In the wake of national presidential conventions and debates conducted over controversial topics to better inform voters as these candidates move closer to the election in November, one of the topics hardly touched in these discussions has been the housing market and its reform. Chief Economist for Redfin, Nela Richardson, believes that there are four things these candidates need to keep in mind to “make the housing market great again,” according to a report from Redfin.
Ignore Mortgage Finance Reform
Richardson says that reform of Fannie Mae and Freddie Mac and other such insurers has been controversial for “longer than millennials have been alive” but despite the agreement that government involvement should be reduced, Richardson says that there is nothing to replace them with as of right now. She suggests that whomever wins the presidency should focus on figuring out a solution for how private capital can be placed back into the mortgage market in order to have viable alternatives to Fannie Mae and Freddie Mac.
Connect affordability to mobility
“Too often a person’s zip code determines their economic mobility,” says Richardson. She states that almost half of the totality of renters are cost burdened and a quarter of those are classified as being “severely” cost burdened. In her report, Richardson says only one in four people who qualify for federal subsidies actually receives them. She feels that the next president can help better the market by increasing subsidies to households who need them and helping them move to better thriving communities near jobs and functional schools.
Richardson says that increasing building is important to the betterment of the market, but included in this equation must be more transit and infrastructure spending in order to make sure neighborhoods don’t suffer due to isolation or neglect. “Political dysfunction in Congress has prevented the federal government from making the infrastructure investment needed in America’s cities,” says Richardson. “Our families pay the price.”
Remembering the “Rust Belt”
This final point is shared as something personal to Richardson, who says that some towns facing decay do to foreclosure never came from the housing market boom or bust. Instead, she says they are due to something far more long lasting i.e. job loss and population decline. “It’s an open question whether foreclosure-choked neighborhoods will ever be a good investment for a new generation of homebuyers,” says Richardson. The answer she sees for these communities comes from jobs and reinvestment into local economies before “homeownership can become a great investment again.”