Weekly update from the National Housing Conference
October 13, 2019
President Message I By David M. Dworkin
Dear Friend,

As housing prices rise and Washington policymakers move forward on housing finance reform, it is both tempting and dangerous to believe the federal government is getting ready to expand its exposure to risky mortgages, leading to another housing bubble and taxpayer bailout. It is a familiar and false narrative that is supported by fear, not facts.

In his recent article , “Federal Government Has Dramatically Expanded Exposure to Risky Mortgages” Washington Post reporter Damian Paletta attempts to make this case, quoting several former officials like Dave Stevens and Ed Golding out of context, while completely misrepresenting the extensive body of research by the Urban Institute .

The truth is that the exact opposite is the case. Tight credit, high development and lending costs, restrictive zoning and exorbitant development fees are driving us into a new housing crisis that will be nothing like the last one. Pretending that the next crisis will be like the last one avoids the hard work of developing new, impactful and sustainable solutions to our current affordable housing supply crisis.

David M. Dworkin
NHC President and CEO
News from Washington I By Tristan Bréaux and
Quinn Mulholland
Brian Montgomery nominated to serve as HUD Deputy Secretary

President Trump nominated FHA Commissioner Brian Montgomery to be HUD’s Deputy Secretary, the second most senior position in the agency, on Tuesday. Montgomery has held the position on an acting basis since former HUD Deputy Secretary and former NHC Board member Pam Patenaude stepped down at the beginning of this year. In an interview with the M Report, NHC President and CEO David Dworkin said of Montgomery, “His vision of modernizing the critical infrastructure of the FHA is essential to successfully serving all Americans with affordable and responsible mortgage financing while protecting both borrowers and taxpayers from avoidable risk. He will be a valuable voice within the administration and in the housing community as a whole.” HUD Secretary Ben Carson also praised Montgomery in a statement, 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. As Federal Housing Commissioner, Brian made certain FHA remains a stable and reliable resource for first-time and minority homebuyers, and other underserved borrowers while protecting the interests of taxpayers."
California governor signs new housing laws 

California Governor Gavin Newsom signed a host of bills last week aimed at addressing the state’s affordable housing crisis and mitigating its impacts. One bill, perhaps the highest-profile, will cap yearly rental increases for buildings built 15 or more years ago or owned by corporations or institutional investors to 5 percent plus inflation. The bill  was criticized  by many landlords in the state, who said that it may force them to raise rents more frequently. However the California Apartment Association and the California Building Industry Association did not lobby against the bill, which was supported by many NHC members, including NHC Board Chair Linda Mandolini, president and CEO of Eden Housing, one of the state’s largest affordable housing developers. Many traditional supporters of rent control supported or refrained from actively opposing the bill because it focuses on rent gouging and displacement, rather than market control. Newsom also signed several other bills into law, including  a package  that would aim to incentivize more housing construction, a bill that would outlaw discrimination against Section 8 voucher holders, and a bill legalizing public banking, which could be used spur affordable housing.
Bennet, O’Rourke unveil housing plans

Democratic presidential candidates Michael Bennet and Beto O’Rourke introduced their plans to address the nation’s affordable housing crisis. Bennet's plan calls for supporting the construction or refurbishment of almost 4 million affordable units through transit oriented-development, disincentivizing exclusionary zoning codes, and expanding programs like the Low Income Housing Tax Credit (LIHTC), the Housing Trust Fund, and the Capital Magnet Fund. The plan also calls for fully funding the Section 8 voucher program, providing down payment assistance, and creating a loan fund for smaller mortgages. O’Rourke’s plan focuses on helping families gain access to homeownership through a new matched savings program and Public Credit Reporting Agency. O’Rourke’s plan would support the construction of 6 million housing units through a $400 billion investment in the National Housing Trust Fund and a $60 billion investment in the Capital Magnet Fund, in addition to rehabilitating the nation’s public housing and rural housing stock and eliminating homelessness through increased Section 8 vouchers and McKinney-Vento Homeless Assistance Grants.
Chart of the Week
White-Latinx homeownership gap narrows slightly, but remains large

According to recent research from Zillow, despite the fact that Latinx people are becoming homeowners at a higher rate than the overall U.S. population, the homeownership gap between whites and Latinxs remains large. The report also found that Latinx households report that discrimination remains an obstacle to homeownership.
USDA invests $152 in expanding rural broadband access

On Monday, USDA Deputy Under Secretary for Rural Development Donald LaVoy announced that the agency will invest $152 million expanding rural access to broadband service. The investment will fund 20 projects in 14 states and will be made through the Community Connect Grant Program, the Telecommunications Infrastructure Loan Program, and the Rural Broadband Access Loan and Loan Guarantee Program. Also last week, the Brookings Institution published a report on what states, rather than the federal government, can do to facilitate the expansion of rural broadband service.
CFPB issues final HMDA rule

On Thursday, the Consumer Financial Protection Bureau (CFPB) issued its final rule on the Home Mortgage Disclosure Act (HMDA). The new rule would extend the higher threshold of 500 open-end lines of credit for lenders who have to report data under HMDA. The rule comes after CFPB relaxed other aspects of the law last year, excluding some data from the set that is publicly disclosed under HMDA. In its press release, the agency said it would issue a separate final rule in 2020 addressing the permanent coverage thresholds for closed-end mortgage loans and open-end lines of credit, which were also addressed in the May 2019 Notice of Proposed Rulemaking.
What we're reading
In an article published last weekend, the Tampa Bay Times examined roadblocks to affordable housing construction. The article found that affordable housing developers often face hurdles such as zoning regulations, complex requirements for grants, and NIMBY protesters. Read the article here.

A recently published study by researchers from Columbia University and Boston University found that Medicaid expansion in California was associated with a reduction in evictions. The researchers found that this effect was highest in counties with more uninsured residents prior to expansion. Read the study here.

ProPublica published an in-depth article on Thursday examining the effect of the cap on deductions for state and local taxes under the 2017 tax overhaul on homeowners. According to the article, this cap inflicted a trillion dollars of damage on homeowners across the country. Read the article 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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