Tom Gleason has spent his career working in affordable housing lending and community development finance.
For the past nine years, he has been executive director of MassHousing, an independent, quasi-public agency that provides financing for affordable housing across Massachusetts. The agency raises capital by selling bonds and lends the proceeds to developers and low- and moderate-income home buyers.
In a new role, Gleason was recently selected to serve on Fannie Mae's inaugural Affordable Housing Advisory Council.
Q: How did you get started in the affordable housing business?
A: When I was attending graduate school for public administration at the University of Massachusetts in the 1970s, I had a job in the community development department in Westfield, a solid, working-class city in western Massachusetts that, like many places, was trying to evolve from its industrial past. They had received a grant to inventory the housing stock, and I walked the streets of Westfield with a clipboard, looking at homes and recording information about their condition. That's when I really started to see the importance of good housing in our communities. It led to a lifelong involvement in community development and housing.
Q: What was your big break?
A: When I was 23 I landed an internship working directly for the Cabinet secretary at the Massachusetts Executive Office of Communities and Development. Seeing the world of affordable housing from that vantage point at such a young age was a tremendous opportunity. It ultimately gave me the courage to apply for a job managing the Small Cities program, which at the time was something I felt was a big leap. I didn't get the top job, but I did get the deputy's job. The rest, as they say, is history.
Q: Give us a housing statistic or fact to think about.
A: One out of every 10 homeowners in America was behind on their mortgage payment in the first quarter of 2010. This is unprecedented.
Q: How has the nation's financial crisis affected MassHousing?
A: First the good news. We did not have to shut down our lending, and we have not had any disruption in our ability to sell bonds. We even managed to secure a bond rating upgrade from S&P. We consider ourselves very fortunate in that respect, as many other housing finance agencies did not fare as well. We've even had record lending years, as people flocked to our fixed-rate mortgages after the subprime lenders disappeared. But it's not been all wine and roses. Our investment income is down substantially. While we have a substantial pipeline of rental projects, many of them can't proceed because of the weak tax credit market. We did take advantage of the Treasury's New Issue Bond Program and the Temporary Credit and Liquidity Facility (TCLF), which enabled us to offer our lowest ever interest rates for multifamily loans and to get out from under some variable-rate debt. In May of 2010, we became the first housing finance agency to refund our variable-rate debt and repay the TCLF. All in all we're in good shape, but there have been a few restless nights, for sure.
Q: What has MassHousing recently done that other housing agencies can learn from?
A: We recently launched a Web site exclusively for our rental housing business partners (www.masshousingrental.com), and we're gradually moving toward doing more rental business online. This was part of an overall strategic realignment of our rental housing business lines. We did it to be more user-friendly to our customers—developers, owners, and managers of multifamily housing. We brought the local rental housing trade group in and let them help guide our efforts and react to our proposals. I think they really appreciated being able to participate in the process. I think you've got to reassess the way you do things every few years. The private sector does it, and the public sector should too.
Q: You were just named to Fannie Mae's inaugural Affordable Housing Advisory Council. What are your goals for the council?
A: For many years Fannie Mae has been a terrific partner with housing finance agencies, providing a lending platform that has not been available anywhere else. Having said that, there is no question that the shape of the secondary mortgage market is changing before our eyes. Almost everyone in this business changed their underwriting standards to chase business and market share in our recent past. Those changes went too far. Now, almost everyone is going too far in the other direction, with underwriting standards that are leaving legitimate borrowers out in the cold. My hope for the council is to carve out a role for affordable homeownership and rental lending based on concepts that are realistic and sustainable.
Q: What trends in affordable housing finance are you watching?
A: Like everyone, we are watching the tax credit markets closely and things do seem to be improving, although slowly. It's great that a high profile company like Google has entered the tax credit market. We're also closely watching the Department of Housing and Urban Development's new Transforming Rental Assistance initiative, as well as the various federal efforts to keep the housing market going, such as the Tax Credit Exchange Program.
Q: When you visit an affordable housing development, what do you look for?
A: I immediately ask myself would I want to live here or would I want someone in my family, such as an elderly parent, to live here? I think that comes from the fact that my mom lived in subsidized housing in her later years. It should be clean, well-maintained, well-lit, well-landscaped, and it should fit in with the rest of the surrounding area. No one wants to live in a building that screams “subsidized housing.” With new construction these days, more and more I look for photovoltaics on the roof, recycled building materials, water conservation measures, and other green elements. We've got to do this stuff. We don't have a choice.
Q: Do you have any hidden talents?
A: I might, who knows? I think new challenges can bring out talents you didn't know you had. I like to think I'm still a work in progress.
Q: Favorite fictional hero and why?
A: It's a tie between Jack Ryan, the Tom Clancy hero, and Indiana Jones. Both were played by Harrison Ford, and they're similar in many ways. They both have a very strong sense of right and wrong, and they prevail over the bad guys in some pretty powerful institutions. Neither one has too big an ego—they're painfully aware that they sometimes just plain get lucky.
Q: What makes you mad?
A: I have a very high boiling point so I rarely get mad, but I do get cranky (just ask my staff), mostly with people who strike me as unreasonable. When people ask for unrealistic public concessions, for example, or take unsupportable positions, in the name of “affordable housing,” then I get irritated.
Q: What makes you happy?
A: I like to relax with my family. Occasionally I'll get on the Jet Ski as our sons cringe at my lack of cool. At work, I enjoy talking with people who live in our developments. I like to hear their stories and see how proud they are when they show off where they live. In the affordable housing business, you get to touch people's lives every day. The trick is to stay in touch with your customer and not get lost in all of the numbers.
Q: What do you listen to when you are in the car?
A: Going to work, I listen to sports talk radio. Going home, I wind down with some good old-fashioned Motown. The Temptations. The Four Tops. Harold Melvin and the Blue Notes. Stevie Wonder. You name it, and I can sing it all ”¦ badly.
Q: Besides the usual work papers, what's on your desk (or in your office)?
A: More papers. Blackberry. Laptop. A large photo of one of my favorite MassHousing developments to remind me of what we do. Pictures of my wife, Brita, and our nearly 21-year-old twin sons, Alex and Steve, to remind me of why I do this. Did I mention the papers?
Q: If you have friends or family visiting, where's the first place you take them?
A: Boston has become a world-class city. With new visitors, it's always a trip to Faneuil Hall Marketplace and then a stroll to the North End for some great Italian food. In the spring and summer, you have to visit the Public Gardens.
Q: Who would you like to meet?
A: Steve Jobs. His ability to create the “next big thing” year after year is pretty uncanny. I'd love to know what Apple's creative and development processes are. In every line of work—and that includes the public sector—I think you've got to be creative and entrepreneurial, because the needs of your customers are always changing. I'd like to get a little of that pixie dust from Apple and sprinkle it around the affordable housing business.
Q: What's next for Tom Gleason and MassHousing?
A: I want very much for the lending industry and policy-makers to become more aware of housing finance agencies and our track record of financing housing for people with modest incomes. I've testified before the U.S. House Financial Services Committee twice in the last couple of months, and I hope we can get the word out even more. Most people are amazed when they hear that we can successfully lend to all of these people who most people write off as bad credit risks. We're going to continue to show that lending for mixed-income housing and to lower-income buyers is good business, not just philanthropy.