House Financial Services Subcommittee on Insurance, Housing and Community Opportunity Chair Judy Biggert (R-IL) held her first hearing as Chair of the committee on February 16. The hearing was entitled “Are there government barriers to the housing market recovery?”
The panel providing testimony included David Stevens, Commissioner of the Federal Housing Administration (FHA) and Assistant Secretary of Housing, HUD; Theodore Tozer, Government National Mortgage Association (Ginnie Mae); Phyllis Caldwell, Chief of the Homeownership Preservation Office, Treasury; Douglas Holtz-Eakin, American Action Forum; Michael Farrell, Annaly Capital Management, Inc.; Faith Schwartz, HOPE Now; and Julia Gordon, Center for Responsible Lending.
The hearing focused on Government Sponsored Enterprise (GSE) reform, reconstituting governmental support of the housing market, encouraging homeownership, and other efforts to stabilize the housing market. While the hearing focused on homeownership and mortgage market stabilization, there was mention of creating a balanced housing policy that emphasized rental security and broader affordable housing options for low income individuals and families unable to afford homeownership.
Mr. Stevens emphasized the importance of the government’s “commitment to affordable rental housing, which is a critical component of a comprehensive balanced national housing policy.” Mr. Stevens went on to suggest that the FHA’s lending to multifamily markets could provide greater support for rental housing. Mr. Stevens referenced the “half of all renters spending more than a third of their income on housing—and a quarter spending more than half” as the need for a range of affordable renting options for all Americans.
Ms. Gordon said, “The biggest barrier to recovery right now is the continued rapid pace of unnecessary foreclosures.” Ms. Gordon utilized NLIHC figures to emphasize the impact of this foreclosure crisis on rental housing. She stated, “according to the National Low Income Housing Coalition, a fifth of single family (1-4 unit) properties in foreclosure were rental properties and as many as 40% of families affected by foreclosure are tenants.” Ms. Gordon also said that, while there is some legal protection for renter households in foreclosed units, these families are ultimately forced to leave their homes.
Other panelists recognized the government’s important role in the housing market and noted that, while government’s role should be reduced moving forward, the government’s role in housing and mortgages did not cause the collapse of the housing bubble. This echoed the opinion expressed at the hearing by Representative Luis Gutierrez (D-IL), the Ranking Member of the Subcommittee, that the government is not hampering the housing market and that the government is not responsible for the collapse of the housing bubble.
Access witness testimony and an archive webcast of the hearing at http://financialservices.house.gov/hearings/hearingDetails.aspx?newsid=1764