A key feature of the report is the emphasis on better balance in the U.S. housing market to provide for a wider range of choices for all households. This includes a more robust and affordable rental housing sector. The Administration asserts that an essential element of whatever new housing finance system the Congress will create is a commitment to a “system of transparent and targeted support for access and affordability.” This includes a dedicated funding mechanism that “would support the development and preservation of more affordable rental housing for the lowest-income families to address serious supply shortages, similar to the Housing Trust Fund that the President has proposed to be capitalized.” The paper cites the fact that for “every 100 extremely low income American families, only 32 adequate rental homes are affordable.”
On behalf of the National Housing Trust Fund Campaign, Sheila Crowley, President of the National Low Income Housing Coalition, said in a press release that “by including the housing shortage faced by the lowest income Americans in this report, the Obama Administration has focused attention on the fact that the U.S. housing market has not met the needs of all our people. The report offers a way forward for change and a chance to finally assure decent and affordable homes for all Americans, including a revenue source for the National Housing Trust Fund. We look forward to working with Congress and the Administration to advance this goal as soon as possible.”
The Administration calls for a winding down and eventual elimination of the two mortgage giants, Fannie Mae and Freddie Mac, and strengthening the Federal Housing Administration (FHA) and the Federal Home Loan Banks to provide access to mortgage credit for low and moderate income people. Rather than detail specifics in the paper, the Administration offers three options for the degree of federal involvement in the mortgage market going forward.
In a press release in February 11, Congressman Barney Frank (D-MA), ranking member on the House Financial Services Committee, said “I am pleased that the paper specifically supports funding for rental housing. It is important that any new legislation include a revenue stream to support rental housing…. The central question going forward is how to protect taxpayers without unduly increasing the cost of mortgages to American families.”
Objections to the proposal were raised by a group of civil rights organizations who said two of the three options failed “to ensure that all communities and families have access to capital needed for sustainable homeownership and a range of rental options.” The coalition, which includes the National Council of La Raza, the NAACP, and the National Fair Housing Alliance, was more optimistic about the third option that includes a larger federal role, but is concerned about the lack of specificity in the report.
To read the Administration press release and download a copy of the report, go to http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.2011-02-11
To read the press release from the NLIHC, go to http://nlihc.org/detail/article.cfm?article_id=7659&id=48
To read Congressman Frank’s statement, go to http://democrats.financialservices.house.gov/press/PRArticle.aspx?NewsID=1397
To read the statement from civil rights groups, go to http://nlihc.org/doc/CR_Statement_Adminitration_Proposal_Housing_Finance.pdf