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Weekly update from the National Housing Conference
In this issue
April 5, 2020 I Issue 89-13

  • Lawmakers debate fourth Coronavirus stimulus package
  • HUD issues mortgage relief under CARES Act
  • Tenant, industry groups call for additional aid
  • Homeless service providers sound alarm bells as Coronavirus spreads among homeless
  • Housing construction continues in some areas, banned in others
  • Mortgage market faces volatility as government acts to protect liquidity
  • Chart of the Week: Lower-income households were more likely to work in occupations prone to COVID-related job loss
Numerous opportunities to mitigate this devastating reality

Dear Friend,

Last week, we saw new claims for unemployment surge by over 6 million – each claim filed by a person who, up until two weeks ago, was paying their rent, supporting themselves or their families and going to work every day. Without actually getting sick, their lives have been turned upside down. This week, millions more will join them, and thousands will likely get sick as well. There is nothing that any of us can do to change this; the feeling of powerlessness can be overwhelming. But we are not powerless to help, as you know. As leaders in America’s housing system, we have numerous opportunities to mitigate this devastating reality and help avert a much worse economic crisis in the weeks and months ahead. In that sense, we are incredibly fortunate. We don’t have to sit at home and feel helpless. Instead, we get to close our home office door (or in some cases, clear off the kitchen table) and get to work.

I am so inspired by the many things our members are doing every day to make a difference for millions of fellow Americans. There is a lot to do, and together we can get it done. Each week, we meet with the largest leadership groups in the housing industry, from mortgage bankers to apartment owners and developers, to advocates for the homeless and low-income renters – and everybody in between. All of the participants represent associations of organizations, or entire sectors of the housing economy, and most are CEOs, who have taken one hour of their week to share their priorities and listen to colleagues with the collective aim of leveraging our networks, coordinating our actions, and working together wherever possible.

Together, we are working on developing a “No Drama Priorities List” that we can share with policymakers in Congress and the Trump administration – the most impactful agenda items that have broad support across the entire political spectrum. Here are just a few of the priorities raised during last week’s call:

·         Broad based rental assistance that can be made available to those most in need and those newly in need, designed to help avert a crisis that could wipe out thousands of small and mid-size apartment building owners, and lead to an avoidable eviction crisis that need not follow the health crisis we are experiencing today.

·         Mortgage forbearance that helps those who need it, while addressing the liquidity needs of those who provide it, so mortgage servicers, both single family and multifamily, can remain fully engaged with the mortgagees whom they serve.

·         Counseling resources, to augment and enhance communication channels to housing consumers at every level.

·         Adjustments and enhancements in the financing for construction of desperately needed new housing units, already in short supply before the crisis and more essential now than ever. Housing construction will also be an essential component of our economic recovery, potentially putting millions of Americans back to work.

News from Washington I By Quinn Mulholland
Lawmakers debate fourth Coronavirus stimulus package

After passing a $2 trillion stimulus package in the previous week, lawmakers on Capitol Hill began laying the groundwork for a fourth legislative package last week that will focus on infrastructure needs in addition to shoring up health systems. “Our first bills were about addressing the emergency. The third bill was about mitigation. The fourth bill would be about recovery. Emergency, mitigation, recovery,” House Speaker Nancy Pelosi (D-Calif.) said on a conference call. President Trump’s tweet on Tuesday signaled his support for an infrastructure-focused package. One infrastructure issue that has emerged as vital during the COVID-19 pandemic is broadband internet access, with America’s broadband infrastructure facing strains from increased usage and large gaps remaining in which areas have access to high-speed broadband.
HUD issues mortgage relief under CARES Act

On Wednesday, HUD announced a set of mortgage payment relief options for homeowners with FHA-insured mortgages who are experiencing hardship because of the Coronavirus crisis. This relief includes a requirement that mortgage servicers extend forbearance for borrowers with a financial hardship for up to six months, with an optional additional six months. Several banks have also announced mortgage relief plans, with Forbes publishing a list of banks offering deferment on mortgage payments as well as a list of banks suspending foreclosures during the crisis. Mortgage industry groups, however, cautioned that the forbearance plan under the CARES Act may strain the industry as call centers are overwhelmed with borrower relief requests. These groups also stressed that homeowners who can still afford to pay their mortgages should, because, as Housing Policy Council President Ed DeMarco told American Banker, “You’re going to still owe the money, but you’re just going to owe it much later.” This message was echoed by Treasury Secretary Steven Mnuchin and FHFA Director Mark Calabria, who also warned that the crisis could lead to mortgage delinquencies at levels rivaling those during the subprime mortgage meltdown.
Mortgage market faces volatility as government acts to protect liquidity

After the Federal Reserve’s announcement that it will purchase unlimited amounts of mortgage-backed securities (MBS) to support liquidity in the mortgage market, mortgage-related shares rose and volatility dropped in a sign that the decision achieved its intended impact. In another sign of improved liquidity, mortgage rates fell last week, according to Freddie Mac. However, mortgage bankers warned in a dire letter on Sunday that the Fed’s MBS purchases are triggering margin calls on hedges used by lenders to protect themselves from wild swings in interest rates. Ginnie Mae also recently announced an effort to shore up liquidity in the mortgage market, following similar steps by the FHFA. And Secretary Mnuchin recently formed a task force of financial regulators to find further ways to address the liquidity shortfall faced by mortgage servicers, which will be announced in the coming weeks.
Tenant, industry groups call for additional aid

On Wednesday, rent was due for millions of tenants for the first time since the Coronavirus outbreak became a national emergency, with many unable to pay as a result of the crisis. Although the CARES Act signed into law on March 27 included a 120-day eviction moratorium for properties with federally backed mortgages, it only covered roughly one-fourth of the 44 million rental units in the country. Many tenant advocates are urging local, state, and federal officials to take further action to protect tenants during the crisis. Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio), heeding those calls, announced he will introduce new legislation when Congress returns to “provide emergency rental assistance to help renters stay in their homes even after eviction bans expire.” Meanwhile, housing industry groups amplified calls for additional aid as many landlords and mortgage servicers face a growing cash crunch with renters and homeowners unable to make rental and mortgage payments. Several federal agencies announced further regulatory relief for landlords and mortgage lenders, with FHA and VA joining Fannie Mae and Freddie Mac in relaxing standards for property appraisals and employment verification, and FHFA authorizing further loan processing flexibilities for the GSEs.

In a Washington Post article last Wednesday, NHC President and CEO David Dworkin emphasized the importance of communication between tenants and landlords, sharing, “Renters who lost their job or are sick because of the virus should immediately contact their landlord and alert them — in writing — of their hardships. Most landlords will be sympathetic and willing to offer help. That communication is incredibly important.”
Homeless service providers sound alarm bells as Coronavirus spreads among homeless

Homeless service providers and advocates have warned for weeks that people experiencing homelessness face greater risks from the Coronavirus. Last week, calls to assist the homeless community grew more urgent as the number of reported cases among the homeless climbed. In New York, the number of Coronavirus cases among the homeless population surpassed 100 last week, and additional cases were reported in homeless shelters from Seattle to Denver and D.C. Local governments took action to protect homeless communities, with Boston adding hundreds of new beds for homeless residents and other cities using open locations from fairgrounds to hotels and parking lots to house the homeless. In Los Angeles, a group of homeless people moved into 11 vacant houses, arguing that they had no choice given the pandemic – a move that highlighted the severity of both the public health crisis and housing crisis there.

A recent report from the National Alliance to End Homelessness estimates the cost to meet the nation’s emergency and quarantine shelter bed need for the homeless is approximately $11.5 billion.
Housing construction continues in some areas, banned in others

As more states issued emergency orders closing nonessential businesses and ordering residents to shelter in place, housing construction has been deemed essential in most of the country, according to the National Association of Home Builders. The Department of Homeland Security also announced on Sunday that local shelter in place and stay at home orders should not apply to workers involved in building infrastructure, including residential construction. Several states, however, including New York and Washington, have cracked down on residential construction, and even in states where homebuilding has been deemed essential, the construction industry is experiencing work stoppages. “Projects are starting to hit roadblocks,” one construction executive told Curbed. “There are no inspections. Some cities have shut down their building departments. The next thing we’ve been facing is all the subcontractors. They’re in various situations. Some want to work; some don’t want to work.”
CRA comments due on Wednesday

Despite calls from advocates including NHC, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) did not delay the deadline for comments on the agencies’ Notice of Proposed Rulemaking (NPR) on the Community Reinvestment Act (CRA). As such, comments will be due on Wednesday, April 8 at 11:59 pm ET. NHC’s CRA Working Group is working to finalize our comment letter, and we encourage other organizations to submit comments as well, which can be done here. NHC President and CEO David Dworkin was featured on National Association of Local Housing Finance Agencies’ podcast focused on CRA modernization, in which he explained NHC’s opposition to certain aspects of OCC and FDIC’s NPR. “Under the new proposal by the OCC, they change the way we look at investments, and we really look at a ratio-driven approach,” which will likely mean that smaller investments and more complicated investments are less likely to be done,” Dworkin explained.
Chart of the Week
Lower-income households were more likely to work in occupations prone to COVID-related job loss

A recent analysis by the NYU Furman Center found that in 2018, lower-income households in New York City were more likely to work in occupations prone to COVID-related job loss. Among households with at least one worker in a vulnerable occupation and income under $150,000, median monthly rental costs totaled $1,430.
What we're reading
The Opportunity Starts at Home Campaign, which NHC is a part of, recently released a fact sheet on LGBTQ equality and housing. According to the fact sheet, a majority of states have no explicit legal protections from bias on the basis of sexual orientation and gender identity in housing transactions. Read the fact sheet here.

HUD recently released a report finding that tenants in LIHTC properties at the end of 2017 earned roughly the same income as tenants in 2015 and paid almost the same percentage of income toward rent. HUD is required to publish the report under the Housing and Economic Recovery Act of 2008. Read the full report here.

Realtor.com® recently unveiled its March housing data, showing the first signs of COVID-19’s impact on the U.S. housing market. According to the data, the number of newly listed properties declined and housing prices decelerated in March. Read the full release here.

Housing Partnership Equity Trust (HPET), led by NHC Board Vice Chair Anne McCulloch, released its annual report on Friday. The report features personal stories from an affordable housing resident and an investor. Read the full report 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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