Friday, August 22, 2014

How to bounce back from a housing crisis

National experts descend upon Sun Valley for summit

Express Staff Writer

Sen. Mike Crapo, R-Idaho, addresses the BPC Housing Commission Regional Forum on Thursday, Aug. 21, in Sun Valley. Photo by Roland Lane

     The number of American homeowners under age 35 is at an all-time low.

     At 35.9 percent in the second quarter of 2014—that’s April, May and June—it’s the lowest quarterly homeowner rate for the young adult demographic recorded by the Census Bureau since it began collecting data four times a year in 1993. It’s also the lowest annual rating it has collected since it began tracking home ownership by age in 1982.

     Those post-recessionary statistics were cited during a Housing Commission Regional Forum hosted by the Washington, D.C.,-based Bipartisan Policy Center on Thursday, Aug. 21, at Carol’s Dollar Mountain Lodge in Sun Valley.

     The day-long conference featured national experts on housing, lending, homelessness, rural housing and economic trends. The Bipartisan Policy Center, founded in 2007 by former U.S. Senate majority leaders from both parties, advocates politically balanced policy-making. It hosted regional summits across the country to address housing needs in different locales throughout 2012 and 2013. The Sun Valley summit was scheduled for last summer, but the event was pushed back due to the Beaver Creek Fire.

     Introductory speaker Sen. Jim Risch, R-Idaho, said these summits are integral to economic prosperity.

     “[The economy] isn’t going to recover until the housing industry recovers,” Risch said, adding that personal wealth is often tied up in home ownership.

     Sen. Mike Crapo, R-Idaho, spoke about his attempts to change what he calls the “status quo” of the national housing finance market. His bill with Sen. Tim Johnson, D-S.D., would slowly eliminate the government-owned financing giants Fannie Mae and Freddie Mac and reorganize credit risk so that private investors take on the initial risk. The bill received a near-even split of votes from both Democrats and Republicans, but it needs more than half the Democrats on the Senate Banking Committee to vote “yes” for it to go before the entire Senate, Crapo said.

     “If we can get it to the floor, we can pass it,” he said.

     Carol Galante, Federal Housing Administration commissioner, commended Crapo for his efforts to fix the lending market, citing the “devastating” low-income tax credit market. The FHA provides mortgage insurance on loans made by approved lenders throughout the country on single and multi-family homes. Galante said that when the economy tanked, the FHA went from a 2 percent market share to a 30 percent market share in 2009 when private capital fled.

     Rob Couch, a Bipartisan Policy Center Housing Commission member, pointed out that the FHA had to draw from the federal treasury during the financial crisis, and Galante countered that it took the financial risk because there were “real people” throughout the country facing sky-high interest rates. She went on to say that the experience has prompted it to increase premiums to cover losses and rebuild its reserves. The importance of affordable rental pricing—75 percent of the HUD’s budget goes to rental assistance programs—is another concern, Galante said.

     “Fifty percent of people paying more than 50 percent of their income toward rent is not sustainable,” she said.

     Following Galante and Couch, a panel of regional homelessness authorities spoke about the benefits of short-term shallow assistance for rental housing.

     Greg Morris, of Boise-based Charitable Assistance to Community’s Homeless, spoke about the benefits of the nonprofit’s six-month rental assistance program. With almost 90 percent of homeless families able to pay their own rent in six months, Morris said, the organization is making a dent in ending homelessness in southern Idaho.

     Alice Shobe, a representative from a similar Seattle-based program, Building Changes, said Americans need to stop thinking about homeless people as “something broken to fix.”

     “Homeless families are resilient,” she said.

     Other notable speakers at the summit included former HUD Secretary Henry Cisneros and former U.S. Sen. Christopher “Kit” Bond.

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