Posted May 2, 2012

Welcome to the BPC Housing Commission expert forum! This forum is intended to foster interactive and substantive discussion about pressing housing issues. Each month contributors from different parts of the housing sector will be invited to respond to a discussion topic.

Guest posts are shared regularly with Housing Commissioners to help inform their work.

Have a pressing question you’d like us to consider? Please leave it in the comments section. We encourage you and our expert bloggers to add comments, contributing to the national dialogue on solutions for the future of the housing sector.

Expert bloggers are not members of the BPC Housing Commission. Any views expressed on this forum do not necessarily represent the views of the Housing Commission, its Co-Chairs, or the Bipartisan Policy Center.

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Back to the Future: The 20% Solution
By Robert J. Cristiano

Around the turn of the last century in 1900, homeownership in America was 36.5 percent, consisting primarily of the family farm. American homeownership steadily increased to 46% in 1930 before dropping to 41.1% following the Great Depression. As a result of the Great Depression, banks failed and many Americans lost the family farm. The New Deal created the Federal Housing Administration (FHA) and Fannie Mae to insure home loans and create a secondary market for mortgages. By 1960, homeownership had jumped to 61%. Ownership peaked near 70% in 2005.

In 1900, less than one-third of homes were mortgaged. In 1940, less than half of homeowners had any mortgage on their property. By 1960, the majority of homes were mortgaged. The traditional mortgage required a 20% down payment, providing a buffer for the lender, the Savings & Loan, and thus insuring a steady supply of capital. This system worked for a century.

Read the full post here.

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What lessons can the U.S. learn from housing programs, policies, or regulatory frameworks in other countries? Are there specific tools in use (e.g., covered bonds, full recourse loans, prepayment penalties, etc.) that we should consider adopting or using on a larger scale?

Valuable Lessons from Europe
By Brian Montgomery

Many countries maintain high homeownership levels and functional mortgage markets. As the U.S. undergoes regulatory reform and market contraction, it is timely to draw on other countries’ experiences. Some European countries offer insight into alternative finance mechanisms, reform and accounting convergence for U.S. policymakers and lawmakers.

Although the U.S. ranks relatively high in homeownership at 66.1 percent of the population in 2011 (although if you back-out the estimated 1.6 million homes where the borrower has not made a payment in more than 24 months the rate could be as low as 63%), several European countries have higher rates (U.S. Census Bureau 2011).

Read the full post here.

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Centralized Government Planning is Not the Answer
By Mark Calabria

Social scientists do not have the luxury of natural experiments. When it comes to housing policy, we will not exactly know the precise impact of saying removing the mortgage interest deduction until we do so. We are forced to rely on theory and imperfect comparisons. A useful and rich set of comparisons are the policies of other countries. Such offer us an interesting list of do’s and don’ts.

First let’s acknowledge that despite previous claims, America’s system of housing and mortgage finance is not “the envy of the world”. Few countries are scrambling to copy our various mortgage subsidies and few are interested in making mortgage credit as easy as it once was here. Yet many countries maintain homeownership rates comparable or higher than that of the U.S. Many also have housing markets that are far more affordable than the U.S. Of course others are more expensive and have lower rates of homeownership.

Read the full post here.

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Government Must Empower Trusted Partners
By Bill Kelly

For affordable multifamily housing, we should explore the effectiveness and cost-effectiveness of having the government rely more heavily on trusted partners, mostly nonprofits but potentially also other public and private owners with the right mission alignment. Various European models are worth exploring, but the UK's approach perhaps best captures the big idea.

Read the full post here.

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Principles for Affordable Housing from Dubai to Kenya
By David A. Smith

Our work at the Affordable Housing Institute has taken us to over a dozen countries from the very poor (Kenya) to the very rich (Dubai), to say nothing of my 37 years' experience with the U.S. ecosystem. Here are some principles proven around the world:

1. Though housing finance ecosystems operate on sound principles, every housing finance ecosystem is sui generis. Everything does influence everything else, and it is impossible to intervene unilaterally without the ecosystem responding even before you have intervened. The trick is to work with the ecosystemic and market forces, not obliviously to them.
2. Urbanization is unstoppable, even in America. America will continue to urbanize, and as it does some parts of the country will depopulate.
3. Affordable housing is an intrinsic element of national urban infrastructure, because it is where blue-collar and flexible jobs go to sleep at night. The city does not exist that has no poor people in it, and we have to make sure that the people who make the city work can live in the city they make work.

Read the full post here.

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Making the Case for Better Housing Policy
By Jonathan T.M. Reckford

Though commerce and social media have seemed to shrink the world and invalidate boundaries, the reality is that we must still look carefully at our assertions anytime we use the word “global.” At Habitat for Humanity, we have found this to be especially true about housing issues. There are very few universal truths about housing and land ownership, and no individual country has housing policy completely figured out.

Our desire to advocate for those in need of adequate and affordable shelter led us to become a primary partner in the Global Housing Policy Indicators Project in 2004. Through this project we began assessing regulations, policies and practices concerning housing in various locations.

Read the full post here.

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Innovative Tools for a 21st Century Market
By Kent Watkins

To be sure, there are many robust technologies, tools, and regulatory frameworks to replicate from our own petri dishes of state, regional, and local governments. But, there is also a rich historical context of what we have ‘borrowed’ from or interacted with other countries, and the lessons learned from those experiences. We need to look at what is going on presently; and what can be re-constituted and illuminated anew for innovative tools in the housing sub-sector of the urban sector.

Read the full post here.

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Past Forums

March 2011 Housing Expert Forum: How can housing policy be responsive to today’s urgent needs and simultaneously address long-term trends?

February 2011 Housing Expert Forum: What are some of the key characteristics of a healthy housing system? And how can the success of these features be measured?

January 2011 Housing Expert Forum: What should the federal government do to address the inventory of foreclosed properties?

December 2011 Housing Expert Forum: What are the most pressing issues in housing policy today?

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Housing Commission