Coalition asks Congress to alleviate affordable housing shortage

To help address the nationwide affordable housing crunch, a coalition of nine national housing organizations in February laid out a plan that calls on Congress and the Bush Administration to take immediate and specific actions that will stimulate the production and preservation of affordable housing, create new jobs and spur economic growth, according to a release from the Mortgage Bankers Association.

The nine-member housing coalition was formed under the auspices of the National Housing Conference, a Washington-based nonprofit organization focused on affordable housing and development. The coalition's membership comprises The Enterprise Foundation, Fannie Mae, Freddie Mac, Local Initiatives Support Corporation, Mortgage Bankers Associa-tion of America, National Association of Home Builders, National Association of Realtors, National Council of State Housing Agencies and National Housing Conference.

The coalition's policy agenda is based on several recommendations included in the 2002 report, "Meeting the Nation's Housing Needs," which was produced by the congressionally-appointed Millennial Housing Commission. The MHC found that almost 28 million households spend "more on housing than the federal government considers affordable and appropriate."

To support the production of affordable for-sale housing, the coalition recommends implementing a Homeownership Tax Credit, like the one proposed by President Bush in his fiscal year 2004 budget. For example, on an annualized basis, the president's proposal could produce as many as 50,000 new and rehabilitated homes; contribute an estimated $2 billion of private equity investment resulting in a total annual investment of $6 billion; create some 122,000 jobs; and generate approximately $4 billion in wages and $2 billion in taxes and fees. The U.S. Treasury Department estimates the cost of the program is $2.4 billion over five years a modest investment that would spur economic growth and help open the door to homeownership for hundreds of thousands of families living in distressed urban and rural communities.

The coalition also calls for a new multifamily production program to expand and preserve the supply of affordable rental housing for extremely low- to moderate-income families in communities built for residents with a mix of incomes. The coalition believes that additional production of tens of thousands of apartment units annually is essential to respond to the overwhelming demand for this type of housing. The production program would be used for new construction and substantial rehabilitation, including necessary operating assistance for eligible units.

Additionally, the coalition reaffirmed its support for the nation's existing housing delivery programs while at the same time offering proposals for improving and strengthening the current system. Regarding the Federal Housing Administration and the Government National Mortgage Association, the coalition calls for new authorities to permit separate human resources, contracting, legal assistance, budgeting and earnings management that would improve the entities' risk management.

The Low Income Housing Tax Credit, the HOME Investment Partnerships program and the Mortgage Revenue Bond program are highly effective affordable housing programs. The coalition strongly supports these programs and recommends enhancements to make them more effective.

The coalition also identified preservation of existing rental units as an essential ingredient for maximizing the availability of affordable rental housing. It therefore supports congressional enactment of tax incentives to encourage the transfer of these properties for long-term affordability in good physical condition.