Putting Housing Finance on the Agenda

“The greatest current threat to the multifamily industry is poorly designed and executed GSE reform,” Bibby and Bob DeWitt wrote recently. (Photo: REIT.com)

WASHINGTON, DC—Whether victory in the presidential election goes to the Democratic or Republican contender, people will continue to require a roof over their heads. With that in mind, the National Multifamily Housing Council intends to put the spotlight on housing policy at both parties’ national conventions, starting with a panel discussion Wednesday at the Republican convention. “As many as 4.4 million new renter households could form over the next decade, and more than ever we need to work with all levels of government to ensure our industry can meet the growing demand for rental housing,” says NMHC president Doug Bibby . “The conventions provide an unprecedented opportunity to educate policymakers about the fundamentals of our housing markets and how they have the potential to impact our economy overall, not to mention the families and communities that call rental housing home.” NMHC secretary Ken Valach , CEO of Trammell Crow Residential , served as an expert on a panel Wednesday at the Republican convention in Cleveland that focused on economic growth and sustainability. Moderated by Jeffrey DeBoer , president and CEO of the Real Estate Roundtable , the discussion examined the overall real estate and multifamily industry with new leadership next year in Congress and the White House. Next week brings the Democratic convention in Philadelphia. There, Alan George , EVP and CIO and CIO of Equity Residential and NMHC executive committee member , will join other industry and political leaders to highlight issues that are critical to the multifamily industry. One of those issues is housing finance reform, an issue that “continues to draw interest—along with a lot of different opinions on what to do next,” according to an NMHC blog posting. “Although this year there is no expectation that any serious run at reform of Fannie Mae and Freddie Mac will take place, the noise around this topic is getting louder.” With lawmakers on both sides of the aisle sending letters to Mel Watt , director of the Federal Housing Finance Agency , as well as published papers on the subject, “there’s no question that the debate is raging on in Washington.” A group of 32 Representatives, all Democrats, sent Watt a letter in late May calling for the recapitalization of Fannie Mae and Freddie Mac. They wrote that the GSEs’ present capital base, which will expire in 2018, puts “underserved markets” at risk. Earlier this month, a bipartisan group of six senators—including Ron Johnson (R-WI), Mike Crapo (R-ID), Bob Corker (R-TN) and Mark Warner (D-VA), all recognized as leaders of GSE reform—sent their own letter to the FHFA director, saying that the issue should be left up to Congress. At about the same time, Bibby and NMHC chairman Bob DeWitt published an in-depth essay along with concluding remarks as part of the Urban Institute’s Housing Finance Reform Incubator project. “The greatest current threat to the multifamily industry is poorly designed and executed GSE reform,” Bibby and Dewitt wrote. “The fact is that Fannie Mae and Freddie Mac’s multifamily programs are a critical capital provider and participate alongside private capital sources to support a well-functioning marketplace for multifamily borrowers. “GSE reform that destabilizes the presently healthy market must be avoided,” they concluded. “We support GSE reform that builds on the proven, successful elements of today’s system and promotes rental housing for all Americans.” Along similar lines, former FHFA director Ed Demarco and Milken Institute director M ichael Bright , a key figure in drafting the Johnson-Crapo and Corker-Warner housing finance reform bills, issued the first of a proposed series of papers outlining their recommended approaches to housing finance reform. “This work must get done,” wrote Demarco and Bright. “Eventually, legislators will have to resolve their differences to chart a modernized course for housing in our country.”