Hello, LOs!
There was a lot to digest in yesterday's flurry of announcements from the Biden administration to make headway on the nation's housing supply woes.
Will it make a difference?
Many of the changes will take place immediately, unlike the opaque and painfully slow negotiations going on in Congress to pass a bill which may or may not include a down payment assistance program.
One portion of the announcement which caught my eye is a somewhat-cryptic statement from Sandra Thompson, acting director of the Federal Housing Finance Agency, who said that the agency will be taking a look at the "interaction between exclusionary zoning" and the GSEs. I'll be keeping an eye on how that takes shape in the months to come.
But from what we can tell, mortgage and housing development stakeholders were pleasantly surprised at the Biden administration's actions.
In a statement, Bob Broeksmit, president of the Mortgage Bankers Association, said the trade group strongly supported the efforts, which included upping Fannie Mae and Freddie Mac investments in income-limited subsidized developments, expanding GSE financing for manufactured homes and re-starting a program administered jointly by the Department of Housing and Urban Development and the U.S. Treasury.
"The lack of supply is a huge problem, and HUD and FHFA should do what they can administratively while Congress considers more significant initiatives," Broeksmit said. "MBA looks forward to continuing to work with the administration, Congress, and all other stakeholders on ways to address supply constraints and ensure government programs appropriately complement private capital to help both renters and homeowners."
Jolie Milstein, CEO of the New York State Association for Affordable Housing, told me she was thrilled about the news. Her trade association, which represents real estate developers, has been lobbying for years for the relaunching of HUD and the Treasury's risk-based sharing program.
Milstein said restarting the risk-based sharing program was a "no-brainer." The program, which lapsed in 2019, provides low-cost financing to housing finance agencies to finance affordable subsidized housing.
Short of training a civilian corps to rehab and retrofit existing homes and build new ones, it's hard to envision a solution that could dig the country out of a housing deficit that could be as large as 5 million, according to Robert Dietz, the chief economist at the National Association of Homebuilders.
"We've come to refer to the supply issues which have been in place for the market for at least half a decade as the five L's: we lacked the labor, the lots, the lending, the builders and land developers," Dietz said, in a recent episode of HousingWire Daily.
What do you think the GSEs could be planning to do about exclusionary zoning?
Georgia Kromrei
Senior Mortgage Reporter, HousingWire
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