On October 27, Representative Scott Garrett (R-NJ) held a press conference to announce new GSE reform legislation. Because this latest salvo in the housing finance reform debate is likely to garner a significant amount of media attention, we are writing to answer the questions most likely in your minds—how would this affect multifamily and how important is this in the overall debate?
On the first question, the bill is focused primarily on the single-family market; it has no language specifically addressing multifamily lending activities. However, it does seek to eliminate the federal guarantee for all housing—single-family and multifamily—which would directly impact our industry.
In terms of its importance, given the political pressure Republicans are under to address this issue, we believe there will be a renewed emphasis on housing finance reform this fall in the House of Representatives.
We expect the House to consider the new Garrett bill in tandem with a comprehensive GSE reform bill previously introduced by Rep. Jeb Hensarling (R-TX). Hensarling's bill would completely privatize the housing finance system over the next five years. Even if the bills do pass the House, the Senate is not expected to act on them.
We will continue to work closely with members of Congress in both the House and Senate to urge them to be mindful of the unique needs of the multifamily industry and to take steps to avoid creating a capital shortage for rental housing as they attempt to fix the problems in the single-family sector.
More information on Chairman Garrett's bill is available at http://1.usa.gov/vU3JMP.
More information on GSE reform, including pending bills and links to earlier hearings and NMHC/NAA's testimony during those hearings, is available at www.nmhc.org/goto/GSEreform.