REALTOR® Party News

Taking the Lead in Housing Affordability

February 2020

Last week, we had our second successful Policy Forum at the National Press Club in Washington, D.C. Focused on one our top strategic priorities – housing affordability, this event was another step in our efforts to collaborate with a broad coalition of organizations, including multicultural real estate groups, lenders, builders, economists, and law and policy makers, to amplify our advocacy voice and discuss was to positively impact and broaden housing opportunities.

As America confronts low housing inventory and a persistent lack of affordable housing options, we were excited to bring together some of the brightest minds in our industry in front of more than 300 registered attendees. Housing affordability is set to be one of the defining policy issues of this decade, it is imperative for REALTORS® to lead discussions that will generate solutions to these far-reaching problems.

Also highlighted was the gap in homeownership rates between white and black Americans recorded at the end of 2019, which is larger than it was more than 50 years ago. During a session led by Director of Fair Housing Policy Bryan Greene, panelists highlighted proposals that would tackle housing supply constraints; improve access to credit for mortgage-ready Americans; and increase post-purchase support and counseling programs, among others.

Earlier this year, NAR Chief Economist Lawrence Yun released a report showing that major U.S. metro areas where housing affordability has worsened over the last five years have seen a corresponding drop in job growth. Specifically, housing affordability rankings have declined in 81 of 174 U.S. metro areas, while 34 regions are seeing job growth fall faster than the national average over the past five years. Additional research conducted by Lawrence’s team found that, from 1989 to 2019, 87% of home purchases in all major metro markets resulted in a positive housing equity gain for owners who held the property for 7–10 years.

  • Stockton Williams, executive director of the National Council of State Housing Finance Agencies
    “I really appreciate everyone at the National Association of Realtors® using this forum this year to talk about housing affordability. I think everybody knows that when NAR’s members get organized and focused on a policy issue, things in Washington happen.”
  •  Steve Francks, CEO of Washington REALTORS®
    “Rather than focusing on just one area of this massive problem, [the Washington Realtors®] decided to group together a range of legislation that addressed housing, from [serving] the most vulnerable populations, to addressing the infrastructure, to condo reform, to incentives to increase density and supply. We wanted to… deliver a message of reform and market-based solutions that addressed the housing shortage over the entire spectrum.”
  • Julia Gordon, president of the National Community Stabilization Trust
    “This is such an important conversation, and what I see today is a lot of creativity out there, as well as some big and very, very wide coalitions working together… So, thanks to everyone at the Realtors® for being such a great partner on so many projects right now.”
  • Muriel Bowser, District of Columbia Mayor
    “You mentioned our commitment to local funding and funding gaps for building new units. We’ve had a tool in the District [for about 15 years], our Housing Production Trust Fund, where we [dedicate] a portion of our deed and recordation taxes to the Housing Production Trust Fund – so thank you, Realtors®, for making sure that part of our economy continues to churn… Because we’ve been consistent, our development partners tell us they are ready to build more units because they know the city is going to be there. We have created more demand for HPTF, which means more units.” 
  • Lawrence Yun, chief economist at the National Association of Realtors®
    “Home sales – even with record low unemployment and high job creation – are not breaking higher. We need to ensure there is an adequate [tax] incentive to bring more new homes to the market… If homeownership isn’t rising, the wealth divide will expand between the haves and have-nots. [And If the homeownership rate continues to lag behind historical norms] one has to wonder: Are we turning into a renter nation?”

Earlier this year, NAR Chief Economist Lawrence Yun released a report showing that major U.S. metro areas where housing affordability has worsened over the last five years have seen a corresponding drop in job growth. Specifically, housing affordability rankings have declined in 81 of 174 U.S. metro areas, while 34 regions are seeing job growth fall faster than the national average over the past five years. Additional research conducted by Lawrence’s team found that, from 1989 to 2019, 87% of home purchases in all major metro markets resulted in a positive housing equity gain for owners who held the property for 7–10 years.

While barriers inhibiting development remain, we support policies that we believe could bring relief to the market. In response to HUD’s Request for Information on policies that “raise the costs of affordable housing and contribute to… low housing inventory,” NAR penned a letter arguing for improved FHA underwriting criteria that is more equitable for first-time homebuyers; incentivization of “Yes in My Backyard” markets to encourage states and localities receiving federal dollars to reform high-density zoning; and for additional Community Development Block Grants that encourage localities to update development plans and address barriers to housing affordability.

Additional NAR research unveiled during the Policy Forum projected that $220 to $400 billion would be added to the economy if the pace of homebuilding and for-sale housing activity returned to a more normalized level, translating to 0.25% to 0.50% in added annual GDP growth over the next four years. We encourage you to watch the recorded session and read the conference materials, including reports examining inclusionary zoning, accessory dwelling units and, most notably, a White Paper reiterating the case for homeownership while calling on Congress to restore homeownership incentives in the U.S. tax code.

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Comments(4)

  1. REPLY
    Vicki Guinn says

    The time to address the housing crisis is now but it has been urgent since the Great Recession. The crisis foreclosures caused a hemorrhage into the rental market cash buyer landlords took advantage of the rent bubble it created by the good investment deals and vast needs by desperate renters. During the Fire Storms, it is against the law for landlords to gouge renters. Why was it not the case during the Great Recession emergency? Why are landlords so eager to take advantage of inflated rental markets even when their equity doesn’t call for it? Renters loose and investors win. Single home buyers should have first priority in purchase opportunities that investors and their cash swoop up. No one has been watching out for the little guy and it shows. Our industry should take the lead in making home ownership attainable.

  2. REPLY
    Ray Joseph says

    Rents always go up over time. While home ownership can can be more expensive up front, overtime home ownership becomes less expensive. If the owner purchases with a fixed rate loan their payment remains the same while rental prices go up with inflation.

    Many home owners go into retirement with their homes paid off while renters (on fixed income) have increasing rents. Home ownership is the ultimate affordability.

  3. REPLY
    Paula Smith says

    This is an issue very dear to my heart, in fact low income housing & job growth (low wages) is my passion….my why.

  4. REPLY
    Detra Harris says

    Thank you for addressing this matter. This is a very important topic for our real estate investor members as well. Although it’s very challenging to engage local housing advocates in my area to participate in forums to address this issue, I will continue to work to bridge the gap between real estate investors, developers, and professionals to work together to develop, renovate and provide affordable housing for families in need. We are working on creating a strong platform for real estate investors to invest in affordable housing, reduce their risk and leverage their revenue. This article brings encouragement.

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