This week, NMHC and NAA weighed in with the Federal Housing Finance Agency (FHFA) on two issues—the Request for Input (RFI) on the release of the Equitable Housing Finance Plan for the Enterprises and the Notice of Proposed Rulemaking on Housing Goals for the Enterprises 2022-2024.
Equitable Housing Finance Plan for the Enterprises
Following the September release of the Equitable Housing Finance Plans for the Enterprises, FHFA issued a Request for Input (RFI) to help inform the Enterprises’ plan. On October 25, NMHC and NAA submitted comments outlining the multifamily industry’s viewpoint and putting forth a number of recommendations.
As part of our comments, we noted the Agency’s absence of an explicit reference to rental housing in the Overview of Plan Framework description. “While it may have been implicit, we ask that FHFA clearly communicate the importance of identifying barriers to sustainable housing opportunity either directly related to the Enterprises’ actions or barriers to equity in the housing market for ALL; home ownership and rental housing,” the comments read.
In response to a question on redlining, the letters suggested that the Enterprises should look for ways to incentivize eliminating onerous exclusionary zoning, streamline the permitting process and ease regulations that exacerbate the development of affordable rental housing in neighborhoods of opportunity across the nation. Further, we made the case that the plan should include goals that are applicable to both single family and multifamily communities and aim to:
- Reduce racial and ethnic disparities across a variety of financing and servicing activities;
- Increase the quality of the supply of affordable housing available in racially or ethnically concentrated areas of poverty;
- Increase the supply of affordable housing available in areas with access to educational, transportation, economic, and other important opportunities;
- Reduce underinvestment or undervaluation in other (non-redlined) areas that remain underserved or undervalued;
- Increase the supply of affordable housing that is accessible for persons with disabilities and available in the most integrated setting appropriate to the needs of an individual with a disability; and
- Increase the supply of affordable housing available to families with children in areas with access to educational, transportation, economic, and other important opportunities.
Notice of Proposed Rulemaking on Housing Goals for the Enterprises 2022-2024
On October 25, NMHC and NAA also submitted comments in response to the notice of proposed rulemaking (Proposed Rule) on housing goals for the Enterprises. The purpose of the Proposed Rule is to establish the benchmark housing goals for the Enterprises for the period 2022 to 2024.
As required by the Safety and Soundness Act of 1992 (the Act), FHFA began issuing housing goals upon its establishment in 2010 and is now proposing housing goals for the period covering 2022 to 2024. The Act requires that FHFA establish a single annual goal, by either unit or dollar volume, for purchases of multifamily housing that finance units affordable to low-income and very low-income families as well small balance loans.
“Many factors influence the apartment industry’s health and ability to meet the nation’s growing demand for rental housing, but the availability of consistently reliable and competitively priced capital is the most essential,” our comments read.
To help guide FHFA as they develop their new housing goals, NMHC raised a number of concerns that we feel may impede the Enterprises’ mission of meeting housing supply goals at all price points, including:
- The proposed benchmark levels for multifamily housing goals may be too prescriptive. The unit increase may be too high and the three-year time frame too long and may cause the Enterprises to act irrationally if the market dynamics change during the three-year period.
- The annual production cap and the affordable housing goals should be harmonized. The goals in the annual production cap and those in the Proposed Rule create confusion since they are issued for different periods, contain different affordable housing metrics, and use different methods for determining purchases.