Tag Archives: Environment

Promoting Equitable Transit-Oriented Development

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graphic by USGAO

Enteprise has released a report, Promoting Opportunity through Equitable Transit-Oriented Development (eTOD): Navigating Federal Transportation Policy. It opens,

Transportation, housing and land use decisions that form the foundation of our development patterns are made at every level of government. While the local regulatory environment significantly impacts the amount and type of development that occurs, the federal government plays a major role in local development in both overt and hidden ways. Federal funding is the most obvious source of influence. However, this funding comes with a catch, as the incentives and regulations that govern funding programs can have a significant impact – both positive and negative – on the type of housing and transportation infrastructure that is built and how it is maintained over time.

The federal ability to influence development patterns gives it both direct and indirect influence on a community’s strength and composition. Individual families, the local economy, municipal governments and the environment all benefit when well-located housing, jobs and other necessary resources are connected by efficient transportation and infrastructure networks. Equitable transit-oriented development (eTOD, see sidebar for definition) is an important approach to facilitating these connections. eTOD supports the achievement of multiple cross-sector goals, including regional economic growth, enhanced mobility and access, efficient municipal and transportation network operations, improved public health and decreased cost of living. For a full discussion of the benefits of eTOD, read Promoting Opportunity through eTOD: Making the Case.

In recent years, the federal government has taken several actions that are more conducive to fostering eTOD. Notable examples include the adoption of incentives for creating and preserving affordable housing near transit, the provision of planning and technical assistance resources to support eTOD, and the reduction of barriers to producing affordable housing on federally-funded property. However, a wide range of policies and incentives that do not explicitly address eTOD can also support or detract from the conditions that make such development possible.

Navigating Federal Transportation Policy is the third report in our Promoting Opportunity through eTOD research series. This report seeks to assist stakeholders involved in achieving eTOD, such as public entities, developers and practitioners, as they work to navigate the federal policy landscape, with a focus onFederal Transit Administration (FTA) policies and programs. These policies and programs generally offer several funding and technical assistance opportunities that can address eTOD (among a range of other uses), but housing practitioners may be less familiar with these resources and how to access them. (2, footnote omitted)

While the report explicitly acknowledges the changed environment since President Trump’s election, it does not seem to fully integrate those changes into its recommendations. While there are a lot of good ideas in the report, I am afraid that it will take a few years, or longer, for them to find a sympathetic ear in the Executive Branch.

Housing Finance Reform, Going Forward

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photo by Michael Vadon

President-Elect Trump

Two high-level officials in the Treasury Department recently posted Housing Finance Reform: Access and Affordability Going Forward. It highlighted principles that should guide housing finance reform going forward. It opened,

Access to affordable housing serves as a cornerstone of economic security for millions of Americans. The purchase of a home is the largest and most significant financial transaction in the lives of many households. Access to credit and affordable rental housing defines when young adults start their own households and gives growing families options in choosing the quality and location of their homes. Homeownership can be an opportunity to build wealth, placing a college education within reach and helping older Americans attain a secure retirement. Whether they are aware of it or not, some of the most momentous decisions American families make are shaped by how the housing finance system serves them.

Financial reform has sought to reorient financial institutions to their core mission of supporting the real economy. The great unfinished business of financial reform is refocusing the housing finance system toward better meeting the needs of American families. How policymakers address this challenge will be the critical test for any model for housing finance reform. The most fundamental question any future system must answer is this: Are we providing more American households with greater and more sustainable access to affordable homes to rent or own? It is through this lens that we will assess the performance of the current marketplace and evaluate a set of policy considerations for addressing access and affordability in a future system. (1-2)

These principles of access and affordability have guided federal housing finance policy for quite some time, particularly in Democratic administrations. They now appear to fallen by the wayside as Republicans control both the Executive and Legislative branches.

President-Elect Trump has not yet outlined his thinking on housing finance reform. And the Republican Party Platform is somewhat vague on the topic as well. But it does give some guidance as to where we are headed:

We must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts. Reforms should provide clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices. Compliance with regulatory standards should constitute a legal safe harbor to guard against opportunistic litigation by trial lawyers.

We call for a comprehensive review of federal regulations, especially those dealing with the environment, that make it harder and more costly for Americans to rent, buy, or sell homes.

For nine years, Fannie Mae and Freddie Mac have been in conservatorship and the current Administration and Democrats have prevented any effort to reform them. Their corrupt business model lets shareholders and executives reap huge profits while the taxpayers cover all loses. The utility of both agencies should be reconsidered as a Republican administration clears away the jumble of subsidies and controls that complicate and distort home-buying.

The Federal Housing Administration, which provides taxpayer-backed guarantees in the mortgage market, should no longer support high-income individuals, and the public should not be financially exposed by risks taken by FHA officials. We will end the government mandates that required Fannie Mae, Freddie Mac, and federally-insured banks to satisfy lending quotas to specific groups. Discrimination should have no place in the mortgage industry.

Turning those broad statements into policies, we are likely to see some or all of the following on the agenda for housing finance reform:

  • a phasing out of Fannie Mae and Freddie Mac, perhaps via some version of Hensarling’s PATH Act;
  • a significant change to Dodd-Frank’s regulation of mortgage origination as well as a full frontal assault on the Consumer Financial Protection Bureau;
  • a dramatic reduction in the FHA’s footprint in the mortgage market; and
  • a rescinding of Obama’s Affirmatively Furthering Fair Housing Executive Order.

Some are already arguing that Trump and Congress will take a more pragmatic approach to reforming the housing finance system than what is outlined in the Republican platform. I think it is more honest to say that we just don’t know yet what the new normal is going to be.

The Republican Housing Platform

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photo by DonkeyHotey

The Republican Party adopted its platform earlier this week.  The short housing platform is worth reading in its entirety:

Responsible Homeownership and Rental Opportunities

Homeownership expands personal liberty, builds communities, and helps Americans create wealth. “The American Dream” is not a stale slogan. It is the lived reality that expresses the aspirations of all our people. It means a decent place to live, a safe place to raise kids, a welcoming place to retire. It bespeaks the quiet pride of those who work hard to shelter their family and, in the process, create caring neighborhoods.

The Great Recession devastated the housing market. U.S. taxpayers paid billions to rescue Freddie Mac and Fannie Mae, the latter managed and controlled by senior officials from the Carter and Clinton Administrations, and to cover the losses of the poorly-managed Federal Housing Administration. Millions lost their homes, millions more lost value in their homes.

More than six million households had to move from homeownership to renting. Rental costs escalated so that today nearly 12 million families spend more than 50 percent of their incomes just on rent. The national homeownership rate has sharply fallen and the rate for minority households and young adults has plummeted. So many remain unemployed or underemployed, and for the lucky ones with jobs, rising rents make it harder to save for a mortgage.

There is a growing sense that our national standard of living will never be as high as it was in the past. We understand that pessimism but do not share it, for we believe that sound public policies can restore growth to our economy, vigor to the housing market, and hope to those who are now on the margins of prosperity.

Our goal is to advance responsible homeownership while guarding against the abuses that led to the housing collapse. We must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts. Reforms should provide clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices. Compliance with regulatory standards should constitute a legal safe harbor to guard against opportunistic litigation by trial lawyers.

We call for a comprehensive review of federal regulations, especially those dealing with the environment, that make it harder and more costly for Americans to rent, buy, or sell homes.

For nine years, Fannie Mae and Freddie Mac have been in conservatorship and the current Administration and Democrats have prevented any effort to reform them. Their corrupt business model lets shareholders and executives reap huge profits while the taxpayers cover all loses. The utility of both agencies should be reconsidered as a Republican administration clears away the jumble of subsidies and controls that complicate and distort home-buying.

The Federal Housing Administration, which provides taxpayer-backed guarantees in the mortgage market, should no longer support high-income individuals, and the public should not be financially exposed by risks taken by FHA officials. We will end the government mandates that required Fannie Mae, Freddie Mac, and federally-insured banks to satisfy lending quotas to specific groups. Discrimination should have no place in the mortgage industry.

Zoning decisions have always been, and must remain, under local control. The current Administration is trying to seize control of the zoning process through its Affirmatively Furthering Fair Housing regulation. It threatens to undermine zoning laws in order to socially engineer every community in the country. While the federal government has a legitimate role in enforcing non-discrimination laws, this regulation has nothing to do with proven or alleged discrimination and everything to do with hostility to the self-government of citizens. (4)

Here are some of the policy proposals that I think it gets right: abolishing Fannie and Freddie in their current form as hybrid public/private corporations; implementing regulation that promotes responsible underwriting and protects against predatory lending; and banning discrimination in the credit markets.

There is a lot of coded language in the platform, however. And that coded language may be inconsistent with some of those goals. For instance, the opposition to the Obama Administration’s attempts to reduce de facto segregation in the housing markets through such initiatives as the Affirmatively Furthering Fair Housing regulation undercuts the claim that the party opposes discrimination in the housing market.

It will be a long, strange trip to the November election. The direction of federal housing policy must be counted as one of important issues at stake.

Promoting Opportunity with Development

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"ArlingtonTODimage3" by This image was altered by Thesmothete with additional graphical elements to indicate the location of transit stations and the extent of development around them. - Derivative of :Image:ArlingtonRb aerial.jpg. Licensed under Public Domain via Commons - https://commons.wikimedia.org/wiki/File:ArlingtonTODimage3.jpg#/media/File:ArlingtonTODimage3.jpg

Enterprise Community Partners have posted Promoting Opportunity Through Equitable Transit-Oriented Development (eTOD): Barriers to Success and Best Practices for Implementation. It opens,

Development patterns directly relate to a community’s strength. Individual families, the local economy, municipal governments and the environment all benefit when well-located housing, jobs and other necessary resources are connected by efficient transportation and infrastructure networks. Equitable transit-oriented development (eTOD) is an important approach to facilitating these connections. This paper defines eTOD as compact, often mixed-use development with multi-modal access to jobs, neighborhood-serving stores and other amenities that also serves the needs of low- and moderate-income people. The preservation and creation of dedicated affordable housing is a primary approach to eTOD, which can ensure that high-opportunity neighborhoods are open to people from all walks of life. eTOD supports the achievement of multiple cross-sector goals, including regional economic growth, enhanced mobility and access, efficient municipal and transportation network operations, improved public health, and decreased cost of living.

Yet it is sometimes difficult for planning agencies, local governments, transit agencies, housing organizations, private developers, and other institutions that influence development to act in concert to overcome barriers to eTOD. Each stakeholder has a unique mission with disparate goals and compliance burdens and must comply with complex and sometimes contradictory rules and regulations. However, improving coordination between these sectors can shift a potentially adversarial relationship into a symbiotic partnership. As the public resources that support transportation and infrastructure networks and housing affordability remain threatened, such efficient coordination is an especially important goal. (5, references omitted)

eTOD has a lot going for it: it’s environmentally responsible, it’s socially responsible, it can promote nice development. It is a shame that it is so hard to pull off. It would be great if HUD could take the lead in promoting eTOD, perhaps in tandem with its recent fair housing initiatives.

Wednesday’s Academic Roundup

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