Weekly update from the National Housing Conference
May 2, 2019
President's Message I By David M. Dworkin
Dear Friend,

Last week, I wrote about the important progress being made on modernization of the Community Reinvestment Act (CRA) and NHC’s four principles that any new rule must meet. We believe that any new CRA regulatory regimen must:

  1. Increase investment in communities that are currently underserved;
  2. Benefit more low- and moderate-income (LMI) people, particularly people of color, who live in those communities;
  3. Ensure that CRA lending and investment does not lead to displacement of the very people it is meant to help; and
  4. Make both bank performance and government enforcement more transparent and predictable.

The first three principles really go hand-in-hand. CRA is critically important to increasing investment in underserved communities. It is the heart of CRA’s original intent. But it is equally important that CRA investments also benefit low- and moderate- income (LMI) people, particularly people of color, who live in those communities. Otherwise, we risk the unsustainable practice of displacement, often called gentrification, where those intended to be helped by CRA are instead pushed out of their communities and forced to relocate somewhere else, creating new pockets of poverty that are devoid of investment, a cycle that can be repeated over and over again.

Enterprise Community Partners, one of NHC’s most active members, has launched a series of reports on gentrification and displacement. All investment in low-income communities is not gentrification. In fact, we want underserved communities to benefit from good jobs, good food and even good coffee. But CRA needs to help us find that balance, not tip the scale in favor of displacement. As Enterprise Community Partner’s President and NHC Board member Laurel Blatchford says, our objective should be investing “strategically in all communities so that low-income families do not have to choose between affordable housing and the other factors that contribute to a high quality of life.”

One recent study found that just 20 percent of all potentially gentrifiable tracts in the 50 largest cities in 2000 had gentrified by 2010, representing only 8 percent of all tracts in these cities and just 1.3 percent of all tracts nationwide. Another study by the National Community Reinvestment Coalition, also an active NHC member, found that Washington, D.C. had the highest intensity of gentrification of any city in the country. The study found that about 40 percent of D.C. neighborhoods eligible to gentrify did so.

As regulators begin their process of writing the first draft of a new CRA regulation, NHC will continue to be engaged with all three agencies. We encourage all our members to do the same, advocating for those elements of the regulations that you believe need reform or preservation. We also hope that you will join us in emphasizing these four key requirements of any change to CRA regulations. CRA has made significant progress in promoting responsible community lending and investment, but it has the potential to do much more. It’s up to us to see to it that CRA modernization increases investment in underserved communities while improving the lives of those who live there now.

David M. Dworkin
NHC President and CEO
News from Washington I By Tristan Bréaux and
Quinn Mulholland
May Restoring Neighborhoods Task Force meeting

The May Restoring Neighborhoods webinar is scheduled for Tuesday, May 14 at 3:30 p.m. EDT. The webinar will feature a presentation from Laurie Goodman, vice president of housing finance policy at the Urban Institute on cash out refinances. Cash out refinances are a two-edged sword. On one hand, they allow people to monetize their single largest asset— their home equity. On the other hand, cash out refinance mortgages have historically performed much worse than rate/term refinances and have been prone to abuses. Prudently underwritten cash out refinances, and other forms of home equity extraction will prove to be a very valuable tool, as more people retire with most of their wealth in their home. Register here.
Waters unveils $92 billion housing bill
House Financial Services Committee Chairwoman Maxine Waters unveiled a new bill last week that would invest over $92 billion in housing programs. The bill, entitled the Housing Is Infrastructure Act of 2019, includes $70 billion for the Public Housing Capital Fund, $19 billion for the Community Development Block Grant program, $5 billion for the Predisaster Hazard Mitigation Program, $5 billion for the Housing Trust Fund, and $1 billion for the Native American Housing Block Grant Program. The House Financial Services Committee held a hearing yesterday to discuss the legislation, at which NLIHC President and CEO Diane Yentel, NAHRO CEO Adrianne Todman, Steven Lawson of the NAHB, and Daryl Carter of NMHC and NAA testified. Also yesterday, Democratic congressional leaders Nancy Pelosi and Chuck Schumer announced that they reached an agreement with President Trump to spend $2 trillion on infrastructure after a meeting in the White House.
Homeownership rate drops for the first time in two years; black homeownership falls to record 41 percent

The U.S. homeownership rate fell to 64.2 percent in the first quarter of 2019, down from 64.8 percent in the fourth quarter of 2018, according to new data from the U.S. Census Bureau released last week. Black homeownership continued its decline, reaching a floor of 41 percent, the lowest the rate has been since segregation was legal prior to passage of the 1968 Fair Housing Act. Homeownership rates for non-white Hispanics fell to 47.4 percent, one percent lower than the Q1 2018, following an increase over the four preceding years ( see figure below)

This marked the first time in over two years that the homeownership rate has fallen, with younger buyers having the steepest decline in homeownership, down to 35.4 percent from 36.5 percent. This decline in homeownership “signals the difficulties many of those buyers continue to face in securing a down payment, finding a home in their budget or qualifying for a loan,” according to Zillow Director of Economic Research Skylar Olsen. Meanwhile, median asking rental prices have increased to an all-time high of $1,006, according to the Census data.
HUD delays down payment assistance changes after lawsuit

HUD announced last Thursday that it would delay plans to change the way it offers down payment assistance for FHA-backed mortgages after it was sued over the planned change. The lawsuit was brought by three organizations, the Cedar Band of Paiutes, the Cedar Band Corporation, and the CBC Mortgage Agency (CBCMA), which argued that the new rules would hurt the CBC Mortgage Agency’s down payment assistance program. “The harm that HUD inflicted on CBCMA and the members of the Cedar Band with this administrative action is staggering,” said Helgi C. Walker, the lead counsel for the groups suing HUD.
Study finds that middle-income seniors will be impacted by affordability crisis

According to a study published last week in the journal Health Affairs, more than half of middle-income seniors in the U.S. will struggle to afford housing in a decade. The study, by researchers from the University of Chicago, University of Maryland and Harvard, also found that the number of middle-income seniors in the U.S. will nearly double by 2029, and more than half of them will have annual financial resources of $60,000 or less. “The low-income cohort has been taken care of by tax subsidies, while the high-income cohort is largely self-sufficient. But the middle-income seniors have been ignored,” study co-author Beth Burnham Mace told Governing.
Fannie Mae poll reveals half of Americans can’t afford to live near better amenities

Last week, Fannie Mae released the results of a recent poll showing that 46 percent of Americans said they would rather live in a community with better schools or childcare but cannot afford to. Furthermore, according to the poll, 58 percent of respondents said they cannot afford to live in a community with better job opportunities. “When nearly 6 in 10 Americans have to sacrifice economic opportunities and nearly half have to sacrifice quality education and childcare because of housing affordability, it's clear we need to bring new ideas to the marketplace,” said Fannie Mae Vice President of Sustainable Communities Maria Evans.
Recent Press Statements
In recent weeks, NHC has released statements on HUD's undocumented immigration policy, funds released to the Housing Trust Fund and federal housing finance reform. View them below:

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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