Plans from the Democrats
As HousingWire has written over the last year, a number of the Democratic candidates have released affordable housing plans, in some form or another.
Sen. Bernie Sanders, I-VT, for example, has a plan called “Housing for All.” In his plan, Sanders emphasized cost of living, building more affordable housing units and combating gentrification.
Sanders, who as of Wednesday morning was trailing South Bend Mayor Pete Buttigieg in the still-somehow-not-yet-final Iowa Democratic Caucus by less than two percentage points, is no stranger to rolling out sweeping housing and/or finance plans.
In the last presidential election cycle, Sanders rolled out a broad housing agenda that would have brought significant changes to the country’s housing system.
As part of that plan, Sanders proposed a five-point plan to “promote homeownership,” as in Sanders’ eyes, wages in the U.S. have not risen in accordance with housing prices, making the prospect of owning a home “out of reach” for millions of families.
Sanders has also repeatedly called for the nation’s biggest banks to be broken up, which would likely have a substantial impact on the nation’s mortgage market.
Beyond Sanders on the Democratic side, Sen. Elizabeth Warren, D-Mass., is another candidate that could bring housing to the forefront. The architect of the Consumer Financial Protection Bureau is no stranger to proposing solutions to what she sees as ongoing financial issues.
Warren, like Sanders, released an affordable housing plan. Warren’s plan would expand the National Housing Trust Fund and provide $445 billion over 10 years to build, preserve and operate rental homes affordable to families with the greatest needs. Warren would also seek to lower the cost of renting.
Warren also has former Department of Housing and Urban Development Secretary Julián Castro actively campaigning on her behalf.
Buttigieg, for his part, is considered by observers to be a positive for housing should he win the election.
But both Warren and Buttigieg are currently considered longshots to secure the nomination, with Sanders and former Vice President Joe Biden still the betting favorites to be the choice to take on Trump.
Biden has not discussed housing much during his campaign so far, and if he ends up being the nominee, housing likely won’t be a big topic during the general election. If Sanders is the nominee, it would likely be a different story.
The Trump administration’s actions
As for Trump, his administration is actually making progress on releasing Fannie Mae and Freddie Mac from their seemingly interminable status as wards of the state.
Just this week, the Federal Housing Finance Agency, the federal agency that oversees the government-sponsored enterprises, hired Houlihan Lokey Capital to serve as its advisor for a public stock offering of Fannie and Freddie stock.
That offering will likely be the largest public share offering in the history of this country.
The Trump administration has also cut numerous regulations and has set both the FHFA and the CFPB on a path to change the nation’s mortgage lending rules.
The release of Fannie and Freddie from conservatorship should not be underscored in terms of both its potential impact and the difference between the Trump administration’s efforts and those of the Obama administration.
The Obama administration seemed content with the status quo at the GSEs, allowing them to rebuild business and send profits to the Department of the Treasury to pay back the bailouts given to the companies during the crisis.
Under the direction of former FHFA Director Mel Watt, the government appeared comfortable with allowing the GSEs to rebuild and regrow their businesses.
Watt, unlike his successor Mark Calabria, tried to push Congress to act on GSE reform.
But Calabria and other officials in the Trump administration took the opposite approach of its predecessors on GSE reform, in both words and actions.
Treasury Secretary Steven Mnuchin, for example, said early on that the Trump administration was committed to ending the GSE conservatorship, a sentiment echoed by Calabria. The rest of the administration, meanwhile, formally called for the end of conservatorship on several occasions.
And last year, the Trump administration released a sweeping housing finance reform plan that calls for Fannie and Freddie to be privatized, which Calabria has long indicated is the plan.
And with each passing day, the FHFA moves the GSEs closer to exiting conservatorship. In fact, late last week, the FHFA announced that it was realigning its structure to “ensure that the Agency is well-positioned for the Enterprises to responsibly exit conservatorship.”
Included among those changes was renaming the FHFA’s Division of Conservatorship to the Division of Resolutions, a clear indication that the goal of the FHFA under Calabria is to engineer the resolution of GSE conservatorship.
But what happens to those plans if Trump loses in November? Calabria has a five-year term as FHFA director that lasts until 2024, although an incoming president of a different party could theoretically end Calabria’s term before it’s stated end. But that process could get messy.
On the other hand, if the Trump administration plan is far enough down the road, it’s possible that the incoming administration would choose to let things play out as opposed to trying to reclose Pandora’s box.
What’s the solution?
So, to answer our original question, what’s it going to take to make housing a topic of conversation in this election? The candidates on both sides need to start loudly and publicly giving a damn about something that effects every single person in this country and accounts for more than 15% of our economy.
Plans and platitudes aren’t enough. It needs to be brought to the forefront and talked about in the same way that health care is talked about. In the same way that immigration is talked about. Loudly and energetically. At rallies. In stump speeches. In every interview. At every campaign stop, every time.
Because if the public can’t get behind a message of “let’s make housing work for everyone,” then what exactly are we doing here?