Bi-Partisan Commission Issues Suggestions for Housing Reforms

by devteam February 26th, 2013 | Share

A bi-partisan group of former senators,rnCabinet secretaries, and other housing and economic experts have released whatrnis termed a new proposal for a housing finance system.  The report called Housing America’s Future:  NewrnDirections for National Policy was produced by the Bipartisan Policy Center’srnHousing Commission under a grant from the MacArthur Foundation.  It asks for a reviewrnof federal housing policy calling the current system outdated and not equippedrnto keep pace with today’s demands and the challenges of the imminent future.rnHere is a partial summary of the Commission’s recommendations.</p

The nation needs a responsible, sustainable approach to homeownershiprnthat will help ensure that all creditworthy households have access to homeownership and its considerablernbenefits.  It also needs a reformed system of housing finance withrnthe private sector playing arnfar more prominent role in bearing credit risk while promoting greaterrndiversity in mortgage fundingrnsources.  </p

Federal policy should strike an appropriate balance betweenrnhomeownership and rental subsidies.  Thisrnrebalancing would include winding down and ultimate elimination of the GSEs andrna more targeted FHA restored to its traditional mission of primarily servingrnfirst-time homebuyers.  </p

The GSEs would be replaced by an independent government-ownedrncorporation providing a limited catastrophic guarantee on qualifiedrnmortgage-backed securities (MBS); a reaffirmed commitment to providing a decentrnhome for every American family; and a focus on providing help to those most inrnneed.</p

Rentersrnaccount for 35 percent of the U.S. population and their numbers are likely torngrow significantly over the coming decade. rnPressure on the market may push rents further out of reach for lowrnincome households creating greater hardships for cost burdened renters.  </p

The plan calls for reforms that would establish a new performance-basedrnsystem for delivering federal rental assistance with greater devolution ofrnresponsibilities to state and local providers. The commission also proposes tornshift existing resources to assist more effectively the most vulnerablernhouseholds, and to preserve and expand the Low Income Housing Tax Creditrnprogram to increase the supply of affordable rental housing. </p

The commission supportsrncurrent approaches to thernadministration of housingrnsupport in ruralrnareas delivered through USDA and suggests there be modest incrementalrnfunding for the Section 502 Direct Loan.</p

Finallyrnthe Commission said the country must address the overwhelming numbers ofrnseniors who wish to “age in place” in their own homes andrncommunities.  It recommends better coordination of federalrnprograms that deliver housing and health care servicesrnto seniors including expansion of thernDepartment of Energy’s Weatherization Assistance Program to include homernassessments and modifications for aging in place.rnBetter guidance should be given to help seniors understand reverse mortgagesrnand a White House conferencerncould bring together key publicrnand private players to draw nationalrnattention to the issue of senior housingrnand to catalyze development of a coordinated approach to aging inrnplace.</p

The Housing Commission is co-chaired by former Senate Majority Leader GeorgernJ. Mitchell, former Senator Christopher S. “Kit” Bond, former Senator and HUDrnSecretary Mel Martinez, and former HUD Secretary Henry Cisneros, and includesrn17 other individuals from diverse professional and political backgrounds. </p

 “At this critical time in ourrnnation’s history, we can no longer afford to defer bipartisan action onrnhousing,” said the co-chairs in an op-ed in POLITICO today. “Wernbelieve our report can serve as a framework for Congress and the administrationrnto act in the best interests of all Americans.”</p

 “Six years after the collapse of thernhousing market, the problems in housing remain as severe as ever and solutionsrncontinue to be elusive,” says the op-ed. “We hope [our report] will serve as arncatalyst for action.”

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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