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Weekly update from the National Housing Conference
In this issue
June 7, 2020 I Issue 89-21

  • Housing industry groups stand in solidarity with protests against police brutality
  • FHFA publishes credit risk transfer tool, holds webinar on re-proposed capital rule
  • Eviction moratoriums expire, leaving tenants vulnerable
  • FHFA publishes final rule on the FHLBanks' housing goals
  • Chart of the Week: COVID-19 crisis causes state tax revenues to plunge
Find the information you need at NHC's COVID-19 Housing Resource Center
Five areas that demand action


Dear Friend,

Over the past twelve days, we have seen expressions of rage over persistent racial injustice evolve into growing agreement that the time for real change has come. This week we saw examples of America’s better angels and worst demons. In some cities, police embraced protesters and marched with them, in others they used military grade equipment and tactics to put down peaceful protests. In a few cities, they did both. Looting and arson by small groups of demonstrators have largely disappeared as the protesters themselves often intervene to keep the focus on justice. It is a seminal moment in our history, long overdue.

Converting this passion to real change, however, will be much harder, and require sustained effort. The failure of the Emmett Till Anti-Lynching Act to pass the Senate this week is one stark example. Senator Rand Paul (R-Ky.) blocked the bill’s unanimous consent which would have sent it to the White House with a veto-proof margin. While the bill will likely pass this week, it is over a century late. The first anti-lynching bill was introduced in 1918 and was also blocked by the Senate. Repeated attempts to pass similar legislation have failed over the subsequent 102 years. 

First and foremost on our national agenda is criminal justice reform. Physical safety is the foundation of a just society. At NHC, our attention has turned to the broader issue of economic justice. How thoroughly our nation has fallen short in this area is well documented and supported by almost every measure.

Today, I call your attention to five areas that demand action and are at the top of NHC’s priority list. Some are seemingly arcane regulatory matters, but all of them will have a profound impact on the real justice and equality we say we want.

  1. Passage of comprehensive rental assistance in the wake of the COVID-19 economic crisis. With 21 million Americans out of work, and many of the protections from eviction expiring along with enhanced unemployment benefits at the end of July, comprehensive rental assistance is essential to avoiding a human catastrophe this fall.
  2. Passage of a National Housing Act for the 21st century that includes a major investment in affordable housing construction. Housing has led America out of most of our past recessions. This was not the case in 2009-10, when homebuilders lost thousands of jobs due to a housing-related economic collapse, but as Federal Reserve Chair Ben Bernanke observed in 2011, “the housing sector has been a significant driver of recovery from most recessions in the United States since World War II.” #Housingisjobs
  3. Repeal the Office of the Comptroller of the Currency’s (OCC) final rule on the Community Reinvestment Act (CRA). The CRA was originally intended to incent banks to lend to underserved communities. The OCC’s rule is a cynical reversal of that design. NHC will work with the Federal Reserve Board and Federal Deposit Insurance Corporation (FDIC) to develop effective CRA modernization that we hope will ultimately be adopted by future leadership at the OCC.
  4. Stopping the Federal Housing Finance Agency (FHFA) from moving forward with its new capital standards for Fannie Mae and Freddie Mac. The proposed rule is an ideological assault on the housing economy and must be stopped. If implemented, this dangerous regulation will prolong the recession. It will also make it harder to close the black homeownership gap, one of the lingering wounds of the last recession. The proposed rule is an ideological assault on the housing economy and must be stopped.
  5. Reversing changes by the Department of Housing and Urban Development (HUD) that gut the disparate impact rule. As we stated in our October 18, 2019 comment letter to Secretary Ben Carson, “HUD has an existential obligation to affirmatively further fair housing through its actions and policy. Yet the proposed rule all but renders the disparate impact standard moot by establishing a near-impossible standard for plaintiffs to make disparate impact claims.”

These are just a few of the issues that demand our attention. We look forward to working with our members for impactful and sustainable change. Expressing our outrage is satisfying and important, but it will not make a difference on its own. The hard work lies ahead.
David M. Dworkin is President and CEO of the National Housing Conference.
News from Washington I By Quinn Mulholland
Housing industry groups stand in solidarity with protests against police brutality

As protests continued to sweep the nation last week in the wake of the police killings of Breona Taylor in Louisville and George Floyd in Minneapolis, many housing industry organizations issued statements standing in solidarity with the protestors and announcing renewed efforts toward racial justice in housing. National Association of Real Estate Brokers President Donnell Williams issued a call to action to “eliminate obstructive systemic barriers that hinder or preclude the increase of Black homeownership.” The staff of True Colors United and the membership of the National Youth Forum on Homelessness issued a statement saying the organization “denounces anti-Blackness, white supremacy, and state violence in the LGBTQ and homelessness movements, and in society as a whole.” The Urban Institute’s Housing Matters editorial team issued a statement renewing their commitment to anti-racism.

The protests of police brutality have shone a spotlight on fundamental racial divides in our society, including in the housing system. The homeownership rate for black residents of Minneapolis, for example, is one-third that of their white neighbors. A recent report from the Urban Institute showed that historically, economic downturns increase racial disparities in homeownership, and the COVID-19 pandemic is likely having the same effect. However, in an article for Shelterforce, Mirian Axel-Lute argued that affordable housing and community development organizations must go beyond talking about the systemic connections between housing injustice and other forms of racial injustice, and address the issue of police brutality directly.
FHFA publishes credit risk transfer tool, holds webinar on re-proposed capital rule

On Tuesday, the Federal Housing Finance Agency (FHFA) published a spreadsheet clarifying the capital levels Fannie Mae and Freddie Mac will have to retain for credit risk transfer (CRT) deals under its re-proposed capital rule, which the agency released on May 20. Bloomberg reported on Monday that the new capital rule could mean “higher costs for many mortgage borrowers, with the burden falling most heavily on those with less wealth and lower incomes,” citing economists and housing finance experts who argued that raising the amount of capital the GSEs must hold would lead to increased costs for borrowers in the form of higher interest rates.

The new capital rule comes as the government-sponsored enterprises (GSEs) take additional steps toward exiting conservatorship. On Tuesday, Freddie Mac appointed a new Chief Financial Officer, Christian Lown, whose experience Freddie Mac CEO David Brickman said in a statement “will be invaluable as we prepare our company to exit conservatorship.” Fitch Ratings, however, poured some cold water on the prospects for an imminent exit from conservatorship for the GSEs, releasing a report on Tuesday predicting an extended delay in the housing finance reform process as a result of the economic fallout from the COVID-19 pandemic.
Eviction moratoriums expire, leaving tenants vulnerable

Across the country, eviction moratoriums passed during the height of the COVID-19 crisis to protect vulnerable tenants are expiring, with eviction hearings resuming in states from Arizona to Wisconsin to Kansas . Some states and cities, including Florida , Washington , and Mountain View, California , extended renter protections including eviction moratoriums through June, and others, including San Diego , Illinois , and Iowa , passed measures to establish rental relief funds to help struggling tenants pay rent. However, tenant activists are warning that a tidal wave of evictions may be looming if more rental assistance isn’t enacted, with new data showing that June first-day rent collections were down from April and May. Already, eviction filings are skyrocketing in places where proceedings have resumed, like Texas. According to a recent report by the Brookings Institution, the looming eviction crisis is likely to disproportionately impact renters of color, particularly Black and Latinx renters, who have struggled to keep up with rental payments during the crisis.
FHFA publishes final rule on the FHLBanks' housing goals

On Wednesday, FHFA published a final rule on the Federal Home Loan Banks’ (FHLBanks) housing goals in the Federal Register. The final rule, which will take effect in 2021, will eliminate the retrospective evaluation using Home Mortgage Disclosure Act (HMDA) data, set a new small member participation housing goal for small institutions, and eliminate the $2.5 billion volume threshold, among other things. “By creating housing goal targets that are achievable for the Federal Home Loan Banks, the final rule helps ensure they make meaningful contributions to affordable homeownership,” FHFA Director Mark Calabria said in a statement. “This rule will expand responsible homeownership opportunities for underserved communities across the country.”
Chart of the Week
COVID-19 crisis causes state tax revenues to plunge

In a report published Monday, Urban-Brookings Tax Policy Center senior research associate Lucy Dadayan examined the impact that the COVID-19 pandemic has had on state tax revenues. Overall state tax revenues declined in 34 states and increased in 12 states as of April, according to the report, which could mean cutbacks on public services including housing assistance.
What we're reading
An article published Tuesday by ProPublica highlighted the plight of senior citizens in subsidized housing in Chicago during the pandemic. According to the article, a patchwork social support system for these seniors has resulted in tragic situations where at least seven have died alone, only discovered days after they were last seen alive. Read the article here .

On Wednesday, the Department of Housing and Urban Development (HUD ) and the Census Bureau released the findings of the latest Rental Housing Finance Survey. According to the report, 49% of the 48.2 million rental housing units in America are located in rental properties of one to four units, and of these small rental properties, roughly 73% are owned by individual investors. Read the report here .

Urban Institute researchers Eric Burnstein, Wilton Oliver and Carlos Martín published a blog post on Tuesday examining the risk posed by natural disasters to communities during the COVID-19 pandemic. According to the blog post, disparities in wealth and power, not just physical exposure, affect how communities will fare in the wake of disasters. Read the blog post 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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