Weekly update from the National Housing Conference
January 30, 2019
President's Message I By David M. Dworkin
Dear Friend,

As Washington, D.C. and the rest of the country begin to recover from the longest shutdown of most non-defense functions of the U.S. government, I’d like to share a few reflections with our members; a caution about the future of shutdown politics, and then move on to real policy making rather than manufactured crises. First and foremost, this shutdown will define the speakership of Nancy Pelosi and her future dealings with President Trump. Regardless of one’s political outlook, we are all served by the checks and balances that are the foundation of our Constitution. Speaker Pelosi gave us all a master class in political brinksmanship, negotiation and message discipline as well as a national civics lesson in the power of a co-equal branch of government and the office of the Speaker.

As I have said in past member notes and public comments, government shutdowns are bad for everyone and should never be a part of politics. Having said that, we can’t rule out that the president won’t choose to shut down the government again. NHC will be prepared to help our members, the people we all serve and federal workers navigate whatever comes in our mission to defend the American Home. Legislation to prevent future shutdowns has been proposed by Sen. Rob Portman (R-Ohio) and Sen. Mark Warner (D-Va.) in the Senate. Portman’s S. 104 would create an automatic continuing resolution to keep the government funded if appropriations bills are not completed on time. If no resolution is reached after the first 120 days, funding would decrease by 1 percent and would subsequently decrease by that amount every 90 days. Warner’s bill, S. 198, would automatically renew government funding except for the legislative branch and the Executive Office of the President, who would not be paid. In the House, similar legislation has been proposed by Reps. Brendan Boyle (D-Pa.) (H.R.696), Troy Balderson (R-Ohio) (H.R.791), Glenn Grothman (R-Wis.) and Dave Loebsack (D-Iowa) (H.R.797).

Returning to regular order, the Trump administration is widely reported to be close to launching its plan to reform the housing government sponsored enterprises, Fannie Mae and Freddie Mac. Last Thursday, Politico reported on the White House’s plan to announce a major overhaul of the housing finance system. The overhaul would end government control of Fannie and Freddie through administrative action rather than statutory reform, as efforts to do so in Congress have been stalled for over 10 years. In a recording obtained by Politico from a Jan. 17 staff meeting, acting FHFA Director Joseph Otting remarked, “In the next two to four weeks you’re going to be able to see some communication that comes out of the White House and Treasury that really sets a direction for what the future of housing will be in the U.S. and what the FHFA’s part of that will be.” On Friday, House Financial Services Committee Chairwoman Maxine Waters and Senate Banking Committee Ranking Member Sherrod Brown wrote a letter to Otting calling on him to explain the remarks. On Tuesday, the Wall Street Journal reported the White House is “playing down the idea the administration will seek to unilaterally release the firms from government control,” even though they expect to announce a framework for housing finance changes “shortly.” This is in line with my belief that the Trump administration will seek to leverage congressional action by slowly rolling out administrative changes. While conservatorship and some reforms can be accomplished administratively, legislation is required to address the most fundamental unresolved flaws in the housing finance system including paying for a government guarantee and preventing race to the bottom competition between Fannie Mae and Freddie Mac, which led to their conservatorship in the first place. I addressed these issues in two HousingWire articles on July 17, 2018 and July 24, 2018. NHC is convening a Housing Finance Reform Working Group in February and invite all interested members to join by contacting Tristan Bréaux at [email protected].

One final note, NHC’s membership drive is under way. We are grateful to all of you who have already renewed and ask the remainder to send your dues in as soon as possible. Second invoices will be sent out shortly. It is going to be a big year at NHC, and we look forward to working with you on issues that are critical to your work – and ours!
David M. Dworkin
President and CEO
National Housing Conference
News from Washington I By Tristan Bréaux
Coalition announces $500 million for affordable housing in the Bay Area

A coalition of Bay Area business leaders and foundations came together to announce a new $500 million fund for affordable housing in the region. The fund is backed by the Chan Zuckerberg Initiative, the San Francisco Foundation and the Ford Foundation, among others. The coalition aims to build or preserve over 8,000 affordable Bay Area homes over the next five to 10 years. This comes after Microsoft launched a similar $500 million housing initiative in Seattle on Jan. 16. In addition to the $500 million Bay Area fund, the Partnership for the Bay’s Future is also launching a separate fund of $40 million to help local municipalities change their housing policies to foster more affordable housing. “I think it really has come to a point where we all need to get together and really think about that complex, comprehensive solution that we need in the Bay Area for everyone to thrive, especially the most vulnerable,” said Priscilla Chan, co-founder of the Chan Zuckerberg Initiative.
U.S. home sales decrease dramatically, but look to turn around soon

New data from the National Association of REALTORS ® (NAR) indicated that home sales fell dramatically in December, declining 6.4 percent from November, and 10.3 percent from December 2017. According to NAR Chief Economist Lawrence Yun, the reason for this decline is somewhat of a mystery, but Yun cited declining consumer confidence as a potential explanation. Other possible reasons, according to a Zillow analysis, include stock market volatility and the government shutdown. However, with the shutdown over at least for now and the stock market surging, the housing market could be in for a “crazy spring,” as real estate broker JP Piccinini told the Denver Post.
Shutdown effects linger for USDA, HUD

After President Trump signed a bill to reopen the federal government for three weeks last Friday, Politico reported on the long-term repercussions of the shutdown for several agencies. Some programs funded by the USDA Rural Development program, for example, may be delayed for months, and HUD will have to contend with long backlog of expired contracts and requests for maintenance and repairs in public housing. As the National Association of Affordable Housing Lenders CEO Buzz Roberts told Politico, “I think this has been sort of a sobering experience for everybody — this whole concept of public-private partnerships requires that the government lives up to its expectations.”
Banking regulators close to finalizing private flood insurance rule

The FDIC and the Comptroller of the Currency have approved of the final version of a new rule, which would dictate that banks accept private flood insurance from borrowers seeking mortgages. The regulation, set to take effect on July 1, still must be signed off on by the Federal Reserve, the National Credit Union Administration and the Farm Credit Administration. The FDIC also published a staff memo summarizing the new rule.
Enterprise Community Partners launches initiative around health and affordable housing

Last week, Enterprise Community Partners, Inc. launched Health Begins with Home, a “national initiative to harness the power of affordable homes to create healthier families and stronger communities.” This initiative will invest $250 million over five years to promote affordable housing as a way to improve the health of communities and will focus on four areas:

  1. Research the connection between affordable housing and health.
  2. Increase partnerships between housing and healthcare organizations.
  3. Use data to improve policies.
  4. Preserve healthy, affordable homes.

According to Enterprise President Laurel Blatchford, “We’ve long seen the undeniable economic and environmental power of home. We know that bold, focused efforts can significantly improve outcomes, as we learned from how our Green Communities Criteria dramatically expanded development of green affordable housing.”
Members of Congress offer input on Opportunity Zones

Last Thursday, a bipartisan group of 16 members of Congress wrote a letter to Treasury Secretary Steve Mnuchin requesting more information about the Opportunity Zones provision of the recent tax overhaul. In the letter, the group—which included seven Senators and nine Representatives—urged the Treasury Department to include “basic transparency measures” in implementing the program. They also requested that the Trump administration change the requirement that companies in Opportunity Zones get 50 percent of their business from the zone.
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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