Weekly update from the National Housing Conference |
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In this issue
August 7, 2022
Issue 91-31
· White House holds summit on eviction reform
· Freddie Mac publishes new homeownership map
· HOUSES Act analysis published
· Federal Reserve Board seeking Insurance Policy Advisory Committee members
· HUD announces funding opportunity for homelessness projects
· Banking Committee holds hearing on housing market
· USDA, EPA partner for wastewater sanitation
· HUD releases economic justice agenda
· Chart of the week: Mortgage rate increases stall, but rates still high YoY
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CRA: At the intersection of geography and race
by David Dworkin, NHC President and CEO
This week, NHC submitted its comments on a Notice of Proposed Rulemaking issued by the Federal Reserve Board of Governors (FRB), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and U.S. Treasury Department, as well as a broad range of stakeholders. The NPR is a product of over five years of work that seeks to successfully modernize the CRA to account for the wide range of changes in the financial economy that have occurred since the last effort to modernize the regulations in 1995.
CRA has exceeded the expectations of its authors and early advocates, building a nationwide infrastructure of banking officers dedicated to community development in underserved areas. And CRA is empowering hundreds of major national organizations committed to investing in America’s low- and moderate-income people and communities.
The NPR goes a long way towards addressing all of these objectives. It is responsive to the interests of both industry groups and advocacy organizations. The new proposal generally meets NHC’s benchmarks for improving consistency and clarity while better serving the people and communities that need it the most. The NPR also creates an opportunity for the final CRA rule to redress the key driver of economic disinvestment in LMI communities – racially motivated redlining.
CRA stands at the intersection of geography and race. When enacted in 1977, the CRA responded to concerns over disinvestment in low-income communities and the persistent impact of “redlining,” the practice of avoiding investment in minority neighborhoods codified by the Home Owners’ Loan Corporation (HOLC) in 1933 and the Federal Housing Administration in 1934, and practiced by many financial institutions during much of the 20th century. While the Fair Housing Act of 1968 prohibited redlining and other forms of housing discrimination, these practices proved difficult to reverse.
CRA’s current regulations address race only peripherally, insofar as evidence of racial discrimination can lower a bank’s CRA rating. CRA’s establishment of a “continuing and affirmative obligation” by banks to serve their entire communities goes far beyond a fair lending mandate to do no harm. While CRA does examine service to LMI people and communities, “LMI” and “minority” are far from the same: nearly two-thirds of LMI households are White, while nearly 40 percent of Black households and more than half of Hispanic households are not LMI. These middle-income areas are particularly important in narrowing the significant homeownership gaps that directly result from the legacy of redlining.
NHC recommends that the CRA regulation develop more...
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News from Washington | By Luke Villalobos
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White House holds summit on eviction reform
The White House held a summit on eviction reform on Tuesday that featured an array of speakers from the Administration and states that successfully used American Rescue Plan (ARP) and Emergency Rental Assistance (ERA) funding. The summit included remarks from Gene Sperling, White House ARP Coordinator; Dr. Matthew Desmond of the Eviction Lab; Diane Yentel, President and CEO of the National Low Income Housing Coalition; Vanita Gupta, Associate Attorney General for the U.S. Department of Justice; Wally Adeyemo, Deputy Secretary, U.S. Department of the Treasury; Senate Banking, Housing, and Urban Affairs Committee Chair Sherrod Brown (D-OH); and Erika Poethig, Special Assistant to the President for Housing and Urban Policy, among many others.
Sperling spoke about the vital importance of the feedback loop from housing advocates that allowed ERA funds to move into the hands of families in need. He reported that over 7 million multi-month payments to households have gone out to help prevent evictions and keep those families housed during the pandemic. Sperling also said evictions are 26% below average since the national eviction moratorium ended. Since the efforts came into effect, there has been a substantial uptake in efforts from states to build lasting eviction prevention reforms. These efforts include major expansions in eviction diversion, increased right to counsel for tenants, and new tenant protections. A theme throughout the summit was that returning to pre-pandemic normal is unacceptable.
“This is in no way mission accomplished. No way,” Sperling caveated. He declared the ERA payments “an experiment in progressive and humane government” and called for the new housing assistance infrastructure to be built upon rather than letting it crumble.
Desmond spoke about the importance of eviction diversion and prevention throughout the pandemic, stating that in Dec. 2021, eviction filings were down by half in many major cities. Some cities recorded eviction filing decreases as high as 63%, the lowest on record. Many local officials participated by describing their model diversion programs and the successes the ARP and ERA funds helped achieve.
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Freddie Mac publishes new homeownership map
Freddie Mac published a new research note that includes a First-Time Homebuyer Affordability Map. The map utilizes new methodology to evaluate local affordability based on credit characteristics and income distributions. The map itself was constructed using anonymized administrative datasets that measure the number of creditworthy renters with enough income to purchase a home similar to a recently purchased home by a similarly profiled first-time buyer. The map further allows specific affordability analysis by race and income group, and can account for economic shocks such as the pandemic. The map divides cities into four categories: 1) typically affordable, such as Knoxville, TN, 2) typically unaffordable, such as San Francisco, CA, 3) affordable overall but not affordable to its LMI population, and 4) unaffordable overall but affordable to its LMI population. The map uses a targeted approach to investigate how affordable cities are to future borrowers and can help provide insights into closing minority and LMI homeownership gaps.
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HOUSES Act analysis published
The Congress’ Joint Economic Committee released a new analysis of Sen. Mike Lee’s (R-UT) Helping Open Underutilized Space to Ensure Shelter Act of 2022 (HOUSES Act) on Thursday. The legislation, introduced in April, would authorize the sale of federal land to states and units of local government to provide housing. The analysis finds that the U.S. housing shortage reached 20.1 million homes and that home prices are growing fastest in Western states where the federal government owns more than 50% of the land. It estimates the HOUSES Act would allow for the construction of 2.7 million more homes and alleviate 14% of the housing shortage. It would be particularly impactful in Idaho, Arizona, Oregon, California, Montana, Nevada, and Utah.
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Federal Reserve Board seeking Insurance Advisory Committee members
The Federal Reserve Board announced it’s looking for individuals to serve on its Insurance Policy Advisory Committee (IPAC). Those interested in serving should have a diverse set of expert insurance perspectives for property and casualty issues. The IPAC, established by the Economic Growth, Regulatory Relief, and Consumer Protection Act, consists of 21 members serving three-year terms. The Board will announce its members later this year.
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HUD announces funding opportunity for homelessness projects
HUD announced on Monday the availability of $2.8 billion in competitive funding for evidence-based solutions to homelessness. The money is available for homeless service organizations across the country that offer supportive services and housing programs for people experiencing homelessness. HUD’s Continuum of Care Program will award the funding.
Specifically, HUD is seeking projects focused on ending homelessness, emphasizing racial equity and anti-discrimination policies for LGBTQ individuals, Housing First approaches, reducing the criminalization of homelessness, improving system performance, and innovative partnerships, among other eligible activities. Applications are due to HUD by Sep. 30, 2022.
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Banking Committee holds hearing on housing market
On Tuesday, the United States Senate Committee on Banking, Housing, and Urban Affairs met for a hearing titled ‘The Rent Eats First’: How Today’s Housing Market impacts Renters and Communities. Witnesses for this hearing included Dr. Matthew Desmond, Director of the Eviction Lab; Laura Brunner, President and CEO of Port of Greater Cincinnati Development Authority; Rosanna Morey, a small property owner; Darion Dunn, Managing Partner for Atlantica Properties; and Diane Yentel, President and CEO of the National Low Income Housing Coalition. The hearing discussed soaring rent and housing costs and their impact on families who cannot afford a single economic shock, the aging housing stock, and the general need for more affordable housing.
Chairman Sherrod Brown (D-OH) opened the hearing by painting a picture familiar to many low-income families. “The huge shortage of housing means that renters have to make do with what they’ve got,” Brown said. “And with housing so tough to find, renters are forced to ask themselves whether it’s worth it to push for a repair from the same person who can put an eviction on their record and decide whether they have a place to sleep at night.”
Witnesses described the consequences of rising rents, the impacts felt by low- and moderate-income families, and the missed opportunity for wealth building that comes with rising rent costs and limited access to homeownership opportunities.
“As emergency resources are being depleted and pandemic-era renter protections expire, renters are faced with increased inflation, skyrocketing rents, eviction filing rates reaching or surpassing pre-pandemic averages, and, in many communities, increasing homelessness,” Yentel said. “Unprecedented rent increases are exacerbating our country’s affordable housing crisis, pushing more people into homelessness each year. The U.S. Government Accountability Office found that a $100 increase in median rent is associated with a nine percent increase in the estimated homelessness rate. On average, rents increased by nearly $200 per month in the last year.”
Some witnesses called for legislation to relieve pressure on the housing market through eviction protections, increased rent relief, and housing vouchers. Desmond, for example, urged Congress to pass the Family Stability and Opportunity Vouchers Act, saying the law “would create 500,000 new housing vouchers for families who desperately need them and improve services to increase housing and neighborhood choice.”
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USDA, EPA partner for wastewater sanitation
The USDA and the EPA announced the Closing America’s Wastewater Access Gap Community Initiative on Tuesday, addressing basic wastewater management in underserved communities. The initiative will pilot 11 communities in Mississippi, New Mexico, North Carolina, Alabama, Kentucky, West Virginia, and Arizona. USDA and EPA will leverage technical assistance resources to help these communities pursue federal funding opportunities to address their wastewater needs and eliminate harmful exposure threats for the estimated 2.2 million people who lack basic running water and plumbing.
“The America that we all believe in is a land of opportunity. But, for historically marginalized communities from Alabama to Alaska, that opportunity is stolen when basic sanitation doesn’t work—exposing adults and children to backyard sewage and disease. By partnering with USDA and leveraging funding through the Bipartisan Infrastructure Law, EPA is working to restore dignity and opportunity to rural communities here in Alabama and across the country,” said EPA Administrator Michael Regan at the launch event.
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HUD releases economic justice agenda
“With Bridging the Wealth Gap and this historic funding opportunity, we’re trying to make sure that every single person in this country can get their piece of the American dream,” said HUD Secretary Marcia Fudge. “We’re looking at everything through a lens of equity and how we address systemic racism. We’re giving people who have historically been left out and underserved the resources to take a chance on their futures – to improve their credit, save resources for homeownership and other needs, and build wealth. That’s what this is all about.”
The plan describes HUD’s current actions to obtain these goals, including launching the Moving to Work demonstration, expanding the Family Self Sufficiency (FSS) program, moving from annual to triannual income certification, and more. Future actions will include building credit history through rent reporting, integrating financial well-being and supportive services into PHA practice, and improving homeownership programs for HUD-assisted renters. The announcement also includes $113 million for the FSS Program.
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Mortgage rate increases stall, but rates still high YoY
According to Calculated Risk Blog, the year-over-year change in principal and interest is up 30% for a fixed amount, not considering the change in house prices. This YoY change is slightly less than the 30% increase in June but still up sharply. The blog notes that after reaching 6.28% on June 14, 30-year mortgage rates decreased to 5.05% as of Aug. 1. Based on this data, including the increase in house prices, payments are up more than 50% YoY on the same home. The blog predicts declining mortgage rates will help at the margin, but the market will continue to feel pressure, with interest rates stubbornly around 5%.
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An article by the Joint Center for Housing Studies of Harvard University shows that rental deserts perpetuate socioeconomic and racial segregation. The post uses data from the 2015–2019 American Community Survey to determine that nearly a third of neighborhoods in the U.S. have few options for renters, which are disproportionately suburban, higher income, and white. These “rental deserts” comprise 31% of neighborhoods and contribute to racial segregation after decades of discriminatory policies. Zoning challenges make it difficult to alleviate these deserts.
An opinion piece in CNN Business by Urban Institute’s Jung Choi and Daniel Pang discusses how renters bear the brunt of surging housing costs. After median rent prices exceeded $2,000 in May, housing prices continue to soar and take up larger shares of monthly spending without relief. The piece argues that renters were in a worse position to weather the pandemic, with many lacking an emergency fund, and calls for long-term solutions like expanded unemployment insurance and emergency rental assistance to begin addressing the problems.
A webinar hosted by the Bipartisan Policy Center examined the need for more skilled construction workers to help address the affordable housing shortage. The event, part of their Getting Serious About Housing Supply series, included keynote remarks from Ed Brady, President and CEO of the Home Builders Institute. Brady stressed the need for skilled laborers to address homes’ quality, supply, and costs.
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Monday, August 8
Tuesday, August 9
Wednesday, August 10
Thursday, August 11
Friday, August 12
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The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest. |
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