Observers Hopeful of Prospects for Affordable Housing Under Obama Administration
By Caitlin Jones & A. J. Johnson
8 min read
Housing industry observers generally are optimistic about the future for affordable housing under the incoming Obama Administration.
They take heart from the community-organizer background and big city orientation of President-elect Barrack Obama, and from some of the top people around him. But they also concede his White House will begin on January 20 with other, more pressing priorities on its plate, and will probably be constrained financially from being able to press any major new housing funding or initiatives.
“From what we know at this point, we are very encouraged that housing will be at the forefront within this Administration,” said Barbara Thompson, executive director of the National Council of State Housing Agency, whose member agencies allocate low-income housing tax credits and issue housing bonds.
Peter Bell, executive director of the National Housing & Rehabilitation Association, a national trade group for developers and other professionals in the affordable multifamily housing field, said he’s “very optimistic about a strong affirmation of support for affordable housing” in the Obama Administration. “Barrack Obama has a sensitivity to urban issues, community development, and affordable housing that is a result of his personality and interests generally, but also his background in community organizing and other neighborhood-oriented activities,” Bell noted.
David Gasson, spokesman for the Housing Advisory Group, and vice president of syndicator Boston Capital, said, “I’m confident his will be a very housing-friendly Administration.”
Bell and others interviewed by the Tax Credit Advisor generally felt Obama will be supportive of affordable housing and community development, and recognize the importance of affordable rental housing – an alternative to homeownership – as part of a balanced housing policy.
Obama once was a community organizer in Chicago’s South Side, before becoming a Democrat state senator in the Illinois legislature and later winning election, in 2004, to the U.S. Senate.
Michael Bodaken, president of the National Housing Trust, felt Obama’s “formative experience” as a community organizer “will not be forgotten as he tries to tackle the rehabilitation and preservation of existing affordable housing.”
In addition, Bodaken expects the Obama Administration to “pay a significant amount of attention to the greening of federally assisted housing” – specifically how to improve the energy efficiency of existing public housing and other rental properties assisted by the U.S. Department of Housing and Urban Development (HUD).
John McIlwain, a senior fellow at the Urban Land Institute, Washington, DC, felt the Obama Administration will have a “much greater understanding” of the importance of affordable housing, particularly in urban and metropolitan areas. “One of the things that I would hope that they understand – and I think they may well – is that affordable housing is a central piece of an urban strategy, and start to make linkages that we haven’t been able to in the past,” he noted.
For instance, McIlwain noted there’s a natural linkage between housing and transportation, and that it makes sense to connect and coordinate funding and incentives in these two areas to, say, encourage the development of affordable and mixed-income housing around transit nodes.
McIlwain felt there will be encouragement of homeownership in the new Administration, but also “a lot of support for rental housing.”
Chicagoan Valerie Jarrett, a top advisor to Obama and one of his transition co-chairs, has announced the Obama White House will have a chief of urban policy, a new post. Jarrett is CEO of The Habitat Co., a large Midwest private residential development and property management firm with a portfolio that includes numerous affordable rental properties.
Bell felt that Jarrett’s presence and prominence is a good omen for affordable housing. “This is the first time that I’ve seen in my 30-some odd years of Washington,” he said, “that we’ve ever seen somebody with the affordable housing background right there in the inner circle of the president, and who will most probably have a position in the highest echelons of the Administration.”
In fact, Jarrett was subsequently named as a White House senior advisor and assistant to the President for intergovernmental relations and public liaison.
Those interviewed also expected a more prominent role for HUD in the Obama Administration, with Bell believing that the Department will be more “activist.”
Significant Challenges
Those interviewed said President Obama will face immediate, major challenges when he takes office, and felt that at least initially he won’t likely be inclined or able to advance major affordable housing initiatives because of other pressing national problems and priorities (e.g., financial and housing crises, worsening economy) and because of the ballooning federal budget deficit.
“He walks into this job terribly shackled by the two wars and the economic crisis that he inherits,” said Bodaken.
Washington, DC attorney Richard Goldstein, a partner in the law firm Nixon Peabody LLP, and counsel to the Affordable Housing Tax Credit Coalition, anticipated the Obama Administration’s initial attention in the area of housing will be focused on addressing the nation’s home foreclosure crisis, including trying to figure ways to help troubled homeowners stay in their homes, and on trying to increase the availability of credit.
Goldstein and others, though, pointed out that production and preservation of rental housing creates jobs, and were hopeful that proposals to spur affordable multifamily development and preservation, and to bolster the housing credit program, will be included in an expected forthcoming economic stimulus package fashioned by Congress. (See related article on p. 3.)
Obama should benefit from a continued and wider Democratic majority in the 111th Congress, and in continuity in key congressional leaders supportive of affordable housing. In the U.S. House of Representatives, Financial Services Committee Chairman Barney Frank (D-MA), Ways and Means Committee Chairman Charles Rangel (D-NY), and House housing subcommittee chair Maxine Waters (D-CA) all won re-election. In the Senate, Sen. Chris Dodd (D-CT) has said he will continue as Banking Committee chairman and even announced his agenda.
The ballooning federal deficit, including from the federal financial rescue spending and two wars, almost certainly will constrain the new Administration from proposing major new or additional funds for affordable housing and community development. But some said the Obama White House may be able to support affordable housing through less costly ways, such as helpful changes in HUD rules or policies. Bodaken, for example, noted 80% of the provisions in a draft multifamily housing preservation bill prepared for introduction by Chairman Frank are simple procedural changes that would enable HUD to more effectively prevent existing units from being lost from the affordable rental housing stock. “I think that there will be significant changes that’ll make public housing and assisted housing rules fairer, more efficient, and streamlined,” he said.
Record, Campaign Proposals
There is but little on President-elect Obama’s past attitude and actions in his political career regarding affordable housing.
He’s only been in the U.S. Senate since January 2005, and isn’t a member of any Senate committee or subcommittee with direct jurisdiction over housing matters, other than veterans housing issues. [In the Senate, he has authored one bill to strengthen and expand federal programs to assist homeless veterans. In addition, he helped enact a second bill to provide comprehensive services and affordable housing options to veterans through the Department of Veterans Affairs, HUD, and nonprofit organizations.]
Some positions on housing and community development issues, though, can be gleaned from the position papers of the Obama-Biden campaign.
For instance, the campaign’s plan for “investing in cities,” in the area for housing, says the U.S. economy “depends on a stable market that ensures all families have access to safe and affordable housing options,” and notes Obama-Biden will make “stabilizing our housing crisis a top priority.”
This plan calls for creating a new 10% mortgage interest tax credit for homeowner non-itemizing taxpayers, and increasing the supply of affordable housing throughout metropolitan regions. Under the latter, the plan says Obama has “strongly supported efforts to create an Affordable Housing Trust Fund to develop affordable housing in mixed-income neighborhoods.” The plan also pledges to restore cuts to public housing operating subsidies, and to ensure that HUD programs “are restored to their original purpose.”
The plan also proposes: the establishment of 20 “promise neighborhoods” nationwide to boost educational opportunities for children in high-poverty, high-crime neighborhoods; creation of a White House Office on Urban Policy; “fully” funding HUD’s Community Development Block Grant program; creation of a National Infrastructure Investment Bank to strengthen core infrastructure and transportation systems; innovative measures and incentives to dramatically improve the energy efficiency of buildings; and steps to foster more livable and sustainable communities. (Details: http://origin.barackobama.com/issues/urban_policy/)
Thompson noted NCSHA hasn’t seen any specifics on President-elect Obama’s views on the low-income housing tax credit and tax-exempt housing bonds. But she added, “We are very confident that he recognizes those are very important engines, if not the primary engine, behind affordable housing development, both on the homeownership side and the rental side, and we look forward to his support of those programs as well as other tools that the housing finance agencies rely on in delivering housing for their residents.”
