Weekly update from the National Housing Conference

Dear Friend,

This week, the Federal Housing Finance Agency (FHFA) announced a new directive that will go a long way towards avoiding concentrated market share, one of the single largest factors leading to the failure and subsequent conservatorship of the housing government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. This critical issue, that until now has received short shrift by both the Trump and Obama administrations, fueled the “race to the bottom” – not affordable housing goals as alleged by some commentators. This was a major finding of the report of the Financial Crisis Inquiry Commission. The FHFA directive announced this week creates a new reality in the traditional business model of the GSEs, beginning a process of turning them into government sponsored utilities, rather than for-profit enterprises. How it was announced, however, is also a new reality. 

We’ve addressed a lot of issues in our Member Brief, but this is the first time we have ever addressed a “regulatory tweet.” I still can’t get over that I have used the term “regulatory tweet” but I’m afraid I must. At the risk of sounding like the old guy on the porch shouting, “get off my lawn” I will add that I hope I never do it again! I’ll explain why it’s such a big deal, but first, here’s what happened.

For more on the tweet and why it is so important, click here.

Sincerely,

David Dworkin

NHC President and CEO

NHC advocacy on CRA



NHC recently organized a group of organizations to write a letter to Federal Reserve Chairman Jerome Powell, Comptroller of the Currency Joseph Otting and Federal Deposit Insurance Corporation Chairwoman Jelena McWilliams insisting that action to modernize the Community Reinvestment Act (CRA) be done jointly by all three agencies. It also emphasized that “we would have serious concerns about a metrics framework based primarily on a ratio of the aggregate dollar volume of a bank’s CRA balance sheet to the bank’s deposit or asset base, whether at the assessment area level or institution-wide, that would drive a presumptive CRA rating.” The letter noted that “a dollar volume target would reduce CRA to a limited resource, for which each eligible activity must compete against all others. If CRA activity is to be rationed, then the threshold for eligibility will have to be rigorous, the best will become the enemy of the good, and in some cases burdensome documentation will be required to screen out activities whose benefits are harder to prove." The letter was drafted by NHC, the National Community Reinvestment Coalition and the National Association of Housing Lenders and was signed by over two dozen organizations, including NHC board members from Enterprise Community Partners, Local Initiatives Support Corporation, Mortgage Bankers Association, National Community Stabilization Trust, National Housing Trust, NYU Furman Center, Stewards of Affordable Housing for the Future, SKA Marin, and the Tennessee Housing Development Agency.

Consumer access to credit varies widely across the country

A recent report from the Federal Reserve Bank of New York found that access to credit varies widely across the country and is worse overall than previously thought. The report found that in the fourth quarter of 2018, 426 counties, primarily concentrated in the South, were credit-insecure, meaning consumers in those counties had a severe lack of access to credit.

In an article published on Tuesday, the New York Times examined concerns over the use of facial recognition technology in public housing developments. Former NHC Board of Governors member Sandra Henriquez is quoted in the article defending the use of the technology as a means of ensuring residents’ security. Read the article here.

An NBC News investigation published last week shined a spotlight on harrowing conditions in rural housing complexes subsidized by the USDA’s Rural Housing Service. The investigation found that residents of one complex in Florida had to live with mold, roaches and rats in their homes. Read the article here.

The Washington Post profiled a resident of D.C.’s Shaw neighborhood who was forced to move when the owner of her apartment building decided to convert it into high-end condominiums. The article examines the larger forces driving gentrification and displacement in D.C. and the impact that they are having on long-time residents of neighborhoods like Shaw. Read the article here.

Wednesday, October 2

·          Center for Community Progress Reclaiming Vacant Properties Conference 2019, Oct. 2-4

·          Multifamily Executive Conference, Oct. 2-4

·          ULI Washington’s 5^th Annual Trivia Night, 6 p.m.

Thursday, October 3



·          Novogradac 2019 Credit and Bond Financing for Affordable Housing Conference, Oct. 3-4