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

A recent article in The Washington Post on “The ‘heartbreaking’ decrease in black homeownership” details many of the complicated issues that have contributed to African-American homeownership declining to a level lower than when the Fair Housing Act was passed in 1968. Yet, dangerous myths continue to undercut efforts to understand why this homeownership gap persists. It’s a subject that is the focus of a new working group of NHC members, which will develop concrete, practical strategies to reverse this trend, which continues to get worse. We hope you will join us in this important work.

Discrimination is most often cited as the reason for the decline, and while it is clearly embedded into the foundation of the problem, we also must be cognizant of the fact that historic changes in law and regulation have failed to have a meaningful and lasting impact on the homeownership rate. We also need to do a much better job of understanding the current drivers of the homeownership gap and the most impactful strategies to close it. To do this, we are also going to have to let go of some popular myths about what happened during the housing disaster of 2004-2014.

One of these myths is that the housing crisis was caused by efforts to help African-Americans become homeowners. This myth is dangerously misleading. Even the Post falls into this trap when it states that “enticed by relaxed lending policies and plenty of affordable housing, African-Americans purchased homes in record numbers at the peak of the housing bubble.” While the foreclosure crisis hit African-Americans particularly hardest, it was not because African-Americans became homeowners as the bubble inflated.

The fact is that the largest increase in African-American homeownership occurred between 1994 and 2001, when lenders across the country, encouraged by government sponsored investors Fannie Mae and Freddie Mac, sought out African-American first-time home buyers in record numbers. These were overwhelming responsible, well-documented, long-term fixed rate loans that performed well. As housing values rose, the equity wealth these loans created became a tempting target for cash-out refinancing. African-Americans were increasingly targeted for equity-stripping loans that appeared to cost little but were actually both expensive and risky. The chart below makes clear how the African-American homeownership gains that predated the crisis were wiped out in just a few years. We haven’t even begun to fully understand the impact this will have on an entire generation of mortgage-ready African-American renters deciding whether or not to become homeowners. 
David M. Dworkin
President and CEO
National Housing Conference
News from Washington I By Tristan Bréaux and
Quinn Mulholland
Investigation reveals racial and economic disparities in federal disaster aid

Federal disaster aid favors white and wealthy communities over communities of color and poor communities, according to an NPR investigation published yesterday. The investigation found that federal buyouts after disasters were disproportionately concentrated in white neighborhoods, and disasters like Hurricane Harvey in Houston exacerbate wealth inequality. “Cities are often very unequal to begin with. They're segregated and there are lots of income disparities, but what seems to happen after natural hazards hit is these things become exacerbated," Rice University professor James Elliott told NPR. On a similar note, a recent study from researchers at Arizona State and Georgia State found that Hurricane Katrina spurred gentrification in New Orleans.
Housing starts fall, but pending sales rise

New home construction fell 11.2 percent in December 2018, according to the latest numbers from HUD and the Department of Commerce. The resulting rate of 1.08 million homes per year built in December was the lowest since September 2016. In a related development, stock prices for Home Depot fell after the company reported lackluster earnings. Meanwhile, in a more positive sign for the housing market, the Census Bureau reported that new home sales rose 3.7 percent in December and new data from the National Association of REALTORS showed that pending home sales rose 4.6 percent in January.
Congress holds a spate of hearings on housing-related issues

Although most of the nation’s attention was focused on high-profile hearings involving Michael Cohen, several other congressional committees also held hearings last week on issues related to housing. On Tuesday, the House Appropriations Financial Services Subcommittee held a hearing on Community Development Financial Institutions and the House Financial Services Committee held a hearing on credit bureaus. On Wednesday, the House Budget Committee held a hearing on the 2017 Republican tax overhaul, the House Appropriations THUD Subcommittee held a hearing on fair housing and the House Financial Services Committee held a hearing on diversity in the financial services industry. And on Thursday, the Senate Agriculture Committee held a hearing on the 2018 farm bill, which touched on the USDA’s Rural Development programs.
Mortgage applications rise as rates hold steady

According to the Mortgage Bankers Association, mortgage application volume increased 5.3 percent last week as new Freddie Mac data showed that mortgage rates largely remained the same. Mortgage rates were 4.35 percent, the same as the previous week, marking a levelling off after an extended period of decline. Freddie Mac also released its February Forecast last week, predicting mortgage originations to continue to rise. Meanwhile, the mortgage fraud risk continued to increase in January, according to the most recent First American Loan Application Defect Index.
Oregon enacts first statewide rent control measure

Last Thursday, Oregon Governor Kate Brown signed a bill that would limit annual rent increases, making the state the first ever to enact a statewide rent control law. In a statement, Gov. Brown remarked, “This legislation will provide some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market, but it does not work alone. It will take much more to ensure that every Oregonian, in communities large and small, has access to housing choices that allow them and their families to thrive.” Some groups, however, opposed the measure, arguing it would only worsen housing problems. “While the intent of rent control laws is to assist lower-income populations, history has shown that rent control exacerbates shortages, makes it harder for apartment owners to make upgrades and disproportionally benefits higher-income households,” said National Multifamily Housing Council President Doug Bibby.
NHC in the News Recap
Pop Quiz With David Dworkin

by Donna Kimura, Affordable Housing Finance

David Dworkin says we’re long overdue for a national housing policy.

That’s why his organization, the National Housing Conference (NHC), is working to build bipartisan support for a comprehensive national policy in 2019 and 2020.

“Our new slogan is HR-1 in 2021,” he says. “We want the top priority of the next Congress and administration to be housing, and there’s a lot of work ahead to get us there.”

Dworkin became president and CEO of NHC last year after serving as a senior policy adviser at the Treasury Department, where he worked on housing and community development matters. He’s also served as a member of the White House’s Detroit interagency team, where his responsibilities included developing strategies to assist in the city’s revitalization.

Register for the March Restoring Neighborhoods webinar 

Join NHC on March 13 from 3-4 p.m. EDT for a webinar presentation from Frank Relihan, senior vice president of NorthMarq Capital, who will discuss The Conway Center. Owned and operated by the nonprofit So Others Might Eat, the recently completed project provides supportive and transitional housing and services to homeless individuals and at-risk families.

The Conway Center was a finalist for the Urban Land Institute’s 2018 Jack Kemp Excellence in Affordable and Workforce Housing Award. Register here.
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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