National Multi Housing Council News

Apartment Industry Commends Congress For Learning From Past Mistakes and Passing a Balanced Housing Package

WASHINGTON, July 26 PRNewswire-USNewswire — The National Multi Housing Council (NMHC)/National Apartment Association (NAA) joint legislative program issued the following statement by NMHC/NAA Senior Vice President of Government Affairs Jim Arbury concerning the housing stimulus bill that passed Congress and is expected to be signed into law by President Bush.

"We continue to believe that the current situation in the for-sale housing market, which has now spread throughout the entire financial sector, is an extremely unfortunate turn of events that is made even more unfortunate by the fact that it was completely foreseeable and preventable. We — and a wide variety of housing analysts — have been warning as far back as 2004 that the nation would likely pay a high price for its 'homeownership at any cost' housing policy.

"Now we are seeing the consequences of that misguided policy. In testimony delivered to the Senate this February, we urged lawmakers to learn from past mistakes and rethink our nation's housing policy. We argued for a more balanced housing policy that encourages a vibrant rental market along with a functioning ownership market. We are delighted to see that for the most part the legislation passed today reflects those principles.

"We commend Congress for including provisions to expand and restore liquidity to the federal tax credit program to support the production of affordable rental housing. The program, known as the Low-Income Housing Tax Credit (LIHTC) program, has become an unintended victim of the single-family meltdown and the credit crisis it created.

"Most importantly, we commend lawmakers for significantly trimming the superfluous homeownership incentives originally proposed for the bill. The final bill abandons earlier proposals to create a federally insured zero-downpayment mortgage program and instead raises the FHA downpayment requirement. The measure also bans seller-financed downpayment programs, which the FHA says produce loans that are three times as likely to go into foreclosure and represent a serious threat to the continued solvency of the federal mortgage program.

"Lawmakers also wisely rejected calls for a $15,000 tax credit for people who buy foreclosed houses. Such a credit would have likely increased foreclosures, accelerated housing price declines and done nothing to increase housing demand. Although the measure does include an NMHC/NAA-opposed refundable $7,500 tax credit for first-time home buyers, we believe this revised tax credit will have a limited impact on the housing market because of the income restrictions and repayment requirements included with it. We do, however, question the wisdom of using taxpayer dollars to encourage Americans to buy an asset that is likely to lose value in the coming months.

"Finally, we support provisions creating a new regulator for the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. The GSEs have been critical to maintaining basic liquidity in the apartment sector during the credit crisis.

"We look forward to working with Congress to develop a new housing policy that explicitly values apartments and rental housing and recognizes that for many families, renting is a smarter financial decision. We will also continue to urge lawmakers to focus their efforts on restoring confidence in our financial system and allow market forces to restore equilibrium to the single-family housing sector."

About NMHC/NAA

NMHC and NAA operate a Joint Legislative Program and represent the nation's leading firms participating in the multifamily rental housing industry. NMHC/NAA's combined memberships are engaged in all aspects of the development and operation of apartment communities, including ownership, construction, finance and management. Together, the organizations operate a federal legislative program and provide a unified voice for the private apartment industry. Nearly one-third of Americans rent their housing, and more than 14 percent of all U.S. households live in an apartment home. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC's web site at www.nmhc.org.

SOURCE National Multi Housing Council

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