Simply predicting that housing policy will be locked in partisan gridlock for 2014 would play safely to the odds, especially if the recent budget negotiations were any indicator. But that would miss some of the possibilities for effective, bipartisan legislation, helpful regulatory change, and essential action around the country that may well occur this year. Consider a few areas:
- Reforming housing finance. The Senate Banking Committee has been quietly working away in a bipartisan way to craft legislation to replace Fannie Mae and Freddie Mac. Indeed, I testified for NHC at a recent hearing. Expect the ongoing effort to carry on into 2014 and perhaps beyond, depending on whether legislation can make it through 2014. With the confirmation of Rep. Mel Watt to head the Federal Housing Finance Agency, expect change at that agency in directions that better support affordable housing.
- Preventing foreclosures. We’re far from out of the woods on foreclosures, despite the fatigue with the issue in policymaking circles. Although rates of mortgage distress are slowing, the absolute numbers are still much worse than normal market conditions, particularly in areas hit hardest. Last year saw extensions of HARP and HAMP, as well as HUD’s recent proposed rule on housing counseling (see NHC’s comment letter through our National Foreclosure Prevention and Neighborhood Stabilization Task Force).
- Rebuilding neighborhoods. Last year saw some of the final milestones of the Neighborhood Stabilization Program, and the nonprofit sector in particular is seeking to build on the capabilities created through NSP and the lessons learned. Look for new partnerships between nonprofits and for-profits, particularly in the growing single-family rental sector. Also possible are regulatory changes in FHA’s 203(k) program that could help finance acquisition and rehab of distressed properties.
- Access to credit. The multi-year saga of the qualified residential mortgage (QRM) rule continued in 2013 when regulators released a new proposal to align QRM with the now-final qualified mortgage (QM) rule. Their proposal was very much in line with NHC’s advocacy. There may well be a final rule in 2014.
- Encouraging fair housing. In 2013, HUD proposed regulations to implement its obligation to affirmatively further fair housing. NHC’s forum on fair housing helped stakeholders come together to understand the issue (also see our comment letter). HUD has many comments to digest on a politically fraught issue, so it may be well into 2014 or beyond before we see next steps.
The policy activity, however, will occur against the backdrop of many housing markets that are already shifting from the low gear of depressed prices and foreclosure activity to the high gear of rising costs and affordability concerns. The change is happening rapidly in some places, potentially quicker than policy can react. It’s essential that we maintain good lines of communication between practitioners on the ground and decision makers in Washington to help us collectively make the right decisions for housing.