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Weekly update from the National Housing Conference
September 8, 2019
Feature Message I By Steve O'Connor
Dear Friend,

This week, our guest blogger is Steve O’Connor, senior vice president of the Mortgage Bankers Association and an active member of the NHC Board of Governors. Steve is also co-chair of our Black Homeownership Working Group, along with Antoine Thompson of the National Association of Real Estate Brokers. – David Dworkin

In terms of physical beauty, Seattle is a city with few rivals. It blends an impressive skyline with stunning views of the Puget Sound and the Cascade Mountains. However, behind this alluring façade is an affordable housing crisis. It is, quite literally, affecting all aspects of life there.
 
From rampant homelessness that scars the cityscape and divides its residents, to middle-income families struggling to find homes near their workplaces, Seattle has a complex web of housing problems that offer no easy fixes. While Seattle is not alone in this regard, what I discovered on a recent trip there was a host of creative partnerships working to address some of these housing challenges. At the Mortgage Bankers Association, as with the National Housing Conference, we believe in the power of collaboration. 

To this end, MBA launched a new Affordable Housing Initiative in June. At its core, the initiative is about finding ways for MBA and its members to forge new affordable housing partnerships in both the policy and business arenas. As the MBA executive leading this effort, I have been conducting an extensive “listening tour,” with the goal of identifying where we can be most impactful. What I saw in Seattle underscores how diverse groups, working together, can make a difference in the affordable housing space. 

An example of a high-profile housing coalition is Challenge Seattle, with 15 major employers and two foundations. It is focused on what it describes as “the invisible crisis – a lack of affordable housing for middle-income families and individuals.” Its members include such prestigious organizations as Amazon, Starbucks, Microsoft, and the Gates Foundation. This effort shows how disparate stakeholders can rally around a shared housing problem. 


Sincerely,
Steve O’Connor
Senior Vice President
Mortgage Bankers Association
News from Washington I By Tristan Bréaux and
Quinn Mulholland
White House GSE reform plan released

On Thursday, the Treasury Department and HUD released their long-awaited plans for reforming the federal government’s role in the nation’s housing finance system. The report lays out a roadmap for recapitalizing, reforming and releasing Fannie Mae and Freddie Mac from conservatorship and for Congress to authorize a limited, explicit guarantee by Ginnie Mae on the MBS of the enterprises, while allowing the Federal Housing Finance Agency to charter new guarantors that would compete with Fannie and Freddie. But the main focus of the report is on how to effectively amend the current GSEs. NHC President and CEO David Dworkin told The Washington Post that developing a new housing finance system is simply too complicated and fraught with uncontrollable transition risks. “Both in the Obama administration and during periods of bipartisan negotiations the focus was on whiteboarding a totally new system… It is too hard. The current system is too embedded and the unintended consequences are too unpredictable.” The Senate Banking Committee will convene a hearing this Tuesday, Sept.10 to discuss next steps for housing finance reform. In response to the Treasury plan, NHC said in a statement that, “the report outlines essential elements that already have broad bipartisan support. It maintains access to the 30-year fixed rate mortgage, ensures enough private capital will be in place to protect taxpayers, and provides access to community banks and credit unions essential to an effective, safe and sound system.” Dworkin also strongly criticized the plan’s language around the GSEs’ affordable housing goals, saying, “The housing goals language in the report is a non-starter that undercuts the value of everything else in the paper.” Several congressional leaders also issued statements on the plan, with House Financial Services Chairwoman Maxine Waters (D-Calif.) criticizing the plan’s affordable housing proposals, and Senate Banking Committee Chairman Mike Crapo (R-Idaho) and House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.) both issuing statements praising the plan.
Hurricane Dorian wreaks havoc on southeastern coast

After wreaking havoc in the Bahamas early last week, Hurricane Dorian unleashed dangerous winds and flooding on the Carolinas on Thursday and Friday. The storm caused devastation for hundreds of thousands of households, many of whom are low-income and had little means to escape the storm’s deadly path, according to the National Low Income Housing Coalition. The New York Times examined why coastal properties at the greatest risk of destruction from hurricanes like Dorian are still valued as high as they are in a review of a new book on the subject. The Urban Institute’s Carlos Martín highlighted opportunities for the federal response to disasters to improve. And USA Today examined the impact of storms like Dorian on affordable housing more broadly.
House Financial Services Subcommittee holds hearing on housing discrimination in Texas

On Wednesday, the House Financial Services Subcommittee on Oversight and Investigations held a field hearing on discrimination and other barriers to homeownership. Witnesses at the hearing, which was held in Houston, included Belinda Everette of the NAACP Houston Branch, John Wong of the Asian Real Estate Association of America, Dedrick Asante-Muhammad of the National Community Reinvestment Coalition and Noel Poyo of the National Association of Latino Community Asset Builders. In a statement issued after the hearing, Subcommittee Chairman Al Green (D-Texas) said, “This hearing informed the public of pervasive disadvantages in the financial services industry that disproportionately affect people of color and persons in the LGBTQ community.” 
HUD expands RAD to include senior housing

HUD announced on Thursday that the agency will expand the Rental Assistance Demonstration (RAD) program to Section 202 housing for seniors. This will facilitate more opportunities for nonprofit housing developers to use capital investment to revitalize aging properties, according to HUD. “By expanding RAD's reach into this vital part of our affordable housing stock, we can prioritize and mobilize capital investment to tackle the projected backlog of repairs in these properties and preserve more affordable housing for those who need it most,” HUD Secretary Ben Carson said in a statement. According to a report by National Mortgage News, HUD is also mulling a formal rulemaking to enact the restrictions on downpayment assistance by nonprofits that the agency tried to accomplish through its April mortgagee letter, only to be overruled by a federal judge in July.
Fannie Mae Chief Economist discusses the future of housing on HousingWire podcast

In the season finale of HousingWire’s Housing News Podcast, released on Wednesday, Fannie Mae Chief Economist Doug Duncan discussed several important housing issues, including the lack of supply and changing demographics. Duncan said that one reason for the lack of housing supply is that seniors are increasingly choosing to age in place, instead of moving to retirement communities. Duncan also cited the lack of entry-level homes being built, which he attributed in part to the construction labor market. “During the crisis, we went from building 2.2 million units a year to 600,000. And we stayed at that low level for about three years. So, all the labor that would have been used in building the 2.2 million net of the 600,000 had to find someplace else to go,” Duncan said. “Some of it retired, some of it went home to its to its own country, some of it went into other jobs. So, for that long time period, those people have now gone into something that's more sustainable for them longer term.”
Chart of the Week
D.C.’s affordable housing gap

In an Urban Institute report published Wednesday on the Washington region’s future housing needs, researchers found a 264,000-unit gap between demand and supply of housing affordable to low-income people. The report also showed that the Washington region needs to add 374,000 housing units by 2030 to keep up with demand.
What we're reading
In an article published Tuesday, the New York Times examined a new movement among criminal justice reform advocates for housing for those returning from prison. According to the article, formerly incarcerated people face myriad difficulties finding housing upon release, sometimes leading to recidivism. Read the article here.

The Wall Street Journal covered the results of a new study on the connection between use of emergency medical services and homelessness. The researchers found that over a third of first-time homeless shelter users had visited the emergency department in the previous year. Read the article here.

In an in-depth article published Thursday, Rolling Stone took a deep dive into California’s housing crisis. The article examines efforts across the state to invest in affordable housing and reduce homelessness, and why they have proved largely unsuccessful. Read the article 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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