Monday, May 2, 2016

The affordable housing roundtable on Duty to Serve

What we're building 
by Ethan Handelman, National Housing Conference

“I love it when a plan comes together.”
       -John “Hannibal” Smith, The A-Team

 Hannibal’s trademark line, while entertainingly self-aggrandizing, also pointed to a joy we don’t encounter enough in policy circles. Cooperation, a team synchronizing its efforts toward a common goal (be that a cannon made from logs or permanent supportive housing), is a beautiful thing. In housing, we are often so focused on the arcane details of our particular, vexing real estate or social or political challenges that we do not come together in common purpose. Fortunately, a session last month furnished me the opportunity to help and observe housing groups come together to guide the Federal Housing Finance Agency (FHFA) toward a successful Duty to Serve rule.

FHFA asked me and Sarah Edelman from the Center for American Progress to coordinate stakeholders for a roundtable on the Duty to Serve proposed rule. (In case you missed it, the Duty to Serve rule implements a 2008 statute directing Fannie Mae and Freddie Mac to finance affordable housing in underserved parts of the housing market.) The participants came from affordable housing, civil rights, environmental and consumer advocacy organizations, all of whom commented in detail on the proposed rule. This was one of four roundtables FHFA convened with different groups of commenters.

The group did an impressive job of helping FHFA think through the complex issues raised by Duty to Serve, each of which was the subject of detailed comment letters. Those comment letters went deep into the weeds of the rule and surfaced some legitimate differences of opinion on policy. All the participants, however, focused their roundtable remarks on the places of broadest agreement while giving FHFA clarity on points of disagreement. A few examples of topics we covered:
  •  Fannie Mae and Freddie Mac’s purchases of Low Income Housing Tax Credits. There was more consensus than initially appeared, as all participants agreed that if the two mortgage companies reentered the Housing Credit market at all, their role should be carefully constrained.
  • Manufactured housing. Participants agreed that FHFA should have more than a property-size threshold for Duty to Serve credit, focusing more on resident protections.
  • Preserving affordable housing. Some participants focused on the role of Duty to Serve in promoting better financing for preservation of existing affordable housing properties that need new capital to extend affordability commitments and maintain physical viability. Other participants supported that mission but also saw room within Duty to Serve to include activities that preserve affordable housing opportunities in neighborhoods, especially those undergoing rapid economic change, by providing permanent financing for newly constructed apartments.
  • Residential economic diversity. Many participants saw value in encouraging Fannie Mae and Freddie Mac to support activities that foster inclusive communities and align with other federal initiatives trying to change long-standing patterns of residential segregation. To the extent there was disagreement among the participants, it was more about the practicalities of how to target such activities and their relative weight in the process.

 We certainly covered other issues, and the comment letters on the Duty to Serve rule covered even more.  As FHFA works to develop the final rule, I expect most of the participants will reach out to the agency, especially to assist with the more technical questions that arise. 

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