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Research & Policy
The White House’s Focus on Closing Costs: Long Overdue and Worth the Fight (Part 2)
The White House has recently prioritized addressing the high costs associated with closing on home purchases, which have become a significant barrier to homeownership affordability. President Biden has criticized “anti-competitive” practices, especially in title insurance, while the National Association of Realtors (NAR) faces legal repercussions for maintaining high brokerage commissions. Part 2 of this analysis highlights how various closing costs remain high due to a lack of price competition, perpetuated by effective lobbying against reforms. The paper suggests that the long-standing resistance to reform might be weakening, with recent developments like private lawsuits, government initiatives, and coordinated efforts between agencies potentially leading to substantial reductions in closing costs, thereby improving affordability and efficiency in the housing market.
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Research & Policy
The Use of Housing Choice Vouchers in New York City
More than 5 million low-income people across the country use Section 8 Housing Choice Vouchers to help subsidize their housing costs. In our latest study, the Furman Center analyzed rent burdens and the rent paid by typical voucher holders to understand the role vouchers play in making housing affordable in New York City.
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Research & Policy
Closing Cost Reform: Long Overdue and Worth the Fight (Part 1)
President Biden highlighted housing affordability in his recent State of the Union speech, addressing high closing costs as a significant barrier, especially for first-time homebuyers. Part 1, which focuses on buyer-paid closing costs, particularly title insurance, concludes that market distortions contribute to high closing costs, impacting housing affordability. This emphasizes the need to examine and potentially reform closing costs.
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Research & Policy
The GSE Public-Private Hybrid Model Flunks Again: This Time It’s the Federal Home Loan Bank System (Part 2)
In this analysis, Part 2 of a series, Senior Visiting Fellow Donald H. Layton lays out the shortcomings of the Federal Home Loan Bank System, explaining how it has deviated from its original mission and how its structure inherently favors profit over purpose. He also explores the FHFA’s efforts to reform the FHLB System and the challenges ahead, proposing solutions to ensure a lasting balance between mission and profit.
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News & Events
Supply Skepticism Revisited: What New Research Shows About the Impact of Supply on Affordability
Furman Center faculty directors Vicki Been, Ingrid Gould Ellen, and Kathy O’Regan recently released “Supply Skepticism Revisited”, highlighting the latest rigorous research that draws out the nuanced effects housing supply has on housing affordability. The paper delves into arguments made by “supply skeptics” and counters them with evidence from recent studies that show the positive impact additional housing supply has on the affordability of a local housing market.
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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.