The National Multi Housing Council (NMHC) and National Apartment Association’s (NAA) joint legislative program issued a statement in response to the Senate’s recent passage of H.R. 3221. The measure will now head to conference committee, which will produce a conference report that will be subject to a final floor vote in the House.
According to the press release, the apartment industry is pleased with the overall balance between homeownership related measures and apartment rental housing incentives. This is especially true given the federal government’s track record of focusing exclusively on ‘homeownership at any cost’ legislative programs, which is partly responsible for the housing crisis in which we are now mired.
The most prominent examples of the Senate’s prudence in passing well balanced legislation are the homeownership incentives that were removed from the bill by the Senate, and hence the reason it must head to conference before going to the White House.
Most notable of the altered sections are:
- federally insured zero-down payment mortgage program is raised from 3.0 to 3.5 percent
- $15,000 tax credit for people who buy foreclosed homes was reduced to $7,500
- Bans seller-assisted down payments, as they foreclose 3 times as often
In addition to these removals, the Senate also addressed the continued need for affordable apartments for rent by increasing funding for the Low Income Housing Tax Credit (LIHTC). These Section 42 credits (named after the section of IRS code) directly support the building of low-income apartments for rent and, as many apartment buildings are mixed, provide a boost for construction of apartment buildings throughout the nation. As of 2006, 30-40% of all new multifamily construction received subsidies from LIHTC.
Finally, the apartment rental industry fully endorses the creation of a new regulator for Freddie Mac and Fannie Mae, who both provide crucial liquidity to the apartment industry. Just last week, despite its dropping shares, Fannie Mae announced that it would bolster its investment in the apartment rental industry, reports Multi Housing News.
With Freddie and Fannie continue to increase their investments and the U.S. Treasury back up the two GSEs amid solvency questions, the federal government, the administration anyway, may indeed end up embarking on a more balanced approach to its housing policy than it has since the Great Depression.
The press release also alludes to the changes that may fundamentally change the housing market; as gas prices and environmental concerns rise in tandem, many people will be endeavoring upon an apartment search before they believe homeownership is a wise choice.