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Weekly update from the National Housing Conference |
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In this issue
May 16, 2021
Issue 90-19
• Members of Congress reintroduce YIMBY Act
• California governor proposes covering 100% of rent arrears
• MBA and NFHA ask for guidance on SPCPs
• Members of Congress urge action on lumber prices
• Enterprise and Facebook partner to support homeless housing in California
• HUD announces PHA lead abatement grants
• HUD allocates emergency voucher funding
• Chart of the week: Supply of most affordable homes dropped fastest during the pandemic
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Find the information you need at NHC's COVID-19 Housing Resource Center |
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The risk of learning the right lessons from the wrong crisis
by David M. Dworkin, NHC president and CEO
One of the biggest risks today is that we will learn the right lessons from the wrong crisis. During the Great Recession, we saw home prices and home building plummet while homeowner and investor losses exploded. The causes of this crisis were well documented in the report of the Financial Crisis Inquiry Commission, which concluded that it “was the result of human action and inaction, not of Mother Nature or computer models gone haywire.” The report identified five major causes of the crisis:
1) “An explosion in risky subprime lending and securitization;
2) An unsustainable rise in housing prices;
3) Egregious and predatory lending practices;
4) Dramatic increases in household mortgage debt; and
5) Exponential growth in financial firms’ trading activities, unregulated derivatives, and short-term ‘repo’ lending markets.”
These factors contributed to foreclosures on millions of homeowners and the conservatorship of Fannie Mae and Freddie Mac, which required a taxpayer bailout of over $190 billion (since recovered with interest). Only one of these five root causes exist today: an unsustainable rise in housing prices – and this is not due to artificial but natural factors, namely a once-in-a-century pandemic that shut down the country for a year, slashing supply, increasing material and labor costs and driving up demand.
The Consumer Financial Protection Bureau (CFPB) and Federal Housing Finance Agency (FHFA) have done an admirable job of minimizing foreclosures and enhancing forbearance options. Much has been learned from the experience of the Great Recession. As life and the economy get back to normal, we must pay careful attention to how we support the exit from forbearance of those now ready to resume payment schedules, modify the mortgages of those who have seen a sustained decrease in income and provide a graceful transition from homeownership to affordable renting for those no longer capable of making their mortgage payments.
But CFPB and FHFA policies have also unintentionally contributed to increasing the cost of homeownership by more...
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Members of Congress reintroduce YIMBY Act
Sens. Brian Schatz (D-Hawaii) and Todd Young (R-Ind.) reintroduced the bipartisan Yes In My Back Yard (YIMBY) Act on Thursday, with Reps. Trey Hollingsworth (R-Ind.) and Derek Kilmer (D-Wash.) sponsoring the legislation in the House. The bill conditions provision of the Community Development Block Grant (CDBG) on localities’ reforming their zoning codes to better accommodate the production of housing, which the bill’s supporters say will help lower prices and ease the current housing crisis.
“Discriminatory local zoning and land use policies drive up housing costs in communities across America,” said Sen. Young in a statement. “These policies exacerbate the housing affordability crisis and stifle the ability of Americans to move to areas of opportunity. My legislation will require cities, towns, and rural areas across America to face this reality under a new level of transparency and encourage them to cut these harmful regulations.”
The day the bill was introduced, NHC signed a letter to several members of Congress, including the bill’s sponsors in the House and Senate, who sponsored the bill in the last Congress, expressing its support of the bill. Other signers included NHC members National Association of Hispanic Real Estate Professionals, National Association of Home Builders, and National Multifamily Housing Council.
“Bipartisan legislation like the YIMBY Act is critical to addressing the impact of exclusionary zoning, which makes it harder for millions of Americans to find housing they can afford,” said NHC President and CEO David M. Dworkin. “These communities must eliminate restrictions that prevent building more affordable homes for ownership and rental.”
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California governor proposes covering 100% of rent arrears
California Gov. Gavin Newsom (D) proposed Monday a statewide stimulus package that would fund 100% of rent arrears for low-income tenants affected by the COVID-19 pandemic. The measure would make California the latest in a series of states that have removed requirements for landlords to forgive portions of arrears so renters can take advantage of emergency rental assistance (ERA) funding. To receive ERA funding, the state currently requires landlords to forgive 20% of arrears.
Among states with active ERA programs, only California and Connecticut continue to require landlords to forgive back rent in order to participate in ERA programs. Arkansas, Illinois, New York, North Carolina and North Dakota have yet to open statewide programs. Some grantees argue that the practice allows them to stretch ERA funds further to assist more families and property owners, but industry officials have worried that it has the effect of discouraging landlord participation, given that even small percentages of rent arrears can amount to large sums of money.
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MBA and NFHA ask for guidance on SPCPs
In a letter sent Monday, NHC members Mortgage Bankers Association (MBA) and National Fair Housing Alliance (NFHA) asked HUD to clarify whether special purpose credit programs (SPCPs) violate the Fair Housing Act. SPCPs are viewed as a tool by which lenders can contribute to greater racial equity by allowing them to extend favorable credit terms to groups that have historically been denied credit access.
The organizations noted that SPCPs are explicitly permitted under the Equal Credit Opportunity Act (ECOA) if they are designed to extend credit to underserved or disadvantaged populations. While the Fair Housing Act does not state whether it allows SPCPs, the groups argued that programs allowed under ECOA should be legal under the Fair Housing Act as well.
Noting that current uncertainty around SPCPs hampers HUD’s fair housing goals, MBA and NFHA asked the agency to issue a rule to “formally clarify that an ECOA-compliant SPCP designed to benefit Black and Hispanic applicants does not violate the [Fair Housing Act’s] antidiscrimination mandate.”
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Members of Congress urge action on lumber prices
Sens. Jerry Moran (R-Kan.) and Jeanne Shaheen (D-N.H.) published a letter to Commerce Secretary Gina Raimondo and United States Trade Representative Katherine Tai this week urging action on the escalating price of lumber. The letter points to recent tariffs on Canadian lumber as a major source of the rise and asks Tai and Raimondo to work to eliminate them. “American home buyers, not Canadian lumber producers, are the ones who end up paying the cost of these trade restrictions,” they say.
Reps. Kevin Hern (R-Okla.) and Brian Higgins (D-N.Y.) plan to publish a similar letter to Raimondo and Tai tomorrow. In a hearing with Tai on Thursday, Hern called the rise in lumber prices a “travesty” that affects “everyone who participates in the supply chain”, and asked Tai to work with Congress to develop an agreement with Canada on softwood lumber imports.
In a recent segment on FOX Business, NHC’s David Dworkin discussed the impact of soaring housing supply cost on home prices. “We’re seeing double-digit increases in 90% of the markets we look at.” While tariffs on imports are not the sole cause of the lumber shortage, the breakdown in softwood lumber trade between the United States and Canada in recent years over softwood lumber has contributed to the lumber shortage. Until dom estic production can meet demands, the United States must rely on Canadian imports, meaning that Tai’s efforts may have a large effect on lumber prices in the short term.
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Enterprise and Facebook partner to support homeless housing in California
NHC members Enterprise Community Partners and Facebook announced they would partner to provide technical support for a proposed expansion of California’s Homekey initiative, which redevelops vacant or commercial properties as housing for individuals at risk of homelessness. The announcement comes the same day Gov. Newsom proposed increasing funding for the initiative sevenfold as part of his statewide stimulus plan.
Created last year, the program has already created over 6,000 housing units statewide. According to Enterprise, Newsom’s proposed increase in funding to $7 billion would facilitate the development of over 46,000 more units in the coming year, a significant number in a state where 150,000 residents are unsheltered on a typical night.
“With Facebook’s support, we will help communities create practical proposals, then meet awardees where they are to execute, providing personalized assistance and helping them deliver on Homekey’s ambitious promise,” said Enterprise Vice President Heather Hood. |
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HUD announces PHA lead abatement grants
HUD announced $51 million in grants to PHAs to reduce lead paint hazards in older units, with priority given to units occupied by families with young children. The grants are the third round of disbursements for lead paint abatement HUD has issued in accordance with a broader Biden administration effort to address environmental justice issues and more than double the $46 million that had already been disbursed.
The agency has come under fire in the past for neglecting its lead abatement programs, though the agency has noted that lead hazard rates in HUD housing are actually below those in private units. HUD estimates that 24 million homes nationwide have lead paint hazards, which pose health risks to residents – especially to children, in whom research indicates there is no safe level of exposure. |
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HUD allocates emergency voucher funding
Last week, HUD published operating requirements for the allocation of 70,000 emergency housing vouchers for public housing agencies (PHAs). The vouchers, which were included in the American Rescue Plan, target populations vulnerable to homelessness and people who are fleeing domestic or sexual violence. PHAs are eligible to receive the funding allocation if they currently administer the Housing Choice Voucher program.
Local governments are now starting to receive their allocations and identify eligible households. Vouchers have been hailed as effective tools in housing low-income families, but have also recently come under scrutiny due to the lack of rental properties that will accept vouchers. An estimated 30% of vouchers go unused due to issues with finding a suitable unit. Only 15 states currently prohibit source of income discrimination, often aimed at preventing voucher holders from renting. Currently, more than 2.2 million families receive some kind of voucher. Vouchers remain a vital resource for many struggling households, particularly households of color.
In his announcement of Georgia’s allocation, Sen. Raphael Warnock (D-Ga.) stated, “We cannot underestimate the importance of stable, secure housing to maintaining the health and safety of families and communities in our state, especially as we begin to overcome this once-in-a-century pandemic that’s only heightened housing disparities.” |
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Chart of the week: Supply of most affordable homes dropped fastest during the pandemic
A new report from HouseCanary found that the 32.5% drop in housing supply the country experienced throughout the pandemic was particularly concentrated among homes valued at less than $400,000, which make up the majority of the market. Relative to this group, the availability of pricier homes stayed mostly steady. |
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NPR tells the story of several neighborhoods in and around Los Angeles where in the past, blockbusting, redlining, freeway construction, predatory lending, and appraisal discrimination systemically deprived Black residents of wealth-building opportunities.
RISMedia interviewed Bryan Greene, vice president of policy and advocacy at NHC member National Association of REALTORS® (NAR), who was named one of the publication’s 2021 Real Estate Newsmakers for his work to combat racial discrimination in real estate. The impact of legal housing discrimination “doesn’t go away overnight just because you pass a law,” says Greene. “In fact, the passage of a law suggests you’re going to have to use it sometimes.”
A new report from NHC members National Community Stabilization Trust and National Fair Housing Alliance, with support from NAR, explores ways of protecting homeowners at risk due to the pandemic. The report gives two sets of recommendations. One focuses on supporting homeowners through more generous forbearance and credit score protection. The other focuses on preserving the stock of homes available for homeownership through prioritizing sales to owner-occupants and preventing “zombie foreclosures.” |
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Monday, May 17
Tuesday, May 18
Wednesday, May 19
Thursday, May 20
Friday, May 21
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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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Defending our American Home since 1931 |
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