As the days count down until November 3, the residential real estate economy has been an unexpected source of strength during the pandemic. The nation's crises have so overshadowed housing and homeownership issues that neither party has made much noise about their housing proposals.
Through federal mortgage forbearance and rent deferral policies, the housing sector provides critical relief to pandemic-stricken households. Every passing day increases the financial burden on lenders and landlords, and delays repayment by owners and tenants.
In addition to the pandemic, issues facing the housing sector include:
• Nearly 40 million households pay more than 30 percent of their income for rent or monthly mortgage payments. Both rents and home prices have risen steadily over the past decade.
• The cost of homeownership is rising faster than incomes, a trend that is making homeownership too expensive for middle-class families and replacing the American dream with a nation of "homeownership haves and have nots."
• A scarcity of entry-level homes has frozen the housing ladder and kept 20 million Millennials in rentals.
• Sixty years after the passage of the Fair Housing Act, the gap between the homeownership rates of African Americans and White Americans has not changed.
President Trump and deregulation
By digging through their public statements and campaign pledges, it's possible to get a sense of each ticket's policy positions but no understanding of how high housing and the agendas for either's administration.
Neither side offers much in the way of a fresh approach or new ideas to offer. Generally, Republicans emphasize reducing regulations and privatizing Fannie Mae and Freddie Mac, and Democrats emphasize financial assistance and consumer protection built upon existing models like FHA and Dodd-Frank.
The most important "housing moment:" in the campaign came with the President's repeal of an Obama-era rule requiring communities to build low-cost units in neighborhoods to diminish racial segregation in housing.
"I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low-income housing built in your neighborhood," Trump tweeted in July. "Your housing prices will go up based on the market, and crime will go down."
Another priority of the Trump Administration is the privatization of Fannie Mae and Freddie Mac. The Treasury Department took them over in 2008 during the financial crisis. Scheduled to take place by the end of this year, the privatization plan recently came under fire from the Pacific Investment Management Company, one of the world's largest bond investment firms.
PIMCO warned that some investors would be under the impression that the government is no longer guaranteeing Fannie and Freddie mortgage-backed securities and would stop buying them. The result would be "mortgage rates will increase, homeownership will likely suffer, and the national mortgage rate will no longer exist," according to the Real Deal.
Vice President Biden: consumers' rights, fair housing, and first-time buyers
The Biden-Harris campaign site lists many initiatives addressing first-time buyers and renters, including
• Create a Homeowner and Renter Bill of Rights to protect homeowners and renters from abusive lenders and landlords from discriminating against renters receiving federal housing benefits.
• Eliminate local and state housing regulations that perpetuate discrimination, such as exclusionary zoning.
• Roll back Trump Administration policies gutting fair lending and fair housing protections for homeowners.
• Tackle racial bias that leads to homes in communities of color being assessed by appraisers below their fair value, including a national standard for appraisals, will also make it harder for financial institutions to put pressure on appraisers to their benefit.
• Expand housing benefits for first-responders, public school educators, and other public and national service workers.
• Help families buy their first homes and build wealth by creating a new refundable, advanceable tax credit of up to $15,000. Biden's new First Down Payment Tax Credit will help families offset home buying costs and help millions of families lay down roots for the first time.
Take a little time to do your own research on your congressional candidates and the presidential tickets. Whoever wins in November will shape housing policies and markets for years to come.
