovetta Gardineer will become its Senior Deputy Comptroller for Bank Supervision Policy upon the retirement of Grace Dailey on March 2, 2019.

“Grovetta brings deep policy experience and passion to this new role and has been an important voice on the OCC’s Executive Committee since becoming Senior Deputy Comptroller for Compliance and Community Affairs in March 2016,” said Comptroller of the Currency Joseph Otting in a news release.

In this role, Gardineer will direct the formulation of policies and procedures for the supervision and examination of national banks and federal savings associations as well as overseeing staff responsible for identifying, assessing,and communicating risk to the federal banking system. She will continue to oversee the units that made up the agency’s Compliance and Community Affairs functions as part of OCC’s Bank Supervision Policy business unit.

Gardineer has more than 31 years of experience in bank supervision, policy and regulation.
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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