June 28, 2018

Community Developments: Proposed Changes to the Nation’s Housing Finance System, Legislation Aims to Reinstate Fair Housing Tools 

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Community Developments

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  • In a blog post, Enterprise’s Vice President for Policy Development, Andrew Jakabovics, looks at the Administration’s recent proposal to make major changes to the nation’s housing finance system under the umbrella of reform. Jakabovics explains that the proposal, which was nestled within the Administration’s sweeping proposal to reorganize the Federal Government, calls for ending the conservatorship (and charters) of Fannie Mae and Freddie Mac (collectively, the Government Sponsored Enterprises or GSEs), creating a paid-for guarantee of catastrophic risk on mortgage-backed securities, and establishing other fully private guarantors. Using previous Enterprise policy recommendations for housing finance reform as a guide, Jakabovics evaluates the new proposal pointing out that it is largely in line with the mainstream, bipartisan consensus that there is an appropriate role for a paid-for government backstop that would limit investor losses on mortgage-backed securities without guaranteeing the entities issuing them. However, the proposal is entirely silent on the future of rental housing finance and the GSEs’ multifamily business lines, and makes a critical mistake in assuming that affordable housing objectives and traditional underwriting are mutually exclusive and therefore would shift primary responsibility for serving low- and moderate-income borrowers to HUD and FHA. Enterprise will continue to remain engaged on this critical issue and work towards a future system that is structured to protect taxpayers while broadly serving the needs of homeowners and renters. Learn more about the proposal in Enterprise’s blog post
  • Ranking Member of the House Committee on Financial Services Representative Maxine Waters (D-California) has introduced the Restoring Fair Housing Protections Eliminated by HUD Act of 2018 (H.R. 6220), a bill that would restore several fair housing tools that have been suspended or eliminated. The bill would require HUD to: restart implementation of the Assessment of Fair Housing Requirement, which requires local governments that receive HUD funding to submit an examination of the local housing landscape that helps jurisdictions set their fair housing priorities and goals; reinstate the Local Government Assessment Tool that assists jurisdictions in meeting their obligations under the Fair Housing Act to affirmatively further fair housing; and conduct a review of fair housing complaints involving an online platform to report to Congress with an analysis of trends and risks related to discrimination occurring in connection with the use of online platforms. It would also require HUD to reissue a Federal Register notice regarding a proposal that would require owners and operators of HUD-funded homeless shelters to post a notice informing individuals of their rights under HUD's “Equal Access in Accordance with an Individual’s Gender Identity in Community Planning and Development Programs” rule. (U.S. House Committee on Financial Services)
  • HUD and the National Environmental Health Association (NEHA) have announced the winners of the 2018 HUD Secretary’s Award for Healthy Homes, an award that recognizes “excellence in making indoor environments healthier through healthy homes.”  For the fourth consecutive year, HUD and NEHA identified outstanding local programs and research that promote healthier housing through education, partnering, and innovative practices, selecting efforts in Baltimore, MD, Fort Collins, CO, Milwaukee, WI, and New Orleans, LA. The award was initiated in 2015 to showcase results achieved under a wide range of housing and indoor environmental health programs. (HUD, June 28) 
  • An article in the Mercury News notes that eligible voters in the city of Mountain View, California will vote this November on a ballot measure that would impose an employee “head tax” on businesses to help alleviate traffic and housing affordability challenges. Earlier this week the City Council voted unanimously to place a ballot measure that would authorize taxing businesses between $9 and $149 per employee, depending on their size. This tax is expected to generate up to $6 million annually, with 10 percent of the generated funds funneled towards affordable housing and homeless services. (The Mercury News, June 27) As previously highlighted in Community Developments, a similar effort that would have imposed an employee hours tax on certain business in Seattle to generate funds for housing was repealed earlier this year due to overwhelming big-business opposition. 

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