Weekly update from the National Housing Conference
December 15, 2019
Guest Member Note  I Rep. Lacy Clay
Dear Friend,

A strong leader and dedicated ally in the fight for fair and affordable housing, the Honorable William “Lacy” Clay has represented the 1 st district of Missouri since 2001. Representative Clay serves as the Chairman of the Financial Services Subcommittee on Housing, Community Development and Insurance and is a senior member of the Oversight and Reform Committee. We were proud to have him attend our Solutions for Affordable Housing’s Advocacy Day Breakfast on Capitol Hill and present his remarks as our weekly member note. - David

Thank you, Megan, and good morning everyone. Welcome to Washington.

First, I want to give a huge shout-out to your remarkable CEO, David Dworkin. David, thank you for your passionate advocacy for affordable housing and for your dedication to the cause of making fair housing a reality for millions of low-income Americans. I also want to thank your Board of Governors Vice Chair, Anne McCulloch, for all her leadership across the country. Thank you, Anne, for standing up for fair housing. And finally, I’d like to thank my good friends at the National Association of REALTORS for sponsoring today’s event.

As you heard, I’m the Chairman of the House Financial Services Subcommittee on Housing, Community Development and Insurance, and we’re on a mission to restore consumer protection, fair housing and a real chance to achieve the American dream to millions of working families—especially for the millions of qualified prospective minority home buyers who are often locked out of the market, and for the millions of low-income families who need access to quality, safe public housing across this country.

Like you, I’m also fighting to reform the housing finance system to ensure that underserved minority borrowers in our more challenged neighborhoods have access to mortgages, insurance, fair appraisals, and fair inspections to give them a real chance at homeownership. As your CEO David Dworkin stated so well, “The opportunity for Congress to find the bipartisan path forward on housing finance reform is to work with the administration on the parts of their plan they like, while holding a clear line against those that they oppose.”

In my view as Chairman, the Trump administration’s proposal to reform housing finance falls short of many of the important principles that Maxine Waters and I have demanded. We need to start by telling the truth: Fannie Mae and Freddie Mac didn’t cause the financial crisis. The financial crisis was driven by predatory lending, the private market packaging of those toxic, risky loans into securities; and then selling those securities to confused investors. 

News from Washington I By Tristan Bréaux and
Quinn Mulholland
OCC and FDIC announce new CRA regulations

On Thursday, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) announced a proposal to modernize regulations under the Community Reinvestment Act (CRA). The proposed changes would dramatically alter how and where bank activities are assessed under the CRA. The proposal did not garner the support of the Federal Reserve Board, which is expected to issue their own proposal in the coming weeks. In a statement, NHC President and CEO David Dworkin said “There is no question that CRA needs to be modernized, but the proposed approach is the wrong way to do it. After more than a year of consideration and 1,500 comment letters, the OCC and FDIC have come up with a formula-driven approach that almost nobody in the housing community supports and is rife with millions of dollars in hidden costs and enormous unintended consequences. This is a missed opportunity.”

House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) led a delegation of committee members attending the FDIC board meeting where the proposal was announced, saying in a statement, “We are concerned that the changes that the FDIC and OCC are considering to modify how the CRA is implemented will make it easier for banks to pass their CRA exams, weakening their obligation to responsibly serve communities across the country.” The OCC and FDIC’s Notice of Proposed Rulemaking only gave 60 days for the public to comment, despite a Wednesday letter from Waters, Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio), and House Financial Services Subcommittee on Consumer Protection and Financial Institutions Chairman Gregory Meeks (D-N.Y.) to the three federal bank regulators requesting at least 120 days to review the new regulations. 
Lawmakers introduce more housing-related legislation

On Thursday, Senators Michael Bennet (D-Colo.) and Rob Portman (R-Ohio) introduced the Eviction Crisis Act, which would create a national database to track evictions and establish an Emergency Assistance Fund to help tenants who are vulnerable to eviction. The bill was championed by the Opportunity Starts at Home campaign, which worked closely with senators Bennet and Portman in drafting the legislation, and of which NHC is a member. Additionally, Representative Rosa DeLauro (D-Conn.) recently introduced the Eviction Prevention Act, which would establish and fund a right to counsel for tenants facing eviction. And a group of Republican Senators led by Tim Scott (R-S.C.) recently introduced the IMPACT Act, which expand reporting requirements for investments in opportunity zones. 
Montgomery approved by Senate Banking Committee

At a Senate Banking Committee session on Tuesday, committee members voted to advance the nomination of Brian Montgomery to be Deputy HUD Secretary, the department’s number two position. The committee also advanced the nomination of David Woll as Assistant Secretary of HUD for Community Planning and Development and John Bobbitt as Assistant Secretary of HUD for Administration. In a statement released after Montgomery’s nomination to the position in October, HUD Secretary Ben Carson praised Montgomery’s work as FHA commissioner, saying, “Brian brings tremendous experience to our team and has been a strong voice in the effort to reform the Nation's housing finance system.”
Gathering together is where the real change starts to happen

NHC"s Emerging Leader in Affordable Housing (ELAH) member Olivia Barrow of the Low Income Investment Fund discusses her experience at #Solutions2019.

For the past three years, I’ve attended NHC’s Solutions for Affordable Housing convening. This year offered another fantastic opportunity to network with industry leaders and engage in the broad swath of policy topics that define the challenges and opportunities of our current policy environment.

The Low Income Investment Fund (LIIF) is a national community development financial institution (CDFI) and proud member of NHC. As LIIF’s Policy Officer, I work closely with the NHC team on a range of federal policy issues, from increasing the supply of affordable rental housing to regulatory changes to the Community Reinvestment Act (CRA). I am also a proud member of NHC’s Emerging Leaders in Affordable Housing group .

I have worked with NHC on a variety of issues over several years, yet I was still struck by the comprehensive line-up of topics covered at this year’s Solutions convening. NHC’s eagerness to take on the full range of housing-related policy challenges – from housing finance reform and homelessness, to the black homeownership gap and climate impact – is the type of enthusiasm necessary to address the nation’s vast housing affordability challenges. And NHC’s ability to convene the nation’s leading experts on such a diverse array of issues is what makes events like Solutions worth attending.

GSEs cut down on riskier loans

The Wall Street Journal reported last week that Fannie Mae and Freddie Mac are curbing the proportion of loans they back to borrowers with small down payments as well as other types of loans aimed at lower-income borrowers. This, according to the report, is a result of an initiative by the FHFA to rein in risk as the agency prepares to release the GSEs from conservatorship. “Some of this really is a reflection of the increased emphasis and focus on: let’s do what we need to do to get out of conservatorship,” FHFA Director Mark Calabria told the Wall Street Journal in an interview. Fox Business previously reported that the FHFA is searching for a Wall Street adviser to help with a public offering of the shares of the GSEs.
HUD awards $197 million for affordable housing in Native American communities

HUD announced $197 million in grant awards to 52 Native American Tribes and Tribally Designated Housing Entities for affordable housing projects. The announcement came at the 2019 National American Indian Housing Council Legal Symposium in Las Vegas. The grants will be awarded through HUD’s Indian Housing block Grants program and will fund roughly 1,200 new units in Native American communities from Alaska to Mississippi. Congressional lawmakers also recently introduced a bill that would reauthorize the Native American Housing Assistance and Self-Determination Act of 1996 through 2024, allowing Native American communities to continue to access federal affordable housing programs, among other things.
Look out for our next Member Brief on Jan. 12, 2020!
Lawmakers reach spending deal

On Thursday, lawmakers announced they struck a deal in principle for a $1.3 trillion spending package for 2020 ahead of the Dec. 20 deadline to avoid a shutdown. The announcement came from House Appropriations Committee Chairwoman Nita Lowey (D-N.Y.) and Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) after a meeting with Treasury Secretary Steven Mnuchin. House leaders said they aim to bring the package to the floor on Tuesday, with the Senate in line to approve it later in the week. Specifics have yet to emerge about specific funding levels for HUD and the USDA, but in a Dec. 6 interview with Roll Call, House Appropriations Subcommittee on Transportation and Housing and Urban Development (T-HUD) Chairman David Price (D-N.C.), who oversees the T-HUD spending bill, said, “Our bill is looking good. We’re concerned about policy provisions, we haven’t been able to resolve all of those, but that’s always the way it is.”
What we're reading
In an article published recently in the American Journal of Public Health, researchers from the Columbia Mailman School of Public Health reviewed the state of research on the link between housing and health. The researchers found that these links span across four pillars: stability, affordability, quality and safety and neighborhood opportunity. Read the full journal article here.

In an in-depth article published on Tuesday, Vox examined why so many landlords discriminate against people with Section 8 vouchers. According to the article, despite many cities passing legislation outlawing this type of discrimination, it remains rampant. Read the article here.

Low Income Investment Fund’s Policy Officer and NHC Emerging Leaders in Affordable Housing member Olivia Barrow analyzed recent research on CRA modernization. Barrow found three themes: who does and should benefit from CRA, the need to appropriately account for the growing number of branchless banks and the need for more and better data. Read her blog post here.

A recently published report from the California Legislative Analyst’s Office found that California faces a severe threat from sea-level rise related to climate change. The report suggests the state must build 100,000 more housing units annually in coastal cities to mitigate affordability problems caused by sea-level rise. Read the full report here.
Chart of the Week
Investors raise $4.5 billion for opportunity zones

According to the Novogradac Opportunity Funds Listing, investors reported raising almost $4.5 billion in funds to invest in opportunity zones. As the Dec. 31 deadline for investments to receive the maximum tax benefit approaches, Novogradac reported that most of the Opportunity Funds focused on mixed or residential developments.
The week ahead
Monday, December 16

Wednesday, December 18

Thursday, December 19
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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