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A positive regulatory environment and a tax system that encourages homeownership are key to tackling this problem, he said. Both presidential candidates have clearly indicated their support for the mortgage interest deduction, Sen. John Kerry in an NAHB question-and-answer publication and President Bush in a speech before the association’s board of directors at its fall meeting in Columbus, OH.
Howard said that the President in his address to the NAHB directors also recognized the need to control regulation, which can add thousands of dollars to the cost of a new home. “This is a very important comment by the President,” he said, “and we hope that policy makers in both parties will adopt this kind of policy.”
David Lereah, chief economist for the National Association of Realtors®, said that housing affordability problems have increased dramatically in many parts of the country where prices now tower over what is typical for other areas. In Anaheim, CA, for example, he said that the median price of a home is now $600,000.
“Let’s not take the U.S. housing sector for granted,” Lereah said. “Let’s not put it on the back burner. Our sector needs strengthening.”
From results of a poll taken by his association earlier this year, he said it is evident that American voters are concerned about the cost of housing, they want the government to take a more active role and they will be carrying their housing concerns to the ballot box in November. Two out of three of those surveyed responded that housing will be a significant factor in their voting decisions, he said, and about three-quarters voiced support for affordable housing in their community.
Among other priorities for housing policy discussed by participants at the teleconference:
- Edward Yingling, executive vice president of the American Bankers Association, emphasized the need for outreach programs to minorities and immigrants. There are more than 31 million immigrants living in the country today, he said, and one million new immigrants are joining their ranks each year. “Education is critical, as the mortgage process can be intimidating,” he said, and extensive regulation of financial institutions is needed to root out predatory lending practices among unsuspecting housing consumers.
- Robert Davis, government relations director of America’s Community Bankers, noted that maintaining the health of the housing industry’s Government Sponsored Enterprises (GSEs) is essential because those institutions play an important role in maintaining the availability and affordability of mortgage credit, especially for lower-income households. Citing a disparity between potential risks to the GSEs and the regulations that are currently in place, he said that a new regulatory structure is “essential to ensure they continue to provide the benefits they are intended to provide.”
- Jonathan Kempner, president and CEO of the Mortgage Bankers Association, said that direct federal expenditures for housing should continue to fund efficient and effective low-income rental housing. “A new production program is needed,” he said, and it will be most effective if it helps households across a range of incomes — the lowest as well as those of more moderate means.
Kempner and other conference participants said that housing has emerged as a bipartisan issue and the policy recommendations in the group’s report “makes sense for both political parties.”
Davis observed that, “We haven’t seen any diminution in trying to increase homeownership from the Clinton to the Bush Administrations, and many of the same devices and policies remain in place.” Increasing homeownership rates among African-American and Hispanic households is a major focus of these efforts, and although significant progress is being made, only about 50% of these families own homes today, well behind the general population.
Howard said that both of the presidential candidates are “very pro-housing.”
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