Presentation on theme: "H OUSING P OLICY B EYOND 2012: P ROSPECTS AND P ERILS Larry A. Rosenthal UC Berkeley NACCED Orlando October 1, 2012."— Presentation transcript:
H OUSING P OLICY B EYOND 2012: P ROSPECTS AND P ERILS Larry A. Rosenthal UC Berkeley NACCED Orlando October 1, 2012
Berkeley Guy's Uninvited Subtitle: "H OUSING P OLICY 2012: T HE P RESIDENTIAL D EBATE B OUND N OT T O H APPEN "
The (Dis)Advantages of Being Headline News Housing markets and shelter stability: Star power for four+ years! BUT neither major party has policy prescriptions sure to work and sure to fire up their base.
Many say the bottom is behind us … Source: RealtyTrac (US data)
But risk of a new bottom persists in many places … Source: RealtyTrac (US data)
Conditions remain dire FL: 14% of mortgages are in foreclosure NV: 6% foreclosure, 6% seriously delinquent Nationally, three million HHs in foreclosure or seriously delinquent
Plan for remarks Obamney: Rough Comparison of Obama's Record & Romney's Positions Convergence and Consensus: Policy Frontiers to Come What IF? Concluding Thoughts
DISCLAIMER: Rosenthal/Berkeley Has Nothin' On You NACCED members have lived Obama's housing and community development policies '09-'12, on balance: a blend of drastic measures, genuine vision & creativity, and steady-as-she-goes BUT politically: "It's the recession, stupid" (apologies to James Carville)
Obama's Mixed Record: Examples Foreclosure Prevention, Or Facilitation? Distressed Homeowner Assistance: Some Helped. Many Frustrated. Homeless Prevention and Rapid Rehousing (HPRRP) Neighborhood Stabilization (NSP)
HUD Shortchanged Under FY2013 Proposal
Obama and Cities: Murmurs of Genuine Federal Leadership "Strong cities are building blocks to strong regions" "Interdisciplinary approach that appreciates the interdependent nature of issues affecting urban communities" "Takes into account how cities, suburbs, and exurbs interact" "Revitalize urban areas holistically"
Age of HUD Innovation? (examples) "Rental Alignment" conferences "Rental Assistance Demonstration"(RAD) FHA LIHTC Pilot Sustainable Communities Energy efficiency programs
Source: Census SOMA ARRA: LIHTC "Exchange" Saved Buildings
Romney + Ryan = ?? predictions If landslide (control of Congress): – Voracious cuts-only deficit reduction – Across-the-board slashes HCVs (sec8 & PBV) CDBG Aid to seniors, homeless Full elimination of "unproven" HUD innovation activities (pilots)
If narrow GOP victory … White House + control of one or fewer houses of Congress: – A decidedly more nuanced picture – Little signal on housing/urban policy leanings – Until …
Romney on housing: Five key ideas Reform Fannie/Freddie Liquidate the US REO-foreclosure portfolio (>200k units) Make foreclosure alternatives easier Replace Dodd-Frank Jobs jobs jobs
"Reform Fannie & Freddie" (I) Overwhelmingly complex challenge – Obama punted out of necessity Policy intricacies approach health-care-reform levels Moderate Proposal: decoupling investment and market-stabilization elements of GSE's (UK "covered bonds" approach)
"Reform Fannie & Freddie" (II) Privatize riskiest elements of portfolios; soften affordability obligations Retain some CRA-style incentive system for sustainable-communities investments "End Too-Big-To-Fail" --> verbiage appeals to independents, but could involve "End GSEs" Details lacking...
Responsibly Liquidate 200,000+ Vacant Foreclosed Homes Now Owned by the Government Dems presumably agree Government's a bad landlord (consider public housing's fate) Owner/operator "foreclosure investment" firms springing up, particularly in higher-cost metros Caveat: fast offload can derail the recovery and shortchange lowest-income HHs
"Make foreclosure alternatives easier" Benefits banks and buyers, or current owners? "Short sales, deeds-in-lieu-of-foreclosure, shared appreciation vehicles" Raises serious concerns (local-law variation, tax implications) Independent voters may disfavor another round of "robo-signed" dispositions
"Replace Dodd-Frank To Get Mortgage Credit Flowing Again" (I) Is Dodd-Frank really to blame for the credit crunch? Expansion in the home-lending sector will require upward adjustment in interest rates Stock markets are fully recovered mortgage capital should have followed suit by now... no one really knows why
Heightened lending standards implement fiduciary "suitability" thresholds Implementation still underway Can Romney win on a financial deregulation platform? President Obama's "let's not go backward" plea resonates here Details lacking... "Replace Dodd-Frank To Get Mortgage Credit Flowing Again" (I)
Improve the job market Many unemployed Obama-Biden '08 voters may wish to give the GOP a chance Despite Obama's current momentum, languid jobs recovery is indeed a weakness Q: What does this have to do with housing? A: "Everything."
Convergence & Consensus: Policy Frontiers To Come (I) Deregulate local land use restrictions: reduce barriers to new multifamily Reform mortgage interest deduction Add renter's tax credit Revisit multifamily disinvestment policies: can LIHTC be strengthened by more favorable tax treatment (vis-à-vis pre-TRA86)?
Maintain "chronic" homelessness focus, coupled with housing referrals/assistance Expand Family Self Sufficiency Program Expand Project Based Vouchers Streamline Section 8 Habitability Inspections Portable Vouchers: Location Matters Convergence & Consensus: Policy Frontiers To Come (II)
What if … What if housing & urban policy actually influenced the 2012 Outcome? Not such a far-fetched notion --> remember, we're headline news now! Consider what our fellow rational, common- sense voters are asking themselves
Are foreclosures avoidable? Should government intervene? Can that ever succeed?
What part of our ongoing economic struggles are the President's fault? George W. Bush's fault? Nobody's fault? Our own fault?
If you believe government can heal the housing economy, does Gov. Romney deserve a chance to lead that effort?
The Tea Party and Occupy Wall Street agree on at least one thing: Government-as-usual helped get us into this mess, and may never be able to get us out. What if existing policy tools aren't suitable for addressing new, fundamentally different challenges?
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