At a hearing of the Senate Banking, Housing, and Urban Affairs Committee on May 5 to consider the Administration’s FY12 proposed budget for HUD (see article elsewhere in Memo),
Ranking Member Senator Richard Shelby (R-AL) engaged HUD Secretary Shaun Donovan in discussing how the government can shift subsidy away from over-investment in homeownership. The Secretary pointed to the National Housing Trust Fund (NHTF) as the way to rebalance the government’s housing approach and increase focus on rental housing. Prior to the housing crisis, funding the NHTF was critical, said the Secretary; now, funding NHTF is “absolutely essential.” The Secretary pointed to the Administration’s effort to fund the program as part of GSE reform in order to provide a consistent long term funding mechanism that does not fluctuate with appropriations cycles (see Memo, 2/11). The Administration requested $1 billion for the NHTF in its FY10, FY11, and FY12 budgets and called for dedicated funding for the NHTF in its “white paper” on housing finance reform.
Secretary Donovan commended Committee member Senator Jack Reed’s
(D-RI) leadership on funding the National Housing Trust Fund. Senator
Reed discussed his legislation, the Preserving Homes and Communities
Act, S. 489, to fund the NHTF through TARP warrants that the government
has generated $9 billion in profits from selling (see Memo, 3/4).
He is seeking cosponsors for S. 489 (see article below). Senator Reed
pointed to the dramatic increase in worst case housing needs between
2007 and 2009 and said that funding the NHTF would provide those
households with affordable housing.