Weekly update from the National Housing Conference
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In this issue
May 31, 2020 I
Issue 89-20
- OCC releases final CRA rule, Otting resigns
- FHFA releases capital rule for GSEs
- FHFA announces refinance and home purchase eligibility for borrowers in forbearance
- Wyden outlines affordable housing priorities for next stimulus package
- House, Senate committees hold hearings on COVID-19 and housing
- NAEH releases 2020 ‘State of Homelessness’ report
- GSEs unveil LIBOR transition resources
- Chart of the Week: Nearly one-fifth of vulnerable households in small buildings may have difficulty paying rent
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Find the information you need at NHC's COVID-19 Housing Resource Center
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Praying for peace while working for justice
Dear Friend,
As I write this note, many of America’s cities are consumed with unrest as thousands protest the
killing of another unarmed African American by police. But no one should mistake these events as a reaction to the murder of George Floyd in Minneapolis. It is a reaction to countless assaults and humiliations experienced by over 40 million Americans every day, in plain sight, with no one looking. I can’t begin to imagine how that feels, because I don’t have to. This kind of thing doesn’t happen to people like me, and that’s part of the problem. It should never happen to anyone.
When President Barack Obama was elected President in 2008, it was easy to believe that we as a nation had turned a corner in our racial relations. Today we are reminded how thin the veneer of progress can be and how easily it can be ripped apart. But there is still hope. Genesee County Sheriff Chris Swanson took off his helmet and baton and
joined protesters in Flint, Michigan, exclaiming, “these cops love you,” and asking, “you tell us what you need us to do.” The crowd’s response: “Walk with us!” And they did. It’s the exception, not the rule, but it is a vision of what our society can look like – if we work for it.
All of this is occurring in the midst of the worst pandemic the world has seen in 100 years, and the worst economic disaster in over 80 years. One in five Americans is out of work and more are likely to lose their jobs before things get better.
Hanging on the wall of my office is a plaque with a pen President Lyndon Johnson used to sign the
Housing and Urban Development Act of 1968. That historic law was passed following three years of civil unrest, including devastating riots in Washington, D.C. in the wake of the murder of Dr. Martin Luther King, Jr. The act called for the construction or rehabilitation of 26 million housing units, 6 million of these for low- and moderate-income families, over the next ten years. While major advances were made, that goal was never met.
As we watch the horrifying images on TV this week and ask ourselves what we can do, it is useful for us to remember that social justice and economic justice go hand in hand. As
Minnesota Attorney General Keith Ellison said on FOX News Sunday today, “people are upset for a reason.” No human being should have to die like Mr. Floyd, and no parent should have to fear that their son or daughter could suffer the same fate for no reason whatsoever. Yet every one of my friends who are not white live with that fear every day. It is equally true that no one should have to live on the street, or die of COVID-19, in part because they were denied adequate health care for their entire life. These are all basic human rights.
As members of the National Housing Conference, our mission is clear. We need to pass new landmark housing legislation for the 21
st century that finally fulfills the goal of providing “a decent home and suitable living environment for every American family.” This has been our objective for the past year, and we have made significant progress working with our members to draft proposals to achieve it. We shouldn’t fool ourselves into thinking that anything about this is going to be easy. It won’t be. But it has never been more important.
Please be healthy and safe, and join me in praying for peace while working for justice.
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David M. Dworkin is President and CEO of the National Housing Conference.
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Recapping the 2020 Solutions for Housing Communications virtual convening
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On May 27, NHC held our
Solutions for Housing Communications
virtual convening. This event was originally scheduled to take place in March at the National Press Club. In light of the COVID-19 pandemic, NHC took the necessary steps to cancel the in-person event, but still wanted to bring people together to take part in important discussions around messaging, marketing and advocacy strategies to build support for affordable housing. We thank everyone for joining us via Zoom, especially all of our speakers and special keynote speakers
Grovetta Gardineer
, senior deputy comptroller for bank supervision policy for the Office of the Comptroller of the Currency (OCC), and
Conor Dougherty,
New York Times economics reporter and author of “Golden Gates: Fighting for Housing in America.” During her opening remarks, Gardineer noted that there will be a “significant transition period” and that examinations under the new framework will not be implemented until 2023.
To read brief recaps of all the sessions during the conference,
click here.
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News from Washington I
By Quinn Mulholland
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OCC releases final CRA rule, Otting resigns
On May 20, the Office of the Comptroller of the Currency (OCC)
released a final rule on the Community Reinvestment Act (CRA). The final OCC rule, Comptroller Joseph Otting wrote in
an op-ed for the American Banker, “will make evaluating national banks and federal savings associations for CRA performance more objective and transparent,” and “will encourage those banks to lend, invest and provide more services to the communities they serve, including low- and moderate-income (LMI) neighborhoods, across the country.” The Federal Deposit Insurance Corporation (FDIC), which joined the OCC for the
Notice of Proposed Rulemaking (NPR) on CRA in January,
announced that it would not join the agency for the final rule. In her remarks for NHC’s Solutions for Housing Communications, which convened on May 27, Grovetta Gardineer, senior deputy comptroller for bank supervision policy for the OCC, shared the updates will become effective this October; however, examinations will not be fully implemented until 2023. Despite the absence of the Federal Reserve and FDIC’s participation in the final rule, Gardineer said the agencies were aligned in the need for CRA change.
In a
statement
, NHC President and CEO David Dworkin criticized the final rule, saying, “Banks, regulators, and community groups must be singularly focused on responding to this unprecedented crisis and not on bureaucratic and regulatory diversions that will sidetrack essential resources from the task at hand.” In
an interview
with The New York Times, Dworkin was asked if the intent of Comptroller Otting was to gut CRA. “There are many people who believe that he wanted to gut C.R.A.,” he said. “I can’t make that judgment, but I can say that what he has done will gut it.”
Comptroller Otting also
announced his resignation on May 20 in a conference call with agency employees. OCC Chief Operating Officer Brian Brooks
became acting comptroller on Friday.
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FHFA releases capital rule for GSEs
On May 21, the Federal Housing Finance Agency (FHFA)
announced an NPR establishing a new regulatory capital framework for Fannie Mae and Freddie Mac. The proposed rule is a re-proposal of the NPR published in June 2018 under former FHFA Director Mel Watt and would require the government-sponsored enterprises (GSEs) to retain 4% of their assets in capital, which would have amounted to roughly $240 billion last year, once they are released from conservatorship. In
a statement, House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.) praised the NPR, saying, “stronger capital requirements for Fannie Mae and Freddie Mac will set a solid foundation to responsibly move the Enterprises out of government conservatorship.” Comments on the NPR are due July 19 and can be submitted
here.
In another move geared towards preparing for release from conservatorship,
Fannie Mae and
Freddie Mac issued requests for proposals to hire financial advisors to assist in developing and implementing a plan for recapitalization. “While we are fulfilling our mission and helping to keep people in their homes during this national emergency, we also remain committed to ensuring a responsible exit from conservatorship,” Fannie Mae CEO Hugh R. Frater said in a statement. “Today's announcement is a significant step on that path, and we look forward to making a timely selection in the competitive process.”
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FHFA announces refinance and home purchase eligibility for borrowers in forbearance
FHFA
announced on May 19 that
Fannie Mae and
Freddie Mac will allow borrowers in forbearance to refinance their loan or buy a new home if they are current on their mortgage or if they have made three consecutive payments under their repayment plan. “Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said FHFA Director Mark Calabria in a statement. “Today's action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.” The announcement comes as concerns grow that some borrowers have been
put in forbearance plans without requesting them and that forbearance
may have a negative impact on their credit scores.
Fannie Mae and
Freddie Mac also unveiled new initiatives on Tuesday to help consumers affected by the pandemic. The initiatives, called “Here to Help” and “#HelpStartsHere,” will connect struggling homeowners and renters with educational resources and other tools to help them make their mortgage and rent payments.
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Wyden outlines affordable housing priorities for next stimulus package
Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) recently
unveiled a list of policy priorities to preserve and expand affordable housing to be included in the next COVID-19 relief bill. The policies, which all pertain to the Low Income Housing Tax Credit (LIHTC), include regulatory relief to allow LIHTC projects to continue, a 4% floor for LIHTC, and emergency assistance to help LIHTC tenants remain housed. “This country needs more affordable housing, not less, and Congress can’t allow this crisis to foster homelessness and further reduce the supply of affordable housing,” Wyden said in a statement. The ACTION Campaign, which NHC is a part of,
has previously called for many of the policies Wyden outlined to be enacted. The campaign, along with the Seattle Office of the Mayor,
circulated a letter last week signed by mayors across the country calling for Members of Congress to include provisions that support the Housing Credit in the next COVID-19 response package.
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House, Senate committees hold hearings on COVID-19 and housing
In the past two weeks, several House and Senate committees have held virtual hearings and roundtables on aspects of the COVID-19 pandemic related to housing. On May 19, the Senate Banking Committee held
a virtual hearing on the CARES Act with Treasury Secretary Steve Mnuchin and Federal Reserve Board of Governors Chairman Jerome Powell. In the hearing, Powell testified that the Federal Reserve’s decision in March to purchase mortgage-backed securities
helped to stabilize the mortgage market, saying, “With these purchases, market conditions improved substantially, and thus we have slowed our pace of purchases.” On May 22, the House Financial Services Subcommittee on Housing, Community Development, and Insurance
held a virtual roundtable on the impact of COVID-19 on the U.S. housing market with National Low Income Housing Coalition President and CEO Diane Yentel, Mortgage Bankers Association Vice Chairman Kristy Fercho and Brookings Institution fellow Jenny Schuetz. In his opening remarks at the roundtable, Subcommittee Chairman Lacy Clay (D-Mo.)
remarked, “We need to be sure that our response to this crisis includes lessons learned from the 2008 financial crisis.” And on Wednesday, the House Ways and Means Committee
held a hearing on the disproportionate impact of COVID-19 on communities of color, which included a discussion of social determinants of health like housing.
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NAEH releases 2020 ‘State of Homelessness’ report
The National Alliance to End Homelessness (NAEH) recently
released the 2020 edition of its “State of Homelessness” report, which showed that 567,715 people in America were experiencing homelessness on a single night in January 2019, 37% of whom were unsheltered. The report examines the risks posed by the COVID-19 crisis to the homeless population, with over 200,000 homeless individuals over the age of 50. In
an accompanying blog post, Joy Moses, NAEH homelessness research institute director, wrote, “Expected growths in the homeless population growth will add further strain to emergency services – services that already weren’t meeting the needs of people experiencing unsheltered homelessness, years before the crisis began.”
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GSEs unveil LIBOR transition resources
On Thursday,
Fannie Mae and
Freddie Mac launched new websites to provide resources for lenders and investors on the transition away from the London Interbank Offered Rate (LIBOR). “To protect our nation’s housing finance markets, FHFA has directed the entities we regulate to transition away from LIBOR,” FHFA Director Mark Calabria said
in a statement. “These resources will help market participants to likewise move away from LIBOR in a safe and sound manner.” The GSEs’ websites provide resources including a transition playbook, frequently asked questions, and recommended actions to help support products linked to the Secured Overnight Financing Rate (SOFR), the new reference rate. In
a statement, Alternative Reference Rates Committee (ARRC) Chair Tom Wipf applauded the websites, adding, “We encourage other institutions to follow this exemplary model the GSEs have set in establishing specific transition plans.”
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Nearly one-fifth of vulnerable households in small buildings may have difficulty paying rent
In
a recent blog post,
Harvard Joint Center for Housing Studies research associate Whitney Airgood-Obrycki and research analyst Alexander Hermann examined the potential for rent shortfalls in small multifamily buildings. According to their research, 15% of renters with at-risk wages living in buildings with 2-4 units would face rent shortfalls and an additional 4% would be severely burdened by rent payments.
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An article in the
New York Times highlighted the possibility of an impending wave of evictions as moratoriums expire across the country and renters continue to struggle to make rent payments. Without new rental relief, according to Columbia Law School professor Emily Benfer, “we will have an avalanche of evictions across the country.”
Read the article here.
The
Harvard Joint Center for Housing Studies and the
Brookings Institution recently published the second installment of a series on innovations in design and construction. The report highlights the ways flexible zoning and streamlined procedures can make housing more affordable.
Read the report here.
A recent
Michigan Radio story examined the poor housing conditions faced by seasonal migrant workers in farms across the country. In response to the COVID-19 pandemic, farmworker advocates are calling for stricter housing standards to keep farmworkers safe.
Read the article here.
On Thursday, the
National Low Income Housing Coalition and the
Public and Affordable Housing Research Corporation released a report on the federal government’s role in building and preserving affordable rental homes. According to the report, nearly 300,000 may be lost from the nation’s affordable stock in the next five years.
Read the full report here.
In an article published Saturday,
Washington Post
reporter Renae Merle reviewed key information for renters and homeowners on making June rental and mortgage payments. In the article, NHC President and CEO David Dworkin advised homeowners reaching out to their mortgage servicers to "document every conversation and follow up in a letter or email noting what was discussed in your phone call."
Read the article here
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Monday, June 1
Tuesday, June 2
Wednesday, June 3
Thursday, June 4
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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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Defending our American Home since 1931
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Copyright © 2020. All Rights Reserved.
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