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Uniting Over Housing

The midterm elections are history but Democrats and Republicans are still arguing with each other over who won. The answer may be that we did – Americans who want their government to work.

As freshmen members of Congress are trying to figure out how they will afford a home in DC while maintaining one in their district, they should consider how housing can be an issue on which a divided government can come together.

Many Republicans and Democrats, already understand that the affordable housing crisis is a top line agenda item. So, a Republican-led Senate and a Democrat-led House can serve the American home well if Members of Congress are given thoughtful answers to the questions they are being asked by their constituents such as: Why is it still so hard to get a mortgage on an affordable house? Why is my rent so high? Why are there so many people experiencing homelessness in my city? Why do I still live with my parents? Where am I going to live when I retire on Social Security?

Asking these questions is the easy part. Answering them with action and results is much harder.

Here’s what legislators can do in the first six months of the new Congress before the 2020 campaign overwhelms their ability to work together:

Fund Affordable Housing

Affordable housing production creates jobs and helps take pressure off low and moderate-income renters struggling to make ends meet. According to the National Housing Conference’s Paycheck to Paycheck database, a carpenter can’t afford to buy a modest home in DC.

Senators Orin Hatch (R-UT) and Maria Cantwell (D-WA) have written bipartisan legislation to expand the housing tax credit. Congress should take that up immediately. It’s not enough by itself to solve the affordable housing crisis, but it’s a good start.

A responsible housing component of a national infrastructure bill can also help families spend more of their time and money on raising their kids and saving for the future instead of worrying about how they can afford to buy a home or make their next rent payment.

Fix What’s Wrong With Our Housing Finance System

Leaving Fannie Mae and Freddie Mac in conservatorship is not the answer. The parts of our housing finance system that remain broken can be fixed without creating an entirely new system out of whole cloth that no one will capitalize. “If you build it, they will come,” is not a strategy for repairing nearly one-fifth of the world’s largest economy, it’s a tagline for a movie.

Congress will follow if Treasury Secretary Mnuchin leads. America has never had a Treasury Secretary who understands the complexities and opportunities of the housing market as well.  Mnuchin should put together the same kind of nonpartisan and diverse group of housing leaders to consult with and offer a plan for administrative as well as statutory reform that worked well for him with Dodd-Frank Reform. All deficit spending is not equal, and neither are all tax cuts. The last tax bill slashed estate taxes to help 10,000 dead rich people. It also created Opportunity Zones, which could bring hundreds of billions of dollars off the sidelines and into communities that need it most.

Expand the Federal Finance Bank’s Multifamily Risk Share Program

Since 2014, this little-known program has closed or committed $2.4 billion in financing for 24,857 affordable apartments in 14 states. Under the FHA-FFB partnership, lenders must take 50 percent of the credit risk and have the financial capacity to support this commitment – an extraordinary mitigation of federal risk. The FHA-FFB platform is also sufficiently streamlined and efficient to accommodate the modest-sized loans that rural and other smaller and more affordable properties need; 35 percent of all FHA-FFB loans closed as of June 30, 2018, had original balances below $5 million. There’s simply no good reason for the Trump administration not to embrace and expand this program.

This country’s first comprehensive housing act was passed in 1949 and it was developed and fought for by a diverse group of social advocates and homebuilders, labor unions and investors, brought together by the National Housing Conference. It was passed by a divided government and signed by a President who barely won his first election as president. The bill promised “a decent home and suitable living environment for every American family.” It’s not too late to make good on that commitment.

Today, America is overdue for a comprehensive national housing policy. If Democrats want to show how they can govern, and Republicans want to prove they are more than the President’s closing arguments on immigration, housing can be the place they come together.

About Author: David Dworkin

David Dworkin is the President and CEO of the National Housing Conference. Prior to joining NHC, Dworkin worked as a senior policy advisor at the U.S. Department of the Treasury, where he advised senior Treasury Department officials on matters related to housing and community development. His expertise includes credit availability; housing finance reform, mortgage servicing, affordable housing, access to credit, residential housing vacancy, abandonment and demolition and community stabilization strategies. He also served as a member of the White House’s Detroit interagency team, where his responsibilities included developing and implementing strategies to assist in the City of Detroit’s revitalization.
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