By the Numbers
Housing Finance | Notes from Washington
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- In the scramble to finish a budget package, only a modest share of proposed funding addresses the tight supply of affordable housing—a plus for property prices at the affordable end of the market but a negative for aspiring homeowners
- Any game worth watching gets more interesting once you know the players, so we offer a list of the administration policymakers with the most clout on housing policy
In the scramble to finish a budget package, only a modest share of proposed funding addresses the tight supply of affordable housing—a plus for property prices at the affordable end of the market but a negative for aspiring homeowners
The White House on Thursday released a proposed $1.85 trillion budget package including $150 billion in housing funds. The administration’s initial $3.5 trillion proposed package envisioned more than $300 billion for housing, so the sector looks like it took its fair share of lumps. The proposed legislation includes $65 billion for public housing, $22 billion for rental vouchers, $10 billion for down payment assistance and $5 billion for a new FHA 20-year loan program. It also contains roughly $32 billion that will support new or renovated supply and another $15 billion for “community investments,” some of which should help support new supply indirectly by improving infrastructure in places where the lack of it has been a headwind to building. While these numbers help address the supply shortage, the focus on public housing and demand side help is surprising given the severity of the supply shortfall.
The allocation seems due in large part to the political clout of Sen. Chuck Schumer (D-NY), who has pushed for heavy funding of public housing generally and for the New York Public Housing Authority specifically. It also reflects the influence of Rep. Maxine Waters (D-CA), who has pushed for funding of rental vouchers. While several industry groups have been focused on housing supply, those groups have better traction with Republicans than Democrats. Supply programs also typically take years to show effects while demand programs get visible results much more quickly, which officials up for election next year like.
If this is where the final housing numbers land, then there is little reason to expect pricing at the affordable end of the market to ease any time soon. Rental vouchers should drive demand for smaller private multifamily properties and down payment assistance should drive demand for the more affordable end of the single-family market. More affordable supply may come out over time, but the timelines for building affordable housing are long.
Any game worth watching gets more interesting once you know the players, so we offer a list of the administration policymakers with the most clout on housing policy
The key voices around the table on housing policy—the stuff that shapes Fannie Mae, Freddie Mac, Ginnie Mae and the boundaries between these agencies and the private market—come from a few places in the administration. The White House has a view, the Treasury has a view, HUD has a view and, with it director now serving at the will of the president, the FHFA has a view. The people in the chairs of nominated for the chairs:
- Brian Deese, Assistant to the President for Economic Policy and Director of the National Economic Council
- Bharat Ramamurti, Deputy Diurector of the National Economic Council for Consumer Protection
- Erika Poethig, Special Assistant to the President for Housing and Urban Policy
- Jared Bernstein, Member of the Council of Economic Advisors
- Joshua Frost, nominee for Assistant Secretary for Financial Markets
- Dini Ajmani, Deputy Assistant Secretary for Financial Markets
HOUSING AND URBAN DEVELOPMENT
- Julia Gordon, nominee for Assistant Secretary of Housing and Commissioner of the Federal Housing Administration
- Alanna McCargo, nominee for President of Ginnie Mae
FEDERAL HOUSING FINANCE AGENCY
- Sandra Thompson, Acting Director
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