Weekly update from the National Housing Conference
September 12, 2018
President's Message I By David M. Dworkin

Last week, we saw the first bipartisan movement on housing finance reform in many years. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) joined Reps. John Delaney (D-Md.) and Jim Himes (D-N.Y.) to introduce the Bipartisan Housing Finance Reform Act. The approach would eliminate Fannie Mae and Freddie Mac, moving most of their functions into Ginnie Mae. It would not, however, include enforceable mechanisms to serve the entire market of renters and qualified homebuyers, including underserved markets and manufactured housing. 

Hensarling’s bill would also eliminate the Capital Magnet Fund (CMF) and the Housing Trust Fund (HTF), both of which were expanded in the last bipartisan effort to complete housing finance reform. These funds are desperately needed to address the housing affordability crisis and must be a part of any viable resolution. As longtime NHC board member and one of the national thought leaders on housing finance reform Barry Zigas noted, both Reps. Hensarling and Delaney are retiring from Congress at the end of 2018 and “there is no chance” their bill will advance “any time soon.”

So 10 years following the placement of Fannie Mae and Freddie Mac into conservatorship, housing finance reform remains the unfinished business of the Great Recession. It’s time for a new approach to housing finance reform – but not new principles. It is noteworthy that nearly five years after they were adopted, NHC’s housing finance reform principles are as relevant and timely as ever. These include a government guarantee of mortgage-backed securities to attract private capital, equal access for large and small lenders through multiple capital channels and targeted housing assistance mechanisms, including continued funding for the CMF and HTF. 

Last week, NHC joined 28 national housing organizations to call for an end to conservatorship combined with legislation that locks in recent reforms for the GSEs. The statement, which NHC helped draft, urges policymakers to “protect taxpayers, provide liquidity and promote stability while taking care not to roll back aspects of the GSEs’ operations that are supporting the foundation of the housing market.” The statement was signed by a broad range of organizations including the Mortgage Bankers Association, the National Association of REALTORS®, the National Association of Home Builders, LISC, Enterprise Community Partners and the Center for Responsible Lending, among others. It made clear that any effort to change the existing role of the GSEs “must also include enforceable mechanisms to serve the entire market of renters and qualified homebuyers, including underserved markets and manufactured housing.”

It is increasingly clear that the only viable solution to this 10-year long stalemate may be to release the GSEs from conservatorship and amend their charters to ensure that we fix what remains broken in the housing finance system. This will require both bold action and bipartisan support. NHC is uniquely qualified to lead this effort, and we are asking our members to join us in a Housing Finance Reform Working Group to develop and execute a strategy to stabilize and revitalize our housing finance system. To join this initiative, email me directly at davidmdworkin@nhc.org. I look forward to working with you. If you are not currently a member and would like to participate, you can join online here.

David M. Dworkin
President and CEO
News from Washington I By Kaitlyn Snyder & Nathan Park
Major financial regulators to testify on Senate regulatory reform

The Senate Committee on Banking, Housing and Urban Affairs is holding a full committee hearing on the Implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act ( S. 2155), which was signed into law in May. The hearing is scheduled for Sept. 13 at 10 a.m. EDT in the Dirksen Senate Office Building in room 538, and via webcast. Witnesses include: Randal Quarles of the Board of Governors of the Federal Reserve System, Comptroller Joseph Otting of the Office of the Comptroller of the Currency, Chairman Jelena McWilliams, chair of the Federal Deposit Insurance Corporation and Mark McWatters, chair of the National Credit Union Administration. 
Low Income Housing Tax Credit costs in line with market, new study finds

Rental unit construction costs financed with equity from the the Low Income Housing Tax Credit (LIHTC) are roughly the same as overall apartment development costs, according to a report by Abt Associates. Changes in development costs, such as costs of land and labor, are affected by market forces, are not regulated by state agency administrations but severely impact the cost of development. The report points to LIHTC financing requirements for the slightly higher costs of constructing LIHTC apartments. The report data, which spans from 2011 to 2016, shows that overall construction costs grew more rapidly overall than construction costs for LIHTC properties.
Report: Preserving rural affordable housing

Significant numbers of Section 515 properties will no longer be affordable as the loans mature in the next few decades, according to a new report on the rural affordable housing crisis released by the Housing Assistance Council . Over 13,000 rental properties and 415,000 affordable units throughout rural America are financed by the U.S. Department of Agriculture (USDA) through its Rural Rental Housing Loans program, Section 515. Many maturing Section 515 properties are located in markets that are either declining or growing rapidly, putting their affordability at risk, mostly in the South and Midwest. 
NHC sends letter on FY 2019 HUD appropriations

NHC sent a letter to the appropriations subcommittees on Transportation, Housing and Urban Development regarding FY 2019 funding levels for HUD. NHC encourages the subcommittees to fund HUD at higher of the levels proposed in the House and Senate bills. Additionally, NHC asks the subcommittees to support the Senate-passed provision that increases HUD’s Family Self-Sufficiency program from $75 million to $80 million and to include $50 million in funding for the Housing Choice Voucher Mobility Demonstration.
Letter of support for the Housing Voucher Mobility Demonstration

NHC and 32 other organizations signed onto the Center on Budget and Policy Priorities letter in support of funding for the Housing Voucher Mobility Demonstration. The letter calls on Congress to include a House provision that provides $50 million for the Mobility Demonstration in the FY 2019 Transportation, Housing and Urban Development appropriations bill. The initiative will help low-income families to low-poverty neighborhoods and provide them with support throughout their move, as well as encourage inter-agency collaboration to remove housing choice barriers for families.
Letter to increase funding for FSS coordinators

NHC joined the Housing Partnership Network and six other organizations in a letter to the appropriations subcommittees on Transportation, Housing and Urban Development. The letter calls for increasing funding for service coordinators for HUD's Family Self-Sufficiency (FSS) program from $75 million to $80 million for FY 2019. FSS, the largest asset building program for low-income households in the country, helps families save money through financial coaching and escrow accounts. 
The National Housing Conference has been defending the American Home since 1931. 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.
Defending our American Home since 1931
Copyright © 2018. All Rights Reserved.