Weekly update from the National Housing Conference
November 17, 2019
Feature Message I By Nathan Park
Dear Friend,

When Tropical Storm Imelda hit the southeast of Texas in September of this year, 2019 became the fifth consecutive year that the United States suffered from more than $10 billion dollars in damages due to natural disasters. Over the past four decades, natural disasters have cost the U.S. more than $1.7 trillion, a number that will continue to rise as climate change increases the likelihood that natural disasters will occur. Last month, however, San Francisco Bay Area residents experienced a different kind of climate emergency.

In October, an onslaught of dry, strong winds spurred investor-owned utility company Pacific Gas & Electric (PG&E) to announce planned blackouts just days before they were slated to occur. Two weeks later, another round of blackouts hit ratepayers. The two historic blackouts, which were announced for 800,000 and 940,000 PG&E customers respectively (totaling nearly 2.7 million people), were intended to mitigate the risk of PG&E’s electrical infrastructure causing fires. After declaring bankruptcy at the beginning of this year, PG&E was deemed responsible for the 2018 Camp Fire—which killed 84 people—in addition to 12 fires that burned the region in 2017. PG&E expects to continue large-scale blackouts for the next 10 years as they attempt to correct after decades of disinvestment in their infrastructure and other safety measures.

We have seen the tragic ways in which fires affect housing and resident stability. More than 200,000 have evacuated due to the Kincaid Fire. Over the past few weeks, we spoke with NHC member organizations that own and operate properties throughout Northern California, including BRIDGE Housing Corporation, Community Housing Improvement Program, Eden Housing, Enterprise Community Partners, The John Stewart Company, Non-Profit Housing Association of Northern California, Stewarts of Affordable Housing for the Future and Terra Search Partners. They substantiated reports that PG&E did not properly communicate to officials and residents when the blackouts would occur and who would be affected. This made preparations for the blackout difficult and uneven. But while nationwide reporting often added missteps in communication to the long list of failures by PG&E, our members expounded upon it as a source of anxiety and fear for impacted individuals.

Nathan Park
NHC Policy and Research Associate
News from Washington I By Tristan Bréaux and
Quinn Mulholland
OCC to release CRA overhaul in December

The Wall Street Journal reported on Thursday that the Office of the Comptroller of the Currency (OCC) plans to publish its overhaul of regulations under the Community Reinvestment Act (CRA) sometime in December. According to the report, the OCC plans to do so whether or not the other two federal bank regulators, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) are on board. In fact, Comptroller of the Currency Joseph Otting told the Wall Street Journal, while he is “very optimistic” the FDIC will join the proposal, he does not expect the Federal Reserve to do so, saying “at this point in time, we’ve just got to move forward.” Speaking at an American Banker conference on Tuesday, Otting indicated there was a disagreement between the three regulators over whether to reform the Camels ratings system, saying “I'm not sure that banks want the Camel ratings to change.” Federal Reserve Chairman Jerome Powell, meanwhile, made clear on Wednesday that he still wants to work with the other regulators on a “common answer,” saying at a Joint Economic Committee hearing, “we've been working very, very hard with the other two bank agencies to try to find common ground.”

NHC, the National Association of Affordable Housing Lenders, and the National Community Reinvestment Coalition led a coalition of organizations to encourage all three regulators to agree on a common NPR on CRA regulator actions; and that metrics for CRA activity should be workable, flexible, robust, and address community needs.
FHA releases 2019 Annual Report to Congress

On Thursday, the FHA released its 2019 Annual Report to Congress on the economic condition of its Mutual Mortgage Insurance Fund (MMI Fund). According to the report, the FHA MMI Fund Capital Ratio for FY 2019 was 4.84 percent, which was the highest ratio since 2007. In a call with reporters, FHA Commissioner Brian Montgomery said that, while the ratio shows the fund is healthy, it’s not high enough yet to cut premiums. “When do we think we’re at a sufficient level to make any adjustments to premiums? I don’t think we’re there yet, but it’s something we’re looking at overall,” Montgomery said. The report also showed that the FHA’s mortgage market share dropped from 12.3 percent in 2018 to 11.4 percent in 2019, and its share of borrowers who were first-time homebuyers remained steady at 83 percent.
HUD announces decline in veteran homelessness

HUD Secretary Ben Carson announced on Tuesday that veteran homelessness declined in 2019 by 2.1 percent, or around 800 fewer veterans experiencing homelessness. Carson cited the success of the HUD-VA Supportive Housing (HUD-VASH) program, which provides rental assistance from HUD and case management and clinical services from the VA. Several outlets also featured local initiatives to end veteran homelessness across the country last week in honor of Veterans Day. The Washington Post covered the opening of a new facility in D.C. for formerly homeless veterans. The San Jose Spotlight covered the announcement by a local nonprofit that 1,605 homeless veterans in Santa Clara County have been housed since 2015. And AL.com featured stories from homeless veterans in Alabama about their experiences.
Register today for #Solutions2019!
Use voucher code: nhchouser1931
Candidates unveil additional housing plans

Democratic presidential candidate Pete Buttigieg recently unveiled his economic agenda, which includes a plan to lower housing costs. The housing plan includes investing $430 billion in the Housing Trust Fund, Capital Magnet Fund, HOME and CDBG funds, and the Low Income Housing Tax Credit program to enable the construction or restoration of over 2 million housing units. The plan also mentions increasing funding for the housing choice voucher program and working with local governments to reform zoning laws that constrict housing construction. Meanwhile, Julián Castro unveiled a plan to help people with disabilities, which included the construction of at least 450,000 housing units accessible to people with disabilities. And Bernie Sanders introduced the Green New Deal for Public Housing Act on Thursday along with Representative Alexandria Ocasio-Cortez (D-N.Y.). The bill, which was co-sponsored by another Democratic candidate, Senator Elizabeth Warren, would create seven grant programs to upgrade public housing units through decarbonization and mixed-use development, as well as repealing the Faircloth Amendment, which outlaws new public housing units. Finally, Joe Biden released his infrastructure plan on Thursday, which calls for, among other things, building more climate-resilient homes and investing $20 billion in rural broadband infrastructure.
Financial Services Committee marks up affordable housing bills

The House Financial Services Committee held a markup on Wednesday of several bills related to housing, including a bill that would expand eligibility for the HUD-VASH program and a bill that clarifies that non-judicial foreclosure proceedings are covered by the law, both of which were approved by the committee on Thursday The committee also marked up a bill introduced by Representatives Tom Emmer (R-Minn.) and Bill Foster (D-Ill.) that would fix the Qualified Mortgage (QM) patch by allowing originators to rely on standards from the Qualified Mortgage Rule or from the FHFA in determining a borrower’s debt-to-income ratio. Elsewhere on Capitol Hill, Representative Yvette Clark (D-N.Y.) introduced the Affordable Housing and Area Median Income Fairness Act, which would change the way area median income is calculated by HUD to make it more targeted to smaller neighborhoods, rather than entire metro areas, among other things. And Representatives Jim Clyburn (D-S.C.), Alma Adams (D-N.C.) and Lacy Clay (D-Mo.) introduced legislation to eliminate loopholes in the Opportunity Zones program and terminate zones that are not low-income, which came under immediate criticism from Senator Tim Scott (R-S.C.), one of the original sponsors of the program.
Chart of the Week
Mortgage debt remains steady as housing equity increases

According to a recent Urban Institute blog post by Laurie Goodman and Michael Neal, homeowners’ mortgage debt level has remained stable for over a decade while housing equity has increased to a historic high. This is good news because in the run-up to the financial crisis, many homeowners cashed in on their home equity through home equity lines of credit (HELOCs), partially contributing to the crash.
What we're reading
In a long-form article published on Wednesday, Curbed took a deep dive into why homebuying is so embedded in the American dream, and the drawbacks of that. The article details the history of government programs to encourage becoming a homeowner, and how that does not serve everyone equally. Read the article here.

The Lewiston Tribune examined the affordable housing crisis in rural Idaho in an article published last weekend. According to the article, vacancy rates across northern Idaho are severely low, making it hard for people, especially those with mental illnesses, senior citizens, and the formerly incarcerated, to find housing. Read the article here.

In an op-ed for The Hill, Affordable Housing Tax Credit Coalition Executive Director Emily Cadik advocated for the passage of the Affordable Housing Credit Improvement Act. The bill, which NHC supports, would enable the construction or preservation of over 550,000 affordable homes over the next decade. Read the op-ed 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.
Defending our American Home since 1931
Copyright © 2019. All Rights Reserved.