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Research & Policy
The GSE Conservatorships: Fifteen Years Old, With No End in Sight
Senior Visiting Fellow Donald H. Layton compiles a 10-point Q&A to explain some of the history and key events of the government’s conservatorships of Fannie Mae and Freddie Mac.
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Research & Policy
Manufactured Housing Is a Good Source of Unsubsidized Affordable Housing - Except When It’s Not: High-Level and Specific Policy Recommendations (Part 3)
Recently, there has been a renewed focus on expanding the supply of manufactured housing (MH), known for being low cost, as one key method to help reduce that shortage. This reflects the belief by its supporters that MH, being produced in an efficient factory environment, can provide low-cost housing without the need for government subsidy, whereas other sources of low-cost housing usually do require such support in one form or another. In Parts 1 and 2, I showed that MH often does not easily fit into the traditional categories of rental or owned housing, particularly due to the significant market share of MH where the structure is owned by its resident but the underlying land is rented from someone else. In this Part 3, after briefly reviewing the analytical framework and policy underpinnings developed in Parts 1 and 2, I lay out recommendations designed to fit the complex economics of the MH marketplace.
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Research & Policy
Government Mortgage Interest Rates: A Serious Discussion about the Intertwined Topics of Risk Adjustment and Cross-subsidies
The purpose of this article is to address the very serious – and not broadly understood or openly discussed – interrelated topics of interest rate risk adjustment (or the lack thereof) and the embedded and often hidden cross-subsidies that today are found at the four government mortgage agencies, i.e., the two GSES plus the Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA).
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Research & Policy
The Weakness of Neighborhood Revitalization Planning in the Low-Income Housing Tax Credit Program: Warnings from Connecticut
The Low-Income Housing Tax Credit (“LIHTC”) is the nation’s largest program to produce and preserve subsidized housing. To ensure that LIHTC avoids harmfully concentrating poverty, entrenching segregation, or inefficiently deploying resources, federal law requires that states prioritize allocating credits to projects located in high-poverty locations that contribute to a “concerted community revitalization plan” (“CCRP”). In high-poverty neighborhoods, tax credit developments are meant to facilitate broader neighborhood revitalization, not only to benefit the residents of the housing itself. This working paper by Noah Kazis, Assistant Professor of Law at the University of Michigan Law School, and Faculty Director Kathy O’Regan provides new, empirical support for long-standing concerns that the CCRP process is ineffectively enforced.
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Research & Policy
Manufactured Housing Is a Good Source of Unsubsidized Affordable Housing - Except When It’s Not: Q&A on Eight Key Policy Topics (Part 2)
Manufactured housing (MH) has recently taken on a high profile among affordable housing advocates, including in the Biden administration. As described in Part 1 of this three-part series, MH has more complex economics than conventional owned or rented housing, particularly with respect to the significant market share of MH where the structure is owned by its resident but the underlying land is rented from someone else. The challenge in such cases is that the MH resident does not get to enjoy the two significant social benefits of homeownership that have long been used to justify government intervention to subsidize and support it: building net worth to support retirement and the next generation, and avoiding landlord-generated housing instability. Part 2 examines eight key policy topics, via a Q&A format, that must be accurately understood to develop effective policy that can expand affordable housing via MH.
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Research & Policy
Implications and Geography of Office to Housing Conversions
In their “Making New York Work for Everyone” plan, released in January, Mayor Adams and Governor Hochul expressed eagerness to build more housing in New York City’s business districts after COVID. But due to significant financing, zoning, and design challenges in converting office buildings to residential, only select offices make good candidates for conversion, and few offices have actually converted in recent years. This post describes three resources to help inform the conversions debate.
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Research & Policy
Current GSE Guarantee Fees Are Too Low to Be Consistent with Regulatory Capital: Does This Mean a Large Increase Is Coming?
The average guarantee fee (G-fee) of Freddie Mac and Fannie Mae, the two government-sponsored enterprises (GSEs), who currently finance about half of the nearly $13 trillion of outstanding first-lien single-family mortgages in the country, is among the most closely-watched numbers by housing finance policymakers and the mortgage lending industry. The G-fee level has been strategically steady since it rose to its current range (between 0.45 percent to 0.49 percent) in 2014, after having been purposefully increased by the FHFA and the two GSEs in prior years. Unfortunately, that level began to be called into question by the adoption in 2020 of a new and much higher capital requirement by the FHFA, which in turn seems to require a much higher average G-fee. As such a higher G-fee has not yet been seen, it creates a major policy uncertainty overhanging the mortgage lending system – is a big G-fee increase inevitably coming?
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Research & Policy
Manufactured Housing Is a Good Source of Unsubsidized Affordable Housing - Except When It’s Not: Key Facts and Figures, and Some Unusual Economics (Part 1)
Manufactured housing (MH), the official name for what have historically been called mobile homes, comprises the most prominent type of factory-built housing in the US. This article aims to take a fresh look at MH to determine just how much it truly can be a large-scale natural source of additional affordable housing, whether owner-occupied or rental, as claimed by its supporters in the industry and policy community. As Part 1 of a three-part series, this article will go over some basic facts and figures about MH.
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Research & Policy
Eviction practices across subsidized housing in New York State
In a new NYU Furman Center data brief, Ingrid Gould Ellen, Katherine O’Regan, and Ellie Lochhead used data on eviction cases from the New York State Office of Court Administration (OCA) to compare eviction patterns in different types of place-based subsidized housing in New York City and in other jurisdictions across New York State from 2016 to 2021. Cases filed due to non-payment of rent are the focus of the brief and represent the majority of eviction filings.
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Research & Policy
Will the GSEs Repeat 2007 - 2009’s Large Losses?
The housing market has just experienced one of the largest upcycles in history. But what goes up usually does eventually come down - and very rapidly in this case. During the last major downcycle, i.e., when the mortgage bubble burst 15 years ago, the two companies lost the confidence of the markets as they began to suffer massive losses. So, given this history, it is reasonable to ask: Did the two GSEs forget the lessons of the past? Are they about to suffer those massive losses again?
