Weekly update from the National Housing Conference

Dear Friend,

One of my favorite rom-com’s is the movie Groundhog Day, staring Bill Murray and Andie MacDowell, who play TV crewmembers assigned to cover the annual ritual involving the question of how many more weeks of winter remain if the groundhog in Punxsutawney, Pennsylvania can see his shadow. Through some unexplained time loop, Bill wakes up every morning to the same day. After numerous failed attempts to get his day right, he ends up falling in love with Andie and they live happily ever after – at least through the credits, anyway.

Which brings us to housing finance reform, the Groundhog Day of housing policy! In the past several weeks, the White House has released a major memo calling for comprehensive housing finance reform, Federal Housing Finance Agency Director Mark Calabria has given a series of speeches emphasizing his aggressive schedule for moving forward on recapitalizing and reforming Fannie Mae and Freddie Mac, with an aim to releasing them from conservatorship, and NHC has been asked to consult with both Treasury and HUD on a path forward. We aren’t ready to roll the credits yet, but housing finance reform is clearly coming soon.

That means NHC and its members need to develop a clear and concise set of detailed proposals to ensure that housing finance reform results in a system that is “stronger, more resilient, and more equitable for American taxpayers and working families,” as Dr. Calabria said just earlier this week in a speech before the Mortgage Bankers Association on Monday. That resilience and equity was sorely missing during the financial crisis, when millions of Americans lost their homes, and the black homeownership rate fell to below the rate when housing segregation was legal in 1968. Young people of all races are also struggling to achieve the American Dream, and families of all ages are unable to find affordable rental housing they desperately need. One in five millennials still live at home with their parents, despite the strongest job market in generations. Last year, I said it was one in six, but it has gotten worse. Each year, we fail to build over 300,000 units of housing just to keep even with household formation, so the problem is not going to get better until we take bold action.

The good news is that policymakers in Washington are no longer proposing a risky redesign of our entire mortgage finance system. Instead, members of Congress and the administration are focused on how to reform Fannie and Freddie through administrative reform allowed under the Housing and Economic Recovery Act of 2008 and additional bipartisan improvements to the Act that will require the agreement of both House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and Senate Banking and Urban Affairs Committee Chair Mike Crapo (R-Idaho). I am confident that we can get there. Much of the work we need to do is already in place.

Last month, a group of NHC members got together to discuss this important work and after the Gala, we will meet again to develop specific proposals to support affordable housing for single family homeownership and multifamily rental. Many of our members have developed a wide range of options, but no other organization has the breadth of experience as our collective intellectual capital and experience. NHC is the place where housers come to get things done. In the months ahead, we will be in the forefront of bipartisan housing finance reform, closing the minority homeownership gap and addressing the growing shortage in affordable housing.

Sincerely,

David M. Dworkin

NHC President and CEO

Calabria, Trump make comments on GSE reform

FHFA Director Mark Calabria made several public remarks over the past week on his efforts to release Fannie Mae and Freddie Mac from conservatorship. At a National Association of REALTORS® (NAR) conference last week, Dr. Calabria argued that he has the authority to enact GSE reform without Congress. In an interview with Politico last Friday, Dr. Calabria expanded on his vision for GSE reform, saying, “I think there are things that Congress should do, but I think there also has to be an urgency for me as a regulator.” And at an MBA conference on Monday, Dr. Calabria emphasized the need for the GSEs to recapitalize before being released from conservatorship. President Trump also made comments on GSE reform at the NAR conference last week, saying that “we have many geniuses looking at the issue.”

NMHC launches housing affordability toolkit

The National Multifamily Housing Council (NMHC) announced last week that it was launching a new Housing Affordability Toolkit to guide discussions of housing affordability. The toolkit includes an overview of national trends, examples of solutions toward greater affordability and case studies from around the country. In a statement, NMHC President Doug Bibby said, “There isn’t a universal solution to solving the affordability problem. It requires a multi-faceted approach, and I’m thrilled our Housing Affordability Toolkit will help communities, lawmakers and industry stakeholders nationwide explore various approaches.”