GRAPEVINE

Time for Bold Action

BY ANDRE SHASHATY

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

Chicago—As I wrapped up AHF Live: The Tax Credit Developers’ Summit here in October, I was amazed by the excitement it generated. Our speakers and attendees left town full of energy and ideas to address our industry’s challenges. One thing was clear: Now is the time for new thinking and bold action by housing developers and advocates.

Sen. Paul Sarbanes and former member of Congress Nancy Johnson told the audience of 600 that they have a great opportunity to get affordable housing back on the political “front burner” in Washington.

With the widespread attention being paid to housing issues just as the presidential campaigns are heating up, there is a very receptive climate among national politicians for new ideas to address the nation’s housing needs.

It’s clear that new efforts are needed. The outlook is mixed at best for the availability of equity for tax credit projects in 2008, which will make it harder to undertake new construction projects.

Not everyone will agree on how to best address the nation’s housing woes. At AHF Live, the debate was about whether it is better to inject more federal funding into the current system of housing programs, or to create new methods of delivering housing assistance.

For some, like Johnson, it’s inefficient to create new programs. She opposed the National Housing Trust Fund, she said, because it would create a new program instead of using existing delivery systems.

For others, like Richard Baron, chairman and CEO of McCormack Baron Salazar, it’s not enough to just convince the Democratic Congress to put a little more money into this or that program. The industry needs to take the lead in proposing bold new steps, and must not wait for Congress to set the course, because few in Congress really understand today’s housing market dynamics.

Then there’s the question of what happens to the Department of Housing and Urban Development (HUD). HUD staffers are abuzz with rumors about whether Secretary Alphonso Jackson will resign or get indicted for lying under oath or for violating the Hatch Act, which prohibits federal employees from undertaking political activity on government time or in government facilities.

The discussion on how to get the agency back on track has already begun. At AHF Live, Johnson and a group of distinguished leaders helped me initiate a discussion on how to make the agency functional again.

As Johnson put it, our task is nothing less than rethinking the mission of HUD. The agency is “a black hole” to members of Congress and can’t be trusted with substantial new funding, she said.

Johnson challenged housing advocates to think about how to modify current housing programs to serve a continuum of needs, rather than targeting only the poor. She said political support depends on having the programs provide a gradually receding amount of assistance all the way up the income ladder.

Sen. Sarbanes said the most important thing the industry could do would be to convince the next president to appoint a competent person to run HUD, rather than a political crony.

AFFORDABLEHOUSING FINANCE will continue to encourage and coordinate discussion on how to fix HUD. We are also very excited about a new feature we are planning. We will profile the Young Leaders of Affordable Housing, and are still accepting nominations for our list. If you know someone who is under 35 and shows outstanding leadership ability, please forward information to us by the first week of December. Send your thoughts and nominations to me at ashashaty@hanleywood.com.

But most importantly, I hope you will heed the words of our great speakers at AHF Live. Now is the time to take action in support of housing. If we all do our part, 2008 will be a very happy new year indeed.

The bill establishing a National Housing Trust Fund has cleared the House of Representatives. It is now up to the U.S. Senate to decide if the bill will move forward and become law. If you support the bill, contact your senator. More information can be found at www.nhtf.org.