2017 Housing Outlook – New Policy Developments
The housing policies of the new administration are evolving, and the direction becomes more evident with each new law, executive order, budget proposal, and statement. We review the evidence and where it points.
We have a new Presidential administration, and that always means changes. In this case, it means more changes than usual, as the new administration ran on a platform of major change. Federal housing programs are among the items due for extensive changes under the Trump administration, but what will these changes be, and how will they affect your chances of finding a safe and comfortable home?
The answer depends on who you ask. These are polarized times, and many people are either avid supporters or bitter opponents of the new administration. A lot of what passes for news is little more than propaganda, spin, or slant. How can we tell what's going on?
Let's avoid speculation, and try to take a look at the factual information that's out there. One immensely important thing to keep in mind is that many of these reforms and laws are proposed changes. A proposed change has not yet taken effect, and it may never take effect. Proposals have to pass through other branches of government, usually Congress, and even in a time when the administration party also has a Congressional majority, that means changes are likely.
Does 2017 Spell Disaster for Federal Housing Programs?
As usual, opinions differ vastly. Many people believe the newly elected Trump administration spells disaster for the Department of Housing and Urban Development (HUD) and key programs like Section 8 housing vouchers, while others are far more optimistic. The newly appointed Secretary of HUD, Ben Carson, has been criticized for referring to one particular fair-housing plan as a "mandated social-engineering scheme" but has also assured the American people that he will not take rental assistance from the hands of the millions of Americans who rely on it. What do we know?
The housing picture will be affected by actual policies, including laws, executive orders, budget allocations, and agency rules. Budget priorities and allocations influence agency actions, and it remains too early in Dr. Carson's tenure to deduce any clear direction in HUD's policies and rules. But what can we learn from laws, executive orders, and the proposed budget?
The Way We Were
It's best to avoid euphoric delusions. Everything wasn't all fine and dandy before the Presidential elections. Funding has been diminishing for years, waiting lists for housing assistance vouchers and places in public housing projects are long, and many public housing units have been affected by shortfalls in repair budgets.
The new administration is taking over a system under severe stress, and the proposed response is still evolving.
There is little new housing legislation on the table today and none that is being promoted by the new administration. The last significant housing legislation to be signed was the Housing Opportunity Through Modernization Act of 2016. This law passed with broad bipartisan support, but many of its implementing regulations are still under development by HUD, a process that will be delayed by the change of administrations.
Florida Democrat Bill Nelson has filed a new amendment that would penalize owners of properties that receive federal assistance if those properties fail inspections or are otherwise found to be substandard.
We don't know whether or not this legislation will pass or be modified, and it is not part of the administration's housing policy.
Here are the current facts. President Trump did state that he intends to roll back federal regulations. On January 30th, a new Executive Order began that process.
It's called the "Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs." This could have a significant impact on the future rule-making abilities of all government agencies, and these agencies include HUD. In this Executive Order, President Trump has instructed that for every one new regulation issued by a federal agency, at least two prior regulations must be "identified for elimination."
Another fact: Trump's first Executive Order as President rolled back an Obama-era initiative reducing mortgage costs for home buyers. The move, which came in the first hour of Trump's presidency, suspended a .25% premium rate cut for FHA-backed loans, a cut that would have saved the holder of a $200,000 mortgage around $29 a month.
What can we deduce from these orders? Not much. The first is a general statement of policy that was expected given the tone of the Trump campaign. The second involves a single very specific issue.