Several industry trade groups have launched lobbying efforts to ensure that affordable housing and the multifamily industry, in general, are given full consideration in the various economic stimulus measures currently before Congress.
The National Low Income Housing Coalition (NLIHC) continues to advocate for capitalization of the National Housing Trust Fund (NHTF) in the current economic recovery package. While the House and Senate versions of the current stimulus bill included funding for some low-income housing programs, neither bill directs funds to the production of homes affordable to extremely low-income families.
The NLIHC says that some lawmakers have a bias against the NHTF because of the perception that since it’s a new program, the funds could not be spent quickly enough to create a desired economic stimulus. But the NLIHC is working to refute that claim by collecting information about affordable housing projects that are ready to go. The organization now has a database of 968 “pipeline projects” from 41 states and the District of Columbia, as of Jan. 30.
Anyone able to contribute project-level information should contact NLIHC senior research analyst Keith Wardrip at email@example.com. The database can be found at http://www.nlihc.org/doc/All-Pipeline-Projects-Jan30.pdf.
The fund was signed into law last year and was to be funded by Freddie Mac and Fannie Mae. But the funds went dormant when the Federal Housing Finance Agency suspended contributions to the fund in December.
Separately, the National Multi Housing Council (NMHC) and the National Apartment Association have released a four-point policy statement outlining the steps federal officials must take to avoid systemic failure in the apartment sector.
An estimated $80 billion to $100 billion in multifamily mortgages will mature and need to be refinanced in the next two years, but the frozen credit markets may force some owners into foreclosure. What’s more, the lack of capital has stalled new apartment construction at a time when access to affordable rental properties is critical.
“The single-family foreclosure crisis has increased the demand for affordable rental housing. Without federal action, however, the apartment industry cannot meet this demand," says Doug Bibby, NMHC’s president. “Like so many other industries, we are a collateral victim of the single-family housing bubble.”
The NAA and NMHC are calling on federal agencies to use the authority they have under the Troubled Assets Relief Program and the Term Asset-Backed Securities Loan Facility to:
1. Purchase multifamily mortgage-backed securities (MBS) guaranteed by Fannie Mae and Freddie Mac. Federal Reserve/Treasury purchases are important to invigorate the multifamily MBS investor market, which has begun to show limited signs of activity.
2. Purchase longer-term debt issuances by Fannie Mae and Freddie Mac so that the government-sponsored enterprises (GSEs) can support their lenders’ funding needs without having to rely on mismatched short-term debt.
3. Purchase highly rated commercial mortgage-backed securities (CMBS). This would restore investor confidence, restart trading in the frozen CMBS market and establish a market-clearing price for a variety of real estate assets, including commercial and multifamily mortgages.
4. Exempt multifamily loans from GSE mortgage portfolio limits through Dec. 31, 2010, or until a new secondary market structure for multifamily loans is operational, whichever comes first.
The four-point plan comes on the heels of a recently released policy paper by Harvard University's Joint Center for Housing Studies detailing the growing importance of rental apartments and pointing to a looming liquidity crisis that could seriously impair the sector and lead to a critical housing shortage.