MReport April 2020

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60 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Trump: Revisiting Regulatory Barriers to Home Affordability a 'Priority' The President looks to boost housing construction by looking at state and local regulations. H ousing affordability—or rather unaffordabil- ity—has been making headlines for a while, and state and local regulations have become a hot-button issue. The White House is also taking aim at regulations that impede home construction and housing affordability and received some attention from the White House recently. The problem with housing affordability is that it "shows no signs of subsiding in certain mar- kets," the White House said in its annual Economic Report of the President released in February. As such, "Removing govern- ment-imposed barriers to more affordable housing is a priority for the Trump Administration," the report said. The report says home prices have outpaced incomes in growth in recent years. Household incomes have grown about 20% since 2000, while home prices have risen nearly 50%, with the report citing the Standard & Poor's/Case Shiller Index. Part of the problem is that construction is not keeping pace with household formation. In fact, the report stated that construction per capita has been on the decline for decades, falling to just three new homes per 1,000 residents between 2010 and 2018. Not only are home prices out of reach for many Americans, but as we know, many Americans are rent-burdened as well. The affordability problems the nation faces contribute to several other problems. The White House report cited labor mobility, home- lessness, environmental impact, and even dampening economic growth among them. To solve this compound prob- lem, the White House is taking aim at local and state regulations, which have also received atten- tion from housing market experts, political candidates, and others in the administration of late. "Research has linked higher home prices and lower housing supply to many of these regula- tions," the report stated. While pointing out that "the majority of areas in the United States have relatively well-func- tioning housing markets in which regulations do not significantly drive up prices," 11 metro markets in particular have particularly "excessive regulatory barriers." Those markets are comprised of San Francisco; Honolulu; Oxnard, California; Los Angeles; San Diego; Washington D.C.; Boston; Denver; New York City; Seattle; and Baltimore. Unfortunately, the report says regulations are "pricing workers out of several of the nation's most productive cities." In fact regulations in these 11 metros are estimated to increase home prices by between 36% and 184%, the report states, citing re- search from Glaeser and Gyourko. In fact, addressing regulatory barriers along in these 11 markets could reduce homelessness by 13% for the nation overall as these markets contributed greatly to the nation's homeless population, according to research cited in the report. Reducing regulatory burden could reduce homelessness by 54% in San Francisco and 40% in Los Angeles, the report stated. Also, allowing more Americans to obtain affordable housing in these markets would also allow more Americans to pursue new employment or move closer to their current employment, which can lead to improvements in the economy overall. Former Vice President Announces $640B Housing Plan Joe Biden said he would work to protect homeowners from "abusive" lenders. D emocratic Presidential candidate Joe Biden released his plan for housing in February, stating he would invest $640 billion over 10 years, to allow Americans to have access to af- fordable housing. According to a release, Biden plans to end redlining and other discriminatory and unfair practices in the housing market, provide financial assistance and down- payment assistance, increasing the supply and lowering the cost of housing, and pursuing a "compre- hensive approach" to end home- lessness. The plan says Americans should have access to housing that takes up no more than 30% of their household income. He added that he would work to protect homeowners and renters from "abusive" lenders and land- lords through a new Homeowners and Renter Bill of Rights, modeled after the California Homeowner Bill of Rights. "Biden will enact legislation to end many shortcomings in the mortgage and rental markets," the release states. "This new Bill of Rights will prevent mortgage brokers from leading borrowers into loans that cost more than appropriate, prevent mortgage ser- vicers from advancing a foreclosure when the homeowner is in the process of receiving a loan modifi- cation, give homeowners a private right of action to seek financial redress from mortgage lenders and servicers that violate these protec- tions, and give borrowers the right to a timely notification on the status of their loan modifications and to be able to appeal modifica- tion denials. "Building on the Obama-Biden Administration's Protecting Tenants at Foreclosure Act, the Bill of Rights will also expand pro- tections for renters. For example, the Bill of Rights will include a law prohibiting landlords from discriminating against renters re- ceiving federal housing benefits." Biden's plan also calls for a $100 billion affordable housing fund to construct and upgrade affordable housing. Also, $65 billion in new incentives for state housing au- thorities and the Indian Housing Block Grant program to construct or rehabilitate low-cost, efficient, resilient, and accessible housing in areas where affordable housing is in short supply is included in the plan. "Biden will enact legislation to end many shortcomings in the mortgage and rental markets."

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